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Income Taxes | 12 Months Ended
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Dec. 31, 2015
Income Taxes |
Income Taxes | 9. Income Taxes The benefit for income taxes was $2.0 million, $10.4 million and $1.2 million and the effective rates were approximately 2%, 12% and 2% for the years ended December 31, 2015, 2014 and 2013, respectively. The benefit for income taxes recorded and the effective tax rates for the year ended December 31, 2015, 2014 and 2013 primarily reflect the reversal of valuation allowances previously recorded against the Company's New Jersey State net operating losses ("NOL") that resulted from the Company's sale of $24.3 million, $110.5 million and $27.0 million of its New Jersey State NOLs under the State of New Jersey's Technology Business Tax Certificate Transfer Program (the "Program") for cash of $2.0 million, $10.4 million and $1.2 million, respectively, net of commissions. The Program allows qualified technology and biotechnology businesses in New Jersey to sell unused amounts of NOLs and defined research and development tax credits for cash. In 2015, the Company reached the lifetime maximum cap of NOLs that can be sold to the State of New Jersey. Therefore the Company will no longer receive cash proceeds from this program in the future. The Company is subject to US federal and state income taxes and the statute of limitations for tax audit is open for the federal tax returns for the years ended 2012 and later, and is generally open for certain states for the years 2011 and later. The Company's US federal tax return for the year ended December 31, 2013 is currently under audit by the Internal Revenue Service. The Company has incurred net operating losses since inception, except for the year ended December 31, 2009. Such loss carryforwards would be subject to audit in any tax year in which those losses are utilized, notwithstanding the year of origin. The Company's policy is to recognize interest accrued related to unrecognized tax benefits and penalties in income tax expense. The Company has recorded no such expense. As of December 31, 2015 and 2014, the Company has recorded no reserves for unrecognized income tax benefits, nor has it recorded any accrued interest or penalties related to uncertain tax positions. The Company does not anticipate any material changes in the amount of unrecognized tax positions over the next twelve months. For the year ended December 31, 2015, the Company was also subject to foreign income taxes as a result of new legal entities established for activities in Europe. The Company's loss before income taxes was generated in the US and globally as follows (in thousands):
|  | Years ended December 31, |
|  | 2015 |  | 2014 |  | 2013 |
US |  | $ | (100,278 | ) | $ | (89,581 | ) | $ | (57,294 | )
Foreign |  |  | (19,876 | ) |  | - |  |  | - |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total |  | $ | (120,154 | ) | $ | (89,581 | ) | $ | (57,294 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
The Company's income tax provision / (benefit) consisted of the following (in thousands):
|  | Years ended December 31, |
|  | 2015 |  | 2014 |  | 2013 |
Current: |  |  |  |  |  |  |  |  |  |
Federal |  | $ | - |  | $ | - |  | $ | - |
State |  |  | (2,015 | ) |  | (10,422 | ) |  | (1,221 | )
Foreign |  |  | 44 |  |  | - |  |  | - |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  |  | (1,971 | ) |  | (10,422 | ) |  | (1,221 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Deferred: |  |  |  |  |  |  |  |  |  |
Federal |  |  | - |  |  | - |  |  | - |
State |  |  | - |  |  | - |  |  | - |
Foreign |  |  | - |  |  | - |  |  | - |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  |  | - |  |  | - |  |  | - |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total |  | $ | (1,971 | ) | $ | (10,422 | ) | $ | (1,221 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
The reconciliation between the federal statutory tax rate of 34% and the Company's effective tax rate is as follows:
|  | Years Ended December 31, |
|  | 2015 |  | 2014 |  | 2013 |
Statutory federal tax rate |  |  | 34 | % |  | 34 | % |  | 34 | %
Permanent items |  |  | (4 | )% |  | (3 | )% |  | 0 | %
State income taxes, net of federal benefit |  |  | 4 | % |  | (7 | )% |  | 7 | %
R&D and other tax credits |  |  | 12 | % |  | 5 | % |  | 7 | %
Foreign income taxes |  |  | (1 | )% |  | 0 | % |  | 0 | %
Change in state tax rate |  |  | 0 | % |  | 0 | % |  | 2 | %
Change in valuation allowance |  |  | (43 | )% |  | (17 | )% |  | (49 | )%
Other |  |  | 0 | % |  | 0 | % |  | 1 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Effective tax rate |  |  | 2 | % |  | 12 | % |  | 2 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Deferred tax assets and liabilities are determined based on the difference between financial statement and tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. The components of the deferred tax assets and liabilities consist of the following:
|  | As of December 31, |
|  | 2015 |  | 2014 |
|  | (in thousands) |
Deferred tax assets: |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 195,052 |  | $ | 160,758 |
General business credits |  |  | 33,360 |  |  | 18,150 |
Alternative minimum tax (AMT) credit |  |  | 418 |  |  | 418 |
Other |  |  | 10,569 |  |  | 7,863 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Gross deferred tax assets |  | $ | 239,399 |  | $ | 187,189 |
Deferred tax liabilities: |  |  |  |  |  |  |
In-process research and development |  | $ | (23,245 | ) | $ | (23,245 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Deferred tax liabilities |  | $ | (23,245 | ) | $ | (23,245 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net deferred tax assets |  | $ | 216,154 |  | $ | 163,944 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Valuation allowance |  |  | (216,154 | ) |  | (163,944 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net deferred tax assets |  | $ | - |  | $ | - |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
The net deferred tax assets (prior to applying the valuation allowance) of $216.2 million and $163.9 million at December 31, 2015 and 2014, respectively, primarily consist of net operating loss carryforwards for income tax purposes. Due to the Company's history of operating losses, the Company recorded a full valuation allowance on its net deferred tax assets by increasing the valuation allowance by $52.3 million and $15.8 million in 2015 and 2014, respectively, as it is more likely than not that such tax benefits will not be realized. At December 31, 2015, the Company had federal net operating loss carryforwards for income tax purposes of approximately $538.7 million. Due to the limitation on NOLs as more fully discussed below, $360.4 million of the NOLs are available to offset future taxable income, if any. The NOL carryovers and general business tax credits expire in various years beginning in 2018. For state tax purposes, the Company has approximately $115.9 million of New Jersey NOLs available to offset against future taxable income or to be sold as part of the New Jersey Transfer Program. The Company also has California and Virginia NOLs that are entirely limited due to Section 382 (as discussed below), in addition to changing state apportionment allocations, as the Company is now 100% resident in New Jersey. During 2014, the Company completed an Internal Revenue Code Section 382 ("Section 382") analysis in order to determine the amount of losses that are currently available for potential offset against future taxable income, if any. It was determined that the utilization of the Company's NOL and general business tax credit carryforwards generated in tax periods up to and including December 2010 (the "December 2010 and prior NOLs") were subject to substantial limitations under Section 382 due to ownership changes that occurred at various points from the Company's original organization through December 2010. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. Since the Company's formation, it has raised capital through the issuance of common stock on several occasions which, combined with the purchasing shareholders' subsequent disposition of those shares, resulted in multiple changes in ownership, as defined by Section 382 since the Company's formation in 1999. These ownership changes resulted in substantial limitations on the use of the Company's NOLs and general business tax credit carryforwards up to and including December 2010. The Company continues to track all of its NOLs and tax credit carryforwards but has provided a full valuation allowance to offset those amounts.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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