LEASES
The Company leases all of its facilities, including its EXPAREL and iovera° handpiece manufacturing facility at its Science Center Campus in San Diego, California. In April 2025, the Company moved its principal executive offices and corporate headquarters to Brisbane, California. The Company also has two embedded leases with Thermo Fisher Scientific Pharma Services, or Thermo Fisher, for the use of their manufacturing facility in Swindon, U.K. for the production of EXPAREL and ZILRETTA. A portion of the associated monthly base fees have been allocated to the lease components based on a relative fair value basis. As part of the GQ Bio Acquisition in February 2025, the Company’s European offices were assumed and include an R&D lab and offices in Luckenwalde, Germany.
Since July 2022 and February 2023, the Company had recognized sublease income for laboratory space leased in Woburn, Massachusetts and a portion of office space leased in Burlington, Massachusetts, respectively, from leases that were assumed as part of the Flexion Acquisition. In February 2024, the lease and sublease term concluded for the laboratory space in Woburn, Massachusetts. In April 2025, the lease and sublease term concluded for the office space in Burlington, Massachusetts.
In December 2024, the Company exited a lease for a training facility in Houston, Texas. The Company recognized a loss of $2.2 million during the year ended December 31, 2024 associated with exiting the lease, which was recorded within contingent consideration gains, acquisition-related expenses, restructuring and other in the consolidated statements of operations. The loss resulted from the derecognition of the right-of-use asset, its related lease liability and a termination payment of $1.3 million.
The operating lease costs for the facilities include lease and non-lease components, such as common area maintenance and other common operating expenses, along with executory costs such as insurance and real estate taxes. Total operating lease expense, net is as follows (in thousands): | | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| Operating Lease Costs | | 2025 | | 2024 | | 2023 |
| Fixed lease costs | | $ | 12,783 | | | $ | 13,876 | | | $ | 14,344 | |
| Variable lease costs | | 2,299 | | | 1,889 | | | 1,952 | |
| Sublease income | | (76) | | | (304) | | | (657) | |
| Total | | $ | 15,006 | | | $ | 15,461 | | | $ | 15,639 | |
Supplemental cash flow information related to operating leases is as follows (in thousands): | | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2025 | | 2024 | | 2023 |
| Cash paid for operating lease liabilities, net of lease incentives | | $ | 12,849 | | | $ | 12,991 | | | $ | 14,259 | |
| Right-of-use assets recorded in exchange for lease obligations | | $ | 2,043 | | | $ | — | | | $ | — | |
The weighted average remaining lease terms and the weighted average discount rates are summarized as follows: | | | | | | | | | | | | | | |
| | December 31, |
| | 2025 | | 2024 |
| Weighted average remaining lease term | | 4.32 years | | 5.19 years |
| Weighted average discount rate | | 6.90% | | 6.89% |
As of December 31, 2025, maturities of the Company’s operating lease liabilities are as follows (in thousands): | | | | | | | | |
| Year | | Aggregate Minimum
Payments Due |
| 2026 | | $ | 12,755 | |
| 2027 | | 12,303 | |
| 2028 | | 11,155 | |
| 2029 | | 11,042 | |
| 2030 | | 5,844 | |
| Thereafter | | 442 | |
| Total future lease payments | | 53,541 | |
| Less: imputed interest | | (7,526) | |
| Total operating lease liabilities | | $ | 46,015 | |
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.