BIOCRYST PHARMACEUTICALS INCBCRX
BIOCRYST PHARMACEUTICALS INC Income Taxes Disclosure
Income Taxes
The components of income (loss) before provision for income taxes were as follows (in thousands):
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | 172,638 | $ | (62,515) | $ | (206,674) | |||||||||||
| Foreign | 94,753 | (24,439) | (19,555) | ||||||||||||||
| Income (loss) before provision for income taxes | $ | 267,391 | $ | (86,954) | $ | (226,229) | |||||||||||
The components of the expense (benefit) for income taxes were as follows (in thousands):
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current expense (benefit) provision: | |||||||||||||||||
| U.S. Federal | $ | — | $ | — | $ | — | |||||||||||
| State | 3,502 | 1,118 | (45) | ||||||||||||||
| Foreign | 1,240 | 1,163 | 1,037 | ||||||||||||||
| Total current expense provision | 4,742 | 2,281 | 992 | ||||||||||||||
| Deferred expense (benefit) provision: | |||||||||||||||||
| U.S. Federal | — | — | — | ||||||||||||||
| State | (184) | 79 | (120) | ||||||||||||||
| Foreign | (1,028) | (433) | (562) | ||||||||||||||
| Total deferred expense provision | (1,212) | (354) | (682) | ||||||||||||||
| Total expense provision | $ | 3,530 | $ | 1,927 | $ | 310 | |||||||||||
Income taxes paid, net of refunds received, were as follows (in thousands):
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Federal | $ | — | $ | — | $ | — | |||||||||||
| State | |||||||||||||||||
| California | 901 | (239) | — | ||||||||||||||
| Other | 38 | 623 | 1,176 | ||||||||||||||
| Foreign | |||||||||||||||||
| Germany | 329 | 105 | 114 | ||||||||||||||
| United Kingdom | 855 | 646 | 81 | ||||||||||||||
| Other | 680 | 468 | 63 | ||||||||||||||
| Total income taxes paid, net of refunds received | $ | 2,803 | $ | 1,603 | $ | 1,434 | |||||||||||
The differences between the Company’s effective tax rate and the statutory tax rate in 2025, 2024, and 2023 were as follows (in thousands):
| Years Ended December 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||
| Income tax expense (benefit) at federal statutory rate | $ | 56,152 | 21 | % | $ | (18,260) | 21 | % | $ | (47,508) | 21 | % | ||||||||||||||
State and local income taxes, net of federal income tax effect (a) | 2,569 | 1 | % | 955 | (1) | % | (351) | — | % | |||||||||||||||||
| Foreign tax effects | ||||||||||||||||||||||||||
| Ireland | ||||||||||||||||||||||||||
| Statutory tax rate difference between Ireland and the United States | (8,262) | (3) | % | 2,457 | (3) | % | 1,648 | (1) | % | |||||||||||||||||
| Sale of European ORLADEYO business | (12,960) | (5) | % | — | — | % | — | — | % | |||||||||||||||||
| Changes in valuation allowances | 1,711 | 1 | % | 3,603 | (4) | % | 2,423 | (1) | % | |||||||||||||||||
| Other | (880) | — | % | 30 | — | % | 46 | — | % | |||||||||||||||||
| Other foreign jurisdictions | 704 | — | % | (228) | — | % | 464 | — | % | |||||||||||||||||
| Tax credits | ||||||||||||||||||||||||||
| Research and development tax credits | (1,323) | — | % | (1,764) | 2 | % | (3,725) | 1 | % | |||||||||||||||||
| Expiration of research and development tax credits | 3,574 | 1 | % | 2,514 | (3) | % | 831 | — | % | |||||||||||||||||
| Changes in valuation allowances | (52,454) | (20) | % | 8,695 | (10) | % | 42,139 | (19) | % | |||||||||||||||||
| Nontaxable or nondeductible items | ||||||||||||||||||||||||||
| Share-based payment awards | 4,837 | 2 | % | 2,780 | (3) | % | 2,625 | (1) | % | |||||||||||||||||
| Sale of European ORLADEYO business | 3,867 | 1 | % | — | — | % | — | — | % | |||||||||||||||||
| Other | 1,285 | — | % | 899 | (1) | % | 388 | — | % | |||||||||||||||||
| Changes in unrecognized tax benefits | (217) | — | % | 353 | — | % | 825 | — | % | |||||||||||||||||
| Other adjustments | 4,927 | 2 | % | (107) | — | % | 505 | — | % | |||||||||||||||||
| Income tax expense at effective income tax rate | $ | 3,530 | 1 | % | $ | 1,927 | (2) | % | $ | 310 | — | % | ||||||||||||||
(a) For the year ended December 31, 2025, state taxes in California, Michigan, Minnesota, Kentucky, and New Jersey made up the majority (greater than 50 percent) of the tax effect in this category. For the year ended December 31, 2024, state taxes in Colorado, Illinois, Maine, Massachusetts, New Jersey, and Texas made up the majority of the tax effect in this category. For the year ended December 31, 2023, state taxes in Colorado, Illinois, Michigan, New Jersey, and Texas made up the majority of the tax effect in this category. | ||||||||||||||||||||||||||
The Company recognizes the impact of a tax position in its financial statements if it is more likely than not that the position will be sustained on audit based on the technical merits of the position. The Company has concluded that it has an uncertain tax position pertaining to its research and development and orphan drug credit carryforwards. The Company has established these credits based on information and calculations it believes are appropriate and the best estimate of the underlying credit. Any changes to the Company’s unrecognized tax benefits are offset by an adjustment to the valuation allowance and there would be no impact on the Company’s financial statements. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. If recognized, none of these tax benefits would affect the effective tax rate due to the valuation allowance.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
| 2025 | 2024 | ||||||||||
| Balance at January 1, | $ | 14,715 | $ | 14,362 | |||||||
| Additions to current period tax positions | 386 | 353 | |||||||||
| Reductions to prior period tax positions | (603) | — | |||||||||
| Balance at December 31, | $ | 14,498 | $ | 14,715 | |||||||
The Company’s ability to utilize the net operating loss and tax credit carryforwards in the future may be subject to substantial restrictions in the event of past or future ownership changes as defined in Section 382 of the IRC and similar state tax law.
Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net federal and state operating losses | $ | 82,049 | $ | 105,865 | |||||||
| Research and development credits | 85,254 | 87,287 | |||||||||
| Royalty income | 106,695 | 117,570 | |||||||||
| Stock-based compensation | 40,070 | 34,486 | |||||||||
| Capitalized R&D | 40,875 | 82,476 | |||||||||
| Leasing obligations | 2,666 | 2,806 | |||||||||
| Other | 26,744 | 22,693 | |||||||||
| Total deferred tax assets | 384,353 | 453,183 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Fixed assets | (1,245) | (797) | |||||||||
| Right of use asset | (2,337) | (2,620) | |||||||||
| Total deferred tax liabilities | (3,582) | (3,417) | |||||||||
| Valuation allowance | (380,519) | (448,740) | |||||||||
| Net deferred tax assets | $ | 252 | $ | 1,026 | |||||||
The majority of the Company’s deferred tax assets relate to net operating loss and research and development carryforwards that can only be realized if the Company is profitable in future periods. It is uncertain whether the Company will realize any tax benefit related to these carryforwards. Accordingly, the Company has provided a valuation allowance against substantially all the net deferred tax assets due to uncertainties as to their ultimate realization. The valuation allowance will remain at the full amount of the deferred tax assets until it is more likely than not that the related tax benefits will be realized. The Company’s valuation allowance decreased by $68,221 in 2025, and increased by $11,642, and $47,490 in 2024 and 2023, respectively.
As of December 31, 2025, the Company had U.S. federal operating loss carryforwards of $351,348, state operating loss carryforwards of $154,550, and U.S. research and development and orphan drug credit carryforwards of $99,751, which will expire at various dates from 2026 through 2045. Federal losses, state losses, and research and development credit carryforwards began expiring in 2021. As of December 31, 2025 the Company had no foreign net operating loss carryforwards.
Tax years 2022-2025 remain open to examination by the major taxing jurisdictions to which the Company is subject. Additionally, years prior to 2022 are also open to examination for loss and credit carryforwards from those years. The Company recognizes interest and penalties accrued related to unrecognized tax benefits as components of its income tax provision. However, there were no provisions or accruals for interest and penalties in 2025, 2024, and 2023.
As of December 31, 2025, the Company has minimal accumulated undistributed earnings generated by its foreign subsidiaries which have already been subject to local and U.S. tax as part of the global intangible low-taxed income provisions. The Company intends to indefinitely reinvest these earnings, as well as future earnings from its foreign subsidiaries, to fund its international operations. In addition, the Company expects future U.S. cash generation will be sufficient to meet future U.S. cash needs.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 13, 2020 | |
| 2018 | Mar 14, 2019 | |
| 2017 | Mar 12, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 26, 2016 | |
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.