Third Quarter 2012

Financial Results

Conference Call

November 2, 2012

1

Forward-looking Statements Forward-looking Statements Certain statements made in this presentation may constitute forward-looking statements, including, but not limited to, statements regarding our expectations with respect to future growth and performance, the market potential for pipeline assets, the closing of the Medicis acquisition and the timing of related regulatory approvals, integration planning and expected revenue and synergies associated with the Medicis acquisition, the composition of the future Medicis management team, future cash returns with respect to acquisitions, expectations with respect to partnering rights and journal publication with respect to efinaconazole, expectations with respect to gross margins, certain expenses and the collection of receivables, future debt amounts and ratios, and financial guidance for 2012, including expected revenues, adjusted cash flow from operations and cash EPS for 2012 and the fourth quarter of 2012. Forward-looking statements may generally be identified by the use of the words “anticipates,” “expects,” “intends,” “plans,” “could,” “should,” “would,” “may,” “will,” “believes,” “estimates,” “potential,” “targets,” 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 and other risks and uncertainties detailed from time to time in the Company's filings with the SEC and the Canadian Securities Administrators, which factors are incorporated herein by reference. Readers are cautioned not to place undue reliance on any of these forward-looking statements. These forward-looking statements speak only as of the date hereof. The Company undertakes no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this presentation or to reflect actual outcomes.

Non-GAAP Information To supplement the financial measures prepared in accordance with generally accepted accounting principles (GAAP), the company uses

non-GAAP financial measures that exclude certain items, such as amortization of inventory step-up, amortization of alliance product

assets & pp&e step up, stock-based compensation step-up, contingent consideration fair value adjustments, restructuring, acquisition-

related and other costs, acquired in-process research and development ("IPR&D"), legal settlements outside the ordinary course of

business, the impact of currency fluctuations, amortization and other non-cash charges, amortization of deferred financing costs, debt

discounts and ASC 470-20 (FSP APB 14-1) interest, loss on extinguishment of debt, (gain) loss on assets held for sale/impairment, net,

(gain) loss on investments, net, and adjusts tax expense to cash taxes. Management uses non-GAAP financial measures internally for

strategic decision making, forecasting future results and evaluating current performance. By disclosing non-GAAP financial measures,

management intends to provide investors with a meaningful, consistent comparison of the company’s core operating results and trends

for the periods presented. Non-GAAP financial measures are not prepared in accordance with GAAP. Therefore, the information is not

necessarily comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, the

corresponding measures calculated in accordance with GAAP.

Note 1: The guidance in this presentation is only effective as of the date given,

November 2, 2012, and will not be updated or affirmed unless and until the Company

publicly announces updated or affirmed guidance.

2

Agenda

1. Third Quarter Results and Performance

2. Performance of Deals and Recent Events

3. Medicis and IPD-108 (efinaconazole) Updates

4. Financial Update

5. 2012 Guidance Update

3

Q3 Revenue and Earnings Growth

Q3 2012

Q3 2011

Q3 2012

vs

Q3 2011

Total Revenue $884 M $601 M 47%

Product Sales $857 M $570 M 50%

Cash EPS $1.15 $0.66 74%

No one-time items reported in Q3 2011 or Q3 2012

4

2012 Organic Growth

Same Store Sales*

Q3 2012 2012 YTD

U.S. Derm 62% 40%

U.S. Neuro -1% -6%

Canada / Australia -6% 4%

Emerging Markets 8% 11%

Total 14% 9%

Pro Forma*

Q3 2012 2012 YTD

U.S. Derm 35% 30%

U.S. Neuro -1% -6%

Canada / Australia -5% 4%

Emerging Markets 9% 13%

Total 12% 11%

* Adjusts for the impact of foreign exchange, acquisitions, divestitures/discontinuations, and includes JV revenues.

5

Price vs. Volume Growth September 2012 YTD

Adjusts for the impact of acquisitions, divestitures/discontinuations,

and includes JV revenues

Price Volume

U.S. Derm 8% 22%

U.S. Neuro 5% -11%

Canada/Australia -2% 6%

Emerging Markets -1% 14%

Total Company 3% 8%

6

Revenue Performance of Past Acquisitions

LTM prior to close as been adjusted to reflect 2012 foreign exchange rates

Acquisition Date

LTM prior

to close (USD $M's)

2012 Forecast (USD $M's) CAGR

On Track or

Ahead of

Deal Model

Coria Oct-08 $28.6 $85.4 28% Yes

Dow/Acanya Dec-08 $36.6 $90.3 23% Yes

Aton May-10 $68.0 $129.1 26% Yes

PharmaSwiss Mar-11 $221.3 $225.6 1% Yes

Zovirax (US & Canada) Feb-11 $169.6 $258.9 29% Yes

Elidel May-11 $43.1 $80.8 43% Yes

Sanitas Aug-11 $120.0 $144.4 12% Yes

Afexa Oct-11 $43.2 $30.3 -35% No

Ortho Dec-11 $150.5 $150.2 0% Yes

Dermik Dec-11 $242.1 $236.6 -2% Yes

Inova Dec-11 $186.6 $205.7 10% Yes

Total $1,309.7 $1,637.2 12%

Note: Excludes deals under $75 million purchase price and transactions completed in 2012

7

Performance of Past Acquisitions

Cash Flow vs. Deal Model

Acquisition

Behind by More

Than 10% On Track

Ahead by More Than

10% Coria P

Dow/Acanya/111 P

Aton P

PharmaSwiss P

Zovirax (US & Canada) P

Elidel P

Sanitas P

Afexa P

Ortho P

Dermik P

Inova P

Total P

Note: Excludes deals under $75 million purchase price and transactions completed in 2012

8

Acquisitions – Cash Payback (USD in millions)

Acquisition

Date

Acquired

Cash Generated

Since Close

Purchase

Price

Cash

Payback to

Date

Coria Oct-08 $133 $95 1.40

Dow/Acanya Dec-08 $292 $400 0.73

Aton May-10 $192 $318 0.60

Biovail (incl. Zovirax) Sep-10 $1,538 $2,636 0.58

PharmaSwiss Mar-11 $98 $491 0.20

Elidel May-11 $97 $99 0.98

Sanitas Aug-11 $99 $448 0.22

Afexa Oct-11 $12 $92 0.13

Ortho Dec-11 $107 $346 0.31

Dermik Dec-11 $119 $421 0.28

Inova Dec-11 $86 $657 0.13

Note: Excludes deals under $75 million purchase price and transactions completed in 2012

9

Medicis Update

Medicis stockholder meeting scheduled for 12/7/12

HSR filed in September

Pulled and re-filed in October

Expect response by end of November

Integration planning ahead of schedule

Highly collaborative process

Expect planning to be complete by end of November

Cost synergies now expected to significantly exceed $225 million

New “Medicis” management team expected to

consist of both Medicis and Valeant executives

10

Significant Business Development

Activities

Company

Acquired Assets

Territories

Revenue

Purchase

Price

Sales

Multiple

Paid

J&J*

Shower to Shower;

Ambi; Caladryl;

Purpose; Cortaid;

Corn Huskers;

Cortef

U.S; Canada;

South East

Asia; Australia;

South Africa;

Latin America

N/A

$153 million

2.2X

Visudyne** U.S. Rights to

Visudyne

U.S ~$21million $50.5 million 2.4X

Visudyne Non-U.S. Royalties

on Visudyne

ROW ~$14 million $50 million 3.6X

* Not all products in every market

** Also purchased $12 million for multiple years of Visudyne inventory (primarily API)

11

Efinaconazole (IDP-108) Update

PDUFA date May 26, 2013

We now have worldwide rights

Except for Japan, China, Taiwan and South Korea

Plan to file in all territories where commercially viable

Looking for partners in territories we are not operating in

Filed with Health Canada in October

Kaken filed NDA in Japan in October

Expect publication in leading dermatology journal by year end

2012

Financial Update

Howard Schiller

13

Financial Summary

Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012

Product Sales $570M $654M $758M $749M $857M

Ongoing Service/Alliance Revenue $31M $34M $32M $26 M $27 M

Total Revenue excl. “one-timers” $601M $688M $790M $775M $884M

One-time items N/A N/A $66 M $45 M N/A

Total Revenue $601M $688M $856M $820M $884M

Cost of Goods Sold% (% of product sales) 28% 25% *25% 24% 23%

SG&A% (% of total revenue) 21% 20% 19% 22% 20%

R&D Expense $18M $17M $22M $18M $19M

Operating Margin (% of total revenue)

(excluding amortization) 50% 57% 55% 52% 54%

Cash EPS (Reported) $0.66 $0.94 $1.14 $1.01 $1.15

w/o one-time items $0.66 $0.87 $0.91 $0.87 $1.15

Adjusted Cash Flow from

Operations $208M $253M $322M $307M $241M

Fully Diluted Share Count 323 M 317 M 316 M 313 M 312 M

* Q1 2012 COGS has been restated to show impact of contract mfg moved to Service/Alliance (previously stated at 26%)

14

Revenue & Cash EPS Trend Analysis

Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12

Reported Revenues ($M) $515 $565 $609 $601 $688 $856 $820 $884

Sale Cloderm/5FU/IDP111 -$36 -$66

Milestones -$40 -$45

Revenue excl. one-time items ($M) $515 $529 $569 $601 $688 $790 $775 $884

Revenue Growth (vs PY) 17% 15% 28% 34% 49% 36% 47%

Reported Cash EPS $0.50 $0.62 $0.73 $0.66 $0.94 $1.14 $1.01 $1.15

Sale Cloderm/5FU/IDP111 (margin) -$0.05 -$0.15

Milestones -$0.12 -$0.14

Gain on Cephalon Shares -$0.06

One-time Fx Gains -$0.06 -$0.08

Cash EPS excl. one-time items $0.50 $0.56 $0.54 $0.66 $0.87 $0.91 $0.87 $1.15

Cash EPS Growth (vs Prior Year) 28% 17% 65% 75% 61% 61% 75%

Base Business Cash Earnings ($M) $164 $188 $179 $212 $277 $287 $314 $357

Cash Earnings / Revenue 32% 36% 31% 35% 40% 36% 41% 40%

Cash Earnings / Revenue (LTM) 31% 32% 32% 34% 36% 36% 38% 39%

15

Cash Flow

Q1 2012 Q2 2012 Q3 2012 YTD 2012

GAAP Cash Flow from

Operations

$167.2 M $254.6 M $166.8 M $588.6 M

Adjusted Cash Flow

from Operations

$321.6 M $307.5 M $241.2 M $870.3 M

Q3 GAAP Cash Flows impacted

by:

Restructuring and Integration

costs of $34.2 million which

decreased vs Q2 and Q1

Payment of accrued legal

settlement costs of $37.7 million

Increased working capital of

$127.9 million, including an

increase in A/R of $182.6 M due

to:

Acceleration in top line growth

Strong September sales

Zovirax stock out early in Q3

Full Year Adjusted Cash Flow from

Operations guidance reduced to

$1.2 - $1.3 billion

Q4 Adjusted Cash Flow from

Operations $330-$430 million

Lower Full Year Adjusted Cash Flow

from Operations driven by:

Strong Emerging Markets Growth

Working Capital investments in

acquired businesses

Global plant consolidations and

related tech transfers

16

Q3 12 Q2 12 Q1 12

Acquisition Related Restructuring/Integration 25.0$ 36.6$ 59.5$

Biovail Merger Related Costs 25.9$

Manufacturing Rationalization 2.3$ 10.6$ 1.9$

IP Migration 5.4$ 1.1$

U.S. Commercial Restructuring 1.6$

Total 34.2$ 48.3$ 87.3$

Acquisition, Integration, & Restructuring

Cash Costs ($ in millions)

17

Update on Recent Financings

Medicis Financing

7 year Term Loan B – to fund at close

$1.0 billion @ L+3.25 (1% LIBOR floor)

8 year High Yield Notes – closed into escrow

$1.75 billion @ 6 3/8%

Other Financings

8 year High Yield Notes - not tied to Medicis deal

$500 million @ 6 3/8%

Q4 2012 Impact

$35 million, or $0.12 Cash EPS, for Medicis related interest expense

$9 million, or $0.03 Cash EPS, for other financing

Pro forma for Medicis closing

Total debt = $10.9 billion

Leverage ratio = ~4.2X

18

Revenue $3.4 - $3.6

billion

$4.55 - $4.75 Cash

EPS

$4.18 – $4.38

ex one-time

items

> $1.4 billion in

Adjusted Cash Flow

from Operations

Financial Guidance for 2012

See Note 1 regarding guidance

Q4 2012 2012

Revenue $900 M+ $3.4 - $3.6 B

Cash EPS Excluding

Medicis Related

Financing

$1.30 - $1.35

$4.60 - $4.65

Cash EPS Including

Medicis Related

Interest Expense

$1.18 - $1.23

$4.48 - $4.53

Cash EPS Excluding

Medicis Related

Interest Expense &

One-time Items

$1.30 - $1.35

$4.23 - $4.28

Adjusted Cash Flow

from Operations

$330 - $430 M

$1.2 - 1.3 B

Previous Guidance Current Guidance

Third Quarter 2012

Financial Results

Conference Call

November 2, 2012