payment upon execution of the agreement and, accordingly, recognized approximately $6,570,000 as collaboration revenue during the three months ended March 31, 2018. As of March 31, 2018, the Company has a remaining deferred revenue balance totaling approximately $231,721,000.
In December 2009, the Company entered into the KHK agreement, which granted KHK an exclusive license to develop and commercialize bardoxolone methyl in the licensed territory. The Company received a nonrefundable, up-front license fee of $35,000,000 and regulatory milestones of $15,000,000 and could receive additional regulatory milestones of $82,000,000 and commercial milestones of $140,000,000, as well as tiered royalties ranging from the low teens to the low 20 percent range, depending on the country of sale and the amount of annual net sales, on net sales by KHK in the licensed territory.
The Company evaluated the KHK agreement under Topic 606 and identified three performance obligations at contract inception: (1) the exclusive license rights to develop and commercialize bardoxolone methyl in Japan and licensed territory, (2) the obligation to participate in JSCs, and (3) the obligation to supply bardoxolone methyl for KHK’s clinical trial and commercial needs. The transaction price was allocated to the exclusive license rights and the obligation to participate on JSCs, which are accounted for as a single performance obligation and is recognized as revenue ratably through December 2021, which is the estimated minimum period to complete the performance obligation under the KHK agreement. Any consideration related to the Company’s obligation to supply KHK with drug product is recognized upon delivery.
Upon adoption of Topic 606, the Company determined that the transaction price for this agreement at contract inception includes the upfront fee of $35,000,000 and regulatory milestones of $15,000,000 received. The Company evaluated the remaining potential milestones and determined that a future regulatory milestone of $30,000,000 is probable of being achieved in 2018 due to certain notifications and events during the period ending March 31, 2018. This future milestone relates to the development of KHK’s clinical program of bardoxolone methyl. The Company believes the remaining additional regulatory milestones of $52,000,000 and commercial milestones of $140,000,000 are fully constrained as they are not within the control of the Company or KHK and did not include these remaining milestones in the transaction price. Any consideration related to royalties will be recognized when the related sales occur.
At the end of January 2018, the Company added the future milestone of $30,000,000 as variable consideration to the transaction price and recorded $24,843,000 in a contract asset, which is included as amounts earned or due from collaboration arrangements, on the balance sheet, and in collaboration revenue as a cumulative catch-up for the portion of this milestone that was satisfied in prior periods. The remainder of $5,157,000 will be recognized as performance obligations are satisfied over the remaining performance obligation period. During the three months ended March 31, 2018, the Company recorded an additional $213,000 in revenue for the portion of this milestone that was satisfied in the period, resulting in a contract asset balance of $25,057,000 as of March 31, 2018. This increase in revenue resulted in increases of $25,057,000 in net income and $0.96 in basic net income per share for the three months ended March 31, 2018.
As of January 1, 2018, the Company’s deferred revenue balance was $8,781,000, which represents the contract liability for the unsatisfied performance obligations as well as the variable consideration paid in advance that is being recognized ratably through December 2021. The Company began recognizing revenue related to the up-front payment and milestones included in the transaction price upon execution of the agreement and, accordingly, recognized approximately $541,000 as collaboration revenue during the three months ended March 31, 2018, resulting in a remaining deferred revenue balance of $8,240,000 as of March 31, 2018.
4. Term Loan
On March 31, 2017, the Company entered into a loan and security agreement (Loan Agreement) with Oxford Finance LLC and Silicon Valley Bank (collectively, the Lenders), under which the Lenders agreed to lend the Company up to $35,000,000, issuable in two separate term loans of $20,000,000 (Term A Loan) and $15,000,000 (Term B Loan). On March 31, 2017, the Company borrowed $20,000,000 from the Term A Loan.