ENANTA PHARMACEUTICALS INC

Previous wording

We are a biotechnology company that uses our robust, chemistry-driven approach and drug discovery capabilities to discover and develop small molecule drugs with an emphasis on virology and immunology indications. We discovered glecaprevir, the second of two protease inhibitors discovered and developed through our collaboration with AbbVie for the treatment of chronic infection with hepatitis C virus, or HCV. Glecaprevir is co-formulated as part of AbbVie’s leading brand of direct-acting antiviral, or DAA, combination treatment for HCV, which is marketed under the tradenames MAVYRET® (U.S.) and MAVIRET® (ex-U.S.) (glecaprevir/pibrentasvir). The ongoing royalties from our AbbVie collaboration, combined with the proceeds from our 2023 royalty sale transaction, have provided us funding to support our wholly-owned research and development programs primarily focused on the following disease targets:

Current wording

We discovered glecaprevir, the second of two antiviral protease inhibitors discovered and developed through our collaboration with AbbVie for the treatment of chronic infection with hepatitis C virus, or HCV. Glecaprevir is co-formulated as part of AbbVie’s leading brand of direct-acting antiviral, or DAA, combination treatment for HCV, which has been marketed under the tradenames MAVYRET®(U.S.) and MAVIRET® (ex-U.S.) (glecaprevir/pibrentasvir) since 2017.

Previous wording

Respiratory syncytial virus, or RSV, the most common cause of bronchiolitis and pneumonia in young children and a significant cause of respiratory illness in older adults, with estimates suggesting that on average each year RSV leads to 3 million hospitalizations globally in children under 5 years old and 177,000 hospitalizations in the U.S. in adults over the age of 65;

Current wording

Our active development programs in virology are focused on respiratory syncytial virus, or RSV, the most common cause of bronchiolitis and pneumonia and leading cause of U.S. hospitalization in young children and a significant cause of respiratory illness in older adults, with estimates suggesting that on average each year RSV leads to three million hospitalizations globally in children under 5 years old and 177,000 hospitalizations in the U.S. in adults over the age of 65.

Previous 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.

Current wording

As of December 31, 2024, we had $216.7 million in cash, cash equivalents and short-term marketable securities. We expect that our existing cash, cash equivalents, short-term marketable securities, as well as the cash flows from our retained portion of future HCV royalties and our forthcoming federal tax refund, will enable us to fund our operating expenses and capital expenditure requirements into fiscal 2028.

Previous wording

Our primary wholly-owned research and development programs are in virology and immunology. Our virology programs have been focused on RSV, SARS-CoV-2 and HBV and our immunology program is focused on oral inhibitors of the receptor tyrosine kinase known as KIT for the treatment of CSU, and potentially other mast-cell-driven diseases. The programs currently in active development are in RSV and CSU.

Current wording

Our primary wholly-owned research and development programs are in virology and immunology.

Previous wording

RSV: We have two clinical stage programs for RSV – zelicapavir (formerly EDP-938) and EDP-323. Both of these compounds are replication inhibitors that work by shutting down replication and the production of new virions, as opposed to the other mechanism in development of fusion inhibition that only blocks viral entry. Zelicapivir, which has Fast Track designation from the U.S. Food and Drug Administration, or FDA, is a potent inhibitor of the RSV N-protein being studied in two ongoing Phase 2 studies, each in a different patient population. EDP-323, which also has a Fast Track designation from the FDA is an inhibitor of the RSV L-protein that is currently in a Phase 2 challenge study.

Current wording

RSV. In virology, we have two clinical stage product candidates for RSV – zelicapavir (formerly EDP-938) and EDP-323. Both of these compounds are replication inhibitors that work by shutting down replication and the production of new virions, as opposed to the other mechanism in development of fusion inhibition that only blocks viral entry. Zelicapavir, which has Fast Track designation from the U.S. Food and Drug Administration, or FDA, is a potent inhibitor of the RSV N-protein for both major subgroups of RSV, referred to as RSV-A and RSV-B. Zelicapavir is being studied in two Phase 2 studies, each in a different high risk patient population. EDP-323, which also has a Fast Track designation from the FDA, is an inhibitor of the RSV L-protein for both major subgroups of RSV that has recently completed a Phase 2 challenge study.

Previous wording

Zelicapavir - N-protein Inhibitor Candidate: We have studied zelicapavir in two Phase 2 studies that were designed to be proof-of-concept and exploratory studies to understand the viral response in the context of RSV infection. With these studies, zelicapavir has demonstrated a favorable safety profile, consistent with that observed in over 500 subjects exposed to zelicapavir to date. These studies were conducted in otherwise healthy young adults (not at high-risk for serious outcomes with RSV) infected with RSV. The first study was a challenge study, in which healthy adults were infected with RSV in a clinical setting and statistically significant effects on viral load and symptoms were observed. The second study, known as RSVP, was in an otherwise healthy young adult outpatient population with community-acquired RSV infection and showed that this population resolves quickly from infection and is not in need of treatment. We believe that zelicapavir has the greatest potential to show optimal efficacy in high-risk populations since these patients have reduced RSV immunity, which manifests in a higher and longer duration of viral load and greater disease severity, allowing a bigger window to realize the full potential of zelicapavir. Based on its growing safety profile, we are continuing to evaluate zelicapavir in high-risk populations in the following ongoing clinical studies, including pediatric patients and high-risk adults, all of which have significant unmet need:

Current wording

Zelicapavir - N-protein Inhibitor Candidate: We have studied zelicapavir in two Phase 2 studies that were designed to be proof-of-concept and exploratory studies in otherwise healthy young adults (not at high-risk for serious outcomes with RSV) to understand the viral response in the context of RSV infection. With these studies, zelicapavir has demonstrated a favorable safety profile, consistent with that observed in over 500 subjects exposed to zelicapavir to date. We believe that zelicapavir has the greatest potential to show optimal efficacy in high-risk populations since these patients have reduced RSV immunity, which manifests in a higher and longer duration of viral load and greater disease severity, allowing a bigger window to realize the full potential of zelicapavir. Based on its growing safety profile, we are continuing to evaluate zelicapavir in high-risk populations, including pediatric patients and high-risk adults, all of which have significant unmet need:

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. Enrollment is progressing and the Company is targeting enrollment completion in the upcoming Northern Hemisphere RSV season.

Current wording

High-Risk Adults Study of Zelicapavir: We also have an ongoing 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 we are targeting enrollment completion in the current Northern Hemisphere RSV season with topline data expected in the third quarter of 2025.

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 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.

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.

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. 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.

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.

Previous 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.

Current wording

KIT Inhibitors. We have a preclinical stage program to develop oral 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 KIT inhibitors, which are in preclinical development. In the fourth quarter of 2024, we selected our lead development candidate, EPS-1421. This candidate demonstrates potent nanomolar activity in both binding and cellular function assays, with sub-nanomolar activityin vivo, and is highly selective for KIT versus other kinases. This inhibitor also demonstrates strongin vitro andin vivo absorption, distribution, metabolism and excretion (ADME) properties. We expect to conduct scale-up activities and IND-enabling studies for this program in 2025.

Previous wording

We plan to expand our presence in immunology with the introduction of a second program in the fourth quarter of calendar 2024.

Current wording

We plan to expand our presence in immunology with the introduction of a third program in 2025.

Previous wording

We are currently funding all research and development for our wholly-owned programs, which are targeted toward the discovery and development of novel compounds. As of the date of this report, we are conducting two Phase 2 studies for zelicapavir and a Phase 2 challenge study of EDP-323. We are also conducting preclinical discovery research efforts in other disease areas.

Current wording

We are currently funding all research and development for our wholly-owned programs, which are targeted toward the discovery and development of novel compounds. As of the date of this report, we are conducting a Phase 2b study of zelicapavir in high risk adults and have recently completed a Phase 2b study of zelicapavir in pediatric patients and a Phase 2a human challenge study of EDP-323. We are also conducting preclinical research and discovery efforts in the field of immunology.

Previous wording

As a result of the timing of our clinical and preclinical development programs, we expect our research and development expenses will fluctuate from period to period. However, in the next 12 months, we expect our external research and development expenses generally to decrease since we will not conduct any further development of EDP-235 into Phase 3 studies and we have made important adjustments to reduce our spending significantly in 2024.

Current wording

As a result of the timing of our clinical and preclinical development programs, we expect our research and development expenses will fluctuate from period to period. However, in the next 12 months, we anticipate a reduction in our external research and development expenses, primarily driven by the completion of the Phase 2a human challenge study of EDP-323 and the Phase 2b study of zelicapavir in pediatric patients. These milestones, along with strategic adjustments, have positioned us to reduce spending in 2025 while maintaining our commitment to advancing key programs.

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 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.

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 marketable securities. We believe that our existing cash, cash equivalents and short-term marketable securities, as well as the cash flows from our retained portion of future HCV royalties and our forthcoming federal tax refund, will enable us to fund our operating expenses and capital expenditure requirements into fiscal 2028.

Previous wording

Our revenue is primarily derived from our collaboration agreement with AbbVie and AbbVie’s sales of MAVYRET/MAVIRET, an 8-week treatment regimen for chronic HCV. During the first quarter of fiscal 2023, we also generated $1.0 million of license revenue from an upfront payment related to a license agreement for one of the antibacterial compounds we are no longer developing.

Current wording

Our revenue is primarily derived from our collaboration agreement with AbbVie and AbbVie’s sales of MAVYRET/MAVIRET, an 8-week treatment regimen for chronic HCV.

Previous wording

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

Current wording

The following table is a summary of revenue recognized for the three months ended December 31, 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. 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. However, in the next 12 months, we anticipate a reduction in our external research and development expenses, primarily driven by the completion of the Phase 2a human challenge study of EDP-323 and the Phase 2b study of zelicapavir in pediatric patients. These milestones, along with strategic adjustments, have positioned us to reduce spending in 2025 while maintaining our commitment to advancing key 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

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.

Current wording

We recognized revenue of $17.0 million during the three months ended December 31, 2024 as compared to $18.0 million during the three months ended December 31, 2023. The $1.0 million decrease in revenue was primarily due to AbbVie’s lower reported HCV sales as compared to the comparable period in 2023.

Previous 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.

Current wording

Research and development expenses for the three months ended December 31, 2024 decreased by $8.7 million compared to the same period in 2023.

Previous 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.

Current wording

The costs in our virology program decreased $9.0 million primarily due to timing of our clinical trials in our RSV program and to a lesser extent, 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

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.

Current wording

General and administrative expenses decreased by $3.7 million for the three months ended December 31, 2024 compared to the same period in 2023. The change was primarily due to a decrease in legal expenses related to our patent infringement suit against Pfizer.

Previous 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.

Current wording

Interest expense decreased $1.5 million for the three months ended December 31, 2024, as compared to the same period in 2023 due to the paydown of our obligation associated with our royalty sale agreement entered into during April 2023 with an affiliate of OMERS.

Previous wording

Interest and investment income, net, decreased $0.4 million for the three months ended June 30, 2024, as compared to the same period in 2023. The decrease was due to lower cash and investment balances year over year.

Current wording

Interest and investment income, net, decreased $1.5 million for the three months ended December 31, 2024, as compared to the same period in 2023. The decrease was due to lower cash and investment balances year over year.

Previous 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.

Current wording

During the three months ended December 31, 2024 and 2023, we recorded an income tax benefit of $0.4 million and $0.6 million, respectively, primarily related to interest recorded on a pending federal tax refund.

Previous 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.

Current wording

We fund our operations with cash flows from our retained portion of our royalty revenue and our existing financial resources. At December 31, 2024, our principal sources of liquidity were cash and cash equivalents and short-term marketable securities of $216.7 million.

Previous 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.

Current wording

Cash used in operating activities was $16.8 million for the three months ended December 31, 2024 as compared to cash used in operating activities of $25.0 million for the same period in 2023. Our cash used in operating activities decreased $8.2 million primarily due to lower research and development payments, offset by lower cash receipts associated with our AbbVie agreement.

Previous 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.

Current wording

Cash provided by investing activities was $68.9 million for the three months ended December 31, 2024 as compared to cash used in investing activities of $13.1 million for the same period in 2023. Our cash provided by investing activities increased $82.0 million, driven by the timing of maturities of marketable securities in 2024 compared to 2023.

Previous wording

Net cash provided by (used in) financing activities

Current wording

Net cash used in financing activities

Previous 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.

Current wording

Cash used in financing activities was $5.0 million for the three months ended December 31, 2024 as compared to cash used in financing activities of $7.4 million for the same period in 2023. Our cash used in financing activities decreased $2.4 million, driven primarily by lower payments on our royalty sale agreement with OMERS.

Previous 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.

Current wording

As of December 31, 2024, we had $216.7 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 December 31, 2024, as well as the cash flows from our retained portion of future HCV royalties and our forthcoming federal tax refund, will enable us to fund our operating expenses and capital expenditure requirements into fiscal 2028. 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

We currently lease space in Watertown, Massachusetts, under two separate lease agreements with one landlord and entered into a third lease agreement with the same landlord in May 2022 to lease additional laboratory and office space located at a to-be-constructed facility at Arsenal on the Charles in Watertown, Massachusetts.

Current wording

As of the date of this report, we lease space in Watertown, Massachusetts, under two separate lease agreements with one landlord.

Previous 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.

Current wording

In May 2022, we entered into a ten-year lease for new laboratory and office space in Watertown, Massachusetts, adjacent to our 400 Talcott Avenue premises at Arsenal on the Charles at 4 Kingsbury Avenue since our lease for office and laboratory space at 500 Arsenal Street was to expire on September 1, 2027. 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. The 4 Kingsbury Avenue lease ends on September 30, 2034.

Previous wording

In conjunction with the commencement of our lease at 4 Kingsbury Avenue during the quarter, we adjusted our 500 Arsenal Street lease liability to shorten the expiration date from September 2027 to the date the Kingsbury Avenue facility is ready for our occupancy which is expected to be by the end of November 2024. This resulted in a decrease in the lease liability and right-of-use asset on our consolidated balance sheets by approximately $9 million.

Current wording

In conjunction with the commencement of our lease at 4 Kingsbury Avenue, during the three months ended March 31, 2024, we adjusted our 500 Arsenal Street lease liability to shorten the expiration date from September 2027 to the date the 4 Kingsbury Avenue building became ready for our occupancy. This resulted in a decrease in the lease liability and right-of-use asset on our consolidated balance sheets by approximately $9.0 million. The rent commencement date for our 4 Kingsbury Avenue lease was September 12, 2024, and we moved into the space in November 2024, at which time our lease at 500 Arsenal Street expired.

Previous 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.

Current wording

Total estimated minimum lease payments for the next 5 years and thereafter under our existing facility and leased equipment agreements are $6.7 million for the remainder of 2025, $8.5 million in 2026, $8.7 million in 2027, $9.0 million in 2028, $9.3 million in 2029, and $50.6 million thereafter.