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Leases | 6 Months Ended
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Jun. 30, 2024
Leases [Abstract] |
Leases | 7. Leases In July 2023, the Company entered into a Sublease with Neurocrine Biosciences, Inc. for office space in San Diego, California which became the Company’s headquarters in August 2023. Under the terms of the Sublease, the Company leased the second floor of the building, including certain furniture and fixtures, located at 12790 El Camino Real in San Diego, California consisting of approximately 35,016 rentable square feet of office space. The term of this non-cancellable lease commenced on July 21, 2023, and will end on July 31, 2031. The Company is subleasing the premises for approximately $2.0 million per year with 3% annual increases in each subsequent year. The Company subleased the premises for approximately $1.0 million in the first year, which included the rent abatement for the second through the seventh full calendar months of the lease term. In lieu of a cash security deposit under the Sublease, Bank of America issued on the Company’s behalf an irrevocable standby letter of credit in the amount of $0.5 million. The letter of credit is secured by a deposit of $0.5 million with the same bank and included in restricted cash on the Company’s condensed consolidated balance sheet at June 30, 2024. The Company used its incremental borrowing rate available at commencement date in determining the present value of lease payments and recognized an operating lease liability of $11.0 million and a corresponding operating lease right-of-use (“ROU”) asset of approximately $11.0 million on the condensed consolidated balance sheet during the year ended December 31, 2023. In March 2021, the Company signed a three-year operating lease for a multi-function ventilated research laboratory and office space in Ghent, Belgium. The non-cancellable lease expired on June 30, 2024. The Company exercised its option to extend the lease term through June 30, 2026, resulting in an immaterial operating lease liability and corresponding operating lease ROU asset. Lease Terminations In February 2024, the Company entered into two separate lease termination agreements related to non-cancellable leases entered into in February 2021, September 2021 and May 2022, each expiring on June 30, 2026. These leases are for office facilities in Encinitas, California and the associated furniture and fixtures (the “Encinitas Asset Group”). The Company wrote off the ROU assets and operating lease liabilities associated with the Encinitas Asset Group of $0.8 million and $0.9 million, respectively, during the first quarter of 2024. The Company’s leases have remaining terms ranging between three months to eight years. The leases contain various termination options. The Company’s leases do not contain any residual value guarantees or material restrictive covenants. The weighted average remaining lease term and discount rate for the Company’s operating leases were approximately 7.1 years and 10.1%, respectively, at June 30, 2024. During the three and six months ended June 30, 2024, the Company recognized operating lease costs of $0.6 million and $1.2 million, respectively, and variable lease costs of $0 and $0.2 million, respectively. During the three and six months ended June 30, 2023, the Company recognized operating lease costs of $0.1 million and $0.3 million, respectively, and an immaterial amount of variable lease costs in both periods. In addition, the Company made cash payments of $1.0 million and $0.3 million for operating leases during the six months ended June 30, 2024 and 2023, respectively, which are included in cash flows from operating activities in the condensed consolidated statements of cash flows. Future minimum payments under non-cancellable leases as of June 30, 2024 were as follows (in thousands):
Years ending December 31, |  |  |
2024 (6 months remaining) |  | $ | 1,018 |
2025 |  |  | 2,073 |
2026 |  |  | 2,135 |
2027 |  |  | 2,199 |
2028 |  |  | 2,265 |
Thereafter |  |  | 6,162 |
Total future minimum lease payments |  |  | 15,852 |
Less: imputed interest |  |  | (4,587 | )
Present value of lease liabilities |  |  | 11,265 |
Less: lease liabilities, current |  |  | (971 | )
Lease liabilities, net of current portion |  | $ | 10,294 |

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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 -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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