INSMED IncINSM
INSMED Inc Leases Disclosure
9. Leases
The Company's lease portfolio consists primarily of office and laboratory space, manufacturing facilities, research equipment and fleet vehicles. All of the Company's leases are classified as operating leases, except for the Company's leases of its corporate headquarters and a research facility in San Diego, which are classified as finance leases. The terms of the Company's lease agreements that have commenced range from less than one year to ten years, ten months. In its assessment of the term of each such lease, the Company has not included any options to extend or terminate the lease due to the absence of economic incentives in its lease agreements. Leases that qualify for treatment as a short-term lease are expensed as incurred. These short-term leases are not material to the Company's financial position. Furthermore, the Company does not separate lease and non-lease components for all classes of underlying assets. The Company's leases do not contain residual value guarantees and it does not sublease any of its leased assets.
The Company outsources its manufacturing operations to CMOs. Upon review of the agreements with its CMOs, the Company determined that these contracts contain embedded leases for dedicated manufacturing facilities. The Company obtains substantially all of the economic benefits from the use of the manufacturing facilities, the Company has the right to direct how and for what purpose the facility is used throughout the period of use, and the supplier does not have the right to change the operating instructions of the facility. The operating lease right-of-use assets and corresponding lease liabilities associated with the manufacturing facilities is the sum of the minimum guarantees over the life of the production contracts.
The Company records variable consideration for variable lease payments in excess of fixed fees or minimum guarantees. Variable costs related to CMO manufacturing agreements are direct costs related to the manufacturing of ARIKAYCE and are capitalized within inventory in the Company's consolidated balance sheet, while the variable costs related to other leasing arrangements, not related to the manufacturing of ARIKAYCE, have been classified within operating expenses in the Company's consolidated statements of comprehensive loss. The following table below summarizes the Company's total lease costs included in its consolidated financial statements, as well as other required quantitative disclosures (in thousands):
| As of December 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| Finance lease cost: | |||||||||||||||||
| Amortization of right-of-use assets | $ | 2,712 | $ | 2,712 | |||||||||||||
| Interest on lease liabilities | 2,005 | 2,230 | |||||||||||||||
| Total finance lease cost | $ | 4,717 | $ | 4,942 | |||||||||||||
| Operating lease cost | 10,880 | 10,415 | |||||||||||||||
| Variable lease cost | 24,764 | 25,818 | |||||||||||||||
| Total lease cost | $ | 40,361 | $ | 41,175 | |||||||||||||
| Other information: | |||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities | |||||||||||||||||
| Operating cash flows for finance leases | $ | 2,006 | $ | 2,230 | |||||||||||||
| Operating cash flows for operating leases | $ | 11,040 | $ | 10,389 | |||||||||||||
| Financing cash flows for finance leases | $ | 2,961 | $ | 2,610 | |||||||||||||
| Right-of-use assets obtained in exchange for new finance lease liabilities | $ | — | $ | — | |||||||||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 12,762 | $ | 8,995 | |||||||||||||
| Weighted average remaining lease term - finance leases | 5.7 years | 6.6 years | |||||||||||||||
| Weighted average remaining lease term - operating leases | 2.4 years | 2.9 years | |||||||||||||||
| Weighted average discount rate - finance leases | 7.8 | % | 7.9 | % | |||||||||||||
| Weighted average discount rate - operating leases | 8.9 | % | 9.0 | % | |||||||||||||
The following table below presents the maturity of lease liabilities on an annual basis for the remaining years of the Company's commenced lease agreements (in thousands):
| Year Ending December 31, | Finance Leases | Operating Leases | |||||||||
| 2026 | $ | 5,097 | $ | 11,058 | |||||||
| 2027 | 5,228 | 9,376 | |||||||||
| 2028 | 5,361 | 2,565 | |||||||||
| 2029 | 5,496 | 954 | |||||||||
| 2030 | 4,413 | — | |||||||||
| Thereafter | 4,248 | — | |||||||||
| Total | 29,843 | 23,953 | |||||||||
Less: present value discount | 5,779 | 2,310 | |||||||||
| Present value of lease liabilities | $ | 24,064 | $ | 21,643 | |||||||
Balance Sheet Classification at December 31, 2025: | |||||||||||
| Current lease liabilities | $ | 3,345 | $ | 9,469 | |||||||
| Long-term lease liabilities | 20,719 | 12,174 | |||||||||
| Total lease liabilities | $ | 24,064 | $ | 21,643 | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 17, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 25, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.