Valeant Pharmaceuticals Reports Third Quarter 2005 Results; Revenues Increase 23 Percent; Product Sales Advance 21 Percent

Third Quarter 2005 vs. Third Quarter 2004 Highlights:

-- Revenues increased 23 percent to $205.0 million compared to $166.4 million.

-- Product sales increased 21 percent to $183.0 million compared to $151.1 million.

-- Ribavirin royalties increased 43 percent to $22.0 million compared to $15.3 million.

-- Net loss was $3.7 million, or $0.04 per diluted share, compared to a net loss of $15.9 million, or $0.19 per diluted share.

-- Adjusting for certain non-GAAP items, adjusted income from continuing operations was $6.9 million, or $0.07 per diluted share, compared to $2.4 million, or $0.03 per diluted share.

A reconciliation of GAAP to non-GAAP results is provided in Tables 2-4.

Timothy C. Tyson, Valeant's president and chief executive officer,said, "Our performance in the third quarter was fueled by the growthof our key promoted brands, including strategic products acquiredearlier in the year. In particular, the launch of the Diastat(R)AcuDial(TM) brand generated significant sales and was achieved quicklybecause of the efforts of our regulatory and marketing teams whoworked closely with the FDA. Because of our revenue expansion andcontinued improvement in metric performance, operating income from ourspecialty pharmaceutical business was up 17 percent in the quarter andadjusted income from continuing operations was substantially ahead ofthe prior year."

Revenues:

The increase in product sales in the 2005 third quarter was led bythe addition and growth of products that were purchased from XcelPharmaceuticals in early 2005 and growth in other key promoted brands.Acquired products have become a key component of the company'spromoted brands and, per the company's strategic plan, havecontributed significantly to growth. Overall, promoted brands grew 55percent in the 2005 third quarter, primarily due to the addition andgrowth of products acquired in the Xcel transaction, includingDiastat(R) and Migranal(R), and increased sales of other products suchas Bedoyecta(TM) and Kinerase(R). Sales of Xcel products totaled $22.9million in the 2005 third quarter, 30 percent higher than the $17.5million in sales recorded by Xcel in the 2004 third quarter.

The impact of foreign currency translation increased product salesby $6.2 million and operating income by $2.0 million in the 2005 thirdquarter, compared to the same period last year.

The increase in ribavirin royalty revenue was primarily due tosales of ribavirin in Japan.

Regional Sales Performance:

North America product sales increased 65 percent in the 2005 thirdquarter to $60.5 million compared to $36.6 million in the same periodlast year. The increase in North America was primarily driven by theaddition and growth of acquired products, particularly Diastat andMigranal. Diastat sales were $17.5 million in the 2005 third quarterand reflected higher demand and the launch of the Diastat AcuDialdelivery system. Growth of other promoted brands, such as Kinerase andCesamet(TM) also contributed to the increase in North America.

European product sales increased slightly in the 2005 thirdquarter to $61.7 million, compared to $61.5 million in the same periodlast year. Foreign currency translation in the European regionincreased sales by $1.8 million. A number of products in Europe,including Bisocard, Mestinon(R), and Dermatix(TM) performed well. Thepricing environment in Europe continues to be challenging andperformance in the quarter was impacted by government-imposed pricereductions in many countries.

Sales in Latin America increased 13 percent to $43.4 million inthe 2005 third quarter, compared to $38.5 million in the same periodlast year. The increase was primarily due to a 90 percent increase insales of Bedoyecta in the quarter. Foreign currency translationcontributed $3.3 million to the Latin American sales increase.

Sales in the Asia, Australia and Africa (AAA) region increased 20percent in the 2005 third quarter to $17.4 million, compared to $14.5million in the same period last year, primarily due to increased salesof regional products such as Nyal(TM) and Reptilase(R).

Financial Metrics:

The company's gross margin on product sales increased for the 2005third quarter to 70 percent, compared to 67 percent in the same periodlast year. The improved gross margin primarily reflects increasedsales in North America, a favorable mix of higher margin products andthe company's manufacturing improvement efforts. In addition, thecompany took a $1.1 million charge in its Latin America cost of goodssold for assets that should have been eliminated in 1999 associatedwith products sold through its Brazilian operations.

Selling expense as a percent of product sales was 32 percent forthe 2005 third quarter, compared to 30 percent in the same period lastyear. General and administrative expenses were 15 percent of productsales for the 2005 third quarter, compared to 14 percent, adjusted fornon-GAAP items, in the same period last year. The increases reflectthe company's expanded neurology business, promotional costs relatedto increased activity and line extensions for promoted products andinvestments in infrastructure to support the growth of the company.

Research and development expenses were 16 percent of product salesfor the 2005 third quarter, compared to 17 percent in the same periodlast year. Research and development costs continue to reflectinvestments in the company's late-stage pipeline for the developmentof Viramidine(R), pradefovir and retigabine.

Balance Sheet Information:

Cash and marketable securities at September 30, 2005 totaled $385million, compared to $462 million at December 31, 2004. The reductionof cash was primarily due to the acquisition of Xcel Pharmaceuticals.

Conference Call Information:

Valeant will host a conference call today at 10:00 a.m. EST (7:00a.m. PST) to discuss its 2005 third quarter results. The dial-innumber to participate on this call is (877) 295-5743, confirmationcode 1259446. International callers should dial (706) 679-0845,confirmation code 1259446. The company will also webcast theconference call live over the Internet. The webcast may be accessedthrough the investor relations section of Valeant's corporate Web siteat www.valeant.com.

About Valeant:

Valeant Pharmaceuticals International (NYSE: VRX) is a global,publicly traded, research-based specialty pharmaceutical company thatdiscovers, develops, manufactures and markets pharmaceutical productsprimarily in the areas of neurology, infectious disease anddermatology. More information about Valeant can be found atwww.valeant.com.

Viramidine, Diastat, Diastat AcuDial, Migranal, Kinerase,Mestinon, Bedoyecta, Dermatix, Cesamet, Nyal and Reptilase aretrademarks or registered trademarks of Valeant PharmaceuticalsInternational or its related companies. All other trademarks are thetrademarks or the registered trademarks of their respective owners.

FORWARD-LOOKING STATEMENTS:

This press release may contain forward-looking statements that arebased on management's current expectations and involve risks anduncertainties, including, but not limited to, risks and uncertaintiesrelating to projections of future sales, returns on invested assetsand clinical development, regulatory approval processes, marketplaceacceptance of the company's products, success of the company'sstrategic repositioning initiatives and the ability of management toexecute them, cost-cutting measures, success of the company'sstrategic plan and the ability to achieve financial targets and costreduction goals, general economic factors and business and capitalmarket conditions, general industry trends, changes in tax lawrequirements and government regulation, adverse events that wouldrequire clinical trials to be prematurely terminated, clinical resultsthat indicate continuing clinical and commercial pursuit of productcandidates is not advisable, and the fact that Phase 2 clinical trialresults are not always indicative of those seen in Phase 3 clinicaltrials, and other risks detailed from time to time in Valeant's SECfilings. Valeant wishes to caution the reader that these factors, aswell as other factors described in Valeant's SEC filings, are amongthe factors that could cause actual results to differ materially fromthe expectations described in the forward-looking statements. Valeantalso cautions the reader that undue reliance should not be placed onany of the forward-looking statements, which speak only as of the dateof this release. The company undertakes no responsibility to updateany of these forward-looking statements to reflect events orcircumstances after the date of this release or to reflect actualoutcomes.

Financial Tables Follow
Valeant Pharmaceuticals International
Consolidated Condensed Statement of Income
For the three and nine months ended September 30, 2005 and 2004

Three Months Ended Nine Months Ended
September 30, September 30,
------------------- --------------------
(In thousands,
except per % %
share data) 2005 2004 Change 2005 2004 Change
--------- --------- ------ ---------- --------- -------

Product sales $183,004 $151,099 21% $525,635 $431,058 22%
Ribavirin
royalties 21,953 15,333 43% 65,494 63,444 3%
--------- --------- ---------- ---------
Total
revenues 204,957 166,432 23% 591,129 494,502 20%
--------- --------- ---------- ---------

Cost of goods
sold 55,694 49,264 13% 157,355 141,914 11%
Selling expenses 59,017 45,046 31% 173,286 146,363 18%
General and
administrative
expenses 26,665 24,962 7% 77,227 73,686 5%
Research and
development
costs 28,883 25,045 15% 82,166 64,429 28%
Acquired in-
process
research and
development (a) - - -- 126,399 11,770 974%
Restructuring
charges (b) 135 (69) (296%) 506 20,116 (97%)
Amortization
expense 15,782 14,094 12% 46,961 41,514 13%
--------- --------- ---------- ---------
186,176 158,342 18% 663,900 499,792 33%
--------- --------- ---------- ---------
Income
(loss) from
operations 18,781 8,090 (72,771) (5,290)

Interest
expense, net (6,884) (7,748) (20,494) (30,821)
Loss on early
extinguishment
of debt - (13,994) - (19,892)
Other expense,
net including
translation and
exchange (1,207) (515) (5,629) (2,193)
--------- --------- ---------- ---------
Income (loss)
from continuing
operations before
provision for
income taxes
and minority
interest 10,690 (14,167) (98,894) (58,196)

Provision
(benefit) for
income taxes 15,319 (5,550) 41,745 (11,831)
Minority
interest 184 (81) 489 8
--------- --------- ---------- ---------
Loss from
continuing
operations (4,813) (8,536) (141,128) (46,373)

Income (loss)
from discontinued
operations, net 1,123 (7,365) (2,368) (24,392)
--------- --------- ---------- ---------


Net loss $(3,690) $(15,901) $(143,496) $(70,765)
========= ========= ========== =========


Basic earnings
per common share
Loss from
continuing
operations $(0.05) $(0.10) $(1.54) $(0.55)
Discontinued
operations,
net 0.01 (0.09) (0.03) (0.29)
--------- --------- ---------- ---------
Net loss $(0.04) $(0.19) $(1.57) $(0.84)
========= ========= ========== =========
Shares used
in per
share
computation 92,626 84,055 91,357 83,795
========= ========= ========== =========

Diluted earnings
per common share
Loss from
continuing
operations $(0.05) $(0.10) $(1.54) $(0.55)
Discontinued
operations,
net 0.01 (0.09) (0.03) (0.29)
--------- --------- ---------- ---------
Net loss $(0.04) $(0.19) $(1.57) $(0.84)
========= ========= ========== =========
Shares used
in per share
computation 92,626 84,055 91,357 83,795
========= ========= ========== =========



(a) Expense associated with the write-off of acquired in-process
research and development ("IPR&D") related to the Xcel
Pharmaceuticals, Inc. acquisition in 2005 and the Amarin acquisition
in 2004.

(b) Restructuring charges related to our manufacturing rationalization
plan. In the third quarter of 2005, we sold a manufacturing site and
recorded a net gain on the sale of this site.


Valeant Pharmaceuticals International
Consolidated Condensed Statements of Operations and Reconciliation of
Non-GAAP Adjustments


Three Months Ended
September 30, 2005
---------------------------------
Non-GAAP
GAAP Adjustments Adjusted
--------- ----------- --------
(In thousands, except per
share data)

Product sales $ 183,004 $ - $183,004
Ribavirin royalties 21,953 - 21,953
--------- ----------- --------
Total revenues 204,957 - 204,957
--------- ----------- --------

Cost of goods sold 55,694 - 55,694
Selling expenses 59,017 - 59,017
General and administrative
expenses 26,665 - 26,665
Research and development
costs 28,883 - 28,883
Restructuring charges 135 (135) (a) -
Amortization expense 15,782 - 15,782
--------- ----------- --------
186,176 (135) 186,041
--------- ----------- --------
Income from operations 18,781 135 18,916

Interest expense, net (6,884) - (6,884)
Other expense, net including
translation and exchange (1,207) - (1,207)
--------- ----------- --------
Income from continuing
operations before provision
for income taxes and
minority interest 10,690 135 10,825

Provision for income taxes 15,319 (11,530) (b) 3,789
Minority interest 184 - 184
--------- ----------- --------
Income (loss) from
continuing operations (4,813) 11,665 6,852

Income (loss) from
discontinued operations, net 1,123 (1,780) (c) (657)
--------- ----------- --------


Net income (loss) $ (3,690)$ 9,885 $ 6,195
========= =========== ========


Basic earnings per common
share
Income (loss) from
continuing operations $ (0.05) $ 0.07
Discontinued operations,
net 0.01 -
--------- --------
Net income (loss) $ (0.04) $ 0.07
========= ========
Shares used in per share
computation 92,626 92,626
========= ========

Diluted earnings per common
share
Income (loss) from
continuing operations $ (0.05) $ 0.07
Discontinued operations,
net 0.01 -
--------- --------
Net income (loss) $ (0.04) $ 0.07 (d)
========= ========
Shares used in per share
computation 92,626 95,316
========= ========



(a) Related to net loss on sale of manufacturing sites.

(b) The tax adjustment of $11.5 million includes $5.5 million
attributable to tax benefits from U.S. net operating losses ("NOL")
not recognized for GAAP purposes and $3.9 million related to the
repatriation of foreign earnings related to the American Jobs
Creation Act of 2004.

(c) Net gain on sale of Hungary discontinued operations.

(d) Shares used in adjusted diluted earnings per share ("EPS")
includes the effect of diluted shares which are anti-dilutive to GAAP
EPS.

We use certain non-GAAP financial measures, including adjusted net
income (loss) from continuing operations and adjusted earnings per
share, both of which exclude acquired IPR&D, sales force reduction
costs, restructuring costs, impairment charges and various tax issues.
We exclude these items in assessing our financial performance,
primarily due to their non-operational nature or because they are
outside of our normal operations. The non-GAAP financial measures
should not be considered as an alternative to, or more meaningful than
the GAAP financial measures.


Valeant Pharmaceuticals International
Consolidated Condensed Statements of Operations and Reconciliation of
Non-GAAP Adjustments


Nine Months Ended
September 30, 2005
---------------------------------
Non-GAAP
GAAP Adjustments Adjusted
--------- ----------- --------
In thousands, except per
share data

Product sales $ 525,635 $ - $525,635
Ribavirin royalties 65,494 - 65,494
--------- ---------- --------
Total revenues 591,129 - 591,129

Cost of goods sold 157,355 - 157,355
Selling expenses 173,286 - 173,286
General and administrative
expenses 77,227 - 77,227
Research and development
costs 82,166 - 82,166
Acquired in-process research
and development 126,399 (126,399) (a) -
Restructuring charges 506 (506) (b) -
Amortization expense 46,961 (1,532) (c) 45,429
--------- ---------- --------
663,900 (128,437) 535,463
--------- ---------- --------
Income (loss) from
operations (72,771) 128,437 55,666

Interest expense, net (20,494) - (20,494)
Other expense, net including
translation and exchange (5,629) - (5,629)
--------- ---------- --------
Income (loss) from continuing
operations before provision
for income taxes and
minority interest (98,894) 128,437 29,543

Provision for income taxes 41,745 (31,405) (d) 10,340
Minority interest 489 - 489
--------- ---------- --------
Income (loss) from
continuing operations (141,128) 159,842 18,714

Loss from discontinued
operations, net (2,368) (1,780) (e) (4,148)
--------- ---------- --------


Net income (loss) $(143,496)$ 158,062 $ 14,566
========= ========== ========


Basic earnings per common
share
Income (loss) from
continuing operations $ (1.54) $ 0.20
Discontinued operations,
net (0.03) (0.04)
--------- --------
Net income (loss) $ (1.57) $ 0.16
========= ========
Shares used in per share
computation 91,357 91,357
========= ========

Diluted earnings per common
share
Income (loss) from
continuing operations $ (1.54) $ 0.20
Discontinued operations,
net (0.03) (0.04)
--------- --------
Net income (loss) $ (1.57) $ 0.16
========= ========
Shares used in per share
computation 91,357 94,612 (f)
========= ========


(a) Expense associated with the write-off of acquired IPR&D
related to the Xcel Pharmaceuticals acquisition.

(b) Impairment charge on our manufacturing site in China and
net gain on sale of four manufacturing sites.

(c) Impairment charges on products sold in Spain and North America.

(d) The acquired IPR&D charge and the restructuring charge are not
deductible for income tax purposes. The tax adjustment of $31.4
million includes $22.2 million relating to our estimate of expenses
associated with various tax issues raised by the Internal Revenue
Service, $15.7 million attributable to U.S. NOLs not recognized for
GAAP purposes and $3.9 million related to the repatriation of foreign
earnings related to the American Jobs Creation Act of 2004, partially
offset by the reversal of foreign tax valuation allowances.

(e) Net gain on sale of Hungary discontinued operations.

(f) Shares used in adjusted diluted earnings per share ("EPS")
includes the effect of diluted shares which are anti-dilutive to GAAP
EPS.

See non-GAAP financial measure disclosure on Table 2.


Valeant Pharmaceuticals International
Consolidated Condensed Statements of Operations and Reconciliation of
Non-GAAP Adjustments


Three Months Ended
September 30, 2004
--------------------------------------
Non-GAAP
GAAP Adjustments Adjusted
--------- ----------- ---------
(In thousands, except per
share data)

Product sales 151,099 $ - $151,099
Ribavirin royalties 15,333 - 15,333
--------- ----------- ---------
Total revenues 166,432 - 166,432
--------- ----------- ---------

Cost of goods sold 49,264 - 49,264
Selling expenses 45,046 (210) (a) 44,836
General and administrative
expenses 24,962 (3,190)(a),(b) 21,772
Research and development
costs 25,045 - 25,045
Restructuring charges (69) 69 (c) -
Amortization expense 14,094 - 14,094
--------- ----------- ---------
158,342 (3,331) 155,011
--------- ----------- ---------
Income from operations 8,090 3,331 11,421

Interest expense, net (7,748) - (7,748)
Other expense, net including
translation and exchange (14,509) 13,994 (d) (515)
--------- ----------- ---------
Income (loss) from continuing
operations before provision
for income taxes and
minority interest (14,167) 17,325 3,158

Provision (benefit) for
income taxes (5,550) 6,370 (e) 820
Minority interest (81) - (81)
--------- ----------- ---------
Income (loss) from
continuing operations (8,536) 10,955 2,419

Loss from discontinued
operations, net (7,365) - (7,365)
--------- ----------- ---------


Net loss $(15,901) $ 10,955 $(4,946)
========= =========== =========


Basic earnings per common
share
Income (loss) from
continuing operations $(0.10) $0.03
Discontinued operations,
net (0.09) (0.09)
---------- ---------
Net loss $(0.19) $(0.06)
========== =========
Shares used in per share
computation 84,055 84,055
========== =========

Diluted earnings per common
share
Income (loss) from
continuing operations $(0.10) $0.03
Discontinued operations,
net (0.09) (0.09)
---------- ---------
Net loss $(0.19) $(0.06)
========== =========
Shares used in per share
computation 84,055 86,543 (f)
========== =========



(a) Sales force reduction costs.

(b) Legal expenses related to the settlement of a bondholder class
action lawsuit.

(c) Restructuring charges were primarily related to our manufacturing
rationalization plan and include impairment charges on manufacturing
sites and severance charges.

(d) Loss on early extinguishment of debt.

(e) Tax effect for non-GAAP adjustments.

(f) Shares used in adjusted diluted EPS includes the effect of diluted
shares which are anti-dilutive to GAAP EPS.


See non-GAAP financial measure disclosure on Table 2.


Valeant Pharmaceuticals International
Consolidated Condensed Statements of Operations and Reconciliation of
Non-GAAP Adjustments


Nine Months Ended
September 30, 2004
--------------------------------------
Non-GAAP
GAAP Adjustments Adjusted
--------- ----------- ---------
In thousands, except per
share data

Product sales $431,058 $ - $431,058
Ribavirin royalties 63,444 - 63,444
--------- ----------- ---------
Total revenues 494,502 - 494,502

Cost of goods sold 141,914 - 141,914
Selling expenses 146,363 (3,561) (a) 142,802
General and administrative
expenses 73,686 (4,349) (b) 69,337
Research and development
costs 64,429 - 64,429
Acquired in-process research
and development 11,770 (11,770) (c) -
Restructuring charges 20,116 (20,116) (d) -
Amortization expense 41,514 - 41,514
--------- ----------- ---------
499,792 (39,796) 459,996
--------- ----------- ---------
Income (loss) from
operations (5,290) 39,796 34,506

Interest expense, net (30,821) - (30,821)
Other expense, net including
translation and exchange (22,085) 19,892 (e) (2,193)
--------- ----------- ---------
Income (loss) from continuing
operations before provision
for income taxes and
minority interest (58,196) 59,688 1,492

Provision (benefit) for
income taxes (11,831) 12,218 (f) 387
Minority interest 8 - 8
--------- ----------- ---------
Income (loss) from
continuing operations (46,373) 47,470 1,097

Loss from discontinued
operations, net (24,392) 10,080 (g) (14,312)
--------- ----------- ---------


Net loss $(70,765) $57,550 $(13,215)
========= =========== =========


Basic earnings per common
share
Income (loss) from
continuing operations $(0.55) $0.01
Discontinued operations,
net (0.29) (0.17)
---------- ---------
Net loss $(0.84) $(0.16)
========== =========
Shares used in per share
computation 83,795 83,795
========== =========

Diluted earnings per common
share
Income (loss) from
continuing operations $(0.55) $0.01
Discontinued operations,
net (0.29) (0.16)
---------- ---------
Net loss $(0.84) $(0.15)
========== =========
Shares used in per share
computation 83,795 86,543 (h)
========== =========



(a) Sales force reduction costs.

(b) Legal expenses related to the settlement of the bondholder class
action lawsuit.

(c) In-process research and development charge related to the
acquisition of Amarin.

(d) Restructuring charges were primarily related to our manufacturing
rationalization plan and include impairment charges on manufacturing
sites and severance charges.

(e) Loss on early extinguishment of debt.

(f) Tax effect for non-GAAP adjustments.

(g) Environmental reserve, net of tax.

(h) Shares used in adjusted diluted EPS includes the effect of diluted
shares which are anti-dilutive to GAAP EPS.


See non-GAAP financial measure disclosure on Table 2.


Valeant Pharmaceuticals International
GAAP reconciliation of basic and diluted earnings per share
For the three and nine months ended September 30, 2005 and 2004


Three Months Ended Nine Months Ended
September 30, September 30,
----------------- --------------------
(In thousands, except per
share data) 2005 2004 2005 2004
-------- -------- ---------- ---------

Loss from continuing
operations $(4,813) $(8,536) $(141,128) $(46,373)

Non-GAAP pre-tax adjustments:
Acquired IPR&D - - 126,399 11,770
Sales force reduction
costs, net - 175 - 4,685
Product impairment
charges - - 1,532 -
Restructuring charges 135 (69) 506 20,116
Loss on early
extinguishment of debt - 13,994 - 19,892
Settlement of class
action lawsuit - 3,225 - 3,225
Tax effect on the above
charges and tax
settlements 11,530 (6,370) 31,405 (12,218)
-------- -------- ---------- ---------


Adjusted income from
continuing operations
before the above charges $6,852 $2,419 $18,714 $1,097
======== ======== ========== =========

Adjusted basic EPS from
continuing operations $0.07 $0.03 $0.20 $0.01
======== ======== ========== =========

Adjusted diluted EPS
from continuing
operations $0.07 $0.03 $0.20 $0.01
======== ======== ========== =========

Shares used in basic per
share calculation 92,626 84,055 91,357 83,795
======== ======== ========== =========

Shares used in diluted per
share calculation 95,316 86,543 94,612 86,543
======== ======== ========== =========


Reconciliation of consolidated operating income to non-GAAP adjusted
earnings before interest, taxes, depreciation and amortization
("EBITDA")

Three Months Ended Nine Months Ended
September 30, September 30,
----------------- ------------------
% %
2005 2004 Change 2005 2004 Change
-------- -------- -------- --------- -------- --------

Consolidated
operating
income (loss)
(GAAP) $18,781 $8,090 132% $(72,771) $(5,290) --
Depreciation
and
amortization 22,823 20,652 11% 68,321 62,521 9%
-------- -------- --------- --------
EBITDA (non-
GAAP) (a) 41,604 28,742 45% (4,450) 57,231 --
Non-GAAP
adjustments (b) 135 3,331 126,905 39,796
-------- -------- --------- --------

Adjusted EBITDA
(non-GAAP) (a) $41,739 $32,073 30% $122,455 $97,027 26%
======== ======== ========= ========


(a) We believe that EBITDA is a meaningful non-GAAP financial measure
as an earnings-derived indicator that approximates cashflow. We
calculate EBITDA by adding depreciation and amortization back to
consolidated operating income. Adjusted EBITDA excludes the
additional costs set forth in note (b) below. Adjusted EBITDA, as
defined and presented by us, may not be comparable to similar
measures reported by other companies.

(b) See Tables 2, 2.1, 3 and 3.1 for explanation of non-GAAP
adjustments.

See non-GAAP financial measure disclosure in Table 2.


Valeant Pharmaceuticals International
Supplemental Sales Information
For the three and nine months ended September 30, 2005 and 2004
(in thousands)

Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
------------------- % -------------------- %
2005 2004 Change 2005 2004 Change
--------- --------- --------------- ----------------
Dermatology
Efudix/
Efudex(R)(G)(P) $14,365 $15,442 (7%) $45,872 $34,216 34%
Kinerase(R)(G)(P) 5,921 3,777 57% 16,177 11,875 36%
Oxsoralen-
Ultra(R)(G)(P) 449 1,530 (71%) 7,544 8,142 (7%)
Dermatix(TM)(G)(P) 2,249 1,794 25% 6,711 5,098 32%
Other Dermatology 14,203 (a) -- 34,543 (a) --

Infectious Disease
Virazole(R)(G)(P) 2,939 1,622 81% 11,173 10,118 10%
Other Infectious
Disease 4,952 (a) -- 15,049 (a) --

Neurology
Mestinon(R)(G)(P) 12,206 11,067 10% 32,500 30,327 7%
Diastat(P)(1) 17,525 -- -- 36,993 -- --
Librax(P) 4,042 2,811 44% 9,792 11,314 (13%)
Migranal(P)(1) 3,744 -- -- 8,648 -- --
Dalmane/
Dalmadorm(P) 2,597 3,155 (18%) 8,568 8,870 (3%)
Cesamet(P) 2,919 1,474 98% 6,893 3,252 112%
Limbitrol(P) 1,430 1,527 (6%) 4,348 4,106 6%
TASMAR(R)(G)(P)(2) 1,438 2,121 (32%) 3,910 2,705 45%
Other Neurology 10,958 (a) -- 37,050 (a) --

Other Therapeutic
Classes
Bedoyecta(TM)(P) 14,549 7,652 90% 34,769 17,415 100%
Solcoseryl 5,837 4,426 32% 13,942 13,637 2%
Nyal(P) 4,191 2,892 45% 12,031 9,406 28%
Bisocard(P) 3,284 2,493 32% 9,303 7,051 32%
Calcitonin(P) 1,835 1,509 22% 7,154 8,122 (12%)
Espaven(P) 2,324 1,751 33% 5,395 4,555 18%
Aclotin(P) 1,379 1,506 (8%) 4,269 4,163 3%
Espacil(P) 1,909 1,336 43% 4,000 3,591 11%
Other
Pharmaceutical
Products 45,759 81,214(a) (44%) 149,001 233,095(a) (36%)
--------- --------- --------- ----------

Total Product
Sales $183,004 $151,099 21% $525,635 $431,058 22%
========= ========= ========= ==========

Total Global Brand
Product Sales(G) $39,567 $37,353 6% $123,887 $102,481 21%
========= ========= ========= ==========

Total Promoted
Product Sales(P) $101,295 $65,459 55% $276,050 $184,326 50%
========= ========= ========= ==========


(a) In 2004, the Company tracked other products, but not by
therapeutic classes; therefore, our ability to provide additional
data by therapeutic classes is not practicable at this time. A total
for other pharmaceutical products is not provided as the amount would
not be comparable to 2005 periods.

(G) Global products represent those products with targeted
centralized promotional strategy.

(P) Promoted products represent promoted products with
annualized sales greater than $5 million.

(1) Diastat and Migranal were acquired in March 2005; total sales of
products acquired in the Xcel transaction were $22.9 million and
$54.5 million for the three and nine months ended September 30, 2005,
respectively.

(2) Tasmar was acquired in April 2004.


Valeant Pharmaceuticals International
Consolidated Condensed Statement of Revenue and Operating
Income - Regional
For the three and nine months ended September 30, 2005 and 2004
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -------------------
Revenues % %
2005 2004 Change 2005 2004 Change
--------- -------- ------ -------- -------- ------

Pharmaceuticals

North America 60,524 36,613 65% $169,865 $99,500 71%
Latin America 43,420 38,514 13% 116,877 104,158 12%
Europe 61,698 61,472 -- 189,326 184,671 3%
AAA 17,362 14,500 20% 49,567 42,729 16%
--------- -------- -------- --------
Total
pharmaceuticals 183,004 151,099 21% 525,635 431,058 22%

Ribavirin royalty
revenues 21,953 15,333 43% 65,494 63,444 3%
--------- -------- -------- --------

Consolidated
revenues $204,957 $166,432 23% $591,129 $494,502 20%
========= ======== ======== ========

Cost of goods sold $55,694 $49,264 13% $157,355 $141,914 11%
========= ======== ======== ========

Gross profit margin
on pharmaceutical
sales 70% 67% 70% 67%
========= ======== ======== ========


Operating Income
(Loss)

Pharmaceuticals

North America $16,117 $12,060 34% $49,363 $29,847 65%
Latin America 14,492 10,532 38% 37,342 29,236 28%
Europe 9,858 14,245 (31%) 30,729 25,772 19%
AAA 2,334 1,278 83% 5,253 2,774 89%
--------- -------- -------- --------
42,801 38,115 12% 122,687 87,629 40%

Corporate expenses (14,955) (14,408) 4% (43,666) (39,060) 12%
--------- -------- -------- --------

Total specialty
pharmaceuticals 27,846 23,707 17% 79,021 48,569 63%

Restructuring
charges (135) 69 -- (506) (20,116) (97%)
R&D (8,930) (15,686) (43%) (24,887) (21,973) 13%
Acquired IPR&D - - -- (126,399) (11,770) 974%
--------- -------- --------- --------

Total consolidated
operating income
(loss) $18,781 $8,090 $(72,771) $(5,290)
========= ======== ======== ========



Three Months Ended Nine Months Ended
Gross Profit Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 % 2004 % 2005 % 2004 %
-------- --- -------- --- --------- --- -------- ---

Pharmaceuticals

North America $49,092 81% $29,528 81% $136,657 80% $82,351 83%
Latin America 31,712 73% 25,757 67% 86,267 74% 73,985 71%
Europe 37,420 61% 38,488 63% 119,572 63% 111,690 60%
AAA 9,086 52% 8,062 56% 25,784 52% 21,118 49%
-------- -------- --------- --------

Total
pharma-
ceuticals $127,310 70% $101,835 67% $368,280 70% $289,144 67%
======== ======== ========= ========

Valeant Pharmaceuticals International
Consolidated Balance Sheet and Other Data
(in thousands)

September 30, December 31,
Balance Sheet Data 2005 2004
------------- -------------

Cash and cash equivalents $369,818 $222,590
Marketable securities 15,222 238,918
------------- -------------
Total cash and marketable securities $385,040 $461,508
============= =============

Accounts receivable, net $168,611 $171,860
Inventory, net 130,260 112,250
Long-term debt 789,721 793,139
Total equity 487,844 476,223


Other Data Nine Months Ended
September 30, September 30,
2005 2004
------------- -------------
Cash flow provided by (used in) continuing
operations

Operating activities $57,257 $37,933
Investing activities (85,864) (170,147)
Financing activities 183,905 (362,237)
Effect of exchange rate changes on cash and
cash equivalents (8,070) 1,082
------------- -------------

Net increase (decrease) in cash and cash
equivalents 147,228 (493,369)
Net increase (decrease) in marketable
securities (223,696) 91,298
------------- -------------

Net decrease in cash and marketable
securities $(76,468) $(402,071)
============= =============

Valeant Pharmaceuticals International
Supplemental Non-GAAP Information on Currency Effect
(in thousands)


Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Consolidated

Product sales $183,004 $151,099 $525,635 $431,058
Currency effect (6,166) (21,500)
Product sales, excluding
currency impact $176,838 $504,135

Operating income (loss) $18,781 $8,090 $(72,771) $(5,290)
Currency effect (2,013) (6,458)
Operating income, excluding
currency impact $16,768 $(79,229)

Geographic Product Sales

North America pharmaceuticals $60,524 $36,613 $169,865 $99,500
Currency effect (633) (1,665)
North America pharmaceuticals,
excluding currency impact $59,891 $168,200

Latin America pharmaceuticals $43,420 $38,514 $116,877 $104,158
Currency effect (3,288) (5,236)
Latin America
pharmaceuticals, excluding
currency impact $40,132 $111,641

Europe pharmaceuticals $61,698 $61,472 $189,326 $184,671
Currency effect (1,838) (12,812)
Europe pharmaceuticals,
excluding currency impact $59,860 $176,514

AAA pharmaceuticals $17,362 $14,500 $49,567 $42,729
Currency effect (407) (1,787)
AAA pharmaceuticals, excluding
currency impact $16,955 $47,780



Note: Currency effect is determined by comparing adjusted 2005
reported amounts, calculated using 2004 monthly average exchange
rates, to the actual 2004 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.