Company: ARWR
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001628280-25-038858
Chunk: 37

Company: ARROWHEAD PHARMACEUTICALS, INC.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 37
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 Hoyt Park from 11404 & 11408 Sorrento Valley Owner, LLC, which lease expires on April 30, 2038. Pursuant to the lease, within twelve months of the expiration of the initial 15-year term, the Company has the option to extend the lease for up to one additional ten-year term, with certain annual increases in base rent. The Company is not reasonably certain that it will exercise this option to renew and therefore it is not included in right-of-use assets and liabilities as of June 30, 2025.The lease agreement, as amended, granted the Company the right to receive an Additional Tenant Improvement Allowance (“ATIA”) funded by the lessor. The Company received $30.8 million in ATIA, including a final payment of $3.1 million during the first quarter of fiscal 2024. As a result, the Company remeasured its lease liability and right-of-use assets to reflect these additional allowances and the related increased lease payments. The Company has further concluded that these ATIAs have no effects on the classification of the lease.Madison, Wisconsin: The Company leases 110,956 square feet space, which it increased from 107,000 square feet on June 30, 2025, located at 502 South Rosa Road for its office and laboratory facilities, which lease expires on September 30, 2031. The lease contains options to renew for two terms of five years. The Company is not reasonably certain that it will exercise this option and therefore it is not included in right-of-use assets and liabilities as of June 30, 2025.The components of lease assets and liabilities along with their classification on the Company’s consolidated balance sheets were as follows:Lease Assets and LiabilitiesClassificationJune 30, 2025September 30, 2024(in thousands)Operating lease assetsRight-of-use assets$44,002 $45,255 Current operating lease liabilitiesLease liabilities7,010 6,342 Non-current operating lease liabilitiesLease liabilities, net of current portion105,690 111,027 

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Three Months Ended June 30,Nine Months Ended June 30,Lease CostClassification2025202420252024(in thousands)Operating lease costResearch and development$2,233 $2,965 $7,754 $8,531 General and administrative expense449 537 1,442 1,504 Variable lease cost (1)Research and development