Leases
The Company has non-cancellable operating leases for office and laboratory space, which expire at various times in 2031 and 2036. The non-cancellable lease agreements provide for monthly lease payments, which increase during the term of each lease agreement.
All of the Company's leases are classified as operating leases, which are included as operating lease right-of-use assets and current and non-current operating lease liabilities in the consolidated balance sheets. The Company's operating lease costs are included in operating expenses in the accompanying consolidated statements of operations and comprehensive loss. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.
A majority of the Company's lease agreements include fixed rental payments. Certain lease agreements include fixed rental payments that are adjusted periodically by a fixed rate. The fixed payments, including the effects of changes in the fixed rate or amount, and renewal options reasonably certain to be exercised, are included in the measurement of the related lease liability. The exercise of lease renewal options is at the Company's sole discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease term, which includes renewal options reasonably certain to be exercised. The majority of the Company's real estate leases require that the Company pay maintenance, real estate taxes and insurance in addition to rent. These payments are generally variable and based on actual costs incurred by the lessor. Therefore, these amounts are not included in the consideration of the contract when determining the right-of-use asset and lease liability but are reflected as variable lease expenses.
As the interest rate implicit in the lease is not readily determinable, the Company uses the incremental borrowing rate as the discount rate. The Company considers observable inputs as of the effective date of the ASC 842 adoption including the credit rating, existing borrowings and other relevant borrowing rates, such as risk-free rates like the United States Treasury rate, and then adjusting as necessary for the appropriate lease term. The incremental borrowing rate is reassessed if there is a change to the lease term or if a modification occurs and it is not accounted for as a separate contract. As of December 31, 2025, the Company's operating leases had a weighted-average remaining lease term of 9.7 years and a weighted-average discount rate of 11.9%.
Supplemental cash flow information related to the Company's operating leases was as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Years Ended December 31, |
| | | | | | 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | | | | | | |
| Operating cash flows for operating leases | | | | | | $ | 6,080 | | | $ | 3,495 | | | 1,648 | |
| Right of use assets obtained in exchange for new lease obligations: | | | | | | | | | | |
| Operating leases | | | | | | $ | — | | | $ | — | | | $ | 20,043 | |
The Company reports the amortization of operating lease right-of-use assets and the change in operating lease liabilities on a net basis in other in the operating activities of the accompanying consolidated statements of cash flows.
The components of lease expense were as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Years Ended December 31, |
| Lease expense | | | | | | 2025 | | 2024 | | 2023 |
| Operating lease expense | | | | | | $ | 5,163 | | | $ | 5,276 | | | $ | 4,474 | |
| Variable lease expense | | | | | | 3,915 | | | 1,938 | | | 1,208 | |
| Sublease income | | | | | | (1,101) | | | (590) | | | (216) | |
| Total lease expense | | | | | | $ | 7,977 | | | $ | 6,624 | | | $ | 5,466 | |
The operating and variable lease expenses are reported within operating expenses while sublease income is reported in interest and other income.
As of December 31, 2025, maturities of lease liabilities are summarized as follows (in thousands):
| | | | | |
| 2026 | $ | 6,232 | |
| 2027 | 6,389 | |
| 2028 | 6,549 | |
| 2029 | 6,714 | |
| 2030 | 6,883 | |
| Thereafter | 31,844 | |
| Total lease payments | 64,611 | |
| Less: Effect of discounting to net present value | (26,848) | |
| Present value of lease liabilities | $ | 37,763 | |
| |
| Operating lease liabilities, current | $ | 6,232 | |
| Operating lease liabilities, non-current | 31,531 | |
| Total operating lease liabilities | $ | 37,763 | |