Rigel Pharmaceuticals, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of components of the entity's deferred tax assets


	December 31,
	2020		2019
Deferred tax assets
Net operating loss carryforwards	$	240,767	$	240,157
Orphan drug and research and development credits		64,252		59,603
Deferred compensation		7,760		8,817
Lease liabilities		4,399		6,989
Capitalized Inventory		34		—
Capitalized research and development expenses		—		2,282
Other, net		3,170		529
Deferred tax liabilities
Operating lease right-of-use asset		(4,084)		(6,719)
Others		(537)		—
Total net deferred tax assets		315,761		311,658
Less: valuation allowance		(315,761)		(311,658)
Deferred tax assets, net of allowance	$	—	$	—

Schedule of reconciliation of the statutory federal income tax rate to the effective tax rate


	Year Ended December 31,
	2020		2019		2018
Federal statutory tax rate	(21.0)	%	(21.0)	%	(21.0)	%
State, Net of Federal Benefit	0.1	%	0.1	%	—	%
Valuation allowance	24.4	%	21.7	%	16.3	%
Stock compensation	4.7	%	2.8	%	8.2	%
Orphan drug and research and development credits	(12.7)	%	(5.1)	%	(3.7)	%
Other, net	4.6	%	1.5	%	0.2	%
Effective tax rate	0.1	%	0.0	%	0.0	%

Schedule of activity related to the entity's gross unrecognized tax benefits

The following table summarizes the activity related to our gross unrecognized tax benefits (in thousands):


	Year Ended December 31,
	2020		2019
Balance at the beginning of the year	$	8,358	$	7,849
Increase related to current year tax positions		543		509
Balance at the end of the year	$	8,901	$	8,358

During the years ended December 2020 and December 31, 2019, the amount of unrecognized tax benefits increased $543,000 and $509,000, respectively, due to additional research and development and orphan drug credits generated during those years. As of December 31, 2020 and 2019, the total amount of unrecognized tax benefit was $8.0 million and $7.2 million, respectively. The reversal of the uncertain tax benefits would not affect the Company’s effective tax rate to the extent that we continue to maintain a full valuation allowance against our deferred tax assets.