XML 43 R14.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes For the years ended December 31, 2019, 2018 and 2017 there was no provision for income taxes due to taxable losses generated, fully offset by a valuation allowance. The significant components of the Company's deferred income tax assets (liabilities) were as follows (in thousands):
| December 31, |  |
| 2019 |  | 2018
Deferred income tax assets: |  |  |
Federal U.S. net operating loss carryforward | $ | 116,436 |  |  | $ | 87,284 |
State net operating loss carryforward | 31,110 |  |  | 22,809 |
Research and development credit, net | 35,580 |  |  | 29,750 |
Orphan drug credit, net | 22,881 |  |  | 22,580 |
Operating lease liabilities | 8,413 |  |  | — |
Deferred revenue | 367 |  |  | 3,736 |
Other | 9,123 |  |  | 9,972 |
Gross deferred income tax assets | 223,910 |  |  | 176,131 |
Valuation allowance | (214,893) |  |  | (172,457) |
Net deferred income tax assets | 9,017 |  |  | 3,674 |
Deferred income tax liabilities: |  |  |
Depreciation | (438) |  |  | (1,911) |
Operating lease ROU assets | (5,547) |  |  | — |
Prepaid expenditures | (3,032) |  |  | (1,763) |
Gross deferred income tax liabilities | (9,017) |  |  | (3,674) |
Net deferred income tax asset/(liability) | $ | — |  |  | $ | — |
The Company recognizes valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. In assessing the likelihood of realization, management considers (i) future reversals of existing taxable temporary differences; (ii) future taxable income exclusive of reversing temporary difference and carryforwards; (iii) taxable income in prior carryback years if carryback is permitted under applicable tax law; and (iv) tax planning strategies. The Company's net deferred income tax asset is not more likely than not to be utilized due to the lack of sufficient sources of future taxable income and cumulative book losses which have resulted over the years. As of December 31, 2019, the Company has U.S. federal and state net operating loss (NOL) carryforwards of approximately $554.5 million. Of these NOLs, $237.8 million will expire in various years beginning in 2025 through 2037. $316.7 million of NOLs were generated post December 31, 2017 and carryforward indefinitely. In addition, the Company has U.S. federal tax credits of $58.2 million which will expire in various years beginning in 2022 through 2039. The use of the Company's U.S. federal NOL and tax credit carryforwards in future years are restricted due to changes in the Company's ownership and tax attributes acquired through the Company's acquisitions. As of December 31, 2019, $13.5 million of the Company's U.S. Federal NOLs are limited for use over the years 2020 – 2028 in which a range of such amounts could be utilized on an annual basis of $0.2 million to $1.4 million. The remaining $541.0 million of NOLs is not limited and can be offset against future taxable income, subject to certain limitations for newly enacted tax legislation. The reconciliation of the reported estimated income tax benefit to the amount that would result by applying the U.S. federal statutory tax rate to the net income is as follows (in thousands):
| Year Ended December 31, |  |  |  |
| 2019 |  | 2018 |  | 2017
United States federal tax at statutory rate | $ | (31,880) |  |  | $ | (36,005) |  |  | $ | (6,869) |
State taxes (net of federal benefit) | (9,524) |  |  | (11,133) |  |  | (735) |
Deferred income tax adjustments | 2,004 |  |  | (4,435) |  |  | 607 |
Deferred state blended rate adjustments | — |  |  | — |  |  | (485) |
Deferred federal rate change reduction in corporate rate | — |  |  | — |  |  | 39,447 |
Research credit, net | (5,830) |  |  | (8,466) |  |  | (8,455) |
Orphan drug credit, net | (301) |  |  | (872) |  |  | (1,853) |
Other permanent items | 1,206 |  |  | 148 |  |  | 276 |
Equity-based compensation | 1,889 |  |  | 758 |  |  | 2,067 |
Change in valuation allowance | 42,436 |  |  | 60,005 |  |  | (24,000) |
Income tax expense/(benefit) | $ | — |  |  | $ | — |  |  | $ | — |
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands):
| Year Ended December 31, |  |  |  |
| 2019 |  | 2018 |  | 2017
Beginning balance | $ | 4,318 |  |  | $ | 3,395 |  |  | $ | 2,465 |
Increases for current year tax positions | 637 |  |  | 642 |  |  | 569 |
Increases/(decreases) for prior year tax positions | (5) |  |  | 281 |  |  | 361 |
Ending balance | $ | 4,950 |  |  | $ | 4,318 |  |  | $ | 3,395 |
As of December 31, 2019 and 2018, of the total gross unrecognized tax benefits, approximately $4.9 million and $4.3 million would favorably impact the Company's effective income tax rate, respectively. Although, due to the Company's determination that the deferred income tax asset would not more likely than not be realized, a valuation allowance would be recorded, therefore, zero net impact would result within the Company's effective income tax rate. The Company's uncertain income tax position liability has been recorded to deferred income taxes to offset the tax attribute carryforward amounts. For the years ended December 31, 2019, 2018 and 2017, the Company has not recognized any interest or penalties related to the uncertain income tax positions due to the fact such position is related to tax attribute carryforwards which have not yet been utilized. The Company does not expect its unrecognized income tax position to significantly decrease within the next twelve months. The Company's U.S. Federal and state income tax returns from 2001 forward remain open to examination due to the carryover of unused net operating losses and tax credits.

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration