INCOME TAXES

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

11. INCOME TAXES

The components of Income/(Loss) before income taxes are as follows:

	2024			2023			2022
Domestic		(174,737	)		(181,884	)		(141,930	)
Foreign		215			150			28
Total		(174,521	)		(181,734	)		(141,902	)

Provision for (benefit from) income taxes:

	2024		2023		2022
State		398		—		—
Foreign		51		22		—
Total		449		22		—

The following table reconciles the federal statutory tax rate to the effective income tax rate from continuing operations:

	2024				2023				2022
Tax at statutory rate		21.0		%		21.0		%		21.0		%
State income tax, net of federal benefit		(1.7	)			6.6				6.8
Federal and state tax credits		2.7				4.1				4.9
Stock-based compensation		(0.1	)			(0.7	)			(0.8	)
Net operating loss not benefitted		(0.5	)			(5.7	)			(4.3	)
Other		(1.6	)			(0.5	)			(0.1	)
Change in valuation allowance		(20.1	)			(24.8	)			(27.5	)
Effective tax rate		(0.3	)	%		0.0		%		0.0		%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets are as follows:

	December 31,
	2024			2023
	(In thousands)
Net operating loss carryforwards	$	272,970		$	272,300
Federal and state tax credits		70,492			64,700
Capitalized research and development		39,503			43,300
Stock-based compensation		8,353			11,200
Revenue Participation		29,547			—
Operating lease liabilities		767			1,100
Other		8,963			3,600
Total deferred tax assets		430,595			396,200
Less: valuation allowance		(429,913	)		(395,200	)
Net deferred tax assets		682			1,000
Operating leases, right-of-use assets		(682	)		(1,000	)
Total deferred tax liabilities		(682	)		(1,000	)
Total net deferred tax assets	$	—		$	—

We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial performance. Forming a conclusion that a valuation allowance is not required is difficult when there is negative evidence such as cumulative losses in recent years. Because of our history of losses, the net deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by $35.0 million and $45.6 million for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, we had domestic federal net operating loss carryforwards of approximately $1.0 billion. Of this, $631.5 million will expire at various dates beginning in 2025 through 2037 and the remaining will carryforward indefinitely under the new tax laws, but is subject to an 80% taxable income limitation for tax years beginning after 2020. As of December 31, 2024, we had state net operating loss carryforwards of approximately $844.4 million expiring at various dates beginning in 2028 through 2044. We also had federal tax credit carryforwards of approximately $79.0 million expiring at various dates beginning in 2025 through 2044, if not utilized. Our state tax credit carryforwards of approximately $23.3 million carry forward indefinitely.

Utilization of net operating loss and tax credit carryforwards may be subject to an annual limitation due to ownership change limitations provided by the Internal Revenue Code and similar state provisions. Annual limitations may result in expiration of net operating loss and tax credit carryforwards before some or all of such amounts have been utilized.

We adopted the provision of the standard for accounting for uncertainties in income taxes on January 1, 2007. Upon adoption, we recognized no material adjustment in the liability for unrecognized tax benefits. At December 31, 2024, we had approximately $28.3 million of unrecognized tax benefits, none of which would currently affect our effective tax rate if recognized due to our net deferred tax assets being fully offset by a valuation allowance.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands):

Balance as of December 31, 2023	$	26,331
Decrease related to prior year tax positions		(494	)
Increase related to current year tax positions		2,473
Balance as of December 31, 2024	$	28,310

If applicable, we would classify interest and penalties related to uncertain tax positions in income tax expense. Through December 31, 2024, there has been no interest expense or penalties related to unrecognized tax benefits.

We do not currently expect any significant changes to unrecognized tax benefits during the fiscal year ended December 31, 2025. In certain cases, our uncertain tax positions are related to tax years that remain subject to examination by the relevant tax authorities. Tax years for which we have carryforward net operating loss and credit attributes remain subject to examination by federal and most state tax authorities.