Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Reconciliation of U.S. Federal Statutory Rate to Effective Tax Rate

reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows:

	Year Ended December 31,
	2022				2021
Federal statutory income tax rate		21.0		%		21.0		%
State taxes, net of federal benefit		5.9				5.8
Research and orphan drug tax credits		4.1				3.3
Other		(1.1	)			0.5
Increase in deferred tax asset valuation allowance		(29.9	)			(30.6	)
Effective income tax rate		—		%		—		%

Company's Deferred Tax Assets

Net deferred tax assets as of December 31, 2022 and 2021 consisted of the following (in thousands):

	December 31,
	2022			2021
Deferred tax assets:
Net operating loss carryforwards	$	73,843		$	67,236
Capitalized research and development expenses		20,137			8,665
Research and orphan drug tax credit carryforwards		15,550			12,370
Operating lease liability		8,110			—
Stock compensation expense		6,683			5,430
Accrued expense		1,112			936
Other		—			1,891
Total deferred tax assets		125,435			96,528
Valuation allowance		(118,215	)		(95,367	)
Net deferred tax assets		7,220			1,161
Deferred tax liabilities:
Operating lease, right-of-use asset		(6,271	)		—
Depreciation and amortization		(949	)		(1,161	)
Total deferred tax liabilities		(7,220	)		(1,161	)
Net deferred tax assets and liabilities	$	—		$	—

Changes in Deferred Tax Asset Valuation Allowance

During the year ended December 31, 2022, capitalized research and development expenses increased pursuant to Section 174 of the Code. The changes in the valuation allowance for the years ended December 31, 2022 and 2021 and were as follows (in thousands):

	Year Ended December 31,
	2022		2021
Valuation allowance as of beginning of year	$	95,367	$	73,600
Net increases recorded to income tax provision		22,848		21,767
Valuation allowance as of end of year	$	118,215	$	95,367