Annual report [Section 13 and 15(d), not S-K Item 405]

Income Taxes

v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

11. Income Taxes

The reconciliation of federal statutory income tax rate to the Company’s effective income tax rate is as follows:

 

 

Year Ended December 31,

 

 

 

2025

 

 

2024

 

U.S. Statutory Tax Rate

 

$

(35,304

)

 

 

21.0

%

 

$

(24,331

)

 

 

21.0

%

State and Local Income Taxes, Net of Federal Income Tax Effect (1)

 

 

—

 

 

 

0.0

%

 

 

—

 

 

 

0.0

%

Foreign Tax Effects

 

 

24

 

 

 

0.0

%

 

 

(4

)

 

 

0.0

%

Effect of Cross-Border Tax Laws

 

 

94

 

 

 

-0.1

%

 

 

6

 

 

 

0.0

%

Tax Credits

 

 

(9,489

)

 

 

5.6

%

 

 

(5,769

)

 

 

5.0

%

Change in Valuation Allowances (Domestic)

 

 

43,489

 

 

 

-25.9

%

 

 

29,176

 

 

 

-25.2

%

Nontaxable or Nondeductible Items

 

 

983

 

 

 

-0.6

%

 

 

951

 

 

 

-0.8

%

Other Adjustments

 

 

203

 

 

 

0.0

%

 

 

(29

)

 

 

0.0

%

Actual income tax benefit effective tax rate

 

$

—

 

 

 

0.0

%

 

$

—

 

 

 

0.0

%

(1) Within the State Income Tax category, Pennsylvania and Philadelphia accounted for the majority, representing over 50% of the total reconciling impact.

Consistent with the Company’s cumulative loss position and absence of taxable income in federal, state, and local jurisdictions, the Company made no income tax payments and received no income tax refunds in the current fiscal year.

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The principal components of the Company’s deferred tax assets and liabilities consisted of the following:

 

 

Year Ended December 31,

 

 

 

2025

 

 

2024

 

Deferred tax assets:

 

 

 

 

 

 

Federal, state and local net operating loss carryforwards

 

$

83,014

 

 

$

44,369

 

Capitalized research and development costs

 

 

31,333

 

 

 

36,646

 

Research and development tax credits

 

 

25,050

 

 

 

16,296

 

Stock-based compensation deductions

 

 

13,299

 

 

 

9,919

 

License fee deductions

 

 

186

 

 

 

221

 

Operating lease liabilities

 

 

7,357

 

 

 

4,607

 

Accrued expenses

 

 

2,805

 

 

 

2,603

 

Gross deferred tax assets

 

 

163,044

 

 

 

114,661

 

Less: valuation allowance

 

 

(157,850

)

 

 

(110,723

)

Total deferred tax assets

 

 

5,194

 

 

 

3,938

 

Deferred tax liabilities:

 

 

 

 

 

 

Operating lease right-of-use assets

 

 

(5,194

)

 

 

(3,938

)

Net deferred tax assets

 

$

—

 

 

$

—

 

The Company increased its valuation allowance by $47,127 for the year ended December 31, 2025 in order to maintain a full valuation allowance against its deferred tax assets. Based on the Company’s history of losses, the Company recorded a full valuation allowance against its deferred tax assets as of December 31, 2025. The Company intends to maintain a valuation allowance until sufficient positive evidence exists to support a reversal of the allowance.

As of December 31, 2025, the Company had federal, state and local net operating loss carryforwards of $319,886, $255,101 and $257,607, respectively; $319,636 of the federal net operating losses do not expire, and the remaining $250 expire in 2037. The state net operating losses begin to expire in 2037. The local net operating losses begin to expire in 2042.

As of December 31, 2025, the Company had federal and state research and development tax credit carryforwards of $25,044 and $6, respectively. The research and development credits begin to expire in 2038. The Company’s federal

research credits consist of approximately $13,821 of Research and Development credits and $11,223 of Orphan Drug credits.

Under the provisions of Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, these net operating losses, credit carryforwards and other tax attributes may be subject to limitation based on previous significant changes in ownership and upon future significant changes in ownership of the Company, as defined by the Code.

The Company files income tax returns in the U.S. federal jurisdiction and in multiple state and local jurisdictions; however, Pennsylvania and Philadelphia constitute the Company’s most significant tax jurisdictions due to the concentration of its operational footprint and the resulting apportionment profile. The tax years 2024, 2023 and 2022 remain open to examination by the jurisdictions where the Company is subject to tax.

The Company evaluates tax positions for recognition using a more-likely-than-not recognition threshold, and those tax positions eligible for recognition are measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon the effective settlement with a taxing authority that has full knowledge of all relevant information. As of December 31, 2025, the Company had no unrecognized income tax benefits that would affect the Company’s effective tax rate if recognized.