NOTE 7. DEFERRED REVENUE

Deferred revenue consists of the following (in thousands):

	December 31, 2013		December 31, 2012

Deferred revenue, current portion:
Deferred license revenue, current portion:
Valeant	$	1,598	$	1,598
Santarus		1,443		1,444
Janssen		—		231


Deferred license revenue, current portion		3,041		3,273


Deferred revenue, current portion	$	3,041	$	3,273


Deferred license revenue, non-current portion:
Valeant		10,905		12,503
Santarus		1,570		3,013


Deferred license revenue, non-current portion		12,475		15,516
Total deferred revenue	$	15,516	$	18,789

Deferred license revenue relates to upfront payments received by the Company under license and collaborative agreements with its partners. At December 31, 2013 and 2012, deferred license revenue consisted primarily of upfront license fee payments received from Santarus and Valeant.

In December 2004, the Company received a $25.0 million license fee payment under its agreements with Valeant. The $25.0 million license fee is being recognized as revenue ratably until October 2021, which represents the estimated length of time our obligations exist under the arrangement related to royalties we are obligated to pay Valeant on net sales of Glumetza in the United States and for our obligation and our licensee's (Santarus) obligation to use Valeant as the sole supplier of the 1000mg Glumetza.

In July 2008, the Company received a $12.0 million upfront payment under its promotion agreement with Santarus. The upfront payment received was originally being amortized as revenue ratably until October 2021, which represented the estimated length of time the Company's obligations existed under the promotion agreement related to manufacturing Glumetza and paying Santarus promotion fees on gross margin of Glumetza. The commercialization agreement in August 2011 superseded the promotion agreement and removed our promotion fee obligations and contemplated removal of our manufacturing obligations. The commercialization agreement included obligations with respect to manufacturing and regulatory transition to Santarus and managing the patent infringement lawsuits against Sun and Lupin. At the time of the commercialization agreement, all of these obligations were estimated to be completed in December 2013. During the fourth quarter of 2012, events occurred relating to the transfer of manufacturing with one of the contract manufacturers of Glumetza that pushed the estimated completion date of the Company's manufacturing obligations to February 2016, which is now the estimated length of time the Company expects it will take to complete its obligations under the commercialization agreement. On the effective date of the commercialization agreement, the amortization period related to remaining deferred revenue on the $12.0 million upfront fee was adjusted, and the remaining deferred revenue of $9.2 million was changed to be recognized ratably until December 2013. During the fourth quarter of 2012, the amortization period related to the remaining deferred revenue on the $12.0 million upfront fee was adjusted again, and the remaining deferred revenue of $4.8 million was changed to be recognized ratably until February 2016.

In July 2011, Ironwood paid the Company a $0.9 million upfront license fee associated with the collaboration and license agreement. The $0.9 million was amortized ratably through June 2012, which is the estimated length of time Depomed was obligated to perform formulation work under the agreement.