Valeant Pharmaceuticals Reports 2006 First Quarter Results; Restructuring Initiative on Track; $20-30 Million in 2006 Cost Savings Targeted

First Quarter 2006 vs. First Quarter 2005 Highlights:

-- Revenues increased 10 percent to $198.8 million compared to $181.1 million.

-- Product sales increased 12 percent to $180.8 million compared to $161.8 million.

-- Ribavirin royalties decreased 6 percent to $18.1 million compared to $19.3 million.

-- Net loss was $6.4 million, or $0.07 per diluted share, including the impact of stock-based compensation expense of $5.7 million, compared to a net loss of $139.3 million, or $1.57 per diluted share.

-- Adjusted for non-GAAP items, the adjusted loss from continuing operations was $0.6 million, or $0.01 per diluted share, compared to adjusted income from continuing operations of $4.3 million, or $0.05 per diluted share.

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

Timothy C. Tyson, president and chief executive officer, said,"Our first quarter results were disappointing and not indicative ofour expectations for the rest of 2006, although in line with ourrecently communicated expectations. Revenues in the quarter werehigher primarily due to sales in North America of products acquiredlast year. Excluding such acquisitions, sales declined primarily dueto wholesaler buying patterns in Europe and Latin America. Costs wereimpacted by a temporary plant shutdown in Mexico and othermanufacturing variances in the quarter. We have taken aggressiveactions to address these manufacturing issues, and we expect thatfuture results will be further improved by our restructuringinitiative. Our restructuring will result in significant cost savingsfor the company, and allow us to achieve our adjusted earnings targetsof more than $0.50 per share in 2006, $1.00 per share in 2007 and$1.90 per share in 2008."

Revenues:

The increase in product sales in the 2006 first quarter was led bysales of acquired products and the growth of Kinerase(R), Cesamet(TM)and Bedoyecta(TM). These factors were offset by a decrease in sales inthe period of Efudex(R) and non-promoted products.

Excluding acquired products, sales decreased four percent in the2006 first quarter compared to the same period last year. Infergen(R)was acquired at the end of last year and had sales totaling $13.7million in the 2006 first quarter. Sales of products acquired in theXcel transaction totaled $18.3 million in the 2006 first quarter. The2005 first quarter included sales of Xcel products from the March 1,2005 acquisition date and totaled $7.3 million. Sales of theseproducts reported by Xcel in the first two months of 2005 were $11.6million.

Sales of promoted products increased 27 percent in the 2006 firstquarter. Excluding acquired products, sales of promoted products inthe 2006 first quarter were flat compared to the same period lastyear.

Foreign currency translation reduced product sales by $1.6 millionin the 2006 first quarter, but increased operating income by $1.0million in the same period.

Regional Sales Performance:

North America product sales increased 54 percent in the 2006 firstquarter compared to the same period in 2005, primarily due to sales ofacquired products, particularly Infergen, Diastat(R) and Migranal(R).Excluding acquired products, sales in North America increased twopercent in the quarter, primarily due to increased sales of Kinerase,Cesamet and Virazole(R), partially offset by decreased sales of Efudexin the quarter.

Sales in Europe declined 15 percent in the 2006 first quartercompared to the same period last year. Foreign currency translationhad a negative effect of six percent on European product sales. Inaddition, sales were negatively impacted by wholesaler buying patternsin Germany and generic competition in Spain.

Latin America sales increased 12 percent in the first quarter of2006 compared to the same period last year. Sales in Latin Americawere led by a 14 percent increase in sales of Bedoyecta(TM) andincreased sales of a variety of promoted products. Foreign currencytranslation had a positive effect on Latin American product sales ofseven percent in the quarter.

Financial Metrics:

The company's gross margin on product sales decreased in the 2006first quarter to 68 percent compared to 70 percent in the same periodlast year. The decline was primarily due to an increase in cost ofgoods sold that resulted from manufacturing variances, particularlyadjustments for products manufactured that did not meet specificationsand other inventory write-offs, primarily for products that have beendiscontinued or are no longer promoted, along with the impact of atemporary shutdown of the company's Mexico manufacturing facility thatlasted longer than anticipated.

Adjusted for non-GAAP items, selling expense was 35 percent ofproduct sales in the 2006 first quarter compared to 33 percent a yearago. The increase was significantly impacted by expenses for marketdevelopment activities associated with Viramidine(R) made prior to theannouncement of the company's first Phase 3 trial results. Adjustedfor non-GAAP items, general and administrative expenses were 14percent of product sales compared to 15 percent in the same periodlast year.

Research and development costs were 16 percent of product sales inthe 2006 first quarter, the same level reported in the first quarterlast year.

Restructuring Update:

On April 3, 2006, the company announced a restructuring initiativeto reduce costs and accelerate earnings growth. In connection with theinitiative, the company expects to record restructuring charges in2006 of $90-115 million, of which $26.5 million was recorded in thefirst quarter. It is expected that between $20-30 million of therestructuring costs in 2006 will be in cash.

The company expects to save approximately $20-30 million in 2006as a result of its restructuring initiative. In 2007 and 2008, costsavings are expected to be approximately $50-70 million each year.

Valeant continues to expect to report adjusted earnings per sharein 2006 of more than $0.50 per share, excluding restructuring costs,the gain from the settlement of litigation with the Serbiangovernment, stock-based compensation expense and the recognition oftax benefits from U.S. net operating losses. The company continues toexpect adjusted earnings per share in 2007 and 2008 of more than $1.00per share and $1.90 per share, respectively, after taking into accountsimilar adjustments and excluding any benefit or expense associatedwith further development of Viramidine.

The following table summarizes the company's actual metricperformance and expectations for 2006 and 2008:
2004A(1) 2005A(1) 1Q06A(1)(2) 2006E(1)(2) 2008E(2)(3)
-------- -------- ----------- ----------- -----------
Gross Margin 67% 69% 68% 69-71% 75-80%
Cost of Goods
Sold 33% 31% 32% 29-31% 20-25%
Selling Expense 32% 31% 35% 29-31% 25-30%
G & A 16% 15% 14% 11-13% 10-12%
R&D 15% 16% 16% 15-17% 7-10%
Effective Tax
Rate 26% 35% 27% 26-28% 32-34%

(1) Includes non-GAAP adjustments which in 2006 includes estimated
restructuring charges of $90-115 million
(2) Excludes impact from the implementation of SFAS 123R
(3) Excludes any benefit or expense of Viramidine development

Conference Call and Webcast Information:

Valeant will host a conference call today at 10:00 a.m. EDT (7:00a.m. PDT) to discuss its 2006 first quarter results. The dial-innumber to participate on this call is (877) 295-5743, confirmationcode 8056568. International callers should dial (706) 679-0845,confirmation code 8056568. A replay will be available approximatelytwo hours following the conclusion of the conference call throughThursday, May 11, 2006 and can be accessed by dialing (800) 642-1687,confirmation code 8056568. 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,science-based specialty pharmaceutical company that develops,manufactures and markets pharmaceutical products primarily in theareas of neurology, infectious disease and dermatology. Moreinformation about Valeant can be found at www.valeant.com.

Viramidine, Efudex, Diastat, Migranal, Kinerase, Infergen,Bedoyecta, Virazole and Cesamet are trademarks or registeredtrademarks of Valeant Pharmaceuticals International or its relatedcompanies. All other trademarks are the trademarks or the registeredtrademarks of their respective owners.

FORWARD-LOOKING STATEMENTS:

This press release contains forward-looking statements, including,but not limited to, statements regarding the company's restructuringinitiative and its anticipated effect on the company's expenses, thecharges associated with the restructuring initiative, the company'sexpected margins, expenses, tax rates and earnings, the continuingdevelopment of Viramidine, and the possible sale or license ofpradefovir, 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, productdevelopment and regulatory approval, the execution and success of thecompany's restructuring and strategic plans and other risks detailedfrom time to time in Valeant's SEC filings. Valeant wishes to cautionthe reader that these factors are among the factors that could causeactual results to differ materially from the expectations described inthe forward-looking statements. Valeant also cautions the reader thatundue reliance should not be placed on any of the forward-lookingstatements, which speak only as of the date of this release. Thecompany undertakes no responsibility to update any of theseforward-looking statements to reflect events or circumstances afterthe date of this release or to reflect actual outcomes.

NON-GAAP INFORMATION:

To supplement the consolidated financial results prepared inaccordance with generally accepted accounting principles (GAAP), thecompany uses non-GAAP financial measures that exclude certain items,such as in-process research and development expenses, special chargesand credits, stock compensation expense, and results of discontinuedbusinesses. Management does not consider the excluded items part ofday-to-day business or reflective of the core operational activitiesof the company as they result from transactions outside the ordinarycourse of business. Management uses non-GAAP financial measuresinternally for strategic decision making, forecasting future resultsand evaluating current performance. Guidance is provided only on anon-GAAP basis due to the inherent difficulty in forecasting suchitems. By disclosing non-GAAP financial measures, management intendsto provide investors with a more meaningful, consistent comparison ofthe company's core operating results and trends for the periodspresented. Non-GAAP financial measures are not prepared in accordancewith GAAP; therefore, the information is not necessarily comparable toother companies and should be considered as a supplement to, not asubstitute for, or superior to, the corresponding measures calculatedin accordance with GAAP.

The company has included adjusted earnings estimates and otherforward-looking financial metrics that have not been prepared inaccordance with GAAP. Valeant has not provided a reconciliation ofthese forward-looking non-GAAP financial measures due to thedifficulty in forecasting and quantifying the exact amount of therestructuring charges and the related tax benefits that will beincluded in the comparable GAAP measures.
Valeant Pharmaceuticals International Table 1
Consolidated Condensed Statement of Income
For the Three Months Ended March 31, 2006 and 2005

Three Months Ended
March 31,
--------------------
(In thousands, except per share data) 2006 2005 % Change
--------- ---------- ---------

Product sales $180,757 $161,803 12%
Ribavirin royalties 18,091 19,335 -6%
--------- ----------
Total revenues 198,848 181,138 10%
--------- ----------

Cost of goods sold (a) 58,580 48,721 20%
Selling expenses (a) 64,270 52,815 22%
General and administrative expenses (a) 28,540 24,577 16%
Research and development costs (a) 29,535 25,724 15%
Acquired in-process research and
development (b) - 126,399
Gain on litigation settlement (c) (34,000) -
Restructuring charges (d) 26,466 1,695
Amortization expense 17,523 13,968 25%
--------- ----------
190,914 293,899 -35%
--------- ----------
Income (loss) from operations 7,934 (112,761)

Interest expense, net (7,780) (6,666)
Other income (expense), net including
translation and exchange 937 (1,791)
--------- ----------
Income (loss) from continuing
operations before provision for income
taxes and minority interest 1,091 (121,218)

Provision for income taxes 7,242 16,367
Minority interest 1 171
--------- ----------
Loss from continuing operations (6,152) (137,756)

Loss from discontinued operations, net (212) (1,503)
--------- ----------


Net loss $(6,364) $(139,259)
========= ==========


Basic and diluted earnings per common
share
Loss from continuing operations $(0.07) $(1.55)
Discontinued operations, net - (0.02)
--------- ----------
Net loss $(0.07) $(1.57)
========= ==========
Shares used in per share
computation 92,770 88,836
========= ==========

(a) In 2006 Valeant adopted a new accounting standard (FAS 123R) which
requires that the estimated value of employee stock options and
stock purchase plans be recorded as an expense. Stock compensation
expense in 2006 totaled $5.7 million consisting of $0.4 million in
cost of sales, $0.8 million in selling expenses, $0.8 million in
research and development and $3.7 million in general and
administrative expenses. In 2005, Valeant recorded $0.5 million of
stock compensation expense, however, that amount did not include a
provision for the value of employee stock options granted at the
market price or the Valeant employee stock purchase plan which
permits employees purchase stock at a discount to market price.
Had the new accounting standard been adopted in 2005, stock
compensation expense would have been increased by $5.1 million.

(b) Expense associated with the write-off of acquired in-process
research and development (IPR&D) expense associated with the Xcel
acquisition.

(c) Gain results from settlement of long-standing dispute with
Republic of Serbia over joint venture. In March 2006 Valeant
collected $28 million of this amount; an additional $6 million to
be paid in 2007.

(d) Charges relate to our restructuring program which includes a
manufacturing rationalization plan, the write off of certain
information system costs and a portion of the severance costs
associated with our restructuring plan.




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

Three Months Ended
March 31, 2006
------------------------------------
Non-GAAP
GAAP Adjustments Adjusted
--------- ------------- ---------
(In thousands, except per share
data)

Product sales $180,757 $- $180,757
Ribavirin royalties 18,091 - 18,091
--------- ------------ ---------
Total revenues 198,848 - 198,848
--------- ------------ ---------

Cost of goods sold 58,580 (413)(a) 58,167
Selling expenses 64,270 (847)(a) 63,423
General and administrative
expenses 28,540 (3,641)(a) 24,899
Research and development costs 29,535 (780)(a) 28,755
Acquired in-process research and
development - - -
Gain on litigation settlement (34,000) 34,000 (b) -
Restructuring charges 26,466 (26,466)(c) -
Amortization expense 17,523 - 17,523
--------- ------------ ---------
190,914 1,853 192,767
--------- ------------ ---------
Income from operations 7,934 (1,853) 6,081

Interest expense, net (7,780) - (7,780)
Other expense, net including
translation and exchange 937 - 937
--------- ------------ ---------
Income (loss) from continuing
operations before provision for
income taxes and minority
interest 1,091 (1,853) (762)

Provision (benefit) for income
taxes 7,242 (7,448)(d) (206)
Minority interest 1 - 1
--------- ------------ ---------
Loss from continuing
operations (6,152) 5,595 (557)

Loss from discontinued
operations, net (212) - (212)
--------- ------------ ---------


Net loss $(6,364) $5,595 $(769)
========= ============ =========


Basic and diluted earnings per
common share
Loss from continuing
operations $(0.07) $(0.01)
Discontinued operations, net - -
--------- ---------
Net loss $(0.07) $(0.01)
========= =========
Shares used in per share
computation 92,770 92,770
========= =========

(a) Stock based compensation expense totaling $5.7 million. After
income taxes, the effect on non-GAAP adjusted net income is $4
million or $0.04 per share.

(b) Gain results from settlement of long-standing dispute with
Republic of Serbia over joint venture. In March 2006 Valeant
collected $28 million of this amount; an additional $6 million to
be paid in 2007.

(c) Charges include the write off of certain information system costs
and a portion of the severance costs associated with our
restructuring plan.

(d) Tax effect for non-GAAP adjustments, including tax benefits from
U.S. net operating losses not recognized for GAAP purposes.

To supplement the consolidated financial results prepared in
accordance with Generally Accepted Accounting Principles (GAAP), the
company uses non-GAAP financial measures that exclude certain items,
such as in-process research and development expenses, special charges
and credits, stock compensation expense and results of discontinued
businesses. Management does not consider the excluded items part of
day-to-day business or reflective of the core operational activities
of the company as they result from transactions outside the ordinary
course of business. Management uses non-GAAP financial measures
internally for strategic decision making, forecasting future results
and evaluating current performance. Guidance is provided only on a
non-GAAP basis due to the inherent difficulty in forecasting such
items.
By disclosing non-GAAP financial measures, management intends to
provide investors with a more 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.




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

Three Months Ended
March 31, 2005
---------------------------------------
Non-GAAP
GAAP Adjustments Adjusted
---------- ------------ ---------
(In thousands, except per
share data)

Product sales $161,803 $- $161,803
Ribavirin royalties 19,335 - 19,335
---------- ------------ ---------
Total revenues 181,138 - 181,138
---------- ------------ ---------

Cost of goods sold 48,721 - 48,721
Selling expenses 52,815 - 52,815
General and administrative
expenses 24,577 - 24,577
Research and development costs 25,724 - 25,724
Acquired in-process research
and development 126,399 (126,399)(a) -
Restructuring charges 1,695 (1,695)(b) -
Amortization expense 13,968 - 13,968
---------- ------------ ---------
293,899 (128,094) 165,805
---------- ------------ ---------
Income (loss) from
operations (112,761) 128,094 15,333

Interest expense, net (6,666) - (6,666)
Other income, net including
translation and exchange (1,791) - (1,791)
---------- ------------ ---------
Income (loss) from continuing
operations before provision
for income taxes and minority
interest (121,218) 128,094 6,876

Provision for income taxes 16,367 (13,961)(c) 2,406
Minority interest 171 - 171
---------- ------------ ---------
Income (loss) from
continuing operations (137,756) 142,055 4,299

Loss from discontinued
operations, net (1,503) - (1,503)
---------- ------------ ---------


Net Income (loss) $(139,259) $142,055 $2,796
========== ============ =========


Basic earnings per common
share
Income (loss) from
continuing operations $(1.55) $0.05
Discontinued operations,
net (0.02) (0.02)
---------- ---------
Net Income (loss) $(1.57) $0.03
========== =========
Shares used in per share
computation 88,836 88,836
========== =========

Diluted earnings per common
share
Income (loss) from
continuing operations $(1.55) $0.05
Discontinued operations,
net (0.02) (0.02)
---------- ---------
Net Income (loss) $(1.57) $0.03
========== =========
Shares used in per share
computation 88,836 91,826 (d)
========== =========

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

(b) Impairment of our manufacturing site in China and a gain on the
sale of a manufacturing plant in Argentina.

(c) Tax effect of non-GAAP adjustments. This adjustment reflects
future tax benefits for net operating losses in the US which are
not reflected in the GAAP financial statements offset by the
effect of the IPR&D related to Xcel and the restructuring charge
not being deductible for tax purposes.

(d) Shares used in adjusted diluted EPS include 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 4
GAAP reconciliation of basic and diluted earnings per share
For the Three Months Ended March 31, 2006 and 2005

Three Months Ended
March 31,
-------------------
(In thousands, except per share data) 2006 2005
-------- ----------

Loss from continuing operations $(6,152) $(137,756)

Non-GAAP adjustments:
Acquired IPR&D - 126,399
Stock based compensation expense 5,681 -
Gain on litigation settlement (34,000) -
Restructuring charges 26,466 1,695
Tax effect of non-GAAP adjustments 7,448 13,961
-------- ----------


Adjusted income (loss) from continuing
operations before the above charges $(557) $4,299

Adjusted basic EPS from continuing
operations $(0.01) $0.05
======== ==========

Adjusted diluted EPS from continuing
operations $(0.01) $0.05
======== ==========

Shares used in basic per share
calculation 92,770 88,836
======== ==========

Shares used in diluted per share
calculation 92,770 91,826
======== ==========




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

Three Months Ended
March 31,
-------------------
2006 2005 % Change
-------- ---------- ---------

Consolidated operating income (loss)
(GAAP) $7,934 $(112,761) --
Depreciation and amortization 23,482 21,038 12%
-------- ----------
EBITDA (non-GAAP) (a) 31,416 (91,723) --
Stock based compensation expense (b) 5,681 -
Other Non-GAAP adjustments (b) (7,534) 128,094
-------- ----------

Adjusted EBITDA (non-GAAP) (a) $29,563 $36,371 -19%
======== ==========

(a) We believe that EBITDA is a meaningful non-GAAP financial measure
as an earnings-derived indicator of the cash flow generation
ability of the company. 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 and 3 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 Months Ended March 31, 2006 and 2005
(In thousands)

Three Months Ended
March 31, %
------------------- Increase/
2006 2005 (Decrease)
--------- --------- ----------
Dermatology
Efudix/Efudex(R)(P) $15,581 $19,276 (19%)
Kinerase(R)(P) 6,860 4,435 55%
Oxsoralen-Ultra(R)(P) 3,508 2,968 18%
Dermatix(TM)(P) 1,834 1,896 (3%)
Other Dermatology 8,569 8,133 5%

Infectious Disease
Infergen(R)(P) (a) 13,705 - --
Virazole(R)(P) 5,157 4,195 23%
Other Infectious Disease 4,731 5,853 (19%)

Neurology
Diastat(P) (b) 12,022 5,177 132%
Mestinon(R)(P) 9,817 9,860 (0%)
Cesamet(P) 3,303 2,055 61%
Migranal(P) (b) 3,115 774 302%
Librax(P) 2,919 4,080 (28%)
Dalmane/Dalmadorm(P) 2,466 2,642 (7%)
Limbitrol(P) 1,510 1,294 17%
TASMAR(R)(P) 1,185 939 26%
Other Neurology 14,591 10,568 38%

Other Therapeutic Classes
Bedoyecta(TM)(P) 10,580 9,244 14%
Bisocard(P) 3,565 2,655 34%
Solcoseryl(P) 3,377 4,194 (19%)
Calcitonin(P) 1,850 2,585 (28%)
Nyal(P) 1,754 2,474 (29%)
Aclotin(P) 1,372 1,520 (10%)
Espaven(P) 1,302 1,562 (17%)
Other Pharmaceutical Products 46,084 53,424 (14%)
--------- ---------

Total Product Sales $180,757 $161,803 12%
========= =========

Total Promoted Product Sales(P) $106,782 $83,825 27%
========= =========

(a) Infergen was acquired from InterMune on December 30, 2005.

(b) Diastat and Migranal were acquired with the Xcel transaction on
March 1, 2005.

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




Valeant Pharmaceuticals International Table 6
Consolidated Condensed Statement of Revenue and Operating
Income - Regional
For the Three Months Ended March 31, 2006 and 2005
(In thousands)

Three Months Ended
March 31,
------------------------
Revenues 2006 2005 % Change
--------- ---------- ---------


North America $75,212 $48,943 54%
Latin America 35,788 32,060 12%
Europe 56,257 65,875 -15%
AAA 13,500 14,925 -10%
--------- ----------
Total specialty pharmaceuticals 180,757 161,803 12%

Ribavirin royalty revenues 18,091 19,335 -6%
--------- ----------

Consolidated revenues $198,848 $181,138 10%
========= ==========

Cost of goods sold $58,580 $48,721 20%
========= ==========

Gross profit margin on
pharmaceutical sales 68% 70%
========= ==========


Operating Income (Loss)



North America $22,492 $16,694 35%
Latin America 8,684 9,818 -12%
Europe 4,550 11,734 -61%
AAA 154 790 -81%
--------- ----------
35,880 39,036 -8%

Corporate expenses (a) $(23,190) $(14,367) 61%
--------- ----------

Total specialty pharmaceuticals 12,690 24,669 -49%

Restructuring charges (26,466) (1,695) --
Gain on litigation settlement 34,000 -
R&D (12,290) (9,336) 32%
Acquired IPR&D - (126,399) --
--------- ----------

Total consolidated operating income
(loss) $7,934 $(112,761)
========= ==========

(a) Includes $5.7 million of stock based compensation expense in 2006
and $0.5 million in 2005.


Three Months Ended
Gross Profit March 31, March 31,
2006 % 2005 %
--------- --- ---------- ---------



North America $62,564 83% $40,496 83%
Latin America 23,788 66% 23,592 74%
Europe 29,360 52% 41,462 63%
AAA 6,465 48% 7,532 50%
--------- ----------

Total specialty pharmaceuticals $122,177 68% $113,082 70%
========= ==========




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

March 31, December 31,
Balance Sheet Data 2006 2005
---------- ------------

Cash and cash equivalents $244,362 $224,856
Marketable securities 11,121 10,210
---------- ------------
Total cash and marketable securities $255,483 $235,066
========== ============

Accounts receivable, net $174,433 $187,987
Inventory, net 137,729 136,034
Long-term debt 785,850 788,439
Total equity 434,590 439,251



Other Data Three Months Ended
March 31, March 31,
2006 2005
---------- ------------
Cash flow provided by (used in) continuing
operations

Operating activities $40,038 $8,662
Investing activities (14,056) (83,477)
Financing activities (7,204) 182,453
Effect of exchange rate changes on cash and
cash equivalents 728 (4,782)
---------- ------------

Net increase in cash and cash equivalents 19,506 102,856
Net increase (decrease) in marketable
securities 911 (202,799)
---------- ------------

Net increase (decrease) in cash and marketable
securities $20,417 $(99,943)
========== ============




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

Three Months Ended
March 31,
--------------------
2006 2005
--------- ----------
Consolidated

Product sales $180,757 $161,803
Currency effect 1,550
Product sales, excluding currency impact $182,307

Operating income (loss) $7,934 $(112,761)
Currency effect (981)
Operating income, excluding currency impact $6,953

Geographic Product Sales

North America pharmaceuticals $75,212 $48,943
Currency effect (489)
North America pharmaceuticals, excluding currency
impact $74,723

Latin America pharmaceuticals $35,788 $32,060
Currency effect (2,097)
Latin America pharmaceuticals, excluding
currency impact $33,691

Europe pharmaceuticals $56,257 $65,875
Currency effect 3,769
Europe pharmaceuticals, excluding currency impact $60,026

AAA pharmaceuticals $13,500 $14,925
Currency effect 367
AAA pharmaceuticals, excluding currency impact $13,867


Note: Currency effect is determined by comparing adjusted 2006
reported amounts, calculated using 2005 monthly average exchange
rates, to the actual 2005 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.