Kodiak Sciences Inc. Notes to Consolidated Financial Statements (in thousands, except share and per share data) 96 Switzerland Lease In April 2020, the Company entered into a lease agreement for office and laboratory space at Rottenstrasse 5 in Visp, Switzerland. The space is approximately 1,000 square meters. The initial lease term is 5 years, with automatic renewals every 5 years for a maximum lease term of 15 years. The monthly rent during the initial 5-year term will be approximately 32.0 thousand Swiss Francs plus certain operating expenses and taxes. Under ASC 842, the Company classified these leases as operating leases and recorded right-of-use assets and lease liabilities on the lease commencement date. The maturities of the operating lease liabilities as of December 31, 2022 were as follows (in thousands): Year ending December 31, As of December 31, 2022 2023.............................................................................................................................................. $ 15,592 2024.............................................................................................................................................. 15,020 2025.............................................................................................................................................. 15,458 2026.............................................................................................................................................. 15,909 2027.............................................................................................................................................. 9,183 Thereafter ..................................................................................................................................... 46,184 Total undiscounted lease payments.............................................................................................. 117,346 Less: imputed interest................................................................................................................... (28,055) Less: future tenant improvement reimbursements ....................................................................... (1,558) Total operating lease liabilities..................................................................................................... $ 87,733 The minimum lease payments above do not include any related common area maintenance charges or real estate taxes. The operating lease expense for the years ended December 31, 2022, 2021 and 2020 were $12.8 million, $12.8 million and $6.1 million, respectively. The weighted-average remaining lease terms and weighted-average discount rates were as follows: December 31, 2022 December 31, 2021 Weighted-average remaining lease term (in years) .......................................... 8.4 8.8 Weighted-average discount rate........................................................................ 6.8% 6.7% Embedded Lease 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 drug substance for tarcocimab. A custom- built manufacturing facility is planned to be completed and dedicated to the manufacture of the Company’s drug substance. The manufacturing agreement has an initial term of eight years, and the Company has the right to extend the term up to a total of 16 years. The Company and Lonza each has the ability to terminate this agreement upon the occurrence of certain conditions. In April 2021, the agreement was amended to provide for higher annual manufacturing capacity. The Company expanded and finalized the design and scope of the bioconjugate manufacturing facility with a revised estimated capital contribution of approximately 75.0 million Swiss Francs of which the Company has paid 40.0 million Swiss Francs of the capital contribution, equivalent to 44.1 million U.S. Dollars, which is recorded in other assets on the consolidated balance sheet as of December 31, 2022. Over the period from 2022 through 2029, manufacturing payments totaling approximately 150.0 million Swiss Francs may be incurred for potential commercial supply of tarcocimab drug substance. These commitments are not included in the operating lease liabilities table above. The Company concluded that this agreement contains an embedded lease as the custom-built manufacturing suite will be dedicated for the Company’s use. As of December 31, 2022, the Company did not have control of this manufacturing space and therefore, did not record a right-of-use asset and corresponding lease liability. On January 31, 2023, the custom- built manufacturing suite was commissioned as a cGMP facility and the right-of-use asset and corresponding lease liability were subsequently recorded.