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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The amount of net loss before taxes for the years ended December 31, 2024, 2023, and 2022 is as follows:
| December 31,
| 2024 |  | 2023 |  | 2022
| (in thousands)
U.S. loss before taxes | $ | 32,178 |  |  | $ | 134,073 |  |  | $ | 175,777 |
Foreign loss before taxes | 23,457 |  |  | 45,736 |  |  | 53,593 |
Pre-tax Loss | $ | 55,635 |  |  | $ | 179,809 |  |  | $ | 229,370 |
A reconciliation of income tax expense for the years ended December 31, 2024, 2023 and 2022 is as follows:
| December 31,
| 2024 |  | 2023 |  | 2022
| (in thousands)
Current: |  |  |  |  |
Federal | $ | 886 |  |  | $ | — |  |  | $ | — |
State | 7 |  |  | 8 |  |  | 8 |
Total income tax expense | $ | 893 |  |  | $ | 8 |  |  | $ | 8 |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities at December 31, 2024, 2023 and 2022 are shown below. The Company has established a valuation allowance against net deferred tax assets due to the uncertainty that such assets will be realized. The Company periodically evaluates the recoverability of the deferred assets. At such time as it is determined that it is more likely than not that the deferred tax asset will be realized, the valuation allowance will be reduced. The change in the valuation allowance for the year ended December 31, 2024 was an increase of $7.4 million.
| December 31,
| 2024 |  | 2023 |  | 2022
| (in thousands)
Deferred tax assets: |  |  |  |  |
Net operating losses | $ | 97,940 |  |  | $ | 122,987 |  |  | $ | 128,989 |
Deferred loss | 10,575 |  |  | — |  |  | — |
Capital loss | 20,348 |  |  | — |  |  | — |
Tax credits | 44,803 |  |  | 45,445 |  |  | 34,193 |
Amortization | 2,646 |  |  | 6,919 |  |  | 8,487 |
Stock-based compensation | 10,984 |  |  | 9,886 |  |  | 8,445 |
Lease liability | 1,135 |  |  | 726 |  |  | 1,354 |
Accrued compensation | 547 |  |  | 1,887 |  |  | 2,514 |
Section 174 capitalization | 35,715 |  |  | 34,268 |  |  | 21,840 |
Other | 5,076 |  |  | 43 |  |  | 37 |
Total gross deferred tax assets | 229,769 |  |  | 222,161 |  |  | 205,859 |
Deferred tax liabilities: |  |  |  |  |
Other | (3) |  |  | — |  |  | — |
Right of use asset | (1,083) |  |  | (660) |  |  | (1,244) |
Property, plant and equipment | — |  |  | (108) |  |  | (565) |
Total gross deferred tax liabilities | (1,086) |  |  | (768) |  |  | (1,809) |
Valuation allowance | (228,683) |  |  | (221,393) |  |  | (204,050) |
Net deferred tax asset | $ | — |  |  | $ | — |  |  | $ | — |
As of December 31, 2024, the Company had federal and state NOL carryforwards of approximately $398.1 million and $3.3 million, respectively. The federal NOL carryforwards can be carried forward indefinitely and be available to offset up to 80% of future taxable income each year. The California NOL carryforwards begin to expire in 2036. As of December 31, 2024, the Company also has Irish NOL carryforwards of approximately $113.0 million, which can be carried forward indefinitely. In the current year, the Company removed federal and foreign NOL carryforwards of $141.0 million and $0.4 million, respectively, as a result of mergers and liquidations. As of December 31, 2024, the Company also had orphan drug credit and federal research tax credit carryforwards of approximately $48.2 million and California research tax credits of $13.2 million. The federal research tax credit carryforwards begin to expire in 2038, and the California research tax credit carryforward does not expire and can be carried forward indefinitely until utilized. In the current year, the Company removed federal and California credit carryforwards of $9.7 million and $0.4 million, respectively, as a result of mergers. A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate is as follows:
| December 31,
| 2024 |  | 2023 |  | 2022
Federal statutory income tax rate | 21.00 | % |  | 21.00 | % |  | 21.00 | %
Change in valuation allowance | (12.38 | %) |  | (8.73 | %) |  | (20.25 | %)
Research and experimentation credits | 3.03 | % |  | 5.69 | % |  | 3.39 | %
Foreign rate differential | (3.75 | %) |  | (2.13 | %) |  | (1.88 | %)
GILTI | (4.72 | %) |  | — | % |  | — | %
Stock-based compensation | (4.61 | %) |  | (1.44 | %) |  | (0.90 | %)
Nondeductible interest | (4.13 | %) |  | (1.27 | %) |  | (0.99 | %)
Domestic/Foreign Restructuring Impact | 2.52 | % |  | (12.49 | %) |  | — | %
Other | 1.44 | % |  | (0.62 | %) |  | (0.37 | %)
Provision for income taxes | (1.60 | %) |  | — | % |  | — | %
The NOL carryforward may be subject to an annual limitation under Section 382 and 383 of the Internal Revenue Code of 1986, and similar state provisions if the Company experienced one or more ownership changes which would limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax respectively. In general, an ownership change as defined by Sections 382 and 383, results from the transactions increasing ownership of certain stockholders or public groups in the stock of the corporation of more than 50 percentage points over a three-year period. The Company had an ownership change with the IPO in February of 2019 which resulted in no forfeiture of NOLs or credits. The Company had an additional ownership change in July of 2023, which resulted in a significant limitation on the Company's utilization of its NOLs and is expected to result in forfeiture of some or all of the federal credits. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company's effective tax rate. The Company files income tax returns in the United States, California, Florida, Ireland, and Luxembourg. Due to the Company’s losses incurred, the Company is subject to the income tax examination by authorities since inception. The Company’s policy is to recognize interest expense and penalties related to income tax matters as tax expense. For the years ended December 31, 2024, 2023 and 2022 and as of December 31, 2024 and 2023, there were no accruals for interest related to unrecognized tax benefits or tax penalties. A reconciliation of the beginning and ending amount of unrecognized tax benefits for 2024, 2023, and 2022, excluding interest and penalties, is as follows:
| December 31,
| 2024 |  | 2023 |  | 2022
| (in thousands)
Balance at beginning of the year | $ | 13,654 |  |  | $ | 10,572 |  |  | $ | 7,551 |
Decrease related to prior year positions | (2,028) |  |  | — |  |  | — |
Increase related to current year positions | 2,293 |  |  | 3,082 |  |  | 3,021 |
Balance at the end of the year | $ | 13,919 |  |  | $ | 13,654 |  |  | $ | 10,572 |
Included in the balance of unrecognized tax benefits at December 31, 2024 is $13.9 million that, if recognized, would not impact the Company’s income tax benefit or effective tax rate as long as the Company's deferred tax asset remains subject to a full valuation allowance. The Company does not expect any significant increases or decreases to the Company's unrecognized tax benefits within the next 12 months.

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