Income Taxes

6 Months Ended

Jun. 30, 2019

INCOME TAXES

The following table summarizes our effective tax rate and income tax (benefit) expense from continuing operations for the three and six months ended June 30, 2019 and 2018 (in thousands except for percentages):



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Effective tax rate	—		%	197		%	—		%	(113		)%
Income tax (benefit) expense	$	(120	)	$	52,556		$	(257	)	$	44,556

For the three and six months ended June 30, 2019, we recognized an income tax benefit of $0.1 million and $0.3 million, respectively, representing an effective tax rate of 0% for both periods. The income tax benefit for the three and six months ended June 30, 2019 primarily related to the offset of the recognition of the income tax expense recorded in other comprehensive loss associated with the increase in the value of available-for-sale securities that we carried at fair market value during the period. The difference between the statutory federal tax rate of 21% and the effective tax rate for the three and six months ended June 30, 2019, was primarily attributable to the valuation allowance established against our current period losses generated and the non-deductible IPR&D expense related to the Perosphere acquisition. We have established a valuation allowance on our deferred tax assets other than refundable alternative minimum tax (“AMT”) credits to the extent that our existing taxable temporary differences would not be available as a source of income to realize the benefits of those deferred tax assets.

For the three and six months ended June 30, 2018, we recognized an income tax expense of $52.6 million and $44.6 million, respectively, representing an effective tax rate of 197% and (113)%, respectively. The difference between the statutory federal tax rate of 21% and the effective tax rates for the three and six months ended June 30, 2018 was primarily attributable to

the establishment of a valuation allowance on net deferred tax assets other than refundable AMT credits, the impact of non-deductible stock compensation and other non-deductible expenses, partially offset by a benefit from contingent consideration, state income taxes and orphan drug credits.

The primary driver of the decrease in tax expense for the three and six months ended June 30, 2019 as compared to the three and six months ended June 30, 2018 is the decrease in the valuation allowance established.