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Lease Liabilities

9 Months Ended

Sep. 30, 2019

Note 7—Lease Liabilities

We have operating leases related to our office and laboratory space. The initial term of the leases is through November 2027 and we have two options to extend the lease term, each by five years. We have finance leases for certain laboratory and office equipment that have lease terms expiring through December 2023.

As described further in Note 1 – “Organization and Significant Accounting Policies”, on January 1, 2019, we adopted ASU 2016-02, Leases, (Topic 842) using a modified retrospective approach versus recasting the prior periods presented. The lease-related assets and liabilities recorded on the balance sheet are as follows. Prior year interim financial statements were not recast under the new standard and, therefore, those amounts are not presented below.


	Classification on the Balance Sheet	September 30, 2019
Assets		(In thousands)
Operating lease assets	Right of use assets	$	21,302
Finance lease assets	Property and equipment, net		2,774
Total lease assets		$	24,076

Liabilities
Current:
Operating leases	Current portion of lease liabilities	$	1,927
Finance lease	Current portion of lease liabilities		1,128
Non-current:
Operating	Lease liability, non-current		27,242
Finance	Lease liability, non-current		1,412
Total lease liabilities		$	31,709

Weighted-average remaining lease term
Operating leases			8.1 years
Finance leases			2.4 years
Weighted-average discount rate
Operating leases			12.85	%
Finance leases			12.26	%

The components of total lease costs are as follows:


	Nine Months Ended
	September 30, 2019
	(In thousands)
Lease cost
Operating lease cost	$	3,121
Finance lease cost:
Amortization		984
Interest		248
Short-term lease cost		275
Variable lease cost		1,424
Sublease income		(673)
Total lease cost	$	5,379

The supplemental cash flow information related to leases during 2019 is as follows:


Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows used for operating leases	$	4,962
Operating cash flows used for finance leases	$	248
Financing cash flows used for finance leases	$	813

The future maturities of our lease liabilities as of September 30, 2019 are as follows:


	Operating		Finance
	Leases		Leases
	(In thousands)
2019	$	1,358	$	342
2020		5,755		1,248
2021		5,826		889
2022		5,898		296
2023		5,972		95
Thereafter		23,102		—
Total undiscounted lease payments		47,911		2,870
Less interest		18,742		330
Lease liabilities	$	29,169	$	2,540

In September 2019, we recognized a new lease component associated with additional office space in our headquarters building and recorded additional lease liability of $3.7 million. In October 2019, we leased additional office and laboratory space in our headquarters building and recorded the associated lease liability of $3.9 million.