Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Provision (Benefit) for Income Taxes

The following is a summary of the provision (benefit) for income taxes for the years ended December 31, 2018, 2017 and 2016:



	Year Ended December 31,
(in thousands)	2018			2017			2016
Current:
Federal	$	—		$	—		$	—
State	53			65			66
Foreign	99			(66		)	142
Deferred:
Federal	—			—			—
State	—			—			—
Foreign	(14		)	137			(104		)
Provision for income taxes	$	138		$	136		$	104

Reconciliation Between Statutory Tax Rate and Effective Tax Rate

The following is reconciliation between the federal statutory tax rate and the Company’s effective tax rate for the years ended December 31, 2018, 2017 and 2016:



	Year Ended December 31,
	2018		2017		2016
Federal tax at statutory rate	21.0	%	35.0	%	35.0	%
State taxes	1.7	%	1.7	%	0.8	%
U.S. Tax Cuts and Job Act (1)	0.0	%	-262.6	%	0.0	%
Change in valuation allowance - U.S. Tax Cuts and Jobs Act	0.0	%	262.6	%	0.0	%
Other change in valuation allowance (2)	-16.4	%	-47.8	%	-38.4	%
Research and development credit	-9.1	%	9.0	%	3.8	%
Orphan drug credit	-2.7	%	6.3	%	7.6	%
Section 162(m) limitation	3.1	%	8.1	%	0.0	%
Other tax rate changes	-0.7	%	-2.6	%	3.9	%
Other changes in state deferred taxes (3)	5.9	%	5.1	%	0.0	%
Stock-based compensation	-3.9	%	-13.0	%	-12.5	%
Other items	1.6	%	-2.7	%	-0.8	%
Effective tax rate	0.5	%	-0.9	%	-0.6	%


(1)	Includes the effect of the Tax Cuts and Jobs Act, which primarily relates to the remeasurement of existing deferred taxes as a result of the change to the U.S. federal tax rate.


(2)	Reductions in 2018 valuation allowances are attributable to profitable 2018 U.S. results.


(3)	Includes adjustments to state deferred taxes based on changes to filing jurisdictions.

Components of Deferred Tax Assets, Net, and Related Valuation Allowance

The following is a summary of the components of the Company’s deferred tax liabilities, net, and the related tax valuation allowance as of December 31, 2018 and 2017:



(in thousands)	December 31, 2018			December 31, 2017
Deferred tax assets:
Net operating loss carryforwards	$	55,742		$	59,222
Stock-based compensation	5,202			5,383
Accrued and deferred expenses	2,096			1,967
Allowance for returns and uncollectable receivables	1,247			1,051
Research and development and orphan drug credit carryforwards	48,066			43,976
Intangible assets	—			3,745
Other	1,405			1,123
Total deferred tax assets	113,758			116,467
Deferred tax liabilities:
Intangible assets	(1,247		)	—
Other	(576		)	(386		)
Total deferred tax liabilities	(1,823		)	(386		)
Deferred tax assets, net	111,935			116,081
Valuation allowance	111,950			116,110
Net deferred tax assets (liabilities)	$	(15	)	$	(29	)

Summary of Changes in Tax Valuation Allowance

The following is a summary of changes in the Company’s tax valuation allowance for the years ended December 31, 2018, 2017 and 2016:



(in thousands)	Balance at Beginning of Year		Additions		Reductions			Balance at End of Year
Year Ended:
December 31, 2018	$	116,110	$	4,036	$	(8,196	)	$	111,950
December 31, 2017	146,012		12,403		(42,305		)	116,110
December 31, 2016	139,037		11,031		(4,056		)	146,012