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Note 8 - Income Taxes | 12 Months Ended
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Dec. 31, 2016
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | Note 8 — Income Taxes The Company has incurred net losses since inception and, consequently, has not recorded any U.S. Federal and state income tax expense or benefit. The differences between the Company’s effective tax rate and the statutory tax rate in 2016, 2015, and 2014 are as follows:
|  | 2016 |  | 2015 |  | 2014
Income tax benefit at federal statutory rate (35%) |  | $ | (19,300 | ) |  | $ | (15,057 | ) |  | $ | (15,816 | )
State and local income taxes net of federal tax benefit |  |  | (1,173 | ) |  |  | (819 | ) |  |  | (1,286 | )
Permanent items |  |  | 1,057 |  |  |  | 560 |  |  |  | 258 |
Rate change |  |  | 1,080 |  |  |  | 1,012 |  |  |  | 22 |
Expiration of attribute carryforwards |  |  | 559 |  |  |  | 330 |  |  |  | 373 |
Research and development tax credits |  |  | (4,681 | ) |  |  | (10,454 | ) |  |  | (748 | )
Orphan drug credit |  |  | 1,798 |  |  |  | 4,307 |  |  |  | — |
Other |  |  | 822 |  |  |  | (218 | ) |  |  | (115 | )
Change in valuation allowance |  |  | 19,838 |  |  |  | 20,339 |  |  |  | 17,312 |
Income tax expense |  | $ | — |  |  | $ | — |  |  | $ | — |
The Company recognizes the impact of a tax position in its financial statements if it is more likely than not that the position will be sustained on audit based on the technical merits of the position. The Company has concluded that it has an uncertain tax position pertaining to its research and development and orphan drug credit carryforwards. The Company has established these credits based on information and calculations it believes are appropriate and the best estimate of the underlying credit. Any changes to the Company’s unrecognized tax benefits are offset by an adjustment to the valuation allowance and there would be no impact on the Company’s financial statements. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|  | 2016 |  | 2015
Balance at January 1, |  | $ | 3,085 |  |  | $ | 472 |
Additions to current period tax positions |  |  | 1,170 |  |  |  | 2,616 |
Additions to prior period tax positions |  |  | — |  |  |  | — |
Reductions to prior period tax provisions |  |  | — |  |  |  | (3 | )
Balance at December 31, |  | $ | 4,255 |  |  | $ | 3,085 |
The Company’s ability to utilize the net operating loss and tax credit carryforwards in the future may be subject to substantial restrictions in the event of past or future ownership changes as defined in Section 382 of the Internal Revenue Code of 1986, as amended and similar state tax law. Significant components of the Company’s deferred tax assets and liabilities are as follows:
|  | 2016 |  | 2015
Deferred tax assets: |  |  |  |  |  |  |  |
Net federal and state operating losses |  | $ | 158,618 |  |  | $ | 142,836 |
Research and development credits |  |  | 53,231 |  |  |  | 48,551 |
Fixed assets |  |  | — |  |  |  | 1,054 |
Deferred revenue |  |  | 3,484 |  |  |  | 4,240 |
Stock-based compensation |  |  | 8,952 |  |  |  | 8,605 |
Other |  |  | 2,849 |  |  |  | 2,590 |
Total deferred tax assets |  |  | 227,134 |  |  |  | 207,876 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Fixed assets |  |  | (674 | ) |  |  | — |
Foreign currency derivative |  |  | (1,415 | ) |  |  | (2,668 | )
Total deferred tax liabilities |  |  | (2,089 | ) |  |  | (2,668 | )
Valuation allowance |  |  | (225,045 | ) |  |  | (205,208 | )
Net deferred tax assets |  | $ | — |  |  | $ | — |
The majority of the Company’s deferred tax assets relate to net operating loss and research and development carryforwards that can only be realized if the Company is profitable in future periods. It is uncertain whether the Company will realize any tax benefit related to these carryforwards. Accordingly, the Company has provided a full valuation allowance against the net deferred tax assets due to uncertainties as to their ultimate realization. The valuation allowance will remain at the full amount of the deferred tax assets until it is more likely than not that the related tax benefits will be realized. The Company’s valuation allowance increased by $19,837 in 2016, $20,339 in 2015 and $17,312 in 2014. As of December 31, 2016, the Company had federal operating loss carryforwards of $431,983, state operating loss carryforwards of $403,237, and research and development and orphan drug credit carryforwards of $57,487, which will expire at various dates from 2017 through 2035. The federal losses begin to expire in 2018, the state losses begin to expire in 2017 and the research and development credit carryforwards begin to expire in 2018. The Company’s federal and state operating loss carryforwards include $15,655 of excess tax benefits related to a deduction from the exercise of stock options. The tax benefit of these deductions has not been recognized in deferred tax assets. If utilized, the benefits from these deductions will be recorded as adjustments to additional paid-in capital. Tax years 2013 - 2015 remain open to examination by the major taxing jurisdictions to which the Company is subject. Additionally, years prior to 2013 are also open to examination to the extent of loss and credit carryforwards from those years. The Company recognizes interest and penalties accrued related to unrecognized tax benefits as components of its income tax provision. However, there were no provisions or accruals for interest and penalties in 2016, 2015, and 2014.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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