INCOME TAXES

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

18. INCOME TAXES

The following table summarizes the income (loss) before the provision for income taxes by jurisdiction for the periods indicated:

	For the Year Ended December 31,
	2024		2023			2022
	(in thousands)
Domestic	$	168,666	$	(238,660	)	$	(251,384	)
Foreign		92,108		(281,438	)		(438,579	)
Total	$	260,774	$	(520,098	)	$	(689,963	)

The following table summarizes the provision for income taxes in the accompanying consolidated financial statements for the periods indicated:

	For the Year Ended December 31,
	2024			2023			2022
	(in thousands)
Current provision:
Federal	$	5,064		$	4,180		$	—
State		19,748			11,111			13,193
Foreign		972			753			944
Total current provision		25,784			16,044			14,137
Deferred benefit:
Federal		—			—			—
State		—			—			—
Foreign		(249	)		(165	)		(612	)
Total deferred benefit		(249	)		(165	)		(612	)
Total income tax expense	$	25,535		$	15,879		$	13,525

The following table summarizes the reconciliation between the Company’s effective tax rate and the statutory income tax rate for each of the periods indicated:

	For the Year Ended December 31,
	2024				2023				2022
Federal income tax rate		21.0		%		21.0		%		21.0		%
State taxes		(0.5	)			(7.7	)			4.1
Research and development tax credits		(8.3	)			28.3				6.9
Valuation allowance		2.2				(13.7	)			(14.7	)
Permanent differences		0.1				(0.2	)			(1.1	)
Stock-based compensation		6.1				(2.0	)			(1.5	)
Excess benefit stock deductions		(4.3	)			1.6				0.3
Foreign rate differential		(7.2	)			(11.3	)			(13.2	)
Non-deductible repurchase premium		—				—				(2.2	)
Non-deductible premium on note conversion		—				(15.3	)			—
Other		0.7				(3.8	)			(1.6	)
Effective tax rate		9.8		%		(3.1	)	%		(2.0	)	%

The significant items impacting the Company’s effective tax rate for each of the periods primarily include state taxes, research and development tax credits, valuation allowance, stock-based compensation, and foreign rate differential. For the year ended December 31, 2023, the Company's effective tax rate was also significantly impacted by the $379.9 million non-deductible premium paid on the conversion of the 2024 Notes.

The following table summarizes the deferred tax assets and liabilities for each of the periods indicated:

	As of December 31,
	2024			2023
	(in thousands)
Deferred tax assets:
Net operating loss carryforwards	$	67,594		$	154,948
Difference in depreciation and amortization		35,805			36,611
Research and development tax credits		381,451			374,017
Stock-based compensation		107,775			94,452
Lease liabilities		48,172			33,792
Capitalized inventory		7,009			35,269
Debt discount		18,678			25,597
Capitalized research and development costs		203,416			106,534
Other		52,658			50,308
Total deferred tax assets		922,558			911,528
Deferred tax liabilities:
Right of use asset		(31,971	)		(25,800	)
Debt discount		—			—
Total deferred tax liabilities		(31,971	)		(25,800	)
Valuation allowance		(888,335	)		(883,665	)
Net deferred tax assets	$	2,252		$	2,063

For tax years beginning on or after January 1, 2022, the Tax Cuts and Jobs Act of 2017 eliminates the option to currently deduct research and development expenses and requires taxpayers to capitalize and amortize the costs over five years for research activities performed in the United States and 15 years for research activities performed outside the United States. The requirement to capitalize research and development costs for tax purposes resulted in the Company having taxable profits and recording federal and state tax expense of $5.1 million and $19.7 million, respectively. The state tax expense of $19.7 million is primarily related to the temporary suspension of utilizing net operating loss carryforwards in certain states the Company operates in.

On a periodic basis, the Company reassesses the valuation allowance on its deferred tax assets, weighing positive and negative evidence to assess the recoverability of such deferred tax assets. In assessing the Company’s ability to realize its net deferred tax assets, the Company considered various factors, including future reversals of existing taxable temporary differences, projected future taxable income, potential carryback claims and tax planning strategies to determine whether it is more likely than not that some portion or all of its net deferred tax assets will not be realized. Based upon these factors, the Company has concluded that it is more likely than not that the Company will not recognize the benefits of its net federal and state deferred tax assets. Accordingly, a full valuation allowance against the U.S. net deferred tax assets is maintained at December 31, 2024 and 2023. The Company continues to monitor its recent earnings history and it is possible that within the next 12 months, there may be sufficient positive evidence to release a portion or all of the Company’s valuation allowance. The release of the valuation allowance, as well as the exact timing and the amount of such release, continue to be subject to, among other things, the Company’s level of profitability, revenue growth, and expectations regarding future profitability. Release of the valuation allowance would result in a benefit to income tax expense for the period the release is recorded, which could have a material impact on net earnings. The total deferred tax asset balance subject to the valuation allowance was approximately $890.6 million as of December 31, 2024. The Company will continue to monitor the need for a full or partial valuation allowance on a quarterly basis.

The Company generated foreign deferred tax assets mainly consisting of net operating loss carryforwards, stock-based compensation and unrealized gain/losses. Based upon the income projections in the majority of the foreign jurisdictions, the Company believes it will realize the benefit of its future deductible differences in these jurisdictions. As such, the Company has not recorded a valuation allowance against the net deferred tax assets in these foreign jurisdictions. Brazil, Germany and the Netherlands have generated deferred tax assets, which consist primarily of net operating loss carryforwards. The Company has concluded that it is more likely than not that it will not recognize the future benefits of the deferred tax assets in these jurisdictions, and accordingly, a full valuation allowance has been recorded against these foreign deferred tax assets.

As of December 31, 2024, the Company had federal and state net operating loss carryforwards of $134.9 million and $354.8 million, respectively, available to reduce future taxable income. Federal and state net operating loss carry forwards of $69.1 million and $341.0 million will expire at various dates between 2025 and 2041. Federal and state net operating loss carryforwards of $65.8 million and $13.8 million, respectively, can be carried forward indefinitely. Utilization of these net operating losses could be limited

under Section 382 of the Internal Revenue Code and similar state laws based on future ownership changes and the value of the Company’s stock. Additionally, the Company has $40.9 million and $48.9 million of federal and state research and development credits, respectively, and $301.9 million of federal orphan drug tax credits available to offset future tax liabilities. These federal and state research and development credits expire between 2034 and 2044 and between 2031 and 2039, respectively. The federal orphan drug credits expire between 2034 and 2044. The Company also has foreign net operating loss carryforwards of $13.5 million, mainly derived from the net operating loss generated by its subsidiary in Brazil, which may be carried forward indefinitely.

The Company, or one of its subsidiaries, files income tax returns in the U.S., and various state and foreign jurisdictions. The federal, state and foreign income tax returns are generally subject to tax examinations for the tax years ended December 31, 2021 through December 31, 2024. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service, state or foreign tax authorities to the extent utilized in a future period.

The following table summarizes the reconciliation of the beginning and ending amount of total unrecognized tax benefits for each of the periods indicated:

	For the Year Ended December 31,
	2024			2023			2022
	(in thousands)
Balance at beginning of the period	$	65,030		$	61,704		$	53,815
Increase related to current year tax positions		1,728			4,126			8,079
Increase related to prior year tax positions		178			—			—
Decrease related to prior year tax positions		(401	)		(800	)		(190	)
Balance at end of the period	$	66,535		$	65,030		$	61,704

The balance of total unrecognized tax benefits at December 31, 2024, if recognized, would not affect the effective tax rate on income from continuing operations, due to a full valuation allowance against the Company’s U.S. deferred tax assets. The Company does not expect the amount of unrecognized tax benefits to change significantly in the next twelve months. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. It had no accrual for interest or penalties on its consolidated balance sheets at December 31, 2024 or 2023. No interest and/or penalties were recognized in 2024, 2023, or 2022.

The Company’s intent is to only make distributions from non-U.S. subsidiaries in the future when they can be made at no net tax cost. Otherwise, the Company considers all of its foreign earnings to be permanently reinvested outside of the U.S. and has no plans to repatriate these foreign earnings to the U.S. The Company has no material unremitted earnings from its non-U.S. subsidiaries.