As discussed in Note 1, because our registrational trials in bempegaldesleukin did not meet their primary endpoints, we decided to discontinue all development of bempegaldesleukin and wind down the clinical trials studying bempegaldesleukin. In April 2022, we announced the 2022 Restructuring Plan pursuant to which we completed an approximate 70% reduction of our workforce during 2022. We also sold our research facility in India in December 2022 and decided to sublease certain of our leased premises in San Francisco, CA, including all of our office leased space in the Third Street Facility and portions of our office and laboratory space in the Mission Bay Facility.

Pursuant to plans approved by our Board in March 2023, we announced the 2023 Restructuring Plan to further reduce our San Francisco-based workforce by approximately 60%, which was substantially completed by June 30, 2023. In addition, under the 2023 Restructuring Plan, we decided to sublease our remaining office and laboratory space in the Mission Bay Facility, which we had not planned to sublease pursuant to the 2022 Restructuring Plan.

In connection with our 2022 and 2023 Restructuring Plans, restructuring and impairment includes the following (in thousands):


	Year ended December 31,
	2024		2023
Severance and benefit expense	$	—	$	7,885
Impairment of right-of-use assets and property, plant and equipment		8,329		35,328
Loss on sale of other property, plant and equipment, net		—		1,300
Contract termination and other restructuring costs		7,341		7,445
Restructuring and impairment	$	15,670	$	51,958

Employees affected by the reduction in force under the 2022 and 2023 Restructuring Plans are entitled to receive severance payments and certain Company-funded benefits. The restructuring charges are recorded at fair value.

For the 2022 Restructuring Plan, we recognized all expense in 2022 and paid the final liability of $3.3 million in the three months ended March 31, 2023.

For the 2023 Restructuring Plan, we recognized $7.9 million in total expense in 2023 for the 2023 Restructuring Plan and paid the final liability of $0.2 million in the three months ended March 31, 2024. We do not expect to recognize any additional severance and benefits expense for the 2022 and 2023 Restructuring Plans.

The following table provides details regarding the severance and benefit expense for the years ended December 31, 2024 and 2023 pursuant to the 2022 and 2023 Restructuring Plans and a reconciliation of the severance and benefits liability for the year ended December 31, 2024 pursuant to the 2022 and 2023 Restructuring Plans, which we report within accrued expenses on our Consolidated Balance Sheets (in thousands):


	2023 Restructuring Plan			2022 Restructuring Plan			Total
Liability balance as of December 31, 2022	$	—		$	3,299		$	3,299
Expense recognized during the period		7,885			—			7,885
Payments during the period		(7,689	)		(3,299	)		(10,988	)
Liability balance as of December 31, 2023	$	196		$	—		$	196
Expense recognized during the period		—			—			—
Payments during the period		(196	)		—			(196	)
Liability balance as of December 31, 2024	$	—		$	—		$	—

As a result of our 2022 and 2023 Restructuring Plans, we decided to seek a sublease for all of our leased spaces in the Third Street Facility and the Mission Bay Facility. Accordingly, we evaluate each space for impairment when management decides to sublease the respective space and at each reporting date thereafter, as facts and circumstances change. The significant assumptions in our impairment analysis relate to sublease income, including the length of time to enter into a sublease, sublease rental payments, free rent periods, tenant improvement allowances and broker commissions. When available, we use sublease negotiations or agreements, but in the absence of such information, we develop our own subjective estimates based on current real estate trends and market conditions. Accordingly, our estimates are subject to significant risk, and the terms of sublease agreements, if any, and the resulting amount and timing of sublease income, if ever realized, may be materially different than our estimates.

As part of our evaluation of each sublease space, we separately compare the estimated undiscounted sublease income, as described above, for each sublease to the net book value of the related long-term assets, which include right-of-use assets and certain property, plant and equipment, primarily for leasehold improvements (collectively, sublease assets). If such sublease income exceeds the net book value of the sublease assets, we do not record an impairment charge. Otherwise, we record an impairment charge by reducing the net book value of the sublease assets to their estimated fair value, which we determined by discounting the estimated sublease income using the estimated borrowing rate of a market participant subtenant, which has ranged from 8.7% to 6.2% for the periods described below.

We recorded non-cash impairment charges of lease assets pertaining to the 2022 and 2023 Restructuring Plans as follows (in thousands):


	Three-months Ended
Sublease Spaces	March 31, 2023		June 30, 2023		September 30, 2023		December 31, 2023		March 31, 2024		June 30, 2024		Total
Mission Bay Blvd. South	$	—	$	7,061	$	1,467	$	—	$	—	$	—	$	8,528
Third St		—		6,200		—		—		—		4,429		10,629
Total 2022 Restructuring Plan		—		13,261		1,467		—		—		4,429		19,157
Mission Bay Blvd. South - 2023 Restructuring Plan		11,500		—		9,100		—		—		3,900		24,500
Total impairment of lease assets	$	11,500	$	13,261	$	10,567	$	—	$	—	$	8,329	$	43,657

During the three months ended March 31, 2023, we recorded an initial impairment charge of $11.5 million for our remaining office and laboratory leased space in our Mission Bay Facility, when we initially decided to sublease the space under the 2023 Restructuring Plan. As the life sciences lease market has continued to deteriorate in the San Francisco Bay Area, we recorded additional non-cash impairment charges of $9.1 million in the three months ended September 30, 2023, and $3.9 million in the three months ended June 30, 2024, for this space.

During the three months ended June 30, 2023 and September 30, 2023, we recorded additional non-cash impairment charges of $7.1 million and $1.5 million, respectively, for other sublease assets in our Mission Bay Facility that we sought to sublease under the 2022 Restructuring Plan. Due to the worsening office lease market, for the three months ended June 30, 2023 and 2024, we recorded non-cash impairment charges of $6.2 million and $4.4 million, respectively, for our sublease assets at our Third Street Facility.

The following is a reconciliation of the impairment charges we recorded for the full year ended December 31, 2024 and the full year ended December 31, 2023, including the net book values of the sublease assets before the impairment and the fair values of the sublease assets (in thousands):


	Year Ended December 31, 2023
	Operating Lease Right-of-Use Assets			Property, Plant and Equipment			Total
Net book value of impaired sublease assets	$	44,921		$	6,943		$	51,864
Less: Fair value of impaired sublease assets — Level 3 of Fair Value Hierarchy		(14,364	)		(2,172	)		(16,536	)
Book value in excess of fair value	$	30,557		$	4,771		$	35,328


	Year-Ended December 31, 2024
	Operating Lease Right-of-Use Assets			Property, Plant and Equipment			Total
Net book value of impaired sublease assets	$	12,506		$	1,897		$	14,403
Less: Fair value of impaired facilities — Level 3 of Fair Value Hierarchy		(5,219	)		(855	)		(6,074	)
Total impairment of right-of-use assets and property, plant and equipment	$	7,287		$	1,042		$	8,329

We sold excess lab equipment under the 2023 Restructuring Plan. We determined the loss as follows (in thousands):


	Year Ended December 31,
	2024		2023
Proceeds from sales	$	—	$	1,245
Net book value of assets		—		2,545
Total loss on sale of other property, plant and equipment, net	$	—	$	1,300

Contract termination and other restructuring costs include the following (in thousands):


	Year Ended December 31,
	2024		2023
Contract termination costs	$	7,341	$	1,953
Costs for the wind down of the bempegaldesleukin program		—		5,492
Contract termination and other restructuring costs	$	7,341	$	7,445

We have incurred significant contract termination costs in connection with our Restructuring Plans. Because we continue to adjust the liability based on updates to our assumptions at each reporting date, we continue to recognize expense as our estimates change until settlement.

The following is a reconciliation of the contract termination costs, for the years ended December 31, 2024 and 2023. We reported $3.0 million and $2.8 million in accrued expenses as of December 31, 2023 and December 31, 2024, respectively, and reported $2.5 million and $6.3 million, respectively, in other long-term liabilities on our Consolidated Balance Sheets (in thousands):


	Year Ended
	December 31, 2024
Liability balance as of December 31, 2022	$	7,710
Expense recognized during the period		1,919
Payments during the period		(4,087	)
Liability balance as of December 31, 2023		5,542
Expense recognized during the period		7,341
Payments during the period		(3,805	)
Liability balance as of December 31, 2024	$	9,078

In prior periods through March 31, 2022, we reported the clinical trial costs, other third-party costs and employee costs related to the bempegaldesleukin program primarily in research and development expense. Beginning in the second quarter of 2022, following our announcement to terminate the program, we began recording these costs for the wind down of the bempegaldesleukin program in restructuring and impairment. For the year ended December 31, 2024, such amounts are immaterial and are included in research and development expense.