XML 38 R18.htm IDEA: XBRL DOCUMENT v3.25.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2024
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,

 

 

 

2024

 

 

2023

 

 

2022

 

Domestic

 

$

95,845

 

 

$

(100,215

)

 

$

(233,216

)

Foreign

 

 

162,230

 

 

 

49,179

 

 

 

19,772

 

 

 

$

258,075

 

 

$

(51,036

)

 

$

(213,444

)

The income tax provision consists of the following (in thousands):

 

 

Years Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

Current provision:

 

 

 

 

 

 

 

 

 

Federal

 

$

19,542

 

 

$

5,440

 

 

$

—

 

State

 

 

12,064

 

 

 

4,805

 

 

 

2,531

 

Foreign

 

 

18

 

 

 

5

 

 

 

—

 

Total current provision

 

 

31,624

 

 

 

10,250

 

 

 

2,531

 

Total income tax provision

 

$

31,624

 

 

$

10,250

 

 

$

2,531

 

At December 31, 2024, the Company had federal, state, and foreign net operating loss (NOL) carryforwards of approximately $130.2 million, $453.9 million, and $475.2 million, respectively. The Company recognized federal and state income tax provisions of $31.6 million, $10.3 million and $2.5 million for the years ended December 31, 2024, 2023 and 2022, respectively. These tax liabilities were primarily associated with federal and state liabilities in excess of net operating losses in the current year and an increase in federal and state reserves related to uncertain tax positions. 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, 2024 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 $14.7 million and $452.3 million that will begin to expire in 2031 and 2028, respectively unless utilized. The remaining federal and state NOL carryforwards of $115.4 million and $1.6 million will carry forward indefinitely. At December 31, 2024, the Company had federal and state charitable contribution carryforwards of $166.4 million which will begin to expire in 2025. At December 31, 2024, the Company had $36.2 million of federal R&D credit carryforwards, of which $0.2 million will expire in 2025 unless utilized, and the remaining federal R&D credit carryforwards will begin to expire beginning in 2026. At December 31, 2024, the Company had state R&D credit carryforwards of approximately $2.4 million that will begin to expire in 2025 and $21.5 million that have no expiration date. At December 31, 2024, the Company had foreign NOL carryforwards of $145.3 million that will expire in 2025 unless utilized and $9.0 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,

 

 

 

2024

 

 

2023

 

Deferred tax assets

 

 

 

 

 

 

NOL carryforwards

 

$

117,052

 

 

$

149,049

 

R&D credit carryforwards

 

 

27,543

 

 

 

70,906

 

Capitalized R&D

 

 

110,848

 

 

 

90,164

 

Stock-based compensation

 

 

51,438

 

 

 

51,028

 

Charitable contributions

 

 

40,008

 

 

 

40,956

 

Lease liabilities

 

 

12,753

 

 

 

13,671

 

Intangibles

 

 

50,431

 

 

 

43,220

 

Accrued rebates

 

 

35,186

 

 

 

19,401

 

Other

 

 

21,130

 

 

 

16,087

 

Total deferred tax assets

 

 

466,389

 

 

 

494,482

 

Valuation allowance

 

 

(454,966

)

 

 

(482,089

)

Deferred tax liabilities

 

 

 

 

 

 

Right-of-use assets

 

 

(11,423

)

 

 

(12,393

)

Total deferred tax liabilities

 

 

(11,423

)

 

 

(12,393

)

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. The Company assesses all available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative book loss incurred over the three-year period ended December 31, 2024. Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth. On the basis of this analysis, a valuation allowance of $455.0 million and $482.1 million at December 31, 2024 and 2023, respectively, was recorded to offset the net deferred tax asset as realization of such asset is uncertain. However, the amount of the deferred tax asset considered realizable could be adjusted if estimates of future taxable income during the carryforward period are increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as the Company’s projections for future growth.

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 income (loss) is summarized as follows (in thousands):

 

 

Years Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

Amounts computed at statutory federal rate

 

$

54,196

 

 

$

(10,718

)

 

$

(44,823

)

Stock-based compensation and other permanent differences

 

 

9,986

 

 

 

7,865

 

 

 

7,459

 

Branded pharmaceutical drug fee

 

 

2,122

 

 

 

1,848

 

 

 

1,454

 

Write-off of IP R&D

 

 

1,260

 

 

 

—

 

 

 

2,449

 

Other permanent differences

 

 

1,008

 

 

 

593

 

 

 

137

 

R&D credits

 

 

(18,406

)

 

 

(5,827

)

 

 

(9,974

)

Change in valuation allowance

 

 

(27,013

)

 

 

1,100

 

 

 

11,227

 

State taxes

 

 

3,050

 

 

 

(977

)

 

 

(2,232

)

Contingencies

 

 

5,960

 

 

 

(2,071

)

 

 

6,993

 

Foreign rate differential

 

 

(13,715

)

 

 

(5,076

)

 

 

(1,971

)

Deferred adjustments for limits on executive compensation

 

 

2,375

 

 

 

2,112

 

 

 

3,918

 

Deferred rate adjustment

 

 

(528

)

 

 

(438

)

 

 

922

 

Expiration of attributes

 

 

3,264

 

 

 

17,225

 

 

 

16,142

 

GILTI

 

 

8,215

 

 

 

7,665

 

 

 

10,804

 

Other

 

 

(150

)

 

 

(3,051

)

 

 

26

 

Income tax expense

 

$

31,624

 

 

$

10,250

 

 

$

2,531

 

The tax years 2003 – 2024 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 $1.3 million, $18.0 million and $5.1 million for the years ended December 31, 2024, 2023 and 2022, respectively. Due to the valuation allowance recorded against the Company’s deferred tax assets, approximately $8.7 million and $6.8 million of the total unrecognized tax benefits as of December 31, 2024 and 2023, 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, 2024 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, 2024 or 2023, respectively. Further, the Company recognized an insignificant amount of interest and/or penalties in the statement of operations for the years ended December 31, 2024, 2023 and 2022, respectively, related to uncertain tax positions.

The following table provides a reconciliation of changes in unrecognized tax benefits (in thousands):

 

 

Years Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

Balance at beginning of period

 

$

37,112

 

 

$

19,064

 

 

$

13,923

 

Additions related to current period tax positions

 

 

6,337

 

 

 

5,304

 

 

 

5,140

 

Additions related to prior period tax positions

 

 

—

 

 

 

12,956

 

 

 

38

 

Reductions related to prior period tax positions

 

 

(5,074

)

 

 

(212

)

 

 

(37

)

Balance at end of period

 

$

38,375

 

 

$

37,112

 

 

$

19,064