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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Taxes  
Income Taxes

13.Income Taxes

The following table presents the components of loss before the provision for (benefit from) income taxes during the years ended December 31, 2024 and 2023 (in thousands):

​

​

​

​

​

​

​

​

    

December 31,

​

    

2024

    

2023

U.S.

​

$

(160,918)

​

$

(10,845)

Non-U.S.

​

 

4,359

​

 

(25,978)

Loss before taxes on income

​

$

(156,559)

​

$

(36,823)

​

The components of the income tax provision for the years ended December 31, 2024 and 2023 are as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

December 31,

​

    

2024

    

2023

Current income tax provision:

 

​

  

 

​

  

Federal

​

$

123

​

$

289

State

​

 

306

​

 

12

Foreign

​

 

—

​

 

—

Total current income tax provision

​

 

429

​

 

301

​

​

​

​

​

​

​

Deferred income tax provision:

​

 

  

​

 

  

Federal, state and foreign

​

 

—

​

 

—

Total deferred income tax provision

​

 

—

​

 

—

Total income tax provision

​

$

429

​

$

301

​

A reconciliation of the income tax expense computed using the federal statutory income tax rate to the Company’s effective income tax rate is as follows:

​

​

​

​

​

​

​

​

​

December 31, 

 

​

​

2024

​

2023

 

Federal statutory income tax rate

    

21.0

%  

21.0

%

State income taxes, net of federal benefit

 

6.4

 

3.4

​

Change in valuation allowance

 

(32.3)

 

(26.4)

​

IP transfer

​

(0.3)

​

—

​

Research and development tax credits

 

4.9

 

8.8

​

Foreign tax rate differential

 

0.2

 

(7.6)

​

Other adjustments

 

(0.2)

 

—

​

Effective income tax rate

 

(0.3)

%  

(0.8)

%

​

The Company’s change in effective tax rate for the year ended December 31, 2024 compared to the year ended December 31, 2023 decreased primarily due to a change in income earned in the U.S.

The following table presents the components of the Company’s deferred tax assets and liabilities (in thousands):

​

​

​

​

​

​

​

​

​

December 31,

​

    

2024

    

2023

Deferred tax assets:

 

​

  

 

​

  

Net operating loss carryforwards

​

$

29,605

​

$

9,960

Capitalized research and development

​

 

39,716

​

 

19,573

Research and development tax credits

​

 

14,292

​

 

6,547

Accruals

​

 

1,886

​

 

1,424

Milestone payments

​

 

442

​

 

719

Stock-based compensation

​

 

4,016

​

 

1,188

Other

​

 

901

​

 

550

Total deferred tax assets

​

 

90,858

​

 

39,961

Deferred tax liabilities:

​

​

​

​

​

​

Amortization and other

​

 

(563)

​

 

(200)

Total deferred tax liabilities

​

 

(563)

​

 

(200)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net deferred tax asset before valuation allowance

​

​

90,295

​

​

39,761

Valuation allowance

​

​

(90,295)

​

​

(39,761)

Net deferred tax asset

​

$

—

​

$

—

​

ASC Topic 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of available 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 full valuation allowances against its domestic and foreign deferred tax assets as of December 31, 2024, because management has determined that it is more likely than not that these assets will not be realized. The valuation allowance increased by $50.5 million from December 31, 2023 to December 31, 2024, primarily due to additional net operating losses related to the U.S. and non-U.S. entities as well as the capitalization of research and development expenses under Internal Revenue Code Section 174 (“Section 174”) at the U.S. entity.

Beginning on or after January 1, 2022, Section 174 of the U.S. internal revenue code was amended as part of the Tax Cuts and Jobs Act of 2017 (the “TCJA”) to no longer permit an immediate deduction for research and development expenditures in the tax year that such costs are incurred. Rather, the research and development expenses must be capitalized and amortized over five years for research performed in the U.S. and fifteen years for research performed outside the U.S. As a result of this provision, the Company capitalized applicable costs resulting in a deferred tax asset of $39.7 million as of December 31, 2024.

As of December 31, 2024, the Company had approximately $75.5 million and $65.0 million of U.S. federal and state net operating loss (“NOL”) carryforwards, respectively. As of December 31, 2023, the Company had approximately $2.3 million of U.S. federal NOL carryforwards. The Company had no state NOL carryforwards as of December 31, 2023. The Company utilized previous net operating loss carryforwards to offset the taxable income in prior years. The federal NOL carryforwards do not expire, but they may be limited in their usage to an annual deduction equal to 80% of annual taxable income.  The state NOL carryforwards expire in 20 years, starting in 2042. The federal and state NOL carryforwards are fully offset by valuation allowances.

As of December 31, 2024, the Company had $13.3 million and $1.2 million in federal and state general business or research and development tax credit carryforwards. As of December 31, 2023, the Company had $5.9 million and $0.8 million in federal and state general business or research and development tax credit carryforwards. These carryforwards are subject to review and possible adjustment by the appropriate taxing authorities. The federal and state research credit carryforwards expire in 20 years and 15 years, respectively, starting in 2036. The federal and state tax credit carryforwards are fully offset by valuation allowances.

As of December 31, 2024 and 2023, the Company had $54.2 million and $53.7 million of foreign NOL carryforwards, respectively. Foreign NOL carryforwards of $47.8 million will carryforward indefinitely, with the remaining expiring between 2026 and 2028. The foreign NOL carryforwards are fully offset by valuation allowances. The Company files income tax returns in the U.S., as well as various state and foreign jurisdictions. The Company is not currently under any income tax examinations. All tax years generally remain open in each jurisdiction.

​

There have been no unrecognized tax benefits since the Company’s inception. The Company’s policy is to record estimated interest and penalties related to the underpayment of income taxes as a component of its income tax provision. As of December 31, 2024 and 2023, the Company had no accrued interest or penalties related to uncertain tax positions and since inception, no amounts have been recognized in the Company’s consolidated statements of operations and comprehensive loss.

Under the provisions of Section 382 of the Internal Revenue Code of 1986, as amended, utilization of the NOLs and research and development tax credit carryforwards may be subject to a substantial annual limitation under Section 382 due to ownership change limitations that have occurred previously or that could occur in the future in accordance with Section 382, as well as similar state provisions. These ownership changes may limit the amount of NOLs and research and development tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. If a change in control as defined by Section 382 has occurred at any time since the Company’s formation, utilization of its NOLs or research and development tax credit carryforwards would be subject to an annual limitation under Section 382, 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, which could then be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the NOLs or research and development tax carryforwards before their utilization.