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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | 8. Income Taxes Domestic and foreign pre-tax income (loss) is as follows (in thousands):
|  | Years Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Domestic |  | $ | (100,215 | ) |  | $ | (233,216 | ) |  | $ | (138,913 | )
Foreign |  |  | 49,179 |  |  |  | 19,772 |  |  |  | (28,606 | )
|  | $ | (51,036 | ) |  | $ | (213,444 | ) |  | $ | (167,519 | )
The income tax provision consists of the following (in thousands):
|  | Years Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Current provision: |  |  |  |  |  |  |  |  |
Federal |  | $ | 5,440 |  |  | $ | — |  |  | $ | — |
State |  |  | 4,805 |  |  |  | 2,531 |  |  |  | 351 |
Foreign |  |  | 5 |  |  |  | — |  |  |  | — |
Total deferred tax assets |  |  | 10,250 |  |  |  | 2,531 |  |  |  | 351 |
Total income tax provision |  | $ | 10,250 |  |  | $ | 2,531 |  |  | $ | 351 |
At December 31, 2023, the Company had federal, state, and foreign net operating loss (NOL) carryforwards of approximately $196.8 million, $456.3 million, and $845.1 million, respectively. Utilization of the domestic NOL and research and development (R&D) credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred or that could occur in the future, as required by Section 382 of the Code, as well as similar state and foreign provisions. These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups. The Company previously completed a study to assess whether an ownership change, as defined by Section 382 of the Code, had occurred from the Company’s formation through December 31, 2013. Based upon this study, the Company determined that several ownership changes had occurred. Accordingly, the Company reduced its deferred tax assets related to the federal NOL carryforwards and the federal R&D credit carryforwards that are anticipated to expire unused as a result of these ownership changes. These tax attributes were excluded from deferred tax assets with a corresponding reduction of the valuation allowance with no net effect on income tax expense or the effective tax rate. The Company completed a study through December 31, 2022 and concluded no additional ownership changes occurred. Future ownership changes may further limit the Company’s ability to utilize its remaining tax attributes. The Company had federal and state carryforwards of $29.4 million and $454.4 million that will begin to expire in 2031 and 2024 respectively unless utilized. The remaining federal and state NOL carryforwards of $167.4 million and $1.9 million will carry forward indefinitely. At December 31, 2023, the Company had federal and state charitable contribution carryforwards of $174.8 million which will begin to expire in 2024. At December 31, 2023, the Company had $75.6 million of federal R&D credit carryforwards, of which $0.5 million will expire in 2024 unless utilized, and the remaining federal R&D credit carryforwards will begin to expire beginning in 2025. At December 31, 2023, the Company had state R&D credit carryforwards of approximately $2.3 million that will begin to expire in 2025 and $20.3 million that have no expiration date. At December 31, 2023, the Company had foreign NOL carryforwards of $231.6 million that will expire in 2024 unless utilized and $6.5 million that have no expiration date. The Company continues to record the deferred tax assets related to these attributes, subject to valuation allowance, until expiration occurs. The components of the deferred tax assets are as follows (in thousands):
|  | December 31, |
|  | 2023 |  |  | 2022 |
Deferred tax assets |  |  |  |  |  |
NOL carryforwards |  | $ | 149,049 |  |  | $ | 225,993 |
R&D credit carryforwards |  |  | 70,906 |  |  |  | 83,074 |
Capitalized R&D |  |  | 90,164 |  |  |  | 38,507 |
Stock-based compensation |  |  | 51,028 |  |  |  | 51,661 |
Charitable contributions |  |  | 40,956 |  |  |  | 42,677 |
Lease liabilities |  |  | 13,671 |  |  |  | 14,730 |
Intangibles |  |  | 43,220 |  |  |  | 24,030 |
Property and equipment |  |  | 51 |  |  |  | — |
Accrued rebates |  |  | 19,401 |  |  |  | 5,748 |
Other |  |  | 16,036 |  |  |  | 8,022 |
Total deferred tax assets |  |  | 494,482 |  |  |  | 494,442 |
Valuation allowance |  |  | (482,089 | ) |  |  | (481,210 | )
Deferred tax liabilities |  |  |  |  |  |
Property and equipment |  |  | — |  |  |  | (29 | )
Right-of-use assets |  |  | (12,393 | ) |  |  | (13,203 | )
Total deferred tax liabilities |  |  | (12,393 | ) |  |  | (13,232 | )
Total net deferred tax assets |  | $ | — |  |  | $ | — |
Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by approximately $0.9 million in 2023 primarily due to an increase in deferred tax assets generated by capitalization of research and development expenses, acquired intangibles and accrued rebates, offset in part by the utilization of US and state net operating losses and research credits, the expiration of Switzerland NOLs, and the remeasurement of the Company’s deferred tax balance for future state tax rates. An accounting policy may be selected to either (i) treat taxes due on future U.S. inclusions in taxable income related to global intangible low-taxed income (GILTI) as a current-period expense when incurred or (ii) factor such amounts into a company’s measurement of its deferred taxes. The Company has elected to account for GILTI as a period cost. A reconciliation of income taxes to the amount computed by applying the statutory federal income tax rate to the pretax loss is summarized as follows (in thousands):
|  | Years Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Amounts computed at statutory federal rate |  | $ | (10,718 | ) |  | $ | (44,823 | ) |  | $ | (35,179 | )
Stock-based compensation and other permanent differences |  |  | 8,458 |  |  |  | 7,596 |  |  |  | 6,083 |
Branded pharmaceutical drug fee |  |  | 1,848 |  |  |  | 1,454 |  |  |  | 613 |
Write-off of IP R&D |  |  | — |  |  |  | 2,449 |  |  |  | 1,277 |
R&D credits |  |  | (5,827 | ) |  |  | (9,974 | ) |  |  | (11,727 | )
Change in valuation allowance |  |  | 1,100 |  |  |  | 11,227 |  |  |  | 36,099 |
State taxes |  |  | (977 | ) |  |  | (2,232 | ) |  |  | (2,617 | )
Contingencies |  |  | (2,071 | ) |  |  | 6,993 |  |  |  | 3,879 |
Foreign rate differential |  |  | (5,076 | ) |  |  | (1,971 | ) |  |  | 2,857 |
Deferred adjustments for limits on executive compensation |  |  | 2,112 |  |  |  | 3,918 |  |  |  | 1,808 |
Deferred rate adjustment |  |  | (192 | ) |  |  | 922 |  |  |  | (2,424 | )
Switzerland tax reform |  |  | (246 | ) |  |  | — |  |  |  | (923 | )
Expiration of attributes |  |  | 17,225 |  |  |  | 16,142 |  |  |  | 726 |
GILTI |  |  | 7,665 |  |  |  | 10,804 |  |  |  | — |
Other |  |  | (3,051 | ) |  |  | 26 |  |  |  | (121 | )
Income tax expense |  | $ | 10,250 |  |  | $ | 2,531 |  |  | $ | 351 |
The tax years 2003-2022 remain open to examination by the major taxing jurisdictions to which the Company is subject. The Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination. The Company recorded an uncertain tax position reserve of $18.0 million, $5.1 million and $4.1 million for the years ended December 31, 2023, 2022 and 2021, respectively. Due to the valuation allowance recorded against the Company’s deferred tax assets, approximately $6.8 million and $1.2 million of the total unrecognized tax benefits as of December 31, 2023 and December 31, 2022, respectively, would reduce the annual effective tax rate if recognized. The Company does not anticipate that the amount of unrecognized tax benefits as of December 31, 2023 will significantly change within the next twelve months. The Company’s practice is to recognize interest and/or penalties related to uncertain income tax positions in income tax expense. The Company had immaterial interest and/or penalties accrued on the Company’s consolidated balance sheets at December 31, 2023 or 2022, respectively. Further, the Company recognized an insignificant amount of interest and/or penalties in the statement of operations for the years ended December 31, 2023, 2022 and 2021, respectively, related to uncertain tax positions. The following table provides a reconciliation of changes in unrecognized tax benefits (in thousands):
|  | Years Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Balance at beginning of period |  | $ | 19,064 |  |  | $ | 13,923 |  |  | $ | 9,843 |
Additions related to current period tax positions |  |  | 5,304 |  |  |  | 5,140 |  |  |  | 3,973 |
Additions related to prior period tax positions |  |  | 12,956 |  |  |  | 38 |  |  |  | 140 |
Reductions related to prior period tax positions |  |  | (212 | ) |  |  | (37 | ) |  |  | (33 | )
Balance at end of period |  | $ | 37,112 |  |  | $ | 19,064 |  |  | $ | 13,923 |

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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 -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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