Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXESThe components of loss before benefit for income taxes from continuing operations are as follows:

	Year Ended December 31,
	2021		2020
United States	$	(158,552)	$	(173,398)
Foreign	120		2,066
Total	$	(158,432)	$	(171,332)

The benefit for income taxes from continuing operations consist of the following:

	Year Ended December 31,
	2021		2020
Current:
Federal	$	—	$	—
State	—		(76)
Foreign	4		16
	$	4	$	(60)
Deferred:
Federal	—		—
State	—		—
	—		—
Total income tax expense (benefit)	$	4	$	(60)

For the fiscal year ended December 31, 2021, we generated losses from continuing operations and recognized $4 of tax expense from our foreign continuing operations during the year ended December 31, 2021. The intraperiod allocation is not applicable for the years ended December 31, 2021 and 2020 as a result of the early adoption of ASU 2019-12.

The income tax benefit differs from that computed using the applicable federal statutory rate, as applied to our income before taxes in each year as follows:

	Year Ended December 31,
	2021		2020
Tax provision computed at the federal statutory rate	$	(33,210)	$	(35,980)
State tax, net of federal benefit	(11,050)		(5,142)
Research and development expense tax credits	(1,838)		(2,686)
Change in uncertain tax benefit reserve	—		(27)
Change in tax credit carryforwards	—		109
Officers compensation	1,988		2,497
Stock based compensation	1,234		1,619
Permanent items and other	(173)		(37)
Tax differential on foreign earnings	—		(1)
Change in tax rate	(6,671)		(1,091)
Change in prior year deferred taxes	(353)		(998)
Valuation allowance	50,077		41,677
Income tax expense (benefit)	$	4	$	(60)

Significant components of our deferred tax assets and liabilities as of December 31, 2021 and 2020 are presented below. A valuation allowance has been recognized to offset the net deferred tax assets as realization of such deferred tax assets did not

meet our “more-likely-than-not” assessment threshold, as required under GAAP.

	December 31,
	2021		2020
Deferred tax assets:
Net operating loss carry forwards	$	187,129	$	143,045
Research and development expense tax credits	27,341		25,424
Stock based compensation	5,470		4,037
Lease obligation	783		599
Development costs	286		487
Returns and allowances	1,198		1,061
Amortization differences	1,749		1,479
Depreciation	57		4,746
Other, net	20,267		17,420
Total deferred tax assets before valuation allowance	244,280		198,298
Valuation allowance	(242,590)		(192,513)
Total deferred tax assets	1,690		5,785
Deferred tax liabilities, net:
Unrealized gains	(973)		(5,230)
Right-of-use asset	(717)		(555)
Net deferred tax liabilities	$	—	$	—

At December 31, 2021 and 2020, we recorded a valuation allowance of $242.6 million and $192.5 million, respectively. The valuation allowance increased by $50.1 million and $39.5 million during 2021 and 2020, respectively. The increases in the valuation allowance in 2021 and 2020 were mostly due to an increase in net operating loss carryforwards.

We had federal and state net operating loss carryforwards of approximately $746.6 million and $545.5 million, at December 31, 2021, respectively. We have approximately $0.5 million of foreign loss carryforwards that will begin to expire in 2039. The federal and state loss carry forwards began to expire in 2022 unless previously utilized, of which approximately $93.1 million of federal loss carryforwards expire in the next five years. Federal loss carryforwards generated in 2018 and beyond will be carried forward indefinitely. At December 31, 2021, we had federal and state tax credits of approximately $19.0 million and $10.6 million, respectively. The federal tax credit carryovers begin to expire in 2027 unless previously utilized. The state research and development credit carryforwards have an indefinite carryover period.

Our utilization of certain net operating loss and research and development expense tax credit carryforwards, including those acquired in connection with the acquisition of Allos Therapeutics, Inc. in April 2012 and Talon Therapeutics, Inc. in July 2016, are subject to annual limitations under Sections 382 and 383 of the Internal Revenue Code of 1986 and similar state provisions. Any net operating losses or credits that would expire unutilized as a result of Section 382 and 383 limitations have been removed from the table of deferred tax assets and the accompanying disclosures of net operating loss and research and development carryforwards.

The following tabular reconciliation summarizes the activity related to our unrecognized tax benefits:

	Year Ended December 31,
	2021		2020
Balance at beginning of year	$	3,336	$	3,473
Adjustments related to prior year tax positions	(318)		(689)
Increases related to current year tax positions	506		579
Decreases due to expiration of tax statutes	—		(27)
Balance at end of year	$	3,524	$	3,336

We continue to believe that our tax positions meet the “more-likely-than-not” standard and as part of that analysis, we considered the amounts and probabilities from ultimate settlement with the tax authorities.

Approximately $0.0 million and $0.1 million of the total unrecognized tax benefits as of December 31, 2021 and 2020, respectively, would reduce our annual effective tax rate if recognized. Additional amounts in the summary rollforward could impact our effective tax rate if we did not maintain a full valuation allowance on our net deferred tax assets.

We do not expect our unrecognized tax benefits to change significantly over the next 12 months. With a few exceptions, we are no longer subject to U.S. federal, state and local income tax examinations for years before 2017. Our policy is to recognize interest and/or penalties related to unrecognized tax benefits in income tax expense in the Consolidated Statements of Operations.

On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, a $2 trillion relief package comprised of a combination of tax provisions and other stimulus measures. The CARES Act broadly provides entities tax payment relief and significant business incentives and makes certain technical corrections to the 2017 Tax Cuts and Jobs Act, or the Tax Act. The tax relief measures for entities include a five-year net operating loss carry back, increased interest expense deduction limits, acceleration of alternative minimum tax credit refunds, payroll tax relief, and a technical correction to allow accelerated deductions for qualified improvement property. The CARES Act also provides other non-income tax benefits, including federal funding for a range of stabilization measures and emergency funding to assist those impacted by the COVID-19 pandemic. Similar legislation is being enacted in other jurisdictions in which the Company operates. ASC Topic 740, Income Taxes, requires the effect of changes in tax law be recognized in the period in which new legislation is enacted. The enactment of the CARES Act and similar legislation in other jurisdictions in which the Company operates is not expected to have a material impact on its consolidated financial position and results of operations as of December 31, 2021.

Early Adoption of ASU 2019-12 — Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

In March 2020, we elected to early adopt ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. Based upon this early adoption, we were not required to calculate an income tax benefit for each quarter end period.