Valeant Pharmaceuticals Announces Strategic Restructuring Plan

The company also announced that it expects to report approximatelybreak-even adjusted earnings per share in the first quarter of 2006,excluding the impact of any restructuring charges, as a result ofslightly lower than anticipated revenues that are consistent withhistorical trends, and higher selling and research and developmentexpenses.

The restructuring program includes the following steps:

-- Rationalize discovery and pre-clinical development operations;

-- Out-license pradefovir, the company's compound in development for the treatment of hepatitis B, and VRX-840773, its HIV compound;

-- Restructure the clinical and product development organization to focus on completing the development of Viramidine(R) (taribavirin), retigabine and Infergen(R);

-- Reduce selling expense to a range of 29-31 percent of product sales in 2006;

-- Reduce general and administrative expenses to a range of 11-13 percent of product sales in 2006;

-- Reduce commercial regions from four to three; and,

-- Rationalize manufacturing facilities further to assure achievement of the company's cost of goods sold goal of 20-25 percent by 2008.

Timothy C. Tyson, president and chief executive officer, said,"The steps we are taking are driven by our goal to deliver asignificant increase in earnings over the next three years. Wecontinue to expect our revenues to grow at an annual rate of 5 to 10percent. We remain committed to the development of Viramidine,retigabine and Infergen, which we will continue to pursueaggressively. As we near the completion of our second pivotal, Phase 3trial for Viramidine, we are evaluating the best path to advance thisdevelopment program to regulatory approval."

Excluding costs associated with the restructuring, Valeant expectsto report adjusted earnings of more than $0.50 per diluted share in2006. The company also expects to report adjusted earnings of morethan $1.00 per diluted share in 2007. The company reiterates its 2008goal of $1.90 in adjusted diluted earnings per share, excluding anyimpact from Viramidine.

As a result of these steps, Valeant expects to record arestructuring charge of approximately $80 million to $100 million, ofwhich a portion will be recorded in the 2006 first quarter.Approximately 25-35 percent of the restructuring charge will be incash.

Earnings estimates for all periods do not reflect theimplementation of Statement of Financial Accounting Standards No.123(R). Adjusted earnings estimates in 2006 reflect non-GAAPadjustments primarily consisting of the restructuring charges for theactions announced today, the gain on settlement of litigation with theSerbian government and the recognition of tax benefits from U.S. netoperating losses. Expected earnings for 2007 and 2008 do not reflectany benefit or expenses associated with further development ofViramidine pending an economic assessment and determination of thepotential regulatory and commercialization path. The earningsestimates for all periods also assume stable ribavirin royalties.

About Valeant

Valeant Pharmaceuticals International (NYSE:VRX) is a global,science-based specialty pharmaceutical company that develops,manufactures and markets products primarily in the areas of neurology,infectious disease and dermatology. More information about Valeant canbe found at www.valeant.com.

Viramidine is a registered trademark 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, including,but not limited to, statements regarding the anticipated impact of therestructuring program on the company's operations and expenses, thecharge associated with the program, expected revenues, expenses andearnings, and the continuing development of Viramidine, retigabine andInfergen, that are based on management's current expectations andinvolve risks and uncertainties, including, but not limited to, risksand uncertainties relating to projections of future sales, returns oninvested assets and clinical development, regulatory approvalprocesses, marketplace acceptance of the company's products, successof the company's strategic restructuring initiatives and the abilityof management to execute them, cost-cutting measures, success of thecompany's strategic plan and the ability to achieve financial targetsand cost reduction goals, general economic factors and business andcapital market conditions, general industry trends, changes in tax lawrequirements and government regulation, adverse events that wouldrequire clinical trials to be prematurely terminated, and other risksdetailed from time to time in Valeant's SEC filings. Valeant wishes tocaution the reader that these factors, as well as other factorsdescribed in Valeant's SEC filings, are among the factors that couldcause actual results to differ materially from the expectationsdescribed in the forward-looking statements. Valeant also cautions thereader that undue reliance should not be placed on any of theforward-looking statements, which speak only as of the date of thisrelease. The company undertakes no responsibility to update any ofthese forward-looking statements to reflect events or circumstancesafter the date of this release or to reflect actual outcomes.

NON-GAAP INFORMATION:

In this press release, Valeant refers to certain adjusted earningsestimates that have not been prepared in accordance with generallyaccepted accounting principles (GAAP). Valeant has not provided areconciliation of these forward-looking non-GAAP financial measuresdue to the difficulty in forecasting and quantifying the exact amountof the restructuring charge and the related tax benefits that will beincluded in the comparable GAAP measures.