8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of the earliest event reported): November 4, 2010

Valeant Pharmaceuticals International, Inc.

(Exact name of registrant as specified in its charter)

Canada	001-14956	98-0448205
(State or other jurisdiction of	(Commission File Number)	(I.R.S Employer
incorporation or organization)		Identification No.)

7150 Mississauga Road,
Mississauga, Ontario,
Canada L5N 8M5

(Address of principal executive offices) (Zip Code)

(Registrant’s telephone number, including area code): (905) 286-3000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-99.1

Item 2.02 Results of Operations and Financial Condition

     On November 4, 2010, Valeant issued a press release announcing results of operations for the quarter ended September 30, 2010 and certain other financial information as of and for the quarter ended September 30, 2010. A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated herein by this reference.

     The information in this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Item 2.02 and Exhibit 99.1 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1       Press release dated November 4, 2010.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
Date: November 4, 2010	By:	/s/ Margaret Mulligan
		Margaret Mulligan
		Executive Vice President, Chief Financial Officer

INDEX TO EXHIBITS

99.1       Press release dated November 4, 2010.

EX-99.1

Exhibit 99.1

International Headquarters
7150 Mississauga Road
Mississauga, Ontario L5N 8M5
Phone: 905.286.3000
Fax: 905.286.3050

Contact Information:
Laurie W. Little
949-461-6002
laurie.little@valeant.com

VALEANT PHARMACEUTICALS REPORTS
2010 THIRD QUARTER FINANCIAL RESULTS

• Legacy Biovail 2010 Third Quarter Revenue of $208.3 million

• Legacy Valeant 2010 Partial Third Quarter Revenue of $259.2 million, Third Quarter product shipments cut-off early across all markets (3 – 13 days)

• Strong Operating Cash Flow from Legacy Biovail of $110.9 million in the Third Quarter

• Integration Execution Ahead of Schedule

• Board Approves $1.5 Billion Securities Repurchase Program

     Mississauga, Ontario — November 4, 2010 — Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) announces third quarter financial results for 2010. The merger of Biovail Corporation (Legacy Biovail) and Valeant Pharmaceuticals International (Legacy Valeant) was completed on September 28, 2010. Accordingly, as required under generally accepted accounting principles, the reported third quarter results reflect the full third quarter financial results of Legacy Biovail and only 3 days’ results for Legacy Valeant. The reported revenue included no contribution from Legacy Valeant; as an administrative accommodation, shipping for Legacy Valeant was cut-off in advance of the merger date. These financial statements also reflect the recognition of the assets and liabilities of Legacy Valeant acquired under the merger at their fair values.

     “The Legacy Biovail financial results for the quarter, from my perspective, were disappointing,” said J. Michael Pearson, chief executive officer. “The Legacy Valeant business continues to perform well. With one month behind us as a new company, I am pleased with the combined operating performance of our new company and the many new commercial initiatives underway. In the fourth quarter, we expect to generate approximately $500 million in revenue and $200 million in adjusted non-GAAP cash flows from operations, despite the anticipated loss of over $20 million of 4^th quarter revenues from the impact of the entry of an authorized generic of Diastat, reduced ribavirin royalties and the elimination of both the Biovail R&D revenues and the GSK alliance payment. More important, with the merger now complete, we have already made the hard decisions about products, people, facilities and development programs, and have

begun to put the combined company on a path to sustainable growth and strong cash flow generation.”

Revenue for Legacy Biovail

          Total reported revenue was $208.3 million in the third quarter of 2010 as compared to $212.5 million in the third quarter of 2009, a decrease of 2%.

          Product sales were $201.4 million in the third quarter of 2010, as compared to $204.3 million in the third quarter of 2009, a decrease of 1%. This decline was primarily due to decreased product sales for Wellbutrin XL^®, Ultram^® ER, Cardizem^® LA and Generics, partially offset by increases in Xenazine^®, Biovail Pharmaceuticals Canada and the Legacy portfolio.

          Research and development (R&D) revenue was $0.5 million in the third quarter of 2010 as compared to $3.4 million in the third quarter of 2009. This decrease is attributable to the divestiture of Biovail’s contract research division (CRD) to Lambda Therapeutic Research Inc. in July 2010.

Operating Expenses for Legacy Biovail

          The Company’s cost of goods sold increased 23% to $62.1 million in the third quarter of 2010 as compared to $50.7 million in the third quarter of 2009, primarily reflecting the increased supply price in effect for Zovirax^® and increased sales of lower-margin Xenazine^®.

          Selling, General and Administrative expenses increased 34% in the third quarter of 2010 to $60.2 million as compared to $44.8 million in the third quarter of 2009, primarily due to the inclusion of a non-cash $20.1 million charge, reflecting the valuation of replacement share-based awards arising from the merger transaction.

          Research and development expenses in the quarter of $14.3 million reflect a decrease of 38% or $8.9 million as compared to the third quarter of 2009. Included in the third quarter of 2009 was an IPR&D charge of $8.1 million related to the fipamezole acquisition.

Merger Related Costs & Expenses

     The Company recorded $28.0 million of merger-related transaction costs in the third quarter.

     Restructuring charges of $95.9 million were recorded in the quarter, virtually all of which arise from the merger and are primarily employee termination costs. The Company estimates it will incur costs of between $135 million and $180 million (of which the non-cash component, including share-based compensation, is expected to be approximately $55 million) in connection with the integration and cost-rationalization activities associated with the merger.

          The tax provision in the quarter ended September 30, 2010 of $60 million was impacted by a number of merger-related items and by the provision for legal settlements in jurisdictions with lower tax rates or where a full valuation allowance exists against available tax loss carryfowards.

Net Loss and Cash Flow from Operating Activities

     The Company reported a net loss of $207.9 million for the third quarter of 2010, or a loss of $1.27 per diluted share, as compared to net income of $40.4 million, or $0.25 per diluted share, for the third quarter of 2009.

     Cash flow from operating activities was $110.9 million in the quarter, as compared to $89.2 million for the third quarter of 2009.

     The Company has determined that the provision of a Cash EPS number in the third quarter is not useful given the significant impact of the merger on both earnings and the fully-diluted share computation.

Legacy Valeant Revenues

     Legacy Valeant revenues were $259.2 million for the partial third quarter of 2010 as compared to $220.3 million in the full third quarter of 2009, an increase of 18%. The partial third quarter of 2010 reflected a significant decrease from Diastat due to the impact of an authorized generic entering the market on September 1, 2010. Excluding Diastat, product sales increased 26%. It is also important to note that product sales only reflected a partial quarter given the decision to stop shipment of all products three to thirteen days prior to the quarter end.

Integration

     Significant progress has been made on the integration of Legacy Biovail and Legacy Valeant. Following a disciplined review of the Company’s pipeline assets, which focused on strategic and financial hurdles, the decision was made to terminate a number of these projects. The affected counterparties have all been notified. The estimated costs to terminate these arrangements (approximately $15 — $20 million in total) are included in our estimated restructuring costs. As these decisions were reached after the quarter end, none of the termination costs are reflected in the current quarter. We expect spending on all these terminated projects to be completed by the end of the first quarter of 2011.

     As committed, by October 15, 2010 all our employees had been notified as to their status with the ongoing Company. Approximately 500 jobs were eliminated and the majority of those terminated will be leaving by December 31, 2010. We are in the process of vacating several facilities, including Aliso Viejo, CA, Bridgewater, NJ, Carolina, PR, Chantilly, VA, Fort Worth, TX, Lawrenceville, NJ, and Redwood City, CA.

2010 Guidance

     Due to the recently completed merger, the Company will not be issuing full year guidance for 2010. For the fourth quarter of 2010, the Company is expecting approximately $500 million in total revenue and approximately $200 million in adjusted non-GAAP cash flows from operations. The Company expects to be in a position to provide financial guidance for 2011 in January of 2011.

Conference Call and Webcast Information

     The Company will host a conference call and a live Internet webcast along with a slide presentation today at 8:00 a.m. EDT (5:00 a.m. PDT), November 4, 2010 to discuss its third quarter financial results for 2010. The dial-in number to participate on this call is (877) 295-5743, confirmation code 18324045. International callers should dial (973) 200-3961, confirmation code 18324045. A replay will be available approximately two hours following the conclusion of the conference call through November 11, 2010 and can be accessed by dialing (800) 642-1687, or (706) 645-9291, confirmation code 18324045. The live webcast of the conference call may be accessed through the investor relations section of the Company’s corporate website at www.valeant.com.

About Valeant

     Valeant Pharmaceuticals International, Inc. (NYSE/TSX:VRX) is a multinational specialty pharmaceutical company that develops and markets a broad range of pharmaceutical products primarily in the areas of neurology, dermatology and branded generics. More information about Valeant can be found at www.valeant.com.

Forward-looking Statements

     This press release may contain forward-looking statements, including, but not limited to, statements regarding our performance and growth in 2010, anticipated fourth quarter revenues and adjusted cash flows from operations and the expected integration of Legacy Biovail and Legacy Valeant, including spending on Legacy Biovail R&D projects and the departure of employees from the combined company. Forward-looking statements may be identified by the use of the words “anticipates,” “expects,” “intends,” “plans,” “should,” “could,” “would,” “may,” “will,” “believes,” “estimates,” “potential,” or “continue” and variations or similar expressions. These statements are based upon the current expectations and beliefs of management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties discussed in the company’s most recent annual or quarterly report filed with the Securities and Exchange Commission (“SEC”) and risks and uncertainties relating to the proposed merger, as detailed from time to time in Valeant’s filings with the SEC and the Canadian Securities Administrators (“CSA”),

which factors are incorporated herein by reference. Readers are cautioned not to place undue reliance on any of these forward-looking statements. Valeant undertakes no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect actual outcomes.

Note on Guidance

     The guidance contained in this press release is only effective as of the date given, November 4, 2010, and will not be updated or confirmed until the Company publicly announces updated or affirmed guidance.

Non-GAAP Financial Measures

     The company has provided guidance with respect to adjusted non-GAAP cash flow from operations, which is a non-GAAP financial measure that represents adjusted non-GAAP cash flow from operation. The company has not provided a reconciliation of this forward-looking non-GAAP financial measure due to the difficulty in forecasting and quantifying the exact amount of the items excluded from the non-GAAP financial measure that will be included in the comparable GAAP financial measure.

Financial Tables follow.

###

VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(All dollar amounts are expressed in thousands of U.S. dollars, except per share data)
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2010			2009			2010			2009
REVENUE
Product sales	$	201,372		$	204,291		$	644,650		$	557,400
Research and development		455			3,392			6,096			10,362
Royalty and other		6,440			4,840			15,927			11,615
		208,267			212,523			666,673			579,377
EXPENSES
Cost of goods sold (exclusive of amortization of intangible assets shown separately below)		62,142			50,669			184,947			145,566
Research and development		14,298			23,202			118,443			82,422
Selling, general and administrative		60,187			44,774			148,794			137,516
Amortization of intangible assets		35,499			33,121			102,098			70,402
Restructuring costs and other costs		95,916			2,413			99,410			15,128
Acquisition-related costs		28,037			—			35,614			5,596
Legal settlements		38,500			—			38,500			241
		334,579			154,179			727,806			456,871
Operating income (loss)		(126,312	)		58,344			(61,133	)		122,506
Interest income		126			238			548			823
Interest expense		(11,218	)		(10,998	)		(30,997	)		(14,850	)
Write-down of deferred financing charges		(5,774	)		—			(5,774	)		(537	)
Foreign exchange gain		301			197			345			918
Loss on auction rate securities		(5,005	)		(385	)		(5,552	)		(4,709	)
Gain on disposal of investments		—			466			—			804
Gain on auction rate security settlement		—			—			—			22,000
Income (loss) before provision for income taxes		(147,882	)		47,862			(102,563	)		126,955
Provision for income taxes		60,000			7,500			74,500			23,500
Net income (loss)	$	(207,882	)	$	40,362		$	(177,063	)	$	103,455
Basic and diluted earnings (loss) per share	$	(1.27	)	$	0.25		$	(1.11	)	$	0.65
Weighted-average number of common shares outstanding (000s)
Basic		163,295			158,231			160,082			158,225
Diluted		163,295			158,652			160,082			158,418
Cash dividends declared per share	$	0.095		$	0.090		$	0.280		$	0.555

VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)

	At		At
	September 30		December 31
	2010		2009
ASSETS
Cash, cash equivalents and marketable securities	$	598,245	$	124,029
Other current assets		702,203		226,611
		1,300,448		350,640
Marketable securities		3,645		11,516
Property, plant and equipment, net		280,161		103,848
Intangible assets, net		6,470,596		1,335,222
Goodwill		2,963,947		100,294
Deferred tax assets, net of valuation allowance		88,646		132,800
Other long-term assets, net		28,460		32,724
	$	11,135,903	$	2,067,044
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities	$	845,922	$	256,906
Long-term liabilities		4,940,317		455,766
Shareholders’ equity		5,349,664		1,354,372
	$	11,135,903	$	2,067,044

VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2010			2009			2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(207,882	)	$	40,362		$	(177,063	)	$	103,455
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		42,338			43,293			122,619			102,447
Amortization of deferred revenue		(4,775	)		(5,300	)		(14,326	)		(15,901	)
Amortization of discounts on long-term obligations		2,712			2,682			8,350			3,246
Amortization and write-down of deferred financing costs		6,854			1,228			9,498			2,326
Acquired in-process research and development		—			8,126			61,245			38,540
Deferred income taxes		59,500			3,800			64,500			12,000
Payment of accrued legal settlements		—			(24,648	)		(5,950	)		(30,806	)
Addition to accrued legal settlements		38,500			—			38,500			241
Share-based compensation		68,284			1,126			71,836			4,217
Impairment charges		5,405			385			5,952			12,392
Gain on disposal of investments		—			(466	)		—			(804	)
Other		(346	)		(89	)		(1,022	)		80
Changes in operating assets and liabilities		100,334			18,698			80,451			1,817
Net cash provided by operating activities		110,924			89,197			264,590			233,250
Net cash provided by (used in) investing activities		315,367			(4,514	)		262,135			(748,309	)
Net cash provided by (used in) financing activities		(10,590	)		(89,214	)		(48,794	)		245,475
Effect of exchange rate changes on cash and cash equivalents		387			1,019			260			1,443
Net increase (decrease) in cash and cash equivalents		416,088			(3,512	)		478,191			(268,141	)
Cash and cash equivalents, beginning of period		176,566			52,918			114,463			317,547
Cash and cash equivalents, end of period	$	592,654		$	49,406		$	592,654		$	49,406