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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income tax expense (benefit) is comprised of the following:
Year Ended December 31,
202420232022
Current:
Federal$(202)$727 $(195)
State352 509 (280)
Foreign1,515 963 538 
Current income tax expense 1,665 2,199 63 
Deferred:
Federal— — — 
State— — — 
Foreign(253)— — 
Deferred income tax benefit(253)— — 
Income tax expense$1,412 $2,199 $63 
Components of (loss) income before income taxes by tax jurisdiction were as follows:
Year Ended December 31,
202420232022
United States$(190,298)$39,076 $(150,147)
Foreign4,587 3,843 1,021 
(Loss) income before income taxes$(185,711)$42,919 $(149,126)
Reconciliation of income tax expense at the applicable statutory income tax rates to the effective income tax rate is as follows:
Year Ended December 31,
202420232022
Statutory federal income tax rate21.0 %21.0 %21.0 %
State taxes, net of federal benefits3.6 5.8 5.1 
Section 162(m) limitation— 1.2 (1.1)
Stock compensation(1.8)1.7 0.6 
Return-to-provision adjustments(1.5)(3.3)0.2 
Research and development credit4.8 (14.1)3.1 
Tax contingencies, net of reversals(0.5)1.4 (0.3)
Change in valuation allowance(22.2)(4.4)(28.6)
Other(4.2)(4.2)— 
Effective income tax rate(0.8)%5.1 %— %
Income tax expense for the year ended December 31, 2024 represents the Company's income tax obligations in certain states and taxes in foreign jurisdictions in which it conducts business. Income tax expense for the years ended December 31, 2023 represents the Company's federal and certain state income tax obligations and taxes in foreign jurisdictions for which it conducts business. Income tax expense for the year ended December 31, 2022 represents the Company's income tax obligations in certain states and taxes in foreign jurisdictions in which it conducts business. As of December 31, 2024, the Company has a full valuation allowance on U.S. federal and state deferred tax assets.
The total change in valuation allowance for the year ended December 31, 2024 was $41,195, which was primarily due to temporary differences for capitalized research and development expenses and share based compensation, partially offset by adjustments to equity method investments.
Tax effects of temporary differences that give rise to significant portions of deferred income tax assets and deferred income tax liabilities were as follows:
As of December 31,
202420232022
Deferred income tax assets:
Net operating loss carryforwards$51,542 $44,116 $67,758 
Capitalized research and development62,215 13,224 5,511 
Accrued expenses37,544 71,676 43,362 
Deferred revenue5,462 5,296 6,532 
Lease liabilities27,551 32,491 28,952 
Credits29,884 21,903 18,456 
Gross deferred tax assets214,198 188,706 170,571 
Less valuation allowance(177,226)(136,031)(137,957)
Net deferred tax assets36,972 52,675 32,614 
Deferred income tax liabilities:
Unrealized gain on equity investments(7,284)(18,553)(4,439)
Prepaid expenses(652)(1,554)(1,435)
Depreciation and amortization(29,036)(32,568)(26,740)
Net deferred income tax assets$— $— $— 
As of December 31, 2024, the Company had federal and state net operating loss ("NOL") carryforwards of $204,474 and $129,490, respectively. The state NOL carryforwards will expire between 2025 and 2044, if not used by the Company to reduce income taxes payable in future periods. Utilization of post-2017 federal NOL carryforwards is limited to 80% of taxable income generated in a given year and carry forward indefinitely. As of December 31, 2024, the Company had federal orphan drug credits and federal research and development tax credit carryforwards of $31,294 and state research and development tax credit carryforwards of $2,736. The federal and state carryforwards, with the exception of $2,223 indefinite state credits will expire between 2025 and 2044, if not utilized.
Pursuant to Internal Revenue Code Sections 382 and 383, the utilization of NOLs and other tax attributes may be substantially limited due to cumulative changes in ownership greater than 50% that may have occurred or could occur during applicable testing periods. The Company has performed an analysis through December 31, 2024 and determined no such ownership change has occurred in the periods presented.
The Company has not recognized a deferred tax liability for the undistributed earnings of its foreign operations as the Company considers these earnings to be indefinitely reinvested. The determination of a hypothetical unrecognized deferred tax liability as of December 31, 2024 is not practicable because of the complexity and variety of assumptions necessary to compute the tax.
The Company classifies interest and penalties related to unrecognized tax benefits within income tax expense in the consolidated statement of operations. Following is a reconciliation of total gross unrecognized tax benefits:
Year Ended December 31,
202420232022
Balance, January 1$2,742 $2,142 $1,702 
Additions for tax positions taken in prior years258 89 35 
Reductions for tax positions taken in prior years— (4)(24)
Additions for tax positions related to the current year648 515 429 
Balance, December 31
$3,648 $2,742 $2,142 
The Company does not anticipate any significant increases or decreases in its uncertain tax positions within the next 12 months.
The Company and its subsidiaries file U.S. federal income tax returns and various state, local and foreign income tax returns. As of December 31, 2024, the Company’s statutes of limitations are open for all federal and state tax returns filed after the years ended December 31, 2021 and 2020, respectively. NOL and credit carryforwards for all years are subject to examination and adjustments for the three years following the year in which the carryforwards are utilized. The Company is not currently under Internal Revenue Service or state examination.