Bedoyecta Acanya CeraVe Diastat Kinerase Atralin Cesamet Migranal Realizing the Potential of Focus Corporate Headquarters: One Enterprise, Aliso Viejo, CA 92656 www.valeant.com Valeant Pharmaceuticals 2008 Annual Report BIV51347_cvr_spd13.indd 1 3/24/09 10:44:23 PM Company Overview 2008 REVENUE BREAKOUT Corporate Information Corporate Headquarters Valeant Pharmaceuticals International (NYSE:VRX) is a multi- Alliance Revenue One Enterprise national specialty pharmaceutical company that develops and Product Sales BOARD OF DIRECTORS Aliso Viejo, CA 92656 markets prescription and nonprescription pharmaceutical products (949) 461-6000 that make a meaningful diff erence in patients’ lives. Valeant is J. Michael Pearson www.valeant.com focused on the neurology and dermatology therapeutic areas Chairman, Valeant Pharmaceuticals International primarily in the United States, Canada, Mexico, Brazil, Central Chief Executive Offi cer, Valeant Pharmaceuticals International Principal Transfer Agent & Registrar For Stockholders questions regarding lost stock certifi cates, address Europe and Australia. Robert A. Ingram changes and changes in ownership or names in which shares are Lead Director, Valeant Pharmaceuticals International held, direct inquiries to: Th roughout 2008, Valeant’s new management team simplifi ed Vice Chairman, Pharmaceuticals of GlaxoSmithKline and refocused its business strategy to concentrate on the company’s Committees: Compensation, Corporate Governance/Nominating American Stock Transfer and Trust Company strengths in the neurology and dermatology therapeutic areas. 6201 15th Avenue Valeant will maximize its pipeline through strategic partnering Richard H. Koppes Brooklyn, NY 11219 to optimize its research and development assets and strengthen Of Counsel, Jones Day (800) 937-5449 ongoing internal development capabilities. During the year, Committees: Compensation, Corporate Governance/Nominating the company made signifi cant strides by divesting its licensing Independent Auditors rights in Argentina, the Asia Pacifi c region, Western and Eastern Lawrence N. Kugelman PricewaterhouseCoopers LLP Europe, the Middle East and Africa. Additionally, Valeant Director, Coventry Healthcare Orange County, California signed an exclusive worldwide partnership agreement with CONSOLIDATED REVENUE Committees: Compensation, Finance and Audit GlaxoSmithKline for retigabine, its Phase III compound Alliance Revenue Annual Meeting for the treatment of partial onset seizures in adult pa- Anders Lönner Th e Annual Meeting of Stockholders will be held at 9:00 a.m. Product Sales tients with refractory epilepsy. Valeant also entered into a Group President and Chief Executive Offi cer, Meda AB EDT, May 12, 2009 at the Hilton Short Hills Hotel: joint venture agreement with Meda AB to strengthen its Th eo Melas-Kyriazi 41 John F. Kennedy Parkway presence in Australia, Canada and Mexico through $604 $603 development, marketing and commercialization of certain $546 $593 Chief Financial Offi cer, Levitronix LLC Short Hills, NJ 07078 current and future products. During 2008, Valeant acquired Committees: Corporate Governance/Nominating (Chairman), All stockholders are welcome. Coria Laboratories, Ltd., DermaTech Pty Ltd, and Dow Finance and Audit Pharmaceutical Sciences, Inc., and expanded its dermatology $431 Investor and Media Relations product portfolio and pipeline with prescription and OTC products. G. Mason Morfi t You may request a copy of documents at no cost by contacting: Partner, ValueAct Capital Laurie W. Little Vice President, Investor Relations Based in Orange County, California, Valeant employs approximately Committees: Compensation (Chairman), Corporate Governance/Nominating (949) 461-6002 2,300 people worldwide. For more information about Valeant $92 $76 $81 $86 $64 [email protected] Pharmaceuticals International, please visit our corporate website Norma A. Provencio Email updates are also available through the Investor Relations page at www.valeant.com. at Valeant’s website. 2004 2005 2006 2007 2008 President and Owner, Provencio Advisory Services Committees: Finance and Audit (Chairperson), Compensation SPECIALTY PHARMACEUTICALS Stock Exchange AND BRANDED GENERICS DIVERSIFIED PRODUCT PORTFOLIO MANAGEMENT TEAM New York Stock Exchange NYSE Trading Symbol Specialty Pharmaceuticals J. Michael Pearson Common Stock: VRX Revenues as of 12/31/08 Chairman and Chief Executive Offi cer 2008 2007 % U.S. 36 Peter J. Blott Dermatology $ 91,708 $ 92,751 Branded Generics Executive Vice President, Chief Financial Offi cer Neurology & Other 127,641 131,968 Total U.S. 219,349 224,719 % Dr. Bhaskar Chaudhuri President, Valeant Pharmaceuticals International Canada 56,988 51,952 55 Specialty Pharmaceuticals Australia 21,602 19,467 Rajiv De Silva Divested Business 5,784 30,544 % Chief Operating Offi cer of Specialty Pharmaceuticals 9 Over-the-Counter Total Specialty Pharmaceuticals 303,723 326,682 Elisa Karlson Executive Vice President and Chief Administrative Offi cer Branded Generics Branded Generics - Latin America 136,638 151,299 Richard K. Masterson Branded Generics - Europe 152,804 125,070 Executive Vice President, Commercial Development 593,165 603,051 Steve T. Min Executive Vice President, General Counsel and Corporate Secretary Total, net of divested businesses $587,381 $572,507 BIV51347_cvr_spd_23.indd 2 3/30/09 8:43:13 AM Valeant Pharmaceuticals 2008 Annual Report Throughout 2008, Valeant’s new management team simplifi ed its business strategy to focus on the company’s strengths in the neurology and dermatology therapeutic areas. Valeant will maximize its pipeline through strategic partnering to optimize its research and development assets and strengthen ongoing internal development capabilities. Forward-looking Statements: Th is annual report contains forward-looking statements, including, but not limited to, statements regarding the growth and profi tability of the company, the eff ects of restructuring eff orts, regulatory submissions with respect to and the approvability of product candidates, the potential for taribavirin in the treatment of hepatitis C, clinical trial results, securities repurchases, future cash fl ows and guidance with respect to expected earnings. Th ese 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 diff er materially from those described in the forward-looking statements. Th ese risks and uncertainties include, but are not limited to, risks and uncertainties related to the company’s ability to realize the benefi ts of its strategic restructuring plan, the fact that market conditions and other factors that may infl uence the company’s determination as to whether and when to repurchase its securities, the ability of the company to complete the programs in compliance with applicable requirements, the clinical development of new products, regulatory approval processes, the fact that interim results from a Phase IIb clinical trial are not necessarily predictive of the entire Phase IIb trial or a Phase III trial, and other risks and uncertainties discussed in the company’s annual report on Form 10-K for the year ended December 31, 2008 and other fi lings with the SEC. Valeant wishes to caution the reader that these factors are among the factors that could cause actual results to diff er materially from the expectations described in the forward-looking statements. Valeant also cautions the reader that undue reliance should not be placed on any of the forward-looking state- ments, which speak only as of the date of this annual report. Th e company undertakes no obligation to update any of these forward-looking statements to refl ect events or circumstances after the date of this annual report or to refl ect actual outcomes. Valeant Pharmaceuticals 2008 Annual Report To our stockholders, 2008’S SIX STRATEGIC INITIATIVES In March 2008, we established six key milestone initiatives that we focused on and diligently strived to achieve by the end of the 2008 marked a major turning point for Valeant as we signifi cantly year. I am proud to say that we completed most of these initiatives restructured and right-sized our business, forged new partnerships, and expect to put the fi nal touches on the remaining initiative in added products to our portfolio and pipeline, and divested com- 2009. plex operations. Th e net result is a more robust pharmaceutical company that is strategically positioned for future growth. 1. SELL/IPO EUROPE We announced our plans to divest the majority of our European When I joined Valeant as Chairman and CEO in February of operations in July and successfully closed the transaction in Sep- 2008, the company looked much diff erent than it does today. We tember for $428 million in cash from Meda AB. As for the pos- were in many countries, operating diff erent businesses, and selling sible IPO or sale of our remaining Central European operations, a wide variety of products. Since my arrival, we replaced some of we are no longer considering a near-term IPO due to current mar- our assets with ones that are more suitable to our new business ket conditions. Although an IPO or a sale remains a possibility in strategy. We set about restructuring both our business operations the future, our current plans are to keep these operations as part of and our corporate culture into a lean, cost-eff ective, decentral- the Valeant business as it continues to deliver double digit growth ized organization. We partnered retigabine,