Income Taxes (Tables)
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12 Months Ended |
Dec. 31, 2022 |
Income Tax Disclosure [Abstract] |
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Summary of the Domestic and Foreign Components of Income Before Income Taxes |
The following is a summary of the domestic and foreign components of income before income taxes for the years ended December 31, 2022, 2021 and 2020: | | | | | | | | | | | | | | | | | | | Year Ended December 31, | (in thousands) | 2022 | | 2021 | | 2020 | Domestic | $ | 11,216 | | | $ | 42,221 | | | $ | 31,667 | | Foreign | 84 | | | 143 | | | (12) | | Total income before income taxes | $ | 11,300 | | | $ | 42,364 | | | $ | 31,655 | |
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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, 2022, 2021 and 2020: | | | | | | | | | | | | | | | | | | | Year Ended December 31, | (in thousands) | 2022 | | 2021 | | 2020 | Current | | | | | | Federal | $ | — | | | $ | — | | | $ | — | | State | 3,710 | | | 2,200 | | | 2,061 | | Foreign | 185 | | | 267 | | | 68 | | Deferred | | | | | | Federal | 1,238 | | | 6,604 | | | 6,076 | | State | (111) | | | 119 | | | 155 | | Foreign | 3 | | | 22 | | | (42) | | Provision for income taxes | $ | 5,025 | | | $ | 9,212 | | | $ | 8,318 | |
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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, 2022, 2021 and 2020: | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2022 | | 2021 | | 2020 | Federal tax at statutory rate | 21.0 | % | | 21.0 | % | | 21.0 | % | State taxes | 4.8 | % | | 2.3 | % | | 2.6 | % | Change in valuation allowance | 1.0 | % | | (0.1) | % | | (3.5) | % | Research and development credit | (25.9) | % | | (6.5) | % | | (5.4) | % | Orphan drug credit | (0.9) | % | | (0.1) | % | | (1.3) | % | Section 162(m) limitation | 9.4 | % | | 2.6 | % | | 1.7 | % | Other tax rate changes | 1.7 | % | | (0.2) | % | | 0.2 | % | Uncertain tax positions | 24.5 | % | | 4.0 | % | | 4.7 | % | Stock-based compensation | 5.8 | % | | (1.8) | % | | 5.1 | % | Settlements | 2.6 | % | | — | % | | — | % | Other items | 0.5 | % | | 0.5 | % | | 1.2 | % | Effective tax rate | 44.5 | % | | 21.7 | % | | 26.3 | % |
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Components of Net Deferred Tax Assets and Related Valuation Allowance |
The following is a summary of the components of the Company’s net deferred tax assets and the related tax valuation allowance as of December 31, 2022 and 2021. | | | | | | | | | | | | (in thousands) | December 31, 2022 | | December 31, 2021 | Deferred tax assets | | | | Net operating loss carryforwards | $ | 13,746 | | | $ | 35,509 | | Stock-based compensation | 4,930 | | | 4,846 | | Accrued expenses | 1,469 | | | 1,409 | | Allowance for returns and credit losses | 1,560 | | | 1,142 | | Research and development and orphan drug credit carryforwards | 42,402 | | | 39,975 | | Capitalized research and development expenses | 16,990 | | | — | | Other | 3,798 | | | 3,081 | | Total deferred tax assets | 84,895 | | | 85,962 | | Deferred tax liabilities | | | | Intangible assets | (1,924) | | | (1,919) | | Other | (1,796) | | | (2,140) | | Total deferred tax liabilities | (3,720) | | | (4,059) | | Deferred tax assets, net | 81,175 | | | 81,903 | | Less: Valuation allowance | 7,136 | | | 7,025 | | Net deferred tax assets | $ | 74,039 | | | $ | 74,878 | |
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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, 2022, 2021 and 2020: | | | | | | | | | | | | | | | | | | | | | | | | (in thousands) | Balance at Beginning of Year | | Additions | | Reductions | | Balance at End of Year | Year Ended | | | | | | | | December 31, 2022 | $ | 7,025 | | | $ | 111 | | | $ | — | | | $ | 7,136 | | December 31, 2021 | 7,051 | | | — | | | (26) | | | 7,025 | | December 31, 2020 | 8,155 | | | — | | | (1,104) | | | 7,051 | |
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Reconciliation of Gross Unrecognized Tax Benefits |
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows: | | | | | | | | | | | | | | | | | | | Year Ended December 31, | (in thousands) | 2022 | | 2021 | | 2020 | Unrecognized tax benefits at the beginning of the year | $ | 12,935 | | | $ | 11,233 | | | $ | 9,741 | | Increases (decreases) related to prior year tax positions | (75) | | | 122 | | | (121) | | Increases related to current year tax positions | 2,895 | | | 1,580 | | | 1,613 | | Settlements | (270) | | | — | | | — | | Unrecognized tax benefits at the end of the year | $ | 15,485 | | | $ | 12,935 | | | $ | 11,233 | |
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