Immunovant, Inc.IMVT
Immunovant, Inc. Income Taxes Disclosure
Income Taxes
The loss before income taxes and the related tax provision are as follows (in thousands):
| Years Ended March 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (Loss) income before income taxes | |||||||||||||||||
| United States | $ | (17,730) | $ | (16,180) | $ | (27,708) | |||||||||||
| Switzerland | (395,119) | (242,518) | (183,187) | ||||||||||||||
| Bermuda | (100) | (71) | (58) | ||||||||||||||
| United Kingdom | — | — | 2 | ||||||||||||||
| Total loss before income taxes | $ | (412,949) | $ | (258,769) | $ | (210,951) | |||||||||||
| Current taxes | |||||||||||||||||
| United States – Federal | $ | 880 | $ | 562 | $ | — | |||||||||||
| United States – State | 11 | 5 | 9 | ||||||||||||||
Total current tax expense | 891 | 567 | 9 | ||||||||||||||
| Deferred tax expense | — | — | — | ||||||||||||||
Total provision for income taxes | $ | 891 | $ | 567 | $ | 9 | |||||||||||
A reconciliation of the provision for income taxes computed at the U.S. statutory rate of 21% for the years ended March 31, 2025, 2024 and 2023 to the provision for income taxes reflected in the consolidated statements of operations is as follows (in thousands):
| Years Ended March 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Income tax benefit at statutory rate | $ | (86,719) | $ | (54,341) | $ | (44,300) | |||||||||||
| Foreign rate differential | 31,499 | 19,321 | 14,569 | ||||||||||||||
| Research and development credits | (17,972) | (8,096) | (4,798) | ||||||||||||||
| Valuation allowance | 74,541 | 46,389 | 31,944 | ||||||||||||||
| Non-deductible expense | 5,826 | 7,518 | 3,632 | ||||||||||||||
| Tax deficiencies (excess tax benefits) from stock-based compensation | (6,282) | (9,204) | (1,960) | ||||||||||||||
| Other | (2) | (1,020) | 922 | ||||||||||||||
Total provision for income taxes | $ | 891 | $ | 567 | $ | 9 | |||||||||||
The Company’s effective tax rate was (0.22)%, (0.22)% and 0% for the years ended March 31, 2025, 2024 and 2023 respectively, primarily driven by the Company’s jurisdictional earnings by location, certain non-deductible expenditures, research and development credits, and a valuation allowance that eliminates the Company’s global net deferred tax assets.
Deferred taxes reflect the tax effects of the differences between the amounts recorded as assets and liabilities for financial reporting purposes and the comparable amounts recorded for income tax purposes. Significant components of the deferred tax assets (liabilities) at March 31, 2025 and 2024 are as follows (in thousands):
| March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets | |||||||||||
| Intangible assets | $ | 10,099 | $ | 9,865 | |||||||
| Net operating losses | 153,370 | 98,248 | |||||||||
| Stock-based compensation | 13,643 | 9,110 | |||||||||
| Research and development credits | 39,217 | 21,245 | |||||||||
| Others | 3,522 | 3,363 | |||||||||
| Total deferred tax assets | 219,851 | 141,831 | |||||||||
| Valuation allowance | (218,753) | (141,484) | |||||||||
| Deferred tax assets, net of valuation allowance | $ | 1,098 | $ | 347 | |||||||
| Deferred tax liabilities | |||||||||||
| Depreciation | $ | (109) | $ | (74) | |||||||
| Right-of-use assets | (41) | (39) | |||||||||
| Others | (948) | (234) | |||||||||
| Total deferred tax liabilities | (1,098) | (347) | |||||||||
| Total net deferred taxes | $ | — | $ | — | |||||||
As of March 31, 2025, the Company has gross net operating loss carryforwards in the following jurisdictions: Switzerland of approximately $1,094.6 million, which will begin to expire as of March 31, 2027, the United Kingdom of approximately $0.9 million, which can be carried forward indefinitely with an annual usage limitation, and the U.S. of approximately $48.7 million, which can be carried forward indefinitely with utilization limited to 80% of future taxable income for tax years beginning on or after January 1, 2021. The Company has research and development and orphan drug credit carryforwards in the U.S. of approximately $39.2 million, which begin to expire as of March 31, 2039.
The Company assesses the realizability of its net deferred tax assets at each balance sheet date based on available positive and negative evidence in order to determine the amount which is more likely than not to be realized and record a valuation allowance as necessary. Due to the Company’s cumulative loss position which provides significant negative evidence difficult to overcome, the Company has recorded a valuation allowance of $218.8 million and $141.5 million for the years ended March 31, 2025 and 2024, respectively, representing the portion of the net deferred tax assets that is not expected to be realized. The amount of the net deferred tax assets considered realizable could be adjusted for future factors that would impact the assessment of the objective and subjective evidence of the Company. The Company will continue to assess the realizability of net deferred tax assets at each balance sheet date in order to determine the proper amount, if any, required for a valuation allowance.
As of March 31, 2025, the Company does not have undistributed earnings from foreign subsidiaries. The Company regularly evaluates whether foreign earnings are expected to be indefinitely reinvested. This evaluation requires judgment about the future operating and liquidity needs of the Company. Changes in economic and business conditions, foreign or U.S. tax laws or the Company’s financial situation could result in a change to the Company’s position.
The Company is subject to tax and files income tax returns in the United Kingdom, Switzerland, and U.S. federal, state and local jurisdictions. The Company’s tax periods for the fiscal years ended March 31, 2019 through March 31, 2025 remain open for tax examinations in most applicable income tax jurisdictions. Tax audits and examinations can involve complex issues, interpretations and judgments. The resolution of matters may span multiple years particularly if subject to litigation or negotiation. The Company believes it has appropriately recorded its tax position using reasonable estimates and assumptions, however the potential tax benefits may impact the consolidated results of operations or cash flows in the period of resolution, settlement or when the statutes of limitations expire. The Company’s unrecognized tax benefit activity during the years ended March 31, 2025 and 2024 and related liabilities were not material to the Company’s consolidated financial statements as of March 31, 2025 and 2024. The Company does not expect the amount of unrecognized tax benefits to significantly increase or decrease within the next 12 months.
Free Sentinel
Track for freeWant the next Immunovant, Inc. income taxes disclosure the moment it drops?
Set a Sentinel and we'll alert you the moment Immunovant, Inc.'s next filing hits EDGAR. No credit card, your email never gets sold.
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.