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Intangible Assets
 12 Months Ended
Dec. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets
Intangible Assets
Intangible assets consisted of the following at December 31:
 
 
2013
 
2012
 
 
 
 
 
Product and license rights
 
$
12,139,031

 
$
7,352,308

Less: accumulated amortization
 
(1,096,238
)
 
(520,385
)
Total product and license rights
 
11,042,793

 
6,831,923

Patents
 
4,866,570

 
2,735,117

Less: accumulated amortization
 
(410,544
)
 
(90,242
)
Total patents
 
4,456,026

 
2,644,875

Trademarks
 
9,020

 
9,020

Less: accumulated amortization
 
(9,020
)
 
(9,020
)
Total trademarks
 
—

 
—

Total intangible assets
 
$
15,498,819

 
$
9,476,798


On October 28, 2013, the Company entered into an agreement with Pernix Therapeutics to promote Omeclamox-Pak. Omeclamox-Pak is a branded prescription product that combines omeprazole, amoxicillin and clarithromycin for the treatment of Helicobacter pylori (H. pylori) infection and duodenal ulcer disease. It is the first FDA approved triple combination medication to contain omeprazole as the proton pump inhibitor and is prescribed over a shortened treatment period of ten days. Under the terms of the agreement, the Company will promote the product to gastroenterologists across the United States through its field sales force which also promotes its Kristalose brand. Pernix will promote the product through its specialty sales force focusing on select primary care physicians. The companies will cooperate in the marketing and other activities needed to support the commercialization of the brand. The Company paid an upfront payment of $4.0 million to Pernix Therapeutics on October 29, 2013. There are also additional milestones at the first and second anniversary dates of the execution of the agreement totaling $4.0 million in the aggregate. Royalty payments ranging from 15% to 20% based on tiered levels of gross profits will be paid by Cumberland to Pernix Therapeutics monthly.
The $4.0 million upfront payment the Company paid to Pernix Therapeutics on October 29, 2013 is included in product and license rights and will be amortized over the remaining expected useful life of the acquired asset, currently the life of the agreement, which ends in June 2032.
In 2011, the Company acquired the Kristalose trademark and FDA registration from Mylan Inc. The agreement requires the Company to make future quarterly payments over a seven-year period equal to a percentage of Kristalose net sales. The payments are being treated as consideration for the assets acquired, and are being capitalized and amortized over the remaining expected useful life of the acquired asset, currently the term of the agreement, 15 years. During 2013, the Company paid $0.8 million to Mylan in quarterly Kristalose payments.
During 2013, the Company recorded an additional $2.1 million in intangible assets for capitalized patent costs, including amounts incurred in the protection of the Company's intellectual property.
Amortization expense related to product and license rights, trademarks and patents was $0.9 million, $0.5 million and $0.7 million in 2013, 2012 and 2011, and is expected to be approximately $1.2 million in each of the years 2014 through 2018.