Gossamer Bio, Inc.GOSS
Gossamer Bio, Inc. Income Taxes Disclosure
Income Taxes
The amount of net loss before taxes for the years ended December 31, 2025, 2024, and 2023 is as follows:
| December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| U.S. loss before taxes | $ | 138,048 | $ | 32,178 | $ | 134,073 | |||||||||||
| Foreign loss before taxes | 32,410 | 23,457 | 45,736 | ||||||||||||||
| Pre-tax Loss | $ | 170,458 | $ | 55,635 | $ | 179,809 | |||||||||||
A reconciliation of income tax expense (benefit) for the years ended December 31, 2025, 2024 and 2023 is as follows:
| December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | (94) | $ | 886 | $ | — | |||||||||||
| State | 6 | 7 | 8 | ||||||||||||||
| Total income tax expense (benefit) | $ | (88) | $ | 893 | $ | 8 | |||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities at December 31, 2025, 2024 and 2023 are shown below. The Company has established a valuation allowance against net deferred tax assets due to the uncertainty that such assets will be realized. The Company periodically evaluates the recoverability of the deferred assets. At such time as it is determined that it is more likely than not that the deferred tax asset will be realized, the valuation allowance will be reduced. The change in the valuation allowance for the year ended December 31, 2025 was an increase of $45.0 million.
| For the Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Deferred tax assets: | |||||||||||||||||
| Net operating losses | $ | 132,088 | $ | 97,940 | $ | 122,987 | |||||||||||
| Deferred loss | 9,323 | 10,575 | — | ||||||||||||||
| Capital loss | 20,163 | 20,348 | — | ||||||||||||||
| Tax credits | 60,579 | 44,803 | 45,445 | ||||||||||||||
| Amortization | 2,409 | 2,646 | 6,919 | ||||||||||||||
| Stock-based compensation | 11,239 | 10,984 | 9,886 | ||||||||||||||
| Lease liability | 937 | 1,135 | 726 | ||||||||||||||
| Accrued compensation | 1,979 | 547 | 1,887 | ||||||||||||||
| Section 174 capitalization | 30,242 | 35,715 | 34,268 | ||||||||||||||
| Other | 5,621 | 5,076 | 43 | ||||||||||||||
| Total gross deferred tax assets | 274,580 | 229,769 | 222,161 | ||||||||||||||
| Deferred tax liabilities: | |||||||||||||||||
| Other | (13) | (3) | — | ||||||||||||||
| Right of use asset | (881) | (1,083) | (660) | ||||||||||||||
| Property, plant and equipment | — | — | (108) | ||||||||||||||
| Total gross deferred tax liabilities | (894) | (1,086) | (768) | ||||||||||||||
| Valuation allowance | (273,686) | (228,683) | (221,393) | ||||||||||||||
| Net deferred tax asset | $ | — | $ | — | $ | — | |||||||||||
As of December 31, 2025, the Company had federal and state NOL carryforwards of approximately $540.6 million and $10.2 million, respectively. The majority of the federal NOL carryforwards can be carried forward indefinitely and be available to offset up to 80% of future taxable income each year. The state NOL carryforwards begin to expire in 2036. As of December 31, 2025, the Company also has Irish NOL carryforwards of approximately $143.3 million, which can be carried forward indefinitely.
As of December 31, 2025, the Company also had orphan drug credit and federal research tax credit carryforwards of approximately $65.8 million and California research tax credits of $12.0 million. The federal research tax credit carryforwards begin to expire in 2038, and the California research tax credit carryforward does not expire and can be carried forward indefinitely until utilized.
Upon adoption of ASU 2023-09, the differences between income taxes expected at the U.S. federal statutory income tax rate of 21% and the reported income tax (benefit) expense are summarized as follows:
| Year Ended December 31, 2025 | |||||||||||
| (in thousands) | |||||||||||
| Federal statutory income tax rate | $ | (35,795) | 21.0 | % | |||||||
State income taxes, net of federal benefit (1) | 5 | — | % | ||||||||
| Foreign Tax Effects | |||||||||||
| Ireland | |||||||||||
| Statutory tax rate difference between Ireland and United States | 4,245 | (2.5 | %) | ||||||||
| Change in valuation allowance | 1,916 | (1.1 | %) | ||||||||
| Other Adjustments | 644 | (0.4 | %) | ||||||||
| Tax Credits | |||||||||||
| Research and development credit, net | (1,386) | 0.8 | % | ||||||||
| Orphan Drug Credit, net | (14,230) | 8.3 | % | ||||||||
| Change in valuation allowance | 41,203 | (24.2 | %) | ||||||||
| Nontaxable or nondeductible items | |||||||||||
| Non-Deductible Interest | 2,307 | (1.4 | %) | ||||||||
| Other | 1,277 | (0.7 | %) | ||||||||
| Other Adjustments | (274) | 0.2 | % | ||||||||
| Effective Tax Rate | $ | (88) | — | % | |||||||
(1) Income taxes in California made up the majority (greater than 50 percent) of the tax effect in this category.
The reconciliation of the federal statutory income tax rate to the Company's effective income tax rate in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows:
| Year Ended December 31, | |||||||||||
| Reconciliation to U.S. Statutory Rate | 2024 | 2023 | |||||||||
| Federal statutory income tax rate | 21.00 | % | 21.00 | % | |||||||
| Change in valuation allowance | (12.38 | %) | (8.73 | %) | |||||||
| Research and experimentation credits | 3.03 | % | 5.69 | % | |||||||
| Foreign rate differential | (3.75 | %) | (2.13 | %) | |||||||
| GILTI | (4.72 | %) | — | % | |||||||
| Stock-based compensation | (4.61 | %) | (1.44 | %) | |||||||
| Nondeductible interest | (4.13 | %) | (1.27 | %) | |||||||
| Domestic/Foreign Restructuring Impact | 2.52 | % | (12.49 | %) | |||||||
| Other | 1.44 | % | (0.62 | %) | |||||||
| Effective Tax Rate | (1.60 | %) | 0.01 | % | |||||||
The NOL carryforward may be subject to an annual limitation under Section 382 and 383 of the Internal Revenue Code of 1986, and similar state provisions if the Company experienced one or more ownership changes which would limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax respectively. In general, an ownership change as defined by Sections 382 and 383, results from the transactions increasing ownership of certain stockholders or public groups in the stock of the corporation of more than 50 percentage points over a three-year period. The Company had an ownership change with the IPO in February of 2019 which resulted in no forfeiture of NOLs or credits. The Company had an additional ownership change in July of 2023, which resulted in a significant limitation on the Company's utilization of its NOLs and is expected to result in forfeiture of some federal net operating losses and all of the pre-change federal credits. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company’s effective tax rate.
The Company files income tax returns in the United States, California, Florida and Ireland. Due to the Company’s losses incurred, the Company is subject to the income tax examination by authorities since inception. The Company’s policy is to recognize interest expense and penalties related to income tax matters as tax expense. For the years ended December 31, 2025, 2024 and 2023 and as of December 31, 2025 and 2024, there were no accruals for interest related to unrecognized tax benefits or tax penalties.
A reconciliation of the beginning and ending amount of unrecognized tax benefits for 2025, 2024, and 2023, excluding interest and penalties, is as follows:
| December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Balance at beginning of the year | $ | 13,919 | $ | 13,654 | $ | 10,572 | |||||||||||
| Decrease related to prior year positions | (1,359) | (2,028) | — | ||||||||||||||
| Increase related to current year positions | 2,902 | 2,293 | 3,082 | ||||||||||||||
| Balance at the end of the year | $ | 15,462 | $ | 13,919 | $ | 13,654 | |||||||||||
Included in the balance of unrecognized tax benefits at December 31, 2025 is $15.5 million that, if recognized, would not impact the Company’s income tax benefit or effective tax rate as long as the Company's deferred tax asset remains subject to a full valuation allowance.
The company did not make any material income tax payments for federal, state or foreign purposes.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 17, 2026 | Showing above |
| 2024 | Mar 13, 2025 | |
| 2023 | Mar 5, 2024 | |
| 2021 | Mar 3, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Mar 24, 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.