Valeant Pharmaceuticals International 8-K Valeant Pharmaceuticals Reports Second Quarter Financial Results

Exhibit 99.1

Contact:
Laurie W. Little
Valeant Pharmaceuticals
949-461-6002
laurie.little@valeant.com

VALEANT PHARMACEUTICALS REPORTS
SECOND QUARTER FINANCIAL RESULTS

• Revenue up 25%, 44% at constant exchange rates

• Cash EPS $0.51, GAAP EPS $0.39

• Adjusted Cash Flow from Operations $55 million, GAAP Cash Flow $44 million

• Increased guidance for 2009 is Cash EPS $1.90 — $2.10

     ALISO VIEJO, Calif., August 4, 2009 — Valeant Pharmaceuticals International (NYSE: VRX) today announced second quarter financial results for 2009.

     “The second quarter once again demonstrated the strength of our diversified business model,” stated J. Michael Pearson, chairman and chief executive officer. “We delivered sales and earnings growth at the high end of our expectations, with all businesses and regions reporting solid results. The performance of our Branded Generic business units was particularly strong and reinforces our confidence in our growth strategies for the regions in which they operate.”

Revenues:

     Total revenue was $191.7 million in the second quarter of 2009 as compared to $153.6 million in the second quarter of 2008, an increase of 25%. As part of the company’s 2008 restructuring efforts, the company brought down its wholesaler inventory levels. The impact of this change was a planned reduction in shipments to wholesaler customers in the United States, Canada and Mexico of approximately $20 million in the second quarter of 2008. Our second quarter growth in product sales at constant currency, net of acquisitions and divestitures and inventory drawdown was 15%.

     Specialty Pharmaceutical product sales were $96.6 million in the second quarter of 2009, as compared to $64.4 million in the second quarter of 2008, an increase of 50%. Excluding the impact of acquisitions, divestitures, wholesaler inventory drawdown and currency, Specialty Pharmaceutical product sales increased 13%. Service revenue generated by the company’s Dow Pharmaceutical Sciences subsidiary (Dow) was $5.6 million in the second quarter of 2009.

Because the company acquired Dow in December 2008, no service revenue was recorded in the second quarter of 2008.

     Product sales in Branded Generics — Latin America were $36.2 million in the second quarter of 2009 as compared to $35.8 million in the same period in 2008, an increase of 1%. At constant exchange rates, product sales in Latin America in the second quarter of 2009 increased 27% as compared to the second quarter of 2008. Excluding the impact of acquisitions, divestitures, wholesaler inventory drawdown and currency, Branded Generics — Latin America product sales increased 17%.

     Product sales in Branded Generics — Europe were $34.0 million in the second quarter of 2009 as compared to $38.5 million in the same period in 2008, a decrease of 12%. At constant exchange rates, product sales in the second quarter of 2009 increased 27% as compared to the second quarter of 2008. Excluding the impact of acquisitions, divestitures, wholesaler inventory drawdown and currency, Branded Generics — Europe product sales increased 19%.

     Total alliance revenue, including $2.8 million of revenue from the GlaxoSmithKline (GSK) collaboration, increased 30% to $19.2 million in the second quarter of 2009 as compared to $14.8 million in the second quarter of 2008.

Operating Expenses/Earnings:

     The company’s cost of goods sold was 26% of product sales for the second quarter of 2009 as compared to 35% in the second quarter of 2008. The company’s cost of goods in the second quarter of 2008 was negatively impacted by increased inventory obsolescence charges and exchange rates.

     Selling, General and Administrative expenses decreased 12% in the second quarter of 2009 to $62.5 million as compared to $70.8 million in the second quarter of 2008, primarily attributable to the benefit of cost reduction activities and exchange rates, partially offset by increased costs attributable to acquisitions completed in the last twelve months.

     Research and development costs decreased 59% to $9.1 million in the second quarter of 2009 as compared to $22.6 million in the same period in 2008 primarily as a result of the company’s new leveraged R&D model.

     Income from continuing operations was $33.0 million for the second quarter of 2009, or $0.39 per diluted share, as compared to a loss from continuing operations of $52.0 million, or a loss of $0.58 per diluted share, for the second quarter of 2008. On a non-GAAP Cash EPS basis, adjusted income from continuing operations was $42.9 million, or $0.51 per diluted share, in the second quarter of 2009 as compared to adjusted income from continuing operations of $4.9 million, or $0.05 per diluted share, in the second quarter of 2008.

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     Adjusted cash flow from operations for the second quarter of 2009 was $55 million. GAAP cash flow from operations for the second quarter of 2009 was $44 million, which includes the impact of FSP APB 14-1 and acquisition transaction costs related to EMO-FARM Ltd.

Debt:

     During the second quarter of 2009, the company issued $365 million principal amount of 8.375% senior notes due 2016.

Retigabine Update:

     The company, along with its collaboration partner GSK, is still targeting a third quarter 2009 New Drug Application (NDA) submission for retigabine and is committed to completing this event in 2009. The Marketing Authorization Application (MAA) submission is targeted for one month later.

2009 Guidance:

     The company has provided an update to its previous Cash EPS target and is now targeting Cash EPS between $1.90 and $2.10 in 2009, up from prior guidance of $1.70 to $1.90. This calculation of Cash EPS will exclude certain items, such as acquisition transaction fees included within SG&A, special charges and credits including acquired IPR&D, restructuring, asset impairments and dispositions, amortization expense, gain on early extinguishment of debt, the new non-cash accounting charge for interest on the company’s convertible debt related to FSP APB 14-1, which the company adopted on January 1, 2009, and the tax effect of such charges.

Conference Call and Webcast Information:

     Valeant will host a conference call and a live Internet webcast along with a slide presentation today at 10:00 a.m. EDT (7:00 a.m. PDT) to discuss its second quarter financial results for 2009. The dial-in number to participate on this call is (877) 295-5743, confirmation code 20797641. International callers should dial (973) 200-3961, confirmation code 20797641. A replay will be available approximately two hours following the conclusion of the conference call through August 18, 2009 and can be accessed by dialing (800) 642-1687, or (706) 645-9291, confirmation code 20797641. The company will webcast the conference call live over the Internet. The webcast may be accessed through the investor relations section of Valeant’s corporate Web site at www.valeant.com.

About Valeant:

     Valeant Pharmaceuticals International (NYSE:VRX) is a multinational specialty pharmaceutical company that develops and markets a broad range of pharmaceutical products

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primarily in the areas of neurology and dermatology. More information about Valeant can be found at www.valeant.com.

Forward-looking Statements:

     This press release may contain forward-looking statements, including, but not limited to, statements regarding guidance with respect to expected non-GAAP cash earnings per share, the growth and future development of the company, and the expected timing of the retigabine NDA submission. Forward-looking statements may be identified by the use of the words “anticipates,” “expects,” “intends,” “plans,” “should,” “could,” “would,” “may,” “will,” “believes,” “estimates,” “potential,” or “continue” and variations or similar expressions. These statements are based upon the current expectations and beliefs of management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties discussed in the company’s most recent annual or quarterly report filed with the Securities and Exchange Commission, which factors are incorporated herein by reference. Readers are cautioned not to place undue reliance on any of these forward-looking statements. Valeant undertakes no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect actual outcomes.

Non-GAAP Information:

     To supplement the consolidated financial results prepared in accordance with generally accepted accounting principles (GAAP), the company uses non-GAAP financial measures that exclude certain items, such as acquisition transaction fees included within SG&A, special charges and credits including acquired IPR&D, restructuring, asset impairments and dispositions, amortization expense, gain on early extinguishment of debt, the new non-cash accounting charge for interest on the convertible debt related to FSP APB 14-1, which the company adopted on January 1, 2009, and the non-GAAP tax effect of such charges. Management does not consider the excluded items part of day-to-day business or reflective of the core operational activities of the company as they result from transactions outside the ordinary course of business. Management uses non-GAAP financial measures internally for strategic decision making, forecasting future results and evaluating current performance. By disclosing non-GAAP financial measures, management intends to provide investors with a more meaningful, consistent comparison of the company’s core operating results and trends for the periods presented. Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. A reconciliation of GAAP to non-GAAP measures can be found in the table below. The company has provided guidance with respect to Cash Earnings Per Share, which is a non-GAAP financial measure that represents earnings per share, excluding certain items, such as acquisition transaction fees included within SG&A, special charges and credits including acquired IPR&D,

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     restructuring, asset impairments and dispositions, amortization expense, gain on early extinguishment of debt, the new non-cash accounting charge for interest on the company’s convertible debt related to FSP APB 14-1 and the tax effect of such charges. The company has not provided a reconciliation of these forward-looking non-GAAP financial measures due to the difficulty in forecasting and quantifying the exact amount of the items excluded from the non-GAAP financial measures that will be included in the comparable GAAP financial measures.

     Financial Tables, including a reconciliation of GAAP to non-GAAP financial measures, follow.

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Valeant Pharmaceuticals International	Table 1
Statement of Income
For the Three and Six Months Ended June 30, 2009 and 2008

	��
		Three Months Ended									Six Months Ended
		June 30,									June 30,
(In thousands, except per share data)		2009			2008			% Change			2009			2008			% Change
Product sales		$	166,865		$	138,751			20	%	$	319,698		$	277,961			15	%
Service revenue			5,606			—		NM				12,344			—		NM
Alliance revenue (a)			19,227			14,805			30	%		37,579			27,578			36	%
Total revenues			191,698			153,556			25	%		369,621			305,539			21	%
Cost of goods sold			42,750			47,874			-11	%		82,447			83,629			-1	%
Cost of services			5,337			—		NM				9,663			—		NM
Selling, general and administrative (“SG&A”)			62,535			70,772			-12	%		126,751			140,211			-10	%
Research and development costs, net			9,145			22,567			-59	%		17,880			51,861			-66	%
Special charges and credits including acquired in-process research and development (b)			1,974			—		NM				1,974			—		NM
Restructuring, asset impairments and dispositions			1,694			13,957		NM				2,905			767		NM
Amortization expense			17,105			12,799			34	%		34,109			26,128			31	%
			140,540			167,969			-16	%		275,729			302,596			-9	%
Income (loss) from operations			51,158			(14,413	)					93,892			2,943
Interest expense, net			(7,826	)		(8,089	)					(14,004	)		(16,749	)
Gain on early extinguishment of debt			2,777			—						7,376			—
Other income (expense), net including translation and exchange			(647	)		(300	)					564			(1,833	)
Income (loss) from continuing operations before income taxes			45,462			(22,802	)					87,828			(15,639	)
Provision for income taxes			12,427			29,215						23,996			33,874
Income (loss) from continuing operations			33,035			(52,017	)					63,832			(49,513	)
Income (loss) from discontinued operations, net			(175	)		(26,313	)					223			(23,020	)
Net income (loss)		$	32,860		$	(78,330	)				$	64,055		$	(72,533	)
Earnings per share:
Basic:
Income (loss) from continuing operations		$	0.40		$	(0.58	)				$	0.77		$	(0.55	)
Discontinued operations			—			(0.29	)					—			(0.26	)
Basic earnings (loss) per share		$	0.40		$	(0.87	)				$	0.77		$	(0.81	)
Shares used in per share computation			82,794			89,802						82,733			89,696
Diluted:
Income (loss) from continuing operations		$	0.39		$	(0.58	)				$	0.76		$	(0.55	)
Discontinued operations			—			(0.29	)					0.01			(0.26	)
Diluted earnings (loss) per share		$	0.39		$	(0.87	)				$	0.77		$	(0.81	)
Shares used in per share computation			83,673			89,802						83,566			89,696

(a)

Alliance revenue for the three and six months ended June 30, 2009 relates to ribavirin royalty of $12.6 million and $25.8 million, alliance revenue from the GSK collaboration of $2.8 million and $6.1 million and dermatology royalties of $3.8 million and $5.7 million, respectively. Alliance revenue for the three and six months ended June 30, 2008 includes ribavirin royalties of $14.8 million and $27.5 million, respectively and in the six months ended June 30, 2008 a $0.1 million payment from an unrelated third party for a license to certain intellectual property assets.

(b)

Special charges and credits including acquired in-process research and development for the three and six months ended June 30, 2009 relates primarily to the acquisition of product rights to market Opana in Canada, Australia and New Zealand.

Valeant Pharmaceuticals International	Table 2
Reconciliation of GAAP EPS to Cash EPS
For the Three and Six Months Ended June 30, 2009 and 2008

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands, except per share data)	2009			2008			2009			2008
Income (loss) from continuing operations	$	33,035		$	(52,017	)	$	63,832		$	(49,513	)
Non-GAAP adjustments(a):
Acquisition transaction fees		909			—			909			—
Special charges and credits including acquired in-process research and development		1,974			—			1,974			—
Restructuring, asset impairments and dispositions		1,694			13,957			2,905			767
Amortization expense		17,105			12,799			34,109			26,128
		21,682			26,756			39,897			26,895
FSP APB 14-1 interest		2,695			3,725			6,174			7,379
Gain on early extinguishment of debt		(2,777	)		—			(7,376	)		—
Tax		(11,715	)		26,420			(21,552	)		27,091
Total adjustments		9,885			56,901			17,143			61,365
Adjusted income from continuing operations	$	42,920		$	4,884		$	80,975		$	11,852
GAAP earnings (loss) per share — diluted	$	0.39		$	(0.58	)	$	0.76		$	(0.55	)
Cash earnings per share — diluted	$	0.51		$	0.05		$	0.97		$	0.13
Shares used in diluted per share calculation — GAAP earnings (loss) per share		83,673			89,802			83,566			89,696
Shares used in adjusted diluted per share calculation — Cash earnings per share		83,673			90,876			83,566			90,561

(a) To supplement the financial measures prepared in accordance with generally accepted accounting principles (GAAP), the company uses non-GAAP financial measures that exclude certain items, such as acquisition transaction fees included within SG&A, special charges and credits including acquired in-process research and development, restructuring, asset impairments and dispositions, amortization expense, FSP APB 14-1 interest, gain on early extinguishment of debt and the non-GAAP tax effect of such charges. Management uses non-GAAP financial measures internally for strategic decision making, forecasting future results and evaluating current performance. By disclosing non-GAAP financial measures, management intends to provide investors with a more meaningful, consistent comparison of the company’s core operating results and trends for the periods presented. Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.

This table includes Cash Earnings Per Share, which is a non-GAAP financial measure that represents earnings per share, excluding acquisition transaction fees included within SG&A, special charges and credits including acquired in-process research and development, restructuring, asset impairments and dispositions, amortization expense, FSP APB 14-1 interest, gain on early extinguishment of debt and the non-GAAP tax effect of such charges.

Valeant Pharmaceuticals International	Table 3
Statement of Revenue — by Segment
For the Three and Six Months Ended June 30, 2009 and 2008
(In thousands)

	Three Months Ended							Six Months Ended
	June 30,							June 30,
	2009		2008		% Change			2009		2008		% Change
Revenue
Specialty pharmaceuticals
U.S.
Dermatology (a)	$	29,486	$	15,360		92	%	$	60,454	$	42,993		41	%
Neurology & Other		41,841		25,436		64	%		77,852		56,366		38	%
Total U.S. (a)		71,327		40,796		75	%		138,306		99,359		39	%
Canada		15,831		13,911		14	%		30,319		27,624		10	%
Australia (a)		9,475		7,426		28	%		14,321		11,660		23	%
		96,633		62,133		56	%		182,946		138,643		32	%
Divested business		—		2,280	NM				—		5,784	NM
Specialty pharmaceuticals product sales		96,633		64,413		50	%		182,946		144,427		27	%
Services and alliance revenue		12,196		—	NM				24,101		—	NM
Total specialty pharmaceuticals revenue		108,829		64,413		69	%		207,047		144,427		43	%
Branded generics — Latin America product sales		36,200		35,838		1	%		67,382		57,081		18	%
Branded generics — Europe product sales(a)		34,032		38,500		-12	%		69,370		76,453		-9	%
Alliances (ribavirin royalties)		12,637		14,805		-15	%		25,822		27,578		-6	%
Total revenue	$	191,698	$	153,556		25	%	$	369,621	$	305,539		21	%
Total product sales included above	$	166,865	$	138,751		20	%	$	319,698	$	277,961		15	%

Currency impact and revenue excluding currency impact(b)(c)

	Three Months Ended									Six Months Ended
	June 30,									June 30,
			2009									2009
	2009		excluding							2009		excluding
	currency		currency				%			currency		currency				%
	impact		impact		2008		Change			impact		impact		2008		Change
Specialty pharmaceuticals
U.S.	$	—	$	71,327	$	40,796		75	%	$	—	$	138,306	$	99,359		39	%
Canada		2,456		18,287		13,911		31	%		5,868		36,187		27,624		31	%
Australia		2,283		11,758		7,426		58	%		4,049		18,370		11,660		58	%
		4,739		101,372		62,133		63	%		9,917		192,863		138,643		39	%
Divested business		—		—		2,280	NM				—		—		5,784	NM
Specialty pharmaceuticals product sales		4,739		101,372		64,413					9,917		192,863		144,427
Services and alliance revenue		271		12,467		—	NM				537		24,638		—	NM
Total specialty pharmaceuticals revenue		5,010		113,839		64,413		77	%		10,454		217,501		144,427		51	%
Branded generics — Latin America product sales		9,338		45,538		35,838		27	%		19,406		86,788		57,081		52	%
Branded generics — Europe product sales		15,046		49,078		38,500		27	%		28,961		98,331		76,453		29	%
Alliances (ribavirin royalties)		—		12,637		14,805		-15	%		—		25,822		27,578		-6	%
Total revenue	$	29,394	$	221,092	$	153,556		44	%	$	58,821	$	428,442	$	305,539		40	%
Total product sales included above	$	29,123	$	195,988	$	138,751		41	%	$	58,284	$	377,982	$	277,961		36	%

(a)	Product sales in the U.S., Australia and Branded generics — Europe in the three months ended June 30, 2009 include the sales of products acquired in the fourth quarter of 2008 from Coria in the U.S. and DermaTech in Australia, and products acquired in the second quarter 2009 from Emo-Farm in Branded generics — Europe of $9.3 million, $2.2 million and $2.3 million, and $19.2 million, $3.7 million and $2.3 million in the six months ended June 30, 2009, respectively.
(b)	Note: Currency effect for constant currency sales is determined by comparing 2009 reported amounts adjusted to exclude currency impact, calculated using 2008 monthly average exchange rates, to the actual 2008 reported amounts. Constant currency sales is not a GAAP-defined measure of revenue growth. Constant currency sales as defined and presented by us may not be comparable to similar measures reported by other companies.
(c)	See footnote (a) to Table 2.

Valeant Pharmaceuticals International	Table 4
Statement of Cost of Goods Sold and Non-GAAP Operating Income — by Segment
For the Three and Six Months Ended June 30, 2009 and 2008
(In thousands)

	Three Months Ended												Six Months Ended
	June 30,												June 30,
				% of						% of					% of						% of
				product						product					product						product
	2009			sales			2008			sales			2009		sales			2008			sales
Cost of goods sold
Specialty pharmaceuticals	$	18,181			19	%	$	16,168			25	%	$	33,544		18	%	$	29,667			21	%
Branded generics — Latin America		9,598			27	%		14,517			41	%		17,496		26	%		23,545			41	%
Branded generics — Europe		14,984			44	%		18,136			47	%		31,401		45	%		31,298			41	%
Corporate		(13	)					(947	)					6					(881	)
	$	42,750			26	%	$	47,874			35	%	$	82,447		26	%	$	83,629			30	%

Non-GAAP operating income excluding currency impact(a)(b)

	Three Months Ended
	June 30,
								2009
						2009		excluding
			% of			currency		currency		% of						% of
	2009		revenue			impact		impact		revenue			2008			revenue
Specialty pharmaceuticals	$	49,843		46	%	$	1,716	$	51,559		45	%	$	(3,888	)		-6	%
Branded generics — Latin America		14,627		40	%		3,860		18,487		41	%		6,265			17	%
Branded generics — Europe		8,196		24	%		3,198		11,394		23	%		6,755			18	%
		72,666		41	%		8,774		81,440		39	%		9,132			7	%
Alliances & Corporate		174					—		174					3,211
	$	72,840		38	%	$	8,774	$	81,614		37	%	$	12,343			8	%

	Six Months Ended
	June 30,
									2009
							2009		excluding
				% of			currency		currency			% of					% of
	2009			revenue			impact		impact			revenue			2008		revenue
Specialty pharmaceuticals	$	94,084			45	%	$	3,936	$	98,020			45	%	$	4,539		3	%
Branded generics — Latin America		27,614			41	%		8,266		35,880			41	%		4,876		9	%
Branded generics — Europe		17,294			25	%		6,521		23,815			24	%		19,774		26	%
		138,992			40	%		18,723		157,715			39	%		29,189		11	%
Alliances & Corporate		(5,203	)					—		(5,203	)					649
	$	133,789			36	%	$	18,723	$	152,512			36	%	$	29,838		10	%

(a)

See footnote (a) to Table 2 and footnote (b) to Table 3.

(b)

Non-GAAP operating income of $72.8 million and $133.8 million for the three and six months ended June 30, 2009 excludes the following GAAP items from GAAP operating income of $51.2 million and $93.9 million: acquisition transaction fees included within SG&A of $0.9 million and $0.9 million, special charges and credits including acquired in-process research and development of $2.0 million and $2.0 million, restructuring, asset impairments and dispositions of $1.7 million and $2.9 million and amortization expense of $17.0 million and $34.1 million, respectively. Non-GAAP operating income of $12.3 million and $29.8 million for the three and six months ended June 30, 2008 excludes the following GAAP items from GAAP operating income (loss) of ($14.4) million and $2.9 million: restructuring, asset impairments and dispositions of $13.9 million and $0.8 million and amortization expense of $12.8 million and $26.1 million, respectively.

Valeant Pharmaceuticals International	Table 5
Consolidated Balance Sheet and Other Data
(In thousands)

	As of		As of
	June 30,		December 31,
	2009		2008
Cash
Cash and cash equivalents	$	345,620	$	199,582
Marketable securities		107,359		19,193
Total cash and marketable securities	$	452,979	$	218,775

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
Other Data
Cash flow provided by (used in):
Operating activities, continuing operations (GAAP)	$	44,461		$	5,631		$	82,283		$	56,057
Effect of FSP APB 14-1 (a)(b)		9,710			—			22,987			—
Acquisition transaction fees (a)(b)		866			—			866			—
Operating activities, continuing operations (Non-GAAP) (a)(b)		55,037			5,631			106,136			56,057
Operating activities, discontinued operations		(285	)		3,103			(2,434	)		(4,354	)
Investing activities (GAAP) (c)		(151,028	)		(48,788	)		(187,594	)		87,717
Acquisition transaction fees (a)(b)		(866	)		—			(866	)		—
Investing activities (Non-GAAP) (a)(b)(c)		(151,894	)		(48,788	)		(188,460	)		87,717
Financing activities (GAAP) (c)		305,512			902			261,775			554
Effect of FSP APB 14-1 (a)(b)		(9,710	)		—			(22,987	)		—
Financing activities (Non-GAAP) (a)(b)(c)		295,802			902			238,788			554
Effect of exchange rate changes on cash and cash equivalents (c)		7,051			7,355			(7,992	)		16,961
Net increase (decrease) in cash and cash equivalents (c)		205,711			(31,797	)		146,038			156,935
Net increase in marketable securities (c)		101,429			62,522			88,166			31,562
Net increase in cash and marketable securities (c)	$	307,140		$	30,725		$	234,204		$	188,497

(a)	See footnote (a) to Table 2.
(b)	Cash flow for the three and six months ended June 30, 2009 includes $9.7 million and $23.0 million, respectively relating to payments of accreted interest on long-term debt and notes payable made during these periods as determined by and pursuant to FSP APB 14-1, as well as $0.9 million in both the three and six months ended June 30, 2009 for acquisition transaction fees related to the purchase of Emo-Farm.
(c)	Includes results from discontinued operations.

	Three months ended
	June 30, 2009
GSK Collaboration — Retagibine
Valeant SG&A	$	56
Valeant R&D		5,477
		5,533
GSK incurred cost		7,976
	$	13,509
Equalization (difference between individual partner costs and 50% of total)	$	(1,222	)

	Three months ended June 30, 2009
				Alliance
	Balance sheet			revenue			SG&A			R&D
Accounting impact
Upfront payment from GSK	$	125,000		$	—		$	—		$	—
Release from upfront payment in prior quarters		(20,926	)		—			—			—
Incurred cost in current quarter		—			—			56			5,477
Release from upfront payment in current quarter		(9,555	)		(2,800	)		(295	)		(6,460	)
Remaining upfront payment from GSK	$	94,519			—			—			—
Equalization payable to GSK	$	(1,222	)		—			239			983
				$	(2,800	)	$	—		$	—

Valeant Pharmaceuticals International	Supplemental Table
Reconciliation of Product Sales Excluding Acquisitions, Divestitures, Estimated Wholesaler Inventory Reductions and Currency Impact
For the Three Months Ended June 30, 2009 and 2008
(In thousands)

	Three Months Ended									Three Months Ended
	June 30, 2009									June 30, 2008
																	2008		Q2 2009 growth at
								2009							2008		excluding		constant currency, net
			2009					excluding							estimated		divestiture		of acquisitions, 2008
			acquisition			2009		currency &							wholesaler		&		divestitures, &
	2009		impact at			currency		acquisition		2008		2008			inventory		wholesaler		estimated wholesaler
	as reported		2009 rates			impact		impact		as reported		divestitures			reductions		impact		inventory reductions
Specialty pharmaceuticals
U.S.		71,327	$	(9,266	)	$	—	$	62,061	$	40,796	$	—		$	15,000	$	55,796
Canada		15,831		—			2,456		18,287		13,911		—			2,000		15,911
Australia		9,475		(2,253	)		1,746		8,968		7,426		—			—		7,426
		96,633		(11,519	)		4,202		89,316		62,133		—			17,000		79,133		13	%
Divested business		—		—			—		—		2,280		(2,280	)		—		-
Specialty pharmaceuticals product sales		96,633		(11,519	)		4,202		89,316		64,413		(2,280	)		17,000		79,133
Branded generics — Latin America product sales		36,200		—			9,338		45,538		35,838		—			3,000		38,838		17	%
Branded generics — Europe product sales		34,032		(2,297	)		13,947		45,682		38,500		—			—		38,500		19	%
Total product sales	$	166,865	$	(13,816	)	$	27,487	$	180,536	$	138,751	$	(2,280	)	$	20,000	$	156,471		15	%

See footnote (a) to Table 2.