Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Table Text Blocks

Reconciliation of income taxes from continuing operations computed using U.S. federal statutory rate to that reflected in operations

A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations follows (in thousands):

	Year Ended December 31,
	2019		2018		2017
Income tax benefit using U.S. federal statutory rate	$	4,517	$	(59,297)	$	(39,759)
Effect of U.S. tax reform		—		—		153,894
Permanent differences		65		218		34
State income taxes, net of federal benefit		(1,902)		(17,121)		(6,117)
Disallowed Separation related costs		4,658		—		—
Executive compensation - Section 162(m)		662		8		—
Meals and entertainment		495		995		1,346
Non-deductible share-based compensation		(1,202)		(494)		9
Excess tax benefits		3,324		(1,223)		(2,626)
Fair market valuation of Note Hedge Warrants and Convertible Note Hedges		(290)		2,367		1,289
Tax credits		(4,374)		(7,863)		(12,290)
Expiring net operating losses and tax credits		3,764		250		276
Effect of change in state tax rate on deferred tax assets and deferred tax liabilities		(2,563)		1,476		(232)
Change in the valuation allowance		(7,154)		80,684		(95,824)
	$	—	$	—	$	—

Schedule of components of deferred tax assets and liabilities

Components of the Company’s deferred tax assets and liabilities are as follows (in thousands):

	Year Ended December 31,
	2019		2018
Deferred tax assets:
Net operating loss carryforwards	$	265,494	$	259,450
Tax credit carryforwards		59,892		60,115
Capitalized research and development		9,952		12,113
Contingent consideration		—		14
Share-based compensation		24,401		23,242
Basis difference on North America collaboration agreement		48,594		36,423
Accruals and reserves		6,415		10,867
Basis difference on 2022 Convertible Notes		4,322		7,220
Interest expense		22,020		5,104
Intangibles		—		25,928
Operating lease liability		6,421		—
Other		5,295		18,867
Total deferred tax assets		452,806		459,343
Deferred tax liabilities:
Basis Difference on 2024 Convertible Notes		(7,381)		—
Basis Difference on 2026 Convertible Notes		(10,276)		—
Operating lease right-of-use assets		(4,905)		—
Total deferred tax liabilities		(22,562)		—
Net deferred tax asset		430,244		459,343
Valuation allowance		(430,244)		(459,343)
Net deferred tax asset	$	—	$	—

Summary of changes in the unrecognized tax benefits

The following table summarizes the changes in the Company’s unrecognized income tax benefits for the years ended December 31, 2019, 2018 and 2017 (in thousands):

	Year Ended December 31,
	2019		2018		2017
Balance at the beginning of the period	$	38,551	$	24,078	$	26,393
Increases based on tax positions related to the current period		51,699		38,551		24,078
Increases for tax positions related to prior periods		1,400		—		—
Decreases for tax positions in prior periods		(38,551)		(24,078)		(26,393)
Balance at the end of the period	$	53,099	$	38,551	$	24,078