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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

13. Income Taxes

The components of loss from continuing operations before provision for income taxes are as follows (in thousands):

 

 

Year Ended December 31,

 

 

2024

 

 

2023

 

 

2022

 

United States

$

(22,701

)

 

$

(48,495

)

 

$

(82,815

)

Foreign

 

(174,015

)

 

 

(478,001

)

 

 

(568,688

)

Total

$

(196,716

)

 

$

(526,496

)

 

$

(651,503

)

Provision for income taxes for the years ended December 31, 2024, 2023, and 2022 are as follows (in thousands):

 

 

Year Ended December 31, 2024

 

 

Year Ended December 31, 2023

 

 

Year Ended December 31, 2022

 

Current income tax expense:

 

 

 

 

 

 

 

 

U.S. Federal

$

—

 

 

$

—

 

 

$

—

 

U.S. State and Local

 

474

 

 

 

1,869

 

 

 

520

 

Foreign

 

688

 

 

 

263

 

 

 

149

 

Total current income tax expense

 

1,162

 

 

 

2,132

 

 

 

669

 

Deferred income tax expense:

 

 

 

 

 

 

 

 

U.S. Federal

 

—

 

 

 

—

 

 

 

—

 

U.S. State and Local

 

—

 

 

 

—

 

 

 

—

 

Foreign

 

—

 

 

 

—

 

 

 

—

 

Total deferred income tax expense

 

—

 

 

 

—

 

 

 

—

 

Total tax expense

$

1,162

 

 

$

2,132

 

 

$

669

 

A reconciliation between the U.S. federal statutory tax rate and the Company's effective tax rate is summarized as follows (in thousands):

 

 

Year Ended December

 

 

2024

 

 

2023

 

 

2022

 

 

Amount

 

 

Percentage of income before income taxes

 

 

Amount

 

 

Percentage of income before income taxes

 

 

Amount

 

 

Percentage of income before income taxes

 

Statutory U.S. federal income tax

$

(41,310

)

 

 

21.0

%

 

$

(110,564

)

 

 

21.0

%

 

$

(136,816

)

 

 

21.0

%

Foreign tax rate differential

 

16,791

 

 

 

(8.5

)

 

 

42,100

 

 

 

(8.0

)

 

 

50,219

 

 

 

(7.7

)

State income taxes, net of federal benefit

 

(18,218

)

 

 

9.3

 

 

 

(13,438

)

 

 

2.6

 

 

 

9,051

 

 

 

(1.4

)

Change in valuation allowances

 

11,106

 

 

 

(5.6

)

 

 

119,592

 

 

 

(23.2

)

 

 

94,668

 

 

 

(14.5

)

Tax credits

 

(22,100

)

 

 

11.2

 

 

 

(11,566

)

 

 

2.2

 

 

 

(19,966

)

 

 

3.0

 

GILTI Inclusion Income

 

59,627

 

 

 

(30.3

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Share Based Compensation

 

(8,688

)

 

 

4.4

 

 

 

(26,881

)

 

 

5.1

 

 

 

—

 

 

 

—

 

Change in state apportionment

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(35

)

 

 

—

 

Loss on debt conversion

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

6,626

 

 

 

(1.0

)

Permanent and other

 

3,954

 

 

 

(2.1

)

 

 

2,889

 

 

 

(0.1

)

 

 

(3,078

)

 

 

0.5

 

   Effective income tax provision

$

1,162

 

 

 

(0.6

)

 

$

2,132

 

 

 

(0.4

)

 

$

669

 

 

 

(0.1

)

The Company’s effective income tax rate for the year ended December 31, 2024 compared to the year ended December 31, 2023 increased primarily as a result of operations in state jurisdictions.

 

The following table presents the principal components of the Company’s deferred tax assets and liabilities (in thousands):

 

 

December 31,

 

 

2024

 

 

2023

 

Deferred tax assets:

 

 

 

 

 

Intangible assets

$

177,244

 

 

$

160,281

 

Research and development capitalization

 

21,474

 

 

 

32,163

 

Share-based compensation

 

38,494

 

 

 

31,712

 

Net operating loss carryforwards

 

312,672

 

 

 

329,135

 

Research and development credits

 

81,340

 

 

 

67,667

 

Orphan drug credits

 

48,015

 

 

 

34,023

 

Development derivative liability

 

—

 

 

 

75,190

 

Convertible debt

 

1,021

 

 

 

5,582

 

Fixed Assets

 

194

 

 

 

18

 

Lease liability

 

3,026

 

 

 

2,888

 

Accruals

 

7,668

 

 

 

9,998

 

Deferred Interest Expense

 

1,974

 

 

 

—

 

Inventory Reserves

 

31,476

 

 

 

6,317

 

UNICAP

 

1,806

 

 

 

1,086

 

Total deferred tax assets

 

726,404

 

 

 

756,060

 

Deferred tax liabilities:

 

 

 

 

 

Fixed assets

 

—

 

 

 

—

 

Right-of-use asset

 

(2,821

)

 

 

(2,672

)

Total deferred tax liabilities

 

(2,821

)

 

 

(2,672

)

Net deferred tax assets before allowance:

 

723,583

 

 

 

753,388

 

Less valuation allowance

 

(723,583

)

 

 

(753,388

)

Net deferred tax assets

$

—

 

 

$

—

 

 

Management has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets and has determined that it is more likely than not that the Company will not recognize the benefits of its net federal, foreign and state deferred tax assets, and as a result, a valuation allowance of $723.6 million and $753.4 million has been established at December 31, 2024 and 2023, respectively. The decrease in the valuation allowance of $29.8 million was primarily driven by the utilization of federal and foreign net operating losses and pay-down of the development liability with SFJ.

 

The Tax Cuts and Jobs Act (TCJA) requires taxpayers to capitalize and amortize research and development (R&D) expenditures under IRC Section 174 for tax years beginning after December 31, 2021. This rule became effective for the Company on January 1, 2022 and resulted in the capitalization of R&D costs of approximately $42.4 million and $42.3 million for tax year ending December 31, 2024 and 2023, respectively. The Company will amortize these costs for tax purposes over 5 years if the R&D was performed in the U.S. and over 15 years if the R&D was performed outside the U.S.

On December 31, 2024, the Company had approximately $422.5 million, $621.8 million and $1,515.7 million of federal, state and foreign net operating loss carryforward, respectively. On December 31, 2023, the Company had approximately $494.1 million, $524.0 million and $1,663.3 million of federal, state and foreign net operating loss carryforward, respectively. The Company also had federal and state research and development tax credit carryforwards $107.8 million and $26.4 million, respectively of as of December 31, 2024. Federal net operating loss carryforward in the amount of $420.9 million may be carried forward indefinitely. The remaining federal and state net operating loss, research and development tax credit carryforwards begin to expire in 2025. The Company’s foreign net operating loss carryforwards will begin to expire in 2027.

Under the provisions of the Internal Revenue Code (“IRC”), the net operating loss (“NOL”), and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the IRC, respectively, as well as similar state provisions. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. The Company may have experienced such ownership changes in the past and may experience ownership changes in the future, as a result of shifts in its stock ownership, some of which are outside the Company’s control. Such ownership changes could limit the amount of tax attributes that can be utilized annually to offset future tax liability.

 

The Company does not have any unrecognized tax benefits during any periods presented and does not expect this to significantly change in the next twelve months. There were no interest and penalties recorded in the statement of operations during any period and no amounts accrued for interest and penalties on December 31, 2024 or 2023.

 

The Company and its subsidiaries file income tax returns in the United States, as well as various state and foreign jurisdictions. Generally, the tax years 2021 through 2023 remain open and subject to examination by the major taxing jurisdictions to which the Company is subject. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service, or state or foreign tax authorities, to the extent utilized in a future period.