Valeant Pharmaceuticals Reports 2011 First Quarter Financial Results

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    MISSISSAUGA, Ontario, May 9, 2011 /CNW/ --

    --  2011 First Quarter Total Revenue $565 million, including $36 million
        related to out-license of Cloderm
    --  Pro forma organic growth for the combined company, excluding the
impact
        of foreign exchange and acquisitions, was approximately 7%
        --  Excluding impact from Diastat and Efudex, pro forma organic growth
            for the combined company was approximately 11%
    --  2011 First Quarter GAAP EPS $0.02; Cash EPS $0.62
        --  Excluding impact from Cloderm out-licensing, Cash EPS was $0.56
    --  2011 First Quarter GAAP Cash Flow from Operations was $86 million;
        Adjusted Cash Flow from Operations was $204 million
    --  2011 Guidance increased to $2.65 - $2.90 Cash EPS


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Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) announces first quarter financial results for 2011.

"Our performance in the first quarter is a strong start to what I believe will be another successful year for Valeant," said J. Michael Pearson, chairman and chief executive officer. "Our specialty businesses performed well and our branded generic operations, in particular Central Europe, exceeded our expectations this quarter. This strong performance is a testament to our diversified business model that gives us the ability to pursue acquisition opportunities, while continuing to deliver strong operating results."

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    Revenue
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Total revenue was $565.0 million in the first quarter of 2011 as compared to $219.6 million in the first quarter of 2010. Included in total revenue was $36.0 million of alliance and royalty revenue related to the out-license of product rights for Cloderm, a mid-potency steroid with an annual revenue run rate of approximately $7 million, that was completed on March 31, 2011. Product sales were $500.4 million in the first quarter of 2011, as compared to $212.0 million in the year-ago quarter. These increases are primarily due to the acquisition of Valeant Pharmaceuticals International (Legacy Valeant) by Biovail Corporation (Legacy Biovail), which was completed in September 2010. In connection with the acquisition, Biovail was renamed Valeant Pharmaceuticals International, Inc. Results for the first quarter of 2010 only reflect Legacy Biovail revenues and do not include any revenues from Legacy Valeant.

Pro forma revenue growth for the combined company (combined Legacy Biovail and Legacy Valeant product sales and royalties) was approximately 21% for the first quarter of 2011. Pro forma organic revenue growth, excluding the impact of foreign exchange and acquisitions, for the combined company was approximately 7% for the first quarter of 2011. Excluding the genericization impact from Diastat and Efudex, pro forma organic growth for the combined company was approximately 11%. Wellbutrin and Zovirax, Valeant's largest products, delivered 2% and 38% growth in the first quarter of 2011, respectively.

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    Operating Expenses
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The Company's cost of goods sold was $169.3 million in the first quarter of 2011 and represented 34% of product sales. This number in the first quarter of 2011 included a $29.9 million fair value adjustment to inventory and a $2.0 million amortization expense adjustment related to the acquisition of Legacy Valeant by Legacy Biovail. Excluding the adjustments, cost of goods for the first quarter of 2011 were 27% of product sales.

Selling, General and Administrative expenses were $139.5 million in the first quarter of 2011, which includes a $22.9 million step-up in stock based compensation expenses related to the acquisition of Legacy Valeant. Excluding the step-up in stock based compensation, SG&A was approximately 21% of revenue. Research and Development expenses were $13.7 million in the first quarter of 2011, or approximately 3% of revenue.

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    Net Income and Cash Flow from Operating Activities
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The Company reported net income of $6.5 million for the first quarter of 2011, or $0.02 per diluted share. On an adjusted Cash EPS basis, adjusted income was $205.1 million, or $0.62 per diluted share. Excluding the purchase price adjustment on Cloderm as a result of the merger between Legacy Biovail and Legacy Valeant, adjusted income was $186.3 million, or $0.56 per diluted share.

GAAP cash flow from operating activities was $86.3 million in the first quarter of 2011, and adjusted cash flow from operations was $203.6 million in the first quarter of 2011.

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    Securities Repurchase Program
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Since December 31st, 2010, under Valeant's securities repurchase program, the company repurchased an additional $63.8 million principal amount of the 5.375% senior convertible notes due 2014, for an aggregate purchase price of $181.3 million, bringing the aggregate repurchases to $190 million of the $350 million face value of the 5.375% convertible notes.

As previously announced, Valeant repurchased 7.4 million common shares of the Company's common stock held by ValueAct Capital in March 2011 for approximately $275 million. In addition on May 6, 2011, the Company entered into an agreement to purchase approximately 4.5 million of the Company's common shares from ValueAct for $224.9 million. This purchase is expected to close in mid-May, in advance of the redemption of the 4.0% Convertible Notes, which we expect to settle fully in common shares upon conversion of the notes.

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    2011 Guidance
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The Company is updating its previous Cash EPS guidance and is now targeting Cash EPS of $2.65 to $2.90 in 2011, up from prior guidance of $2.45 to $2.70.

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    Conference Call and Webcast Information
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The Company will host a conference call and a live Internet webcast along with a slide presentation today at 10:00 a.m. ET (7:00 a.m. PT), May 9, 2011 to discuss its first quarter financial results for 2011. The dial-in number to participate on this call is (877) 295-5743, confirmation code 63195016. International callers should dial (973) 200-3961, confirmation code 63195016. A replay will be available approximately two hours following the conclusion of the conference call through May 16, 2011 and can be accessed by dialing (800) 642-1687, or (706) 645-9291, confirmation code 63195016. The live webcast of the conference call may be accessed through the investor relations section of the Company's corporate website at www.valeant.com.

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    About Valeant
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Valeant Pharmaceuticals International, Inc. (NYSE/TSX:VRX) is a multinational specialty pharmaceutical company that develops and markets a broad range of pharmaceutical products primarily in the areas of neurology, dermatology and branded generics. More information about Valeant can be found at www.valeant.com.

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    Forward-looking Statements
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This press release may contain forward-looking statements, including, but not limited to, statements regarding our performance, acquisitions, the closing of the repurchase from ValueAct, the redemption and settlement of our 4% convertible notes, and anticipated Cash EPS for 2011. 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 ("SEC") and risks and uncertainties relating to the proposed merger, as detailed from time to time in Valeant's filings with the SEC and the Canadian Securities Administrators ("CSA"), 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.

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    Note on Guidance
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The guidance contained in this press release is only effective as of the date given, May 9, 2011, and will not be updated or confirmed until the Company publicly announces updated or affirmed guidance.

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    Non-GAAP Information
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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 amortization of inventory step-up, amortization of alliance product assets and PP&E step up, stock-based compensation step-up, restructuring and acquisition-related costs, acquired in-process research and development ("IPR&D"), legal settlements, the impact of currency fluctuations, acquisitions, amortization and other non-cash charges, amortization of deferred financing costs, debt discounts and ASC 470-20 (FSP APB 14-1) interest, loss on extinguishment of debt, and (gain) loss on investments, net, and adjusts tax expense to cash taxes. 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 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.

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

    Financial Tables follow.


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    Valeant Pharmaceuticals International, Inc.        Table 1
    Condensed Consolidated Statement of Income (Loss)
    For the Three Months Ended March 31, 2011 and 2010
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                                                  Three Months
                                                     Ended
                                                   March 31,
                                                   ---------
                                                                         %
    (In thousands, except per share data)        2011          2010   Change
                                                 ----          ----  -------
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    Product sales                            $500,421      $212,033     NM
    Alliance and royalty                       58,414         4,349     NM
    Service and other                           6,191         3,253     NM
                                                -----         -----
        Total revenues                        565,026       219,635     NM
                                              -------       -------
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    Cost of goods sold                        169,287        58,955     NM
    Cost of services                            3,210         3,307     NM
    Cost of alliances                          30,735             -     NM
    Selling, general and administrative
     ("SG&A")                                 139,506        43,513     NM
    Research and development                   13,670        12,577     NM
    Acquired in-process research and
     development                                2,000        51,003     NM
    Legal settlements                             400             -     NM
    Restructuring and acquisition-related
     costs                                     19,046           613     NM
    Amortization of intangible assets         112,043        33,300     NM
                                              -------        ------
                                              489,897       203,268
                                              -------       -------
        Operating income                       75,129        16,367
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    Interest expense, net                     (68,334)       (9,639)
    Loss on extinguishment of debt             (8,262)            -
    Gain (loss) on investments, net             1,769          (155)
    Other income (expense), net including
     translation and exchange                   2,807          (623)
                                                -----          ----
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    Income before (recovery of) provision
     for income taxes                           3,109         5,950
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    (Recovery of) provision for income taxes   (3,373)        9,100
                                               ------         -----
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    Net income (loss)                          $6,482       $(3,150)
                                               ======       =======
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Earnings per share:

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    Basic:
        Net income (loss)                       $0.02        $(0.02)
                                                =====        ======
        Shares used in per share computation  303,749       158,387
                                              =======       =======
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    Diluted:
        Net income (loss)                       $0.02        $(0.02)
                                                =====        ======
        Shares used in per share computation  332,900       158,387
                                              =======       =======





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    Valeant Pharmaceuticals International, Inc.                Table 2
    Reconciliation of GAAP EPS to Adjusted Non-GAAP (Cash) EPS
    For the Three Months Ended March 31, 2011 and 2010
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                                                   Three Months
                                                       Ended
                                                    March 31,
                                                    ---------
    (In thousands, except per share data)          2011          2010  (a)
                                                   ----          ----
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Net income (loss) $6,482 $(3,150)

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    Non-GAAP adjustments (b)(c):
    Inventory step-up (d)                        29,909             -
    Alliance product assets & pp&e step-up (e)   19,065             -
    Stock-based compensation step-up (f)         23,337             -
    Restructuring and acquisition-related
     costs (g)                                   19,046           613
    Acquired in-process research and
     development                                  2,000        51,003
    Legal settlements                               400             -
    Amortization and other non-cash charges     114,527        36,128
                                                -------        ------
                                                208,284        87,744
    Amortization of deferred financing costs,
     debt discounts and ASC 470-20 (FSP APB
     14-1) interest                               3,596         4,113
    Loss on extinguishment of debt                8,262             -
    (Gain) loss on investments, net              (1,769)          155
    Tax                                         (19,773)        4,300
                                                -------         -----
    Total adjustments                           198,600        96,312
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    Adjusted income                            $205,082       $93,162
                                               ========       =======
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    GAAP earnings  per share - diluted            $0.02        $(0.02)
                                                  =====        ======
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    Adjusted Non-GAAP (Cash) earnings per
     share - diluted                              $0.62         $0.59
                                                  =====         =====
    Non-GAAP benefit from the out-license of
     Cloderm (e)                                  $0.06
                                                  =====
    Adjusted Non-GAAP (Cash) earnings per
     share - diluted (excluding the Non-GAAP
     benefit from the out-license of Cloderm)
     (e)                                          $0.56
                                                  =====
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    Shares used in diluted per share
     calculation -GAAP earnings per share       332,900       158,387
                                                =======       =======
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    Shares used in diluted per share
     calculation - Adjusted Non-GAAP (Cash)
     earnings per share                         332,900       159,205
                                                =======       =======
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    (a) Prior year non-GAAP adjustments have been modified to conform to
    the 2011 disclosure.
    (b) 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
    amortization of inventory step-up, amortization of alliance product
    assets & pp&e step up, stock-based compensation step-up,
    restructuring and acquisition-related costs, acquired in-process
    research and development ("IPR&D"), legal settlements outside the
    ordinary course of business, the impact of currency fluctuations,
    acquisitions, amortization and other non-cash charges, amortization
    of deferred financing costs, debt discounts and ASC 470-20 (FSP APB
    14-1) interest, loss on extinguishment of debt, (gain) loss on
    investments, net, and adjusts tax expense to cash taxes. 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 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.
    (c) This table includes Adjusted Non-GAAP (Cash) Earnings Per Share,
    which is a non-GAAP financial measure that represents earnings per
    share, excluding amortization of inventory step-up, amortization of
    alliance product assets & pp&e step up, stock-based compensation
    step-up, restructuring and acquisition-related costs, acquired in-
    process research and development ("IPR&D"), legal settlements
    outside the ordinary course of business, amortization and other non-
    cash charges, amortization of deferred financing costs, debt
    discounts and ASC 470-20 (FSP APB 14-1) interest, loss on
    extinguishment of debt, (gain) loss on investments, net, and adjusts
    tax expense to cash taxes.
    (d) ASC 805, accounting for business combinations requires an
    inventory fair value step-up. The impact of the amortization of
    this step-up is included in cost of goods sold. For the three
    months ended March 31, 2011 the total impact is $29.9 million. A
    total of  $26.4 million for the merger with Valeant Pharmaceutical
    International, and $3.5 million pertaining to the acquisition of
    Pharma Swiss SA on March 10, 2011.
    (e) Alliance product assets & pp&e step-up represents the step up to
    fair market value from Legacy Valeant's original cost resulting from
    the merger of Legacy Valeant into Legacy Biovail. The impact of the
    amortization of this step-up is included in cost of alliance and
    royalty & SG&A. For the three months ended March 31, 2011 the total
    impact is $19.1 million.
    (f) Total stock-based compensation for the three months ended March
    31, 2011 was $ 29.9 million, of which $23.3 million reflects the
    amortization of the fair value step-up increment resulting from the
    merger.
    (g) Restructuring and acquisition-related costs for the three months
    ended March 31, 2011 represent costs related to the merger of Legacy
    Valeant into Legacy Biovail and include $4.9 million related to
    employee severance, $4.1 million related to facility closure costs,
    $3.3 million related to increases in Deferred Stock Unit values
    related to directors retired as a result of the merger with Valeant
    Pharmaceuticals International, $3.3 million related to contract
    cancellation fees, consulting, legal and other costs, $3.1 million
    related to acquisition related costs, and $0.3 million related to
    R&D wind down costs.





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    Valeant Pharmaceuticals International, Inc.        Table 3
    Statement of Revenue - by Segment
    For the Three Months Ended March 31, 2011 and 2010
    (In thousands)
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                                              Three Months Ended
                                                  March 31,
                                                  ---------
    Revenue (a)(b)                       2011           2010        %
                                                                 Change
                                         ----           ----       (c)
                                                                  ------
      U.S. Neurology & Other         $209,599       $148,304          41%
      U.S. Dermatology                152,706         38,974         292%
                                      -------         ------
          Total U.S.                  362,305        187,278          93%
    Canada/Australia                   70,245         24,512         187%
                                       ------         ------
        Specialty Pharmaceuticals     432,550        211,790         104%
                                      -------        -------
    Branded generics - Europe          76,093          7,845         870%
    Branded generics - Latin America   56,383              -       NM
                                       ------            ---
        Branded Generics              132,476          7,845       NM
                                      -------          -----
    Total revenue                    $565,026       $219,635         157%
                                     ========       ========



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                                          Three Months Ended
                                              March 31,
                                              ---------
    Revenue (a)(b)                       2011            2011    %
                                                              Change
                                     currency      excluding    (c)
                                     impact         currency   ------
                                     ------          impact
                                                     ------
      U.S. Neurology & Other               $-        $209,599      41%
      U.S. Dermatology                    (15)        152,691     292%
                                          ---         -------
          Total U.S.                      (15)        362,290      93%
    Canada/Australia                   (3,856)         66,389     171%
                                       ------          ------
        Specialty Pharmaceuticals      (3,871)        428,679     102%
                                       ------         -------
    Branded generics - Europe             162          76,255     872%
    Branded generics - Latin America   (3,260)         53,123   NM
                                       ------          ------
        Branded Generics               (3,098)        129,378   NM
                                       ------         -------
    Total revenue                     $(6,969)       $558,057     154%
                                      =======        ========
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    (a) Note: Currency effect for constant currency sales is determined
    by comparing 2011 reported amounts adjusted to exclude currency
    impact, calculated using 2010 monthly average exchange rates, to the
    actual 2010 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.
    (b) See footnote (b) to Table 2.
    (c) The % change reflects revenue for the combined company for the
    three months ended March 31, 2011 as compared to Legacy Biovail
    alone for the three months ended March 31, 2010.





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      Valeant Pharmaceuticals International, Inc.   Table 4
      Reconciliation of GAAP Statement of Cost of Goods Sold to Non-GAAP
      Statement Cost of Goods Sold - by Segment
      For the Three Months Ended March 31, 2011
      (In thousands)
                                                          Three Months Ended
    4.1  Cost of goods sold (a)                               March 31,
    >>

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                            2011    %             2011         2011   %
                                    of
                           as    product                excluding     of
                        reported  sales   fair value       fair     product
                                                       value step-
                          GAAP   -------    step-up         up      sales
                                           adjustment
                          ----                 to      adjustment   -----
                                           inventory        to
                                               and      inventory
                                          amortization     and
                                              (b)      amortization
                                              ---        non-GAAP
                                                         --------
     U.S. Neurology &
      Other              $46,384      23%      $11,402      $34,982      17%
     U.S. Dermatology     34,703      36%        7,696       27,007      28%
     Canada/Australia     21,233      30%        2,767       18,466      26%
     Branded Generics -
      Europe              40,004      53%        5,304       34,700      46%
     Branded Generics -
      Latin America       26,528      47%        4,694       21,834      39%
    >>

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     Corporate               435                     -          435
                             ---                   ---          ---
    >>

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                        $169,287      34%      $31,863     $137,424      27%
                        ========               =======     ========
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      (a) See footnote (b) to Table 2.
      (b) U.S. Neurology and Other and U.S. Dermatology include $9.4
      million and $7.7 million of fair value step-up adjustment to
      inventory, respectively and U.S. Neurology and Other includes $2.0
      million of amortization.





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     Valeant Pharmaceuticals International, Inc. Table 5
     Consolidated  Balance Sheet and Other Data
     (In thousands)
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                                               As of              As of
                                             March 31,        December 31,
    5.1  Cash                                     2011              2010
                                                  ----
    >>

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      Cash and cash equivalents                 $401,752          $394,269
      Marketable securities                       84,252             8,166
                                                  ------             -----
      Total cash and marketable securities      $486,004          $402,435
                                                ========          ========
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Debt

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      Convertible notes                       $373,135          $417,555
      Senior notes                           4,326,012         2,185,822
      Term loan A facility                           -           975,000
      Other                                     17,224            16,900
                                                ------            ------
                                             4,716,371         3,595,277
      Less: Current portion                    (17,224)         (116,900)
                                               -------          --------
                                            $4,699,147        $3,478,377
                                            ==========        ==========
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    5.2  Summary of Cash Flow Statement        Three Months Ended
                                                   March 31,
                                                   ---------
                                                  2011              2010
                                                  ----              ----
      Cash flow provided by (used in):
    >>

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      Net cash provided by operating
       activities (GAAP)                       $86,330           $44,753
      Tax benefits from stock options
       exercised (a)                            24,050                 -
      Restructuring and acquisition-related
       costs                                    19,046               613
      Payment of accrued legal settlements      16,000             5,950
      Effect of ASC 470-20 (FSP APB 14-1)        2,289                 -
      Working capital change related to
       Zovirax transaction (b)                  30,771                 -
      Changes in working capital related to
       restructuring and acquisition-
       related costs                            25,145                 -
                                                ------               ---
      Adjusted cash flow from operations
       (Non-GAAP) (c)                         $203,631           $51,316
                                              ========           =======
    >>

    <<
      (a) Includes stock option tax benefit which will reduce taxes in
      future periods.
      (b) Includes one time impact to accounts receivable, inventory and
      accounts payable associated with Zovirax transaction and launch of
      30g ointment.
      (c) See footnote (b) to Table 2.





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    Valeant Pharmaceuticals International
    Pro Forma Organic Growth - by Segment
    For the Three Months Ended March 31, 2011
    (In thousands)
                                              Three Months Ended
                                                  March 31,
                                                  ---------
    >>

    <<
                                                             Pro       %
                                                Mar YTD    forma    Change
                                                    2011  Mar YTD    ------
                                                            2010
                                                    ----     (c)
                                                           -----
    Product Sales (a)(b)
      U.S. Dermatology                           $95,919   $73,418       31%
      U.S. Neurology & Other                     203,544   189,713        7%
                                                 -------   -------
    Total U.S.                                   299,463   263,131       14%
    Canada/Australia                              69,050    58,778       17%
                                                  ------    ------
      Specialty pharmaceuticals                  368,513   321,909       14%
    Branded generics - Latin America              56,383    42,058       34%
    Branded generics - Europe                     75,525    49,551       52%
                                                  ------    ------
      Branded Generics                           131,908    91,609       44%
                                                 -------    ------
    Total product sales                          500,421   413,518       21%
    Royalties                                     20,740    17,041       22%
                                                  ------    ------
    Total organic revenue                       $521,161  $430,559       21%
                                                ========  ========
    >>

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    Organic Growth - excluding Diastat & Efudex
    Diastat adjustment                           $(7,914) $(15,864)     -50%
      U.S. Neurology & Other                     195,630   173,849       13%
                                                 -------   -------
    >>

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    Efudex adjustment                             (1,630)  (10,307)     -84%
      U.S. Dermatology                            94,289    63,111       49%
                                                  ------    ------
    Total product sales                         $490,877  $387,347       27%
                                                ========  ========
    Total organic revenue                       $511,617  $404,388       27%
                                                ========  ========



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    <<
                                                 Mar YTD    Mar YTD
                                                    2011   excluding
                                                 currency  currency
                                                  impact    impact       %
                                                --------   ---------  Change
                                                                      ------
    Product Sales (a)(b)
      U.S. Dermatology                               $(25)   $95,894       31%
      U.S. Neurology & Other                            -    203,544        7%
                                                      ---    -------
    Total U.S.                                        (25)   299,438       14%
    Canada/Australia                               (4,415)    64,635       10%
                                                   ------     ------
      Specialty pharmaceuticals                    (4,440)   364,073       13%
    Branded generics - Latin America               (3,260)    53,123       26%
    Branded generics - Europe                         (98)    75,427       52%
                                                      ---     ------
      Branded Generics                             (3,358)   128,550       40%
                                                   ------    -------
    Total product sales                            (7,798)   492,623       19%
    Royalties                                           -     20,740       22%
                                                      ---     ------
    Total organic revenue                         $(7,798)  $513,363       19%
                                                  =======   ========
    >>

    <<
    Organic Growth - excluding Diastat & Efudex
    Diastat adjustment                                 $-    $(7,914)     -50%
      U.S. Neurology & Other                            -    195,630       13%
                                                      ---    -------
    >>

    <<
    Efudex adjustment                                   -     (1,630)     -84%
      U.S. Dermatology                                (25)    94,264       49%
                                                      ---     ------
    Total product sales                           $(7,798)  $483,079       25%
                                                  =======   ========
    Total organic revenue                         $(7,798)  $503,819       25%
                                                  =======   ========



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    <<
                                       Mar YTD      Mar YTD      Mar YTD
                                     acquisition   excluding    growth at
                                      impact at   currency &     constant
                                         2010
                                         rates    acquisition   currency,
                                        -----        impact       net of
                                                     ------    acquisitions
                                                               ------------
    Product Sales (a)(b)
      U.S. Dermatology                   $(6,531)     $89,363            22%
      U.S. Neurology & Other             (20,625)     182,919            -4%
                                         -------      -------
    Total U.S.                           (27,156)     272,282             3%
    Canada/Australia                      (3,843)      60,792             3%
                                          ------       ------
      Specialty pharmaceuticals          (30,999)     333,074             3%
    Branded generics - Latin America      (6,471)      46,652            11%
    Branded generics - Europe            (17,042)      58,385            18%
                                         -------       ------
      Branded Generics                   (23,513)     105,037            15%
                                         -------      -------
    Total product sales                  (54,512)     438,111             6%
    Royalties                                  -       20,740            22%
                                             ---       ------
    Total organic revenue               $(54,512)    $458,851             7%
                                        ========     ========
    >>

    <<
    Organic Growth -excluding
     Diastat & Efudex
    Diastat adjustment                        $-      $(7,914)          -50%
      U.S. Neurology & Other             (20,625)     175,005             1%
                                         -------      -------
    >>

    <<
    Efudex adjustment                          -       (1,630)          -84%
      U.S. Dermatology                    (6,531)      87,733            39%
                                          ------       ------
    Total product sales                 $(54,512)    $428,567            11%
                                        ========     ========
    Total organic revenue               $(54,512)    $449,307            11%
                                        ========     ========
    >>

    <<
    (a) See footnote (a) to Table 3.
    (b) See footnote (b) to Table 2.
    (c) Combined Legacy Biovail and Legacy Valeant product sales and royalty.


    (Logo: http://photos.prnewswire.com/prnh/20101025/LA87217LOGO)



    >>

SOURCE Valeant Pharmaceuticals International, Inc.

For further information: Web Site: http://www.valeant.com


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