Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Domestic and Foreign Components of Loss before Provision for Income Taxes

For financial reporting purposes, the components of loss from continuing operations before income taxes were as follows (in thousands):


	December 31,
	2018		2017		2016
United States	$	(35,838)	$	(32,112)	$	(24,285)
Foreign	(87,878)		(93,910)		(45,349)
Total	$	(123,716)	$	(126,022)	$	(69,634)

Reconciliation of Income Tax to Expense (Benefit)

A reconciliation of the Company’s income tax benefit from continuing operations compared to the income tax benefit computed at the federal statutory tax is was as follows (in thousands):


	December 31,
	2018		2017		2016
Income tax at federal statutory rate	$	(26,022)	$	(42,846)	$	(23,675)
State taxes, net of federal benefit	(8)		(19)		(65)
Change in valuation allowance	16,949		(11,208)		16,024
Impact of U.S. statutory rate change on revaluing deferred tax assets	—		36,085		—
Permanent interest disallowed	(35)		(150)		(1,832)
Impact of foreign rate change on deferred taxes	1,961		1,619		521
Other permanent differences⁽¹⁾	(666)		8,236		630
Research and development tax credits	(51)		(274)		(145)
State tax rate benefit	169		56		578
Foreign rate differential	1,731		10,636		6,122
Stock-based compensation⁽¹⁾	(1,344)		(2,462)		1,132
Net operating losses surrendered under UK's R&D tax relief scheme	6,322		—		—
Credits and other⁽¹⁾	994		327		(238)
Income tax benefit	$	—	$	—	$	(948)

⁽¹⁾ Certain prior years’ amounts in the table above have been reclassified to conform with current year’s presentation.

Schedule of Deferred Tax Assets

Significant components of the Company’s deferred tax assets are presented below. A valuation allowance of $118.1 million and $101.1 million as of December 31, 2018 and 2017, respectively, has been established against the deferred tax assets for which it is more likely than not that the tax benefit will not be realized.


	December 31,
	2018		2017
Deferred tax assets:
Net operating losses	$	103,187	$	87,142
Capitalized research and development	1,537		2,155
Accrued expenses	1,300		1,310
Research and development credits	5,343		5,282
Amortization	528		630
Depreciation	—		163
Stock-based compensation⁽¹⁾	5,868		4,334
Other, net⁽¹⁾	775		98
Total gross deferred tax assets	118,538		101,114
Less valuation allowance	(118,064)		(101,114)
Net deferred tax assets	$	474	$	—

Deferred tax liabilities:
IPR&D	$	(17,425)	$	(17,425)
Depreciation	(474)		—
Total deferred tax liabilities	(17,899)		(17,425)
Net deferred tax liability	$	(17,425)	$	(17,425)

⁽¹⁾ Prior year’s amounts have been reclassified to conform with current year’s presentation.

Summary of Unrecognized Tax Benefits

The following table summarizes the activity related to the Company’s unrecognized tax benefits (in thousands):


	December 31,
	2018		2017		2016
Beginning balance of unrecognized tax benefits	$	2,030	$	1,248	$	1,132
Gross increases based on tax positions related to current year	—		633		116
Gross decreases based on tax positions related to prior years	(634)		—		—
Gross increases based on tax positions related to prior years	91		149		—
Settlements with taxing authorities	—		—		—
Expiration of statute of limitations	—		—		—
Ending balance of unrecognized tax benefits	$	1,487	$	2,030	$	1,248