Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

(10)Income Taxes

During the three months and nine months ended September 30, 2022, the Company recorded an income tax benefit of $2.5 million and an income tax expense of $44.0 million, respectively. The income tax expense recorded for the nine months ended September 30, 2022 was driven by the expected tax from the gain on sale of Cullinan Pearl, partially offset by the release of valuation allowance for the expected utilization of current year and certain historical tax attributes against the gain from the sale. The income tax benefit recorded for the three months ended September 30, 2022 is due to the expected utilization of current year tax attributes against the gain from the sale of Cullinan Pearl. Refer to Note 3 for additional details on this transaction. The Company did not record an income tax benefit or expense for the three and nine months ended September 30, 2021.

The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets, which primarily consist of net operating loss carryforwards. The Company has considered its history of cumulative net losses, estimated future taxable income and prudent and feasible tax planning strategies and 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 gain on sale of Cullinan Pearl. As a result, as of September 30, 2022, the Company has maintained a full valuation allowance against its remaining net deferred tax assets.