Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The major taxing jurisdictions for the Company are Ireland and the U.S. The Company recorded income tax expense of $44.8 million and $43.6 million for the three and six months ended June 30, 2025, as compared to an income tax benefit of $2.0 million and $4.2 million for the three and six months ended June 30, 2024, respectively. The provision for income taxes differs from the statutory tax rate of 12.5% applicable to Ireland primarily due to Irish net operating losses for which a tax provision benefit is not recognized, U.S. income taxed at different rates, and the recognition of a full valuation allowance against deferred tax assets. The Company has generally computed its interim period provision for (benefit from) income taxes by applying its forecasted effective tax rate to year-to-date earnings. However, due to a significant amount of U.S. permanent differences relative to the amount of U.S. forecasted income (exclusive of significant unusual or infrequently occurring items accounted for discretely) used in computing the effective tax rate, the effective tax rate is highly sensitive to minor fluctuations in U.S. forecasted income. As such, the Company has computed the U.S. component of the consolidated provision for (benefit from) income taxes for the three and six months ended June 30, 2025 using an actual year-to-date tax calculation. The non-U.S. tax expense continues to be zero due to cumulative historic and year-to-date losses and a full valuation allowance on our deferred tax assets in our non-U.S. jurisdictions. Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company's deferred tax assets (“DTAs”) are composed primarily of its Irish subsidiaries' net operating loss carryforwards, California net operating loss carryforwards available to reduce future taxable income of the Company's U.S. subsidiaries, federal and California tax credit carryforwards, capitalized R&D, share-based compensation, and other temporary differences. As of each reporting date, the Company considers new evidence that could affect the future realization of DTAs by jurisdiction. Valuation allowances are established if there is uncertainty that a portion or all of the DTAs will not be realized. The ultimate realization of a DTA is dependent upon the generation of future taxable income of the proper character in appropriate jurisdictions to obtain benefit from the reversal of temporary differences and net operating loss carryforwards. Management performed an assessment of its DTA in the three months ended June 30, 2025. Based upon the weight of available evidence, including the outcome of the Phase 3 AFFIRM-AL clinical trial for birtamimab and the announced corporate restructuring, including a substantial workforce reduction, management believes that it is not more likely than not the Company will realize the benefits of its federal DTAs. Accordingly, in the three months ended June 30, 2025, the Company recorded an expense to establish a valuation allowance of $44.9 million resulting in a full valuation allowance against its federal DTAs. No provision for income tax has been recognized on undistributed earnings of the Company’s U.S. subsidiaries as the Company considers the U.S. earnings to be indefinitely reinvested. The Company is subject to reviews and audits by the U.S. Internal Revenue Service (“IRS”), the Irish Revenue Commissioners, and other taxing authorities from time to time. The IRS concluded its examination of the Company’s U.S. subsidiaries for tax year 2021, with no adjustments arising. There are no other ongoing income tax audits as of June 30, 2025. The Company periodically reviews its uncertain tax positions. The Company’s assessment is based on many factors, including any ongoing IRS audits. For the six months ended June 30, 2025, the Company’s assessment did not result in a material change in unrecognized tax benefits.
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