SANGAMO THERAPEUTICS, INCSGMO
SANGAMO THERAPEUTICS, INC Income Taxes Disclosure
INCOME TAXES
The domestic and foreign components of loss before income taxes were as follows (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Domestic | $ | (123,969) | $ | (103,729) | |||||||
| Foreign | 469 | 5,621 | |||||||||
| Loss before income taxes | $ | (123,500) | $ | (98,108) | |||||||
Income tax benefit for the years ended December 31, 2025 and 2024 consisted of the following (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Income tax benefit: | |||||||||||
| Current: | |||||||||||
| Federal | $ | — | $ | — | |||||||
| State | — | — | |||||||||
| Foreign | (568) | (167) | |||||||||
| Subtotal | (568) | (167) | |||||||||
| Deferred: | |||||||||||
| Federal | — | — | |||||||||
| State | — | — | |||||||||
| Foreign | — | — | |||||||||
| Subtotal | — | — | |||||||||
| Income tax benefit | $ | (568) | $ | (167) | |||||||
The following table represents a reconciliation of the statutory federal rate and the Company’s effective tax rate (after the adoption of ASU 2023-09) for the year ended December 31, 2025 (in thousands):
| Amount | Percentage | ||||||||||
| Income taxes (benefit) at statutory federal rate | $ | (25,935) | 21.0 | % | |||||||
| State and local taxes, net of federal income tax effect | — | — | |||||||||
| Foreign tax effects | |||||||||||
| Other foreign | (667) | 0.5 | % | ||||||||
| Effect of cross-border tax laws | |||||||||||
| Global Intangible Low-taxed Income | — | — | |||||||||
| Non-taxable or non-deductible items | |||||||||||
| Other non-taxable or non-deductible items | 660 | (0.5) | % | ||||||||
Change in valuation allowance (1) | 28,674 | (23.2) | % | ||||||||
| Tax credits | |||||||||||
| R&D credit | (3,671) | 3.0 | % | ||||||||
| Changes in unrecognized tax benefits | 160 | (0.1) | % | ||||||||
| Other adjustments | |||||||||||
| Other | 211 | (0.2) | % | ||||||||
| $ | (568) | 0.5 | % | ||||||||
(1) In 2024, the change in valuation allowance related to the state jurisdictions was included in the change in valuation allowance. In 2025, this amount is net in the state and local taxes.
For the year ended December 31, 2024, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows (in thousands):
| Year Ended December 31, | |||||
| 2024 | |||||
| Tax at federal statutory rate | $ | (20,603) | |||
| State taxes, net | 3,483 | ||||
| Foreign rate differential | 263 | ||||
| Global Intangible Low-taxed Income | 617 | ||||
| Non-deductible stock-based compensation | 2,656 | ||||
| Research credits | (3,201) | ||||
| Change in valuation allowance | 16,172 | ||||
| Other | 446 | ||||
| Income tax benefit | $ | (167) | |||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts 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 are as follows (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Assets: | |||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss carryforwards | $ | 255,860 | $ | 211,585 | |||||||
| Research and development tax credit carryforwards | 62,819 | 58,409 | |||||||||
| Stock-based compensation | 4,325 | 3,998 | |||||||||
| Deferred revenue | 1,476 | — | |||||||||
| Capitalized research | 66,760 | 74,354 | |||||||||
| Property and equipment | 17,272 | 15,648 | |||||||||
| Intangible assets | 130 | 31 | |||||||||
| Lease liabilities | 6,732 | 6,666 | |||||||||
| Accruals and reserves | 4,754 | 331 | |||||||||
| Other | 421 | 235 | |||||||||
| Total deferred tax asset | 420,549 | 371,257 | |||||||||
| Valuation allowance | 419,779 | 367,578 | |||||||||
| Deferred tax assets | 770 | 3,679 | |||||||||
| Liabilities: | |||||||||||
| Operating lease right-of-use assets | (770) | (3,679) | |||||||||
| Deferred tax liabilities | (770) | (3,679) | |||||||||
| Total net deferred tax liabilities | $ | — | $ | — | |||||||
The Company did not make any income tax payments in any jurisdiction during the year ended December 31, 2025.
A valuation allowance is recorded when it is more likely than not that all or some portion of the deferred income tax assets will not be realized. The Company regularly assesses the need for a valuation allowance against its deferred income tax assets by considering both positive and negative evidence related to whether it is more likely than not that the Company’s deferred income tax assets will be realized. In evaluating the Company’s ability to recover its deferred income tax assets within the jurisdiction from which they arise, the Company considers all available positive and negative evidence, including scheduled reversals of deferred income tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations.
The Company continues to maintain a full valuation allowance on its U.S. federal and state, Sangamo France and Sangamo U.K. net deferred tax assets, as the Company believes it is not more likely than not that these benefits will be realized. The valuation allowance increased by $52.2 million and $16.1 million for the years ended December 31, 2025 and 2024, respectively.
As of December 31, 2025, Sangamo had net operating loss carryforwards for federal and state income tax purposes of approximately $980.4 million and $470.3 million, respectively.
The federal net operating loss generated before 2018 will begin to expire in 2026 and will keep expiring through 2037, if not utilized. Federal net operating loss generated from 2018 will carry forward indefinitely. If not utilized, the state net operating loss carryforwards will begin to expire in 2029. The Company’s French net operating loss carryforward balance is $129.3 million, which carries over indefinitely. The Company also has federal and state research tax credit carryforwards of $53.2 million and $35.2 million, respectively. The federal research credits will begin to expire in 2026 and will keep expiring through 2045, while the state research credits have no expiration date. Utilization of the Company’s net operating loss carryforwards and research tax credit carryforwards may be subject to substantial annual limitations due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. The annual limitation could result in the expiration of the net operating loss carryforwards and research tax credit carryforwards before utilization.
The Company’s policy is to reinvest the earnings of its non-U.S. subsidiaries in those operations. The Company does not provide for U.S. taxes on the earnings of foreign subsidiaries because the Company intends to reinvest such earnings offshore indefinitely. However, if these funds were repatriated, the Company would be required to accrue and pay applicable U.S. taxes and withholding taxes. Due to the cumulative losses generated in foreign countries there are no earnings to repatriate.
Government incentives in the form of refundable research tax credits are recognized when there is reasonable assurance that the incentive will be received and the Company will comply with the conditions specified in the agreement or statutory requirements. The Company is eligible to receive these incentives because it engages in qualifying research and development activities in a foreign jurisdiction as defined by the government entity. As of December 31, 2025 and 2024, the Company had refundable research tax credits of $10.1 million and $4.1 million, respectively, in current assets and $8.9 million and $12.8 million, respectively, in non-current assets on the Consolidated Balance Sheets.
The Company files federal and state income tax returns with varying statutes of limitations. The tax years from 2006 forward remain open to examination due to the carryover of net operating losses or tax credits. The Company also files the U.K. and French income tax returns, and the tax years from 2021 and thereafter remain open in the U.K., and the tax years 2021 and thereafter in France are still subject to examination.
The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had $0.2 million and $0.2 million accrued interest and/or penalties as of December 31, 2025 and 2024, respectively. Unrecognized tax benefits are not expected to change materially over the next 12 months. The amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $0.6 million and $0.9 million as of December 31, 2025 and 2024, respectively.
The following table summarizes the activity related to the Company’s unrecognized tax benefits (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Beginning balance | $ | 22,137 | $ | 18,320 | |||||||
| Additions based on tax positions related to the current year | 1,292 | 4,274 | |||||||||
| Additions for tax positions of prior years | 22 | 26 | |||||||||
| Reductions for tax positions of prior years | (2,949) | (224) | |||||||||
| Statute lapse | (308) | (259) | |||||||||
| Ending balance | $ | 20,194 | $ | 22,137 | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 30, 2026 | Showing above |
| 2024 | Mar 17, 2025 | |
| 2023 | Mar 13, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 18, 2016 | |
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.