VERTEX PHARMACEUTICALS INC / MAVRTX
VERTEX PHARMACEUTICALS INC / MA Leases Disclosure
Leases
A summary of our most significant leases, including real estate and embedded leases with contract manufacturing
organizations, is as follows:
Corporate Headquarters
In 2011, we entered into two lease agreements, pursuant to which we lease approximately 1.1 million square feet of
office and laboratory space in two buildings in Boston, Massachusetts for a term of 15 years (our “Corporate Headquarters”).
In August 2024, we amended the existing lease agreements to, among other terms, extend the lease termination dates from
December 2028 to June 2044 (the “Amendments”). We have the option to extend the amended leases for up to two additional
ten-year periods.
The Amendments did not grant us any additional rights of use not contemplated in the existing lease agreements. As a
result, we accounted for the Amendments as modifications that extended the terms of the existing leases and reassessed the
classification of the leases as of their effective dates. We remeasured the lease liabilities using our incremental borrowing rate
as of the effective date of the Amendments and classified the leases associated with our Corporate Headquarters as operating
leases. As a result, we obtained right-of-use operating lease assets of $847.9 million in exchange for operating lease
obligations of $1.0 billion and reduced our finance lease liabilities and property and equipment by $275.3 million and
$107.5 million, respectively.
Jeffrey Leiden Center for Biologics, Cell and Genetic Therapies Campus (“Leiden Campus”)
In 2019, we entered into an agreement to lease approximately 269,000 square feet of office and laboratory space at our
Leiden Campus near our corporate headquarters in Boston, Massachusetts for a term of 16 years (“Leiden I”), which is
classified as an operating lease. Base rent payments commenced in 2021 and will continue through November 2036. We
utilize the initial period as our lease term. We have an option to extend the lease term for up to two additional ten-year
periods.
In 2024, we entered into a lease agreement for a second building (“Leiden II”) at our Leiden Campus. The Leiden II
lease, which commenced in 2025, includes approximately 348,000 square feet of office and laboratory space for a term of
approximately 16 years. Upon lease commencement, we recorded a right-of-use asset and corresponding lease liability, net of
tenant allowances, of $296.7 million within each of “Operating lease assets” and “Long-term operating lease liabilities” on
our consolidated balance sheet. We anticipate that base rent payments will commence in the first quarter of 2027 and expect
them to continue through the first quarter of 2042. We have an option to extend the Leiden II term for up to two additional
ten-year periods. We utilize the initial period as our lease term.
Lonza Portsmouth - T1D Facility
In 2023, we entered into a strategic agreement with Lonza to support the manufacture of T1D cell therapy product
candidates, pursuant to which we have partnered with Lonza to build a 130,000 square foot dedicated new facility operated
by Lonza in New Hampshire. The lease commencement for the facility occurred in the first quarter of 2026. Lease payments
will continue through the tenth anniversary of the facility’s regulatory approval for commercial production. We will complete
the lease accounting analysis for this facility in the first quarter of 2026.
Please refer to our accounting policy, Leases, in Note A, “Nature of Business and Accounting Policies,” for further
information on the accounting treatment for our leases.
Aggregate Lease Information
The components of lease cost recorded in our consolidated statements of income (loss) were as follows:
Year ended December 31, | |||||
2025 | 2024 | 2023 | |||
(in millions) | |||||
Operating lease cost | $194.7 | $103.9 | $47.8 | ||
Finance lease cost | |||||
Amortization of leased assets | 7.2 | 30.9 | 42.7 | ||
Interest on lease liabilities | 5.7 | 25.2 | 38.8 | ||
Variable lease cost | 50.1 | 43.6 | 44.6 | ||
Sublease income | (0.2) | (1.6) | (2.7) | ||
Net lease cost | $257.5 | $202.0 | $171.2 | ||
Our variable lease cost during 2025, 2024 and 2023 primarily related to operating expenses, taxes and insurance
associated with our real estate leases.
Our leases are included on our consolidated balance sheets as follows:
As of December 31, | |||
2025 | 2024 | ||
(in millions) | |||
Operating leases | |||
Operating lease assets | $1,562.7 | $1,356.8 | |
Total operating lease assets | $1,562.7 | $1,356.8 | |
$77.3 | $87.1 | ||
Long-term operating lease liabilities | 1,846.5 | 1,544.4 | |
Total operating lease liabilities | $1,923.8 | $1,631.5 | |
Finance leases | |||
$81.5 | $57.9 | ||
Total finance lease assets | $81.5 | $57.9 | |
$5.5 | $5.2 | ||
Other long-term liabilities | 106.7 | 112.8 | |
Total finance lease liabilities | $112.2 | $118.0 | |
Maturities of our finance and operating lease liabilities as of December 31, 2025 were as follows:
Year | Operating Leases | Finance Leases | Total | |||
(in millions) | ||||||
2026 | $155.2 | $10.5 | $165.7 | |||
2027 | 196.9 | 11.8 | 208.7 | |||
2028 | 193.3 | 12.2 | 205.5 | |||
2029 | 139.9 | 12.5 | 152.4 | |||
2030 | 197.8 | 12.8 | 210.6 | |||
Thereafter | 2,316.4 | 118.3 | 2,434.7 | |||
Total lease payments | 3,199.5 | 178.1 | 3,377.6 | |||
Less: tenant allowance | (220.8) | — | (220.8) | |||
Less: amount representing interest | (1,054.9) | (65.9) | (1,120.8) | |||
Present value of lease liabilities | $1,923.8 | $112.2 | $2,036.0 | |||
The weighted-average remaining lease terms and discount rates related to our leases were as follows:
As of December 31, | |||
2025 | 2024 | ||
Weighted-average remaining lease term (in years) | |||
Operating leases | 15.17 | 15.58 | |
Finance leases | 21.94 | 22.17 | |
Weighted-average discount rate | |||
Operating leases | 4.75% | 4.61% | |
Finance leases | 4.51% | 4.58% | |
Supplemental cash flow information related to our leases was as follows:
Year ended December 31, | |||||
2025 | 2024 | 2023 | |||
(in millions) | |||||
Cash paid for amounts included in the measurement of lease liabilities | |||||
Operating cash flows from operating leases | $183.2 | $113.5 | $62.8 | ||
Operating cash flows from finance leases | $5.6 | $25.7 | $38.4 | ||
Financing cash flows from finance leases | $5.4 | $33.6 | $44.9 | ||
Right-of-use assets obtained in exchange for lease obligations | |||||
Operating leases | $311.0 | $1,120.9 | $2.4 | ||
The majority of right-of-use assets obtained in exchange for lease obligations in 2025 and 2024 are described above.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 13, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 10, 2023 | |
| 2021 | Feb 9, 2022 | |
| 2020 | Feb 11, 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.