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Leases

12 Months Ended

Dec. 31, 2020

7. Leases

The Company has multiple lease agreements for office, laboratory and manufacturing space with varying contractual terms set to expire between 2021 and 2025. Typically, base rent payments commence at the beginning of each lease term and continue through the term of the respective lease. Additionality, base rent is also subject to increases over the term of the lease. The Company has two significant leases for office and laboratory space located in Cambridge, Massachusetts that are summarized below. Prior to January 1, 2019, the Company accounted for leases as operating leases under ASC 840, Leases (“ASC 840”) and recognized straight-line rent expense over the remaining non-cancellable lease terms. As part of its adoption of ASC 842, the Company elected to apply the package of practical expedients which, among other things, allowed the Company to carry forward its existing operating lease classification under ASC 840. Additionally, the Company recorded right-of-use assets and lease liabilities for these operating leases on the effective date.

The Company’s leases are included on its consolidated balance sheet as follows (in thousands):


	As of
	December 31,		January 1,
	2020		2019
Right-of-use assets	$	25,128	$	19,461
Operating lease liabilities, current	$	(6,811)	$	(3,848)
Operating lease liabilities, noncurrent	$	(19,324)	$	(15,909)

During the years ended December 31, 2020 and 2019, the Company recorded $10.5 million and $5.6 million related to operating lease costs and $1.1 million and $1.0 million related to variable costs associated with the Company’s operating leases under ASC 842, respectively. Under ASC 840, the Company incurred rent expense of approximately $1.8 million during the year ended December 31, 2018.

Maturities of the Company’s lease liabilities in accordance with ASC 842 as of December 31, 2020 were as follows (in thousands):


		Year Ended
Maturity of lease liabilities:		December 31, 2020
2021	$	8,778
2022	$	9,342
2023	$	7,807
2024	$	3,695
2025	$	474
Thereafter	$	110
Total minimum lease payments	$	30,206
Less: imputed interest	$	(4,071)
Total operating lease liabilities at December 31, 2020	$	26,135

The weighted-average remaining lease term is 3.4 years and the weighted-average discount rate is 8.8%.

Hurley Street

In 2016, the Company entered into a lease agreement for 59,783 square feet of office and laboratory space located on Hurley Street in Cambridge, Massachusetts. The term of the lease began on October 1, 2016 and continues until October 2023. In connection with the lease and as a security deposit, the Company deposited with the landlord a letter of credit in the amount of approximately $1.6 million. Subject to the terms of the lease and certain reduction requirements specified therein, the $1.6 million security deposit may decrease over time. The letter of credit, which is collateralized by the Company, is recorded in restricted cash and other non-current assets in the accompanying consolidated balance sheets as of December 31, 2020 and December 31, 2019.

The Company has the option to extend the lease for an additional five-year term at market-based rates. The base rent payments commenced in November 2016 and continue through the term of the lease and are subject to increases over the term of the lease.

One Main Street

In December 2019, the Company entered into a lease agreement for 31,571 square feet of office space located on One Main Street in Cambridge, Massachusetts. The term of the lease began on January 15, 2020 and continues until January 2025. In connection with the lease and as a security deposit, the Company issued a letter of credit in the amount of approximately $0.8 million in January 2020.

The Company has the option to extend the lease for an additional five-year term at market-based rates. The base rent payments commenced in January 2020 and continue through the term of the lease and are subject to increases over

the term of the lease.