
	December 31,
	2020		2019
Deferred income tax assets:
Federal U.S. net operating loss carryforward	$	136,086	$	116,436
State net operating loss carryforward	37,465		31,110
Research and development credit, net	50,271		35,580
Orphan drug credit, net	23,409		22,881
Operating lease liabilities	8,048		8,413
Deferred revenue	3,132		367

Other	14,285		9,123
Gross deferred income tax assets	272,696		223,910
Valuation allowance	(263,403)		(214,893)
Net deferred income tax assets	9,293		9,017

Deferred income tax liabilities:
Depreciation	(2,123)		(438)
Operating lease ROU assets	(5,316)		(5,547)
Prepaid expenditures	(1,854)		(3,032)
Gross deferred income tax liabilities	(9,293)		(9,017)
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, 2020, the Company has U.S. federal and state net operating loss (NOL) carryforwards of approximately $648.0 million. Of these NOLs, $237.7 million will expire in various years beginning in 2025 through 2037. $410.3 million of NOLs were generated post December 31, 2017 and carryforward indefinitely. In addition, the Company has U.S. federal tax credits of $69.6 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, 2020, $13.5 million of the Company's U.S. Federal NOLs are limited for use over the years 2021 – 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 $634.5 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,
	2020		2019		2018

United States federal tax at statutory rate	$	(27,245)	$	(31,880)	$	(36,005)
State taxes (net of federal benefit)	(8,100)		(9,524)		(11,133)
Deferred income tax adjustments	344		2,004		(4,435)


Research credit, net	(14,691)		(5,830)		(8,466)
Orphan drug credit, net	(528)		(301)		(872)
Other permanent items	1,156		1,206		148
Equity-based compensation	554		1,889		758
Change in valuation allowance	48,510		42,436		60,005
Income tax expense/(benefit)	$	—	$	—	$	—


	Year Ended December 31,
	2020		2019		2018
Beginning balance	$	4,950	$	4,318	$	3,395
Increases for current year tax positions	839		637		642
Increases/(decreases) for prior year tax positions	337		(5)		281
Ending balance	$	6,126	$	4,950	$	4,318

As of December 31, 2020 and 2019, of the total gross unrecognized tax benefits, approximately $6.1 million and $4.9 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, 2020, 2019 and 2018, 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 income tax credits, and from 2004 forward due to the carryover of unused net operating losses.