v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
8.
Income Taxes

 

Our income before provision for (benefit from) income taxes for the years ended December 31, 2025, 2024 and 2023 is as follows (in thousands):

 

 

 

December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Current:

 

 

 

 

 

 

 

 

 

U.S. loss before income taxes

 

$

(203,522

)

 

$

(105,855

)

 

$

(84,866

)

Foreign loss before income taxes

 

 

(156,117

)

 

 

(4,108

)

 

 

(1,029

)

Loss before income taxes

 

$

(359,639

)

 

$

(109,963

)

 

$

(85,895

)

Income tax expense from continuing operations consists of the following for the years ended December 31, 2025, 2024 and 2023 (in thousands):

 

 

 

December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Current:

 

 

 

 

 

 

 

 

 

Federal

 

$

—

 

 

$

—

 

 

$

—

 

State

 

 

1

 

 

 

1

 

 

 

1

 

 

 

$

1

 

 

$

1

 

 

$

1

 

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

$

(60,357

)

 

$

(33,180

)

 

$

(22,303

)

State

 

 

(20,756

)

 

 

(11,926

)

 

 

(6,785

)

Foreign

 

 

(19,561

)

 

 

—

 

 

 

—

 

 

 

$

(100,674

)

 

$

(45,106

)

 

$

(29,088

)

 

 

 

 

 

 

 

 

 

 

Change in valuation allowance

 

 

100,674

 

 

 

45,106

 

 

 

29,088

 

Total income tax expense

 

$

1

 

 

$

1

 

 

$

1

 

 

The reconciliations of the U.S. federal statutory tax rate to the effective income tax rate for the year ended December 31, 2025 is as follows (in thousands, except %):

 

 

 

December 31,

 

 

 

2025

 

Tax provision at U.S. Federal statutory rates

 

$

(75,524

)

 

 

21

%

State income taxes net of federal benefit

 

 

1

 

 

 

0

%

Foreign tax effects

 

 

 

 

 

 

Ireland:

 

 

 

 

 

 

Statutory Tax Rate Difference

 

 

13,238

 

 

 

(4

)%

Change in Valuation Allowance

 

 

19,468

 

 

 

(5

)%

    Other Foreign Jurisdictions:

 

 

78

 

 

 

(0

)%

Research and development credits

 

 

(22,639

)

 

 

6

%

Change in federal valuation allowance

 

 

60,357

 

 

 

(17

)%

Non-taxable or non-deductible items

 

 

565

 

 

 

(0

)%

Share-based compensation

 

 

4,221

 

 

 

(1

)%

Other

 

 

236

 

 

 

(0

)%

Effective income tax rate

 

$

1

 

 

 

—

 

 

The reconciliations of the U.S. federal statutory tax rate to the effective income tax rate for the years ended December 31, 2024 and 2023 are as follows:

 

 

 

December 31,

 

 

 

2024

 

 

2023

 

Tax provision at U.S. Federal statutory rates

 

 

21

%

 

 

21

%

State income taxes net of federal benefit

 

 

9

%

 

 

7

%

Non-deductible permanent items

 

 

—

 

 

 

(1

)%

Stock options

 

 

3

%

 

 

3

%

Research and development credits

 

 

10

%

 

 

4

%

Change in valuation allowance

 

 

(43

)%

 

 

(34

)%

Effective income tax rate

 

 

—

 

 

 

—

 

 

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred taxes as of December 31, 2025 and 2024 are as follows (in thousands):

 

 

 

December 31,

 

 

 

2025

 

 

2024

 

Deferred tax assets:

 

 

 

 

 

 

Accrued liabilities

 

$

174

 

 

$

403

 

Intangible assets

 

 

134,134

 

 

 

93,056

 

Net operating loss carryforwards

 

 

68,178

 

 

 

40,799

 

Share-based compensation

 

 

4,237

 

 

 

2,796

 

Credit Carryforwards

 

 

58,261

 

 

 

27,199

 

Other

 

 

—

 

 

 

91

 

Total deferred tax assets

 

 

264,984

 

 

 

164,344

 

Valuation Allowance

 

 

(264,737

)

 

 

(164,063

)

Total deferred tax assets, net of allowance

 

$

247

 

 

$

281

 

Deferred tax liabilities:

 

 

 

 

 

 

Right of use assets

 

$

(24

)

 

$

(281

)

Other

 

 

(223

)

 

 

—

 

Total deferred tax liabilities:

 

$

(247

)

 

$

(281

)

Net deferred tax assets (liabilities):

 

$

—

 

 

$

—

 

 

A valuation allowance of $264.7 million and $164.1 million at December 31, 2025 and December 31, 2024, respectively, has been recorded to offset net deferred tax assets, as the Company is unable to conclude that it is more likely than not that such deferred tax assets will be realized.

At December 31, 2025, the Company had approximately $194.7 million of federal net operating loss carryforwards, of which $17.7 million will begin to expire in 2032 and the remaining $177.0 million of which can be carried forward indefinitely. The Company has $110.6 million of state net operating loss carryforwards that will begin to expire in 2034. The Company has $156.1 million of foreign net operating loss carryforwards that can be carried forward indefinitely.

The Company's ability to utilize its federal net operating loss carryforwards may be limited under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"). Specifically, this limitation may arise in the event of an "ownership change," which is defined by Section 382 of the Code as a cumulative change in ownership of the Company of more than 50% within a three-year period. If the Company undergoes one or more ownership changes in connection with any future transactions in its stock, the Company's ability to utilize net operating loss carryforwards to offset federal taxable income, if any, could potentially result in increased future tax liability to the Company. An ownership change under Section 382 of the Code occurred during the year ended December 31, 2018. However, as of December 31, 2025, there is no limitation on the federal and state net operating losses.

The Company is subject to U.S. federal income tax, as well as income tax in various state and foreign jurisdictions. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service and various state agencies for the years ended December 31, 2021 through December 31, 2025.

At December 31, 2025, the Company has federal and state research and development tax credit carry-forwards of approximately $41.5 million and $21.2 million, respectively. The federal credits begin to expire in 2036. The state credits do not expire.

The differences between the Company's effective income tax rate and the statutory federal rate for the year ended December 31, 2025 and the year ended December 31, 2024 relate primarily to losses incurred for which no tax benefit was recognized, due to uncertainty of realization. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. The Company considers projected future taxable income and tax planning strategies in making this assessment. At each of December 31, 2025 and December 31, 2024, the Company provided a full valuation allowance against its deferred tax assets due to uncertainty surrounding the realization of those assets as a result of historical taxable net losses.

The Company has reviewed its operations and has not identified any material uncertain tax positions. As a result, there is no liability for uncertain tax positions in the income tax provision as of December 31, 2025 or December 31, 2024.