Rubius Therapeutics, Inc. - 10-K filing on 2022-02-25

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

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


	Year ended
	December 31,
	2021		2020
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	(6.4)		(5.9)
Stock‑based compensation expense	(1.6)		0.4
Section 162(m) compensation deduction limitation	1.6		—
Other	(0.4)		0.5
Increase in deferred tax asset valuation allowance	34.0		32.2
Effective income tax rate	—	%	—	%

Net deferred tax assets

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


	December 31,
	2021		2020
Deferred tax assets:
Net operating loss carryforwards	$	145,990	$	97,791
Research and development tax credit carryforwards		36,161		23,524
Accrued expenses		2,137		2,241
Capitalized intellectual property costs		1,746		1,123
Capitalized research and development expense		86		97
Operating lease liabilities		10,194		11,394
Stock‑based compensation expense		21,483		15,847
Total deferred tax assets		217,797		152,017
Deferred tax liabilities:
Operating lease assets		(9,590)		(11,050)
Depreciation and other		(1,500)		(1,090)
Total deferred tax liabilities		(11,090)		(12,140)
Valuation allowance		(206,707)		(139,877)
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, 2021, 2020 and 2019 related primarily to the increase in net operating loss carryforwards and research and development tax credit carryforwards and were as follows (in thousands):


	Year ended December 31,
	2021		2020		2019
Valuation allowance as of beginning of year	$	139,877	$	85,884	$	33,666
Decreases recorded as benefit to income tax provision		—		—		—
Increases recorded to income tax provision		66,830		53,993		52,218
Valuation allowance as of end of year	$	206,707	$	139,877	$	85,884