XML 50 R22.htm IDEA: XBRL DOCUMENT
v3.22.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | 14. Income Taxes The components of net loss before the provision for income taxes are as follows:
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
|  | (in thousands) |
U.S. |  | $ | (198,704 | ) |  | $ | (87,904 | )
Non-U.S. |  |  | 1,103 |  |  |  | (27 | )
Loss before income taxes |  | $ | (197,601 | ) |  | $ | (87,931 | )
The provision for income taxes for the years ended December 31, 2022 and 2021 is as follows:
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
|  | (in thousands) |
Current income tax provision |  |  |  |  |  |
U.S. - Federal |  | $ | — |  |  | $ | — |
U.S. - State |  |  | — |  |  |  | — |
Non-U.S. |  |  | 774 |  |  |  | — |
Provision for income taxes |  | $ | 774 |  |  | $ | — |
A reconciliation of the Company’s effective income tax rate to the U.S. statutory federal income tax rate of 21% for the years ended December 31, 2022 and 2021 is as follows:
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Tax at U.S. statutory tax rate |  |  | 21.0 | % |  |  | 21.0 | %
State income tax benefit |  |  | 3.9 | % |  |  | 4.0 | %
Research and development tax credits |  |  | 1.4 | % |  |  | 1.5 | %
Valuation allowances |  |  | (25.5 | )% |  |  | (24.4 | )%
Other |  |  | (1.2 | )% |  |  | (2.1 | )%
Effective income tax rate |  |  | (0.4 | )% |  |  | 0.0 | %
Deferred tax assets and liabilities reflect the net tax effects of net operating loss and tax credit carryforwards and temporary differences between the carrying amount of assets and liabilities for financial reporting and the amounts used for tax purposes. Significant components of the Company’s deferred tax assets and liabilities were as follows for the years ended December 31, 2022 and 2021:
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
|  | (in thousands) |
Deferred tax assets: |  |  |  |  |  |
Federal net operating loss carryforwards |  | $ | 42,673 |  |  | $ | 24,303 |
State net operating loss carryforwards |  |  | 10,628 |  |  |  | 5,474 |
Capitalized research and development costs |  |  | 18,079 |  |  |  | 6,205 |
Inventory |  |  | 5,721 |  |  |  | — |
Tax credits |  |  | 5,581 |  |  |  | 2,808 |
Accruals and other |  |  | 9,284 |  |  |  | 1,556 |
Total deferred tax assets |  | $ | 91,966 |  |  | $ | 40,346 |
Valuation allowance |  |  | (90,587 | ) |  |  | (40,346 | )
Net total deferred tax assets |  | $ | 1,379 |  |  | $ | — |
Deferred tax liabilities: |  |  |  |  |  |
Other |  |  | (1,379 | ) |  |  | — |
Total deferred tax liabilities |  | $ | (1,379 | ) |  | $ | — |
Net deferred tax assets |  | $ | — |  |  | $ | — |
The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets. The Company has considered its history of cumulative losses, including significant losses incurred in every year since inception, including 2022, and has concluded that it is more likely than not that it will not realize the benefits of the deferred tax assets. Accordingly, a full valuation allowance has been established against the net deferred tax assets as of December 31, 2022 and 2021. On a periodic basis the Company reassess the valuation allowance that has been established, weighing positive and negative evidence. In 2022, the Company reassessed the valuation allowance and considered negative evidence, including cumulative losses over the three years ended December 31, 2022, and positive evidence, including regulatory approvals of ALBRIOZA and RELYVRIO. After assessing both the negative and positive evidence, the Company concluded that a full valuation should be retained against the net deferred tax assets as of December 31, 2022. It is possible that all or a portion of the valuation allowance will be released in the near-term. The release of the valuation allowance, as well as the exact timing and the amount of such release, continue to be subject to, among other things, levels of profitability, revenue growth, clinical program progression and expectations regarding future profitability. As of December 31, 2022 and 2021, the Company had federal net operating loss carryforwards of approximately $203.2 million and $115.7 million, respectively, and state net operating loss carryforwards of approximately $164.1 million and $102.9 million, respectively, which are available to reduce future taxable income. Of the $203.2 million federal net operating loss carryforwards, $1.3 million begin to expire in 2034 and the remaining $201.9 million net operating losses carryforward indefinitely. Of the $164.1 million state net operating loss carryforwards, $113.0 million of Massachusetts net operating loss carryforwards begin to expire in 2034. As of December 31, 2022 and 2021, the Company also had federal tax credits of $4.6 million and $2.7 million, respectively, and state tax credits of $1.2 million. The tax credit carryforwards will expire at various dates beginning in 2034. The utilization of the net operating loss carryforwards and research and development tax credit carryforwards may be subject to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, 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. The Company has not conducted a formal study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study. If the Company has experienced a change of control, as defined by Section 382 and 383 of the Code, at any time since inception, utilization of the net operating loss carryforwards or research and development tax credit carryforwards may be subject to an annual limitation, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization. The Company has not yet conducted a study of its research and development credit carryforward. Such a study, once undertaken by the Company, may result in an adjustment to the Company’s research and development credit carryforward. A full valuation allowance has been provided against the Company’s research and development credit and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all the evidence, both positive and negative, the Company has recorded a valuation allowance against its deferred tax assets as of December 31, 2022 and 2021, because the Company’s management has determined that it is more likely than not that these assets will not be fully realized. The increase in the valuation allowance recorded during the year primarily relates to the net operating loss incurred by the Company as well as the increase in research and development credits. The following table reflects the roll-forward of the Company’s valuation allowance:
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
|  | (in thousands) |
Valuation allowance at beginning of year |  | $ | 40,346 |  |  | $ | 18,900 |
Increases recorded to income tax provision |  |  | 50,241 |  |  |  | 21,446 |
Valuation allowance at end of year |  | $ | 90,587 |  |  | $ | 40,346 |
The Company accounts for uncertainty in income taxes under the provisions of ASC 740 which defines the thresholds for recognizing the benefits of tax return positions in the consolidated financial statements as “more likely than not” to be sustained by the taxing authority. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlemen t. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for the years ended December 31, 2022 and 2021 is as follows:
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
|  | (in thousands) |
Balance at beginning of the period |  | $ | 564 |  |  | $ | 349 |
Increases (decreases) related to tax positions taken during prior years |  |  | (32 | ) |  |  | — |
Increases related to tax positions taken during the prior years |  |  | 481 |  |  |  | 215 |
Balance at end of the period |  | $ | 1,013 |  |  | $ | 564 |
The Company has reviewed the tax positions taken, or to be taken, in its tax returns for all tax years currently open to examination by a taxing authority. Unrecognized tax benefits represent the aggregate tax effect of differences between tax return positions and the benefits recognized in the consolidated financial statements. The Company does not expect the amount of unrecognized tax benefits to change over next 12 months. The Company accrues interest and penalties related to unrecognized tax benefits as a component of its provision for income taxes. The Company did no t recognize any interest or penalties related to uncertain tax positions during the two years ended December 31, 2022 and 2021. The Company files U.S. federal, foreign and state income tax returns in various jurisdictions. The status of limitations varies by jurisdiction. There are currently no federal or state audits or examinations in process.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration