Contingent value right, monthly reduction (in cents per share)

  
The following table summarizes revenue by geographical area:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Three Months Ended June 30, |  | Six Months Ended June 30, |
|  | 2022 |  | 2021 |  | 2022 |  | 2021 |
| Revenue—to unaffiliated customers(1): |  |  |  |  |  |  |  |
| U.S. | $ | 3,934.8  |  |  | $ | 3,704.2  |  |  | $ | 9,109.4  |  |  | $ | 7,645.5  |  |
| Europe | 1,101.1  |  |  | 1,209.8  |  |  | 2,168.4  |  |  | 2,531.0  |  |
| Japan | 454.4  |  |  | 665.4  |  |  | 864.6  |  |  | 1,237.2  |  |
| China | 352.1  |  |  | 522.5  |  |  | 758.5  |  |  | 884.7  |  |
| Other foreign countries | 645.7  |  |  | 638.1  |  |  | 1,397.2  |  |  | 1,247.3  |  |
| Revenue | $ | 6,488.0  |  |  | $ | 6,740.1  |  |  | $ | 14,298.0  |  |  | $ | 13,545.7  |  |

Numbers may not add due to rounding.(1) Revenue is attributed to the countries based on the location of the customer.  
Note 3: AcquisitionsWe engage in various forms of business development activities to enhance our product pipeline, including acquisitions, collaborations, investments, and licensing arrangements. In connection with these arrangements, our partners may be entitled to future royalties and/or commercial milestones based on sales should products be approved for commercialization and/or milestones based on the successful progress of compounds through the development process.In January 2021, we completed the acquisition of Prevail Therapeutics Inc. (Prevail). This transaction, as further discussed below in Acquisition of a Business, was accounted for as a business combination under the acquisition method of accounting. Under this method, the assets acquired and liabilities assumed were recorded at their respective fair values as of the acquisition date in our consolidated condensed financial statements. The determination of estimated fair value required management to make significant estimates and assumptions. The excess of the purchase price over the fair value of the acquired net assets, where applicable, has been recorded as goodwill. The results of operations of this acquisition is included in our consolidated condensed financial statements from the date of acquisition.We also acquired assets in development which are further discussed below in Asset Acquisitions. Upon each acquisition, the cost allocated to acquired IPR&D is immediately expensed if the compound has no alternative future use. Milestone payment obligations incurred prior to regulatory approval of the compound are expensed when the event triggering an obligation to pay the milestone occurs. We recognized acquired IPR&D and development milestone charges of $440.4 million and $606.0 million for the three and six months ended June 30, 2022, respectively, and $42.8 million and $354.8 million for the three and six months ended June 30, 2021, respectively. Acquisition of a BusinessPrevail AcquisitionOverview of TransactionIn January 2021, we acquired all shares of Prevail for a purchase price that included $22.50 per share in cash (or an aggregate of $747.4 million, net of cash acquired) plus one non-tradable contingent value right (CVR) per share. The CVR entitles Prevail stockholders up to an additional $4.00 per share in cash (or an aggregate of approximately $160 million) payable, subject to certain terms and conditions, upon the first regulatory approval of a Prevail product in one of the following countries: U.S., Japan, United Kingdom, Germany, France, Italy or Spain. To achieve the full value of the CVR, such regulatory approval must occur by December 31, 2024. If such regulatory approval occurs after December 31, 2024, the value of the CVR will be reduced by approximately 8.3 cents per month until December 1, 2028, at which point the CVR will expire without payment.Under the terms of the agreement, we acquired potentially disease-modifying AAV9-based gene therapies for patients with neurodegenerative diseases. The acquisition established a new modality for drug discovery and development, extending our research efforts through the creation of a gene therapy program that is being anchored by Prevail's portfolio of assets. The lead gene therapies in clinical development that we acquired were PR001 for patients with Parkinson's disease with GBA1 mutations and neuronopathic Gaucher disease and PR006 for patients with frontotemporal dementia with GRN mutations. Both PR001 and PR006 were granted Fast Track designation from the U.S. Food and Drug Administration (FDA). 15
