Vaxcyte, Inc., a biotechnology company specializing in biological products, has entered into an amended and restated lease agreement to expand its corporate headquarters in San Carlos, California. The agreement, effective November 15, 2024, consolidates previous leasing arrangements into a single unified lease for a total of 258,581 rentable square feet in the building at 825 Industrial Road.
The new lease includes the existing premises already occupied by Vaxcyte and additional floors, with the space being leased in a phased approach. The lease term for the existing premises began on the effective date, while the additional premises have target commencement dates ranging from February 10, 2025, to June 1, 2026. Once all phases are commenced, the lease will run for 120 months from the first day of the first full month following these dates.
Vaxcyte will pay a monthly base rent starting at rates varying from $5.941 to $6.026 per square foot for the existing premises, with annual increases of 3%. The additional premises will have a base rent of $6.00 per square foot, also subject to a 3% annual increase. The company is granted an eight-month rent abatement period for each of the additional premises following their respective commencement dates.
In addition to rent, Vaxcyte is responsible for certain costs and expenses, including maintenance, taxes, and operating expenses as outlined in the lease agreement. The lease includes various standard covenants, indemnities, and termination rights, as well as an option to further expand within the building under certain conditions.
Concurrently, Vaxcyte has subleased a portion of its space to Iovance Biotherapeutics (NASDAQ:IOVA), Inc. The sublease for 16,731 square feet of Suite 100A commences no later than December 15, 2024, and will last until the second anniversary of that commencement date, with options for further extension.
The financial terms and other details of the amended and restated lease will be disclosed in Vaxcyte's Annual Report on Form 10-K for the year ending December 31, 2024. This expansion reflects Vaxcyte's growth and ongoing commitment to its operations and research in the field of biological products. The information in this article is based on a press release statement.
InvestingPro Insights
Vaxcyte's recent lease expansion aligns with its growth trajectory, as evidenced by InvestingPro data. The company's market capitalization stands at $11.02 billion, reflecting significant investor confidence. This expansion comes on the heels of strong performance, with a 69.35% price total return over the past year and a 36.88% return year-to-date.
InvestingPro Tips highlight that Vaxcyte holds more cash than debt on its balance sheet, which supports its ability to fund this expansion and maintain financial flexibility. Additionally, the company's liquid assets exceed short-term obligations, indicating a solid financial position to take on new lease commitments.
However, investors should note that Vaxcyte is not currently profitable, with a negative gross profit of $75 million in the last twelve months. This aligns with the InvestingPro Tip that analysts do not anticipate the company to be profitable this year. The expansion could be seen as a strategic move to support future growth and potential profitability.
For readers interested in a deeper analysis, InvestingPro offers 11 additional tips for Vaxcyte, providing a comprehensive view of the company's financial health and market position.
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