Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of summary of the income tax expense (benefit)

The summary of the income tax expense for the years ended December 31, 2022, 2021, and 2020 is as follows (dollars in thousands):


	Years Ended December 31,
	2022		2021		2020
Current
Federal	$	17,515	$	16,606	$	29,893
State	8,846		8,196		11,234
Deferred
Federal	(6,802)		(1,651)		2,200
State	(19,527)		(3,400)		(1,629)
Total income tax expense	$	32	$	19,751	$	41,698

Schedule of reconciliation of income tax expense

A reconciliation of income tax expense at the U.S. federal statutory income tax rate to annual income tax expense at the Company's effective tax rate is as follows (dollars in thousands):


	Years Ended December 31,
	2022		2021		2020
Income tax expense computed at U.S. federal statutory income tax rate	$	12,756	$	15,367	$	35,417
State income taxes	(3,198)		3,088		7,281
Permanent items	399		1,465		2,654
Research and development credits	237		(1,016)		(3,602)
Uncertain income tax position	(1,992)		(314)		348
Change in valuation allowance	(8,626)		250		—
Other	456		911		(400)
Income tax expense	$	32	$	19,751	$	41,698

Schedule of significant components of deferred tax assets (liabilities)

The significant components of the Company's deferred income tax assets (liabilities) are as follows (dollars in thousands):


	As of December 31,
	2022		2021
Deferred tax assets:
Net operating loss carryforwards	$	112,516	$	126,333
Accrued product returns and rebates	23,300		19,506
Accrued compensation and stock based compensation	15,422		17,802
Capitalized research and development	13,926		—
Operating lease liability	10,821		12,146
Investment	4,946		7,819
Charitable contributions	3,620		7,730
Research and development credit carryforwards	3,070		4,448
Convertible bond hedge	1,449		6,910
Interest limitation	45		7,860
Other	5,356		4,256
Total deferred tax assets	194,471		214,810
Less: valuation allowance	(59,598)		(70,529)
Total deferred tax asset, net of valuation allowance	134,873		144,281
Deferred tax liabilities:
Amortization of intangibles	(162,654)		(199,240)
Debt discount on 2023 Notes	(133)		(5,671)
Patent infringement legal costs	(10,968)		(10,689)
Operating lease assets	(7,338)		(9,099)
Other	(3,589)		(4,937)
Total deferred tax liabilities	(184,682)		(229,636)
Net deferred tax liabilities	$	(49,809)	$	(85,355)

Summary of Valuation Allowance

A reconciliation of the deferred asset valuation allowance is as follows (dollars in thousands):


	Years Ended December 31,
	2022		2021		2020
Beginning balance	$	70,529	$	582	$	11
Acquisition Accounting (1)	(2,305)		69,697		573
Additions	435		250		—
Deductions	(9,061)		—		(2)
Ending balance	59,598		70,529		582

(1) Amount comprised principally of acquisitions and purchase accounting adjustments in connect with acquisitions

Schedule of reconciliation of unrecognized tax benefits

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (dollars in thousands):


	Years Ended December 31,
	2022		2021		2020
Balance as of January 1	$	6,100	$	5,881	$	5,978
Gross increases related to current year tax positions	32		898		1,027
Gross decreases related to current year tax positions	—		—		—
Gross increases related to prior year tax positions	—		—		221
Gross decreases related to prior year tax positions	(39)		(363)		—
Lapse of statute of limitations	(1,770)		$	(316)	(1,345)
Balance as of December 31	$	4,323	$	6,100	$	5,881