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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of loss before income taxes for the years ended twelve months ended December 31, are as follows:
Loss Before Income Taxes: |  | 2021 |  | 2020 |  | 2019
Ireland |  | $ | (36,631) |  |  | $ | (27,205) |  |  | $ | (50,134) |
U.S. |  | (56,687) |  |  | 22,335 |  |  | 10,401 |
France |  | 173 |  |  | (212) |  |  | 1,151 |
Total loss before income taxes |  | $ | (93,145) |  |  | $ | (5,082) |  |  | $ | (38,582) |
The income tax benefit consists of the following for the years ended December 31:
Income Tax Benefit: |  | 2021 |  | 2020 |  | 2019
Current: |  |  |  |  |  |
U.S. - Federal |  | $ | — |  |  | $ | (12,810) |  |  | $ | — |
U.S. - State |  | 60 |  |  | 20 |  |  | 97 |
Total current |  | 60 |  |  | (12,790) |  |  | 97 |
Deferred: |  |  |  |  |  |
Ireland |  | — |  |  | — |  |  | (1,256) |
U.S. - Federal |  | (15,876) |  |  | 680 |  |  | (4,093) |
U.S. - State |  | — |  |  | — |  |  | (104) |
Total deferred |  | (15,876) |  |  | 680 |  |  | (5,453) |
Income tax benefit |  | $ | (15,816) |  |  | $ | (12,110) |  |  | $ | (5,356) |
The reconciliation between income taxes at the statutory rate and the Company’s benefit for income taxes is as follows for the years ended December 31:
Reconciliation to Effective Income Tax Rate: |  | 2021 |  | 2020 |  | 2019
Income tax benefit - at statutory tax rate |  | $ | (11,642) |  |  | $ | (636) |  |  | $ | (4,823) |
Differences in international tax rates |  | (8,950) |  |  | 1,755 |  |  | (1,218) |
Nondeductible changes in fair value of contingent consideration |  | — |  |  | 988 |  |  | 121 |
Intercompany asset transfer |  | — |  |  | — |  |  | (8,190) |
Change in valuation allowances |  | 4,296 |  |  | 4,231 |  |  | 7,379 |
Nondeductible share-based compensation |  | 645 |  |  | 1,060 |  |  | 1,039 |
Hospital Products sale |  | — |  |  | (9,328) |  |  | — |
Unrealized tax benefits |  | 239 |  |  | (274) |  |  | (261) |
State and local taxes (net of federal) |  | 60 |  |  | 20 |  |  | (7) |
Change in U.S. tax law |  | — |  |  | (9,124) |  |  | — |
Nondeductible interest expense |  | 2,173 |  |  | 1,728 |  |  | 982 |
Orphan drug and R&D tax credit |  | (1,524) |  |  | (2,793) |  |  | — |
Other |  | (1,113) |  |  | 263 |  |  | (378) |
Income tax benefit - at effective income tax rate |  | $ | (15,816) |  |  | $ | (12,110) |  |  | $ | (5,356) |
In 2021, the income tax benefit increased by $3,706 when compared to the same period in 2020. The increase in the income tax benefit in 2021 was primarily driven by the additional tax benefit from an increase in the net operating losses in the U.S. in 2021, when compared to the same period in 2020. This was partially offset by the nonrecurring nature of tax benefits recognized in 2020 from the sale of the Company’s Hospital Products and passage of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) in the U.S. In 2020, the income tax benefit increased by $6,754 when compared to the same period in 2019. The increase in the income tax benefit in 2020 was primarily driven by the tax benefits from the sale of the Company’s Hospital Products and passage of the CARES Act in the U.S. The Company recorded additional tax benefit in 2020 from the Orphan Drug and R&D tax credit in the U.S. Tax benefit from the intercompany asset transfer recorded in 2019 did not recur, resulting in a partial offset of tax benefits described above. Unrecognized Tax Benefits The Company or one of its subsidiaries files income tax returns in Ireland, France, U.S. and various states. The Company is no longer subject to Irish, French, U.S. Federal, and state and local examinations for years before 2017. During 2020, the Company completed the 2015 through 2017 U.S. Federal Tax Audit. Completion of the audit resulted in an assessment of $1,937 for the 2015 through 2017 U.S. Federal Tax Returns compared to the IRS Claims of $50,695 made on July 2, 2019 and the updated IRS Claims of $9,302 on October 2, 2019 made as part of the Specialty Pharma bankruptcy proceedings, which at this time does not include interest and penalties. The following table summarizes the activity related to the Company’s unrecognized tax benefits for the twelve months ended December 31:
Unrecognized Tax Benefit Activity |  | 2021 |  | 2020 |  | 2019
Balance at January 1: |  | $ | 3,143 |  |  | $ | 6,465 |  |  | $ | 5,315 |
Increases for tax positions of prior years |  | — |  |  | — |  |  | 2,416 |
Statute of limitations expiration |  | — |  |  | — |  |  | (1,266) |
Settlements |  | — |  |  | (3,322) |  |  | — |
Balance at December 31: |  | $ | 3,143 |  |  | $ | 3,143 |  |  | $ | 6,465 |
The Company expects that within the next twelve months the unrecognized tax benefits could decrease by an immaterial amount and the interest could increase by an immaterial amount. At December 31, 2021, 2020 and 2019, there are $2,483, $2,483 and $3,806 of unrecognized tax benefits that if recognized would affect the annual effective tax rate. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. During the years ended December 31, 2021, 2020 and 2019, the Company recognized approximately $239, $203 and $555 in interest and penalties. The Company had approximately $1,777 and $1,475 for the payment of interest and penalties accrued at December 31, 2021 and 2020, respectively. Deferred Tax Assets (Liabilities) Deferred income tax provisions reflect the effect of temporary differences between consolidated financial statement and tax reporting of income and expense items. The net deferred tax assets (liabilities) at December 31, 2021 and 2020 resulted from the following temporary differences:
Net Deferred Tax Assets and Liabilities: |  | 2021 |  | 2020
Deferred tax assets: |  |  |  |
Net operating loss carryforwards |  | $ | 35,990 |  |  | $ | 31,302 |
Orphan drug and R&D tax credit |  | 4,964 |  |  | 2,793 |
Share-based compensation |  | 4,108 |  |  | 2,626 |
Amortization |  | 3,429 |  |  | 3,701 |
Other |  | 662 |  |  | 423 |
Gross deferred tax assets |  | 49,153 |  |  | 40,845 |
Deferred tax liabilities: |  |  |  |
Other |  | (925) |  |  | (890) |
Prepaid expenses |  | (75) |  |  | (75) |
Gross deferred tax liabilities |  | (1,000) |  |  | (965) |
Less: valuation allowances |  | (24,025) |  |  | (21,624) |
Net deferred tax assets |  | $ | 24,128 |  |  | $ | 18,256 |
At December 31, 2021, the Company had $124,720 of net operating losses in Ireland that do not have an expiration date and $74,406 of net operating losses in the U.S. Of the $74,406 of net operating losses in the U.S., $10,365 were acquired due to the acquisition of FSC Therapeutics and FSC Laboratories, Inc., (collectively “FSC”) and $64,041 are due to the losses at US Holdings. The portion due to the acquisition of FSC will expire in 2034 through 2035. A valuation allowance is recorded if, based on the weight of available evidence, it is more likely than not that a deferred tax asset will not be realized. This assessment is based on an evaluation of the level of historical taxable income and projections for future taxable income. For the year ended December 31, 2021, the Company recorded $4,045 of valuation allowances related to Irish net operating losses. The U.S. net operating losses are subject to an annual limitation as a result of the FSC acquisition under Internal Revenue Code Section 382 and will not be fully utilized before they expire. The Company recorded a valuation allowance against all of its net operating losses in Ireland and France as of December 31, 2021 and 2020. The Company intends to continue maintaining a full valuation allowance on the Irish net operating losses until there is sufficient evidence to support the reversal of all or some portion of these allowances. While the Company believes it is more likely than not that it will be able to realize the deferred tax assets in the U.S., the Company continues to monitor any unfavorable changes that could ultimately impact its assessment of the realizability of the Company’s U.S. deferred tax assets. If the Company experiences an ownership change under Internal Revenue Code Section 382, the U.S. net operating losses could also be limited in their utilization. At December 31, 2021, the Company has unremitted earnings of $3,916 outside of Ireland as measured on a U.S. GAAP basis. Whereas the measure of earnings for purposes of taxation of a distribution may be different for tax purposes, these earnings, which are considered to be invested indefinitely, would become subject to income tax if they were remitted as dividends or if the Company were to sell its stock in the subsidiaries, net of any prior income taxes paid. It is not practicable to estimate the amount of deferred tax liability on such earnings, if any. R&D Tax Credits Receivable The French and Irish governments provide tax credits to companies for spending on innovative R&D. These credits are recorded as an offset of R&D expenses and are credited against income taxes payable in years after being incurred or, if not so utilized, are recoverable in cash after a specified period of time, which may differ depending on the tax credit regime. As of December 31, 2021, the Company’s net research tax credit receivable amounts to $3,668 and represents a French gross research tax credit of $3,139 and an Irish gross research tax credit of $529. As of December 31, 2020, the Company’s net research tax credit receivable amounts to $6,771 and represents a French gross research tax credit of $6,396 and an Irish gross research tax credit of $375. 2020 CARES Act The CARES Act, enacted on March 27, 2020, includes significant business tax provisions. In particular, the CARES Act modified the rules associated with net operating losses. Under the temporary provisions of the CARES Act, net operating loss carryforwards and carrybacks may offset 100% of taxable income for taxable years beginning before 2021. In addition, net operating losses arising in 2018, 2019 and 2020 taxable years may be carried back to each of the preceding five years to generate a refund. During the twelve months ended December 31, 2020, the income tax benefit includes a discrete tax benefit of $9,124 as a result of the Company’s ability under the CARES Act to carry back net operating losses incurred to periods when the statutory U.S. Federal tax rate was 35% versus the Company’s current U.S. Federal tax rate of 21%. During the twelve months ended December 31, 2020, the Company received $3,351 in cash tax refunds from carryback claims related to the CARES Act from the carryback of 2018 tax losses. The Company filed refund claims for $18,753 associated with the carryback of 2019 tax losses and a $10,273 refund claim associated with the carryback of 2020 tax losses.

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