BridgeBio Pharma, Inc.BBIO
BridgeBio Pharma, Inc. Income Taxes Disclosure
Income Taxes
The following table presents the components of net loss before income taxes for the years ended December 31, 2025, 2024 and 2023:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Domestic | $ | 437,614 | $ | 207,795 | $ | 565,840 | |||||||||||
| Foreign | 294,889 | 334,399 | 87,411 | ||||||||||||||
| Total loss before income taxes | $ | 732,503 | $ | 542,194 | $ | 653,251 | |||||||||||
The following table presents the provision of income taxes for the years ended December 31, 2025, 2024 and 2023:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Current: | |||||||||||||||||
| U.S. federal | $ | (78) | $ | 811 | $ | — | |||||||||||
| State | — | — | — | ||||||||||||||
| Foreign | 513 | 342 | — | ||||||||||||||
| Total current | 435 | 1,153 | — | ||||||||||||||
| Deferred | — | — | — | ||||||||||||||
| Total provision for income taxes | $ | 435 | $ | 1,153 | $ | — | |||||||||||
The following table presents a reconciliation of the statutory federal rate and our effective tax rate (after the adoption of ASU 2023-09, on a retrospective basis) for the years ended December 31, 2025, 2024 and 2023:
| Years Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Amount | Percentage | Amount | Percentage | Amount | Percentage | ||||||||||||||||||||||||||||||
| (in thousands, except percentage data) | |||||||||||||||||||||||||||||||||||
| U.S. federal statutory tax rate | $ | (153,830) | 21.0 | % | $ | (113,860) | 21.0 | % | $ | (137,110) | 21.0 | % | |||||||||||||||||||||||
| Foreign tax effects | |||||||||||||||||||||||||||||||||||
| Switzerland | |||||||||||||||||||||||||||||||||||
| Changes in valuation allowances | 58,930 | (8.1) | % | 39,800 | (7.3) | % | 10,230 | (1.6) | % | ||||||||||||||||||||||||||
| Foreign rate differential | 3,890 | (0.5) | % | 30,300 | (5.6) | % | 7,970 | (1.2) | % | ||||||||||||||||||||||||||
| Nontaxable or nondeductible items | — | — | % | (170) | — | % | 200 | — | % | ||||||||||||||||||||||||||
| Other foreign jurisdictions | (380) | — | % | 630 | (0.1) | % | (40) | — | % | ||||||||||||||||||||||||||
| Effect of cross-border tax laws | |||||||||||||||||||||||||||||||||||
| Global intangible low-taxed income (GILTI) | — | — | % | 52,790 | (9.7) | % | — | — | % | ||||||||||||||||||||||||||
| Other | — | — | % | 1,700 | (0.3) | % | — | — | % | ||||||||||||||||||||||||||
| Tax credits | |||||||||||||||||||||||||||||||||||
| Research and development tax credit | (15,880) | 2.2 | % | (14,780) | 2.7 | % | (13,230) | 2.0 | % | ||||||||||||||||||||||||||
| Orphan drug credit | (5,030) | 0.7 | % | (7,720) | 1.4 | % | (7,290) | 1.1 | % | ||||||||||||||||||||||||||
| Changes in valuation allowances | 125,510 | (17.1) | % | (170) | — | % | 120,440 | (18.4) | % | ||||||||||||||||||||||||||
| Nontaxable or nondeductible items | |||||||||||||||||||||||||||||||||||
| Disallowed executive compensation | 9,120 | (1.3) | % | 6,320 | (1.2) | % | 5,130 | (0.8) | % | ||||||||||||||||||||||||||
| Excess tax benefit on stock awards | (30,850) | 4.2 | % | (7,350) | 1.4 | % | (3,590) | 0.5 | % | ||||||||||||||||||||||||||
| Other | (555) | 0.1 | % | 1,693 | (0.3) | % | 790 | (0.1) | % | ||||||||||||||||||||||||||
| Changes in unrecognized tax benefits | 4,980 | (0.7) | % | 4,020 | (0.7) | % | 4,760 | (0.7) | % | ||||||||||||||||||||||||||
| Other adjustments | |||||||||||||||||||||||||||||||||||
| Deconsolidation of subsidiaries | 3,770 | (0.5) | % | 7,630 | (1.4) | % | 9,120 | (1.4) | % | ||||||||||||||||||||||||||
| Other | 760 | (0.1) | % | 320 | (0.1) | % | 2,620 | (0.4) | % | ||||||||||||||||||||||||||
| Effective tax rate | $ | 435 | (0.1) | % | $ | 1,153 | (0.2) | % | $ | — | — | % | |||||||||||||||||||||||
The following table presents the income taxes paid for the years ended December 31, 2025, 2024 and 2023:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Federal | $ | 1,000 | $ | — | $ | — | |||||||||||
| State | — | — | — | ||||||||||||||
| Foreign: | |||||||||||||||||
| UK | 198 | — | — | ||||||||||||||
| Foreign subtotal | 198 | — | — | ||||||||||||||
| Total cash paid for income taxes (net of refunds) | $ | 1,198 | $ | — | $ | — | |||||||||||
Significant components of our deferred tax assets and liabilities are as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||
| (in thousands) | |||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss carryforwards | $ | 490,732 | $ | 379,019 | |||||||
| Amortization | 9,948 | 10,188 | |||||||||
| Accruals and reserves | 11,251 | 7,787 | |||||||||
| Deferred revenue | 3,856 | — | |||||||||
| Stock-based compensation | 20,621 | 21,109 | |||||||||
| Equity method investments | 16,110 | 2,998 | |||||||||
| Tax credits | 139,489 | 117,020 | |||||||||
| Operating lease liabilities | 1,944 | 2,200 | |||||||||
| Deferred income from asset sale | 2,312 | 2,242 | |||||||||
| Capitalized research and experimental expenditures | 157,931 | 150,520 | |||||||||
| Deferred interest expense | 45,192 | 30,747 | |||||||||
| Property and equipment | 712 | 918 | |||||||||
| Unrealized gains and losses | 47 | 3,336 | |||||||||
| Deferred royalty obligations | 69,427 | — | |||||||||
| Other | — | 554 | |||||||||
| Gross deferred tax assets | 969,572 | 728,638 | |||||||||
| Less valuation allowance | (968,021) | (727,326) | |||||||||
| Deferred tax assets, net of valuation allowance | 1,551 | 1,312 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Operating lease right-of-use assets | (1,465) | (1,312) | |||||||||
| Other | (86) | — | |||||||||
| Deferred tax liabilities | (1,551) | (1,312) | |||||||||
| Net deferred tax assets (liabilities) | $ | — | $ | — | |||||||
As of December 31, 2025, we have net operating loss carryforwards available to reduce future taxable income, if any, for federal and state income tax purposes of approximately $1.7 billion and $462.2 million, respectively.
The federal net operating losses generated prior to 2018 amounting to $10.8 million will begin to expire in 2036, losses generated after 2018 amounting to $1.6 billion will carry over indefinitely and will be subject to an 80% taxable income limitation in the year utilized. State net operating losses will generally begin to expire in 2036. We also have foreign net operating loss carryforwards of $543.0 million available to reduce future taxable income, if any, which will begin to expire in 2030.
As of December 31, 2025, we have federal research and development and orphan drug credit carryforwards of approximately $141.3 million, which will expire beginning in 2038 if not utilized.
As of December 31, 2025, we have California and other state research and development tax credit carryforwards of $37.4 million. The state research and development tax credits will expire at various dates while the California research and development tax credits will carry over indefinitely.
Beginning in 2022, the 2017 Tax Cuts and Jobs Act amended Section 174 of the Internal Revenue Code of 1986, as amended, to eliminate current-year deductibility of research and experimentation (“R&E”) expenditures and software development costs (collectively, “R&E expenditures”) and instead require taxpayers to charge their R&E expenditures to a capital account amortized over five years (15 years for expenditures attributable to R&E activity performed outside the U.S.). The Company generated a deferred tax asset for capitalized R&E expenditures for the year ended December 31, 2024 which was fully offset by a valuation allowance. On July 4, 2025, the current administration signed the One Big Beautiful Bill Act (“OBBBA”), which includes comprehensive U.S. corporate tax legislation. The OBBBA permanently reinstates the immediate deduction of domestic specified research and experimental expenditures. The Company continues to generate a deferred tax asset for foreign capitalized R&E expenditures for the year ended December 31, 2025 which is fully offset by a valuation allowance.
A valuation allowance is provided for deferred tax assets where the recoverability of the assets is uncertain. The determination to provide a valuation allowance is dependent upon the assessment of whether it is more likely than not that sufficient future taxable income will be generated to utilize the deferred tax assets. Based on the weight of the available evidence, which includes our historical operating losses and forecast of future losses, we provided a valuation allowance against the U.S. federal, state, and foreign deferred tax assets resulting from the tax losses and credits carried forward.
The valuation allowance increased by $240.7 million, $55.2 million and $138.2 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Utilization of the net operating loss and credit carryforwards may be subject to a substantial annual limitation due to an ownership change limitation as provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. In the event that we have a change of ownership, utilization of the net operating loss and tax credit carryforwards may be restricted.
As of December 31, 2025, we have an immaterial amount of undistributed earnings of our non-U.S. subsidiaries for which we have not provided for non-U.S. withholding taxes and state taxes because such earnings are intended to be reinvested indefinitely in international operations. The amount of applicable taxes due if such earnings were distributed would be immaterial. Accordingly, we have not provisioned U.S. state taxes and foreign withholding taxes on non-U.S. subsidiaries for which the earnings are permanently reinvested.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Beginning balance | $ | 36,866 | $ | 30,856 | |||||||
| Additions of prior year positions | 318 | 99 | |||||||||
| Reductions of prior year positions | — | (520) | |||||||||
| Additions based on tax positions related to current year | 6,795 | 6,431 | |||||||||
| Ending balance | $ | 43,979 | $ | 36,866 | |||||||
As of December 31, 2025 and 2024, we have not recorded interest and penalties associated with our unrecognized tax benefits. Our policy is to recognize interest and penalties related to income tax matters in “Provision for income taxes” on our consolidated statements of operations.
Our unrecognized gross tax benefits would not reduce the annual effective tax rate if recognized because we have recorded a valuation allowance on our deferred tax assets.
We file federal and various income tax returns. We currently have no federal or state tax examinations in progress. All years are open for examination by federal, state and foreign authorities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Mar 3, 2020 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.