5. Leases

In December 2023, the Company entered into a 7-year lease for 99,557 square feet of lab and office space in San Carlos, California. The agreement provides for two options to renew for three years each, which the Company is not reasonably certain to exercise. The Company is required to maintain a letter of credit for $0.6 million which has been classified as restricted cash on the unaudited condensed balance sheets.

In July 2024, the Company entered into an agreement with a third party to sublease approximately 38,200 square feet of the Company’s lab and office space in San Carlos, California. The sublease term ends on June 30, 2026 with the third party having the option to extend the term for 12 months, unless sooner terminated or cancelled in accordance with the terms and conditions of the sublease or the Company intends to reoccupy the space. The sublease did not relieve the Company of its obligations under the primary lease, and therefore the Company did not adjust the right-of-use asset and the operating lease liability.

In June 2025, the Company entered into an agreement with the landlord of the San Carlos leased premises (“Landlord”) and a third party (“Assignee”) to assign its lease in San Carlos and related sublease to the Assignee. Upon execution of the assignment, the Company paid a termination penalty of $35.8 million to the Landlord. Effective on the latest of the following dates: (1) the date the Landlord delivers a signed consent to assign the lease, (2) the date the leased premises are delivered to the Assignee, or (3) September 1, 2025, the Company will be relieved of its obligations under the lease, and the Assignee will assume all of the rights and obligations under the lease and related sublease. Additionally, the Company has agreed to assign certain items of property and equipment located within the leased premises in San Carlos to the Assignee free of charge. The Company accounted for this amendment as a lease modification and reduced the operating lease liability by $29.2 million, and reduced the carrying amount of the right-of-use asset by $22.4 million to zero. The Company recognized the excess reduction of the lease liability of $6.8 million as an offset to the termination-related expenses of $39.0 million, recognizing a net expense of $32.2 million related to the modification in restructuring, impairment and costs of suspended programs in the condensed statement of operations during the three and six months ended June 30, 2025. The termination-related expenses consisted of a $35.8 million of termination penalty, $2.6 million of broker fees and $0.6 million of non-reimbursable one-time payment represented by the security deposit paid to the Landlord on behalf of the Assignee.

The Company previously leased 31,117 square feet of lab and office space in San Mateo, California which expired in November 2024.

The future cash receipts associated with the Company’s sublease as of June 30, 2025 through the assignment date of September 1, 2025 are $0.4 million.