20.         Income taxes

a.           Income tax expense

Due to the uncertainty surrounding the realization of favorable tax attributes in future tax returns, a valuation allowance is recorded against the Company’s net deferred tax assets in the Netherlands, and a partial valuation allowance against the Company’s net deferred tax assets in France.

There are no significant unrecognized tax benefits as of December 31, 2025 and 2024.

For the years ended December 31, 2025, 2024 and 2023, loss before income tax expense consists of the following:

Years ended December 31, 

  ​ ​ ​

2025

  ​ ​ ​

2024

  ​ ​ ​

2023

(in thousands)

Domestic - Netherlands

$

(174,507)

$

(215,251)

$

(282,530)

Foreign - U.S.

 

(4,470)

 

(1,133)

 

(6,903)

Foreign - Other

(14,363)

(20,743)

(17,124)

Total

$

(193,340)

$

(237,127)

$

(306,557)

The income tax expense for the years ended December 31, 2025, 2024 and 2023, consists of the following:

Years ended December 31, 

  ​ ​ ​

2025

  ​ ​ ​

2024

  ​ ​ ​

2023

(in thousands)

Current tax expense

Domestic - Netherlands

$

(3,907)

$

$

Other

(136)

(145)

(110)

Total current income tax expense

$

(4,043)

$

(145)

$

(110)

Deferred tax expense

 

 

 

Domestic - Netherlands

$

(466)

$

$

Other

(1,122)

(2,284)

(1,811)

Total deferred tax expense

(1,588)

(2,284)

(1,811)

Total income tax expense

$

(5,631)

$

(2,429)

$

(1,921)

b.           Income taxes paid

The income taxes paid during the years ended December 31, 2025, 2024 and 2023 were as follows:

Years ended December 31, 

  ​ ​ ​

2025

  ​ ​ ​

2024

  ​ ​ ​

2023

(in thousands)

Domestic - Netherlands

$

7,403

$

$

Foreign

139

21

12

Total

$

7,542

$

21

$

12

Since 2023, the Company has been engaged with the Dutch tax authorities regarding the Dutch corporate income tax treatment of the $375.0 million upfront payment received in exchange for the rights to the lowest royalty tier on CSL Behring’s worldwide net sales of HEMGENIX. In September 2025, the Dutch tax authorities communicated their position that, for Dutch corporate income tax purposes, the upfront payment should be treated as taxable income in 2023. In response, the Company revised its Dutch corporate income tax filing position to reflect the upfront payment as taxable income in 2023 (net of directly attributable expenses), together with a revision of a previously filed tax position, which resulted in a taxable profit of EUR 12.9 million ($14.6 million) for 2023, instead of the previous taxable loss for that year.

During 2025, the Company made a provisional payment of EUR 6.4 million ($7.4 million) in respect of the revised 2023 filing position. Subsequently, in conjunction with finalizing its positions, the Company also amended its 2021 Dutch corporate income tax filing position, which reduced the Company’s estimated Dutch corporate income tax related to 2023 to EUR 3.3 million ($3.9 million).

c.           Tax benefit recognized in other comprehensive loss related to defined benefit pension plan liability

The reconciliation of the amount of income tax (loss) / benefit related to the defined benefit pension plan liability recognized in other comprehensive loss for the years ended December 31, 2025, 2024 and 2023, is as follows:

Years ended December 31,

  ​ ​ ​

2025

  ​ ​ ​

2024

  ​ ​ ​

2023

(in thousands)

Unrecognized gain / (loss) related to defined benefit pension plan liability

$

887

$

384

$

(2,553)

Deferred tax (expense) / benefit

(116)

(57)

417

Unrecognized gain / (loss) related to defined benefit pension plan liability, net of tax

$

771

$

327

$

(2,136)

d.           Tax rate reconciliation

The reconciliation of the amount of income tax expense that would result from applying the domestic Dutch statutory income tax rate to the Company’s reported amount of loss before income tax expense for the years ended December 31, 2025, 2024 and 2023, is as follows:

Years ended December 31, 

2025

2024

2023

  ​ ​ ​

Amount

  ​ ​ ​

Percent

  ​ ​ ​

Amount

  ​ ​ ​

Percent

  ​ ​ ​

Amount

  ​ ​ ​

Percent

(in thousands)

(in thousands)

(in thousands)

Domestic statutory tax rate - Netherlands

$

49,882

25.8%

$

61,179

25.8%

$

79,092

25.8%

Foreign tax effects (difference in tax rates between the Netherlands and foreign jurisdictions)

(160)

(0.1%)

(149)

(0.1%)

(124)

(0.0%)

Domestic

Changes in valuation allowance

(42,095)

(21.8%)

(53,745)

(22.7%)

(64,319)

(21.0%)

Non-deductible items

Fair value changes

(4,687)

(2.4%)

471

0.2%

(4,132)

(1.3%)

Other

(1,705)

(0.9%)

(2,417)

(1.0%)

(4,442)

(1.4%)

Foreign

Changes in valuation allowance

(3,518)

(1.8%)

(3,805)

(1.6%)

(2,685)

(0.9%)

Non-deductible items

Share-based payment awards

(2,746)

(1.4%)

(3,083)

(1.3%)

(5,332)

(1.7%)

Other

44

0.0%

(655)

(0.3%)

(119)

(0.0%)

Other adjustments

(646)

(0.3%)

(225)

(0.1%)

140

0.0%

Total tax provision and effective tax rate

$

(5,631)

(2.9%)

$

(2,429)

(1.0%)

$

(1,921)

(0.6%)

e.           Significant components of deferred taxes

The tax effects of temporary differences and carryforwards that give rise to significant portions of deferred tax assets and deferred tax liabilities as of December 31, 2025 and 2024 are as follows:

  ​ ​ ​

Year ended December 31, 

2025

2024

(in thousands)

Deferred tax assets:

 

  ​

 

  ​

Net operating loss carryforwards

$

162,869

$

178,421

Liability from royalty financing agreement

123,042

19,476

Intangibles

1,866

4,702

Operating lease liabilities

3,588

3,846

Accrued expenses and other current liabilities

3,034

3,069

Interest carryforwards

2,956

Property, plant and equipment

 

1,007

 

365

Defined benefit pension plan liability

207

260

Total deferred tax assets

$

295,613

$

213,095

Less valuation allowance

 

(271,429)

 

(191,864)

Deferred tax assets, net of valuation allowance

$

24,184

$

21,231

Acquired IPR&D intangible asset

(16,238)

(14,341)

Operating lease right-of-use assets

(3,564)

(3,864)

Other current assets and receivables

(3,308)

(48)

Property, plant and equipment

(387)

(165)

Deferred tax liability

$

(23,497)

$

(18,418)

Net deferred tax asset

$

687

$

2,813

Changes in the valuation allowance during the years ended December 31, 2025, 2024 and 2023 were as follows:

Years ended December 31, 

  ​ ​ ​

2025

  ​ ​ ​

2024

  ​ ​ ​

2023

(in thousands)

January 1,

$

191,864

$

145,191

$

74,547

Changes recorded in the statement of operations

45,613

57,550

67,004

Changes recorded in equity

6,525

Other changes including currency translation adjustments

 

27,427

 

(10,877)

 

3,640

December 31,

$

271,429

$

191,864

$

145,191

The valuation allowance of $271.4 million as of December 31,2025 is primarily related to EUR 221.9 million ($260.7 million) of deferred tax assets in the Netherlands resulting from net operating loss carryforwards of EUR 118.4 million ($139.1 million), and a liability from the Royalty Financing Agreement of EUR 104.7 million ($123.0 million).

Netherlands

As of December 31, 2025, the total amount of net operating losses carried forward under the Dutch tax regime was EUR 458.9 million ($539.2 million), following the alignment of the Dutch corporate income tax treatment of the Royalty Financing Agreement in 2025, which consumed EUR 13.9 million ($15.7 million) of such net operating losses carried forward to 2025, and resulted in the recognition of a deferred tax asset related to the Liability from royalty financing agreement. As of December 31, 2024, the total amount of net operating losses carried forward was EUR 593.6 million ($616.5 million). The Company has historically recorded a full valuation allowance. The Company evaluates all positive and negative evidence in assessing the need for a full valuation allowance. Management considers reversing taxable temporary differences, projected future taxable income and tax-planning strategies in making this assessment. The Company concluded that as of December 31, 2025, and December 31, 2024 it is more likely than not that the remaining deferred tax assets will not be realized. The Company’s Dutch net operating tax losses carried forward relate to 2019, 2022, 2024 and 2025.

A portion of the valuation allowance for deferred tax assets recorded as of December 31, 2025 relates to follow-on offering costs incurred in 2019 and 2025. During the year ended December 31, 2025, the Company released $0.5 million of the valuation allowance related to 2019 and recorded a deferred tax expense as a result of adjusting the 2023 and 2021 Dutch corporate income tax filing positions. Any subsequently recognized tax benefits will be credited directly to Additional paid-in capital. As of December 31, 2025, that amount was EUR 8.4 million ($9.9 million) and EUR 3.0 million ($3.2 million) as of December 31, 2024.

The Dutch corporate tax rate is 25.8% from 2022 onwards.

Net operating loss carryforwards subject to a limit of offsetting taxable profit in excess of EUR 1.0 million to 50% of the taxable profit can be carried forward indefinitely.

The fiscal periods from 2021 onwards are still open for inspection by the Dutch tax authorities.

United States of America

The federal corporate tax rate in the U.S. is 21.0%. In addition, the Company is subject to state income taxes resulting in a combined tax rate of 27.3% for its U.S. operation. As of December 31, 2025, an estimated $20.1 million of net operating losses remain to be carried forward. These net operating losses carried forward will expire in 2036 and 2037 except for $0.7 million which may be carried forward indefinitely with a deduction limited to 80% of taxable income in a given year.

The Company’s U.S. operations have been generating taxable income since 2018 with the exception of 2022. The Company expects to continue to generate taxable income in the U.S. during the foreseeable future.

Under the provision of the Internal Revenue Code, the U.S. net operating losses carried forward may become subject to an annual limitation in the event of certain cumulative exchange in the ownership interest of significant shareholders over a three-year period, in excess of 50%, as defined under Section 382 and 383 of the Internal Revenue Code. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation.

The fiscal periods from 2022 are still open for inspection by the IRS. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the IRS or Massachusetts Department of Revenue to the extent utilized in a future period. The Company is currently not under examination by the IRS for any tax years.

France

The French corporate tax rate for fiscal year 2025 was 25.0%. In addition, the Company is subject to a surcharge of 3.3% of the 25.0% standard corporate tax rate resulting in a combined rate of 25.8%.

The Company’s French operations have incurred losses since incorporation and are expected to continue incurring tax losses for the foreseeable future. The French operations as of December 31, 2025 have an estimated EUR 59.8 million ($70.3 million) of net operating losses EUR 48.9 million ($50.8 million) as of December 31, 2024) that are available for carry forward indefinitely. The Company recorded a partial valuation allowance during the years ended December 31, 2025, 2024, and 2023. The Company evaluates all positive and negative evidence including future income from reversing taxable temporary differences (particularly from reversing the deferred tax liability related to the acquired IPR&D intangible asset), projected future taxable income subject to the loss limitation rules applicable in France and tax-planning strategies in making this assessment.

Historical Timeline

Fiscal YearFiled
2025Mar 2, 2026Showing above
2024Feb 27, 2025
2023Feb 28, 2024
2022Feb 27, 2023
2021Feb 25, 2022
2020Mar 1, 2021
2019Mar 2, 2020
2018Feb 28, 2019
2017Mar 14, 2018
2016Mar 15, 2017

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.