Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Taxes [Abstract]

Loss Before Income Tax (Benefit) Expense

Loss before income tax (benefit) expense is comprised of (in thousands):

	Year Ended December 31,
	2018			2017			2016
United States	$	(69,576	)	$	(5,289	)	$	(57,466	)
Foreign		(6,580	)		(11,474	)		—
Loss before income tax (benefit) expense	$	(76,156	)	$	(16,763	)	$	(57,466	)

Income Tax (Benefit) Expense

Our income tax (benefit) expense was as follows (in thousands):

	Year Ended December 31,
	2018			2017			2016
Current:
Federal	$	438		$	(7,460	)	$	1,067
State		(1,442	)		1,246			1,867
Foreign		374			234			—
Total current income tax (benefit) expense		(630	)		(5,980	)		2,934
Deferred:
Federal		(290,511	)		—			—
State		—			—			—
Total deferred income tax (benefit) expense		(290,511	)		—			—
Total income tax (benefit) expense	$	(291,141	)	$	(5,980	)	$	2,934

Reconciliation of Statutory to Effective Tax Rate

The reconciliation between our effective tax rate on loss from continuing operations and the statutory U.S. tax rate is as follows (in thousands):

	Year Ended December 31,
	2018					2017					2016
Pre-tax loss	$	(76,156	)			$	(16,763	)			$	(57,466	)
Statutory rate		(15,993	)	21.0	%		(5,867	)	35.0	%		(20,113	)	35.0	%
State income tax net of federal benefit		(2,202	)	2.9	%		820		(4.9	)%		95		(0.2	)%
Foreign		1,735		(2.3	)%		4,299		(25.6	)%		—		0.0	%
Net change in valuation allowance		(277,924	)	364.9	%		(86,296	)	514.8	%		46,402		(80.7	)%
Net operating loss expiration		8,864		(11.6	)%		3,987		(23.8	)%		—		0.0	%
TEGSEDI licensing gain		59,583		(78.2	)%		—		0.0	%		—		0.0	%
Tax credits		(73,362	)	96.3	%		(32,769	)	195.5	%		(26,954	)	46.9	%
Deferred tax true-up		9,947		(13.1	)%		4,848		(28.9	)%		2,591		(4.5	)%
Tax rate change		(1,808	)	2.4	%		114,832		(685.0	)%		—		0.0	%
Non-deductible compensation		3,154		(4.1	)%		1,575		(9.4	)%		825		(1.4	)%
Other non-deductible items		(569	)	0.7	%		2,548		(15.2	)%		324		(0.6	)%
Akcea deconsolidation adjustment at IPO		—		0.0	%		469		(2.8	)%		—		0.0	%
Stock-based compensation		(4,199	)	5.5	%		(14,337	)	85.5	%		—		0.0	%
Other		1,633		(2.1	)%		(89	)	0.5	%		(236	)	0.4	%
Effective rate	$	(291,141	)	382.3	%	$	(5,980	)	35.7	%	$	2,934		(5.1	)%

Deferred Tax Assets and Liabilities

Significant components of our deferred tax assets and liabilities as of December 31, 2018 and 2017 are as follows (in thousands):

	Year Ended December 31,
	2018			2017
Deferred Tax Assets:
Net operating loss carryovers	$	89,717		$	153,575
R&D credits		313,652			240,290
Deferred revenue		27,381			54,302
Stock-based compensation		61,027			40,090
Intangible and capital assets		49,007			672
Other		8,275			12,164
Total deferred tax assets	$	549,059		$	501,093
Deferred Tax Liabilities:
Convertible debt	$	(24,018	)	$	(32,391	)
Net deferred tax asset	$	525,041		$	468,702
Valuation allowance		(234,245	)		(468,702	)
Total net deferred tax assets and liabilities	$	290,796		$	—

Gross Unrecognized Tax Benefits

The following table summarizes our gross unrecognized tax benefits (in thousands):

	Years Ended December 31,
	2018			2017		2016
Beginning balance of unrecognized tax benefits	$	78,014		$	66,999	$	51,257
Settlement of prior period tax positions		—			—		(4,033	)
Decrease for prior period tax positions		(12,814	)		—		—
Increase for prior period tax positions		—			1,520		7,928
Increase for current period tax positions		3,101			9,495		11,847
Ending balance of unrecognized tax benefits	$	68,301		$	78,014	$	66,999