##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-Q
   (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    September 30, 2008oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file
    number: 1-11397
      Valeant Pharmaceuticals
    International
 (Exact name of registrant as
    specified in its charter)
   Delaware

33-0628076(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)One Enterprise
    Aliso Viejo, California(Address of principal
    executive offices)

92656(Zip
    Code)   (949) 461-6000
 (Registrants telephone
    number, including area code)
   þ o
  Rule 12b-2
  Large
    accelerated
    filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ




---



##### 





VALEANT
    PHARMACEUTICALS INTERNATIONAL
  INDEX
   
  PageNumberPART I  FINANCIAL
    INFORMATIONItem 1.

Financial Statements (unaudited)


2Consolidated Condensed Balance Sheets as of
    September 30, 2008 and December 31, 2007


2Consolidated Condensed Statements of Operations
    for the three and nine months ended September 30, 2008 and
    2007


3Consolidated Condensed Statements of
    Comprehensive Income for the three and nine months ended
    September 30, 2008 and 2007


4Consolidated Condensed Statements of Cash Flows
    for the nine months ended September 30, 2008 and 2007


5Notes to Consolidated Condensed Financial
    Statements


6Item 2.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


28Item 3.

Quantitative and Qualitative Disclosures About
    Market Risk


45Item 4.

Controls and Procedures


45PART II  OTHER
    INFORMATIONItem 1.

Legal Proceedings


47Item 1A.

Risk Factors


47Item 2.

Purchases of Equity Securities by the Issuer and
    Affiliated Purchasers


48Item 6.

Exhibits


48SIGNATURES


50EX-10.6EX-10.7EX-15.1EX-15.2EX-31.1EX-31.2EX-32.1   1




---



##### Table of Contents



PART I 
    FINANCIAL INFORMATION  Item 1.
    Financial
    Statements VALEANT
    PHARMACEUTICALS INTERNATIONAL



CONSOLIDATED
    CONDENSED BALANCE SHEETS

As of
    September 30, 2008 and December 31, 2007  September 30,


December 31,2008


2007(Unaudited)(In thousands, except par value data)ASSETSCurrent Assets:Cash and cash equivalents

$
521,263


$
287,728Marketable securities


49,749



51,292Accounts receivable, net


121,161



147,863Inventories, net


73,478



80,150Assets held for sale and assets of discontinued operations






326,270Prepaid expenses and other current assets


14,518



19,119Current deferred tax assets, net


16,811



13,092Income taxes


15,350



25,684Total current assets


812,330



951,198Property, plant and equipment, net


103,279



109,991Deferred tax assets, net


35,927



58,887Goodwill


76,798



80,346Intangible assets, net


214,761



260,802Other assets


32,032



33,038Total non-current assets


462,797



543,064$
1,275,127


$
1,494,262LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Trade payables

$
55,732


$
34,385Accrued liabilities


132,817



118,834Notes payable and current portion of long-term debt


586



1,655Income taxes payable


20,532



276Current deferred tax liabilities, net


2,326



2,252Liabilities held for sale and liabilities of discontinued
    operations






50,358Current liabilities for uncertain tax positions


445



616Total current liabilities


212,438



208,376Long-term debt, less current portion


481,060



782,552Deferred tax liabilities, net


215



4,878Liabilities for uncertain tax positions


54,739



68,749Other liabilities


27,323



15,604Total non-current liabilities


563,337



871,783Total liabilities


775,775



1,080,159Commitments and contingenciesStockholders Equity:Common stock, $0.01 par value; 200,000 shares
    authorized; 85,873 (September 30, 2008) and 89,286
    (December 31, 2007) shares outstanding (after
    deducting shares in treasury of 12,236 as of September 30,
    2008 and 7,585 as of December 31, 2007)


859



893Additional capital


1,134,279



1,192,559Accumulated deficit


(718,025
)


(859,559
)Accumulated other comprehensive income


82,239



80,210Total stockholders equity


499,352



414,103$
1,275,127


$
1,494,262    2




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL



CONSOLIDATED
    CONDENSED STATEMENTS OF OPERATIONS

For the
    three and nine months ended September 30, 2008 and
    2007  Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007(Unaudited, in thousands, except per share data)Revenues:Product sales

$
153,181


$
150,181


$
431,142


$
431,060Alliance revenue (including ribavirin royalties)


15,243



14,078



42,821



69,503Total revenues


168,424



164,259



473,963



500,563Costs and expenses:Cost of goods sold (excluding amortization)


42,698



41,848



126,327



113,084Selling expenses


45,343



46,950



134,040



142,892General and administrative expenses


26,114



26,534



77,629



77,631Research and development costs


23,239



24,865



75,100



68,528Restructuring, asset impairments and dispositions


3,527







4,294



18,074Amortization expense


11,488



14,024



37,616



42,547Total costs and expenses


152,409



154,221



455,006



462,756Income from operations


16,015



10,038



18,957



37,807Other income (expense), net including translation and exchange


(1,555
)


(887
)


(3,384
)


2,503Loss on early extinguishment of debt


(14,882
)






(14,882
)


Interest income


3,066



3,545



13,026



12,748Interest expense


(6,255
)


(10,395
)


(25,585
)


(32,221
)Income (loss) from continuing operations before income taxes and
    minority interest


(3,611
)


2,301



(11,868
)


20,837Provision (benefit) for income taxes


(146
)


7,491



33,727



2,311Minority interest, net


1



1



5



2Income (loss) from continuing operations


(3,466
)


(5,191
)


(45,600
)


18,524Income (loss) from discontinued operations


210,154



(6,899
)


187,134



(4,377
)Net income (loss)

$
206,688


$
(12,090
)

$
141,534


$
14,147Basic income (loss) per share:Income (loss) from continuing operations

$
(0.04
)

$
(0.06
)

$
(0.51
)

$
0.20Income (loss) from discontinued operations


2.39



(0.07
)


2.10



(0.05
)Net income (loss) per share

$
2.35


$
(0.13
)

$
1.59


$
0.15Diluted income (loss) per share:Income (loss) from continuing operations

$
(0.04
)

$
(0.06
)

$
(0.51
)

$
0.19Income (loss) from discontinued operations


2.39



(0.07
)


2.10



(0.04
)Net income (loss) per share

$
2.35


$
(0.13
)

$
1.59


$
0.15Shares used in per share computation  Basic


87,988



91,889



89,123



93,896Shares used in per share computation  Diluted


87,988



91,889



89,123



95,003    3




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL



CONSOLIDATED
    CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

For the
    three and nine months ended September 30, 2008 and
    2007  Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007(Unaudited, in thousands)Net income (loss)

$
206,688


$
(12,090
)

$
141,534


$
14,147Other comprehensive income (loss):Foreign currency translation adjustments


(75,089
)


25,257



21



37,307Unrealized gain (loss) on marketable equity securities






(1,088
)


1,084



(458
)Unrealized gain (loss) on hedges


2,731



(174
)


(1,813
)


6,833Pension liability adjustment


2,576



638



2,737



(1,345
)Comprehensive income

$
136,906


$
12,543


$
143,563


$
56,484    4




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL



CONSOLIDATED
    CONDENSED STATEMENTS OF CASH FLOWS

For the
    nine months ended September 30, 2008 and 2007  Nine Months EndedSeptember 30,2008


2007(Unaudited, in thousands)Cash flows from operating activities:Net income

$
141,534


$
14,147Income (loss) from discontinued operations


187,134



(4,377
)Income (loss) from continuing operations


(45,600
)


18,524Adjustments to reconcile income (loss) from continuing
    operations to net cash provided by operating activities in
    continuing operations:Depreciation and amortization


51,798



53,924Provision for losses on accounts receivable and inventory


20,293



5,815Stock compensation expense


1,341



10,104Translation and exchange (gains) losses, net


3,384



(2,503
)Impairment charges and other non-cash items


(12,167
)


15,151Deferred income taxes


(22,582
)


14,522Loss on extinguishment of debt


2,842



Change in assets and liabilities, net of effects of acquisitions:Accounts receivable


30,723



26,606Inventories


(17,620
)


(608
)Prepaid expenses and other assets


8,859



992Trade payables and accrued liabilities


(1,935
)


(20,545
)Income taxes


36,626



(43,581
)Other liabilities


2,684



119Cash flow from operating activities in continuing operations


58,646



78,520Cash flow from operating activities in discontinued operations


9,632



6,467Net cash provided by operating activities


68,278



84,987Cash flows from investing activities:Capital expenditures


(9,456
)


(22,368
)Proceeds from sale of assets


728



37,918Proceeds from sale of businesses


48,575



2,453Proceeds from investments


151,047



18,598Purchase of investments


(139,722
)


(22,100
)Acquisition of businesses, license rights and product lines


(1,306
)


(22,091
)Cash flow from investing activities in continuing operations


49,866



(7,590
)Cash flow from investing activities in discontinued operations


462,418



7,388Net cash provided by (used in) investing activities


512,284



(202
)Cash flows from financing activities:Payments on long-term debt and notes payable


(300,712
)


(1,545
)Proceeds from capitalized lease financing, long-term debt and
    notes payable


125



1,716Stock option exercises and employee stock purchases


18,589



14,517Purchase of treasury stock


(91,422
)


(79,599
)Cash flow from financing activities in continuing operations


(373,420
)


(64,911
)Cash flow from financing activities in discontinued operations


(43
)


(6,610
)Net cash used in financing activities


(373,463
)


(71,521
)Effect of exchange rate changes on cash and cash equivalents


4,799



15,475Net increase in cash and cash equivalents


211,898



28,739Cash and cash equivalents at beginning of period


309,365



325,579Cash and cash equivalents at end of period


521,263



354,318Cash and cash equivalents classified as part of discontinued
    operations






(31,244
)Cash and cash equivalents of continuing operations

$
521,263


$
323,074    5




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL



NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

September 30, 2008

(Unaudited)



In the consolidated condensed financial statements included
    herein, we, us, our,
    Valeant and the Company refer to Valeant
    Pharmaceuticals International and its subsidiaries. The
    consolidated condensed financial statements have been prepared
    by us, without audit, pursuant to the rules and regulations of
    the Securities and Exchange Commission (the SEC).
    Certain information and footnote disclosures normally included
    in financial statements prepared on the basis of accounting
    principles generally accepted in the United States of America
    have been condensed or omitted pursuant to such rules and
    regulations. The results of operations presented herein are not
    necessarily indicative of the results to be expected for a full
    year. Although we believe that all adjustments (consisting only
    of normal, recurring adjustments) necessary for a fair
    presentation of the interim periods presented are included and
    that the disclosures are adequate to make the information
    presented not misleading, these consolidated condensed financial
    statements should be read in conjunction with the consolidated
    financial statements and notes thereto included in our annual
    report on
    Form 10-K
    for the year ended December 31, 2007. The year-end
    condensed balance sheet data was derived from audited financial
    statements, but does not include all disclosures required by
    accounting principles generally accepted in the United States of
    America. 1.
    Organization
    and Summary of Significant Accounting Policies  Organization:
  Principles of Consolidation:
  Marketable Securities: held-to-maturity
  Derivative Financial Instruments:
  Comprehensive Income: Reporting Comprehensive
    Income.
  Per Share Information:
 6




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
  Stock-Based Compensation Expense: Share-Based
    Payment,
  Assets Held for Sale: Accounting for the Impairment or
    Disposal of Long-lived Assets
  Discontinued Operations: No. 03-13, Applying the Conditions in Paragraph 42 of FASB
    Statement No. 144 in Determining Whether to Report
    Discontinued Operations
  Use of Estimates:
  Out of Period Adjustments: value-added
   7




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
    Recent
    Accounting Pronouncements:
  Fair Value
    Measurements 157-1 157-2. FSP 157-1 Accounting for Leases FSP 157-2
  The
    Fair Value Option for Financial Assets and Financial Liabilities
  Business Combinations
  No. 07-1, Accounting for Collaborative Arrangements (EITF 07-1). EITF 07-1 EITF 07-1 EITF 07-1
 8




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
  EITF 07-1
  Disclosures about Derivative Instruments and Hedging
    Activities  an amendment of FASB Statement
    No. 133
  No. FAS 142-3, Determination of the Useful Life of Intangible Assets FAS 142-3). FAS 142-3 Goodwill and Other Intangible Assets FAS 142-3 FAS 142-3
  14-1, Accounting for Convertible Debt Instruments That May Be
    Settled in Cash upon Conversion (Including Partial Cash
    Settlement) 14-1). 14-1 14-1 14-1 14-1
  The
    Hierarchy of Generally Accepted Accounting Principles
  2.
    Restructuring  Employers
    Accounting for Postemployment Benefits Accounting for Costs Associated
    with Exit or Disposal Activities Accounting for the Impairment or
    Disposal of Long-lived Assets
 9




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
  Form 10-K
  2008
    Restructuring
             10




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
      Three Months


Nine MonthsEnded


EndedSeptember 30,


September 30,2008 Restructuring Program

2008


2008Cash-related charges:Employee severances (160 employees, cumulatively)

$
220


$
12,290Professional services, contract cancellation and other cash costs


2,478



11,030Subtotal: cash charges


2,698



23,320Stock compensation






4,778Impairment of long-lived assets






8,346Loss on sale of long-lived assets






2,926Subtotal: non-cash charges






16,050Subtotal: restructuring expenses


2,698



39,370Gain on Invida transaction


829



(35,076
)Restructurings, asset impairments and dispositions

$
3,527


$
4,294   No. 96-9, Classification of Inventory Markdowns and Other Costs
    Associated with a Restructuring
  2006
    Restructuring
     11




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
      Three Months


Nine MonthsEnded


EndedSeptember 30,


September 30,2006 Restructuring Program

2007


2007Employee severances (417 employees, cumulatively)

$



$
3,788Contract cancellation and other cash costs






2,076Subtotal: cash charges






5,864Write-off of accumulated foreign currency translation adjustments






2,891Impairment of manufacturing and research facilities






9,319Subtotal: non-cash charges






12,210Restructurings, asset impairments and dispositions

$



$
18,074   Reconciliation
    of Cash Restructuring Payments with Restructuring
    Accrual
      2006 Restructuring: Reconciliation of Cash Payments and
    AccrualsRestructuring accrual, June 30, 2008

$
1,375Cash paid


(375
)Restructuring accrual, September 30, 2008

$
1,0002008 Restructuring: Reconciliation of Cash Payments and
    AccrualsRestructuring accrual, June 30, 2008

$
11,799Charges to earnings in continuing operations


2,698Charges to earnings in discontinued operations


11,202Cash paid


(12,456
)Restructuring accrual, September 30, 2008

$
13,243   3.
    Fair
    Value Measurements   12




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
            September 30, 2008Level 1


Level 2


Level 3Available-for-sale securities

$
44,142







Undesignated hedges





$
(213
)


Net investment derivative contracts





$
1,592



Cash flow derivative contracts





$
63



       4.
    Acquisitions    paid-up
  5.
    Discontinued
    Operations  No. 03-13, Applying the Conditions in Paragraph 42 of FASB
    Statement No. 144 in Determining Whether to Report
    Discontinued Operations
 13




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
  post-closing
        Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007WEEMEA Business:Product sales

$
40,856


$
42,796


$
136,767


$
131,436Costs and expenses:Cost of goods sold (excluding amortization)


15,640



16,015



56,380



49,295Selling expenses


13,352



17,448



48,052



47,590General and administrative expenses


2,734



2,625



18,807



6,386Research and development costs


142



21



365



85Restructuring, asset impairments and dispositions


50







1,309



(4,499
)Amortization expense


4,322



4,106



14,372



11,730Total costs and expenses


36,240



40,215



139,285



110,587Other income


1,983



711



744



209Income (loss) from discontinued operations, WEEMEA


6,599



3,292



(1,774
)


21,058Infergen:Product sales






8,636



1,000



26,959Costs and expenses:Cost of goods sold (excluding amortization)






8,365



2,007



14,523Selling expenses






6,586



1,306



19,619General and administrative expenses






679



(682
)


1,367Research and development costs






1,279



9,752



5,279Amortization expense






1,650







4,950Total costs and expenses






18,559



12,383



45,738Loss from discontinued operations, Infergen






(9,923
)


(11,383
)


(18,779
) 14




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
  Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Other discontinued operations:Other income (expense)


376







1,168



Consolidated discontinued operations:Income (loss) from discontinued operations


6,975



(6,631
)


(11,989
)


2,279Provision (benefit) for income taxes


(3,479
)


218



18,685



6,225Income (loss) from discontinued operations


10,454



(6,849
)


(30,674
)


(3,946
)Disposal of discontinued operations, net


199,700



(50
)


217,808



(431
)Income (loss) from discontinued operations, net

$
210,154


$
(6,899
)

$
187,134


$
(4,377
)     September 30,


December 31,2008


2007ASSETSCash

$



$
21,637Marketable securities






830Accounts receivable, net






43,933Inventories, net






36,078Prepaid expenses and other current assets






2,594Current deferred tax assets, net






(1,273
)Income taxes






749Property, plant and equipment, net






6,517Deferred tax assets, net






7,063Goodwill






4,816Intangible assets, net






195,223Other assets






2,305Assets of discontinued operations

$



$
320,472LIABILITIESTrade payables

$



$
14,818Accrued liabilities






22,817Income taxes






7,711Deferred tax liabilities, net






459Other liabilities






2,256Liabilities of discontinued operations

$



$
48,061    15




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
    6.
    Earnings
    Per Share    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Income:Numerator for basic and diluted earnings per share:Income (loss) from continuing operations

$
(3,466
)

$
(5,191
)

$
(45,600
)

$
18,524Income (loss) from discontinued operations


210,154



(6,899
)


187,134



(4,377
)Net income (loss)

$
206,688


$
(12,090
)

$
141,534


$
14,147Shares:Denominator for basic earnings per share:Weighted shares outstanding


87,703



91,705



88,800



93,705Vested stock equivalents (not issued)


285



184



323



191Denominator for basic earnings per share


87,988



91,889



89,123



93,896Denominator for diluted earnings per share:Employee stock options














1,046Other dilutive securities














61Dilutive potential common shares














1,107Denominator for diluted earnings per share


87,988



91,889



89,123



95,003Basic income (loss) per share:Income (loss) from continuing operations

$
(0.04
)

$
(0.06
)

$
(0.51
)

$
0.20Income (loss) from discontinued operations


2.39



(0.07
)


2.10



(0.05
)Net income (loss) per share

$
2.35


$
(0.13
)

$
1.59


$
0.15Diluted income (loss) per share:Income (loss) from continuing operations

$
(0.04
)

$
(0.06
)

$
(0.51
)

$
0.19Income (loss) from discontinued operations


2.39



(0.07
)


2.10



(0.04
)Net income (loss) per share

$
2.35


$
(0.13
)

$
1.59


$
0.15    16




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
  anti-dilutive.
  7.
    Detail of
    Certain Accounts    September 30,


December 31,2008


2007Accounts receivable, net:Trade accounts receivable

$
82,305


$
118,696Royalties receivable


14,872



18,620Other receivables


28,534



19,301125,711



156,617Allowance for doubtful accounts


(4,550
)


(8,754
)$
121,161


$
147,863Inventories, net:Raw materials and supplies

$
20,680


$
24,337Work-in-process


12,470



11,667Finished goods


61,724



56,62294,874



92,626Allowance for inventory obsolescence


(21,396
)


(12,476
)$
73,478


$
80,150Property, plant and equipment, net:Property, plant and equipment, at cost

$
205,183


$
202,577Accumulated depreciation and amortization


(101,904
)


(92,586
)$
103,279


$
109,991     Intangible assets:
  Weighted


September 30, 2008


December 31, 2007Average


Gross


Accumulated


Net


Gross


Accumulated


NetLives (Years)


Amount


Amortization


Amount


Amount


Amortization


AmountProduct rightsNeurology


12


$
278,265


$
(141,087
)

$
137,178


$
281,327


$
(122,622
)

$
158,705Dermatology


13



95,213



(51,533
)


43,680



108,491



(52,067
)


56,424Other


17



79,249



(45,346
)


33,903



94,321



(54,820
)


39,501Total product rights


14



452,727



(237,966
)


214,761



484,139



(229,509
)


254,630License agreement


5



67,376



(67,376
)






67,376



(61,204
)


6,172Total intangible assets





$
520,103


$
(305,342
)

$
214,761


$
551,515


$
(290,713
)

$
260,802  17




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
    Scheduled Future Amortization ExpenseRemainingThreeMonths of2008


2009


2010


2011


2012


Thereafter


TotalProduct rightsNeurology

$
6,529


$
26,115


$
24,787


$
19,284


$
17,866


$
42,597


$
137,178Dermatology


2,232



8,929



8,929



8,918



3,890



10,782



43,680Other


1,202



5,107



5,145



4,861



4,715



12,873



33,903Total

$
9,963


$
40,151


$
38,861


$
33,063


$
26,471


$
66,252


$
214,761     8.
    Long-term
    Debt      9.
    Income
    Taxes     18




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
      Three Months EndedSeptember 30,2008Release of reserves for U.S. liabilities upon settlement of
    I.R.S. examination

$
(2,356
)Reduction to withholding tax on unremitted earnings due to
    restructuring


(1,997
)Tax provision on current earnings outside the U.S


9,504Benefit of current U.S. losses


(5,297
)$
(146
)            19




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
    10.
    Common
    Stock and Share Compensation  24-month 24-month
  Share-Based Payment
     20




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Employee stock options

$
638


$
2,714


$
(3,484
)

$
8,854Restricted stock units


1,693



368



3,416



1,092Performance stock units


641







1,219



Employee stock purchase plan


57



79



190



158Total stock-based compensation expense

$
3,029


$
3,161


$
1,341


$
10,104     Remainder of 2008

$
3,3652009


8,3602010


5,2172011 and thereafter


1,119$
18,061   11.
    Commitments
    and Contingencies    SEC Investigation:
  Derivative Actions Related to Stock
    Option and/or
 21




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
  and/or
  Permax Product Liability Cases:
  Alfa Wasserman:
 22




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
    Spear Pharmaceuticals, Inc.: No. 07-821,
    Other:
 23




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
  12.
    Business
    Segments    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007RevenuesProduct sales:North America

$
63,740


$
65,295


$
190,723


$
196,504International


49,011



54,290



123,536



145,394Europe


40,430



30,596



116,883



89,162Total product sales


153,181



150,181



431,142



431,060Alliance revenue (including ribavirin royalties)


15,243



14,078



42,821



69,503Consolidated revenues

$
168,424


$
164,259


$
473,963


$
500,563Operating IncomeNorth America

$
18,182


$
21,139


$
53,629


$
64,934International


10,624



12,726



15,039



21,340Europe


15,688



8,855



31,639



29,27544,494



42,720



100,307



115,549Corporate expenses(1)


(16,432
)


(20,220
)


(40,078
)


(55,706
)Subtotal


28,062



22,500



60,229



59,843Restructuring, asset impairments and dispositions


(3,527
)






(4,294
)


(18,074
)Research and development(2)


(8,520
)


(12,462
)


(36,978
)


(3,962
)Consolidated segment operating income


16,015



10,038



18,957



37,807Interest income


3,066



3,545



13,026



12,748Interest expense


(6,255
)


(10,395
)


(25,585
)


(32,221
)Loss on early extinguishment of debt


(14,882
)






(14,882
)


Other, net


(1,555
)


(887
)


(3,384
)


2,503Income (loss) from continuing operations before income taxes and
    minority interest

$
(3,611
)

$
2,301


$
(11,868
)

$
20,837     (1)
    
    Stock-based compensation expense has been considered a corporate
    cost as management excludes this item in assessing the financial
    performance of individual business segments and considers it a
    function of valuation factors that pertain to overall corporate
    stock performance.(2)
    
    The research and development expense above represents the
    operating loss of the research and development segment. 24




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
     September 30,


December 31,Total Assets

2008


2007North America

$
331,391


$
353,395International


142,095



200,955Europe


274,758



247,903Corporate


486,503



319,336Research and development division


40,380



52,201Discontinued operations






320,472Total

$
1,275,127


$
1,494,262     Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Sales:McKesson

$
29,280


$
30,760


$
78,533


$
109,949Cardinal


15,887



17,638



47,973



53,236Percentage of total product sales:McKesson


19
%


20
%


18
%


26
%Cardinal


10
%


12
%


11
%


12
%   13.
    Alliance
    Revenue    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Ribavirin royalty

$
15,243


$
14,078


$
42,771


$
50,253Licensing payment














19,200Other










50



50Total alliance revenue

$
15,243


$
14,078


$
42,821


$
69,503    25




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
  14.
    Subsequent
    Events  Business
    Combinations
          country-by-country
   26




---



##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
      ® ®
       27




---



##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations    Overview
      Company
    Strategy and Restructuring
    Focus the busines
  Maximize the pipeline.
  Rebase and grow.
   28




---



##### Table of Contents



Pharmaceutical
    Products
        Clinical
    Development
   29




---



##### Table of Contents



Alliance
    Revenue
      Schering-Ploughs
  Results
    of Operations
   30




---



##### Table of Contents



Three Months EndedSeptember 30,


Increase/


Percent2008


2007


(Decrease)


ChangeRevenuesProduct sales:North America

$
63,740


$
65,295


$
(1,555
)


(2
)%International


49,011



54,290



(5,279
)


(10
)%Europe


40,430



30,596



9,834



32
%Total product sales


153,181



150,181



3,000



2
%Alliance revenue (including ribavirin royalties)


15,243



14,078



1,165



8
%Total revenues


168,424



164,259



4,165



3
%Costs and ExpensesCost of goods sold (excluding amortization)


42,698



41,848



850



2
%Selling expenses


45,343



46,950



(1,607
)


(3
)%General and administrative expenses


26,114



26,534



(420
)


(2
)%Research and development costs


23,239



24,865



(1,626
)


(7
)%Restructuring, asset impairments and dispositions


3,527







3,527



Amortization expense


11,488



14,024



(2,536
)


(18
)%Income from operations

$
16,015


$
10,038


$
5,977



60
%Gross profit on product sales (excluding amortization)

$
110,483


$
108,333


$
2,150



2
%Gross margin on product sales, excluding amortization


72
%


72
%Gross profit on product sales (net of amortization)

$
100,440


$
97,114


$
3,326



3
%Gross margin on product sales, net of amortization


66
%


65
%   31




---



##### Table of Contents



Nine Months EndedSeptember 30,


Increase/


Percent2008


2007


(Decrease)


ChangeRevenuesProduct sales:North America

$
190,723


$
196,504


$
(5,781
)


(3
)%International


123,536



145,394



(21,858
)


(15
)%Europe


116,883



89,162



27,721



31
%Total product sales


431,142



431,060



82



0
%Alliance revenue (including ribavirin royalties)


42,821



69,503



(26,682
)


(38
)%Total revenues


473,963



500,563



(26,600
)


(5
)%Costs and ExpensesCost of goods sold (excluding amortization)


126,327



113,084



13,243



12
%Selling expenses


134,040



142,892



(8,852
)


(6
)%General and administrative expenses


77,629



77,631



(2
)


0
%Research and development costs


75,100



68,528



6,572



10
%Restructuring, asset impairments and dispositions


4,294



18,074



(13,780
)


(76
)%Amortization expense


37,616



42,547



(4,931
)


(12
)%Income from operations

$
18,957


$
37,807


$
(18,850
)


(50
)%Gross profit on product sales (excluding amortization)

$
304,815


$
317,976


$
(13,161
)


(4
)%Gross margin on product sales, excluding amortization


71
%


74
%Gross profit on product sales (net of amortization)

$
273,371


$
284,404


$
(11,033
)


(4
)%Gross margin on product sales, net of amortization


63
%


66
%   Revenues:
   32




---



##### Table of Contents



Gross Profit Margin:
    No. 96-9, Classification of Inventory Markdowns and Other Costs
    Associated with a Restructuring
    Selling Expenses:
 33




---



##### Table of Contents



General and Administrative Expenses: other-than-temporary
  Research and Development Costs:
  Restructuring, Asset Impairments and Dispositions:
  2008
    Restructuring
       34




---



##### Table of Contents



Three Months


Nine MonthsEnded


EndedSeptember 30,


September 30,2008 Restructuring Program

2008


2008Cash-related charges:Employee severances (160 employees, cumulatively)

$
220


$
12,290Professional services, contract cancellation and other cash costs


2,478



11,030Subtotal: cash charges


2,698



23,320Stock compensation






4,778Impairment of long-lived assets






8,346Loss on sale of long-lived assets






2,926Subtotal: non-cash charges






16,050Subtotal: restructuring expenses


2,698



39,370Gain on Invida transaction


829



(35,076
)Restructurings, asset impairments and dispositions

$
3,527


$
4,294   No. 96-9, Classification of Inventory Markdowns and Other Costs
    Associated with a Restructuring.
 35




---



##### Table of Contents



Form 10-Q,
  2006
    Restructuring
          Three Months


Nine MonthsEnded


EndedSeptember 30,


September 30,2006 Restructuring Program

2007


2007Employee severances (417 employees, cumulatively)

$



$
3,788Contract cancellation and other cash costs






2,076Subtotal: cash charges






5,864Write-off of accumulated foreign currency translation adjustments






2,891Impairment of manufacturing and research facilities






9,319Subtotal: non-cash charges






12,210Restructurings, asset impairments and dispositions

$



$
18,074   Reconciliation
    of Cash Restructuring Payments with Restructuring
    Accrual
   36




---



##### Table of Contents



2006 Restructuring: Reconciliation of Cash Payments and
    AccrualsRestructuring accrual, June 30, 2008

$
1,375Cash paid


(375
)Restructuring accrual, September 30, 2008

$
1,0002008 Restructuring: Reconciliation of Cash Payments and
    AccrualsRestructuring accrual, June 30, 2008

$
11,799Charges to earnings in continuing operations


2,698Charges to earnings in discontinued operations


11,202Cash paid


(12,456
)Restructuring accrual, September 30, 2008

$
13,243   Amortization:
  Other Income (Expense) Net, Including Translation and
    Exchange:
  Loss on Early Extinguishment of Debt:
  Interest Expense, Net:
  Income Taxes:
 37




---



##### Table of Contents



Income (Loss) from Discontinued Operations, Net of
    Taxes:
  Liquidity
    and Capital Resources
           38




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
  Form 10-K.
  Products
    in Development
  Late
    Stage Development of New Chemical Entities
  Retigabine:
      28-day 3 28-day
   39




---



##### Table of Contents



th Form 10-K
  anti-epileptic
  28-day 3 28-day
         40




---



##### Table of Contents



Taribavirin:
    38-40%
  30 mg/kg in 13-18 mg/kg).
  follow-up
  The 12-week
  Form 10-K
  th
 41




---



##### Table of Contents



Other
    Development Activities
  Diastat Intranasal:
  Foreign
    Operations
    Critical
    Accounting Estimates
  Form 10-K
  Other
    Financial Information
    Forward-Looking
    Statements
  Form 10-Q Form 10-Q,
 42




---



##### Table of Contents




    The results from the initial 12 and 24 weeks of our Phase
    IIb study for taribavirin may not be predictive of the final
    results of the Phase IIb study or of any subsequent clinical
    trial necessary for approval of taribavirin. Thus we give no
    assurance that taribavirin will ultimately meet its clinical
    efficacy or safety endpoints, that we will conduct additional
    trials necessary for approval of taribavirin or that, if we
    conduct such additional trials, the results will lead to
    approval of taribavirin by the FDA or similar authority or any
    foreign government.
    We have identified a material weakness in our internal control
    over financial reporting that could adversely affect our stock
    price and ability to prepare complete and accurate financial
    statements in a timely manner.
    We are involved in several legal proceedings, including the
    current SEC investigation and those other proceedings described
    in Note 11, Commitments and Contingencies, of the notes to
    consolidated condensed financial statements included elsewhere
    in this quarterly report, any of which could result in
    substantial cost and divert managements attention and
    resources.
    Adverse U.S and international economic and market conditions may
    adversely affect our product sales and business.
    We may have to withdraw those products that cause, or are
    alleged to cause, serious or widespread personal injury from the
    market
    and/or incur
    significant costs, including payment of substantial sums in
    damages.
    Our future growth will depend, in large part, upon our ability
    or the ability of our partners or licensees to develop or obtain
    and commercialize new products and new formulations of, or
    indications for, current products.
    We can protect our products from generic substitution by third
    parties only to the extent that our technologies are covered by
    valid and enforceable patents, are effectively maintained as
    trade secrets or are protected by data exclusivity. However, our
    pending or future patent applications may not issue as patents.
    Any patent issued may be challenged, invalidated, held
    unenforceable or circumvented. Furthermore, our patents may not
    be sufficiently broad to prevent third parties competing
    products. The expiration of patent protection for ribavirin has
    resulted in significant competition from generic substitutes and
    declining royalty revenues and may negatively impact future
    financial results.
    Trade secret protection is less effective than patent protection
    because competitors may discover our technology or develop
    parallel technology.
    The scope of protection afforded by a patent can be highly
    uncertain. A pending claim or a result unfavorable to us in a
    patent dispute may preclude development or commercialization of
    products or impact sales of existing products, result in
    cessation of royalty payments to us
    and/or
    result in payment of monetary damages.
    Obtaining drug approval in the United States and other countries
    is costly and time consuming. Uncertainties and delays inherent
    in the process can preclude or delay development and
    commercialization of our products.
    Our restructuring plans are intended to improve operational
    efficiencies and our competitiveness. If we are unable to
    realize the benefits from our restructuring plans, our business
    prospects may suffer and our operating results and financial
    condition would be adversely affected. 43




---



##### Table of Contents




    We and our competitors are always striving to develop products
    that are more effective, safer, more easily tolerated or less
    costly. If our competitors succeed in developing better
    alternatives to our current products before we do, we will lose
    sales and revenues to their alternative products. If vaccines
    are introduced to prevent the diseases treated by our products,
    our potential sales and revenues will decrease.
    The pharmaceutical industry is subject to substantial government
    regulation, including the approval of new pharmaceutical
    products, labeling, advertising and, in most countries, pricing,
    as well as inspection and approval of manufacturing facilities.
    The costs of complying with these regulations are high, and
    failure to comply could result in fines or interruption in our
    business.
    We collect and pay a substantial portion of our sales and
    expenditures in currencies other than the U.S. dollar. As a
    result, fluctuations in foreign currency exchange rates affect
    our operating results. Additionally, future exchange rate
    movements, inflation or other related factors may have a
    material adverse effect on our sales, gross profit or operating
    expenses. As of September 30, 2008 we have in place foreign
    currency hedge transactions to reduce our exposure to
    variability in the Polish Zloty. We continue to evaluate the
    possibility of entering into additional hedge arrangements.
    A significant part of our revenue is derived from products
    manufactured by third parties. We rely on their quality level,
    compliance with the FDA regulations or similar regulatory
    requirements enforced by regulatory agencies in other countries
    and continuity of supply. Any failure by them in these areas
    could disrupt our product supply and negatively impact our
    revenues.
    Our flexibility in maximizing commercialization opportunities
    for our compounds may be limited by our obligations to
    Schering-Plough. In November 2000, we entered into an agreement
    that provides Schering-Plough with an option to acquire the
    rights to up to three of our products intended to treat
    hepatitis C that Schering-Plough designates prior to our
    entering Phase 2 clinical trials and a right for first/last
    refusal to license various compounds we may develop and elect to
    license to others. Taribavirin was not subject to the option of
    Schering-Plough, but it would be subject to their right of
    first/last refusal if we elected to license it to a third party.
    The interest of potential collaborators in obtaining rights to
    our compounds or the terms of any agreement we ultimately enter
    into for these rights may be hindered by our agreement with
    Schering-Plough.
    To purchase our products, many patients rely on reimbursement by
    third party payors such as insurance companies, HMOs and
    government agencies. These third party payors are increasingly
    attempting to contain costs by limiting both coverage and the
    level of reimbursement of new drug products. The reimbursement
    levels established by third party payors in the future may not
    be sufficient for us to realize an appropriate return on our
    investment in product development and our continued manufacture
    and sale of existing drugs.
    All drugs have potential harmful side effects and can expose
    drug manufacturers and distributors to liability. In the event
    one or more of our products is found to have harmed an
    individual or individuals, we may be responsible for paying all
    or substantially all damages awarded. A successful product
    liability claim against us could have a material negative impact
    on our financial position and results of operations.
    Our stockholder rights plan, provisions of our certificate of
    incorporation and provisions of the Delaware General Corporation
    Law could provide our Board of Directors with the ability to
    deter hostile takeovers or delay, deter or prevent a change in
    control of our company, including transactions in which
    stockholders might otherwise receive a premium for their shares
    over then current market prices.
    We are authorized to issue, without stockholder approval,
    approximately 10,000,000 shares of preferred stock,
    200,000,000 shares of common stock and securities
    convertible into either shares of common stock or preferred
    stock. If we issue additional equity securities, the price of
    our securities may be materially and adversely affected. The
    Board of Directors can also use issuances of preferred or common
    stock to deter a hostile takeover or change in control of our
    company.
    We are subject to a consent order with the Securities and
    Exchange Commission, which permanently enjoins us from violating
    securities laws and regulations. The consent order also
    precludes protection for forward-looking statements under the
    safe harbor provisions of the Private Securities Litigation
    Reform Act of 1995 44




---



##### Table of Contents



with respect to forward-looking statements we made prior to
    November 28, 2005. The existence of the permanent
    injunction under the consent order, and the lack of protection
    under the safe harbor with respect to forward-looking statements
    made prior to November 28, 2005 may limit our ability
    to defend against future allegations.  Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk      Notional/


Assets (Liabilities)Contract


Carrying


FairDescription

Amount


Value


ValueUndesignated hedges

$
94,200


$
(213
)

$
(213
)Net investment hedges

$
24,695


$
1,592


$
1,592Cash flow hedges

$
750


$
63


$
63Outstanding fixed-rate debt

$
480,000


$
(480,000
)

$
(444,446
)     Item 4.
    Controls
    and Procedures  Disclosure
    Controls and Procedures
     45




---



##### Table of Contents



Form 10-K
  Remediation
    Plan
    
    We engaged professional actuarial and accounting consultants to
    review our accounting for our foreign pension plans. Such review
    was conducted for the first quarter of 2008 and will continue
    for the foreseeable future. We have also developed modified
    controls with regard to our accounting for pension obligations.
    We have implemented enhancements to our accounting for product
    returns and credit memos in foreign markets.
    We have reviewed the qualifications and performance of our
    accounting staff in key roles in our foreign locations and
    identified some critical roles in certain foreign markets where
    accounting staff will be retrained or new accounting staff will
    be recruited. We have assigned qualified accounting staff from
    Corporate and our North American offices to review accounting
    procedures in certain foreign countries and have begun to
    enhance our accounting staff in various foreign locales.
    We have modified our revenue recognition procedures in Italy and
    other locations in order to ensure that, when required by
    specific circumstances, we recognize revenue on a cash basis.
    We have implemented revised review procedures over tax
    accounting.     46




---



##### Table of Contents



Changes
    in Internal Control over Financial Reporting
   PART II 
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings    Item 1A.
    Risk
    Factors  Form 10-K Form 10-Q, Form 10-K. Form 10-K Form 10-Q.
  The
    current SEC investigation could adversely affect our business
    and the trading price of our securities.
    Adverse
    U.S. and international economic and market conditions may
    adversely affect our product sales and business.
     47




---



##### Table of Contents



Item 2.
    Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers  24-month 24-month
    Approximate DollarTotal Number of


Value of Shares thatShares Purchased as


may yet beTotal Number of


Average Price


Part of Publicly


Purchased under thePeriod

Shares Repurchased


Paid per Share


Announced Plan


Plan(In thousands)7/1/08 - 7/31/08


1,361,641


$
17.43



8,264,320


$
169,8588/1/08 - 8/31/08


1,732,825


$
18.88



9,997,145


$
137,1089/1/08 - 9/30/08


1,469,455


$
19.09



11,466,600


$
109,020Total


4,563,921


$
18.52   Item 6.
    Exhibits  Exhibit3
.1

Restated Certificate of Incorporation, as amended to date,
    previously filed as Exhibit 3.1 to the Registrants
    Form 10-Q
    for the quarter ended September 30, 2003, which is
    incorporated herein by reference.3
.2

Certificate of Designation, Preferences and Rights of
    Series A Participating Preferred Stock previously filed as
    Exhibit 3.1 to the Registrants Current Report on
    Form 8-K,
    dated October 6, 2004, which is incorporated herein by
    reference.3
.3

Certificate of Correction to Restated Certificate of
    Incorporation, dated April 3, 2006, previously filed as
    Exhibit 3.3 to the Registrants
    Form 10-Q
    for the quarter ended September 30, 2007, which is
    incorporated herein by reference.3
.4

Amended and Restated Bylaws of the Registrant previously filed
    as Exhibit 3.1 to the Registrants Current Report on
    Form 8-K,
    dated February 25, 2008, which is incorporated herein by
    reference.10
.1

Separation and Release Agreement dated as of July 11, 2008
    between Valeant Pharmaceuticals International and Charles J.
    Bramlage, previously filed as Exhibit 99.1 to the
    Registrants Current Report on
    Form 8-K,
    dated July 16, 2008, which is incorporated herein by
    reference.10
.2

Acquisition Agreement dated August 4, 2008 between Valeant
    Pharmaceuticals International, and Meda AB, previously filed as
    Exhibit 99.1 to the Registrants Current Report on
    Form 8-K,
    dated August 5, 2008, which is incorporated herein by
    reference. 48




---



##### Table of Contents



Exhibit10
.3

Asset Transfer and License Agreement dated August 4, 2008
    between Valeant Pharmaceuticals International, and Meda AB,
    previously filed as Exhibit 99.2 to the Registrants
    Current Report on
    Form 8-K,
    dated August 5, 2008, which is incorporated herein by
    reference.10
.4

Performance Restricted Stock Unit and Matching RSU Award
    Agreement between Valeant Pharmaceuticals International and
    Peter J. Blott, previously filed as Exhibit 99.2 to the
    Registrants Current Report on
    Form 8-K,
    dated August 27, 2008, which is incorporated herein by
    reference.10
.5**

License and Collaboration Agreement, dated August 27, 2008
    between Valeant Pharmaceuticals North America and Glaxo
    Group Limited, previously filed as Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K/A,
    dated August 29, 2008, which is incorporated herein by
    reference.10
.6**

Agreement and Plan of Merger, dated as of September 16,
    2008, among Coria Laboratories, Ltd., the Shareholders of Coria
    Laboratories, Ltd., Valeant Pharmaceuticals International and CL
    Acquistion Corp. (the Coria Merger Agreement).10
.7

Amendment to the Coria Merger Agreement, dated as of
    October 15, 2008, among Coria Laboratories, Ltd., the
    Shareholders of Coria Laboratories, Ltd., Valeant
    Pharmaceuticals International and CL Acquistion Corp.15
.1

Review Report of Independent Registered Public Accounting Firm.15
.2

Awareness Letter of Independent Registered Public Accounting
    Firm.31
.1

Certification of Chief Executive Officer pursuant to
    Rule 13a-14(a)
    under the Exchange Act and Section 302 of the
    Sarbanes-Oxley Act of 2002.31
.2

Certification of Chief Financial Officer pursuant to
    Rule 13a-14(a)
    under the Exchange Act and Section 302 of the
    Sarbanes-Oxley Act of 2002.32
.1

Certification of Chief Executive Officer and Chief Financial
    Officer of Periodic Financial Reports pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002,
    18 U.S.C. § 1350.     **
    
    Portions of this exhibit have been omitted pursuant to a request
    for confidential treatment.
    
    Management contract or compensatory plan or arrangement. 49




---



##### Table of Contents



SIGNATURES  Form 10-Q
  Valeant Pharmaceuticals
    International
  /s/  J.
    Michael Pearson   Chairman and Chief Executive Officer
      /s/  Peter
    J. Blott   Executive Vice President and Chief Financial Officer
 (Principal Financial and Accounting Officer)
   50




---



##### Table of Contents



EXHIBIT INDEX
  Exhibit3
.1

Restated Certificate of Incorporation, as amended to date,
    previously filed as Exhibit 3.1 to the Registrants
    Form 10-Q
    for the quarter ended September 30, 2003, which is
    incorporated herein by reference.3
.2

Certificate of Designation, Preferences and Rights of
    Series A Participating Preferred Stock previously filed as
    Exhibit 3.1 to the Registrants Current Report on
    Form 8-K,
    dated October 6, 2004, which is incorporated herein by
    reference.3
.3

Certificate of Correction to Restated Certificate of
    Incorporation, dated April 3, 2006, previously filed as
    Exhibit 3.3 to the Registrants
    Form 10-Q
    for the quarter ended September 30, 2007, which is
    incorporated herein by reference.3
.4

Amended and Restated Bylaws of the Registrant previously filed
    as Exhibit 3.1 to the Registrants Current Report on
    Form 8-K,
    dated February 25, 2008, which is incorporated herein by
    reference.10
.1

Separation and Release Agreement dated as of July 11, 2008
    between Valeant Pharmaceuticals International and Charles J.
    Bramlage, previously filed as Exhibit 99.1 to the
    Registrants Current Report on
    Form 8-K,
    dated July 16, 2008, which is incorporated herein by
    reference.10
.2

Acquisition Agreement dated August 4, 2008 between Valeant
    Pharmaceuticals International, and Meda AB, previously filed as
    Exhibit 99.1 to the Registrants Current Report on
    Form 8-K,
    dated August 5, 2008, which is incorporated herein by
    reference.10
.3

Asset Transfer and License Agreement dated August 4, 2008
    between Valeant Pharmaceuticals International, and Meda AB,
    previously filed as Exhibit 99.2 to the Registrants
    Current Report on
    Form 8-K,
    dated August 5, 2008, which is incorporated herein by
    reference.10
.4

Performance Restricted Stock Unit and Matching RSU Award
    Agreement between Valeant Pharmaceuticals International and
    Peter J. Blott, previously filed as Exhibit 99.2 to the
    Registrants Current Report on
    Form 8-K,
    dated August 27, 2008, which is incorporated herein by
    reference.10
.5**

License and Collaboration Agreement, dated August 27, 2008
    between Valeant Pharmaceuticals North America and Glaxo
    Group Limited, previously filed as Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K/A,
    dated August 29, 2008, which is incorporated herein by
    reference.10
.6**

Agreement and Plan of Merger, dated as of September 16,
    2008, among Coria Laboratories, Ltd., the Shareholders of Coria
    Laboratories, Ltd., Valeant Pharmaceuticals International and CL
    Acquistion Corp. (the Coria Merger Agreement).10
.7

Amendment to the Coria Merger Agreement, dated as of
    October 15, 2008, among Coria Laboratories, Ltd., the
    Shareholders of Coria Laboratories, Ltd., Valeant
    Pharmaceuticals International and CL Acquistion Corp.15
.1

Review Report of Independent Registered Public Accounting Firm.15
.2

Awareness Letter of Independent Registered Public Accounting
    Firm.31
.1

Certification of Chief Executive Officer pursuant to
    Rule 13a-14(a)
    under the Exchange Act and Section 302 of the
    Sarbanes-Oxley Act of 2002.31
.2

Certification of Chief Financial Officer pursuant to
    Rule 13a-14(a)
    under the Exchange Act and Section 302 of the
    Sarbanes-Oxley Act of 2002.32
.1

Certification of Chief Executive Officer and Chief Financial
    Officer of Periodic Financial Reports pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002,
    18 U.S.C. § 1350.     **
    
    Portions of this exhibit have been omitted pursuant to a request
    for confidential treatment.
    
    Management contract or compensatory plan or arrangement.