Valeant Pharmaceuticals International 8-K/A Completion of Acquisition or Disposition of Assets

Exhibit 99.3

Unaudited Pro Forma Condensed Consolidated Financial Statements of Valeant Pharmaceuticals International

On May 26, 2010, Valeant Pharmaceuticals International (the “Company”) completed the acquisition of Princeton Pharma Holdings LLC, and its wholly owned operating subsidiary, Aton Pharma, Inc. (collectively, “Aton”) for cash consideration of $317.5 million, net of cash acquired, subject to certain closing adjustments. Additionally, we agreed to pay future milestone payments of up to $390.0 million, with an aggregate fair value at acquisition of $19.7 million, predominately based upon the achievement of approval and commercial targets for certain pipeline products in development.

The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2009 and for the three months ended March 31, 2010 included in this report have been prepared as if the acquisition occurred on January 1, 2009. The historical consolidated statements of operations have been adjusted in the unaudited pro forma condensed consolidated financial statements to only give effect to pro forma events that are (1) directly attributable to the acquisition; (2) factually supportable; and (3) expected to have a continuing impact on the combined results. The unaudited pro forma condensed consolidated financial information should be read in conjunction with the accompanying notes to the unaudited pro forma condensed consolidated financial statements. In addition, the unaudited pro forma condensed consolidated financial information was based on and should be read in conjunction with the:

• Company’s historical financial statements and related notes thereto contained in its Annual Report on Form 10-K for the year ended December 31, 2009;

• Company’s historical financial statements and related notes thereto contained in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2010;

• Separate historical financial statements of Aton as of and for the year ended December 31, 2009 and the related notes included within this Form 8-K/A; and

• Separate historical financial statements of Aton as of and for the three months ended March 31, 2010 and the related notes included within this Form 8-K/A.

The unaudited condensed consolidated balance sheet contained in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 reflects the acquisition of Aton and thus, is not included in this report.

The unaudited pro forma condensed consolidated financial information has been presented for illustrative purposes only and is not necessarily indicative of what the combined company’s results of operations actually would have been had the acquisition been completed as of the dates indicated. Additionally, the unaudited pro forma condensed consolidated financial information does not purport to project the future operating results of the combined company.

The unaudited pro forma condensed consolidated financial information has been prepared using the acquisition method of accounting under existing U.S. generally accepted accounting principles, which are subject to change and interpretation. The unaudited pro forma condensed consolidated financial information does not reflect any operating synergies or other operational improvements, if any, that the combined company may achieve as a result of the acquisition, the costs to integrate the operations of the Company and Aton or the costs necessary to achieve potential operating synergies and revenue enhancements.

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Valeant Pharmaceuticals International
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2009
(In thousands, except per share amounts)

	Year Ended December 31, 2009
							Pro Forma
	As Reported			Aton			Adjustments			Pro Forma
Revenues:
Product sales	$	710,761		$	59,452		$	—		$	770,213
Service revenue		22,389			—			—			22,389
Alliance revenue		97,311			—			—			97,311
Total revenues		830,461			59,452			—			889,913
Costs and expenses:
Cost of goods sold (excluding amortization)		192,974			11,239			(1,349	)(a)		202,864
Cost of services		17,836			—			—			17,836
Selling, general and administrative		255,782			26,561			—			282,343
Research and development costs, net		43,977			2,024			—			46,001
Special charges and credits		6,351			—			—			6,351
Restructuring and acquisition-related costs		10,068			—			—			10,068
Amortization expense		70,640			2,505			21,725	(b)		94,870
Total costs and expenses		597,628			42,329			20,376			660,333
Income from operations		232,833			17,123			(20,376	)		229,580
Other expense, net including translation and exchange		(1,455	)		—			—			(1,455	)
Gain on early extinguishment of debt		7,221			—			—			7,221
Interest income		4,321			43			(4,364	)(c)		—
Interest expense		(43,571	)		(4,114	)		(4,937	)(d)		(52,622	)
Income from continuing operations before income taxes		199,349			13,052			(29,677	)		182,724
Provision (benefit) for income taxes		(58,270	)		4,488			(11,277	)(e)		(65,059	)
Income from continuing operations		257,619			8,564			(18,400	)		247,783
Less: income from continuing operations attributable to noncontrolling interest		3			—			—			3
Income from continuing operations attributable to controlling interest	$	257,616		$	8,564		$	(18,400	)	$	247,780
Income per share from continuing operations attributable controlling interest:
Basic	$	3.15								$	3.03
Diluted	$	3.07								$	2.95
Shares used in per share computations:
Basic		81,781									81,781
Diluted		83,970									83,970

See notes to unaudited pro forma condensed consolidated financial statements.

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Valeant Pharmaceuticals International
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Three Months Ended March 31, 2010
(In thousands, except per share amounts)

	Three Months Ended March 31, 2010
							Pro Forma
	As Reported			Aton			Adjustments			Pro Forma
Revenues:
Product sales	$	204,507		$	16,143		$	—		$	220,650
Service revenue		4,960			—			—			4,960
Alliance revenue		22,524			—			—			22,524
Total revenues		231,991			16,143			—			248,134
Costs and expenses:
Cost of goods sold (excluding amortization)		54,203			2,264			(337	)(a)		56,130
Cost of services		3,166			—			—			3,166
Selling, general and administrative		70,541			8,836			—			79,377
Research and development costs, net		10,402			935			—			11,337
Special charges and credits		538			—			—			538
Restructuring and acquisition-related costs		1,024			—			—			1,024
Amortization expense		19,330			288			5,769	(b)		25,387
Total costs and expenses		159,204			12,323			5,432			176,959
Income from operations		72,787			3,820			(5,432	)		71,175
Other expense, net including translation and exchange		(524	)		—			—			(524	)
Interest income		459			18			(477	)(c)		—
Interest expense		(13,090	)		(1,163	)		(1,116	)(d)		(15,369	)
Income from continuing operations before income taxes		59,632			2,675			(7,025	)		55,282
Provision for income taxes		24,030			1,196			(2,670	)(e)		22,556
Income from continuing operations		35,602			1,479			(4,355	)		32,726
Less: income from continuing operations attributable to noncontrolling interest		1			—			—			1
Income from continuing operations attributable to controlling interest	$	35,601		$	1,479		$	(4,355	)	$	32,725
Income per share from continuing operations attributable to controlling interest:
Basic	$	0.45								$	0.42
Diluted	$	0.43								$	0.40
Shares used in per share computations:
Basic		78,465									78,465
Diluted		82,332									82,332

See notes to unaudited pro forma condensed consolidated financial statements.

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Valeant Pharmaceuticals International
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
(In thousands)

Note 1 – Basis of Presentation

The unaudited pro forma condensed consolidated statements of operations are based on historical statements of operations of Valeant Pharmaceuticals International (“Valeant” or the “Company”) and Princeton Pharma Holdings LLC, and its wholly owned operating subsidiary, Aton Pharma, Inc. (collectively, “Aton”), after giving effect to the acquisition of Aton as if it occurred on January 1, 2009 for the year ended December 31, 2009 and three months ended March 31, 2010. Certain reclassifications have been made to the historical financial statements of Aton to conform to Valeant’s presentation.

The purchase price for the Aton acquisition consisted of $317.5 million in cash, net of cash acquired, subject to certain closing adjustments, and contingent consideration of up to $390.0 million for future milestones, with an aggregate fair value at acquisition of $19.7 million, predominantly based upon the achievement of approval and commercial targets for certain pipeline products in development. Under accounting rules for business combinations, obligations that are contingently payable to the sellers based upon the occurrence of one or more future events are to be recorded as a discounted liability on the Company’s balance sheet. The fair value of the obligation to pay contingent consideration was based on probability-weighted payments adjusted by a probability of success (“POS”) factor corresponding to the POS factor for the respective pipeline product, then discounted using a 4% discount rate. The range of the undiscounted amounts the Company could be obligated to pay as contingent consideration ranges from $0 to $390.0 million. The Company will periodically reassess the estimated fair value of the contractual obligation to pay the contingent consideration and any changes in estimated fair value will be recorded in the Company’s statement of operations. The estimate of the fair value of contingent consideration requires very subjective assumptions to be made of various potential POS scenarios and discount rates. Future revisions to these assumptions could materially change the estimate of the fair value of contingent consideration and therefore materially affect the Company’s future financial results.

The following table summarizes the estimated fair values of the net assets acquired:

Accounts receivable	$	11,819
Inventories		16,481
Other current assets		9,078
Long-term assets		8,892
Identifiable intangible assets:
Developed technologies		341,300
Trade names		6,900
Acquired in-process research and development		9,700
Goodwill		103,928
Current liabilities		(28,234	)
Long-term liabilities, primarily deferred taxes		(142,632	)
Net assets acquired	$	337,232

Long-term liabilities include a $5.3 million liability for unfavorable international distribution agreements and $13.4 million for deferred purchase price payments payable in 2012 through 2019. The deferred purchase price payments relate to certain products acquired by Aton in 2009 and are contingent on the continued absence of generic competition for one of the products.

The purchase price is subject to certain closing adjustments as defined in the purchase agreement. Purchase price adjustments recorded subsequent to this date will affect the recorded amount of goodwill.

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Valeant Pharmaceuticals International
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements-(Continued)
(In thousands)

Note 2 – Pro Forma Adjustments

(a)	To record the amortization of liability for unfavorable international distribution contracts recorded in connection with the acquisition.
(b)	To record incremental amortization expense for the identified intangible assets for developed technologies and trade names based upon the estimated fair value assigned to these assets at the date of acquisition and useful lives ranging from 5 to 15 years. Amortization expense adjustments are as follows:

	Weighted	Year Ended			Three Months
	average	December 31,			Ended March
	useful life	2009			31, 2010
Amortization of developed technology	13.3 years	$	22,850		$	5,712
Amortization of trade names	5 years		1,380			345
Eliminate Aton’s historical intangible assets amortization			(2,505	)		(288	)
Total adjustments to amortization expense		$	21,725		$	5,769

(c)	To record the reduction in Valeant’s interest income due to use of Valeant cash and marketable securities, net of cash acquired, to fund the acquisition. This also reflects the reversal of Aton’s historical interest income as it is assumed Aton’s cash would be used to fund the acquisition.
(d)	To record the following interest expense adjustments:

	Year Ended			Three Months
	December 31,			Ended March
	2009			31, 2010
Eliminate interest expense recorded by Aton related to debt not assumed by Valeant and accretion of deferred Timoptic acquisition payments	$	(4,114	)	$	(1,163	)
Record interest expense on borrowings to fund the Aton acquisition		7,793			1,948
Record accretion of deferred Timoptic acquisition payments		469			134
Record accretion of contingent consideration		789			197
Total adjustments to interest expense	$	4,937		$	1,116

(e) To record the income tax effect relating to adjustments using the appropriate local statutory tax rates.

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