Quarterly report [Sections 13 or 15(d)]

Income Taxes

v3.25.3
Income Taxes
 9 Months Ended
Sep. 30, 2025
Income Taxes  
Income Taxes

14. Income Taxes

On July 4, 2025, H.R.1 - One Big Beautiful Bill Act was enacted in the U.S., which introduced significant changes to U.S. income tax law, including provisions affecting the deductibility and capitalization of research and development expenditures, business interest deductions, and the international tax framework. The enactment of this legislation did not have a material impact on the Company’s condensed consolidated financial statements for the quarter ended September 30, 2025, as the Company maintains a full valuation allowance against its net deferred tax assets. The Company will continue to monitor and evaluate the potential impact of this legislation on future reporting periods as the U.S. Treasury issues implementing guidance.

The Company recorded an income tax expense of $49,000 for the three and nine months ended September 30, 2025, primarily related to the recognition of a deferred tax liability arising from the HilleVax acquisition, attributable to the anticipated repatriation of future earnings from the Company’s Swiss subsidiary. As of September 30, 2025, the Company maintained a full valuation allowance against its remaining net deferred tax assets.

The Company had a total of $5.9 million of gross unrecognized tax benefits as of September 30, 2025, none of which would affect the effective tax rate upon realization, as it had a full valuation allowance against its net deferred tax assets. The reversal of related deferred tax assets will be offset by a valuation allowance, should any of these uncertain tax positions be favorably settled in the future.

The Company does not expect its unrecognized tax benefits to change significantly over the next twelve months. The Company will recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of September 30, 2025, the Company had not accrued interest or penalties related to uncertain tax positions.

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