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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2011
Income Taxes [Abstract] |
Income Taxes | 14. Income Taxes The components of federal and state income tax expense are as follows (in thousands):
|  | As of December 31, |
|  | 2011 |  |  | 2010 |
Current |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |
State |  |  | — |  |  |  | — |
Total current |  |  | — |  |  |  | — |
Deferred |  |  |  |  |  |  |  |
Federal |  |  | 7,531 |  |  |  | 4,853 |
State |  |  | 2,831 |  |  |  | 1,283 |
Total deferred |  |  | 10,362 |  |  |  | 6,136 |
Valuation allowance |  |  | (10,362 | ) |  |  | (6,136 | )
Total income tax expense |  | $ | — |  |  | $ | — |
The components of net deferred tax assets are as follows (in thousands):
|  | As of December 31, |
|  | 2011 |  |  | 2010 |
Net operating loss carryforwards |  | $ | 18,786 |  |  | $ | 13,328 |
Tax credit carryforwards |  |  | 3,160 |  |  |  | 1,061 |
Stock based compensation |  |  | 6,885 |  |  |  | 5,864 |
Other |  |  | 193 |  |  |  | 104 |
Licensing deduction deferral |  |  | 7,458 |  |  |  | 3,264 |
Gross deferred tax assets |  |  | 36,482 |  |  |  | 23,621 |
Valuation allowance |  |  | (36,482 | ) |  |  | (23,621 | )
Net deferred tax asset |  | $ | — |  |  | $ | — |
The components of net deferred tax liabilities are as follows (in thousands): |  |  |  |  |  |  |  |
|  | As of December 31, |
|  | 2011 |  |  | 2010 |
In-process research and development not subject to future amortization for tax purposes |  | $ | 5,053 |  |  | $ | — |
Gross deferred tax liability |  | $ | 5,053 |  |  | $ | — |
The provision for income taxes differs from the provision computed by applying the federal statutory rate to net loss before income taxes as follows (in thousands):
|  | As of December 31, |
|  | 2011 |  |  | 2010 |
Expected federal income tax benefit |  | $ | (3,905 | ) |  | $ | (4,078 | )
Non-qualified stock compensation |  |  | (3,189 | ) |  |  | (1,236 | )
Effect of change in valuation allowance |  |  | 8,551 |  |  |  | 6,136 |
Income tax credits |  |  | (260 | ) |  |  | (231 | )
State income taxes after credits |  |  | (1,197 | ) |  |  | (994 | )
Other |  |  | — |  |  |  | 403 |
|  | $ | — |  |  | $ | — |
The Company has incurred net operating losses from inception. At December 31, 2011, the Company had domestic federal and state net operating loss carryforwards of approximately $41.6 million available to reduce future taxable income, which expire at various dates beginning in 2013 through 2031. The Company also had federal and state research and development tax credit carryforwards of approximately $2,000,000 and $1,800,000, respectively, available to reduce future tax liabilities and which expire at various dates beginning in 2023 through 2031. Under the provisions of the Internal Revenue Code, certain substantial changes in the Company’s ownership may result in a limitation on the amount of net operating loss carryforwards and research and development credit carryforwards which could be utilized annually to offset future taxable income and taxes payable. Based on an assessment of all available evidence including, but not limited to the Company’s limited operating history in its core business and lack of profitability, uncertainties of the commercial viability of its technology, the impact of government regulation and healthcare reform initiatives, and other risks normally associated with biotechnology companies, the Company has concluded that it is more likely than not that these net operating loss carryforwards and credits will not be realized and, as a result, a 100% deferred income tax valuation allowance has been recorded against these assets. The Company adopted certain provisions of the ASC 740, effective January 1, 2007 which clarifies the accounting for uncertainty in income taxes recognized in financial statements and requires the impact of a tax position to be recognized in the financial statements if that position is more likely than not of being sustained by the taxing authority. The adoption of ASC 740-10 did not have any effect on the Company’s financial position or results of operations. The Company files income tax returns in the U.S. federal, Massachusetts and Oregon jurisdictions. The Company is subject to tax examinations for the 2007 tax year and beyond. The Company does not believe there will be any material changes in its unrecognized tax positions over the next 12 months. The Company has not incurred any interest or penalties. In the event that the Company is assessed interest or penalties at some point in the future, they will be classified in the financial statements as general and administrative expense.

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- 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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 + Details
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