Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.8.0.1
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2017
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Tax Benefit
The components of the income tax expense (benefit) for continuing operations are as follows (in thousands):
 
Year Ended December 31,
 
2017
 
2016
 
2015
 
Current expense (benefit):
 
 
 
 
 
 
Federal
$

 
$
21

 
$
11

 
State
111

 
12

 
7

 
Foreign
261

 

 

 
 
372

 
33

 
18

 
Deferred expense (benefit):
 
 
 
 
 
 
Federal
44,075

 
10,534

 
(167,413
)
 
State
228

 
(240
)
 
(24,720
)
 
Foreign

 

 

 
 
$
44,675

 
$
10,327

 
$
(192,115
)
 
Schedule of Effective Income Tax Rate Reconciliation
A reconciliation of income tax expense (benefit) from continuing operations to the amount computed by applying the statutory federal income tax rate to the net income (loss) from continuing operations is summarized as follows:
 
 
Year Ended December 31,
 
2017
 
2016
 
2015
Tax at federal statutory rate
$
20,031

 
$
2,786

 
$
13,198

State, net of federal benefit
622

 
175

 
386

Contingent liabilities
903

 
1,225

 
1,684

Stock-based compensation
(4,019
)
 
263

 
140

Research and development credits
(2,821
)
 
(1,525
)
 
304

Change in uncertain tax positions
1,308

 
1,423

 
27,188

Rate change for changes in federal or state law
32,429

 
25

 
(5,756
)
Change in valuation allowance
(4,169
)
 
6,283

 
(231,370
)
Other
391

 
(328
)
 
2,111

 
$
44,675

 
$
10,327

 
$
(192,115
)
Schedule of Deferred Tax Assets and Liabilities
Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2017 and 2016 are shown below. The Company assesses the positive and negative evidence to determine if sufficient future taxable income will be generated to use the existing deferred tax assets. The Company's evaluation of evidence resulted in management concluding that the majority of the Company's deferred tax assets will be realized. However, the Company maintains a valuation allowance to offset certain net deferred tax assets as management believes realization of such assets are uncertain as of December 31, 2017, 2016 and 2015. The valuation allowance decreased $8.4 million in 2017, increased $6.3 million in 2016 and decreased $231.7 million in 2015.
 
December 31,
 
2017
 
2016
 
(in thousands)
Deferred assets:
 
 
 
Net operating loss carryforwards
$
90,272

 
$
150,226

Research credit carryforwards
30,677

 
26,878

Fixed assets and intangibles
1,984

 
4,385

Accrued expenses
845

 
943

Contingent liabilities
354

 
578

Deferred revenue
17

 

Present value of royalties

 
591

Deferred rent
28

 
45

Capital Loss Carryforward
1,609

 
4,432

Viking Equity Method Investment
5,137

 
5,692

Other
12,117

 
19,312

 
143,040

 
213,082

Valuation allowance for deferred tax assets
(6,987
)
 
(15,349
)
Net deferred tax assets
$
136,053

 
$
197,733

Deferred tax liabilities:
 
 
 
Retrophin fair value adjustment
$
(243
)
 
$
(52
)
Convertible debt
(737
)
 
(1,196
)
Identified intangibles
(48,237
)
 
(68,631
)
Identified indefinite lived intangibles
(2,414
)
 
(3,963
)
Total
$
84,422

 
$
123,891

Schedule of Unrecognized Tax Benefits
A reconciliation of the amount of unrecognized tax benefits at December 31, 2017, 2016 and 2015 is as follows (in thousands):
 
December 31,
 
2017
 
2016
 
2015
Balance at beginning of year
$
38,770

 
$
36,452

 
$
8,524

     Additions based on tax positions related to the current year
1,067

 
70

 
154

     Additions for tax positions of prior years
109

 
2,408

 
28,224

     Reductions for tax positions of prior years
(10,583
)
 
(160
)
 
(450
)
Balance at end of year
$
29,363

 
$
38,770

 
$
36,452