Rubius Therapeutics, Inc. - 10-K filing on 2021-02-23

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of reconciliation of the U.S. federal statutory income tax rate to the Company's effective income tax


	Year ended
	December 31,
	2020		2019
Federal statutory income tax rate	(21.0)	%	(21.0)	%
State taxes, net of federal benefit	(6.2)		(6.2)
Federal and state research and development tax credits	(5.9)		(6.0)
Stock‑based compensation expense	0.4		0.7
Other	0.5		0.5
Increase in deferred tax asset valuation allowance	32.2		32.0
Effective income tax rate	—	%	—	%

Net deferred tax assets

Net deferred tax assets consisted of the following (in thousands):


	December 31,
	2020		2019
Deferred tax assets:
Net operating loss carryforwards	$	97,791	$	61,160
Research and development tax credit carryforwards		23,524		13,525
Accrued expenses		2,241		1,142
Capitalized intellectual property costs		1,123		1,073
Capitalized research and development expense		97		109
Operating lease liabilities		11,394		12,952
Stock‑based compensation expense		15,847		9,156
Total deferred tax assets		152,017		99,117
Deferred tax liabilities:
Operating lease assets		(11,050)		(12,720)
Depreciation and other		(1,090)		(513)
Total deferred tax liabilities		(12,140)		(13,233)
Valuation allowance		(139,877)		(85,884)
Net deferred tax assets	$	—	$	—

Summary of changes in the valuation allowance for deferred tax assets

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2020 and 2019 related primarily to the increase in net operating loss carryforwards and research and development tax credit carryforwards in 2020 and 2019, and were as follows (in thousands):


	Year ended December 31,
	2020		2019		2018
Valuation allowance as of beginning of year	$	85,884	$	33,666	$	12,575
Decreases recorded as benefit to income tax provision		—		—		—
Increases recorded to income tax provision		53,993		52,218		21,091
Valuation allowance as of end of year	$	139,877	$	85,884	$	33,666