MBX Biosciences, Inc. Income Taxes Disclosure
The Company reported pre-tax losses in the United States of $87.0 million and $61.9 million for the years ended December 31, 2025 and 2024, respectively. The Company recorded no income tax benefit for the net loss incurred for the years ended December 31, 2025 and 2024, due to the uncertainty of realizing a benefit from such losses. All of the Company’s operating losses since inception have been generated in the United States.
A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate, applying ASU 2023-09 retrospectively, is as follows:
|
|
As of December 31, |
|
|||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||
Income tax benefit at statutory federal rate |
|
$ |
(18,264 |
) |
|
21.0 |
% |
|
$ |
(13,004 |
) |
|
21.0 |
% |
State and local income taxes, net of federal benefit (1) |
|
|
(246 |
) |
|
0.3 |
% |
|
|
(129 |
) |
|
0.2 |
% |
Tax credits - research and development |
|
|
(7,451 |
) |
|
8.6 |
% |
|
|
(6,347 |
) |
|
10.3 |
% |
Nontaxable or nondeductible items |
|
|
|
|
|
|
|
|
|
|
||||
Executive compensation expense |
|
|
947 |
|
|
(1.1 |
)% |
|
|
382 |
|
|
(0.6 |
)% |
Other |
|
|
24 |
|
|
— |
|
|
|
21 |
|
|
— |
|
Other provision adjustments |
|
|
151 |
|
|
(0.2 |
)% |
|
|
10 |
|
|
(0.1 |
)% |
Change in unrecognized tax benefits |
|
|
2,331 |
|
|
(2.7 |
)% |
|
|
2,183 |
|
|
(3.5 |
)% |
Change in valuation allowance |
|
|
22,508 |
|
|
(25.9 |
)% |
|
|
16,884 |
|
|
(27.3 |
)% |
Benefit for income taxes |
|
$ |
— |
|
|
0.0 |
% |
|
$ |
— |
|
|
0.0 |
% |
(1) State tax benefit in Indiana made up the majority (greater than 50%) of the tax effect in this category.
Due to income tax losses, the Company did not pay any federal or state income taxes for the years ended December 31, 2025 and 2024.
Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. The principal components of the Company’s deferred tax assets and liabilities as of December 31, 2025 and 2024, are included in the table below (in thousands):
|
|
As of December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Deferred tax assets: |
|
|
|
|
|
|
||
Net operating loss carryforwards |
|
$ |
35,463 |
|
|
$ |
14,903 |
|
Capitalized research and development expenses |
|
|
15,650 |
|
|
|
17,076 |
|
Research and development credit carryforwards |
|
|
14,116 |
|
|
|
8,177 |
|
Stock-based compensation expense |
|
|
1,382 |
|
|
|
824 |
|
Accrued expenses |
|
|
1,090 |
|
|
|
583 |
|
Lease liability |
|
|
148 |
|
|
|
43 |
|
Other, net |
|
|
221 |
|
|
|
36 |
|
Total deferred tax assets: |
|
|
68,070 |
|
|
|
41,642 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
||
Operating lease right-of-use assets |
|
|
(121 |
) |
|
|
(30 |
) |
Depreciation |
|
|
(155 |
) |
|
|
(156 |
) |
Total deferred tax liabilities: |
|
|
(276 |
) |
|
|
(186 |
) |
Less valuation allowance |
|
|
(67,794 |
) |
|
|
(41,456 |
) |
Net deferred tax assets |
|
$ |
— |
|
|
$ |
— |
|
The Company’s management has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which are composed primarily of net operating loss (“NOL”) carryforwards, capitalized research and development costs and research and development credit carryforwards. Management has considered the Company’s history of net losses incurred since inception and probability of future losses to conclude it is more likely than not that the Company will not recognize the benefits of federal and state deferred tax assets. As a result, the Company has established a valuation allowance for the full amount of the net deferred tax assets as of December 31, 2025, and 2024. At such time as it is determined that it is more likely than not that the deferred tax assets will be realizable, the valuation allowance will be reduced. The valuation allowance increased by $26.3 million during the year ended December 31, 2025, due to the increase in the deferred tax assets by the same amounts.
As of December 31, 2025, the Company had $128.3 million and $219.7 million of US federal NOLs and state NOL carryforwards, respectively. The federal NOLs have no expiration and the state NOLs begin to expire in 2039. In addition, the Company had US federal research and development tax credit carryforwards of $18.5 million, which may be available to reduce future tax liabilities which start to expire in 2039. The Company had Indiana state research and development tax credits of $2.7 million as of December 31, 2025, which begin to expire in 2029.
Realization of the future tax benefits is dependent on many factors, including the Company’s ability to generate taxable income within the NOL carryforward period. Under the provisions of Sections 382 and 383 of the Internal Revenue Code, and corresponding provisions of state law, certain substantial changes in the Company’s ownership, including a sale of the Company or significant changes in ownership due to sales of equity, may have limited, or may limit in the future, the amount of NOL carryforwards, which could be used annually to offset future taxable income.
Due to the existence of the valuation allowance, future recognition of previously unrecognized tax benefits will not impact the Company’s effective tax rate. The Company is subject to taxation in the U.S and various state jurisdictions. All tax years since incorporation remain open to examination by the major taxing jurisdictions (state and federal) to which the Company is subject, as carryforward attributes generated in years past may still be adjusted upon examination by the Internal Revenue Service (IRS) or other authorities if they have or will be used in a future period. The Company is not currently under examination by the IRS or any other jurisdictions for any tax year. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense.
The Company had no material accrued interest or penalties related to income tax matters in the Company’s balance sheets as of December 31, 2025, and 2024. Further, the Company is not currently under examination by any federal, state or local tax authority.
The following table summarizes the changes to the Company’s gross unrecognized tax benefits for the years ended December 31, 2025, and 2024, respectively (in thousands):
|
|
2025 |
|
|
2024 |
|
||
Balance at January 1, |
|
$ |
4,331 |
|
|
$ |
2,114 |
|
Increase related to current year tax positions |
|
|
2,255 |
|
|
|
2,091 |
|
Increase related to prior year tax positions |
|
|
141 |
|
|
|
126 |
|
Balance at December 31, |
|
$ |
6,727 |
|
|
$ |
4,331 |
|
The unrecognized tax benefit amounts are reflected in the determination of the Company’s deferred tax assets. If recognized, none of these amounts would affect the Company’s effective tax rate, since it would be offset by an equal corresponding adjustment in the valuation allowance. The Company does not foresee material changes to its liability for uncertain tax benefits within the next twelve months.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law. The OBBBA makes changes to US corporate income taxes including reinstating the option to claim 100% accelerated depreciation on qualified property, with retroactive application beginning January 20, 2025 and immediate expensing of domestic research and development costs, with retroactive application beginning January 1, 2025. The impact of this legislation was not material to the Company’s consolidated financial position and results of operations for the year ended December 31, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 12, 2026 | Showing above |
| 2024 | Mar 17, 2025 | |
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.