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Income taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income taxes Income taxes
For the years ended December 31, 2023, 2022 and 2021, the Company recorded no income tax benefit for the net operating losses ("NOLs") incurred in each year, due to the Company’s operating losses and a full valuation allowance on deferred tax assets.
A reconciliation of the effective tax rate for the years ended December 31, 2023 and 2022 is as follows:
20232022
Statutory US Federal Rate21.0 %21.0 %
State taxes, net of federal benefit5.5 %5.7 %
Permanent differences(0.1)%(0.1)%
General business credits4.0 %4.4 %
Stock compensation(1.9)%(1.4)%
Change in valuation allowance(28.5)%(29.6)%
— %— %
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 net deferred tax assets as of December 31, 2023 and 2022 are as follows:
(in thousands)20232022
Deferred tax assets:
Net operating losses$126,798 $113,981 
R&D capitalization67,107 40,380 
Tax credit carryforwards28,409 21,429 
Stock-based compensation6,899 6,522 
Accrued expenses3,142 3,340 
Lease liabilities2,274 3,096 
Capitalized licenses2,725 3,077 
Deferred revenue3,688 1,062 
Depreciation353 437 
Other156 116 
Total gross deferred tax assets241,551 193,440 
Valuation allowance(239,468)(190,588)
Net deferred tax assets less valuation allowance2,083 2,852 
Deferred tax liabilities
Right-of-use assets(2,083)(2,852)
Total gross deferred tax liabilities(2,083)(2,852)
Net deferred taxes$— $— 
The Company has incurred NOLs since inception. At December 31, 2023, the Company had federal and state NOL carryforwards of approximately $479.0 million and $414.8 million, respectively. Of the $479.0 million of federal NOL carryforwards, $34.1 million expire at various dates through 2037. The remaining $444.8 million of federal NOL carryforwards do not expire. The state NOL carryforwards expire at various dates through 2043. At December 31, 2023, the Company had federal and state research and development tax credit carryforwards of approximately $23.2 million and $6.8 million, respectively, which expire at various dates through 2043.
As required by ASC 740, management of the Company has evaluated the evidence bearing upon the reliability of its deferred tax assets. Based on the weight of available evidence, both positive and negative, management has determined that it is more likely than not that the Company will not realize the benefits of all of these assets. Accordingly, the Company recorded a valuation allowance of $239.5 million and $190.6 million at December 31, 2023 and December 31, 2022, respectively. The valuation allowance increased by $48.9 million during the year ended December 31, 2023, primarily a result of the Company's current year net loss and credit generation.
Utilization of the NOLs and research and development tax credit carryforwards may be subject to a substantial annual limitation under Section 382 due to ownership change limitations that have occurred previously or that could occur in the future in accordance with Section 382, as well as similar state provisions. These ownership changes may limit the amount of NOLs and research and development tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. If a change in control as defined by Section 382 has occurred at any time since the Company’s formation, utilization of its NOLs or research and development tax credit carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, which could then be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the NOLs or research and development tax carryforwards before their utilization. The Company has determined that ownership changes have occurred in the past and that certain NOLs and research and development tax credit carryforwards will be subject to limitation.
The Company applies the accounting guidance in ASC 740 related to accounting for uncertainty in income taxes. The Company’s reserves related to taxes are based on a determination of whether, and how much of, a tax benefit taken by the Company in its tax filings or positions is more likely than not to be realized following resolution of any potential contingencies present related to the tax benefit. As of December 31, 2023 and 2022, the Company had no unrecognized tax benefits.
The Company commissioned a multi-year research and development credit study in 2023, which resulted in an adjustment to the Company's cumulative deferred tax asset as of December 31, 2023. The change in the deferred tax asset is offset by a full valuation allowance.
Interest and penalties related to uncertain tax positions would be classified as income tax expense in the accompanying statements of operations and comprehensive loss. As of December 31, 2023 and 2022, the Company had no accrued interest or penalties related to uncertain tax positions.
The Company files income tax returns in the United States federal tax jurisdiction and eight state jurisdictions. The Company did not have any foreign operations during the years ended December 31, 2023, 2022 and 2021. The statute of limitations for assessment by the Internal Revenue Service and state tax authorities is closed for tax years prior to 2019, although carryforward attributes that were generated prior to tax year 2019 may still be adjusted upon examination to the extent utilized in a future period. There are no federal or state audits currently in progress.