##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, 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
    June 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(State or other jurisdiction
    of
    incorporation or organization)

33-0628076(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(Do not check if a smaller reporting company)   Rule 12b-2 o þ




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##### 





VALEANT
    PHARMACEUTICALS INTERNATIONAL
  INDEX
   
 PageNumberPART I  FINANCIAL
    INFORMATIONItem 1.


Financial Statements (unaudited)


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


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


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


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


5Notes to Consolidated Condensed Financial
    Statements


6Item 2.


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


27Item 3.


Quantitative and Qualitative Disclosures About
    Market Risk


43Item 4.


Controls and Procedures


43PART II  OTHER
    INFORMATIONItem 1.


Legal Proceedings


45Item 1A.


Risk Factors


45Item 2.


Purchases of Equity Securities by the Issuer and
    Affiliated Purchasers


45Item 4.


Submission of Matters to a Vote of Security
    Holders


46Item 6.


Exhibits


47SIGNATURES


48EXHIBIT 15.1EXHIBIT 15.2EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1   1




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##### Table of Contents



PART I 
    FINANCIAL INFORMATION  Item 1.
    Financial
    Statements  VALEANT
    PHARMACEUTICALS INTERNATIONALCONSOLIDATED CONDENSED BALANCE SHEETS
    As of June 30, 2008 and December 31, 2007
    (In thousands, except par value data)
  June 30,


December 31,2008


2007(Unaudited)ASSETSCurrent Assets:Cash and cash equivalents

$
466,300


$
309,365Marketable securities


83,684



52,122Accounts receivable, net


169,143



191,796Inventories, net


119,185



115,177Assets held for sale and assets of discontinued operations






66,247Prepaid expenses and other current assets


19,594



21,713Current deferred tax assets, net


12,655



11,819Income taxes


13,753



26,433Total current assets


884,314



794,672Property, plant and equipment, net


123,518



116,376Deferred tax assets, net


91,845



65,950Goodwill


73,138



80,346Intangible assets, net


376,484



401,575Other assets


42,223



35,343Total non-current assets


707,208



699,590$
1,591,522


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

$
54,178


$
49,203Accrued liabilities


151,626



139,754Notes payable and current portion of long-term debt


818



1,655Income taxes payable


9,827



7,987Deferred tax liabilities, net


50,766



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






4,194Liabilities for uncertain tax positions


8,965



616Total current liabilities


276,180



205,661Long-term debt, less current portion


780,963



782,552Deferred tax liabilities, net


10,472



5,337Liabilities for uncertain tax positions


60,319



68,749Other liabilities


26,545



17,860Total non-current liabilities


878,299



874,498Total liabilities


1,154,479



1,080,159Commitments and contingenciesStockholders Equity:Common stock, $0.01 par value; 200,000 shares
    authorized; 89,480 (June 30, 2008) and 89,286
    (December 31, 2007) shares outstanding (after
    deducting shares in treasury of 7,737 as of June 30, 2008
    and 7,585 as of December 31, 2007)


895



893Additional capital


1,208,840



1,192,559Accumulated deficit


(924,713
)


(859,559
)Accumulated other comprehensive income


152,021



80,210Total stockholders equity


437,043



414,103$
1,591,522


$
1,494,262    2




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##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONALCONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
    For the three and six months ended June 30, 2008 and
    2007
    (Unaudited, in thousands, except per share data)
  Three Months Ended June 30,


Six Months Ended June 30,2008


2007


2008


2007Revenues:Product sales

$
191,958


$
201,587


$
373,871


$
369,520Alliance revenue (including ribavirin royalties)


14,805



18,955



27,578



55,425Total revenues


206,763



220,542



401,449



424,945Costs and expenses:Cost of goods sold (excluding amortization)


69,479



57,614



124,369



104,515Selling expenses


59,606



67,645



123,396



126,085General and administrative expenses


41,482



28,743



67,588



54,858Research and development costs


22,692



22,737



52,084



43,727Restructuring, asset impairments and dispositions


17,583



6,337



4,919



13,575Amortization expense


18,112



18,666



36,178



36,147Total costs and expenses


228,954



201,742



408,534



378,907Income (loss) from operations


(22,191
)


18,800



(7,085
)


46,038Other income (expense), net including translation and exchange


(137
)


1,682



(3,389
)


2,818Interest income


5,359



4,769



10,305



9,280Interest expense


(9,634
)


(10,882
)


(19,353
)


(21,834
)Income (loss) from continuing operations before incometaxes and minority interest


(26,603
)


14,369



(19,522
)


36,302Provision (benefit) for income taxes


46,850



(7,511
)


54,501



899Minority interest, net


2







4



Income (loss) from continuing operations


(73,455
)


21,880



(74,027
)


35,403Income (loss) from discontinued operations


(1,149
)


(4,966
)


8,873



(9,166
)Net income (loss)

$
(74,604
)

$
16,914


$
(65,154
)

$
26,237Basic income (loss) per share:Income (loss) from continuing operations

$
(0.82
)

$
0.23


$
(0.83
)

$
0.37Income (loss) from discontinued operations


(0.01
)


(0.05
)


0.10



(0.09
)Net income (loss) per share:

$
(0.83
)

$
0.18


$
(0.73
)

$
0.28Diluted income (loss) per share:Income (loss) from continuing operations

$
(0.82
)

$
0.23


$
(0.83
)

$
0.37Income (loss) from discontinued operations


(0.01
)


(0.05
)


0.10



(0.10
)Net income (loss) per share:

$
(0.83
)

$
0.18


$
(0.73
)

$
0.27Shares used in per share computations  Basic


89,802



95,049



89,696



94,911Shares used in per share computation  Diluted


89,802



96,154



89,696



96,090    3




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##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONALCONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE
    INCOME (LOSS)
    For the three and six months ended June 30, 2008 and
    2007
    (Unaudited, in thousands)
  Three Months Ended June 30,


Six Months Ended June 30,2008


2007


2008


2007Net income (loss)

$
(74,604
)

$
16,914


$
(65,154
)

$
26,237Other comprehensive income (loss):Foreign currency translation adjustments


16,131



11,932



75,110



12,050Unrealized gain on marketable equity securities


2,958



72



1,084



630Unrealized gain (loss) on hedges


1,461



7,338



(4,544
)


7,007Pension liability adjustment


147



(2,426
)


161



(1,983
)Comprehensive income (loss)

$
(53,907
)

$
33,830


$
6,657


$
43,941    4




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##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONALCONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
    For the six months ended June 30, 2008 and 2007
    (Unaudited, in thousands)
  Six Months Ended June 30,2008


2007Cash flows from operating activities:Net income (loss)

$
(65,154
)

$
26,237Income (loss) from discontinued operations


8,873



(9,166
)Income (loss) from continuing operations


(74,027
)


35,403Adjustments to reconcile income (loss) from continuing
    operations to net cashprovided by operating activities in continuing operations:Depreciation and amortization


46,495



43,826Provision for losses on accounts receivable and inventory


19,354



5,385Stock compensation expense


(1,634
)


7,365Translation and exchange (gains) losses, net


3,389



(2,818
)Impairment charges and other non-cash items


(19,024
)


4,483Deferred income taxes


47,765



13,397Change in assets and liabilities, net of effects of acquisitions:Accounts receivable


38,441



17,664Inventories


(17,529
)


(7,309
)Prepaid expenses and other assets


781



(2,202
)Trade payables and accrued liabilities


8,590



(17,185
)Income taxes


13,689



(37,488
)Other liabilities


(1,121
)


1,551Cash flow from operating activities in continuing operations


65,169



62,072Cash flow from operating activities in discontinued operations


(13,466
)


(7,434
)Net cash provided by operating activities


51,703



54,638Cash flows from investing activities:Capital expenditures


(8,254
)


(15,332
)Proceeds from sale of assets


418



37,282Proceeds from sale of businesses


48,575



29,486Proceeds from investments


77,904



15,122Purchase of investments


(100,172
)


(17,100
)Acquisition of businesses, license rights and product lines


(1,554
)


(35,287
)Cash flow from investing activities in continuing operations


16,917



14,171Cash flow from investing activities in discontinued operations


70,800



(266
)Net cash provided by investing activities


87,717



13,905Cash flows from financing activities:Payments on long-term debt and notes payable


(595
)


(8,970
)Proceeds from capitalized lease financing, long-term debt and
    notes payable


101



1,252Stock option exercises and employee stock purchases


7,867



10,251Purchase of treasury stock


(6,819
)


(27,507
)Cash flow from financing activities in continuing operations


554



(24,974
)Cash flow from financing activities in discontinued operations






73Net cash provided by (used in) financing activities


554



(24,901
)Effect of exchange rate changes on cash and cash equivalents


16,961



7,547Net increase in cash and cash equivalents


156,935



51,189Cash and cash equivalents at beginning of period


309,365



325,579Cash and cash equivalents at end of period

$
466,300


$
376,768    5




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##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONALNOTES TO CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS
    June 30, 2008
    (Unaudited)
  Form 10-K
  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. Accumulated other comprehensive income consists of
    accumulated foreign currency translation adjustments, unrealized
    losses on marketable equity securities, pension funded status
    and changes in the fair value of derivative financial
    instruments.
  Per Share Information:
  Stock-Based Compensation Expense: Share-Based
    Payment
 6




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##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
    Assets Held for Sale: Accounting for the Impairment or
    Disposal of Long-lived Assets
  Discontinued Operations: EITF 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:
  Recent
    Accounting Pronouncements:
  SFAS No. 157. Fair Value Measurements 157-1 157-2. FSP 157-1 Accounting for Leases FSP 157-2
 7




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##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
    SFAS No. 159. 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 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
 8




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##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
  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 Organization and Summary of Significant
    Accounting Policies
  2008
    Restructuring
   9




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##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
         10




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##### Table of Contents



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


Six MonthsEnded


EndedJune 30,


June 30,2008 Restructuring Program

2008


2008Cash-related charges:Employee severances (151 employees, cumulatively)

$
6,497


$
13,239Professional services and other cash costs


6,649



11,535Subtotal: cash charges


13,146



24,774Stock compensation






4,778Impairment of long-lived assets


494



8,346Loss on sale of long-lived assets


2,926



2,926Subtotal: non-cash charges


3,420



16,050Subtotal: restructuring expenses


16,566



40,824Gain on Invida transaction


1,017



(35,905
)Total: Restructurings, asset impairments and dispositions

$
17,583


$
4,919   EITF 96-9, Classification of Inventory Markdowns and Other Costs
    Associated with a Restructuring
  2006
    Restructuring
       11




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##### Table of Contents



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


Six MonthsEnded


EndedJune 30,


June 30,2006 Restructuring Program

2007


2007Employee severances (490 employees, cumulatively)

$
1,350


$
5,130Contract cancellation and other cash costs


1,034



3,115Subtotal: cash charges


2,384



8,245Abandoned software and other capital assets






Write-off of accumulated foreign currency translation adjustments


2,891



2,891Impairment of manufacturing and research facilities


1,062



2,439Subtotal: non-cash charges


3,953



5,330Total:

$
6,337


$
13,575   Reconciliation
    of Cash Restructuring Payments with Restructuring
    Accrual
    2006 Restructuring: Reconciliation of Cash Payments and
    AccrualsRestructuring accrual, March 31, 2008

$
3,766Charges to earnings


Cash paid


(334
)Restructuring accrual, June 30, 2008

$
3,4322008 Restructuring: Reconciliation of Cash Payments and
    AccrualsRestructuring accrual, March 31, 2008

$
13,223Charges to earnings


13,146Cash paid


(13,856
)Restructuring accrual, June 30, 2008

$
12,513   3.
    Fair
    Value Measurements   12




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##### Table of Contents



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


Level 2


Level 3Available-for-Sale
    Securities

$
5,424







Interest rate swap





$
(312
)


Undesignated hedges





$
309



Net investment derivative contracts





$
(2,726
)


Cash flow derivative contracts





$
(290
)


       4.
    Acquisitions    paid-up
  5.
    Discontinued
    Operations  Accounting for the
    Impairment or Disposal of Long-lived Assets
   13




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##### Table of Contents



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


Six Months EndedJune 30,


June 30,2008


2007


2008


2007Infergen:Product sales

$
(50
)

$
9,353


$
1,000


$
18,323Costs and expenses:Cost of goods sold (excluding amortization)


(69
)


2,888



2,007



6,158Selling expenses


(59
)


7,039



1,306



13,033General and administrative expenses


(682
)


543



(682
)


688Research and development costs


68



1,880



9,752



4,000Amortization expense






1,650







3,300Total costs and expenses


(742
)


14,000



12,383



27,179Income (loss) from discontinued operations, Infergen


692



(4,647
)


(11,383
)


(8,856
)Other discontinued operations:Other income


792







792



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


1,484



(4,647
)


(10,591
)


(8,856
)Provision (benefit) for income taxes


237



(63
)


1,536



(71
)Income (loss) from discontinued operations


1,247



(4,584
)


(12,127
)


(8,785
)Disposal of discontinued operations, net


(2,396
)


(382
)


21,000



(381
)Income (loss) from discontinued operations, net

$
(1,149
)

$
(4,966
)

$
8,873


$
(9,166
)  14




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##### Table of Contents



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


December 31,2008


2007ASSETSInventories, net

$



$
1,051Property, plant and equipment, net






132Goodwill






4,816Intangible assets, net






54,450Assets of discontinued operations

$



$
60,449LIABILITIESAccrued liabilities






1,897Liabilities of discontinued operations

$



$
1,897    15




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##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
  6.
    Earnings
    Per Share    Three Months Ended June 30,


Six Months Ended June 30,2008


2007


2008


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

$
(73,455
)

$
21,880


$
(74,027
)

$
35,403Income (loss) from discontinued operations


(1,149
)


(4,966
)


8,873



(9,166
)Net income (loss)

$
(74,604
)

$
16,914


$
(65,154
)

$
26,237Shares:Denominator for basic earnings per share:Weighted shares outstanding


89,424



94,868



89,355



94,722Vested stock equivalents (not issued)


378



181



341



189Denominator for basic earnings per share


89,802



95,049



89,696



94,911Denominator for diluted earnings per share:Employee stock options






1,068







1,159Other dilutive securities






37







20Dilutive potential common shares






1,105







1,179Denominator for diluted earnings per share:


89,802



96,154



89,696



96,090Basic income (loss) per share:Income (loss) from continuing operations

$
(0.82
)

$
0.23


$
(0.83
)

$
0.37Income (loss) from discontinued operations


(0.01
)


(0.05
)


0.10



(0.09
)Net income (loss) per share

$
(0.83
)

$
0.18


$
(0.73
)

$
0.28Diluted income (loss) per share:Income (loss) from continuing operations

$
(0.82
)

$
0.23


$
(0.83
)

$
0.37Income (loss) from discontinued operations


(0.01
)


(0.05
)


0.10



(0.10
)Net income (loss) per share

$
(0.83
)

$
0.18


$
(0.73
)

$
0.27    16




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##### Table of Contents



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


December 31,2008


2007Accounts receivable, net:Trade accounts receivable

$
131,377


$
162,591Royalties receivable


15,416



18,620Other receivables


34,969



23,513181,762



204,724Allowance for doubtful accounts


(12,619
)


(12,928
)$
169,143


$
191,796Inventories, net:Raw materials and supplies

$
28,887


$
30,935Work-in-process


13,493



13,707Finished goods


111,270



89,363153,650



134,005Allowance for inventory obsolescence


(34,465
)


(18,828
)$
119,185


$
115,177Property, plant and equipment, net:Property, plant and equipment, at cost

$
238,251


$
215,172Accumulated depreciation and amortization


(114,733
)


(98,796
)$
123,518


$
116,376      17




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##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
  Intangible assets:
  WeightedAverage


June 30, 2008


December 31, 2007Lives


Gross


Accumulated


Net


Gross


Accumulated


Net(Years)


Amount


Amortization


Amount


Amount


Amortization


AmountProduct rightsNeurology


12


$
307,006


$
(143,674
)

$
163,332


$
306,398


$
(128,267
)

$
178,131Dermatology


13



98,811



(51,848
)


46,963



111,934



(54,178
)


57,756Other products


17



387,862



(223,118
)


164,744



365,823



(206,307
)


159,516Total product rights


14



793,679



(418,640
)


375,039



784,155



(388,752
)


395,403License agreement


5



67,376



(65,931
)


1,445



67,376



(61,204
)


6,172Total intangible assets





$
861,055


$
(484,571
)

$
376,484


$
851,531


$
(449,956
)

$
401,575     Scheduled Future Amortization ExpenseRemainingSix Months of2008


2009


2010


2011


2012


Thereafter


TotalProduct rightsNeurology

$
14,715


$
29,429


$
28,670


$
22,609


$
21,214


$
46,695


$
163,332Dermatology


4,766



9,423



9,184



8,918



3,890



10,782



46,963Other products


10,757



22,191



21,516



21,033



20,944



68,303



164,744Total product rights


30,238



61,043



59,370



52,560



46,048



125,780



375,039License agreement


1,445























1,445Total

$
31,683


$
61,043


$
59,370


$
52,560


$
46,048


$
125,780


$
376,484     8.
    Income
    Taxes     18




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##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
      Three Months EndedJune 30,2008Deferred U.S. tax on unrepatriated foreign earnings

$
44,393Foreign withholding tax on unrepatriated foreign earnings


12,693Tax provision on current earnings outside the U.S.


5,306Benefit of current U.S. losses


(15,542
)$
46,850            19




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##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
  9.
    Common
    Stock and Share Compensation  24-month 24-month
  Share-Based Payment
        Three Months Ended June 30,


Six Months Ended June 30,2008


2007


2008


2007Employee stock options

$
(5,534
)

$
3,128


$
(4,152
)

$
6,562Restricted stock units


961



267



1,805



724Performance stock units


356







579



Employee stock purchase plan


67



53



133



79Total stock-based compensation expense

$
(4,150
)

$
3,448


$
(1,635
)

$
7,365  20




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##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
    Remainder of 2008

$
5,4902009


6,0852010


3,9132011 and thereafter


752$
16,240   10.
    Commitments
    and Contingencies    Securities
    Class Actions:
  SEC Investigation:
  Derivative Actions Related to Stock
    Option and/or
  and/or
  Argentina Antitrust Matter:
 21




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##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
    Permax Product Liability Cases: No. 2008-24P
  Alfa Wasserman:
  Spear Pharmaceuticals, Inc.: No. 07-821,
 22




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##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
      Other:
 23




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##### Table of Contents



VALEANT
    PHARMACEUTICALS INTERNATIONAL
  NOTES TO
    CONSOLIDATED CONDENSED FINANCIAL
    STATEMENTS  (Continued)
  11.
    Business
    Segments    Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007RevenuesSpecialty pharmaceuticalsNorth America

$
54,706


$
68,610


$
126,982


$
131,209International


45,662



55,829



74,813



91,104EMEA


91,590



77,148



172,076



147,207Total specialty pharmaceuticals


191,958



201,587



373,871



369,520Alliance revenues (including ribavirin royalties)


14,805



18,955



27,578



55,425Consolidated revenues

$
206,763


$
220,542


$
401,449


$
424,945Operating IncomeSpecialty pharmaceuticalsNorth America

$
8,035


$
26,464


$
35,448


$
43,795International


7,357



8,341



4,704



8,614EMEA


(1,247
)


15,902



9,840



34,61114,145



50,707



49,992



87,020Corporate expenses(1)


(8,272
)


(19,948
)


(23,699
)


(35,908
)Total specialty pharmaceuticals


5,873



30,759



26,293



51,112Restructuring, asset impairments and dispositions


(17,583
)


(6,337
)


(4,919
)


(13,575
)Research and development(2)


(10,481
)


(5,622
)


(28,459
)


8,501Consolidated segment operating income (loss)


(22,191
)


18,800



(7,085
)


46,038Interest income


5,359



4,769



10,305



9,280Interest expense


(9,634
)


(10,882
)


(19,353
)


(21,834
)Other, net


(137
)


1,682



(3,389
)


2,818Income (loss) from continuing operations before income taxes and
    minority interest

$
(26,603
)

$
14,369


$
(19,522
)

$
36,302     (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 income (expense) above represents
    the operating profit (loss) of the research and development
    segment. 24




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##### Table of Contents



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


December 31,Total Assets

2008


2007North America

$
323,514


$
367,869International


155,951



200,955EMEA


673,223



493,452Corporate


396,661



319,335Research and Development Division


42,173



52,202Discontinued operations






60,449Total

$
1,591,522


$
1,494,262     Three Months Ended


Six Months EndedJune 30,


June 30,Therapeutic
    Area/Product

2008


2007


2008


2007NeurologyMestinon®

$
12,754


$
14,014


$
24,285


$
24,552Diastat
AcuDialtm


8,833



12,386



21,012



23,458Cesamet®


9,678



6,859



19,674



12,770Librax®


3,832



4,455



7,414



8,122Other Neurology


30,797



28,670



53,792



53,446Total Neurology


65,894



66,384



126,177



122,348DermatologyEfudix/Efudex®


11,972



17,515



35,166



29,992Kinerase®


5,849



8,133



11,459



16,511Other Dermatology


15,068



16,977



28,304



31,644Total Dermatology


32,889



42,625



74,929



78,147Other therapeutic classesBisocard


7,258



5,575



14,083



10,269Bedoyectatm


9,604



12,237



13,591



16,798Solcoseryl


6,754



8,448



13,039



13,795Virazole®


3,361



3,045



8,857



8,564Other products


66,198



63,273



123,195



119,599Total other therapeutic classes


93,175



92,578



172,765



169,025Total product sales

$
191,958


$
201,587


$
373,871


$
369,520    25




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##### Table of Contents



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


Six Months EndedJune 30,


June 30,2008


2007


2008


2007Ribavirin royalty

$
14,805


$
18,955


$
27,528


$
36,175Licensing payment














19,200Other










50



50Total alliance revenue

$
14,805


$
18,955


$
27,578


$
55,425     13.
    Subsequent
    Events        Common Stock
    and Share Compensation.
 26




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations    Overview
    ten-year
  Company
    Strategy and Restructuring
    Focus the busines
  Maximize the pipeline.
  Rebase and grow.
     27




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##### Table of Contents



Specialty
    Pharmaceuticals
        Clinical
    Development
    Alliance
    Revenues
   28




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##### Table of Contents



Results
    of Operations
   29




---



##### Table of Contents



Three Months EndedJune 30,


Increase/


Percent2008


2007


(Decrease)


ChangeRevenuesSpecialty pharmaceuticalsNorth America

$
54,706


$
68,610


$
(13,904
)


(20
)%International


45,662



55,829



(10,167
)


(18
)%EMEA


91,590



77,148



14,442



19
%Total specialty pharmaceuticals


191,958



201,587



(9,629
)


(5
)%Alliance revenues (including ribavirin royalties)


14,805



18,955



(4,150
)


(22
)%Total revenues


206,763



220,542



(13,779
)


(6
)%Costs and ExpensesCost of goods sold (excluding amortization)


69,479



57,614



11,865



21
%Selling expenses


59,606



67,645



(8,039
)


(12
)%General and administrative expenses


41,482



28,743



12,739



44
%Research and development costs


22,692



22,737



(45
)


0
%Restructuring charges, asset impairments and dispositions


17,583



6,337



11,246



NMAmortization expense


18,112



18,666



(554
)


(3
)%Operating income (loss)

$
(22,191
)

$
18,800


$
(40,991
)


NMGross profit on product sales (excluding amortization)

$
122,479


$
143,973


$
(21,494
)


(15
)%Gross margin, excluding amortization


64
%


71
%Gross profit on product sales (net of amortization)

$
106,730


$
128,393


$
(21,663
)


(17
)%Gross margin, net of amortization


56
%


64
%   30




---



##### Table of Contents



Six Months EndedJune 30,


Increase/


Percent2008


2007


(Decrease)


ChangeRevenuesSpecialty pharmaceuticalsNorth America

$
126,982


$
131,209


$
(4,227
)


(3
)%International


74,813



91,104



(16,291
)


(18
)%EMEA


172,076



147,207



24,869



17
%Total specialty pharmaceuticals


373,871



369,520



4,351



1
%Alliance revenues (including ribavirin royalties)


27,578



55,425



(27,847
)


(50
)%Total revenues


401,449



424,945



(23,496
)


(6
)%Costs and ExpensesCost of goods sold (excluding amortization)


124,369



104,515



19,854



19
%Selling expenses


123,396



126,085



(2,689
)


(2
)%General and administrative expenses


67,588



54,858



12,730



23
%Research and development costs


52,084



43,727



8,357



19
%Restructuring, asset impairments and dispositions


4,919



13,575



(8,656
)


NMAmortization expense


36,178



36,147



31



0
%Operating income (loss)

$
(7,085
)

$
46,038


$
(53,123
)


NMGross profit on product sales (excluding amortization)

$
249,502


$
265,005


$
(15,503
)


(6
)%Gross margin, excluding amortization


67
%


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

$
218,051


$
235,029


$
(16,978
)


(7
)%Gross margin, net of amortization


58
%


64
%        31




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##### Table of Contents



Gross Profit Margin:
    EITF 96-9, Classification of Inventory Markdowns and Other Costs
    Associated with a Restructuring
    Selling Expenses:
  General and Administrative Expenses:
 32




---



##### Table of Contents



Research and Development: Products in
    Development
  Restructuring
    Charges:
  2008
    Restructuring
         33




---



##### Table of Contents



Three Months


Six MonthsEnded


EndedJune 30,


June 30,2008


20082008 Restructuring ProgramCash-related charges:Employee severances (151 employees, cumulatively)

$
6,497


$
13,239Professional services and other cash costs


6,649



11,535Subtotal: cash charges


13,146



24,774Stock compensation






4,778Impairment of long-lived assets


494



8,346Loss on sale of long-lived assets


2,926



2,926Subtotal: non-cash charges


3,420



16,050Subtotal: restructuring expenses


16,566



40,824Gain on Invida transaction


1,017



(35,905
)Total: Restructurings, asset impairments and dispositions

$
17,583


$
4,919   EITF 96-9, Classification of Inventory Markdowns and Other Costs
    Associated with a Restructuring
  Form 10-Q,
  2006
    Restructuring
   34




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##### Table of Contents



Three Months


Six MonthsEnded


EndedJune 30,


June 30,2007


20072006 Restructuring ProgramEmployee severances (490 employees, cumulatively)

$
1,350


$
5,130Contract cancellation and other cash costs


1,034



3,115Subtotal: cash charges


2,384



8,245Abandoned software and other capital assets






Write-off of accumulated foreign currency translation adjustments


2,891



2,891Impairment of manufacturing and research facilities


1,062



2,439Subtotal: non-cash charges


3,953



5,330Total:

$
6,337


$
13,575   Reconciliation
    of Cash Restructuring Payments with Restructuring
    Accrual
    2006 Restructuring: Reconciliation of Cash Payments and
    AccrualsRestructuring accrual, March 31, 2008

$
3,766Charges to earnings


Cash paid


(334
)Restructuring accrual, June 30, 2008

$
3,4322008 Restructuring: Reconciliation of Cash Payments and
    AccrualsRestructuring accrual, March 31, 2008

$
13,223Charges to earnings


13,146Cash paid


(13,856
)Restructuring accrual, June 30, 2008

$
12,513  35




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##### Table of Contents



Amortization:
  Other Income (expense) Net, Including Translation and
    Exchange
  Interest Expense, net:
  Income Taxes:
  Loss from Discontinued Operations, Net of
    Taxes:
  Liquidity
    and Capital Resources
       36




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##### Table of Contents



Off-Balance
    Sheet Arrangements
  Form 10-K.
  Products
    in Development
  Late
    Stage Development of New Chemical Entities
  Retigabine:
   37




---



##### Table of Contents



28-day 3 28-day
  Form 10-K Products in
    Development
    SUMMARY
    EFFICACY DATA
  Placebo

RTG 600 mg

RTG 900 mgMedian reduction in
    28-day total
    partial seizure frequency* (ITT)


15.9%



27.9%



39.9%n=179



n=181



n=178Median reduction in
    28-day total
    partial seizure frequency during Maintenance Phase


17.4%



35.3%



44.3%n=164



n=158



n=149Responder Rate (ITT)


17.3%



31.5%



39.3%n=179



n=181



n=178Responder Rate during Maintenance Phase**


18.9%



38.6%



47.0%n=164



n=158



n=149       *
    
    FDA endpoint**
    
    Endpoint per EU Committee for Human Medicinal Products (CHMP)
    
    p <0.01 compared to placebo
    
    Responder Rate defined as
    3
    50% reduction in
    28-day total
    partial seizure frequency     38




---



##### Table of Contents



Taribavirin:
    38-40%
  13-18 mg/kg).
  follow-up
  12-week
 39




---



##### Table of Contents



Form 10-K Products in
    Development
      Other
    Development Activities
  Diastat Intranasal:
  Foreign
    Operations
    Critical
    Accounting Estimates
    Other
    Financial Information
   40




---



##### Table of Contents



Forward-Looking
    Statements
  Form 10-Q Form 10-Q,
    
    The results from the initial 12 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 10 to notes to consolidated condensed financial
    statements, any of which could result in substantial cost and
    divert managements attention and resources.
    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 prior restructuring plan was, and the restructuring plan
    resulting from our 2008 Strategic Review is, intended to improve
    operational efficiencies and our competitiveness. If we are
    unable to realize the benefits 41




---



##### Table of Contents



from our restructuring plans, our business prospects may suffer
    and our operating results and financial condition would be
    adversely affected.  
    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. At June 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. 42




---



##### Table of Contents




    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 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      Assets (Liabilities)Notional/Contract


Carrying


FairDescription

Amount


Value


ValueUndesignated hedges

$
29,165


$
309


$
309Net investment hedges

$
59,534


$
(2,726
)

$
(2,726
)Cash flow hedges

$
6,629


$
(290
)

$
(290
)Interest rate swap

$
150,000


$
(312
)

$
(312
)Outstanding fixed-rate debt

$
780,000


$
(780,000
)

$
(743,495
)     Item 4.
    Controls
    and Procedures  Disclosure
    Controls and Procedures
   43




---



##### 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.     44




---



##### 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.
    Item 2.
    Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers  24-month 24-month
 45




---



##### Table of Contents



Total Numberof SharesPurchased as


Approximate Dollar ValueTotal Number of


Average Price


Part of Publicly


of Shares that May Yet BePeriod

Shares Purchased


Paid per Share


Announced Plan


Purchased under the Plan(In thousands)4/1/08  4/30/08










6,490,690


$
100,4435/1/08  5/31/08










6,490,690


$
100,4436/1/08  6/30/08


411,989


$
16.53



6,902,679


$
193,623   Item 4.
    Submission
    of Matters to a Vote of Security Holders        Votes Cast


Votes Cast


Votes


VotesMatter

For


Against


Withheld


AbstainElection of Richard H. Koppes


78,661,811







3,411,041Election of G. Mason Morfit


79,518,411







2,554,441Approval of An Amendment To Our 2006 Equity Incentive Plan to
    Increase The Share Reserve By 4,840,000 Shares


71,493,427



4,168,034







21,921Ratification of Appointment of PricewaterhouseCoopers LLP


81,413,032



609,839







49,981  46




---



##### Table of Contents



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.4
.1

Amendment No. 2 to Rights Agreement, dated as of
    June 5, 2008, by and between Valeant Pharmaceuticals
    International and American Transfer &
    Trust Company as Rights Agent, previously filed as
    Exhibit 4.3 to the Registrants Amendment No. 4
    to
    Form 8-A/A,
    filed June 6, 2008, which is incorporated herein by
    reference.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. 47




---



##### Table of Contents



SIGNATURES  Form 10-Q
  Valeant Pharmaceuticals
    International
   /s/  J.
    Michael Pearson   Chairman and Chief Executive Officer
    
   Executive Vice President and Chief Financial Officer
 (Principal Financial and Accounting Officer)
   48




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##### 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.4
.1

Amendment No. 2 to Rights Agreement, dated as of
    June 5, 2008, by and between Valeant Pharmaceuticals
    International and American Transfer &
    Trust Company as Rights Agent, previously filed as
    Exhibit 4.3 to the Registrants Amendment No. 4
    to
    Form 8-A/A,
    filed June 6, 2008, which is incorporated herein by
    reference.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.