Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

18. INCOME TAXES

Details of the provision for income taxes consist of the following:

	Year Ended December 31,
	2022		2021		2020
Federal	$	10,011	$	6,487	$	(6,416)
State		9,573		2,852		4,198
Valuation allowance		(96,366)		(6,508)		2,218
	$	(76,782)	$	2,831	$	—
Current	$	9,161	$	2,831	$	—
Deferred		10,423		6,508		(2,218)
Valuation allowance		(96,366)		(6,508)		2,218
Total	$	(76,782)	$	2,831	$	—

The reasons for the difference between the statutory federal income tax rate and the Company’s effective income tax rate as of December 31, 2022, 2021 and 2020 are as follows:

	Year Ended December 31,
	2022		2021		2020
Federal income tax rate	21.0	%	21.0	%	21.0	%
Stock-based compensation	(4.9)		(2.3)		—
State taxes	(14.1)		6.4		(11.4)
Credits	(4.8)		—		—
Other	(0.3)		(0.2)		(3.6)
Valuation allowance	(70.2)		(17.3)		(6.0)
Total	(73.3)	%	7.6	%	—	%

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021, are as follows:

	As of December 31,
	2022				2021
	Assets		Liabilities		Assets		Liabilities
Acquired in-process research and development	$	45,938	$	—	$	42,460	$	—
Net operating loss carryforward		6,370		—		29,739		—
Accrued compensation		11,551		—		6,285		—
Credits		—		—		168		—
Disallowed interest		—		—		7,635		—
Lease obligations, net		71		—		123		—
Fixed assets		115		—		124		—
Inventory		6,781		—		6,294		—
Accrued rebates		7,118		—		4,564		—
Research and development		8,802		—		—		—
Other		15		818		70		1,096
Total	$	86,761		818	$	97,462		1,096
Net deferred tax asset	$	85,943	$	—	$	96,366	$	—
Valuation allowance	$	—	$	—	$	(96,366)	$	—
Total	$	85,943	$	—	$	—	$	—

As of December 31, 2022 and December 31, 2021, our deferred tax assets were primarily the result of acquired in-process research and development costs, operating loss carryforwards, capitalized research and development costs, disallowed interest, inventory, and accrued rebates. A valuation allowance of $96,366 was recorded against our net deferred tax asset balance as of December 31, 2021. We recorded a tax benefit of $74,474 as a discrete item in the year ended December, 2022 related to the release of a valuation allowance on certain deferred tax assets, net, which had accumulated through December 31, 2021. We also recorded a tax benefit of $21,892 as a component to our current year effective tax rate in the year ended December 31, 2022, related to deferred tax assets, net, which were utilized in the current period.

As of each reporting date, the Company considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. During the year ended December 31, 2022, in part because in the current year we achieved three years of cumulative pretax income, which is a positive indication of the Company’s ability to generate sufficient future taxable income, the Company determined that there was sufficient positive evidence to conclude that it is more likely than not that additional deferred taxes are realizable and, therefore, released the valuation allowance accordingly. Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2022, 2021 and 2020 were as follows:

	Year Ended December 31,
	2022		2021		2020
Valuation allowance at the beginning of the year	$	(96,366)	$	(102,874)	$	(100,656)
Decreases recorded as a benefit to income tax provision		96,366		6,508		—
Increases recorded to income tax provision		—		—		(2,218)
Valuation allowance at the end of the year	$	—	$	(96,366)	$	(102,874)

As of December 31, 2022 and 2021, the Company has approximately $0 and $98,069, respectively, of federal net operating loss ("NOL") carryforward available to offset future federal taxable income. The Company also has approximately $95,230 and $120,074 of state NOL carryforwards as of December 31, 2022 and 2021, respectively, available to offset future state taxable income. All of the Company’s tax years remain open to examination by federal and state taxing authorities. The Company’s state NOLs begin to expire in 2037. Utilization of the net operating loss carryforwards may be subject to a substantial limitation due to state provisions. These changes may limit the amount of net operating loss and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups.

As of December 31, 2022 and 2021, the Company has federal tax credits of $0 and $168, respectively.