Company: ARVN
Filing Date: 2025-02-11
Form Type: 10-K
Source: 0001655759-25-000016
Chunk: 45

Company: ARVINAS, INC.
Filing Date: 2025-02-11
Form: 10-K
Item: Item 16
Chunk 45
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 allowance(471.4)(407.9)Net deferred income tax liability$— $— A valuation allowance is established when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The realization of deferred tax assets depends on the generation of future taxable income during the period in which related temporary differences become deductible. The Company has provided a valuation allowance against the full amount of the deferred tax assets since it is more likely than not that the benefits will not be realized. This assessment is based on the Company's historical cumulative losses, which provide strong objective evidence that cannot be overcome with projections of income, as well as the fact the Company expects continuing losses in the future.All, or a portion of, the remaining valuation allowance may be reduced in future years based on an assessment of earnings sufficient to utilize these potential tax benefits. The valuation allowance increased by $63.5 million and $164.0 million in 2024 and 2023, respectively, due to increases in net operating loss carryforwards, revenue recognition for tax purposes from the Vepdegestrant (ARV-471) Collaboration Agreement and the mandatory capitalization of qualified research and development costs in 2024 and 2023.The Company had $111.0 million and $235.9 million of federal net operating loss carryforwards as of December 31, 2024 and 2023, respectively. Federal net operating losses incurred in 2018 and in future years may be carried forward indefinitely, but the deductibility of such carryforwards is limited to 80% of the Company’s taxable income in the year in which carryforwards are used. The Company had $129.0 million and $250.0 million of state and local net operating loss carryforwards as of December 31, 2024 and 2023, respectively, which expire at various dates beginning in 2035. The Company had $37.7 million and $29.1 million of federal tax credit carryforwards as of December 31, 2024 and 2023, respectively. The Company had $22.4 million and $18.7 million of state tax credit carryforwards as of December 31, 2024 and 2023, respectively, which expire at various dates beginning in 2040.During 2021, the Company performed a Section 382 analysis to determine whether an ownership change occurred for tax purposes. Based on this analysis, the Company determined that ownership changes