Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

(7)Income Taxes

For the three months ended March 31, 2022, the Company recorded an income tax benefit of $19.6 million. The tax benefit recorded for the three months ended March 31, 2022 was driven by the expected utilization of the current quarter's net operating losses based on the effective tax rate and the release of valuation allowance for certain historical tax losses against the expected gain from the sale of Cullinan Pearl. Refer to Note 12, Subsequent Events, for additional details on this transaction. The Company did not record an income tax benefit or expense for the three months ended March 31, 2021.

Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax bases of assets and liabilities using statutory rates. Management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which are comprised principally of net operating loss carryforwards and research and development credits. The Company has considered its history of cumulative net losses, estimated future taxable income and prudent and feasible tax planning strategies. The Company has concluded that it is more likely than not that the Company will not realize the benefits of its deferred tax assets outside of the tax losses that will be utilized against the expected gain from the sale of Cullinan Pearl. As a result, as of March 31, 2022, the Company has maintained a full valuation allowance against its remaining net deferred tax assets.