IRONWOOD PHARMACEUTICALS INC Leases Disclosure
6. Leases
The Company’s lease portfolio for the year ended December 31, 2025 included: an office lease for its current headquarters location and other locations, vehicle leases, and leases for computer and office equipment.
The Company’s headquarters office lease and vehicle leases require letters of credit totaling $0.6 million to secure the Company’s obligations under the lease agreements. The letters of credit are maintained under a subfacility of the revolving credit agreement (Note 9).
Lease cost is recognized on a straight-line basis over the lease term. The components of lease cost for the years ended December 31, 2025 and 2024 are as follows (in thousands):
Year Ended | ||||||
December 31, | ||||||
2025 | 2024 | |||||
Operating lease cost | $ | 2,507 | $ | 2,507 | ||
Short-term lease cost | 354 | 1,520 | ||||
Total lease cost | $ | 2,861 | $ | 4,027 | ||
Supplemental information related to leases for the periods reported is as follows:
Year Ended December 31, | ||||||||
2025 | 2024 | |||||||
Cash paid for amounts included in the measurement of lease liabilities (in thousands) | $ | 3,189 | $ | 3,126 | ||||
Weighted-average remaining lease term of operating leases (in years) | 4.4 | 5.4 | ||||||
Weighted-average discount rate of operating leases | 5.8 | % | 5.8 | % | ||||
Summer Street Lease
In June 2019, the Company entered into a non-cancelable operating lease (the “Summer Street Lease”) for approximately 39,000 square feet of office space on the 23rd floor of 100 Summer Street, Boston, Massachusetts, which has been the Company’s headquarters since October 2019. The Summer Street Lease terminates on June 11, 2030 and includes a 2% annual rent escalation, free rent periods, a tenant improvement allowance, and an option to extend the term of the lease for an additional five years at a market base rental rate. The extension option is not included in the lease term used for the measurement of the lease, as it is not reasonably certain to be exercised. The lease expense, inclusive of the escalating rent payments and lease incentives, is recognized on a straight-line basis over the lease term.
As of lease commencement, the Company recorded a right-of-use asset and a lease liability using an incremental borrowing rate of 5.8%. As of December 31, 2025, the balances of the right-of-use asset and operating lease liability were $9.3 million and $13.1 million, respectively. As of December 31, 2024, the balances of the right-of-use asset and operating lease liability were $11.0 million and $15.5 million, respectively.
Lease costs recorded during each of the years ended December 31, 2025 and 2024 were $2.5 million.
Future minimum lease payments under the Summer Street Lease as of December 31, 2025 are as follows (in thousands):
2026 | $ | 3,252 | |
2027 | 3,317 | ||
2028 | 3,384 | ||
2029 | 3,451 | ||
2030 |
| 1,450 | |
Total future minimum lease payments | 14,854 | ||
Less: present value adjustment | (1,732) | ||
Operating lease liabilities | 13,122 | ||
Less: current portion of operating lease liabilities | (3,252) | ||
Operating lease liabilities, net of current portion | $ | 9,870 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 17, 2021 | |
| 2019 | Feb 13, 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.