NOTE 7. DEFERRED REVENUE

Deferred revenue consists of the following (in thousands):

	December 31, 2014		December 31, 2013
Deferred revenue, current portion:
Deferred product sales
Deferred license revenue, current portion:
Valeant	$	—	$	1,598
Salix		—		1,443

Deferred license revenue, current portion		—		3,041

Deferred revenue, current portion	$	—	$	3,041

Deferred license revenue, non-current portion:
Valeant		—		10,905
Salix		—		1,570

Deferred license revenue, non-current portion		—		12,475

Total deferred revenue	$	—	$	15,516

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

In December 2004, the Company received a $25.0 million license fee payment under its agreements with Valeant. Until September 30, 2014, we were recognizing the $25.0 million license fee payment as revenue ratably until October 2021, which represented the estimated length of time our obligations existed under the arrangement related to royalties that we were obligated to pay Valeant on net sales of the 500mg Glumetza in the United States and to use Valeant as the sole supplier of the 1000mg Glumetza. Effective October 1, 2014, the Company, Valeant and Salix executed an amended agreement which eliminated any and all continuing obligations on the part of the Company in the manufacture and supply of 1000mg Glumetza tablets. The execution of that agreement represented the completion of the final deliverable and, consequently, the Company recognized the remaining unamortized deferred revenue of $11.3 million as of October 1, 2014 in the accompanying Consolidated Statement of Operations. The Company recognized approximately $12.5 million, $1.6 million and $1.6 million of revenue associated with this upfront license fee during 2014, 2013 and 2012, respectively.

In July 2008, the Company received a $12.0 million upfront payment under its promotion agreement with Salix. The upfront payment received was originally being amortized as revenue ratably until October 2021, which represented the estimated length of time our obligations existed under the promotion agreement related to manufacturing Glumetza and paying Salix 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 The commercialization agreement in August 2011 superseded the promotion agreement and removed our promotion fee obligations and contemplated removal of its manufacturing obligations. The commercialization agreement included obligations with respect to manufacturing and regulatory transition to Salix and managing the patent infringement lawsuits against Sun Pharmaceutical Industries, Inc. (Sun) and Lupin Limited (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 related to the transfer of manufacturing with one of the contract manufacturers of Glumetza that extended the estimated completion date of our manufacturing obligations with respect to 1000 mg Glumetza to February 2016, which is the estimated date we expected our obligations would be completed under the commercialization agreement. Effective October 1, 2014, the Company, Valeant and Salix executed an amended agreement which eliminated any and all continuing obligations on the part of the Company in the supply of 1000mg Glumetza tablets. The execution of that agreement represented the completion of the final deliverable and, consequently, the Company recognized the remaining unamortized deferred revenue of $1.9 million as of October 1, 2014 in the accompanying Consolidated Statement of Operations

We recognized approximately $3.0 million, $1.4 million, and $3.3 million of revenue associated with this upfront license fee during 2014, 2013, and 2012, respectively.

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 the Company was obligated to perform formulation work under the agreement.