Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

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

	Year Ended December 31,
	2022		2021
United States	$	(78,126)	$	(158,552)
Foreign	68		120
Total	$	(78,058)	$	(158,432)

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

	Year Ended December 31,
	2022		2021
Current:
Federal	$	—	$	—
State	—		—
Foreign	46		4
	$	46	$	4
Deferred:
Federal	—		—
State	—		—
Foreign	—		—
	—		—
Total income tax expense	$	46	$	4

For the fiscal year ended December 31, 2022, we generated losses from continuing operations and recognized $46 thousand of tax expense from our foreign continuing operations.

The income tax expense 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,
	2022		2021
Tax provision computed at the federal statutory rate	$	(16,392)	$	(33,210)
State tax, net of federal benefit	(2,913)		(11,050)
Research and development expense tax credits	(328)		(1,838)
Officers compensation	(738)		1,988
Stock based compensation	2,688		1,234
Permanent items and other	157		(173)
Change in tax rate	3,288		(6,671)
Change in prior year deferred taxes	568		(353)
Valuation allowance	13,716		50,077
Income tax expense	$	46	$	4

Significant components of our deferred tax assets and liabilities as of December 31, 2022 and 2021 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,
	2022		2021
Deferred tax assets:
Net operating loss carry forwards	$	198,162	$	187,129
Research and development expense tax credits	27,669		27,341
Stock based compensation	4,136		5,470
Lease obligation	456		783
ROLVEDON supplies	9,337		—
Returns and allowances	636		1,198
Amortization differences	857		1,749
Capitalized research and development expenses	12,218		—
Other, net	3,114		20,610
Total deferred tax assets before valuation allowance	256,585		244,280
Valuation allowance	(256,063)		(242,590)
Total deferred tax assets	522		1,690
Deferred tax liabilities, net:
Unrealized gains	(97)		(973)
Right-of-use asset	(425)		(717)
Net deferred tax liabilities	$	—	$	—

At December 31, 2022 and 2021, we recorded a valuation allowance of $256.1 million and $242.6 million, respectively. The valuation allowance increased by $13.5 million and $50.1 million during 2022 and 2021, respectively. The increases in the valuation allowance in 2022 and 2021 were mostly due to an increase in net operating loss carryforwards. The $13.5 million increase in valuation allowance in 2022 is comprised of a $13.7 million increase from losses in continuing operations net of a $0.2 million decrease from income in discontinued operations.

At December 31, 2022, we had federal and state net operating loss carryforwards of approximately $789.3 million and $603.4 million, 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 expiring in 2022 unless previously utilized. Federal loss carryforwards generated in 2018 and beyond of $510.7 million will be carried forward indefinitely. At December 31, 2022, we had federal and state tax credits of approximately $19.0 million and $11.0 million, respectively. The federal tax credit carryovers begin to expire in 2027 unless previously utilized. The state 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 2013, 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,
	2022		2021
Balance at beginning of year	$	3,524	$	3,336
Adjustments related to prior year tax positions	—		(318)
Increases related to current year tax positions	102		506
Balance at end of year	$	3,626	$	3,524

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 $0.1 million and $0.1 million of the total unrecognized tax benefits as of December 31, 2022 and 2021, 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 2018. In addition, the utilization of net loss carryforwards is subject to federal and state adjustment for the periods in which those net losses were incurred. Our policy is to recognize interest and/or penalties related to unrecognized tax benefits in income tax expense in the Consolidated Statements of Operations.