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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Company operated as a nontaxable partnership until its conversion on March 31, 2019. The Company had deferred tax assets in existence on March 31, 2019 when the Company became a taxable entity. Deferred tax assets were not recognized due to the uncertainty that such assets will be realized. The Company retained the valuation allowance on the deferred tax assets at December 31, 2019. No provision for income taxes was recorded for the years ended December 31, 2024, 2023, and 2022. A reconciliation of the federal statutory income tax rate and the Company’s effective income tax rate is as follows (in thousands):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Income tax expense (benefit) at statutory rates | $ | (67,683) |  |  | $ | (44,566) |  |  | $ | (36,539) |
State income tax, net of federal benefit | (8,170) |  |  | (5,882) |  |  | (11,821) |
Permanent items | 66 |  |  | 51 |  |  | 1 |
Reserve for uncertain tax positions | 10,572 |  |  | 5,993 |  |  | 2,583 |
Research and development tax credits | (42,279) |  |  | (24,054) |  |  | (9,983) |
Valuation allowance | 98,813 |  |  | 61,332 |  |  | 54,093 |
Stock-based compensation | (15,264) |  |  | 3,331 |  |  | 492 |
Section 162(m) disallowance | 20,604 |  |  | 291 |  |  | 1,077 |
Rate adjustment | 2,766 |  |  | 2,526 |  |  | (5) |
Other | 575 |  |  | 978 |  |  | 102 |
Income tax expense (benefit) | $ | — |  |  | $ | — |  |  | $ | — |
Significant components of the Company’s deferred tax assets as of December 31, 2024, and 2023 are shown below (in thousands):
| December 31,
| 2024 |  | 2023
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 83,371 |  |  | $ | 72,658 |
Section 174 R&E capitalization | 103,288 |  |  | 52,085 |
Research and development tax credits | 62,793 |  |  | 31,053 |
Deferred revenue | 12,529 |  |  | 125 |
Accrued expenses | 287 |  |  | 2,809 |
Intangibles and fixed assets | 698 |  |  | 1,265 |
Lease liabilities | 1,446 |  |  | 2,342 |
Stock-based compensation | 8,418 |  |  | 12,451 |
Total deferred tax assets | 272,830 |  |  | 174,788 |
Less valuation allowance | (271,636) |  |  | (172,822) |
Net deferred tax assets | 1,194 |  |  | 1,966 |
Deferred tax liabilities: |  |  |
Right-of-use assets | (1,194) |  |  | (1,966) |
Total deferred tax liabilities | (1,194) |  |  | (1,966) |
Net deferred tax assets | $ | — |  |  | $ | — |
The Company has established a valuation allowance against its net deferred tax assets due to the uncertainty that such assets will be realized. The Company periodically evaluates the recoverability of the deferred tax assets. At such time as it is determined that it is more likely than not that the deferred tax assets will be realizable, the valuation allowance will be released. The change in the valuation allowance was an increase of $98.8 million and $61.3 million for the years ended December 31, 2024 and 2023, respectively. At December 31, 2024, the Company had federal and state net operating loss (NOL) carryforwards of $249.4 million and $439.3 million, respectively. The federal NOL carryforwards will carryforward indefinitely and can offset 80% of future taxable income each year, and the state NOLs begin to expire in 2039 unless previously utilized. At December 31, 2024, the Company had federal and state research and development tax credits of approximately $13.3 million and $15.8 million, respectively. The federal research and development tax credits begin to expire in 2039 unless previously utilized, and the California state credits carry forward indefinitely. At December 31, 2024, the Company had federal orphan drug tax credits of $58.0 million, which begin to expire in 2041. Pursuant to Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended (the "Code"), the Company’s ability to use NOL and R&D tax credit carryforwards (“tax attribute carryforwards”) to offset future taxable income may be limited if the Company experienced a cumulative change in ownership by certain stockholders or groups of stockholders of more than 50 percentage points within a three-year testing period. The Company determined there was one ownership change through December 31, 2023. Limitations as a result of these ownership changes did not impact the Company’s deferred tax assets. Due to the existence of a valuation allowance, impacts to the Company’s deferred tax assets would not impact the Company’s effective tax rate. The following table summarizes the activity related to the Company’s gross unrecognized tax benefits for the years ended December 31, 2024, 2023 and 2022 (in thousands):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Gross unrecognized tax benefits at the beginning of the year | $ | 11,049 |  |  | $ | 4,771 |  |  | $ | 1,996 |
Increases related to current year positions | 11,110 |  |  | 6,156 |  |  | 2,614 |
Increases related to prior year positions | — |  |  | 122 |  |  | 161 |
Gross unrecognized tax benefits at the end of the year | $ | 22,159 |  |  | $ | 11,049 |  |  | $ | 4,771 |
The unrecognized tax benefit amounts are reflected in the determination of the Company’s deferred tax assets. If recognized, none of these amounts would affect the Company’s effective tax rate, since it would be offset by a corresponding adjustment to the deferred tax asset valuation allowance. The Company does not foresee material changes to its liability for uncertain tax benefits within the next twelve months. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties as of December 31, 2024 or 2023. As of December 31, 2024, the Company’s tax years since conversion to a corporation in 2019 are subject to examination by U.S. federal and various state taxing authorities.

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