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Leases | 9 Months Ended
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Sep. 30, 2023
Leases [Abstract] |
Leases | Leases The Company leases certain office space, laboratory space, and equipment. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Operating Leases In September 2017, the Company executed an arrangement with Cell Therapy Catapult Limited to lease a manufacturing suite at the Cell and Gene Therapy Catapult manufacturing center in Stevenage, United Kingdom for a term through May 2021, at which time the Company had the option to renew or terminate the lease. The lease had a six-month rent-free period. In December 2018, the Company executed an additional lease arrangement for additional manufacturing space for a term through September 2023, at which time the Company has the option to renew or terminate the lease. In addition, in May 2020, the Company executed an arrangement with Cell Therapy Catapult Limited to lease a manufacturing suite at the Cell and Gene Therapy Catapult manufacturing center in Stevenage, United Kingdom for a term through April 2024. In July 2022, the Company and Cell Therapy Catapult Limited mutually agreed: (i) to extend the lease term of a manufacturing suite leased by the Company from April 2024 to February 2025, and (ii) to reduce the lease term of a different manufacturing suite leased by the Company from July 2024 to June 2023. In March 2023, the Company and Cell Therapy Catapult Limited mutually agreed: (i) to terminate the lease relating to the leased manufacturing suite which originally had a lease term until February 2025, (ii) to extend the lease term of one of the remaining manufacturing suites from June 2023 to August 2024, and (iii) to extend the lease term of a third manufacturing suite leased by the Company from September 2023 to August 2024. The Company recognized a lease termination loss of $0.1 million for the nine months ended September 30, 2023 related to the manufacturing suite terminated and exited on March 31, 2023. In addition, during the nine months ended September 30, 2023, the Company recognized a loss on disposal on leasehold improvements of $3.8 million arising from the manufacturing suite terminated and exited on March 31, 2023. In October 2018, the Company executed an agreement to sublease office space in Rockville, Maryland for a term through October 2021. The Company then terminated the sublease in February 2020 and immediately entered into a five-year lease for the same space with the landlord. The lease related to this facility is classified as an operating lease. In January 2019, the Company executed a lease agreement with Whitewood Media Village GP Limited and Whitewood Media Village Nominee Limited to lease the fifth floor of MediaWorks including laboratory space. In August 2021, MediaWorks became the Company's main corporate headquarters. The lease term is nine years and eleven months with an eighteen-month rent free period at the beginning of the lease term. The Company has the option to terminate the lease in November 2026. In February 2019, the Company entered into a fifteen-year lease for three manufacturing units in Enfield, United Kingdom with option to terminate the lease in February 2029. In addition to base rent, the Company is obligated to pay its proportionate share of building operating expenses and real estate taxes in excess of base year amounts. In March 2021, one of the units was split into two separate units and the Company surrendered one of the units. Upon the surrender, the Company recognized a $0.1 million gain in other (expense) income after recognizing a termination fee of $0.2 million. The Company has no further obligations for the surrendered unit and the right of use asset and lease liability which were recorded for this unit have been written off in the relevant period. The Company subleased two of the three units to third parties with lease terms ranging from October, 2021 to February 2029 and October 2026, respectively. The Company is actively seeking to sublease or assign the lease arrangements relating to the final unit. The Company completed an asset impairment analysis of the right-of-use lease concluding the undiscounted cash flows exceeded the carrying value as of September 30, 2023. In September 2021, the Company entered into an arrangement for lease with the landlord, Forge Life Sciences Nominee, an affiliate of the Reef Group, for the design, construction and lease of a new 70,000 square foot commercial manufacturing facility in Stevenage, United Kingdom. Under this arrangement, the landlord leased the facility, which will be called The Nucleus, to the Company on agreed terms, upon satisfaction of certain conditions and completion of construction. Since November 2022, the landlord has handed over various portions of the facility to the Company until July 31, 2023 when the landlord and the Company accepted practical completion of The Nucleus. The Company is required to pay a pro-rated license fee for each portion of the facility which the Company has been granted access until the execution of a lease agreement. The Company cumulatively contributed $7.5 million as part as of landlord works and tenant contributions towards the lease as of September 30, 2023 resulting in these payments being taken into account in the determination of the right of use asset for this facility. On July 31, 2023, the landlord and its contractors accepted practical completion of The Nucleus. On September 19, 2023, the Company entered into a 20 year lease agreement with the landlord for The Nucleus. The Company made fit-out costs in other areas of the building and will be required to be removed at the end of the lease term. As a result, as of September 30, 2023, the Company has recognized an estimated Asset Retirement Obligation ("ARO") amounting to $0.1 million. The following table contains a summary of the lease costs recognized under Accounting Standards Update, "ASU" 2016-02 and other information pertaining to the Company’s operating leases for three and nine months ended September 30, 2023 and 2022 (in thousands):
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
Lease costs |  | 2023 |  | 2022 |  | 2023 |  | 2022
Operating lease costs |  | $ | 2,061 |  |  | $ | 1,103 |  |  | $ | 5,235 |  |  | $ | 3,542 |
Variable costs |  | 573 |  |  | 268 |  |  | 657 |  |  | 720 |
Short term lease costs |  | 227 |  |  | 119 |  |  | 451 |  |  | 231 |
Total lease costs |  | $ | 2,861 |  |  | $ | 1,490 |  |  | $ | 6,343 |  |  | $ | 4,493 |
|  |  |  | Nine Months Ended September 30,
Other information |  |  |  | 2023 |  | 2022
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash outflows from operating leases (in thousands) |  | $ | 7,817 |  | $ | 3,740
Weighted-average remaining lease term - operating leases (in years) |  | 15.9 years |  | 5.1 years
Weighted-average discount rate - operating leases |  | 7.44 | % |  | 7.18 | %
Future fixed payments for non-cancellable operating leases in effect as of September 30, 2023 are payable as follows (in thousands):
Remainder of 2023 |  |  |  | $ | 1,975 |
2024 |  |  |  | 8,062 |
2025 |  |  |  | 6,625 |
2026 |  |  |  | 6,396 |
2027 |  |  |  | 6,255 |
Thereafter |  |  |  | 60,424 |
Total lease payments |  |  |  | 89,737 |
Less: imputed interest |  |  |  | (37,279) |
Present value of lease liabilities |  |  |  | $ | 52,458 |
Sublease Agreements In October 2021, the Company entered into two separate sublease agreements with two third parties for two manufacturing spaces in Enfield which are currently leased by the Company. The annual lease payments to be received for each of the subleased units are £97,000 and £109,000, over lease terms from October 2021 to February 2029 and October 2021 to October 2026, respectively. In October 2021, the Company received $0.1 million in rental deposits, arising from the sub-lease agreements which have been classified as restricted cash as of September 30, 2023 and December 31, 2022, respectively. Both subleases have been classified as operating leases. The Company recognized the sublease payments on a straight-line basis from the commencement of the sublease agreements. The following table shows the sublease rental income for the three and nine months ended September 30, 2023 and 2022 (in thousands):
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
Sublease rental income |  | 2023 |  | 2022 |  | 2023 |  | 2022
Sublease rental income (included in other income (expenses), net) |  | $ | 61 |  |  | $ | 57 |  |  | $ | 181 |  |  | $ | 183 |
Total sublease rental income |  | $ | 61 |  |  | $ | 57 |  |  | $ | 181 |  |  | $ | 183 |
Future fixed receipts for non-cancellable operating subleases in effect as of September 30, 2023 are receivable as follows (in thousands):
Remainder of 2023 |  | $ | 65
2024 |  | $ | 261
2025 |  | $ | 261
2026 |  | $ | 203
2027 |  | $ | 123
Thereafter |  | $ | 106
Total lease payments receivable |  | $ | 1,019

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=77888251 + Details
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