Valeant Pharmaceuticals Reports Second Quarter 2005 Results; Revenues Increase 20 Percent; Product Sales Advance 22 Percent

Second Quarter 2005 vs. Second Quarter 2004 Highlights:

-- Revenues increased 20 percent to $205.0 million compared to $170.4 million.

-- Product sales increased 22 percent to $180.8 million compared to $147.7 million.

-- Ribavirin royalties increased 6 percent to $24.2 million compared to $22.7 million.

-- Net loss was $0.5 million, or $0.01 per diluted share, compared to a net loss of $41.3 million, or $0.49 per diluted share.

-- Adjusting for certain non-GAAP items, adjusted income from continuing operations was $7.6 million, or $0.08 per diluted share, compared to $2.0 million, or $0.02 per diluted share.

A reconciliation of GAAP to non-GAAP results is provided in Tables2-4.

"Our specialty pharmaceuticals business continues to deliverexcellent results and reflects the success of our strategicinitiatives," said Timothy C. Tyson, Valeant's president and chiefexecutive officer. "Our plan to grow the top line is clearly working.We have rapidly integrated newly acquired products to quickly delivertop line results and continued to focus on our global brands andimportant regional products with strong marketing and medical support.Our success in growing the North America business has been acceleratedwith products acquired from Xcel. We are making great progress inachieving our financial metrics; operating income from the specialtypharmaceuticals business is up 63 percent in the quarter. In additionto our excellent results in the base business, our research anddevelopment pipeline is advancing rapidly. We now have four importantproducts in late-stage development. We recently announced the start ofViramidine(R) trials in Japan, exciting 24-week interim results forpradefovir and the initiation of Phase 3 trials for retigabine, whilewe also await approval for Zelapar(TM) from the U.S. Food and DrugAdministration."

Revenues:

Growth in product sales in the 2005 second quarter was led by acombination of products that were acquired in the acquisition of XcelPharmaceuticals in the 2005 first quarter, continued global brandgrowth and strong sales of important regional products. Sales ofpromoted products in North America, where the company has focusedspecific growth initiatives, were particularly strong. Global brandgrowth of 25 percent was led by increased sales of Efudex(R) andKinerase(R).

The impact of foreign currency translation increased product salesby $8.0 million in the 2005 second quarter, while the net impact tooperating income was $2.4 million in the same period.

The increase in ribavirin royalty revenues was primarily due toincreased sales of Rebetol in Japan, offset by declining sales in theUnited States due to generic competition.

Regional Sales Performance:

North America product sales increased 71 percent in the 2005second quarter to $60.4 million compared to $35.3 million in the sameperiod last year. The increase in North America was primarily drivenby sales of acquired products and continued strong growth of promotedbrands, including Efudex, Kinerase and Cesamet(TM), moderated by adecline in sales of other products. Sales of products acquired in theXcel transaction totaled $24.3 million in the 2005 second quarter, 54percent higher than the $15.8 million in sales recorded by Xcel in the2004 second quarter. The rapid integration of the Xcel sales force andnew sales training has resulted in increased demand, correspondingacceleration of Diastat(R) sales, which were $14.3 million in thesecond quarter of 2005, and the successful launch of the improvedMigranal(R) nasal spray.

European product sales increased 3 percent in the 2005 secondquarter to $61.8 million, compared to $60.1 million in the same periodlast year. The European region benefited from the impact of foreigncurrency translation of $4.6 million. A number of products in Europe,including Mestinon, Bisocard and Dermatix(TM) performed well; however,the challenging environment in Europe continues to be very difficultand performance in the quarter was impacted by government-imposedprice reductions in many countries.

Sales in Latin America increased 13 percent to $41.4 million inthe 2005 second quarter, compared to $36.5 million in the same periodlast year. The increase was primarily due to a 97 percent increase insales of Bedoyecta(TM) in the quarter as a result of increasedpromotional activities and strong consumer demand. The Latin Americaregion also benefited from the impact of foreign currency translationof $2.1 million.

Sales in the Asia, Australia and Africa (AAA) region increased 9percent in the 2005 second quarter to $17.3 million, compared to $15.8million in the same period last year, primarily due to increased salesof Nyal(TM) in Australia.

Financial Metrics:

The company's gross margin increased for the 2005 second quarterto 71 percent, compared to 69 percent in the same period last year.The improved gross margin primarily reflects increased sales in NorthAmerica and a favorable mix of higher margin products.

Selling expenses as a percent of sales were 34 percent for the2005 second quarter, the same rate experienced in the 2004 secondquarter, adjusted for non-GAAP items. General and administrativeexpenses were 14 percent of sales for the 2005 second quarter,compared to 16 percent, adjusted for non-GAAP items, in the sameperiod last year.

Research and development expenses were 15 percent of sales for the2005 second quarter, compared to 14 percent in the same period lastyear. The increase reflects investments in the company's late-stagepipeline for the continued development of Viramidine(R) andpradefovir, and early expenses associated with the start of Phase 3clinical trials for retigabine.

Balance Sheet Information:

Cash and marketable securities at June 30, 2005 totaled $357million, 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. EDT (7:00a.m. PDT) to discuss its 2005 second quarter results. The dial-innumber to participate on this call is 877-295-5743, confirmation code7748675. International callers should dial 706-679-0845, confirmationcode 7748675. The company will also webcast the conference call liveover the Internet. The webcast may be accessed through the investorrelations section of Valeant's corporate Web site at 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, Efudex, Kinerase, Bedoyecta, Cesamet and Nyalare trademarks 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 contains 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.

Valeant Pharmaceuticals International Table 1
Consolidated Condensed Statement of Income
For the three and six months ended June 30, 2005 and 2004



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

Product sales $180,828 $147,634 22% $342,631 $279,959 22%
Ribavirin
royalties 24,206 22,734 6% 43,541 48,111 -9%
--------- --------- ---------- ---------
Total
revenues 205,034 170,368 20% 386,172 328,070 18%
--------- --------- ---------- ---------

Cost of goods
sold 52,940 45,938 15% 101,661 92,650 10%
Selling expenses 61,454 53,575 15% 114,269 101,317 13%
General and
administrative
expenses 25,985 24,849 5% 50,562 48,724 4%
Research and
development
costs 27,559 20,921 32% 53,283 39,384 35%
Acquired in-process
research and
development (a) - 384 -- 126,399 11,770 974%
Restructuring
charges (b) (1,324) 20,185 -- 371 20,185 -98%
Amortization
expense 17,211 14,133 22% 31,179 27,420 14%
--------- --------- ---------- ---------
183,825 179,985 2% 477,724 341,450 40%
--------- --------- ---------- ---------
Income (loss)
from
operations 21,209 (9,617) (91,552) (13,380)

Interest, net (6,944) (11,174) (13,610) (23,073)
Loss on early
extinguishment
of debt - (5,898) - (5,898)
Other expense,
net including
translation and
exchange (2,631) (632) (4,422) (1,678)
--------- --------- ---------- ---------
Income (loss)
from continuing
operations
before provision
for income
taxes and
minority
interest 11,634 (27,321) (109,584) (44,029)

Provision for
income taxes 10,059 (99) 26,426 (6,281)
Minority
interest 134 103 305 89
--------- --------- ---------- ---------
Income (loss)
from continuing
operations 1,441 (27,325) (136,315) (37,837)

Loss from
discontinued
operations, net (1,988) (13,966) (3,491) (17,027)
--------- --------- ---------- ---------


Net loss $(547) $(41,291) $(139,806) $(54,864)
========= ========= ========== =========


Basic earnings per common share
Income (loss)
from continuing
operations $0.02 $(0.32) $(1.50) $(0.45)
Discontinued
operations,
net (0.03) (0.17) (0.04) (0.21)
--------- --------- ---------- ---------
Net loss $(0.01) $(0.49) $(1.54) $(0.66)
========= ========= ========== =========
Shares used
in per share
computation 92,568 83,880 90,712 83,663
========= ========= ========== =========

Diluted earnings per common share
Income (loss)
from continuing
operations $0.02 $(0.32) $(1.50) $(0.45)
Discontinued
operations,
net (0.03) (0.17) (0.04) (0.21)
--------- --------- ---------- ---------
Net loss $(0.01) $(0.49) $(1.54) $(0.66)
========= ========= ========== =========
Shares used
in per share
computation 95,591 83,880 90,712 83,663
========= ========= ========== =========


(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 second quarter of 2005, we sold two
manufacturing sites and recorded a net gain on the sale of these
sites.


Valeant Pharmaceuticals International Table 2
Consolidated Condensed Statements of Operations and
Reconciliation of Non-GAAP Adjustments


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

Product sales $180,828 $- $180,828
Ribavirin royalties 24,206 - 24,206
---------- --------- ---------
Total revenues 205,034 - 205,034
---------- --------- ---------

Cost of goods sold 52,940 - 52,940
Selling expenses 61,454 - 61,454
General and
administrative expenses 25,985 - 25,985
Research and development
costs 27,559 - 27,559
Restructuring charges (1,324) 1,324 (a) -
Amortization expense 17,211 (1,532) (b) 15,679
---------- --------- ---------
183,825 (208) 183,617
---------- --------- ---------
Income from
operations 21,209 208 21,417

Interest, net (6,944) - (6,944)
Other expense, net
including translation
and exchange (2,631) - (2,631)
---------- --------- ---------
Income from continuing
operations before
provision
for income taxes and
minority interest 11,634 208 11,842

Provision for income
taxes 10,059 (5,914) (c) 4,145
Minority interest 134 - 134
---------- --------- ---------
Income from
continuing
operations 1,441 6,122 7,563

Loss from discontinued
operations, net (1,988) - (1,988)
---------- --------- ---------


Net income (loss) $(547) $6,122 $5,575
========== ========= =========


Basic earnings per common share
Income from
continuing
operations $0.02 $0.08
Discontinued
operations, net (0.03) (0.02)
---------- ---------
Net income (loss) $(0.01) $0.06
========== =========
Shares used in per
share computation 92,568 92,568
========== =========

Diluted earnings per common share
Income from
continuing
operations $0.02 $0.08
Discontinued
operations, net (0.03) (0.02)
---------- ---------
Net income (loss) $(0.01) $0.06
========== =========
Shares used in per
share computation 95,591 95,591
========== =========


(a) Net gain on sale of two manufacturing sites.

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

(c) The tax adjustment of $5.9 million includes $6.8 million
attributable to tax benefits from U.S. net operating losses
("NOL") not recognized for GAAP purposes partially offset by the
reversal of foreign tax valuation allowances and the net tax
benefit of the non-GAAP adjustments.

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 Table 3
Consolidated Condensed Statements of Operations and
Reconciliation of Non-GAAP Adjustments


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

Product sales $342,631 $- $342,631
Ribavirin royalties 43,541 - 43,541
---------- --------- ---------
Total revenues 386,172 - 386,172

Cost of goods sold 101,661 - 101,661
Selling expenses 114,269 - 114,269
General and
administrative expenses 50,562 - 50,562
Research and development
costs 53,283 - 53,283
Acquired in-process
research and
development 126,399 (126,399) (a) -
Restructuring charges 371 (371) (b) -
Amortization expense 31,179 (1,532) (c) 29,647
---------- --------- ---------
477,724 (128,302) 349,422
---------- --------- ---------
Income (loss) from
operations (91,552) 128,302 36,750

Interest, net (13,610) - (13,610)
Other income (expense),
net including
translation and
exchange (4,422) - (4,422)
---------- --------- ---------
Income (loss) from
continuing operations
before provision
for income taxes and
minority interest (109,584) 128,302 18,718

Provision for income
taxes 26,426 (19,875) (d) 6,551
Minority interest 305 - 305
---------- --------- ---------
Income (loss) from
continuing
operations (136,315) 148,177 11,862

Income (loss) from
discontinued
operations, net (3,491) - (3,491)
---------- --------- ---------


Net income (loss) $(139,806) $148,177 $8,371
========== ========= =========


Basic earnings per common share
Income (loss) from
continuing
operations $(1.50) $0.13
Discontinued
operations, net (0.04) (0.04)
---------- ---------
Net income (loss) $(1.54) $0.09
========== =========
Shares used in per
share computation 90,712 90,712
========== =========

Diluted earnings per common share
Income (loss) from
continuing
operations $(1.50) $0.13
Discontinued
operations, net (0.04) (0.04)
---------- ---------
Net income (loss) $(1.54) $0.09
========== =========
Shares used in per
share computation 90,712 94,213 (e)
========== =========


(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 three 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 $19.9
million includes $21.7 million relating to our estimate of
expenses associated with various tax issues raised by the Internal
Revenue Service and $10.2 million attributable to U.S. NOLs not
recognized for GAAP purposes partially offset by the reversal of
foreign tax valuation allowances.

(e) 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 Table 2.1
Consolidated Condensed Statements of Operations and
Reconciliation of Non-GAAP Adjustments


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

Product sales 147,634 $- $147,634
Ribavirin royalties 22,734 - 22,734
--------- ------------ ---------
Total revenues 170,368 - 170,368
--------- ------------ ---------

Cost of goods sold 45,938 - 45,938
Selling expenses 53,575 (3,351) (a) 50,224
General and
administrative
expenses 24,849 (1,159) (a) 23,690
Research and
development costs 20,921 - 20,921
Acquired in-process
research and
development 384 (384) (b) -
Restructuring charges 20,185 (20,185) (c) -
Amortization expense 14,133 - 14,133
--------- ------------ ---------
179,985 (25,079) 154,906
--------- ------------ ---------
Income (loss) from
operations (9,617) 25,079 15,462

Interest, net (11,174) - (11,174)
Other expense, net
including translation
and exchange (6,530) 5,898 (d) (632)
--------- ------------ ---------
Income (loss) from continuing
operations before provision
for income taxes
and minority
interest (27,321) 30,977 3,656

Provision for income
taxes (99) 1,635 (e) 1,536
Minority interest 103 - 103
--------- ------------ ---------
Income (loss) from
continuing
operations (27,325) 29,342 2,017

Loss from discontinued
operations, net (13,966) 10,080 (f) (3,886)
--------- ------------ ---------


Net loss $(41,291) $39,422 $(1,869)
========= ============ =========


Basic earnings per common share
Income (loss) from
continuing
operations $(0.32) $0.02
Discontinued
operations, net (0.17) (0.04)
--------- ---------
Net loss $(0.49) $(0.02)
========= =========
Shares used in per
share computation 83,880 83,880
========= =========

Diluted earnings per common share
Income (loss) from
continuing
operations $(0.32) $0.02
Discontinued
operations, net (0.17) (0.04)
--------- ---------
Net loss $(0.49) $(0.02)
========= =========
Shares used in per
share computation 83,880 86,435 (g)
========= =========

(a) Sales force reduction costs.

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

(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) Environmental reserve, net of tax.

(g) 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 Table 3.1
Consolidated Condensed Statements of Operations and
Reconciliation of Non-GAAP Adjustments


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

Product sales $279,959 $- $279,959
Ribavirin royalties 48,111 - 48,111
--------- ------------ ---------
Total revenues 328,070 - 328,070

Cost of goods sold 92,650 - 92,650
Selling expenses 101,317 (3,351) (a) 97,966
General and
administrative
expenses 48,724 (1,159) (a) 47,565
Research and
development costs 39,384 - 39,384
Acquired in-process
research and
development 11,770 (11,770) (b) -
Restructuring charges 20,185 (20,185) (c) -
Amortization expense 27,420 - 27,420
--------- ------------ ---------
341,450 (36,465) 304,985
--------- ------------ ---------
Income (loss) from
operations (13,380) 36,465 23,085

Interest, net (23,073) - (23,073)
Other income
(expense), net
including translation
and exchange (7,576) 5,898 (d) (1,678)
--------- ------------ ---------
Loss from continuing
operations before
provision
for income taxes
and minority
interest (44,029) 42,363 (1,666)

Provision for income
taxes (6,281) 5,848 (e) (433)
Minority interest 89 - 89
--------- ------------ ---------
Loss from
continuing
operations (37,837) 36,515 (1,322)

Loss from discontinued
operations, net (17,027) 10,080 (f) (6,947)
--------- ------------ ---------


Net loss $(54,864) $46,595 $(8,269)
========= ============ =========


Basic earnings per common share
Loss from
continuing
operations $(0.45) $(0.02)
Discontinued
operations, net (0.21) (0.08)
--------- ---------
Net loss $(0.66) $(0.10)
========= =========
Shares used in per
share computation 83,663 83,663
========= =========

Diluted earnings per common share
Loss from
continuing
operations $(0.45) $(0.02)
Discontinued
operations, net (0.21) (0.08)
--------- ---------
Net loss $(0.66) $(0.10)
========= =========
Shares used in per
share computation 83,663 83,663
========= =========

(a) Sales force reduction costs.

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

(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) Environmental reserve, net of tax.

See non-GAAP financial measure disclosure on Table 2.


Valeant Pharmaceuticals International Table 4
GAAP reconciliation of basic and diluted earnings per share
For the three and six months ended June 30, 2005 and 2004


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

Income
(loss) from
continuing
operations $1,441 $(27,325)$(136,315)$(37,837)

Non-GAAP pre-tax
adjustments:
Acquired IPR&D - 384 126,399 11,770
Sales force
reduction
costs - 4,510 - 4,510
Product
impairment
charges 1,532 - 1,532 -
Restructuring
charges (1,324) 20,185 371 20,185
Loss on early
extinguishment
of debt - 5,898 - 5,898
Tax effect on
the above
charges and
tax
settlements 5,914 (1,635) 19,875 (5,848)
----------------- ------------------


Adjusted income (loss)
from continuing
operations before
the above
charges $7,563 $2,017 $11,862 $(1,322)
================= ==================

Adjusted basic
EPS from
continuing
operations $0.08 $0.02 $0.13 $(0.02)
================= ==================

Adjusted
diluted EPS
from
continuing
operations $0.08 $0.02 $0.13 $(0.02)
================= ==================

Shares used in
basic per share
calculation 92,568 83,880 90,712 83,663
================= ==================

Shares used in
diluted per
share
calculation 95,591 86,435 94,213 83,663
================= ==================


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

Three Months Six Months
Ended June 30, Ended June 30,
----------------- ------------------
2005 2004 % Change 2005 2004 % Change
------------------------------------------------------

Consolidated
operating
income (loss)
(GAAP) $21,209 $(9,617) -- $(91,552)$(13,380) --
Depreciation and
amortization 24,460 20,212 21% 45,498 41,869 9%
----------------- ------------------
EBITDA (non-
GAAP) (a) 45,669 10,595 331% (46,054) 28,489 --
Non-GAAP
adjustments (b) (1,324) 25,079 126,770 36,465
----------------- ------------------

Adjusted EBITDA
(non-GAAP) (a) $44,345 $35,674 24% $80,716 $64,954 24%
================= ==================


(a) We believe that EBITDA is a meaningful non-GAAP financial
measure as an earnings-derived indicator that approximates cash
generation. 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 Table 5
Supplemental Sales Information
For the three and six months ended June 30, 2005 and 2004
(in thousands)

Three Months Ended Six Months Ended
June 30, % June 30, %
----------------- Increase/ ------------ Increase/
2005 2004 (Decrease) 2005 2004 (Decrease)
----------------- -------- ------------- --------
Dermatology
Efudix/Efudex(R)(G)(T) $12,231 $6,852 79% $31,507 $18,774 68%
Kinerase(R)(G)(T) 5,821 4,161 40% 10,256 8,098 27%
Oxsoralen-
Ultra(R)(G)(T) 4,126 5,224 (21%) 7,094 6,612 7%
Dermatix(R)(G) 2,566 1,927 33% 4,462 3,304 35%
Other Dermatology 10,162 (a) -- 20,341 (a) --

Infectious Disease
Virazole(R)(G)(T) 4,039 3,674 10% 8,234 8,491 (3%)
Other Infectious
Disease 4,245 (a) -- 10,098 (a) --

Neurology
Mestinon(R)(G)(T) 10,434 10,274 2% 20,294 19,260 5%
Diastat(T) (b) 14,291 -- -- 19,468 -- --
TASMAR(R)(G)(C) 1,533 584 163% 2,472 584 323%
Other Neurology 28,196 (a) -- 49,609 (a) --

Other Therapeutic Classes
Bedoyecta(R)(T) 10,976 5,579 97% 20,220 11,102 82%
Solcoseryl(T) 3,911 5,159 (24%) 8,105 9,212(12%)
Nyal(T) 5,366 4,270 26% 7,840 6,514 20%
Vision Care(T) 2,911 2,779 5% 6,746 5,685 19%
Other Pharmaceutical
Products 60,020 97,151 (38%) 115,885 182,323(36%)
------------------ ------------------

Total Product Sales $180,828 $147,634 22% $342,631 $279,959 22%
================== ==================

Total Top Ten Product
Sales(T) $74,106 $47,972 54% $139,764 $93,748 49%
================== ==================

Total Global Brand
Product Sales(G) $40,750 $32,696 25% $84,319 $65,123 29%
================== ==================


(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.

(b) Diastat was acquired in March 2005; total sales of products
acquired in the Xcel transaction were $24.3 million and $31.6
million for the three and six months ended June 30, 2005,
respectively.

(c) Tasmar was acquired in April 2004.


Valeant Pharmaceuticals International Table 6
Consolidated Condensed Statement of Revenue
and Operating Income - Regional
For the three and six months ended June 30, 2005 and 2004
(in thousands)

Three Months Ended Six Months Ended
June 30, June 30,
----------------- ----------------
Revenues 2005 2004 % 2005 2004 %
----------------- Change ---------------- Change

Pharmaceuticals

North America 60,398 35,258 71% $109,341 $62,887 74%
Latin America 41,397 36,491 13% 73,457 65,644 12%
Europe 61,753 60,080 3% 127,628 123,199 4%
AAA 17,280 15,805 9% 32,205 28,229 14%
------------------ ------------------
Total
pharmaceuticals 180,828 147,634 22% 342,631 279,959 22%

Ribavirin royalty
revenues 24,206 22,734 6% 43,541 48,111 -9%
------------------ ------------------

Consolidated
revenues $205,034 $170,368 20% $386,172 $328,070 18%
================== ==================

Cost of goods sold $52,940 $45,938 15% $101,661 $92,650 10%
================== ==================

Gross profit margin
on pharmaceutical
sales 71% 69% 70% 67%
================== ==================


Operating Income (Loss)

Pharmaceuticals

North America $16,552 $10,903 52% $33,246 $17,787 87%
Latin America 13,032 12,891 1% 22,850 18,704 22%
Europe 9,137 2,913 214% 20,871 11,527 81%
AAA 2,129 1,619 32% 2,919 1,496 95%
------------------ ------------------
40,850 28,326 44% 79,886 49,514 61%

Corporate expenses (14,344) (12,059) 19% (28,711) (24,652) 16%
------------------ ------------------

Total specialty
pharmaceuticals 26,506 16,267 63% 51,175 24,862 106%

Restructuring
charges 1,324 (20,185) -- (371) (20,185) --
R&D (6,621) (5,315) 25% (15,957) (6,287) 154%
Acquired IPR&D - (384) -- (126,399) (11,770) --
------------------ ------------------

Total consolidated
operating income
(loss) $21,209 $(9,617) $(91,552) $(13,380)
================== ==================



Three Months Ended Six Months Ended
Gross Profit June 30, June 30,
2005 % 2004 % 2005 % 2004 %
-------------------- -- --------------------- --

Pharmaceuticals

North America $47,069 78% $29,301 83% $87,565 80% $52,823 84%
Latin America 30,963 75% 27,986 77% 54,555 74% 48,228 73%
Europe 40,690 66% 36,455 61% 82,152 64% 73,202 59%
AAA 9,166 53% 7,954 50% 16,698 52% 13,056 46%
-------- --------- -------- --------

Total
pharmaceuticals $127,888 71% $101,696 69% $240,970 70% $187,309 67%
======== ========= ======== ========


Valeant Pharmaceuticals International Table 7
Consolidated Balance Sheet and Other Data
(in thousands)

June 30, Dec. 31,
Balance Sheet Data 2005 2004
---------- ----------

Cash and cash equivalents $326,155 $222,590
Marketable securities 31,093 238,918
---------- ----------
Total cash and marketable securities $357,248 $461,508
========== ==========

Accounts receivable, net $171,763 $171,860
Inventory, net 122,673 112,250
Long-term debt 793,047 793,139
Total equity 495,501 476,223


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

Operating activities $22,405 $24,980
Investing activities (83,998) (74,337)
Financing activities 174,125 (104,623)
Effect of exchange rate changes on cash
and cash equivalents (8,967) (287)
---------- ----------

Net increase (decrease) in cash and cash
equivalents 103,565 (154,267)
Net increase (decrease) in marketable securities (207,825) 13,476
---------- ----------

Net decrease in cash and marketable
securities $(104,260) $(140,791)
========== ==========


Valeant Pharmaceuticals International Table 8
Supplemental Non-GAAP Information on Currency Effect
(in thousands)


Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Consolidated

Product sales $180,828 $147,634 $342,631 $279,959
Currency effect (8,030) (15,334)
Product sales,
excluding
currency impact $172,798 $327,297

Operating income
(loss) $21,209 $(9,617) $(91,552) $(13,380)
Currency effect (2,432) (4,445)
Operating income,
excluding
currency impact $18,777 $(95,997)

Geographic Product Sales

North America
pharmaceuticals $60,398 $35,258 $109,341 $62,887
Currency effect (586) (1,032)
North America
pharmaceuticals,
excluding
currency impact $59,812 $108,309

Latin America
pharmaceuticals $41,397 $36,491 $73,457 $65,644
Currency effect (2,139) (1,948)
Latin America
pharmaceuticals,
excluding
currency impact $39,258 $71,509

Europe
pharmaceuticals $61,753 $60,080 $127,628 $123,199
Currency effect (4,592) (10,974)
Europe
pharmaceuticals,
excluding
currency impact $57,161 $116,654

AAA
pharmaceuticals $17,280 $15,805 $32,205 $28,229
Currency effect (713) (1,380)
AAA
pharmaceuticals,
excluding
currency impact $16,567 $30,825


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.