13. Income Taxes

Income taxes paid, net of refunds received, for the six months ended June 30, 2026 were $4.3 million paid to the Internal Revenue Service, $170,000 paid to Massachusetts, $845,000 paid to Pennsylvania and $267,000 paid to other U.S. states.

On April 20, 2026, we completed the Spin-Off of our clinical-stage biotechnology company, First Tracks Biotherapeutics, through a pro rata distribution to shareholders (the “Distribution”). Following the Distribution, we hold and continue to manage the financial collaboration for Jemperli with GSK and for Quimilza with Vanda, and First Tracks Biotherapeutics operates as an independent, separately taxed public company. For tax purposes, the Distribution was taxable resulting in a tax gain of approximately $434.9 million. As a result, we recorded a $96.2 million tax charge to equity.

We assess the realizability of our deferred tax assets each reporting period based on all available positive and negative evidence, including our cumulative earnings history, the character and timing of reversing temporary differences, tax-planning strategies, and projections of future taxable income. Prior to the Distribution, we maintained a full valuation allowance against our net deferred tax assets. As a result of future profits expected for the retained business, Management concluded that a substantial portion of our deferred tax assets are realizable with the exception of certain deductible differences and IRC Section 382 limited tax attributes expected to reverse following the lapse of royalty and license revenue streams. Accordingly, during the six months ended June 30, 2026, we reduced our valuation allowance of $192.6 million as of December 31, 2025 to $24.3 million as of June 30, 2026.

As of June 30, 2026, we had federal and state net operating loss carryforwards (“NOLs”), of $174.2 million and $68.5 million, respectively. Federal NOLs generated in 2018 and after carryover indefinitely and may generally be used to offset up to 80% of future

taxable income. The state NOLs will begin to expire in 2030, unless previously utilized. As of June 30, 2026, we had federal and state research tax credit carryforwards of approximately $22.7 million and $22.7 million, respectively. The federal research tax credits carryforwards will begin to expire in 2042, California state credits carryforward indefinitely and other state tax credits begin to expire in 2043.

The above NOL carryforward and the federal and state research tax credit carryforwards may be subject to an annual limitation under section 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions if we experience one or more ownership changes which would limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change as defined by Section 382 and 383, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percentage points over a three-year period.

We experienced ownership changes as defined by Section 382 of the Code during 2007, 2017 and 2021. As a result, as of June 30, 2026, the federal NOL carryforward of $174.2 million is subject to annual limitation over future periods. State NOL and credit carryforwards may be similarly limited.

Our use of federal and state NOLs and research credits could be further limited if we experience one or more ownership changes subsequent to June 30, 2026. If a change in ownership occurs, NOLs and tax credit carryforwards could be eliminated or restricted.

We recognize a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more likely than not recognition at the effective date to be recognized. As of June 30, 2026, we had $11.3 million unrecognized tax benefits that, if recognized and realized, would affect the effective tax rate. The following table summarizes the activity related to our unrecognized tax benefits:

Our policy is to recognize interest and penalties related to income tax matters in the provision for income taxes. We recognize interest or penalties related to income tax matters in income tax expense. During the six month ended June 30, 2026, we accrued interest and penalties in continuing operations related to income tax matters of $0.1 million and $0.5 million, respectively. We did not accrue any interest or penalties during the years ended December 31, 2025 and 2024. As of June 30, 2026, we recorded accrued interest and penalties of $0.1 million and $0.5 million, respectively on our consolidated balance sheet. As of December 31, 2025 and 2024, we did not have any accrued interest or penalties recorded on our consolidated balance sheets.

We file income tax returns in the United States, California and various U.S. state jurisdictions. Due to our losses incurred, we are essentially subject to income tax examination by tax authorities from inception to date.

The One Big Beautiful Bill Act of 2025 (“OBBBA”) was signed into law on July 4, 2025. The OBBBA makes changes to the U.S. corporate income tax, including immediate expensing of domestic research and development costs while foreign expenditures will continue to be capitalized and amortized over 15 years and modifications to the timing of the deduction for interest expense.