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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
We operate and are required to file tax returns in the U.S. and various foreign jurisdictions.
The benefit (provision) for incomes taxes consists of the following:
 For the years ended December 31,
(In thousands)202220212020
Current
Federal$— $— $(234)
State(394)(2,536)351 
Foreign(10,512)(2,794)(2,094)
(10,906)(5,330)(1,977)
Deferred
Federal40,750 (10,901)(254)
State12,078 1,280 933 
Foreign21,577 (538)(16,319)
74,405 (10,159)(15,640)
Total, net$63,499 $(15,489)$(17,617)
Deferred income tax assets and liabilities as of December 31, 2022 and 2021 are comprised of the following:
(In thousands)December 31, 2022December 31, 2021
Deferred income tax assets:
Federal net operating loss$68,022 $76,646 
State net operating loss55,134 56,583 
Foreign net operating loss16,947 17,106 
Research and development expense14,349 290 
Tax credits22,488 22,938 
Stock options33,558 30,324 
Accruals2,724 10,692 
Equity investments20,968 15,735 
Bad debts265 265 
Lease liability1,842 1,091 
Foreign credits9,629 9,829 
Available-for-sale securities2,649 2,582 
Operating lease asset10,919 14,554 
Other5,263 6,493 
Deferred income tax assets264,757 265,128 
Deferred income tax liabilities:
Intangible assets(94,856)(80,230)
Convertible debt— (6,286)
Operating lease liability(10,675)(14,554)
Investment in subsidiaries— (42,140)
Fixed assets(180)(2,592)
Other(3,097)(1,638)
Deferred income tax liabilities(108,808)(147,440)
Net deferred income tax assets (liabilities)155,949 117,688 
Valuation allowance(279,212)(260,397)
Net deferred income tax liabilities$(123,263)$(142,709)
Note: Net deferred income tax liability balances at December 31, 2022 and 2021 include $3.2 million and $5.8 million, respectively, recorded to Other assets on the Consolidated Balance Sheets.
As of December 31, 2022, we have federal, state and foreign net operating loss carryforwards of approximately $423.8 million, $774.5 million and $83.8 million, respectively, that expire at various dates through 2042 unless indefinite in nature. As of December 31, 2022, we have research and development tax credit carryforwards of approximately $22.5 million that expire in varying amounts through 2042. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. We have determined a valuation allowance is required against all of our net deferred tax assets that we do not expect to be utilized by the reversing of deferred income tax liabilities.
In 2020 we completed the transfer of certain assets to an OPKO affiliate. The transaction gave rise to a deferred tax asset of approximately $148.9 million. Realizability of a deferred tax asset ultimately depends on the existence of sufficient taxable income in the carryback and carryforward periods as permitted by tax law. The Company evaluated the realizability of the deferred tax asset as required by ASC 740-10-30-18. The Company has determined that the deferred tax asset is not more-likely-than-not to be realized as of December 31, 2020. As a result, the Company has recorded a full valuation allowance against the deferred tax asset.
Under Section 382 of the Internal Revenue Code of 1986, as amended, certain significant changes in ownership may restrict the future utilization of our income tax loss carryforwards and income tax credit carryforwards in the U.S. The annual limitation is equal to the value of our stock immediately before the ownership change, multiplied by the long-term tax-exempt rate (i.e., the highest of the adjusted federal long-term rates in effect for any month in the three-calendar-month period ending with the calendar month in which the change date occurs). This limitation may be increased under the IRC Section 338 Approach (IRS approved methodology for determining recognized Built-In Gain). As a result, federal net operating losses and tax credits may expire before we are able to fully utilize them.
During 2008, we conducted a study to determine the impact of the various ownership changes that occurred during 2007 and 2008. As a result, we have concluded that the annual utilization of our net operating loss carryforwards (“NOLs”) and tax credits is subject to a limitation pursuant to Internal Revenue Code Section 382. Under the tax law, such NOLs and tax credits are subject to expiration from 15 to 20 years after they were generated. As a result of the annual limitation that may be imposed on such tax attributes and the statutory expiration period, some of these tax attributes may expire prior to our being able to use them. There is no current impact on these financial statements as a result of the annual limitation. This study did not conclude whether OPKO’s predecessor, eXegenics, Inc., pre-merger NOLs were limited under Section 382. As such, of the $423.8 million of federal net operating loss carryforwards, at least approximately $38.1 million may not be able to be utilized.

During 2020, we conducted a study to determine whether any ownership changes occurred from 2009 through 2020. In 2022, the study has been updated and we have concluded that the annual utilization of our NOLs and tax credits is not subject to a limitation pursuant to Internal Revenue Code Section 382.
We file federal income tax returns in the U.S. and various foreign jurisdictions, as well as with various U.S. states and the Ontario and Nova Scotia provinces in Canada. We are subject to routine tax audits in all jurisdictions for which we file tax returns. Tax audits by their very nature are often complex and can require several years to complete. It is reasonably possible that some audits will close within the next twelve months, which we do not believe would result in a material change to our accrued uncertain tax positions.
U.S. Federal: Under the tax statute of limitations applicable to the Internal Revenue Code, we are no longer subject to U.S. federal income tax examinations by the Internal Revenue Service for years before 2019. However, because we are carrying forward income tax attributes, such as net operating losses and tax credits from those years, these attributes can still be audited when utilized on returns filed in the future.
State: Under the statute of limitations applicable to most state income tax laws, we are no longer subject to state income tax examinations by tax authorities for years before 2018 in states in which we have filed income tax returns. Certain states may take the position that we are subject to income tax in such states even though we have not filed income tax returns in such states and, depending on the varying state income tax statutes and administrative practices, the statute of limitations in such states may extend to years before 2018.
Foreign: Under the statute of limitations applicable to our foreign operations, we are generally no longer subject to tax examination for years before 2017 in jurisdictions where we have filed income tax returns.
Tax Cuts and Jobs Act
On December 22, 2017, the 2017 Tax Act was enacted into law and the new legislation contains several key tax provisions, including a reduction of the corporate income tax rate from 35% to 21% effective January 1, 2018 and a one-time mandatory transition tax on accumulated foreign earnings, among others. We were required to recognize the effect of the tax
law changes in the period of enactment, such as remeasuring our U.S. deferred tax assets and liabilities, as well as reassessing the net realizability of our deferred tax assets and liabilities.
Effective January 1, 2018, the Tax Act provides for a new Global Intangible Low Taxed Income provision (“GILTI”). Under the GILTI provision, certain foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets are included in U.S. taxable income. The Company has not recorded any deferred taxes for future GILTI inclusions as any future inclusions are expected to be treated as a period expense and offset by net operating loss carryforwards in the U.S.
Unrecognized Tax Benefits
As of December 31, 2022, 2021, and 2020, the total amount of gross unrecognized tax benefits was approximately $14.8 million, $11.5 million, and $14.0 million, respectively. As of December 31, 2022, the total amount of unrecognized tax benefits that, if recognized, would affect our effective income tax rate was $(10.8) million. We account for any applicable interest and penalties on uncertain tax positions as a component of income tax expense and we recognized $0.0 million and $0.2 million of interest expense for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2021 and 2020, $(7.9) million and $(10.0) million of the unrecognized tax benefits, if recognized, would have affected our effective income tax rate. We do not expect any unrecognized tax benefits will be recognized within the next twelve months.
The following summarizes the changes in our gross unrecognized income tax benefits.
 For the years ended December 31,
(In thousands)20222021
Unrecognized tax benefits at beginning of period$11,497 $13,954 
Gross increases – tax positions in current period3,713 166 
Gross decreases – tax positions in prior period(271)(575)
Gross decreases – settlements with taxing authorities— (1,952)
Lapse of Statute of Limitations(96)(96)
Unrecognized tax benefits at end of period$14,843 $11,497 
Other Income Tax Disclosures
The significant elements contributing to the difference between the federal statutory tax rate and the effective tax rate are as follows:
 For the years ended December 31,
 202220212020
Federal statutory rate21.0 %21.0 %21.0 %
State income taxes, net of federal benefit4.0 %(7.9)%17.4 %
Foreign income tax(2.0)%21.6 %53.7 %
Income Tax Refunds— %6.1 %(0.6)%
Research and development tax credits0.2 %2.3 %(1.0)%
GeneDx Disposition0.8 %— %— %
Valuation allowance(6.3)%235.4 %227.7 %
Rate change effect5.2 %(40.5)%11.4 %
Non-deductible items0.6 %(67.0)%5.2 %
Unrecognized tax benefits(0.7)%11.3 %(5.0)%
GILTI(4.9)%— %— %
IPR&D benefit— %— %(309.6)%
Stock options excess tax benefit(0.3)%(3.8)%10.6 %
Imputed interest(0.4)%(6.3)%2.5 %
Investment in subsidiaries— %(287.6)%— %
Other(1.0)%9.7 %3.2 %
Total16.2 %(105.7)%36.5 %

Certain operations in Israel have been granted "Beneficiary Enterprise" status by the Israeli Income Tax Authority, which makes us eligible for tax benefits under the Israeli Law for Encouragement of Capital Investments, 1959. Under the terms of the Beneficiary Enterprise program, beneficiary income that is attributable to our operations in Kiryat Gat, Israel will be exempt from income tax through 2023. The impact of the tax holiday on a per share basis for the year ended December 31, 2022 was a benefit of $0.00 per share.
The following table reconciles our income (loss) before income taxes between U.S. and foreign jurisdictions:
  
For the years ended December 31,
(In thousands)202220212020
Pre-tax income (loss):
U.S.$(389,439)$(2,965)$81,734 
Foreign(2,465)(11,689)(33,531)
Total$(391,904)$(14,654)$48,203 

In 2021, we revised our position regarding unrepatriated foreign earnings to a partially reinvested assertion. We assert that all foreign earnings will be indefinitely reinvested, with the exception of certain foreign investments in which earnings and cash generation are in excess of local needs. With the passage of the Tax Act, dividends of earnings from non-U.S. operations are generally no longer subject to U.S. income tax. We continue to analyze and adjust the estimated impact of the non-U.S. income and withholding tax liabilities based on the source of these earnings, as well as the expected means through which those earnings may be taxed. We maintain an accrued withholding tax estimate of $1.1 million related to earnings that are not deemed to be permanently reinvested.