ENANTA PHARMACEUTICALS INC

Previous wording

As of March 31, 2024, we had $300.3 million in cash, cash equivalents and short-term marketable securities. We expect that our existing cash, cash equivalents, short-term marketable securities and our retained portion of future HCV royalties, will enable us to fund our operating expenses and capital expenditure requirements through the third quarter of fiscal 2027.

Current wording

As of June 30, 2024, we had $272.6 million in cash, cash equivalents and short-term and long-term marketable securities. We expect that our existing cash, cash equivalents, short-term and long-term marketable securities, as well as the cash flows from our retained portion of future HCV royalties will enable us to fund our operating expenses and capital expenditure requirements through the third quarter of fiscal 2027.

Previous wording

RSVPEDs: RSVPEDs is a Phase 2 study in pediatric patients, aged >28 days to <36 months. This dose-ranging, randomized, double-blind, placebo-controlled study, is evaluating multiple ascending doses for five days in two age cohorts to determine safety, tolerability, and pharmacokinetics, as well as a second part evaluating antiviral activity at the selected dose.

Current wording

RSVPEDs: RSVPEDs is a Phase 2 study in approximately 90 pediatric patients, aged >28 days to <36 months. This dose-ranging, randomized, double-blind, placebo-controlled study, is evaluating multiple ascending doses for five days in two age cohorts to determine safety, tolerability, and pharmacokinetics, as well as a second part evaluating antiviral activity at the selected dose. In August 2024, we announced completion of enrollment of the RSVPEDs study. We anticipate reporting topline data in the fourth quarter of calendar 2024.

Previous wording

RSVHR: RSVHR is a Phase 2b study in high-risk adults, including those who are older than 65 years of age and those who have asthma, chronic obstructive pulmonary disease, or COPD, or congestive heart failure. Approximately 180 patients will be treated with zelicapavir or placebo for five days with a primary endpoint of time to resolution of RSV lower respiratory tract disease symptoms.

Current wording

RSVHR: RSVHR is a Phase 2b study in high-risk adults, including those who are older than 65 years of age and those who have asthma, chronic obstructive pulmonary disease, or COPD, or congestive heart failure. Approximately 180 patients will be treated with zelicapavir or placebo for five days with a primary endpoint of time to resolution of RSV lower respiratory tract disease symptoms. Enrollment is progressing and the Company is targeting enrollment completion in the upcoming Northern Hemisphere RSV season.

Previous wording

EDP-323 - L-protein Inhibitor Candidate: Our second clinical RSV candidate, EDP-323, is a novel oral, direct-acting antiviral selectively targeting the RSV L-protein, a viral RNA-dependent RNA polymerase enzyme that contains multiple enzymatic activities required for RSV replication. EDP-323 has sub-nanomolar potency against RSV-A and RSV-Bin vitro and protected mice in a dose-dependent manner from RSV infection as demonstrated by both virological and pathological endpoints. EDP-323 is not expected to have cross-resistance to other classes of inhibitors and has the potential to be used alone, or in combination with other RSV mechanisms, to broaden the treatment window or addressable patient populations. In June 2023, we completed a Phase 1 clinical study and reported positive topline results, which demonstrated that EDP-323 was safe and well-tolerated with pharmacokinetics supportive of once-daily dosing and target exposures achieved with no food effect. Based on these positive data, we initiated a Phase 2 challenge study of EDP-323 in the fourth quarter of calendar 2023 and anticipate topline data in the third quarter of calendar 2024.

Current wording

EDP-323 - L-protein Inhibitor Candidate: Our second clinical RSV candidate, EDP-323, is a novel oral, direct-acting antiviral selectively targeting the RSV L-protein, a viral RNA-dependent RNA polymerase enzyme that contains multiple enzymatic activities required for RSV replication. EDP-323 has sub-nanomolar potency against RSV-A and RSV-Bin vitro and protected mice in a dose-dependent manner from RSV infection as demonstrated by both virological and pathological endpoints. EDP-323 is not expected to have cross-resistance to other classes of inhibitors and has the potential to be used alone, or in combination with other RSV mechanisms, to broaden the treatment window or addressable patient populations. In June 2023, we completed a Phase 1 clinical study and reported positive topline results, which demonstrated that EDP-323 was safe and well-tolerated with pharmacokinetics supportive of once-daily dosing and target exposures achieved with no food effect. Based on these positive data, we initiated a Phase 2a challenge study of EDP-323 in the fourth quarter of calendar 2023. We completed our Phase 2a challenge study and are on track to announce topline data in late third quarter of calendar 2024.

Previous wording

COVID-19: We leveraged our expertise in developing protease inhibitors to discover compounds specifically designed to target the SARS-CoV-2 virus and potentially other coronaviruses. We selected EDP-235, an oral inhibitor of the coronavirus 3CL protease, also referred to as 3CLpro or the main coronavirus protease, or Mpro, for clinical development. In addition to nanomolar activity against all SARS-CoV-2 variants tested to date, EDP-235 has potent antiviral activity against other human coronaviruses, enabling the potential for a pan-coronavirus treatment, including possibly coronaviruses that may infect human populations in the future. Furthermore, EDP-235 has good tissue distribution, and is projected to have four times higher drug levels in lung tissue compared to plasma. A robust treatment effect and prevention of transmission was observed in a ferret model. A Phase 1 study demonstrated EDP-235 was generally safe and well-tolerated in doses up to 400 mg for seven days, adverse events were infrequent and mild, and pharmacokinetics were supportive of once-daily dosing without ritonavir and without regard to food and achieved target exposure levels of up to 13-fold over the plasma protein-adjusted EC 90. In May 2023, we reported topline results from a Phase 2 clinical trial of EDP-235 in non-hospitalized, symptomatic patients with mild to moderate COVID-19 who were not at increased risk for developing severe disease. EDP-235 met the primary endpoint of the trial and was generally safe and well-tolerated. A dose-dependent improvement in total symptom score was observed with EDP-235 treatment compared to placebo, which achieved statistical significance (p<0.05) in the 400 mg treatment group at multiple time points, starting as early as one day after the first dose. An analysis of a subset of six symptoms showed a two-day shorter time (5 days to 3 days) to improvement in patients receiving EDP-235 400 mg who were enrolled within three days of symptom onset (p<0.01). No effect on virologic endpoints as measured in the nose was detected due to the rapid viral decline in the placebo arm of this highly immunologically-experienced, standard risk population. However, in the subset of patients who were nucleocapsid seronegative (indicating no recent natural infection with SARS-CoV-2), a viral load decline was observed at day five in the 400 mg group of 0.8 log overall and 1 log in the patients with symptom onset within three days before treatment with EDP-235.

Current wording

COVID-19: We leveraged our expertise in developing protease inhibitors to discover compounds specifically designed to target the SARS-CoV-2 virus and potentially other coronaviruses. We selected EDP-235, an oral inhibitor of the coronavirus 3CL protease, also referred to as 3CLpro or the main coronavirus protease, or Mpro, for clinical development. In addition to nanomolar activity against all SARS-CoV-2 variants tested to date, EDP-235 has potent antiviral activity against other human coronaviruses, enabling the potential for a pan-coronavirus treatment, including possibly coronaviruses that may infect human populations in the future. Furthermore, EDP-235 has good tissue distribution, and is projected to have four times higher drug levels in lung tissue compared to plasma. A robust treatment effect and prevention of transmission was observed in a ferret model. A Phase 1 study demonstrated EDP-235 was generally safe and well-tolerated in doses up to 400 mg for seven days, adverse events were infrequent and mild, and pharmacokinetics were supportive of once-daily dosing without ritonavir and without regard to food and achieved target exposure levels of up to 13-fold over the plasma protein-adjusted EC 90. In May 2023, we reported topline results from a Phase 2 clinical trial of EDP-235 in non-hospitalized, symptomatic patients with mild to moderate COVID-19 who were not at increased risk for developing severe disease. EDP-235 met the primary endpoint of the trial and was generally safe and well-tolerated. A dose-dependent improvement in total symptom score was observed with EDP-235 treatment compared to placebo, which achieved statistical significance (p<0.05) in the 400 mg treatment group at multiple time points, starting as early as one day after the first dose. An analysis of a subset of six symptoms showed a two-day shorter time (5 days to 3 days) to improvement in patients receiving EDP-235 400 mg who were enrolled within three days of symptom onset (p<0.01). No effect on virologic endpoints as measured in the nose was detected due to the rapid viral decline in the placebo arm of this highly immunologically-experienced, standard risk population. However, in the subset of patients who were nucleocapsid seronegative (indicating no recent natural infection with SARS-CoV-2), a viral load decline was observed at day five in the 400 mg group of 0.8 log overall and 1 log in the patients with symptom onset within three days before treatment with EDP-235. We will continue to focus on potential collaborations to progress EDP-235, as we will not advance this candidate into Phase 3 studies on our own.

Previous wording

CSU: We have a discovery stage program to develop KIT inhibitors to treat CSU by depleting mast cells, thereby addressing a primary driver of this disease. We have discovered novel, potent and selective oral inhibitors of KIT, which are now being optimized in preclinical development. Our prototype inhibitors demonstrate potent nanomolar activity in both binding and cellular function assays and are highly selective for KIT versus other kinases. These inhibitors also demonstrate strongin vitro andin vivo ADME properties. Our goal is to select a lead candidate for KIT in calendar Q4 2024 and to move into the clinic shortly thereafter, as well as introduce a second immunology program in 2024.

Current wording

KIT: We have a discovery stage program to develop KIT inhibitors to treat CSU and potentially other indications by depleting mast cells, thereby addressing a primary driver of these diseases. We have discovered novel, potent and selective oral inhibitors of KIT, which are now being optimized in preclinical development. Our prototype inhibitors demonstrate potent nanomolar activity in both binding and cellular function assays and are highly selective for KIT versus other kinases. These inhibitors also demonstrate strongin vitro andin vivo ADME properties. We are continuing to evaluate multiple compounds in preclinical studies, including toxicology studies. Our goal is to select a lead development candidate in calendar Q4 2024.

Previous wording

To date, we have funded our operations primarily through royalty payments received under our collaboration agreement with AbbVie, a $200.0 million payment received in 2023 from our royalty sale agreement, and our existing cash, cash equivalents, and short-term and long-term marketable securities. We believe that our existing cash, cash equivalents and short-term marketable securities, as well as our retained portion of future HCV royalties, will enable us to fund our operating expenses and capital expenditure requirements through the third quarter of fiscal 2027.

Current wording

To date, we have funded our operations primarily through royalty payments received under our collaboration agreement with AbbVie, a $200.0 million payment received in April 2023 from our royalty sale agreement, and our existing cash, cash equivalents, and short-term and long-term marketable securities. We believe that our existing cash, cash equivalents and short-term and long-term marketable securities, as well as the cash flows from our retained portion of future HCV royalties will enable us to fund our operating expenses and capital expenditure requirements through the third quarter of fiscal 2027.

Previous wording

The following table is a summary of revenue recognized for the three months ended March 31, 2024 and 2023:

Current wording

The following table is a summary of revenue recognized for the three and nine months ended June 30, 2024 and 2023:

Previous wording

At any given time, we have later stage programs in clinical development as well as several active early-stage research and drug discovery projects. Our internal resources, employees and infrastructure are utilized across multiple projects, including our early stage discovery projects. As such, we report information regarding costs incurred based on our programs (i.e., disease area) rather than on a project specific basis. All indirect costs are allocated to programs based on headcount and square footage of our facilities. We expect that our research and development expenses will fluctuate from period to period as we advance our research and development programs. However, in the next 12 months, we expect our external research and development expenses generally to decrease since we will not advance EDP-235 into Phase 3 studies on our own. To date, we have not identified any significant impact of inflation on spending in research and development, but it is uncertain whether there will be inflationary impacts in future periods.

Current wording

At any given time, we have later stage programs in clinical development as well as several active early-stage research and drug discovery projects. Our internal resources, employees and infrastructure are utilized across multiple projects, including our early-stage discovery projects. As such, we report information regarding costs incurred based on our programs (i.e., disease area) rather than on a project specific basis. All indirect costs are allocated to programs based on headcount and square footage of our facilities. We expect that our research and development expenses will fluctuate from period to period as we advance our research and development programs. To date, we have not identified any significant impact of inflation on spending in research and development, but it is uncertain whether there will be inflationary impacts in future periods.

Previous wording

Other income (expense) consists of interest expense, interest and investment income, net and the change in fair value of our outstanding Series 1 nonconvertible preferred stock. Interest expense consists of the non-cash interest expense and amortization of debt issuance costs associated with the royalty sale agreement with an affiliate of OMERS. Interest income consists of interest earned on our cash equivalents and short-term marketable securities balances. Investment income consists of the amortization or accretion of any purchased premium or discount, respectively, on our short-term marketable securities. The change in fair value of our Series 1 nonconvertible preferred stock relates to the remeasurement of these financial instruments from period to period as these instruments may require a transfer of assets because of the liquidation preference features of the underlying instrument.

Current wording

Other income (expense) consists of interest expense, interest and investment income, net and the change in fair value of our outstanding Series 1 nonconvertible preferred stock. Interest expense consists of the interest expense and amortization of debt issuance costs associated with the royalty sale agreement with an affiliate of OMERS. Interest income consists of interest earned on our cash equivalents and marketable securities balances. Investment income consists of the amortization or accretion of any purchased premium or discount, respectively, on our marketable securities. The change in fair value of our Series 1 nonconvertible preferred stock relates to the remeasurement of these financial instruments from period to period as these instruments may require a transfer of assets because of the liquidation preference features of the underlying instrument.

Previous wording

We recognized revenue of $17.1 million during the three months ended March 31, 2024 as compared to $17.8 million during the three months ended March 31, 2023. The $0.7 million decrease in revenue was primarily due to AbbVie’s lower reported HCV sales as compared to the comparable period in 2023.

Current wording

We recognized revenue of $18.0 million during the three months ended June 30, 2024 as compared to $18.9 million during the three months ended June 30, 2023. The $0.9 million decrease in revenue was primarily due to AbbVie’s lower reported HCV sales as compared to the comparable period in 2023.

Previous wording

The level of research and development expenses for the three months ended March 31, 2024 decreased by $7.9 million compared to the same period in 2023.

Current wording

Research and development expenses for the three months ended June 30, 2024 decreased by $14.2 million compared to the same period in 2023.

Previous wording

The costs in our virology program decreased $14.8 million primarily due to a decrease in costs associated with our COVID-19 program as we stopped further internal development and will only progress the program in the context of one or more collaborations. This decrease was offset by an increase in costs for our RSV clinical programs as we had two ongoing Phase 2 studies of zelicapavir and a challenge study initiated for EDP-323 in 2024. Costs associated with HBV decreased as we continued to wind down this program.

Current wording

The costs in our virology program decreased $22.4 million primarily due to a decrease in costs associated with our COVID-19 program as we stopped further internal development and will only progress the program in the context of one or more collaborations.

Previous wording

The costs in our immunology increased by $8.1 million as this is a new therapeutic area of focus for the company.

Current wording

The costs in our immunology programs increased by $5.8 million as this is a new therapeutic area of focus for the company.

Previous wording

Other program costs increased by $2.8 million as we focused on early stage drug discovery programs, offset by a decrease in costs for our NASH program as we continued to wind down this program.

Current wording

Other program costs increased by $2.4 million as we focused on early-stage drug discovery programs, offset by a decrease in costs for our NASH program as we continued to wind down this program.

Previous wording

General and administrative expenses increased by $0.5 million for the three months ended March 31, 2024 compared to the same period in 2023. The change was primarily due to an increase in legal expenses related to our patent infringement suit against Pfizer.

Current wording

General and administrative expenses increased by $0.8 million for the three months ended June 30, 2024 compared to the same period in 2023. The change was primarily due to an increase in legal expenses related to our patent infringement suit against Pfizer.

Previous wording

Interest expense increased $2.6 million for the three months ended March 31, 2024, as compared to the same period in 2023 due to interest expense and amortization of debt issuance costs associated with the royalty sale agreement entered into during April 2023 with an affiliate of OMERS.

Current wording

Interest expense increased $0.4 million for the three months ended June 30, 2024, as compared to the same period in 2023 due to interest expense and amortization of debt issuance costs associated with the royalty sale agreement entered into during April 2023 with an affiliate of OMERS.

Previous wording

During the three months ended March 31, 2024, we recorded an income tax benefit of $0.4 million representing interest recorded on a pending federal tax refund.

Current wording

During the three months ended June 30, 2024, we recorded an income tax benefit of $0.4 million representing interest recorded on a pending federal tax refund. The income tax expense during the three months ended June 30, 2023 was driven by the receipt of $200.0 million from the royalty sale agreement, which is taxable for federal and state purposes, partially offset by utilization of federal net operating losses and research and development tax credit carryforwards as well as a deduction for foreign derived intangible income.

Previous wording

We recognized revenue of $35.1 million during the six months ended March 31, 2024 as compared to $41.4 million during the six months ended March 31, 2023. The $6.3 million decrease in revenue was primarily due to AbbVie’s lower reported HCV sales as compared to the comparable period in 2023.

Current wording

We recognized revenue of $53.0 million during the nine months ended June 30, 2024 as compared to $59.3 million during the nine months ended June 30, 2023. The $6.2 million decrease in revenue was primarily due to AbbVie’s lower reported HCV sales as compared to the comparable period in 2023.

Previous wording

The level of research and development expenses for the six months ended March 31, 2024 decreased by $12.4 million compared to the same period in 2023.

Current wording

Research and development expenses for the nine months ended June 30, 2024 decreased by $26.7 million compared to the same period in 2023.

Previous wording

The costs in our virology program decreased $26.0 million primarily due to a decrease in costs associated with our COVID-19 program as we stopped further internal development and will only progress the program in the context of one or more collaborations. This decrease was offset by an increase in costs for our RSV clinical programs as we had two ongoing Phase 2 studies of zelicapavir and a challenge study initiated for EDP-323 in the six months ended March 31, 2024. Costs associated with HBV decreased as we continued to wind down this program.

Current wording

The costs in our virology program decreased $48.4 million primarily due to a decrease in costs associated with our COVID-19 program as we stopped further internal development and will only progress the program in the context of one or more collaborations. This decrease was offset by an increase in costs for our RSV clinical programs as we had two ongoing Phase 2 studies of zelicapavir and a challenge study initiated for EDP-323 in the nine months ended June 30, 2024. Costs associated with HBV decreased as we continued to wind down this program.

Previous wording

The costs in our immunology increased by $4.2 million as this is a new therapeutic area of focus for the company.

Current wording

The costs in our immunology increased by $13.9 million as this is a new therapeutic area of focus for the company.

Previous wording

Other program costs increased by $5.5 million as we focused on early stage drug discovery programs, offset by a decrease in costs for our NASH program as we continued to wind down this program.

Current wording

Other program costs increased by $7.9 million as we focused on early-stage drug discovery programs, offset by a decrease in costs for our NASH program as we continued to wind down this program.

Previous wording

General and administrative expenses increased by $4.3 million for the six months ended March 31, 2024 compared to the same period in 2023. The change was primarily due to an increase in legal expenses related to our patent infringement suit against Pfizer.

Current wording

General and administrative expenses increased by $5.1 million for the nine months ended June 30, 2024 compared to the same period in 2023. The change was primarily due to an increase in legal expenses related to our patent infringement suit against Pfizer.

Previous wording

Interest expense increased $6.0 million for the six months ended March 31, 2024 as compared to the same period in 2023 due to interest expense and amortization of debt issuance costs associated with the royalty sale agreement entered into during April 2023 with an affiliate of OMERS.

Current wording

Interest expense increased $6.4 million for the nine months ended June 30, 2024 as compared to the same period in 2023 due to interest expense and amortization of debt issuance costs associated with the royalty sale agreement entered into during April 2023 with an affiliate of OMERS.

Previous wording

Interest and investment income, net, increased $2.0 million for the three months ended March 31, 2024, as compared to the same period in 2023. The increase was due to an increase in our cash balance due to receipt of the $200.0 million from OMERS in 2023 as well as changes in interest rates year over year.

Current wording

Interest and investment income, net, increased $4.9 million for the nine months ended June 30, 2024 as compared to the same period in 2023. The increase was due to an increase in average invested cash due to receipt of $200.0 million from OMERS in April 2023 as well as changes in interest rates year over year.

Previous wording

During the six months ended March 31, 2024 we recorded an income tax benefit of $1.0 million driven by interest recorded on a pending federal tax refund.

Current wording

During the nine months ended June 30, 2024, we recorded an income tax benefit of $1.4 million driven by interest recorded on a pending federal tax refund. During the nine months ended June 30, 2023, we recorded income tax expense of $4.2 million driven by the receipt of $200.0 million from the royalty sale agreement, which is taxable for federal and state purposes, partially offset by utilization of federal net operating losses and research and development tax credit carryforwards as well as a deduction for foreign derived intangible income.

Previous wording

We fund our operations with cash flows from our retained portion of our royalty revenue and our existing financial resources. At March 31, 2024, our principal sources of liquidity were cash and cash equivalents and short-term marketable securities of $300.3 million.

Current wording

We fund our operations with cash flows from our retained portion of our royalty revenue and our existing financial resources. At June 30, 2024, our principal sources of liquidity were cash and cash equivalents and short-term and long-term marketable securities of $272.6 million.

Previous wording

Cash used in operating activities was $53.6 million for the six months ended March 31, 2024 as compared to cash used in operating activities of $49.4 million for the same period in 2023. Our cash used in operating activities increased $4.2 million primarily due to timing of our research and development payments, offset by lower cash receipts associated with our AbbVie agreement as we now only retain 45.5% of cash royalties following the royalty sale agreement with OMERS.

Current wording

Cash used in operating activities was $68.4 million for the nine months ended June 30, 2024 as compared to cash used in operating activities of $81.6 million for the same period in 2023. Our cash used in operating activities decreased $13.2 million primarily due to lower research and development payments, offset by lower cash receipts associated with our AbbVie agreement as we now only retain 45.5% of cash royalties following the royalty sale agreement with OMERS.

Previous wording

Cash provided by investing activities was $45.5 million for the six months ended March 31, 2024 as compared to cash provided by investing activities of $80.3 million for the same period in 2023. Our cash provided by investing activities decreased $34.8 million, driven by the timing of purchases, sales and maturities of marketable securities in 2024 compared to 2023.

Current wording

Cash provided by investing activities was $39.2 million for the nine months ended June 30, 2024 as compared to cash used in investing activities of $65.4 million for the same period in 2023. Our cash provided by investing activities increased $104.6 million, driven by the timing of purchases, sales and maturities of marketable securities in 2024 compared to 2023.

Previous wording

Net cash used in financing activities

Current wording

Net cash provided by (used in) financing activities

Previous wording

Cash used in financing activities was $13.8 million for the six months ended March 31, 2024 as compared to cash used in financing activities of $1.7 million for the same period in 2023. Our cash used in financing activities increased $12.1 million, driven primarily by our payments to OMERS for our royalty sale agreement which began in fiscal 2024.

Current wording

Cash used in financing activities was $20.4 million for the nine months ended June 30, 2024 as compared to cash provided by financing activities of $198.1 million for the same period in 2023. Our cash provided by financing activities decreased $218.6 million, driven primarily by the timing of receipt of $200.0 million from OMERS for our royalty sale agreement executed in April 2023.

Previous wording

As of March 31, 2024, we had $300.3 million in cash, cash equivalents and short-term marketable securities. We believe that our existing cash, cash equivalents and short-term marketable securities as of March 31, 2024, as well as the cash flows from our retained portion of future HCV royalties will be sufficient to meet our anticipated cash requirements through the third quarter of fiscal 2027. However, our projection of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

Current wording

As of June 30, 2024, we had $272.6 million in cash, cash equivalents and short-term and long-term marketable securities. We believe that our existing cash, cash equivalents and short-term and long-term marketable securities as of June 30, 2024, as well as the cash flows from our retained portion of future HCV royalties will enable us to fund our operating expenses and capital expenditure requirements through the third quarter of fiscal 2027. However, our projection of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

Previous wording

Our first lease for office and laboratory space at 500 Arsenal Street expires on September 1, 2027. In May 2022, we entered into a new ten-year lease for laboratory and office space in Watertown, Massachusetts, adjacent to our 400 Talcott Avenue premises at Arsenal on the Charles at 4 Kingsbury Avenue. The construction of the facility shell was completed and we gained access to the building to construct tenant improvements during the three months ended March 31, 2024. Upon gaining access to the 4 Kingsbury Avenue building, we capitalized a right-of-use asset and lease liability of approximately $32 million on our consolidated balance sheets which reflects our fixed base rent payments, net of approximately $15 million of a tenant improvement allowance provided by the landlord, over the 10-year term of the lease.

Current wording

Our first lease for office and laboratory space at 500 Arsenal Street was to expire on September 1, 2027. In May 2022, we entered into a new ten-year lease for laboratory and office space in Watertown, Massachusetts, adjacent to our 400 Talcott Avenue premises at Arsenal on the Charles at 4 Kingsbury Avenue. The construction of the facility shell was completed and we gained access to the building to construct tenant improvements during the three months ended March 31, 2024. Upon gaining access to the 4 Kingsbury Avenue building, we capitalized a right-of-use asset and lease liability of approximately $32 million on our consolidated balance sheets which reflects our fixed base rent payments, net of approximately $15 million of a tenant improvement allowance provided by the landlord, over the 10-year term of the lease.

Previous wording

Total estimated minimum lease payments for the next 5 years and thereafter under our existing facility and leased equipment agreements are $8.1 million in 2025, $8.5 million in 2026, $8.7 million in 2027, $9.0 million in 2028 and $59.2 million thereafter.

Current wording

Total estimated minimum lease payments for the next 5 years and thereafter under our existing facility and leased equipment agreements are $8.2 million in 2025, $8.5 million in 2026, $8.7 million in 2027, $9.0 million in 2028 and $59.2 million thereafter.