XML 35 R20.htm IDEA: XBRL DOCUMENT
v3.20.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income (loss) before provision for income taxes includes the following components (in thousands):
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Domestic | $ | (445,370) |  |  | $ | (441,494) |  |  | $ | 680,423 |
Foreign | 1,423 |  |  | 1,440 |  |  | 2,302 |
Income (loss) before provision for income taxes | $ | (443,947) |  |  | $ | (440,054) |  |  | $ | 682,725 |
Provision for Income Taxes The provision for income taxes consists of the following (in thousands):
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Current: |  |  |  |  |
Federal | $ | — |  |  | $ | — |  |  | $ | — |
State | 165 |  |  | 139 |  |  | 699 |
Foreign | 364 |  |  | 495 |  |  | 620 |
Total Current | 529 |  |  | 634 |  |  | 1,319 |
Deferred: |  |  |  |  |
Federal | — |  |  | — |  |  | — |
State | — |  |  | — |  |  | — |
Foreign | (36) |  |  | (21) |  |  | 93 |
Total Deferred | (36) |  |  | (21) |  |  | 93 |
Provision for income taxes | $ | 493 |  |  | $ | 613 |  |  | $ | 1,412 |
Our income tax provision related to continuing operations differs from the amount computed by applying the statutory income tax rate of 21% for the years ended December 31, 2020, 2019 and 2018 to pretax income (loss) as follows (in thousands):
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Income tax expense (benefit) at federal statutory rate | $ | (93,229) |  |  | $ | (92,411) |  |  | $ | 143,372 |
Research credits | (3,081) |  |  | (10,511) |  |  | (17,295) |
Premium on equity issuance | — |  |  | — |  |  | (12,551) |
Change in valuation allowance | 87,060 |  |  | 104,440 |  |  | (46,885) |
Stock-based compensation | 7,929 |  |  | (672) |  |  | (66,716) |
Non-cash royalty revenue related to sale of future royalties | (7,967) |  |  | (7,624) |  |  | (6,995) |
Non-cash interest expense on liability related to sale of future royalties | 6,356 |  |  | 5,259 |  |  | 4,451 |
Other | 3,425 |  |  | 2,132 |  |  | 4,031 |
Provision for income taxes | $ | 493 |  |  | $ | 613 |  |  | $ | 1,412 |
Deferred Tax Assets and Liabilities Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We measure deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future. Significant components of our deferred tax assets for federal and state income taxes are as follows (in thousands):
| December 31,
| 2020 |  | 2019
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 456,284 |  |  | $ | 399,361 |
Research and other credits | 132,994 |  |  | 128,015 |
Operating lease liabilities | 35,672 |  |  | 36,907 |
Liability related to the sale of future royalties | 32,737 |  |  | — |
Stock-based compensation | 32,517 |  |  | 30,875 |
Other | 11,688 |  |  | 13,568 |
Deferred tax assets before valuation allowance | 701,892 |  |  | 608,726 |
Valuation allowance for deferred tax assets | (670,103) |  |  | (575,087) |
Total deferred tax assets | 31,789 |  |  | 33,639 |
Deferred tax liabilities: |  |  |
Operating lease right-of-use assets | (29,707) |  |  | (31,718) |
Other | (1,856) |  |  | (1,725) |
Total deferred tax liabilities | (31,563) |  |  | (33,443) |
Net deferred tax assets | $ | 226 |  |  | $ | 196 |
Realization of our deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Because of our lack of U.S. earnings history, other than income resulting from revenue recognized from the BMS Collaboration Agreement, and projected future losses, we have fully reserved our net U.S. deferred tax assets with a valuation allowance. The valuation allowance increased by $95.0 million and $114.6 million during the years ended December 31, 2020 and 2019, respectively, primarily due to the additional domestic net operating losses and credits generated in the current year that are not more likely than not of being utilized. Net Operating Loss and Tax Credit Carryforwards As of December 31, 2020, we had a net operating loss carryforward for federal income tax purposes of approximately $2.0 billion, portions of which will begin to expire in 2021. As of December 31, 2020, we had a total state net operating loss carryforward of approximately $1.3 billion, portions of which will begin to expire in 2026. Utilization of some of the federal and state net operating loss and credit carryforwards are subject to annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. We have federal research credits of approximately $98.9 million, which will begin to expire in 2023 and state research credits of approximately $44.0 million which have no expiration date. We have federal orphan drug credits of $17.7 million which will begin to expire in 2026. These tax credits are subject to the same limitations discussed above. Unrecognized tax benefits We have the following activity relating to unrecognized tax benefits (in thousands):
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Beginning balance | $ | 77,410 |  |  | $ | 27,419 |  |  | $ | 20,483 |
Tax positions related to current year: |  |  |  |  |
Additions | 2,512 |  |  | 49,858 |  |  | 5,664 |
Reductions | — |  |  | — |  |  | — |
Tax positions related to prior years: |  |  |  |  |
Additions | 193 |  |  | 277 |  |  | 1,272 |
Reductions | (1,450) |  |  | (144) |  |  | — |
Settlements | — |  |  | — |  |  | — |
Lapses in statute of limitations | — |  |  | — |  |  | — |
Ending balance | $ | 78,665 |  |  | $ | 77,410 |  |  | $ | 27,419 |
If we are eventually able to recognize our uncertain positions, our effective tax rate may be reduced. We currently have a full valuation allowance against our U.S. net deferred tax asset which would impact the timing of the effective tax rate benefit should any of these uncertain tax positions be favorably settled in the future. Adjustments to the substantial majority of our uncertain tax positions would result in an adjustment of our net operating loss or tax credit carry forwards rather than resulting in a cash outlay. We file income tax returns in the U.S., California, Alabama, certain other states and India. Because of net operating losses and research credit carryovers, substantially all of our domestic tax years remain open and subject to examination. We may be subject to examination in India from time to time, but we do not believe that any resulting liability resulting from such an examination would have a material effect on our financial position or results of operations. Our policy is to include interest and penalties related to unrecognized tax benefits, if any, within the provision for income taxes in the consolidated statements of operations. During the years ended December 31, 2020, 2019 and 2018, no significant interest or penalties were recognized relating to unrecognized tax benefits. Although it is reasonably possible that certain unrecognized tax benefits could change in the future, we do not anticipate any changes over the next twelve months.

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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://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 http://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 http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration