PUMA BIOTECHNOLOGY, INC. Leases Disclosure

Note 6—Leases

 

In December 2011, the Company entered into a non-cancelable operating lease for office space in Los Angeles, California, which was subsequently amended in November 2012, December 2013, March 2014, July 2015 and  December 2017. The initial term of the lease was for seven years and commenced on December 10, 2011. As amended, the Company rents approximately 65,656 square feet. The term of the lease runs until March 2026. In July 2025, the Company executed an additional amendment to its office space in Los Angeles, California to surrender certain suites effective March 31, 2026 and extend the lease term for the remaining 26,700 rentable square feet on the 17th floor for an additional five years and five months through August 31, 2031. Base rent escalates annually and is abated from April 2026 through August 2026. Lease payments also include variable charges for the Company’s proportionate share of building operating expenses and real estate taxes based on a 2026 base year. The Company has the option to renew such lease for an additional five year term. Management determined that the renewal option is not reasonably certain to occur. The Company accounted for this amendment as a lease modification. There was no change in the lease classification as a result of this modification and the Company continues to recognize such a lease as an operating lease. The Company remeasured its ROU assets and operating lease liabilities using an updated incremental borrowing rate. The change in ROU assets and operating lease liabilities related to this lease modification amounted to $4.1 million.

 

In June 2012, the Company entered into a long-term lease agreement for office space in South San Francisco, California, which was subsequently amended in May 2014 and July 2015. As amended, the Company rents approximately 29,470 square feet. The term of this lease runs until March 2026, with the option to extend for an additional five-year term, and rents payable by the Company increase approximately 3% per year. The Company provided the landlord an automatically renewable stand-by letter of credit in the amount of $1.1 million. The stand-by letter of credit is collateralized by a high-yield savings account, which is classified as restricted cash, current on the accompanying consolidated balance sheets.

 

The Company also leases copier equipment for use in the office spaces. Components of copier lease expense include both fixed and variable lease expenses. 

 

Total rent expense for the years ended December 31, 2025, 2024 and 2023 was approximately $4.5 million, $4.9 million and $4.9 million, respectively. For purposes of determining straight-line rent expense, the lease term is calculated from the date the Company first takes possession of the facility, including any periods of free rent and any renewal option periods that the Company is reasonably certain of exercising. The Company’s office leases generally have contractually specified minimum rent and annual rent increases that are included in the measurement of the ROU asset and related lease liability. Additionally, under these lease arrangements, the Company may be required to pay directly, or reimburse the lessors, for real estate taxes, insurance, utilities, maintenance and other operating costs. Such amounts are generally variable and therefore not included in the measurement of the ROU asset and related lease liability but are instead recognized as variable lease expense in selling, general and administrative costs in the consolidated statements of operations when they are incurred. Variable lease payments not included in the lease liability were $0.5 million and $0.7 million for the years ended December 31, 2025 and 2024, respectively.

 

The future minimum lease payments under ASC 842 as of December 31, 2025 were as follows (in thousands):

 

		Amount
2026			1,913
2027			1,248
2028			1,292
2029			1,338
2030			1,385
2031			951
Total minimum lease payments		$	8,127
Less: imputed interest			(2,104	)
Total lease liabilities		$	6,023

 

In February 2019, the Company entered into a long-term sublease agreement for 12,429 square feet of the office space in Los Angeles, California. The term of the lease ran until March 2026 and rent amounts payable to the Company increased approximately 3% per year. The February 2019 sublease was terminated in December 2024. As a result, the Company received $0.7 million, which approximated the sublease rental payments on the remaining lease term. In  March 2025, the Company signed another sublease agreement for the 12,429 square feet of office space with a sublease commencement date of  April 1, 2025.

 

In August 2023, the Company entered into a long-term sublease agreement for 13,916 square feet of the office space in Los Angeles, California, which commenced in November 2023. The term of the lease runs until March 2026 and the rent amounts payable to the Company increase approximately 3% per year. The Company has recorded sublease income in other income (expenses) in the condensed consolidated statements of operations since November 2023. 

 

The Company recorded operating sublease income of $0.7 million and $1.4 million for the years ended  December 31, 2025 and 2024, respectively, in other income (expenses) in the consolidated statements of operations.

 

The future minimum lease payments to be received as of December 31, 2025 were as follows (in thousands):

 

		Amount
2026			81
Total		$	81

 

Supplemental cash flow information related to leases for the year ended December 31, 2025:

 

Supplemental cash flow information related to leases for the twelve months ended December 31, 2025:
Operating cash flows used for operating leases (in thousands)		$	6,469
Right-of-use assets obtained in exchange for new operating lease liabilities			4,123
Weighted-average remaining lease term (in years)			4.7
Weighted average discount rate			12.2	%