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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | 14. Income Taxes The Company is subject to U.S. federal and various state corporate income taxes as well as taxes in foreign jurisdictions for the foreign parent and where foreign subsidiaries have been established. Net income (loss) before taxes For the years ended December 31, 2021, 2020 and 2019, the income (loss) before provision for income taxes consist of the following (in thousands):
|  | Years Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Domestic |  | $ | 4,569 |  |  | $ | 7,630 |  |  | $ | 9,155 |
Foreign |  |  | 374,962 |  |  |  | (355,686 | ) |  |  | 58,151 |
Total |  | $ | 379,531 |  |  | $ | (348,056 | ) |  | $ | 67,306 |
The (provision for) benefit from income taxes consist of the following (in thousands):
|  | Years Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Current income taxes: |  |  |  |  |  |  |  |  |
Federal |  | $ | (80 | ) |  | $ | (248 | ) |  | $ | (423 | )
State |  |  | (42 | ) |  |  | (151 | ) |  |  | (59 | )
Foreign |  |  | — |  |  |  | (1 | ) |  |  | 0 |
Total current income taxes |  |  | (122 | ) |  |  | (400 | ) |  |  | (482 | )
Deferred income taxes: |  |  |  |  |  |  |  |  |
Federal |  |  | (1,748 | ) |  |  | (409 | ) |  |  | 34 |
State |  |  | — |  |  |  | — |  |  |  | — |
Foreign |  |  | — |  |  |  | — |  |  |  | — |
Total deferred income taxes |  |  | (1,748 | ) |  |  | (409 | ) |  |  | 34 |
Total income tax (provision) benefit |  | $ | (1,870 | ) |  | $ | (809 | ) |  | $ | (448 | )
A reconciliation of income tax expense computed at the statutory corporate income tax rate to the effective income tax rate for the years ended December 31, 2021, 2020 and 2019 is as follows:
|  | Years Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Income tax expense at statutory rate |  |  | 11.9 | % |  |  | 11.9 | % |  |  | 9.3 | %
State income tax, net of federal benefit |  |  | (1.0 | )% |  |  | 1.0 | % |  |  | (2.1 | )%
Nondeductible expenses |  |  | 0.7 | % |  |  | 0.1 | % |  |  | (0.1 | )%
Foreign rate differential |  |  | 0.6 | % |  |  | (0.1 | )% |  |  | 2.0 | %
Statutory to US GAAP permanent differences |  |  | 0.0 | % |  |  | 0.0 | % |  |  | 0.1 | %
Stock-based compensation |  |  | (2.5 | )% |  |  | 2.3 | % |  |  | (2.0 | )%
Impact of deferred rate change |  |  | 0.0 | % |  |  | 0.0 | % |  |  | (12.2 | )%
Research credits |  |  | (4.2 | )% |  |  | 3.3 | % |  |  | (5.2 | )%
Change in valuation allowance |  |  | (5.0 | )% |  |  | (18.7 | )% |  |  | 10.9 | %
Effective income tax rate |  |  | 0.5 | % |  |  | (0.2 | %) |  |  | 0.7 | %
The federal statutory rate reflects the Switzerland mixed company service rate. Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The significant components of the Company’s deferred tax assets are comprised of the following (in thousands):
|  | Years Ended December 31, |
|  | 2021 |  |  | 2020 |
Deferred tax assets: |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 47,190 |  |  | $ | 84,531 |
Accruals and reserves |  |  | 5,878 |  |  |  | 4,785 |
Operating lease liabilities |  |  | 61,476 |  |  |  | 16,782 |
Other deferred tax assets |  |  | 6,362 |  |  |  | 1,517 |
Stock-based compensation |  |  | 14,042 |  |  |  | 9,605 |
Deferred revenue |  |  | — |  |  |  | 86 |
Research credit |  |  | 37,878 |  |  |  | 19,526 |
Total deferred tax assets |  |  | 172,826 |  |  |  | 136,832 |
Less valuation allowance |  |  | (98,649 | ) |  |  | (116,640 | )
Net deferred tax assets |  |  | 74,177 |  |  |  | 20,192 |
Deferred tax liabilities: |  |  |  |  |  |
Depreciation |  |  | (28,579 | ) |  |  | (6,778 | )
Operating lease assets |  |  | (47,521 | ) |  |  | (13,776 | )
Intangible assets |  |  | (31 | ) |  |  | (31 | )
Other deferred tax liabilities |  |  | (192 | ) |  |  | (4 | )
Total deferred tax liabilities |  |  | (76,323 | ) |  |  | (20,589 | )
Long term deferred taxes |  | $ | (2,146 | ) |  | $ | (397 | )
The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Based on the Company’s history of worldwide operating losses, the Company has concluded that it is more-likely-than-not that the benefit of its U.S. and non-U.S. deferred tax assets will not be realized. Accordingly, as of December 31, 2021 and 2020, the Company has provided a full valuation allowance against its net deferred tax assets in Switzerland and the United Kingdom. The Company has also provided a valuation allowance against the U.S. deferred tax assets that cannot be realized by existing deferred tax liabilities based upon when they are scheduled to reverse. The valuation allowance decreased by $18.0 million during 2021, which is primarily attributable to decreases in net operating loss carryforwards as a result of current year net income. As of December 31, 2021, the Company had available U.S. federal net operating loss carryforwards of $3.3 million. The U.S. federal net operating losses can be carried forward indefinitely. As of December 31, 2021, the Company had available non-U.S. net operating loss carryforwards of $772.9 million of which $385.2 million relate to Switzerland, $385.2 million relate to the Canton of Zug, and $2.5 million relate to the Company’s wholly-owned subsidiary in the United Kingdom. The net operating losses generated in Switzerland and the Canton of Zug begin to expire in 2027 and the net operating losses generated in the United Kingdom can be carried forward indefinitely. As of December 31, 2021, the Company had U.S. domestic federal research and development credit carryforwards of $19.4 million begin to expire in 2039 for federal purposes, which are net of uncertain tax positions of $9.9 million. As of December 31, 2021, the Company had U.S. domestic federal orphan drug credit carryforwards of $10.6 million which begin to expire in 2040 for federal purposes, which are net of uncertain tax positions of $4.5 million. As of December 31, 2021, the Company had U.S. domestic state research and development credit carryforwards of $10.0 million which begin to expire in 2035, which are net of uncertain tax positions of $7.0 million. ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statement by prescribing the minimum recognition threshold and measurement of a tax position taken or expected to be taken in a tax return. As of December 31, 2021, the Company had gross unrecognized tax benefits of $21.4 million of which $19.9 million would favorably impact the effective tax rate if recognized. The Company will recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2021, 2020 and 2019, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s consolidated statements of operations and comprehensive loss. The aggregate changes in gross unrecognized tax benefits were as follows (in thousands):
|  | Years Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Balance at beginning of year |  | $ | 11,967 |  |  | $ | 5,231 |  |  | $ | 1,595 |
Increases for tax positions taken during current period |  |  | 9,911 |  |  |  | 7,004 |  |  |  | 2,754 |
Increases for tax positions taken in prior periods |  |  | — |  |  |  | — |  |  |  | 882 |
Decreases for tax positions taken during current period |  |  | — |  |  |  | — |  |  |  | — |
Decreases for tax positions taken in prior periods |  |  | (483 | ) |  |  | (268 | ) |  |  | — |
Balance at end of year |  | $ | 21,395 |  |  | $ | 11,967 |  |  | $ | 5,231 |
The Company files income tax returns in the U.S. federal jurisdiction, Massachusetts, California and certain non-U.S. jurisdictions. The Company is subject to U.S. federal, Massachusetts, California and non-U.S. income tax examinations by authorities for tax years ending after December 31, 2017. Research credits generated in prior tax years that are closed for examination may still be adjusted upon future examination if they have or will be used in a future period. The Company is subject to income tax examinations by authorities in its non-U.S. jurisdictions for all years.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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