PMV Pharmaceuticals, Inc. Income Taxes Disclosure
9. Income Taxes
The income/(loss) from operations before tax (expense) benefit was as follows:
|
For the Years Ended December 31, |
|
|||||||||
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Pre-Tax Book Income/(Loss) |
|
|
|
|
|
|
|
|
|||
Domestic |
|
(79,937 |
) |
|
|
(74,905 |
) |
|
|
(68,925 |
) |
Foreign |
|
23 |
|
|
|
96 |
|
|
|
(33 |
) |
Total Pre-Tax Income/(Loss) |
$ |
(79,914 |
) |
|
$ |
(74,809 |
) |
|
$ |
(68,958 |
) |
The income tax (benefit) provision for the years ended December 31, 2025, 2024, and 2023 are as follows (in thousands):
|
|
For the Years Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Current: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
State |
|
|
(2,194 |
) |
|
|
(16,170 |
) |
|
|
2 |
|
Foreign |
|
|
22 |
|
|
|
70 |
|
|
|
- |
|
Total current |
|
|
(2,172 |
) |
|
|
(16,100 |
) |
|
|
2 |
|
Deferred: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
State |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Foreign |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total deferred |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total (benefit) provision |
|
$ |
(2,172 |
) |
|
$ |
(16,100 |
) |
|
$ |
2 |
|
A reconciliation of the provision for income to the amount computed by applying the 21% statutory U.S federal income tax rate to income before income taxes after the adoption of ASU 2023-09 as follows:
|
|
Year Ended December 31, 2025 |
|
|||||
|
|
(in thousands) |
|
|
Percent |
|
||
U.S. Federal Statutory Tax Rate |
|
$ |
(16,782 |
) |
|
|
21 |
% |
State and Local Income Taxes, Net of Federal Income Tax Effect |
|
|
(1,843 |
) |
(a) |
|
2 |
% |
Foreign Tax Effect |
|
|
|
|
|
|
||
Australia - statutory tax rate differential |
|
|
6 |
|
|
|
0 |
% |
Tax Credits |
|
|
(2,542 |
) |
|
|
3 |
% |
Nontaxable or nondeductible items |
|
|
992 |
|
|
|
-1 |
% |
Change in unrecognized tax benefits |
|
|
745 |
|
|
|
0 |
% |
Change in valuation allowance |
|
|
17,252 |
|
|
|
-22 |
% |
Effective tax rate |
|
$ |
(2,172 |
) |
|
|
3 |
% |
(a) State taxes in New Jersey made up the majority (greater than 50 percent) of the tax effect in this category, inclusive of the benefit from the sale of NOLs in 2025 under the New Jersey Technology Business Tax Certificate Transfer Program.
As previously disclosed for the years ended December 31, 2024 and 2023 prior to the adoption of ASU 2023-09, the following is a reconciliation of the difference between the effective income tax rate and federal statutory rate:
|
|
For the Years Ended |
|
|||||
|
|
December 31, |
|
|
December 31, |
|
||
Income tax provision at statutory rate |
|
|
21 |
% |
|
|
21 |
% |
State income taxes, net of federal benefit |
|
|
5 |
% |
|
|
6 |
% |
Tax credits |
|
|
3 |
% |
|
|
3 |
% |
Stock compensation |
|
|
-3 |
% |
|
|
-1 |
% |
Executive compensation limitation |
|
|
-1 |
% |
|
|
-1 |
% |
Proceeds from sale of tax attributes |
|
|
17 |
% |
|
|
0 |
% |
Change in valuation allowance, excluding impact of the sale of tax attributes |
|
|
-21 |
% |
|
|
-28 |
% |
Effective income tax rate |
|
|
21 |
% |
|
|
0 |
% |
For the years ended December 31, 2025 and 2024, the Company generated a state tax benefit from the sale of net operating losses (“NOLs”) under the New Jersey Technology Business Tax Certificate Transfer Program. For the years ended December 31, 2025 and 2024, the Company’s effective tax rate was 3% and 21%, respectively, primarily due to the income tax benefit recognized for the sale of state tax attributes and the Company’s position to establish a full valuation allowance on its deferred tax assets. For the year ending December 31, 2023, the Company’s effective tax rate was below the federal statutory income tax rate of 21% primarily due to state income taxes, net of federal benefit and the Company’s position to establish a full valuation allowance on its deferred tax assets.
The tax effect of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets and liabilities are presented below:
|
|
As of December 31, |
|
|||||
(in thousands) |
|
2025 |
|
|
2024 |
|
||
Deferred tax assets: |
|
|
|
|
|
|
||
Net operating loss carryforwards |
|
$ |
68,592 |
|
|
$ |
49,729 |
|
Stock compensation |
|
|
3,681 |
|
|
|
3,610 |
|
Capitalized research expenditures |
|
|
32,309 |
|
|
|
32,514 |
|
Research and development credits |
|
|
11,788 |
|
|
|
9,554 |
|
Accrued expenses and other |
|
|
1,209 |
|
|
|
1,230 |
|
Operating lease liabilities |
|
|
228 |
|
|
|
338 |
|
Total deferred tax assets |
|
|
117,807 |
|
|
|
96,975 |
|
Valuation allowance |
|
|
(117,542 |
) |
|
|
(96,606 |
) |
Deferred tax assets recognized |
|
|
265 |
|
|
|
369 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
||
Right-of-use assets |
|
|
(238 |
) |
|
|
(325 |
) |
Fixed assets and depreciation |
|
|
(27 |
) |
|
|
(44 |
) |
Total deferred tax liabilities |
|
|
(265 |
) |
|
|
(369 |
) |
Net deferred tax assets |
|
$ |
— |
|
|
$ |
— |
|
The Company has recorded a valuation allowance for its deferred tax assets that it does not believe will be realizable at a more likely than not level based on analysis of all available sources of taxable income.
As of December 31, 2025 and 2024, the Company had federal net operating loss carryforwards of $289,964 and $214,652, respectively. As of December 31, 2025, the Company had state net operating loss carryforwards for New Jersey, California, Massachusetts, and Arizona of approximately $97,539, $4,912, $6,342, and $543, respectively. At December 31, 2024, the Company had state net operating loss carryforwards for New Jersey, California, Massachusetts, and Arizona of approximately $54,685, $4,912, $6,542, and $192, respectively. Federal net operating loss carryforwards of $27,500 expire beginning in the year 2033. State net operating loss carryforwards begin to expire in the year 2033. Net operating loss carryforwards related to tax years after 2017 of $262,464 do not expire. The Company also has federal and state research and development credit carryforward of approximately $16,129 and $13,034 as of December 31, 2025 and 2024, respectively. The federal credits will begin to expire in 2034 if not utilized. The California state credits carryforward indefinitely and the New Jersey state credits expire starting in 2030. The above net operating losses and research and development credits are subject to Sections 382 and 383 of the Internal Revenue Code. In the event of a change in ownership as defined by these code sections, the usage of the net operating losses and research and development credits may be limited.
The Company accrues interest and penalties related to unrecognized tax benefits in the (benefit) provision for income taxes line item in the consolidated statements of operations and comprehensive loss. As of December 31, 2025 and 2024, the Company had not accrued any interest or penalties related to uncertain tax positions.
If the ending balance of $4,032 and $3,259 of unrecognized tax benefits as of December 31, 2025 and 2024, respectively, were recognized, none of the recognition would affect the income tax rate. The following table summarized the activity related to the Company’s unrecognized tax benefits:
|
|
For the Year Ended |
|
|||||
|
|
December 31, |
|
|
December 31, |
|
||
Unrecognized tax benefits, beginning of year |
|
$ |
3,259 |
|
|
$ |
3,173 |
|
Decreases related to prior year tax positions |
|
|
— |
|
|
|
(586 |
) |
Increases related to current year tax positions |
|
|
773 |
|
|
|
672 |
|
Unrecognized tax benefits, end of year |
|
$ |
4,032 |
|
|
$ |
3,259 |
|
The Company files U.S. federal and state income tax returns with varying statutes of limitations. The Company’s tax years will remain open for examination by the federal and state authorities for and four years, respectively, from the date of utilization of any net operating losses and research and development credits.
The State of New Jersey’s Technology Business Tax Certificate Program allows certain high technology and biotechnology companies to sell unused NOL carryforwards and research and development (“R&D”) tax credits to other New Jersey-based corporate taxpayers. As of December 31, 2025 and 2024, the Company received $2,196 and $16,176, respectively, of cash for the NOL and R&D tax credit sales related to the tax years ended December 31, . The sale of the NOLs and R&D tax credits has been recorded as an income tax benefit within the consolidated statement of operations.
For the year ended December 31, 2025, income taxes paid, net of refunds, by jurisdiction were immaterial both individually and in the aggregate and, accordingly, have not been separately disclosed. This is exclusive of the benefit from the sale of NOLs in 2025 under the New Jersey Technology Business Tax Certificate Transfer Program.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 6, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 3, 2021 | |
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.