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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2018
Income Taxes [Abstract] |
Loss Before Income Tax (Benefit) Expense | Loss before income tax (benefit) expense is comprised of (in thousands):
|  | Year Ended December 31, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
United States |  | $ | (69,576 | ) |  | $ | (5,289 | ) |  | $ | (57,466 | )
Foreign |  |  | (6,580 | ) |  |  | (11,474 | ) |  |  | — |
Loss before income tax (benefit) expense |  | $ | (76,156 | ) |  | $ | (16,763 | ) |  | $ | (57,466 | )
Income Tax (Benefit) Expense | Our income tax (benefit) expense was as follows (in thousands):
|  | Year Ended December 31, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 438 |  |  | $ | (7,460 | ) |  | $ | 1,067 |
State |  |  | (1,442 | ) |  |  | 1,246 |  |  |  | 1,867 |
Foreign |  |  | 374 |  |  |  | 234 |  |  |  | — |
Total current income tax (benefit) expense |  |  | (630 | ) |  |  | (5,980 | ) |  |  | 2,934 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (290,511 | ) |  |  | — |  |  |  | — |
State |  |  | — |  |  |  | — |  |  |  | — |
Total deferred income tax (benefit) expense |  |  | (290,511 | ) |  |  | — |  |  |  | — |
Total income tax (benefit) expense |  | $ | (291,141 | ) |  | $ | (5,980 | ) |  | $ | 2,934 |
Reconciliation of Statutory to Effective Tax Rate | The reconciliation between our effective tax rate on loss from continuing operations and the statutory U.S. tax rate is as follows (in thousands):
|  | Year Ended December 31, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
Pre-tax loss |  | $ | (76,156 | ) |  |  |  |  | $ | (16,763 | ) |  |  |  |  | $ | (57,466 | ) |  |  |
Statutory rate |  |  | (15,993 | ) |  |  | 21.0 | % |  |  | (5,867 | ) |  |  | 35.0 | % |  |  | (20,113 | ) |  |  | 35.0 | %
State income tax net of federal benefit |  |  | (2,202 | ) |  |  | 2.9 | % |  |  | 820 |  |  |  | (4.9 | )% |  |  | 95 |  |  |  | (0.2 | )%
Foreign |  |  | 1,735 |  |  |  | (2.3 | )% |  |  | 4,299 |  |  |  | (25.6 | )% |  |  | — |  |  |  | 0.0 | %
Net change in valuation allowance |  |  | (277,924 | ) |  |  | 364.9 | % |  |  | (86,296 | ) |  |  | 514.8 | % |  |  | 46,402 |  |  |  | (80.7 | )%
Net operating loss expiration |  |  | 8,864 |  |  |  | (11.6 | )% |  |  | 3,987 |  |  |  | (23.8 | )% |  |  | — |  |  |  | 0.0 | %
TEGSEDI licensing gain |  |  | 59,583 |  |  |  | (78.2 | )% |  |  | — |  |  |  | 0.0 | % |  |  | — |  |  |  | 0.0 | %
Tax credits |  |  | (73,362 | ) |  |  | 96.3 | % |  |  | (32,769 | ) |  |  | 195.5 | % |  |  | (26,954 | ) |  |  | 46.9 | %
Deferred tax true-up |  |  | 9,947 |  |  |  | (13.1 | )% |  |  | 4,848 |  |  |  | (28.9 | )% |  |  | 2,591 |  |  |  | (4.5 | )%
Tax rate change |  |  | (1,808 | ) |  |  | 2.4 | % |  |  | 114,832 |  |  |  | (685.0 | )% |  |  | — |  |  |  | 0.0 | %
Non-deductible compensation |  |  | 3,154 |  |  |  | (4.1 | )% |  |  | 1,575 |  |  |  | (9.4 | )% |  |  | 825 |  |  |  | (1.4 | )%
Other non-deductible items |  |  | (569 | ) |  |  | 0.7 | % |  |  | 2,548 |  |  |  | (15.2 | )% |  |  | 324 |  |  |  | (0.6 | )%
Akcea deconsolidation adjustment at IPO |  |  | — |  |  |  | 0.0 | % |  |  | 469 |  |  |  | (2.8 | )% |  |  | — |  |  |  | 0.0 | %
Stock-based compensation |  |  | (4,199 | ) |  |  | 5.5 | % |  |  | (14,337 | ) |  |  | 85.5 | % |  |  | — |  |  |  | 0.0 | %
Other |  |  | 1,633 |  |  |  | (2.1 | )% |  |  | (89 | ) |  |  | 0.5 | % |  |  | (236 | ) |  |  | 0.4 | %
Effective rate |  | $ | (291,141 | ) |  |  | 382.3 | % |  | $ | (5,980 | ) |  |  | 35.7 | % |  | $ | 2,934 |  |  |  | (5.1 | )%
Deferred Tax Assets and Liabilities | Significant components of our deferred tax assets and liabilities as of December 31, 2018 and 2017 are as follows (in thousands):
|  | Year Ended December 31, |
|  | 2018 |  |  | 2017 |
Deferred Tax Assets: |  |  |  |  |  |
Net operating loss carryovers |  | $ | 89,717 |  |  | $ | 153,575 |
R&D credits |  |  | 313,652 |  |  |  | 240,290 |
Deferred revenue |  |  | 27,381 |  |  |  | 54,302 |
Stock-based compensation |  |  | 61,027 |  |  |  | 40,090 |
Intangible and capital assets |  |  | 49,007 |  |  |  | 672 |
Other |  |  | 8,275 |  |  |  | 12,164 |
Total deferred tax assets |  | $ | 549,059 |  |  | $ | 501,093 |
Deferred Tax Liabilities: |  |  |  |  |  |  |  |
Convertible debt |  | $ | (24,018 | ) |  | $ | (32,391 | )
Net deferred tax asset |  | $ | 525,041 |  |  | $ | 468,702 |
Valuation allowance |  |  | (234,245 | ) |  |  | (468,702 | )
Total net deferred tax assets and liabilities |  | $ | 290,796 |  |  | $ | — |
Gross Unrecognized Tax Benefits | The following table summarizes our gross unrecognized tax benefits (in thousands):
|  | Years Ended December 31, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
Beginning balance of unrecognized tax benefits |  | $ | 78,014 |  |  | $ | 66,999 |  |  | $ | 51,257 |
Settlement of prior period tax positions |  |  | — |  |  |  | — |  |  |  | (4,033 | )
Decrease for prior period tax positions |  |  | (12,814 | ) |  |  | — |  |  |  | — |
Increase for prior period tax positions |  |  | — |  |  |  | 1,520 |  |  |  | 7,928 |
Increase for current period tax positions |  |  | 3,101 |  |  |  | 9,495 |  |  |  | 11,847 |
Ending balance of unrecognized tax benefits |  | $ | 68,301 |  |  | $ | 78,014 |  |  | $ | 66,999 |

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32639-109319 + Details
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