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Commitments and Contingencies | 9 Months Ended
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Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | 8. Commitments and Contingencies Lease Agreements The Company has various operating lease arrangements for office and laboratory spaces located in California, Oregon, Missouri and Switzerland with contractual lease periods expiring between 2022 and 2033. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain lease agreements also provide the Company with the option to renew for additional periods ranging from one to five years. These renewal options are not considered in the remaining lease term unless it is reasonably certain that the Company will exercise such options. Throughout the term of the lease agreements, the Company is responsible for paying certain operating costs, in addition to rent, such as common area maintenance, taxes, utilities and insurance. These additional charges are considered variable lease costs and are recognized in the period in which the costs are incurred. The maturity of the Company’s operating lease liabilities as of September 30, 2022 was as follows (in thousands):
|  | Amounts |
2022 (excluding the nine months ended September 30, 2022) |  | $ | 4,846 |
2023 |  |  | 19,408 |
2024 |  |  | 18,567 |
2025 |  |  | 16,259 |
2026 |  |  | 16,703 |
Thereafter |  |  | 103,855 |
Total lease payments |  |  | 179,638 |
Less: imputed interest |  |  | (40,108 | )
Less: net tenant improvement allowance yet to be received |  |  | (26,670 | )
Present value of operating lease liabilities |  | $ | 112,860 |
The following amounts were recorded in the unaudited condensed consolidated balance sheets for the periods ended:
|  | September 30, 2022 |  |  | December 31, 2021 |
|  | (in thousands) |
Operating Leases |  |  |  |  |  |
Prepaid expenses and other current assets (1) |  | $ | 18,197 |  |  | $ | 49,536 |
Operating right-of-use assets |  |  | 84,716 |  |  |  | 87,220 |
Accrued and other liabilities |  | $ | 4,115 |  |  | $ | 3,927 |
Operating lease liabilities, noncurrent |  |  | 126,942 |  |  |  | 133,561 |
Total operating lease liabilities |  | $ | 131,057 |  |  | $ | 137,488 |
(1) Current portion of lease liabilities recorded in prepaid expenses and other current assets for which the lease incentives to be received exceed the minimum lease payments to be paid over the next 12 months. Manufacturing and Supply Letter Agreements In April 2020, the Company and Samsung Biologics Co., Ltd. (“Samsung”) entered into a binding letter agreement (the “Samsung Letter Agreement”), under which Samsung performs development and manufacturing services for the Company’s SARS-CoV-2 antibody program. In August 2020, the Company, GlaxoSmithKline Trading Services Limited (“GSKTSL”) and Samsung entered into an Assignment and Novation Agreement effective as of July 31, 2020, under which the Company assigned and transferred to GSKTSL all of the Company’s right, title, and interest in, to and under the Samsung Letter Agreement, and GSKTSL became the Company’s successor in interest in and to all of the Company’s rights, duties, and obligations in, to and under the Samsung Letter Agreement. In August 2020, GSKTSL entered into a Master Services Agreement with Samsung (the “Samsung MSA”) in connection with the performance of the obligations of the Company and GSK under the 2020 GSK Agreement. In accordance with the terms of the 2020 GSK Agreement, the Company continues to be responsible for 72.5% of the costs under the Samsung MSA, and GSK bears 27.5% of such costs under the Samsung MSA, subject to certain conditions and exceptions. The Company’s commitment has been substantially recognized on its balance sheet as part of the profit-sharing amount constrained as of September 30, 2022, which is part of accrued and other liabilities, as discussed in Note 6—Collaboration and License Agreements. In September 2022, the Company and a third-party contract development manufacturing organization (the “CDMO”) entered into a letter agreement under which the Company agreed to pay $7.2 million to the CDMO to reserve manufacturing capacity for VIR-2482 (“Reservation Fee”). The Reservation Fee will be creditable against a future manufacturing charge if the Company and the CDMO subsequently execute a master service agreement (“MSA”) and scope of work (“SOW”). In addition, the Company is required to pre-pay $5.0 million for raw materials that the CDMO will procure to enable manufacturing of VIR-2482. The Reservation Fee and the prepayment of $5.0 million are not refundable, even if the Company and the CDMO fail to execute the MSA and SOW. Indemnification In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Under such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. In addition, the Company has entered into indemnification agreements with its directors and certain officers that may require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. To date, no demands have been made upon the Company to provide indemnification under these agreements, and thus, there are no indemnification claims that the Company is aware of that could have a material effect on the unaudited condensed consolidated balance sheets, unaudited condensed consolidated statements of operations, or unaudited condensed consolidated statements of cash flows.

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