8. Commitments and Contingencies

Leases

Palo Alto, California Leases

In June 2020, the Company entered into lease agreements for two buildings at 1250 and 1200 Page Mill Road in Palo Alto, California, which serve as the Company’s U.S. corporate offices and research and development facilities. The buildings are approximately 73,000 square feet and 83,000 square feet, respectively, and include office and laboratory space.

The lease term for 1250 Page Mill Road is 13 years and commenced in July 2020. The lease includes two options to extend for a term of five years each. The lease term for 1200 Page Mill Road is 6.5 years and commenced in September 2020. The lease includes an option to extend for another 6.5 years. In both cases, the Company determined the extension options were not reasonably certain to be exercised at lease inception. In addition to fixed monthly rent, the Company pays for variable operating expenses, such as property taxes, insurance costs, and maintenance costs.

In March 2025, the Company subleased 1200 Page Mill Road. The term of the sublease is from March 2025 to February 2027, with no option to extend. Future minimum lease payments to be received under the sublease are $5.7 million and $0.5 million for the years ended December 31, 2026 and 2027, respectively. In addition to fixed monthly rent, the sublessee also pays for variable operating expenses. During the year ended December 31, 2025, the Company recognized $4.6 million of sublease income, of which $1.4 million was variable sublease income. Sublease income is recorded as a reduction to rent expense and included within general and administrative expense. Upon entering the sublease, the Company recognized a non-cash lease impairment expense of $1.9 million because the remaining lease cost to be recognized by the Company exceeded anticipated sublease income. See Note 5 for discussion of inputs used in determining the impairment.

Switzerland Lease

In April 2020, the Company entered into a lease agreement for approximately 1,000 square meters of office and laboratory space in Visp, Switzerland. The initial lease term is 5 years, with automatic renewals every 5 years for a maximum lease term of 15 years. In addition to fixed monthly rent, the Company pays certain operating expenses and taxes.

Ursus Facility

In August 2020, the Company and its wholly owned subsidiary Kodiak Sciences GmbH entered into a manufacturing agreement with Lonza Ltd (“Lonza”) for the clinical and commercial supply of the Company’s antibody biopolymer conjugate drug substance, which included a custom-built manufacturing suite. The manufacturing agreement has an initial term of 8 years, and the Company has the right to extend the term up to a total of 16 years. The Company and Lonza each have the ability to terminate this agreement upon the occurrence of certain events.

In April 2021, the agreement was amended to provide for greater manufacturing flexibility, to define a comprehensive mandate as an antibody biopolymer conjugates manufacturing facility to be used for the Company’s antibody biopolymer conjugates pipeline, at clinical as well as commercial scales, across a broad capacity range under the tight quality controls required for ophthalmology and retinal medicines, and to allow for future process and equipment changes as needed.

The Company concluded that this agreement contained an embedded lease as the custom-built manufacturing suite would be dedicated for the Company’s use. On January 31, 2023, the custom-built manufacturing suite was commissioned as a cGMP facility, which was also considered lease commencement. Consideration was allocated to lease and non-lease components as this agreement contained a significant service component (manufacturing services). Under ASC 842, the Company classified the lease portion as an operating lease and recorded a right-of-use asset and lease liability on the lease commencement date.

Fixed assets of $81.7 million, in leasehold improvements and machinery and equipment, were placed in service and capitalized as of January 31, 2023.

Future Lease Payments and Supplemental Lease Information

The table above does not include payments for operating expenses, which are not fixed at lease commencement.

Supplemental balance sheet information related to lease liabilities is as follows:

Manufacturing Agreements

The Company has entered into service and equipment purchase agreements in the normal course of business with various providers, pursuant to which such providers agreed to perform activities in connection with the manufacturing process of certain materials. These agreements, and any related amendments, state that planned activities and purchases that are included in the signed work orders are, in some cases, binding and, hence, obligate the Company to pay the full price of the work order upon satisfactory delivery of products and services or obligate the Company to the binding amount regardless of whether such planned activities are in fact performed. Per the terms of the agreements, the Company has the option to cancel signed orders at any time upon written notice, which may or may not be subject to payment of a cancellation fee. The level of cancellation fees may be dependent on the timing of the written notice in relation to the commencement date of the work, with the maximum cancellation amount dependent on the agreement or the work order.

As of December 31, 2025, future contractual obligations related to these manufacturing agreements that may be subject to cancellation fees was $23.9 million. This amount represents our minimal contractual obligations, excluding the commitments under the Ursus Facility arrangement. Purchases under these manufacturing agreements for the years ended December 31, 2025, 2024 and 2023 were $34.8 million, $25.8 million and $59.7 million, respectively.

In addition, future manufacturing contractual obligations totaling approximately 86.5 million Swiss Francs may be incurred for the potential clinical and commercial supply of tarcocimab and other antibody biopolymer conjugates medicines based on the agreements with Lonza for production at the Ursus Facility.

Other Funding Commitments

In the normal course of business, the Company enters into agreements with third-parties for services to be provided to the Company. Generally, these agreements provide for termination upon notice, with specified amounts due upon termination based on the timing of termination and the terms of the agreement. The actual amounts and timing of payments under these agreements are uncertain and contingent upon the initiation and completion of services to be provided to the Company.

The Company has also entered into various cancellable license agreements for certain technology. The Company may be obligated to make payments on future sales of specified products associated with such license agreements. Such payments are dependent on future product sales and are not estimable.

Legal Proceedings

From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities. Management is currently not aware of any matters that could have a material adverse effect on the its financial position, results of operations or cash flows. The Company records a legal liability when it believes that it is both probable that a liability may be imputed, and the amount of the liability can be reasonably estimated. Significant judgment by the Company is required to determine both probability and the estimated amount.