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Income Taxes | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | 9. Income Taxes All of the Company’s net losses have been generated in the United States. The Company recognized income tax provisions of $0.6 million and $0.8 million during the years ended December 31, 2025 and 2024, respectively, as a result of investment income earned in Nuvalent Securities Corporation. The Company recognized no income tax provision during the year ended December 31, 2023. Reconciliation of federal statutory income tax rate to effective income tax rate The Company has elected to prospectively adopt the guidance in ASU 2023-09. The following tables present reconciliations of the U.S. federal statutory income tax rate of 21% to the Company’s effective income tax rate for the years ended December 31, 2025, 2024 and 2023 (dollar values in thousands):
| Year Ended December 31, 2025 |
U.S. federal statutory income tax rate | $ | (89,206 | ) |  |  | 21.0 | %
State and local income tax, net of federal (national) income tax effect |  | 585 |  |  |  | (0.1 | )%
Foreign tax effects |  | — |  |  |  | — | %
Effect of changes in tax laws or rates enacted in the current period |  | — |  |  |  | — | %
Effect of cross-border tax laws |  | — |  |  |  | — | %
Tax credits |  |  |  |  |
Orphan drug credit |  | (27,137 | ) |  |  | 6.4 | %
R&D credit |  | 1,061 |  |  |  | (0.3 | )%
Changes in valuation allowances |  | 114,819 |  |  |  | (27.0 | )%
Nontaxable or nondeductible items |  |  |  |  |
Section 162(m) limitation |  | 12,316 |  |  |  | (2.9 | )%
Stock-based compensation |  | (12,413 | ) |  |  | 2.9 | %
Permanent adjustments |  | 113 |  |  |  | — | %
Changes in unrecognized tax benefits |  | — |  |  |  | — | %
Other adjustments |  | 447 |  |  |  | (0.1 | )%
Effective income tax rate | $ | 585 |  |  |  | (0.1 | )%
| Year Ended December 31, |
| 2024 |  |  | 2023 |
U.S. federal statutory income tax rate |  | 21.0 | % |  |  | 21.0 | %
State income taxes, net of federal benefit |  | 6.7 | % |  |  | 8.3 | %
Tax credits generated |  | 14.3 | % |  |  | 5.7 | %
Change in deferred tax asset valuation allowance |  | (45.8 | )% |  |  | (38.7 | )%
Stock-based compensation |  | 3.6 | % |  |  | 3.5 | %
Other |  | (0.1 | )% |  |  | 0.2 | %
Effective income tax rate |  | (0.3 | )% |  |  | — | %
During the years ended December 31, 2025, 2024 and 2023, the Company recorded no income tax benefits for the net operating losses incurred or for the research and development tax credits generated in each year, due to its uncertainty of realizing a benefit from those items. Net deferred tax assets Net deferred tax assets consisted of the following (in thousands):
|  | December 31, |
|  | 2025 |  |  | 2024 |
Deferred tax assets: |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 139,120 |  |  | $ | 56,677 |
Capitalized research and development |  |  | 103,127 |  |  |  | 94,002 |
Research and development tax credit carryforwards |  |  | 82,361 |  |  |  | 52,117 |
Change in fair value of related party revenue share liability |  |  | 19,284 |  |  |  | 4,785 |
Stock-based compensation |  |  | 14,225 |  |  |  | 9,705 |
Other, net |  |  | 4,648 |  |  |  | 2,714 |
Total gross deferred tax assets |  |  | 362,765 |  |  |  | 220,000 |
Valuation allowance |  |  | (362,495 | ) |  |  | (220,000 | )
Total net deferred tax assets |  |  | 270 |  |  |  | — |
Deferred tax liabilities: |  |  |  |  |  |
Other |  |  | (270 | ) |  |  | — |
Total gross deferred tax liabilities |  |  | (270 | ) |  |  | — |
Net deferred tax assets |  | $ | — |  |  | $ | — |
As of December 31, 2025, the Company had U.S. federal and state net operating loss carryforwards of $503.2 million and $531.1 million, respectively, which may be available to offset future taxable income. The federal net operating losses include $1.2 million which expire in 2037 and $502.0 million which carryforward indefinitely, but may only be used to offset 80% of annual taxable income. The state net operating losses expire at various dates beginning in 2037. As of December 31, 2025, the Company also had federal and state research and development tax credit carryforwards of $14.6 million and $14.1 million, respectively, and federal orphan drug credits of $56.5 million, which may be available to offset future tax liabilities. The federal and state research and development tax credit carryforwards and the federal orphan drug credits expire at various dates beginning in 2033. Utilization of the U.S. federal and state net operating loss carryforwards, as well as the research and development tax credit carryforwards and federal orphan drug credits may be subject to a substantial annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986 (“IRC”), and corresponding provisions of state law, due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income or tax liabilities. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over a three-year period. The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception. If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforwards, research and development tax credit carryforwards or the federal orphan drug credits would be subject to an annual limitation under Section 382. Any limitation may result in expiration of a portion of the net operating loss carryforwards, research and development tax credit carryforwards or the federal orphan drug credits before utilization. Further, until a study is completed by the Company and any limitation is known, no amounts are being presented as an uncertain tax position. Valuation allowance The Company has evaluated the positive and negative evidence bearing upon its ability to realize the net deferred tax assets. Management has considered the Company’s history of cumulative net losses incurred since inception and that the Company has yet to commercialize any of its product candidates to generate revenue from product sales and has concluded that it is more likely than not that the Company will not realize the benefits of the net deferred tax assets. Accordingly, a full valuation allowance has been established against the net deferred tax assets as of December 31, 2025 and 2024. Management reevaluates the positive and negative evidence at each reporting period. The valuation allowance increased by $142.5 million, $119.1 million and $48.8 million during the years ended December 31, 2025, 2024 and 2023, respectively, primarily as a result of increases in net operating loss carryforwards, research and development tax credit carryforwards, the change in fair value of related party revenue share liability and research and development costs capitalized under Section 174 of the IRC. Unrecognized tax benefits and tax examinations As of December 31, 2025 and 2024, the Company had no t recorded any amounts for unrecognized tax benefits. The Company files income tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations. The Company is open to future tax examination under statute from 2022 to the present.

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