Our headquarters are located in Redwood City, California, where we occupy approximately 77,300 square feet of office and laboratory space in multiple buildings within the same business park operated by Metropolitan Life Insurance Company (“MetLife”). Our lease agreement with MetLife (“RWC Lease”) includes approximately 28,200 square feet of space located at 200 and 220 Penobscot Drive, Redwood City, California (the “200/220 Penobscot Space”) and approximately 37,900 square feet of space located at 400 Penobscot Drive, Redwood City, California (the “400 Penobscot Space”) (the 200/220 Penobscot Space and the 400 Penobscot Space are collectively referred to as the “Penobscot Space”), and approximately 11,200 square feet of space located at 501 Chesapeake Drive, Redwood City, California (the “Chesapeake Space”).

We entered into the initial lease with MetLife for our facilities in Redwood City in 2003 and the RWC Lease has been amended multiple times since then to adjust the leased space and terms of the Lease. In December 2024, we entered into a Ninth Amendment to the Lease (the “Ninth Amendment”) with MetLife with respect to the Penobscot Space and the Chesapeake Space to extend the term of the Lease for additional periods. Pursuant to the Ninth Amendment, the term of the lease of for both the Penobscot Space and the Chesapeake Space has been extended through August 2032. We have one (1) option to extend the term of the lease for the Penobscot Space for five (5) years, and one (1) separate option to extend the term of the lease for the Chesapeake Space for five (5) years. The Ninth Amendment provided a net tenant improvement allowance of $3.0 million.

As a result of the lease extension, the Company remeasured the lease liability and adjusted the corresponding right-of-use asset based on the updated lease payments. The impact of this remeasurement, which included a non-cash increase in both the lease liability and right-of-use asset, was recorded as of December 31, 2024.


	Right-of-use Assets - Operating Lease, net
Right-of-use assets - Operating leases, net, at January 1, 2024	$	13,137
Amortization of right-of-use assets	(3,184)
Addition due to lease modification	18,747


Right-of-use assets - Operating leases, net, at December 31, 2024	$	28,700


	Lease Obligations - Operating Leases
Lease obligations - Operating leases, net, at January 1, 2024	$	16,024
Lease payments	(4,727)
Interest accretion	946
Addition due to lease modification	18,747
Lease obligations - Operating leases, net, at December 31, 2024	$	30,990

In July 2023, we announced our plan to consolidate operations from our previous San Carlos facility to our headquarters in Redwood City. On September 1, 2023, the Company entered into an Assignment and Assumption of Lease (the “Assignment Agreement”) with Vaxcyte, Inc. (“Vaxcyte”) to assign to Vaxcyte all of the Company’s right, title and interest in, under and to the San Carlos facility and the related Lease Agreement, dated as of January 29, 2021. On September 6, 2023, the Company, Vaxcyte and ARE-San Francisco No. 63, LLC (“ARE”) entered into a Consent to Assignment and First Amendment pursuant to which ARE consented to the Assignment Agreement and the assignment by the Company and the assumption by Vaxcyte of the Company’s interest as tenant in the lease. The effective date of the assignment was October 1, 2023.

As a result of the Assignment Agreement, the Company remeasured the lease obligation for the San Carlos facility to its present value of $3.1 million and wrote off the remaining lease liability of $19.6 million and the corresponding right of use asset balance. Simultaneously, the Company determined that indicators of impairment existed because the lease assignment impacts the utilization of the related right of use assets and leasehold improvements in the San Carlos facility, and therefore performed a recoverability test by estimating future undiscounted net cash flows expected to be generated from the use of these assets. As there were no substantial future cash inflows associated with these assets, the carrying values of these assets were deemed unrecoverable. As a result, during the third quarter of 2023, the Company recognized a non-cash impairment charge of $7.7 million, of which $4.7 million was related to leasehold improvements and $3.0 million for the right of use assets, presented within the asset impairment and other charges line item in the consolidated statements of operations in the year ended December 31, 2023.

As part of the plan, the Company entered into agreements to sell certain laboratory equipment previously located in the San Carlos facility through an asset auction and as part of the lease assignment of the San Carlos facility to Vaxcyte. These certain items of laboratory equipment met the assets held for sale criteria and were sold during the fourth quarter of 2023. Using a fair value estimate based on Level 3 inputs in the fair value hierarchy, the Company determined that the carrying value of these assets exceeds fair value less costs to sell, which resulted in a write-down of $1.5 million, presented within the asset impairment and other charges line item in the consolidated statements of operations in the year ended December 31, 2023.

Pursuant to the terms of the RWC Lease, we exercised our right to deliver a letter of credit in lieu of a security deposit. The letter of credit is collateralized by deposit balances held by the bank in the amount of $1.1 million as of December 31, 2024 and 2023, and are recorded as non-current restricted cash on the consolidated balance sheets.

We are required to restore certain areas of the Redwood City facility that we are renting to its original form. We are expensing the asset retirement obligation over the term of the Redwood City lease. We review the estimated obligation each reporting period and make adjustments if our estimates change. We recorded asset retirement obligations of $0.3 million as of December 31, 2024 and 2023, which are included in other liabilities on the consolidated balance sheets. Accretion expense related to our asset retirement obligations was nominal in the years ended December 31, 2024 and 2023.

Lease costs amounts included in measurement of lease obligations and other information related to non-cancellable operating leases and finance leases were as follows (in thousands):


	Year Ended December 31,
	2024		2023		2022
Finance lease costs	$	—	$	—	$	18
Operating lease cost	4,130		6,310		7,321
Short-term lease costs(1)	—		—		40
Total lease cost(2)	$	4,130	$	6,310	$	7,379

Amounts included in the measurement of lease obligations (in thousands):


	Year Ended December 31,
	2024		2023		2022
Cash paid:
Operating cash flows from operating leases	$	4,727	$	9,897	$	6,506



					Operating Lease
Other information:
Weighted-average remaining lease term (in years)					7.6
Weighted-average discount rate					7.0		%


Years ending December 31,	Operating Leases
2025	$	4,868
2026	5,014
2027	4,053
2028	5,400
2029	5,365
Thereafter	15,695
Total minimum lease payments	40,395
Less: imputed interest	9,405
Lease obligations	$	30,990

Reconciliation of operating lease liabilities as shown within the consolidated balance sheets:
Current portion of lease obligations - Operating leases	$	2,827
Long-term lease obligations - Operating leases	28,163
Total operating lease liabilities	$	30,990

We enter into supply and service arrangements in the normal course of business. Supply arrangements are primarily for fixed-price manufacture and supply. Service agreements are primarily for the development of manufacturing processes and certain studies. Commitments under service agreements are subject to cancellation at our discretion which may require payment of certain cancellation fees. The timing of completion of service arrangements is subject to variability in estimates of the time required to complete the work. As of December 31, 2024, the future minimum payments that we expect to pay, including potential obligations under services agreements subject to risk of cancellation by us, is minimal.

On June 30, 2017, we entered into a credit facility (the “Credit Facility”) with Western Alliance Bank consisting of term loans (“Term Debt”) up to $10.0 million, and advances under a revolving line of credit of up to $5.0 million with an accounts receivable borrowing base of 80% of eligible accounts receivable. The right to take draws on the Term Debt expired on December 31, 2022. In March 2023, we terminated the Credit Facility with Western Alliance Bank.

We may be involved in legal actions in the ordinary course of business, including inquiries and proceedings concerning business practices and intellectual property infringement, employee relations and other claims. We will recognize a loss contingency in the consolidated financial statements when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. We will disclose any loss contingencies that do not meet both conditions if there is a reasonable possibility that a material loss may have been incurred. Gain contingencies are not recorded until they are realized.

We are required to recognize a liability for the fair value of any obligations we assume upon the issuance of a guarantee. We have certain agreements with licensors, licensees and collaborators that contain indemnification provisions. In such provisions, we typically agree to indemnify the licensor, licensee and collaborator against certain types of third party claims. The maximum amount of the indemnifications is not limited. We accrue for known indemnification issues when a loss is probable and can be reasonably estimated. There were no accruals for expenses related to indemnification issues for any periods presented.