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INCOME TAXES | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income before provision for income taxes was as follows (in thousands):
| Years Ended December 31,
| 2025 |  | 2024 |  | 2023
United States | $ | (3,721) |  |  | $ | (69,410) |  |  | $ | (51,925) |
Foreign | — |  |  | — |  |  | — |
Income (loss) before taxes | $ | (3,721) |  |  | $ | (69,410) |  |  | $ | (51,925) |
The Company’s income tax provision was computed based on the federal statutory rate and the state statutory rates, net of the related federal benefit. The components of provision for income taxes for all periods presented were as follows (in thousands):
| Years Ended December 31,
| 2025 |  | 2024 |  | 2023
Current: |  |  |  |  |
Federal | $ | — |  |  | $ | — |  |  | $ | — |
State | 1,624 |  |  | — |  |  | — |
Foreign | — |  |  | — |  |  | — |
Total current | 1,624 |  |  | — |  |  | — |
Deferred: |  |  |  |  |
Federal | — |  |  | — |  |  | — |
State | — |  |  | — |  |  | — |
Foreign | — |  |  | — |  |  | — |
Total deferred | — |  |  | — |  |  | — |
Total income taxes | $ | 1,624 |  |  | $ | — |  |  | $ | — |
A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows:
| Year Ended December 31,
| 2025
| (In thousands) |  | Percent
U.S. federal statutory tax rate | $ | (781) |  |  | 21.0 | %
State and local income taxes, net of federal income tax effect(1) | 1,283 |  |  | (34.5) |
Tax credits |  |  |
Research and development tax credits | (988) |  |  | 26.6 |
Changes in valuation allowances | (533) |  |  | 14.3 |
Nontaxable or nondeductible items |  |  |
Meals & entertainment | 165 |  |  | (4.4) |
Lobbying contributions | 294 |  |  | (7.9) |
Stock compensation | 680 |  |  | (18.3) |
162(m) compensation limit | 731 |  |  | (19.6) |
Pharma fee | 105 |  |  | (2.8) |
Warrant liability | 651 |  |  | (17.5) |
Other Adjustments |  |  |
Other | 18 |  |  | (0.6) |
Effective tax rate | $ | 1,624 |  |  | (43.7) | %
(1) The states and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include Tennessee. A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows:
|  |  | Years Ended December 31,
|  |  | 2024 |  | 2023
U.S. federal tax at statutory rate |  |  | 21.0 | % |  | 21.0 | %
State and local tax at statutory rate |  |  | 0.6 |  |  | 2.7 |
Research and development tax credits |  |  | 1.9 |  |  | 0.3 |
Change in valuation allowance |  |  | (32.5) |  |  | (9.1) |
Other permanent differences |  |  | (1.7) |  |  | (2.0) |
Stock option cancellations |  |  | (1.8) |  |  | (3.7) |
Stock option shortfalls |  |  | — |  |  | (1.7) |
Effect of rate changes |  |  | 13.5 |  |  | (7.7) |
Provision to return adjustment |  |  | (1.0) |  |  | (0.3) |
Other |  |  | — |  |  | 0.5 |
Effective tax rate |  |  | — | % |  | — | %
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. When realization of the deferred tax asset is more likely than not to occur, the benefit related to the deductible temporary differences attributable to operations is recognized as a reduction of income tax expense. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. The Company cannot be certain that future taxable income will be sufficient to realize its deferred tax assets. Accordingly, the Company has recorded a valuation allowance against the Company’s otherwise recognizable net deferred tax assets. The Company continues to maintain the underlying tax benefits to offset future taxable income and to monitor the need for a valuation allowance based on the profitability of its future operations. The valuation allowance decreased by approximately $5.8 million for the year ended December 31, 2025 and increased by $22.5 million and $4.7 million during the years ended December 31, 2024 and 2023, respectively. Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):
| December 31,
| 2025 |  | 2024
Deferred tax assets: |  |  |
Accrued expenses and other current liabilities | $ | 9,374 |  |  | $ | 1,757 |
Deferred revenue | 15,765 |  |  | 13,222 |
Sale of royalty | 12,251 |  |  | 13,595 |
R&D credits | 7,726 |  |  | 6,152 |
Capitalized R&D costs | 11,873 |  |  | 21,270 |
Net operating loss carryforward | 289,712 |  |  | 291,723 |
ASC 842 lease liability | 832 |  |  | 2,248 |
Working Capital Fund liability | 9,366 |  |  | 10,123 |
Intangible assets | 4,631 |  |  | 2,040 |
Other | 22,021 |  |  | 29,048 |
Total deferred tax assets | 383,551 |  |  | 391,178 |
Less valuation allowance | (382,001) |  |  | (387,803) |
Total deferred tax assets, net of valuation allowance | 1,550 |  |  | 3,375 |
Deferred tax liabilities: |  |  |
481(a) adjustments | (670) |  |  | (1,271) |
ROU asset (ASC 842) | (859) |  |  | (2,065) |
Other | (21) |  |  | (39) |
Total deferred tax liabilities | (1,550) |  |  | (3,375) |
Net deferred tax liability | $ | — |  |  | $ | — |
As of December 31, 2025, 2024 and 2023, the Company had approximately $1,240.8 million, $1,245.8 million and $1,230.4 million, respectively, of federal net operating losses, or NOLs, carry-forwards which expire through 2037. Included in the $1,240.8 million of federal NOLs are losses of $663.8 million that will carry forward indefinitely as a result of the Tax Cuts and Jobs Act. Additionally, at December 31, 2025, 2024 and 2023, the Company had approximately $562.2 million, $584.3 million and $590.8 million, respectively, of state NOL carry-forwards, which expire through 2045. The Company also has approximately $5.0 million of federal research and development tax credit carryforwards which expire through 2045 and $3.4 million of state R&D tax credit carryforwards which expire through 2040. Under the provisions of the IRC, the NOLs and tax credit carry-forwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOLs and tax credit carryforwards may become subject to an annual limitation under IRC Sections 382 and 383 if there is more than a 50% change in ownership of the stockholders that own 5% or more of the Company’s outstanding stock over a three-year period. The Company completed an evaluation of its ownership changes and concluded that an ownership change did occur on December 12, 2018 for both Akebia and Keryx in connection with the Merger. As a consequence of this ownership change, the Company’s NOLs and tax credit carryforwards allocable to the tax periods preceding the ownership change became subject to limitation under Section 382 of the IRC. The Company reduced its associated deferred tax assets by $44.9 million as a result of the limitation. The Company completed an evaluation of its ownership changes as of December 31, 2025 and concluded that an ownership change had not occurred since the previous evaluation done through December 12, 2018. The Company may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside the Company’s control. As a result, the Company’s ability to utilize these attributes to offset taxable income may be subject to limitations. The Company has not conducted a full study of its research and development credit carryforwards. A study may result in an adjustment to the Company’s research and development credit carryforwards; however, until a study is completed, and any adjustment is known, no amounts will be presented as an uncertain tax position. A full valuation allowance has been provided against the Company’s research and development credit carryforwards and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the balance sheet or statement of operations at this time, if an adjustment were required. The Company files income tax returns in the U.S. federal and various state and local jurisdictions. For federal and state income tax purposes, the 2024, 2023 and 2022 tax years remain open for examination under the normal three-year statute of limitations. The statute of limitations for income tax audits in the U.S. will commence upon utilization of NOLs and will expire three years from the filing of the tax return the loss was utilized on. As of December 31, 2025, the Company’s U.S. federal income tax return for the year ended December 31, 2023 is under examination by the Internal Revenue Service. The examination is in its early stages, and no proposed adjustments have been received. The ultimate resolution of this matter is uncertain and could differ from amounts recorded in the consolidated financial statements. A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the years ending December 31, 2025, 2024 and 2023 are as follows (in thousands):
Balance at December 31, 2022 | $ | 2,697 |
Reductions based on tax positions of current years | (2,697) |
Balance at December 31, 2023 | — |
Reductions based on tax positions of current years | — |
Balance at December 31, 2024 | — |
Reductions based on tax positions of current years | — |
Balance at December 31, 2025 | $ | — |
The Company paid $0.7 million cash for state and local income taxes during the year ended December 31, 2025. The Company did not pay cash for income taxes during the years ended December 31, 2024 and 2023.

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