Income Tax |
9 Months Ended |
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Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Tax | Income Tax Our effective tax rate may vary from the U.S. federal statutory tax rate due to the change in the mix of earnings in various foreign and state jurisdictions with different statutory rates, non-deductible transaction costs and post-combination compensation expense related to the XOMA acquisition, purchased transferable tax credits, the use of tax loss carryforwards to reduce foreign taxes, the tax impact of non-deductible expenses, stock award activities and other permanent differences between income before income taxes and taxable income. The effective tax rate for the three months ended September 30, 2026 and 2025 was 35.4% and 16.9%, respectively. The effective tax rate for the nine months ended September 30, 2026 and 2025 was 264.9% and 22.0%, respectively. The variance from the U.S. federal statutory tax rate of 21% for the three and nine months ended September 30, 2026 was primarily due to the Section 162(m) limitation on the deduction for officer compensation, non-deductible transaction costs and post-combination compensation expense related to the XOMA acquisition, other non-deductible items, and income from foreign operations, which were partially offset by the foreign-derived deduction eligible income deduction. The effective tax rate for the nine months ended September 30, 2026 was also significantly affected by discrete tax benefits related to excess tax deductions on stock-based compensation and energy tax credits, relative to a near break-even pre-tax loss for the period. The variance from the U.S. federal statutory tax rate of 21% for the three and nine months ended September 30, 2025 was primarily due to Section 162(m) limitation on deduction for officer compensation and income from foreign operations, which were partially offset by the foreign derived intangible income deduction. On July 14, 2026, we completed the XOMA Acquisition. In connection with the acquisition, we recorded net deferred tax assets of $50.7 million through acquisition accounting, primarily related to acquired net operating loss and tax credit carryforwards and book-tax basis differences in acquired royalty assets. These amounts are provisional and may be adjusted during the measurement period. Use of XOMA’s pre-acquisition tax attributes is subject to an annual limitation under Section 382 of the Internal Revenue Code.
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