10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2006

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                     

Commission file number: 0-18443

MEDICIS PHARMACEUTICAL CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	52-1574808
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

8125 North Hayden Road
Scottsdale, Arizona 85258-2463

(Address of principal executive offices)

(602) 808-8800

(Registrant’s telephone number,

including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  þ      Accelerated filer  o      Non-accelerated filer  o

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2) YES o NO þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at May 3, 2006
Class A Common Stock $.014 Par Value	54,434,252

MEDICIS PHARMACEUTICAL CORPORATION

Table of Contents

	Page
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 2006 and December 31, 2005		3
Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2006 and 2005		5
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2006 and 2005		6
Notes to the Condensed Consolidated Financial Statements		7
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
Item 3 Quantitative and Qualitative Disclosures About Market Risk		35
Item 4 Controls and Procedures		35
PART II. OTHER INFORMATION
Item 1 Legal Proceedings		36
Item 1A Risk Factors		36
Item 6 Exhibits		37
SIGNATURES		38
Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
Exhibit 12
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1

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Part I. Financial Information

Item 1. Financial Statements

MEDICIS PHARMACEUTICAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	March 31, 2006		December 31, 2005
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	245,789	$	446,997
Short-term investments		352,879		295,535
Accounts receivable, net		50,379		46,697
Inventories, net		15,695		19,076
Deferred tax assets, net		12,040		12,738
Other current assets		13,469		12,241
Total current assets		690,251		833,284
Property and equipment, net		5,025		5,416
Intangible assets:
Intangible assets related to product line acquisitions and business combinations		311,406		311,406
Other intangible assets		5,133		4,888
		316,539		316,294
Less: accumulated amortization		81,582		76,458
Net intangible assets		234,957		239,836
Goodwill		63,269		63,094
Long-term investments		4,693		—
Deferred financing costs, net		3,789		4,325
	$	1,001,984	$	1,145,955

See accompanying notes to condensed consolidated financial statements.

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MEDICIS PHARMACEUTICAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS, Continued

(in thousands, except share amounts)

	March 31, 2006			December 31, 2005
	(unaudited)
Liabilities
Current liabilities:
Accounts payable	$	35,767		$	57,708
Short-term contract obligation		—			27,407
Income taxes payable		9,217			31,521
Other current liabilities		30,042			24,195
Total current liabilities		75,026			140,831
Long-term liabilities:
Contingent convertible senior notes		453,065			453,065
Deferred tax liability, net		11,735			8,572
Stockholders’ Equity
Preferred stock, $0.01 par value; shares authorized: 5,000,000; no shares issued		—			—
Class A common stock, $0.014 par value; shares authorized: 150,000,000; issued and outstanding: 67,082,926 and 67,052,326 at March 31, 2006 and December 31, 2005, respectively		939			938
Class B common stock, $0.014 par value; shares authorized: 1,000,000; no shares issued and outstanding at March 31, 2006 and December 31, 2005		—			—
Additional paid-in capital		557,753			550,006
Accumulated other comprehensive income		1,486			379
Accumulated earnings		244,710			334,894
Less: Treasury stock, 12,651,554 and 12,647,554 shares at cost at March 31, 2005 and December 31, 2005, respectively		(342,730	)		(342,730	)
Total stockholders’ equity		462,158			543,487
	$	1,001,984		$	1,145,955

See accompanying notes to condensed consolidated financial statements.

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MEDICIS PHARMACEUTICAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

(in thousands, except per share data)

	Three Months Ended
	March 31, 2006			March 31, 2005
Net product revenues	$	71,087		$	75,788
Net contract revenues		4,071			19,400
Net revenues		75,158			95,188
Cost of product revenue (1)		12,179			13,914
Gross profit		62,979			81,274
Operating expenses:
Selling, general and administrative (2)		51,223			31,934
Research and development (3)		97,218			14,452
Depreciation and amortization		5,856			6,054
Operating (loss) income		(91,318	)		28,834
Interest income		7,020			2,989
Interest expense		2,658			2,658
(Loss) income before income tax (benefit) expense		(86,956	)		29,165
Income tax expense		1,587			9,794
Net (loss) income	$	(88,543	)	$	19,371
Basic net (loss) income per common share	$	(1.63	)	$	0.36
Diluted net (loss) income per common share	$	(1.63	)	$	0.30
Cash dividend declared per common share	$	0.03		$	0.03
Basic common shares outstanding		54,356			54,251
Diluted common shares outstanding		54,356			69,773
(1) amounts exclude amortization of intangible assets related to acquired products	$	5,075		$	5,342
(2) amounts include share-based compensation expense	$	6,647		$	129
(3) amounts include share-based compensation expense	$	534			—

See accompanying notes to condensed consolidated financial statements.

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MEDICIS PHARMACEUTICAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

	Three Months Ended
	March 31, 2006			March 31, 2005
Operating Activities:
Net (loss) income	$	(88,543	)	$	19,371
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		5,856			6,054
Amortization of deferred financing fees		536			536
(Gain) loss on sale of available-for-sale investments		(1	)		156
Share-based compensation expense		7,181			129
Deferred income tax expense		3,860			3,518
Tax benefit from exercise of stock options		—			(452	)
Provision for doubtful accounts and returns		640			327
Accretion of (discount) premium on investments		(480	)		1,398
Changes in operating assets and liabilities:
Accounts receivable		(4,322	)		(2,615	)
Inventories		3,381			(2,148	)
Other current assets		(1,228	)		4,703
Accounts payable		(21,940	)		4,204
Income taxes payable		(22,304	)		(1,928	)
Other current liabilities		5,844			635
Net cash (used in) provided by operating activities		(111,520	)		33,888
Investing Activities:
Purchase of property and equipment		(343	)		(582	)
Payment of direct merger costs		(27,582	)		(820	)
Payment for purchase of product rights		(245	)		62
Purchase of available-for-sale investments		(186,744	)		(185,470	)
Sale of available-for-sale investments		92,032			171,583
Maturity of available-for-sale investments		34,270			19,425
Net cash (used in) provided by investing activities		(88,612	)		4,198
Financing Activities:
Payment of dividends		(1,637	)		(1,627	)
Proceeds from the exercise of stock options		567			129
Net cash used in financing activities		(1,070	)		(1,498	)
Effect of exchange rate on cash and cash equivalents		(6	)		64
Net (decrease) increase in cash and cash equivalents		(201,208	)		36,652
Cash and cash equivalents at beginning of period		446,997			31,521
Cash and cash equivalents at end of period	$	245,789		$	68,173

See accompanying notes to condensed consolidated financial statements.

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MEDICIS PHARMACEUTICAL CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2006
(unaudited)

1. NATURE OF BUSINESS

     Medicis Pharmaceutical Corporation (“Medicis” or the “Company”) is a leading specialty pharmaceutical company focusing primarily on the development and marketing of products in the United States (“U.S.”) for the treatment of dermatological, aesthetic and podiatric conditions. Medicis also markets products in Canada for the treatment of dermatological and aesthetic conditions. Medicis has built its business by executing a four-part growth strategy. This strategy consists of promoting existing core brands, developing new products and important product line extensions, entering into strategic collaborations and acquiring complementary products, technologies and businesses.

     The Company offers a broad range of products addressing various conditions including acne, fungal infections, rosacea, hyperpigmentation, photoaging, psoriasis, eczema, skin and skin-structure infections, seborrheic dermatitis and cosmesis (improvement in the texture and appearance of skin). Medicis currently offers 15 branded products. Its core brands are DYNACIN^® (minocycline HCI), LOPROX^® (ciclopirox), OMNICEF^® (cefdinir), PLEXION^® (sodium sulfacetamide/sulfur), RESTYLANE^® (hyaluronic acid), TRIAZ^® (benzoyl peroxide), and VANOS^™ (fluocinonide) Cream, 0.1%.

     In March 2003, Medicis expanded into the dermal aesthetic market through its acquisition of the exclusive U.S. and Canadian rights to market, distribute and commercialize the dermal restorative product lines known as RESTYLANE^®, PERLANE^™ and RESTYLANE FINE LINES^™ from Q-Med AB, a Swedish biotechnology/medical device company and its affiliates, collectively Q-Med. RESTYLANE^® has been approved by the Food and Drug Administration (the “FDA”) for use in the U.S. as a medical device for the correction of moderate to severe facial wrinkles and folds, such as nasolabial folds. RESTYLANE^®, PERLANE^™ and RESTYLANE FINE LINES^™ have been approved for use in Canada.

     The consolidated financial statements include the accounts of Medicis Pharmaceutical Corporation and its wholly owned subsidiaries. The Company does not have any subsidiaries in which it does not own 100% of the outstanding stock. All of the Company’s subsidiaries are included in the consolidated financial statements. All significant intercompany accounts and transactions have been eliminated in consolidation.

     The accompanying interim condensed consolidated financial statements of Medicis have been prepared in conformity with U.S. generally accepted accounting principles, consistent in all material respects with those applied in the Company’s Transition Report on Form 10-K/T for the six-month period ended December 31, 2005 (the “Transition Period”). The financial information is unaudited, but reflects all adjustments, consisting only of normal recurring accruals, which are, in the opinion of the Company’s management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with the Company’s Transition Report on Form 10-K/T for the Transition Period. Certain prior period amounts have been reclassified to conform with current period presentation.

2. SHARE-BASED COMPENSATION

     At March 31, 2006, the Company had six active share-based employee compensation plans. Stock option awards granted from these plans are granted at the fair market value on the date of grant. The option awards vest over a period determined at the time the options are granted, ranging from one to five years, and generally have a maximum term of ten years. Certain options provide for accelerated vesting if there is a change in control (as defined in the plans). When options are exercised, new shares of the Company’s Class A common stock are issued. Prior to July 1, 2005, the Company accounted for share-based employee compensation, including stock options, using the method prescribed in Accounting Principles Board Opinion

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No. 25, “Accounting for Stock Issued to Employees” and related Interpretations (“APB Opinion No. 25”). Under APB Opinion No. 25, stock options are granted at market price and no compensation cost is recognized, and a disclosure is made regarding the pro forma effect on net earnings assuming compensation cost had been recognized in accordance with Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”). On December 16, 2004, the FASB issued SFAS No. 123R, which requires companies to measure and recognize compensation expense for all share-based payments at fair value. SFAS No. 123R eliminates the ability to account for share-based compensation transactions using APB Opinion No. 25, and generally requires that such transactions be accounted for using prescribed fair-value-based methods. SFAS No. 123R permits public companies to adopt its requirements using one of two methods: (a) a “modified prospective” method in which compensation costs are recognized beginning with the effective date based on the requirements of SFAS No. 123R for all share-based payments granted or modified after the effective date, and based on the requirements of SFAS No. 123 for all awards granted to employees prior to the effective date of SFAS No. 123R that remain unvested on the effective date or (b) a “modified retrospective” method which includes the requirements of the modified prospective method described above, but also permits companies to restate based on the amounts previously recognized under SFAS No. 123 for purposes of pro forma disclosures either for all periods presented or prior interim periods of the year of adoption. Effective July 1, 2005, the Company adopted SFAS No. 123R using the modified prospective method. Other than restricted stock, no share-based employee compensation cost has been reflected in net income prior to the adoption of SFAS No. 123R. Results for prior periods have not been restated.

     The adoption of SFAS No. 123R increased the loss before income tax expense for the three months ended March 31, 2006 by approximately $7.2 million and increased the net loss for the three months ended March 31, 2006 by approximately $5.2 million. As a result, basic and diluted net loss per common share were increased $0.10.

     The total value of the stock option awards is expensed ratably over the service period of the employees receiving the awards. As of March 31, 2006, total unrecognized compensation cost related to stock option awards was approximately $57.9 million and the related weighted-average period over which it is expected to be recognized is approximately 2.8 years.

     Prior to the adoption of SFAS No. 123R, the Company presented all tax benefits of deductions resulting from the exercise of stock options as operating cash flows in the condensed consolidated statements of cash flows. SFAS No. 123R requires the cash flows resulting from the tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) to be classified as financing cash flows. No excess tax benefits were recognized during the three months ended March 31, 2006.

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     A summary of stock options activity within the Company’s stock-based compensation plans and changes for the three months ended March 31, 2006 is as follows:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number			Exercise		Contractual		Intrinsic
	of Shares			Price		Term		Value
Balance at December 31, 2005		14,379,336		$	27.21
Granted		38,625		$	30.05
Exercised		(26,600	)	$	21.32
Terminated/expired		(84,598	)	$	30.45
Balance at March 31, 2006		14,306,763		$	27.21		6.25	$	92,892,072

     The intrinsic value of options exercised during the three months ended March 31, 2006 was $261,802. Options exercisable under the Company’s share-based compensation plans at March 31, 2006 were 7,310,875, with an average exercise price of $24.27, an average remaining contractual term of 5.2 years, and an aggregate intrinsic value of $63,788,916.

     A summary of fully vested stock options and stock options expected to vest, as of March 31, 2006, is as follows:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Number		Exercise		Contractual		Intrinsic
	of Shares		Price		Term		Value
Outstanding		13,759,712	$	27.19		6.2	$	89,556,658
Exercisable		7,078,896	$	24.25		5.2	$	61,878,760

     The fair value of each stock option award is estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions:

	Three Months Ended			Three Months Ended
	March 31, 2006			March 31, 2005
Expected dividend yield		0.4	%		0.3	%
Expected stock price volatility		0.36			0.44
Risk-free interest rate		4.5	%		3.6	%
Expected life of options	7 Years			5 Years

     The expected dividend yield is based on expected annual dividends to be paid by the Company as a percentage of the market value of the Company’s stock as of the date of grant. The Company determined that a blend of implied volatility and historical volatility is more reflective of market conditions and a better indicator of expected volatility than using purely historical volatility. The risk-free interest rate is based on the U.S. treasury security rate in effect as of the date of grant. The expected lives of options are based on historical data of the Company.

     The weighted average fair value of stock options granted during the three months ended March 31, 2006 was $13.36. There were no stock options granted during the three months ended March 31, 2005.

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     The following table illustrates the effect on net income and net income per common share as if the Company had applied the fair value recognition provisions of SFAS No. 123 to all outstanding stock option awards for periods presented prior to the Company’s adoption of SFAS No. 123R (amounts in thousands, except per share amounts):

	THREE MONTHS
	ENDED
	MARCH 31,
	2005
Net income, as reported	$	19,371
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		5,049
Pro-forma net income	$	14,322
Net income per common share:
Basic, as reported	$	0.36
Basic, pro forma	$	0.26
Diluted, as reported	$	0.30
Diluted, pro forma	$	0.23

     The Company also grants restricted stock awards to certain employees. Restricted stock awards are valued at the closing market value of the Company’s Class A common stock on the date of grant, and the total value of the award is expensed ratably over the service period of the employees receiving the grants. During the three months ended March 31, 2006, 110,025 shares of restricted stock were granted to certain employees. Share-based compensation expense related to all restricted stock awards outstanding during the three months ended March 31, 2006 and 2005, was approximately $0.5 million and $0.1 million, respectively. As of March 31, 2006, the total amount of unrecognized compensation cost related to nonvested restricted stock awards was approximately $7.6 million, and the related weighted-average period over which it is expected to be recognized is approximately 4.4 years.

     A summary of restricted stock activity within the Company’s share-based compensation plans and changes for the three months ended March 31, 2006 is as follows (amounts in thousands, except per share amounts):

				Weighted-
				Average
				Grant-Date
Nonvested Shares	Shares			Fair Value
Nonvested at December 31, 2005		212,260		$	29.65
Granted		110,025		$	30.05
Vested		(4,000	)	$	23.30
Forfeited		—		$	—
Nonvested at March 31, 2006		318,285		$	29.87

     The total fair value of restricted shares vested during the three months ended March 31, 2006 was approximately $0.1 million. No restricted shares vested during the three months ended March 31, 2005.

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3. RESEARCH AND DEVELOPMENT COSTS AND ACCOUNTING FOR STRATEGIC COLLABORATIONS

     All research and development costs, including payments related to products under development and research consulting agreements, are expensed as incurred. The Company may continue to make non-refundable payments to third parties for new technologies and for research and development work that has been completed. These payments may be expensed at the time of payment depending on the nature of the payment made.

     The Company’s policy on accounting for costs of strategic collaborations determines the timing of the recognition of certain development costs. In addition, this policy determines whether the cost is classified as development expense or capitalized as an asset. Management is required to form judgments with respect to the commercial status of such products in determining whether development costs meet the criteria for immediate expense or capitalization. For example, when the Company acquires certain products for which there is already an Abbreviated New Drug Application (“ANDA”) or a New Drug Application (“NDA”) approval related directly to the product, and there is net realizable value based on projected sales for these products, the Company capitalizes the amount paid as an intangible asset. In contrast, if the Company acquires product rights that are in the development phase and as to which the Company has no assurance that the third party will successfully complete its developmental milestones, the Company expenses such payments.

     On January 28, 2005, the Company amended its strategic alliance with AAIPharma Inc. (“AAIPharma”) previously initiated in June 2002 for the development, commercialization and license of a dermatologic product. The consummation of the amendment has not affected the timing of the development project. The amendment allowed for the immediate transfer of the work product, as defined under the agreement, as well as the work product’s management and development, to Medicis, and provides that AAIPharma will continue to assist Medicis with the development of the product on a fee for services basis. Medicis will have no future financial obligations to pay AAIPharma on the attainment of clinical milestones, but incurred approximately $8.3 million as a charge to research and development expense during the three months ended March 31, 2005, as part of the amendment and the assumption of all liabilities associated with the project.

4. DEVELOPMENT AND DISTRIBUTION AGREEMENT WITH IPSEN FOR RIGHTS TO IPSEN’S BOTULINUM TOXIN PRODUCT KNOWN AS RELOXIN^®

     On March 17, 2006, the Company entered into a development and distribution agreement with Ipsen Ltd., a wholly-owned subsidiary of Ipsen (“Ipsen”), whereby Ipsen granted Aesthetica Ltd., a wholly-owned subsidiary of Medicis, rights to develop, distribute and commercialize Ipsen’s botulinum toxin product in the United States, Canada and Japan for aesthetic use by physicians. The product is commonly referred to as Reloxin^® in the U.S. aesthetic market and Dysport^® for medical and aesthetic markets outside the U.S. The product is not currently approved for use in the U.S., Canada or Japan.

     Under the terms of the agreement, Medicis paid Ipsen $90.1 million in consideration for the exclusive distribution rights in the U.S., Canada and Japan and will pay an additional $26.5 million upon successful completion of various clinical and regulatory milestones, $75.0 million upon the product’s approval by the FDA and $2.0 million upon regulatory approval of the product in Japan. Ipsen will manufacture and provide the product to Medicis for the term of the agreement, which extends to September 2019. Ipsen will receive a royalty based on sales and a supply price, the total of which is equivalent to approximately 30% of net sales as defined under the agreement. The initial $90.1 million payment was recognized as a charge to research and development expense during the three months ended March 31, 2006. Under the terms of the agreement, Medicis is responsible for all remaining research and development costs associated with obtaining the product’s approval in the U.S., Canada and Japan.

     Additionally, Medicis and Ipsen agreed to negotiate and enter into an agreement relating to the exclusive distribution and development rights of the product for the aesthetic market in Europe, and subsequently in certain other markets. Under this agreement, Medicis would pay up-front and other milestone payments linked to the development and approval of Ipsen’s botulinum toxin Type A product in

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aesthetic indications as well as royalties based on net sales. Ipsen would manufacture and supply the product to Medicis. Medicis was obligated to make an additional payment to Ipsen in connection with the U.S., Canada and Japan agreement if this agreement was not entered into by April 15, 2006. On April 13, 2006, Medicis and Ipsen agreed to extend this deadline to July 15, 2006.

5. MERGER OF ASCENT PEDIATRICS, INC.

     As part of its merger with Ascent completed in November 2001, the Company may be required to make contingent purchase price payments (“Contingent Payments”) for each of the first five years following closing based upon reaching certain sales threshold milestones on the Ascent products for each twelve month period through November 15, 2006, subject to certain deductions and set-offs. From time to time the Company assesses the probability and likelihood of payment in the coming respective November period based on current sales trends. There can be no assurance that such payment will ultimately be made nor is the accrual of a liability an indication of current sales levels. A total of approximately $27.4 million was included in short-term contract obligation in the Company’s condensed consolidated balance sheets as of December 31, 2005, representing the first four years’ Contingent Payments. Pursuant to the merger agreement, payment of the contingent portion of the purchase price was withheld pending the final outcome of certain pending litigation. The Company distributed the accumulated Contingent Payments to the former shareholders of Ascent during the three months ended March 31, 2006, as the pending litigation matter had concluded. In addition, the Company settled an additional dispute during May 2006 which was initiated in March 2006 related to the concluded lawsuitA $1.8 million settlement was recognized as a charge to selling, general administrative expense during the three months ended March 31, 2006.

6. SHORT-TERM AND LONG-TERM INVESTMENTS

     The Company’s short-term and long-term investments are intended to establish a high-quality portfolio that preserves principal, meets liquidity needs, avoids inappropriate concentrations and delivers an appropriate yield in relationship to the Company’s investment guidelines and market conditions. Short-term and long-term investments consist of corporate and various government agency and municipal debt securities. Management classifies the Company’s short-term and long-term investments as available-for-sale. Available-for-sale securities are carried at fair value with unrealized gains and losses reported in stockholders’ equity. Realized gains and losses and declines in value judged to be other than temporary, if any, are included in operations. A decline in the market value of any available-for-sale security below cost that is deemed to be other than temporary, results in an impairment in the fair value of the investment. The impairment is charged to earnings and a new cost basis for the security is established. Premiums and discounts are amortized or accreted over the life of the related available-for-sale security. Dividend and interest income are recognized when earned. The cost of security sold is calculated using the specific identification method. At March 31, 2006, the Company has recorded the estimated fair value in available-for-sale securities for short-term and long-term investments of approximately $352.9 million and $4.7 million, respectively. The following is a summary of available-for-sale securities (amounts in thousands):

	MARCH 31, 2006
			Gross		Gross		Gross
			Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. corporate securities	$	199,569	$	1,620	$	273	$	200,917
Other debt securities		156,859		1		204		156,655
Total securities	$	356,428	$	1,621	$	477	$	357,572

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     During the three months ended March 31, 2006, the gross realized gains on sales of available-for-sale securities totaled $1,458, while no gross losses were realized. Such amounts of gains and losses are determined based on the specific identification method. The net adjustment to unrealized gains during the three months ended March 31, 2006, on available-for-sale securities included in stockholders’ equity totaled $976,207. The amortized cost and estimated fair value of the available-for-sale securities at March 31, 2006, by maturity, are shown below (amounts in thousands):

	MARCH 31, 2006
			Estimated
	Cost		Fair Value
Available-for-sale
Due in one year or less	$	236,938	$	238,181
Due after one year through five years		16,490		16,391
Due after five years through 10 years		4,000		4,000
Due after 10 years		99,000		99,000
	$	356,428	$	357,572

     At March 31, 2006, approximately $114.7 million of the $119.4 million in estimated fair value expected to mature greater than one year has been classified as short-term investments since these investments are in an unrealized gain position. Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties, and the Company views its available-for-sale securities as available for current operations.

     The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2006 (amount in thousands):

	Less Than 12 Months				Greater Than 12 Months
			Gross				Gross
	Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss
U.S. corporate securities	$	121,931	$	105	$	30,024	$	168
Other debt securities		26,945		17		36,410		188
Total securities	$	148,876	$	122	$	66,434	$	356

     The unrealized losses on the Company’s investments were caused primarily by interest rate increases. It is expected that the investments will not be settled at a price less than the amortized cost. Because the Company has the ability to and intent to hold these investments until a recovery of fair value, which may be maturity, the Company does not consider these investments to be other than temporarily impaired at March 31, 2006.

7. SEGMENT AND PRODUCT INFORMATION

     The Company operates in one significant business segment: Pharmaceuticals. The Company’s current pharmaceutical franchises are divided between the dermatological and non-dermatological fields. The dermatological field represents products for the treatment of acne and acne-related dermatological conditions and non-acne dermatological conditions. The non-dermatological field represents products for the treatment of urea cycle disorder and contract revenue. The acne and acne-related dermatological product lines include core brands DYNACIN^®, PLEXION^® and TRIAZ^®. The non-acne dermatological product lines include core brands LOPROX^®, OMNICEF^®, RESTYLANE^® and VANOS^™. The non-dermatological product lines include AMMONUL^® and BUPHENYL^®. The non-dermatological field also includes contract revenues associated with licensing agreements and authorized generics.

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     The Company’s pharmaceutical products, with the exception of AMMONUL^® and BUPHENYL^®, are promoted to dermatologists, podiatrists and plastic surgeons. Such products are often prescribed by physicians outside these three specialties; including family practitioners, general practitioners, primary-care physicians and OB/GYNs, as well as hospitals, government agencies and others. All products, with the exception of BUPHENYL^®, are sold primarily to wholesalers and retail chain drug stores. BUPHENYL^® is primarily sold directly to hospitals and pharmacies.

     The percentage of net revenues for each of the product categories is as follows:

	THREE MONTHS ENDED
	MARCH 31,
	2006			2005
Acne and acne-related dermatological products		19	%		25	%
Non-acne dermatological products		67			50
Non-dermatological products		14			25
Total net revenues		100	%		100	%

8. INVENTORIES

     The Company utilizes third parties to manufacture and package inventories held for sale, takes title to certain inventories once manufactured, and warehouses such goods until packaged for final distribution and sale. Inventories consist of salable products held at the Company’s warehouses, as well as raw materials and components at the manufacturers’ facilities, and are valued at the lower of cost or market using the first-in, first-out method. The Company provides valuation reserves for estimated obsolescence or unmarketable inventory in an amount equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions.

     Inventories are as follows (amounts in thousands):

	March 31, 2006			December 31, 2005
Raw materials	$	6,996		$	6,436
Finished goods		10,367			13,925
Valuation reserve		(1,668	)		(1,285	)
Total inventories	$	15,695		$	19,076

9. CONTINGENT CONVERTIBLE SENIOR NOTES

     In June 2002, the Company sold $400.0 million aggregate principal amount of its 2.5% Contingent Convertible Notes Due 2032 (the “Old Notes”) in private transactions. As discussed below, approximately $230.8 million in principal amount of the Old Notes was exchanged for New Notes on August 14, 2003. The Old Notes bear interest at a rate of 2.5% per annum, which is payable on June 4 and December 4 of each year, beginning on December 4, 2002. The Company also agreed to pay contingent interest at a rate equal to 0.5% per annum during any six-month period, with the initial six-month period commencing June 4, 2007, if the average trading price of the Old Notes reaches certain thresholds. The Old Notes will mature on June 4, 2032.

     The Company may redeem some or all of the Old Notes at any time on or after June 11, 2007, at a redemption price, payable in cash, of 100% of the principal amount of the Old Notes, plus accrued and unpaid interest, including contingent interest, if any. Holders of the Old Notes may require the Company to repurchase all or a portion of their Old Notes on June 4, 2007, 2012 and 2017; and upon a change in control, as defined in the indenture governing the Old Notes, at 100% of the principal amount of the Old Notes, plus accrued and unpaid interest to the date of the repurchase, payable in cash.

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     The Old Notes are convertible, at the holders’ option, prior to the maturity date into shares of the Company’s Class A common stock in the following circumstances:

• during any quarter commencing after June 30, 2002, if the closing price of the Company’s Class A common stock over a specified number of trading days during the previous quarter, including the last trading day of such quarter, is more than 110% of the conversion price of the Old Notes, or $31.96. The Old Notes are initially convertible at a conversion price of $29.05 per share, which is equal to a conversion rate of approximately 34.4234 shares per $1,000 principal amount of Old Notes, subject to adjustment;

• if the Company has called the Old Notes for redemption;

• during the five trading day period immediately following any nine consecutive day trading period in which the trading price of the Old Notes per $1,000 principal amount for each day of such period was less than 95% of the product of the closing sale price of the Company’s Class A common stock on that day multiplied by the number of shares of the Company’s Class A common stock issuable upon conversion of $1,000 principal amount of the Old Notes; or

• upon the occurrence of specified corporate transactions.

     The Old Notes, which are unsecured, do not contain any restrictions on the payment of dividends, the incurrence of additional indebtedness or the repurchase of the Company’s securities and do not contain any financial covenants.

     The Company incurred $12.6 million of fees and other origination costs related to the issuance of the Old Notes. The Company is amortizing these costs over the five-year Put period, which runs through May 2007. The Put period runs from the date the Old Notes were issued to the date the Company may redeem some or all of the Old Notes.

     On August 14, 2003, the Company exchanged approximately $230.8 million in principal amount of its Old Notes for approximately $283.9 million in principal amount of its 1.5% Contingent Convertible Senior Notes Due 2033 (the “New Notes”). Holders of Old Notes that accepted the Company’s exchange offer received $1,230 in principal amount of New Notes for each $1,000 in principal amount of Old Notes. The terms of the New Notes are similar to the terms of the Old Notes, but have a different interest rate, conversion rate and maturity date. Holders of Old Notes that chose not to exchange continue to be subject to the terms of the Old Notes.

     The New Notes bear interest at a rate of 1.5% per annum, which is payable on June 4 and December 4 of each year, beginning December 4, 2003. The Company will also pay contingent interest at a rate of 0.5% per annum during any six-month period, with the initial six-month period commencing June 4, 2008, if the average trading price of the New Notes reaches certain thresholds. The New Notes mature on June 4, 2033.

     The Company may redeem some or all of the New Notes at any time on or after June 11, 2008, at a redemption price, payable in cash, of 100% of the principal amount of the New Notes, plus accrued and unpaid interest, including contingent interest, if any. Holders of the New Notes may require the Company to repurchase all or a portion of their New Notes on June 4, 2008, 2013 and 2018, and upon a change in control, as defined in the indenture governing the New Notes, at 100% of the principal amount of the New Notes, plus accrued and unpaid interest to the date of the repurchase, payable in cash.

     The New Notes are convertible, at the holders’ option, prior to the maturity date into shares of the Company’s Class A common stock in the following circumstances:

• during any quarter commencing after September 30, 2003, if the closing price of the Company’s Class A common stock over a specified number of trading days during the previous quarter, including the last trading day of such quarter, is more than 120% of the conversion price of the

15

	New Notes, or $46.51. The Notes are initially convertible at a conversion price of $38.76 per share, which is equal to a conversion rate of approximately 25.7998 shares per $1,000 principal amount of New Notes, subject to adjustment;
•	if the Company has called the New Notes for redemption;
•	during the five trading day period immediately following any nine consecutive day trading period in which the trading price of the New Notes per $1,000 principal amount for each day of such period was less than 95% of the product of the closing sale price of the Company’s Class A common stock on that day multiplied by the number of shares of the Company’s Class A common stock issuable upon conversion of $1,000 principal amount of the New Notes; or
•	upon the occurrence of specified corporate transactions.

     The New Notes, which are unsecured, do not contain any restrictions on the incurrence of additional indebtedness or the repurchase of the Company’s securities and do not contain any financial covenants. The New Notes require an adjustment to the conversion price if the cumulative aggregate of all current and prior dividend increases above $0.025 per share would result in at least a one percent (1%) increase in the conversion price. This threshold has not been reached and no adjustment to the conversion price has been made.

     As a result of the exchange, the outstanding principal amounts of the Old Notes and the New Notes were $169.2 million and $283.9 million, respectively. Both the New Notes and Old Notes are reported in aggregate on the Company’s condensed consolidated balance sheets. The Company incurred approximately $5.1 million of fees and other origination costs related to the issuance of the New Notes. The Company is amortizing these costs over the five-year Put period, which runs through August 2008. The Put period runs from the date the New Notes were issued to the date the Company may redeem some or all of the New Notes.

     During the quarters ended December 31, 2005, September 30, 2005, December 31, 2004, September 30, 2004, June 30, 2004, March 31, 2004 and December 31, 2003, the Old Notes met the criteria for the right of conversion into shares of the Company’s Class A common stock. This right of conversion of the holders of Old Notes was triggered by the stock closing above $31.96 on 20 of the last 30 trading days and the last trading day of the quarters ended December 31, 2005, September 30, 2005, December 31, 2004, September 30, 2004, June 30, 2004, March 31, 2004 and December 31, 2003. The holders of Old Notes had this conversion right only until March 31, 2006. During the quarters ended March 31, 2006, June 30, 2005 and March 31, 2005, the Old Notes did not meet the criteria for the right of conversion. At the end of all future quarters, the conversion rights will be reassessed in accordance with the bond indenture agreement to determine if the conversion trigger rights have been achieved. During the three months ended September 30, 2004 and March 31, 2004, outstanding principal amounts of $2,000 and $6,000 of Old Notes, respectively, were converted into shares of the Company’s Class A common stock. As of May 8, 2006, no other Old Notes had been converted.

10. INCOME TAXES

     Income taxes have been provided for using the liability method in accordance with Statement of Financial Accounting Standard No. 109, “Accounting for Income Taxes.” The provision for income taxes generally reflects management’s estimate of the effective tax rate expected to be applicable for the full fiscal year. However, during the three months ended March 31, 2006, the Company’s effective tax rate of (1.8%) differs from the Company’s estimate of the effective tax rate for the full fiscal year. The Company’s effective tax rate during the three months ended March 31, 2006 is a result of not booking tax benefits on the $90.1 million charge to research and development expense related to the Company’s development and distribution agreement with Ipsen for the development of Reloxin^®. The $90.1 million charge was incurred by Aesthetica Ltd., a Bermuda company, which is not subject to corporate income taxes.

     At March 31, 2006, the Company has a federal net operating loss carryforward of approximately $61.7 million that begins expiring in varying amounts in the years 2008 through 2020 if not previously

16

utilized. The net operating loss carryforward was acquired in connection with the Company’s merger with Ascent during fiscal 2002. As a result of the merger and related ownership change for Ascent, the annual utilization of the net operating loss carryforward is limited under Internal Revenue Code Section 382. Based upon this limitation, the Company estimates that approximately $15.2 million of the $61.7 million net operating loss carryforward will be realized. Accordingly, a valuation reserve has been recorded for the remaining net operating loss carryforward that is not expected to be realized.

     At March 31, 2006, the Company had a research and experimentation credit carryforward of approximately $1.3 million that begins expiring in varying amounts in the years 2008 through 2020 if not previously utilized. All of the research and experimentation credit carryforward was acquired in connection with the Company’s merger with Ascent during fiscal 2002 and is subject to the limitation under Internal Revenue Code Section 383. As a result of this limitation, the Company does not expect to realize any of the research and experimentation credits acquired from Ascent. Accordingly, a valuation reserve of $1.3 million has been established for the acquired research and experimentation credits.

     At March 31, 2006, the Company had a foreign tax credit carryover of approximately $0.7 million. The foreign tax credit will expire in 2016 if not previously utilized.

     As a result of the limitations described above, the Company recorded a deferred tax asset valuation allowance of $17.5 million related to the net operating loss and research and experimentation credit carryforwards acquired in the merger with Ascent. Subsequent realization of loss and credit carryforwards in excess of the amounts estimated to be realized as of March 31, 2006 will be applied to reduce the valuation allowance and goodwill recorded in connection with the merger with Ascent.

     During the three months ended March 31, 2006 and March 31, 2005, the Company made net tax payments of $20.7 million and $8.1 million, respectively.

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11. DIVIDENDS DECLARED ON COMMON STOCK

     On March 15, 2006, the Company declared a cash dividend of $0.03 per issued and outstanding share of its Class A common stock payable on April 28, 2006 to stockholders of record at the close of business on April 3, 2006. The $1.6 million dividend was recorded as a reduction of accumulated earnings and is included in other current liabilities in the accompanying condensed consolidated balance sheets as of March 31, 2006.

12. COMPREHENSIVE INCOME (LOSS)

     Total comprehensive income (loss) includes net income (loss) and other comprehensive income, which consists of foreign currency translation adjustments and unrealized gains and losses on available-for-sale investments. Total comprehensive loss for the three months ended March 31, 2006 was $87.4 million. Total comprehensive income for the three months ended March 31, 2005 was $18.6 million.

13. NET (LOSS) INCOME PER COMMON SHARE

     The following table sets forth the computation of basic and diluted net (loss) income per common share (in thousands, except per share amounts):

	Three Months Ended
	March 31,
	2006			2005
BASIC
Net (loss) income	$	(88,543	)	$	19,371
Weighted average number of common shares outstanding		54,356			54,251
Basic net (loss) income per common share	$	(1.63	)	$	0.36
DILUTED
Net (loss) income	$	(88,543	)	$	19,371
Add:
Tax-effected interest expense and issue costs related to Old Notes		—			836
Tax-effected interest expense and issue costs related to New Notes		—			839
Net (loss) income assuming dilution	$	(88,543	)	$	21,046
Weighted average number of common shares		54,356			54,251
Effect of dilutive securities:
Old Notes		—			5,823
New Notes		—			7,325
Stock options and restricted stock		—			2,374
Weighted average number of common shares assuming dilution		54,356			69,773
Diluted net (loss) income per common share	$	(1.63	)	$	0.30

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     Diluted net (loss) income per common share must be calculated using the “if-converted” method in accordance with EITF 04-8, “Effect of Contingently Convertible Debt on Earnings per Share.” Diluted net (loss) income per share is calculated by adjusting net (loss) income for tax-effected net interest and issue costs on the Old Notes and New Notes, divided by the weighted average number of common shares outstanding assuming conversion.

     Due to the Company’s net loss during the three months ended March 31, 2006, a calculation of diluted earnings per share is not required. For the three months ended March 31, 2006, potentially dilutive securities consisted of restricted stock and stock options convertible into 2,209,105 shares in the aggregate, and 5,822,894 and 7,324,819 shares of common stock, issuable upon conversion of the Old Notes and New Notes, respectively.

     The diluted net income per common share computation for the three months ended March 31, 2005 excludes 2,761,900 shares of stock that represented outstanding stock options whose exercise price were greater than the average market price of the common shares during the period and were anti-dilutive.

14. CONTINGENCIES

     The government notified the Company on December 14, 2004, that it is investigating claims that the Company violated the federal False Claims Act. The Company is fully cooperating with the government in its investigation, which relates to the Company’s marketing and promotion of LOPROX^® products to pediatricians prior to the Company’s May 2004, disposition of the Company’s pediatric sales division. In April 2006, the Company offered $6.0 million to resolve the government’s civil claims contingent on the execution of appropriate releases. The Justice Department countered with a demand of $12.8 million to resolve the civil claims that the government is prepared to pursue. The Company is continuing to hold settlement discussions with the government in an effort to resolve their claims, and these discussions may or may not result in a monetary settlement with the government. Accordingly, the Company has accrued a loss contingency of $6.0 million as of March 31, 2006, related to this matter. This loss contingency is included in other current liabilities as of March 31, 2006 in the accompanying condensed consolidated balance sheets, and is included in selling, general and administrative expenses for the three months ended March 31, 2006 in the accompanying condensed consolidated statements of income.

     In the ordinary course of business, the Company is involved in a number of legal actions, both as plaintiff and defendant, and could incur uninsured liability in any one or more of them. Although the outcome of these actions is not presently determinable, it is the opinion of the Company’s management, based upon the information available at this time, that the expected outcome of these matters, individually or in the aggregate, will not have a material adverse effect on the results of operations or financial condition of the Company.

15. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     In November 2005, the FASB issued FSP FAS 115-1 and FAS 124-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments (“FSP 115-1”), which provides guidance on determining when investments in certain debt and equity securities are considered impaired, whether that impairment is other-than-temporary, and on measuring such impairment loss. FSP 115-1 also includes accounting considerations subsequent to the recognition of other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. FSP 115-1 is required to be applied to reporting periods beginning after December 15, 2005, and is required to be adopted by the Company in the first quarter of 2006. The Company adopted FSP 115-1 beginning on January 1, 2006, and the adoption of FSP 115-1 did not have a material impact on the Company’s consolidated results of operations and financial condition.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Summary

     We are a leading independent specialty pharmaceutical company focusing primarily on helping patients attain a healthy and youthful appearance and self-image through the development and marketing of products in the U.S. for the treatment of dermatological, aesthetic and podiatric conditions. We also market products in Canada for the treatment of dermatological and aesthetic conditions. We offer a broad range of products addressing various conditions or aesthetics improvements, including dermal fillers, acne, fungal infections, rosacea, hyperpigmentation, photoaging, psoriasis, eczema, skin and skin-structure infections, seborrheic dermatitis and cosmesis (improvement in the texture and appearance of skin).

     Our current product lines are divided between the dermatological and non-dermatological fields. The dermatological field represents products for the treatment of acne and acne-related dermatological conditions and non-acne dermatological conditions. The non-dermatological field represents products for the treatment of urea cycle disorder and contract revenue. Our acne and acne-related dermatological product lines include core brands DYNACIN^®, PLEXION^® and TRIAZ^®. Our non-acne dermatological product lines include core brands LOPROX^®, OMNICEF^®, RESTYLANE^® and VANOS^™. Our non-dermatological product lines include AMMONUL^® and BUPHENYL^®. Our non-dermatological field also includes contract revenues associated with licensing agreements and authorized generic agreements.

Key Aspects of Our Business

     We derive a majority of our prescription volume from our core prescription products: DYNACIN^®, LOPROX^®, OMNICEF^®, PLEXION^®, TRIAZ^® and VANOS^™. We believe that sales of our core prescription products and sales of our dermal aesthetic product, RESTYLANE^®, which we began selling in the U.S. on January 6, 2004, will continue to constitute a significant portion of our sales for the foreseeable future.

     We have built our business by executing a four-part growth strategy: promoting existing core brands, developing new products and important product line extensions, entering into strategic collaborations and acquiring complementary products, technologies and businesses. Our core philosophy is to cultivate relationships of trust and confidence with the high prescribing dermatologists and podiatrists and the leading plastic surgeons in the United States.

     As a result of customer buying patterns, a substantial portion of our product revenues has been recognized in the last month of each quarter, and we schedule our inventory purchases to meet anticipated customer demand. As a result, relatively small delays in the receipt of manufactured products by us could result in revenues being deferred or lost. Our operating expenses are based upon anticipated sales levels, and a high percentage of our operating expenses are relatively fixed in the short term. Consequently, variations in the timing of revenue recognition could cause significant fluctuations in operating results from period to period and may result in unanticipated periodic earnings shortfalls or losses.

     We estimate customer demand for our prescription products primarily through use of third party syndicated data sources which track prescriptions written by health care providers and dispensed by licensed pharmacies. The data represents extrapolations from information provided only by certain pharmacies and are estimates of historical demand levels. We estimate customer demand for our non-prescription products primarily through internal data that we compile. We observe trends from these data, and, coupled with certain proprietary information, prepare demand forecasts that are the basis for purchase orders for finished and component inventory from our third party manufacturers and suppliers. Our forecasts may fail to accurately anticipate ultimate customer demand for products. Overestimates of demand may result in excessive inventory production and underestimates may result in inadequate supply of our products in channels of distribution.

     We sell our products primarily to major wholesalers and retail pharmacy chains. Consistent with pharmaceutical industry patterns, approximately 80% of our revenues are derived from three major drug

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wholesale concerns. While we attempt to estimate inventory levels of our products at our major wholesale customers by using historical prescription information and historical purchase patterns, this process is inherently imprecise. Rarely do wholesale customers provide us complete inventory levels at regional distribution centers, or within their national distribution systems. We rely wholly upon our wholesale and drug chain customers to effect the distribution allocation of our products. Based upon historically consistent purchasing patterns of our major wholesale customers, we believe our estimates of trade inventory levels of our products are reasonable. We further believe that inventories of our products among wholesale customers, taken as a whole, are similar to those of other specialty pharmaceutical companies, and that our trade practices, which periodically involve volume discounts and early payment discounts, are typical of the industry.

     We periodically offer promotions to wholesale and chain drugstore customers to encourage dispensing of our products, consistent with prescriptions written by licensed health care providers. Because many of our products compete in multi-source markets, it is important for us to ensure the licensed health care providers’ dispensing instructions are fulfilled with our branded products and are not substituted with a generic product or another therapeutic alternative product which may be contrary to the licensed health care providers’ recommended and prescribed Medicis brand. We believe that a critical component of our brand protection program is maintenance of full product availability at drugstore and wholesale customers. We believe such availability reduces the probability of local and regional product substitutions, shortages and backorders, which could result in lost sales. We expect to continue providing favorable terms to wholesale and retail drug chain customers as may be necessary to ensure the fullest possible distribution of our branded products within the pharmaceutical chain of commerce.

     We cannot control or significantly influence the purchasing patterns of our wholesale and retail drug chain customers. They are highly sophisticated customers that purchase products in a manner consistent with their industry practices and, presumably, based upon their projected demand levels. Purchases by any given customer, during any given period, may be above or below actual prescription volumes of any of our products during the same period, resulting in fluctuations of product inventory in the distribution channel.

     The following significant events and transactions occurred during the three months ended March 31, 2006 and affected our results of operations, our cash flows and our financial condition:

• Development and distribution agreement with Ipsen for rights to Ipsen’s botulinum toxin product known as Reloxin^®; and

• Loss contingency for legal matter

Development and Distribution Agreement With Ipsen for Rights to Ipsen’s Botulinum Toxin Product Known as Reloxin^®

     On March 17, 2006, we entered into a development and distribution agreement with Ipsen Ltd., a wholly-owned subsidiary of Ipsen (“Ipsen”), whereby Ipsen granted Aesthetica Ltd., a wholly-owned subsidiary of Medicis, rights to develop, distribute and commercialize Ipsen’s botulinum toxin product in the United States, Canada and Japan for aesthetic use by physicians. The product is commonly referred to as Reloxin^® in the U.S. aesthetic market and Dysport^® for medical and aesthetic markets outside the U.S. The product is not currently approved for use in the U.S., Canada or Japan.

     Under the terms of the agreement, we paid Ipsen $90.1 million in consideration for the exclusive distribution rights in the U.S., Canada and Japan and will pay an additional $26.5 million upon successful completion of various clinical and regulatory milestones, $75.0 million upon the product’s approval by the FDA and $2.0 million upon regulatory approval of the product in Japan. Ipsen will manufacture and provide the product to us for the term of the agreement, which extends to September 2019. Ipsen will receive a royalty based on sales and a supply price, the total of which is equivalent to approximately 30% of net sales as defined under the agreement. The initial $90.1 million payment was recognized as a charge to research and development expense during the three months ended March 31, 2006. Under the terms of the agreement, we are responsible for all remaining research and development costs associated with obtaining the product’s approval in the U.S., Canada and Japan. We expect to incur significant additional research

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and development expenses related to the development of Reloxin^® each quarter throughout the development process.

     Additionally, Medicis and Ipsen agreed to negotiate and enter into an agreement relating to the exclusive distribution and development rights of the product for the aesthetic market in Europe, and subsequently in certain other markets. Under this agreement, we would pay up-front and other milestone payments linked to the development and approval of Ipsen’s botulinum toxin Type A product in aesthetic indications as well as royalties based on net sales. Ipsen would manufacture and supply the product to us. We were obligated to make an additional payment to Ipsen in connection with the U.S., Canada and Japan agreement if this agreement was not entered into by April 15, 2006. On April 13, 2006, Medicis and Ipsen agreed to extend this deadline to July 15, 2006.

Loss contingency for legal matter

     The government notified us on December 14, 2004, that it is investigating claims that we violated the federal False Claims Act. We are fully cooperating with the government in its investigation, which relates to our marketing and promotion of LOPROX^® products to pediatricians prior to our May 2004, disposition of the Company’s pediatric sales division. In April 2006, we offered $6.0 million to resolve the government’s civil claims contingent on the execution of appropriate releases. The Justice Department countered with a demand of $12.8 million to resolve the civil claims that the government is prepared to pursue. We are continuing to hold settlement discussions with the government in an effort to resolve their claims, and these discussions may or may not result in a monetary settlement with the government. Accordingly, we have accrued a loss contingency of $6.0 million as of March 31, 2006, related to this matter. This loss contingency was recognized as a charge to selling, general and administrative expenses during the three months ended March 31, 2006.

Results of Operations

     The following table sets forth certain data as a percentage of net revenues for the periods indicated.

	THREE MONTHS ENDED
	MARCH 31,			MARCH 31,
	2006 (a)			2005 (b)
Net revenues		100.0	%		100.0	%
Gross profit (c)		83.8			85.4
Operating expenses		205.3			55.1
Operating (loss) income		(121.5	)		30.3
Interest income (expense), net		5.8			0.3
(Loss) income before income tax (benefit) expense		(115.7	)		30.6
Income tax expense		2.1			10.2
Net (loss) income		(117.8	)%		20.4	%

(a)	Included in operating expenses is $90.9 million (121.0% of net revenues) related to our development and distribution agreement with Ipsen for the development of Reloxin ® , $7.2 million (9.6% of net revenues) of compensation expense related to stock options and restricted stock, $6.0 million (8.0% of net revenues) related to a loss contingency for a legal matter and $1.8 million (2.4% of net revenues) related to a settlement of a dispute related to our merger with Ascent.
(b)	Included in operating expenses is $8.3 million (8.8% of net revenues) related to a research and development collaboration with AAIPharma and $0.1 million (0.1% of net revenues) of compensation expense related to restricted stock.
(c)	Gross profit does not include amortization of the related intangibles as such expenses is included in operating expenses.

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Three Months Ended March 31, 2006 Compared to the Three Months Ended March 31, 2005

Net Revenues

     The following table sets forth the net revenues for the three months ended March 31, 2006 (the “first quarter of 2006”) and March 31, 2005 (the “first quarter of 2005”), along with the percentage of net revenues and percentage point change for each of our product categories (dollar amounts in millions):

	First Quarter		First Quarter
	2006		2005		$ Change			% Change
Net product revenues	$	71.1	$	75.8	$	( 4.7	)		( 6.2	)%
Net contract revenues	$	4.1	$	19.4	$	(15.3	)		(79.0	)%
Net revenues	$	75.2	$	95.2	$	(20.0	)		(21.0	)%

	First Quarter			First Quarter
	2006			2005			$ Change
Acne and acne-related dermatological products		18.6	%		25.2	%		(6.6	)%
Non-acne dermatological products		67.3	%		49.7	%		17.6	%
Non-dermatological products		14.1	%		25.1	%		(11.0	)%
Total net revenues		100.0	%		100.0	%		—

     Our total net revenues decreased during the first quarter of 2006 primarily as a result of a decrease in net contract revenues associated with licensing agreements and authorized generic agreements. Net contract revenues decreased primarily due to a decrease in contract revenues during the first quarter of 2006 related to our outlicensing of the ORAPRED^® brand pursuant to the terms of our license agreement with BioMarin. Core brand revenues, which are included in net product revenues and includes revenues associated with RESTYLANE^®, DYNACIN^®, LOPROX^®, OMNICEF^®, PLEXION^®, TRIAZ^® and VANOS^™, represented approximately $64.8 million, or approximately 86.2% of net revenues, during the first quarter of 2006, a decrease of approximately 6.6%, compared to core brand revenues of approximately $69.4 million, or approximately 72.9% of net revenues, for the first quarter of 2005. Net revenues associated with our acne and acne-related dermatological products decreased as a percentage of net revenues and decreased in net dollars by 41.6% during the first quarter of 2006 as compared to the first quarter of 2005 due to competitive market pressures on our DYNACIN^®, PLEXION^® and TRIAZ^® products. Net revenues associated with our non-acne dermatological products increased as a percentage of net revenues, and increased in net dollars by 6.7% during the first quarter of 2006, primarily due to an increase in sales of RESTYLANE^®. Net revenues associated with our non-dermatological products decreased as a percentage of net revenues, and decreased in net dollars by 55.6% during the first quarter of 2006, primarily due to the decrease in ORAPRED^® contract revenues discussed above.

Gross Profit

     Gross profit represents our net revenues less our cost of product revenue. Our cost of product revenue includes our acquisition cost for the products we purchase from our third party manufacturers and royalty payments made to third parties. Amortization of intangible assets related to acquired products is not included in gross profit. Product mix plays a significant role in our quarterly and annual gross profit as a percentage of net revenues. Different products generate different gross profit margins, and the relative sales mix of higher gross profit products and lower gross profit products can affect our total gross profit.

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     The following table sets forth our gross profit for the first quarter of 2006 and 2005, along with the percentage of net revenues represented by such gross profit (dollar amounts in millions):

	First Quarter			First Quarter
	2006			2005			$ Change			% Change
Gross profit	$	63.0		$	81.3		$	(18.3	)		(22.5	)%
% of net revenues		83.8	%		85.4	%

     The decrease in gross profit during the first quarter of 2006, compared to the first quarter of 2005, was due to the decrease in our net revenues, while the decrease in gross profit as a percentage of net revenues was primarily due to the different mix of products sold during the first quarter of 2006 as compared to the first quarter of 2005.

Selling, General and Administrative Expenses

     The following table sets forth our selling, general and administrative expenses for the first quarter of 2006 and 2005, along with the percentage of net revenues represented by selling, general and administrative expenses (dollar amounts in millions):

	First Quarter			First Quarter
	2006			2005			$ Change		% Change
Selling, general and administrative	$	51.2		$	31.9		$	19.3		60.4	%
% of net revenues		68.2	%		33.5	%
Share-based compensation expense included in selling, general and administrative	$	6.6		$	0.1		$	6.5		5,062.6	%

     The increase in selling, general and administrative expenses during the first quarter of 2006 from the first quarter of 2005 was attributable to approximately $6.5 million of additional share-based compensation expense recognized in accordance with SFAS No. 123R, $6.0 million related to a loss contingency for a legal matter, approximately $1.8 million related to a settlement of a dispute related to our merger with Ascent, approximately $0.5 million of professional fees related to our development and distribution agreement with Ipsen for the development of Reloxin^®, and $4.5 million of additional selling, general and administrative expenses incurred during the first quarter of 2006.

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Research and Development Expenses

     The following table sets forth our research and development expenses for the first quarter of 2006 and 2005 (dollar amounts in millions):

	First Quarter		First Quarter
	2006		2005		$ Change		% Change
Research and development	$	97.2	$	14.5	$	82.7		572.7	%
Charges included in research and development		90.5		8.3		82.2		992.9	%
Share-based compensation expense included in research and development		0.5		—	$	0.5		100.0	%

     Included in research and development expenses for the first quarter of 2006 was $90.5 million related to the development and distribution agreement with Ipsen for the development of Reloxin^® (including $90.1 million paid to Ipsen) and approximately $0.5 million of compensation expense for stock options and restricted stock. Included in research and development expense for the first quarter of 2005 was approximately $8.3 million related to a research and development collaboration with AAIPharma. Absent these charges, research and development expenses during the first quarter of 2006 and the first quarter of 2005 was approximately $6.2 million. We expect research and development expenses to continue to fluctuate from quarter to quarter based on the timing of the achievement of development milestones under license and development agreements, as well as the timing of other development projects and the funds available to support these projects. We expect to incur significant research and development expenses related to the development of Reloxin^® each quarter throughout the development process, beginning during the quarter ended June 30, 2006.

Depreciation and Amortization Expenses

     Depreciation and amortization expenses during the first quarter of 2006 decreased $0.2 million, or 3.3%, to $5.9 million from $6.1 million during the first quarter of 2005. This decrease was primarily due to less intangible assets being amortized during the first quarter of 2006 as compared to the first quarter of 2005, due to the write-down of a long-lived asset due to impairment during the three months ended December 31, 2005.

Interest Income

     Interest income during the first quarter of 2006 increased $4.0 million, or 134.9%, to $7.0 million from $3.0 million during the first quarter of 2005, due to an increase in the funds available for investment and an increase in the interest rates achieved by our invested funds during the first quarter of fiscal 2006.

Interest Expense

     Interest expense during the first quarter of 2006 remained consistent with the first quarter of 2005, at $2.7 million. Our interest expense during the first quarter of 2006 and 2005 consisted of interest expense on our Old Notes, which accrue interest at 2.5% per annum, our New Notes, which accrue interest at 1.5% per annum, and amortization of fees and other origination costs related to the issuance of the Old Notes and New Notes. See Note 9 in our accompanying condensed consolidated financial statements for further discussion on the Old Notes and New Notes.

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Income Tax Expense

     The following table sets forth our income tax expense and the resulting effective tax rate stated as a percentage of pre-tax income for the first quarter of 2006 and 2005 (dollar amounts in millions):

	First Quarter			First Quarter
	2006			2005			$ Change			% Change
Income tax expense	$	1.6		$	9.8		$	(8.2	)		(83.8	)%
Effective tax rate		(1.8	)%		33.6	%

     Income taxes are determined using an annual effective tax rate, which generally differs from the U.S. Federal statutory rate, primarily because of state and local income taxes, charitable contribution deductions, tax credits available in the U.S., the treatment of certain share-based payments under SFAS 123R that are not designed to normally result in tax deductions, and differences in tax rates in certain non-U.S. jurisdictions. Our effective tax rate may be subject to fluctuations during the year as new information is obtained which may affect the assumptions we use to estimate our annual effective tax rate, including factors such as our mix of pre-tax earnings in the various tax jurisdictions in which we operate, changes in valuation allowances against deferred tax assets, reserves for tax audit issues and settlements, utilization of tax credits and changes in tax laws in jurisdictions where we conduct operations. We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities, along with net operating losses and credit carryforwards. We record valuation allowances against our deferred tax assets to reduce the net carrying values to amounts that management believes is more likely than not to be realized.

     Our effective tax rate for the three months ended March 31, 2006 was (1.8)% compared to our effective tax rate of 33.6% for the three months ended March 31, 2005. Generally, the provision for income taxes reflects management’s estimate of the effective tax rate expected to be applicable for the full fiscal year. However, during the three months ended March 31, 2006, the Company’s effective tax rate of (1.8%) differs from the Company’s estimate of the effective tax rate for the full fiscal year. The Company’s effective tax rate during the three months ended March 31, 2006 relates to the tax treatment of the $90.1 million paid to Ipsen under the development and distribution agreement for the development of Reloxin^®. The $90.1 million was incurred by Aesthetica Ltd., our wholly-owned Bermuda subsidiary. Aesthetica Ltd is not subject to corporate income taxes. As such, we did not record tax benefit on the $90.1 million charge that was included in research and development expenses. We expect Aesthetica Ltd. to incur certain research and development costs during the fiscal year that will not be benefited by taxes which will put upward pressure on our effective tax rate. We would expect our effective tax rate to be approximately 39% – 40% for the full fiscal year. The estimated effective tax rate for the full fiscal year ending December 31, 2006 is higher than our effective tax rate of 38% for the six-month Transition Period ended December 31, 2005, primarily due to Aesthetica Ltd.’s charges that will not result in tax benefits.

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Liquidity and Capital Resources

Overview

     The following table highlights selected cash flow components for the first quarter of 2006 and 2005, and selected balance sheet components as of March 31, 2006 and December 31, 2005 (dollar amounts in millions):

	First Quarter			First Quarter
	2006			2005			$ Change			% Change
Cash provided by (used in):
Operating activities	$	(111.5	)	$	33.9		$	(145.4	)		(429.1	)%
Investing activities		(88.6	)		4.2			(92.8	)		(2,210.7	)%
Financing activities		(1.1	)		(1.5	)		0.4			(28.6	)%

	Mar. 31, 2006		Dec. 31, 2005		$ Change			% Change
Cash, cash equivalents and short-term investments	$	598.7	$	742.5	$	(143.8	)		(19.4	)%
Working capital		615.2		692.5		(77.3	)		(11.2	)%
2.5% contingent convertible senior notes due 2032		169.2		169.2		—			—
1.5% contingent convertible senior notes due 2033		283.9		283.9		—			—

Working Capital

     Working capital as of March 31, 2006 and December 31, 2005 consisted of the following (dollar amounts in millions):

	Mar. 31, 2006		Dec. 31, 2005		$ Change			% Change
Cash, cash equivalents and short-term investments	$	598.7	$	742.5	$	(143.8	)		(19.4	)%
Accounts receivable, net		50.4		46.7		3.7			7.9	%
Inventories, net		15.7		19.1		( 3.4	)		(17.7	)%
Deferred tax assets, net		12.0		12.7		(0.7	)		(5.5	)%
Other current assets		13.4		12.3		1.1			10.0	%
Total current assets		690.2		833.3		(143.1	)		(17.2	)%
Accounts payable		35.8		57.7		(21.9	)		(38.0	)%
Short-term contract obligation		—		27.4		(27.4	)		(100.0	)%
Income taxes payable		9.2		31.5		(22.3	)		(70.8	)%
Other current liabilities		30.0		24.2		5.8			24.2	%
Total current liabilities		75.0		140.8		(65.8	)		(46.7	)%
Working capital	$	615.2	$	692.5	$	(77.3	)		(11.2	)%

     We had cash, cash equivalents and short-term investments of $598.7 million and working capital of $615.2 million at March 31, 2006, as compared to $742.5 million and $692.5 million, respectively, at December 31, 2005. The decreases were primarily due to a $90.1 million payment to Ipsen related to a development and distribution agreement for the development of Reloxin^®, payment of the $27.4 million contingent payment related to the merger with Ascent, and payments of $20.7 million of income taxes during the first quarter of 2006.

     Management believes existing cash and short-term investments, together with funds generated from operations, should be sufficient to meet operating requirements for the foreseeable future. Our cash and short-term investments are available for strategic investments, mergers and acquisitions, and other potential large-scale needs. In addition, we may consider issuing additional debt or equity securities in the future to fund potential acquisitions or investments, to refinance existing debt or for general corporate

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purposes. If a material acquisition or investment is completed, our operating results and financial condition could change materially in future periods. However, no assurance can be given that additional funds will be available on satisfactory terms, or at all, to fund such activities.

     We are currently pursuing additional or new headquarter office space to accommodate our expected long-term growth.

Operating Activities

     Net cash used in operating activities during the first quarter of 2006 was approximately $111.5 million, compared to cash provided by operating activities of approximately $33.9 million during the first quarter of 2005. The change was primarily attributable to the $90.1 million payment made to Ipsen related to a development and distribution agreement for the development of Reloxin^® during the first quarter of 2006 and approximately $16.7 million of professional fees paid related to the termination of the proposed merger with Inamed Corporation. Additionally, approximately $20.7 million of income tax payments were made during the first quarter of 2006, as compared to approximately $8.1 million of income tax payments made during the first quarter of 2005.

Investing Activities

     Net cash used in investing activities during the first quarter of 2006 was approximately $88.6 million, compared to net cash provided by investing activities during the first quarter of 2005 of $4.2 million. The change was primarily due to the net purchases or sales of our short-term investments during the respective quarters. In addition, approximately $27.4 million was paid during the first quarter of 2006 for Contingent Payments related to our 2001 merger with Ascent.

Financing Activities

     Net cash used in financing activities during the first quarter of 2006 was $1.1 million, compared to net cash used in financing activities of $1.5 million during the first quarter of 2005. Dividends paid during the first quarter of 2006 and the first quarter of 2005 was $1.6 million. Proceeds from the exercise of stock options was $0.6 million during the first quarter of 2006 compared to $0.1 million during the first quarter of 2005.

Contingent Convertible Senior Notes and Other Long-Term Commitments

     On August 14, 2003, we exchanged $230.8 million in principal amount of our Old Notes for $283.9 million in principal amount of our New Notes. Holders of Old Notes that accepted the Company’s exchange offer received $1,230 in principal amount of New Notes for each $1,000 in principal amount of Old Notes. The terms of the New Notes are similar to the terms of the Old Notes, but have a different interest rate, conversion rate and maturity date. Holders of Old Notes that did not exchange will continue to be subject to the terms of the Old Notes. See Note 9 of Notes to Condensed Consolidated Financial Statements for further discussion.

     The New Notes and the Old Notes are unsecured and do not contain any restrictions on the incurrence of additional indebtedness or the repurchase of our securities, and do not contain any financial covenants. The Old Notes do not contain any restrictions on the payment of dividends. The New Notes require an adjustment to the conversion price if the cumulative aggregate of all current and prior dividend increases above $0.025 per share would result in at least a one percent (1%) increase in the conversion price. This threshold has not been reached and no adjustment to the conversion price has been made.

     Except for the Old Notes, the New Notes and deferred tax liabilities, we have no long-term liabilities and had only $75.0 million of current liabilities at March 31, 2006. Our other commitments and planned expenditures consist principally of payments we will make in connection with strategic collaborations and research and development expenditures, and we will continue to invest in sales and marketing infrastructure.

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     We have made available to BioMarin the ability to draw down on a Convertible Note up to $25.0 million beginning July 1, 2005 (the “Convertible Note”). The Convertible Note is convertible based on certain terms and conditions including a change of control provision. Money advanced under the Convertible Note is convertible into BioMarin shares at a strike price equal to the BioMarin average closing price for the 20 trading days prior to such advance. The Convertible Note matures on the option purchase date in 2009 as defined in the securities purchase agreement entered into on May 18, 2004 but may be repaid by BioMarin at any time prior to the option purchase date. As of May 9, 2006, BioMarin has not requested any monies to be advanced under the Convertible Note, and no amounts are outstanding.

Dividends

     Since July 2003, we have paid quarterly cash dividends aggregating approximately $16.8 million on our common stock. In addition, on March 15, 2006, we declared a cash dividend of $0.03 per issued and outstanding share of common stock payable on April 28, 2006 to our stockholders of record at the close of business on April 3, 2006. Prior to these dividends, we had not paid a cash dividend on our common stock, and we have not adopted a dividend policy. Any future determinations to pay cash dividends will be at the discretion of our Board of Directors and will be dependent upon our financial condition, operating results, capital requirements and other factors that our Board of Directors deems relevant.

Line of Credit

     We have a revolving line of credit facility of up to $25.0 million from Wells Fargo Bank, N.A. The facility may be drawn upon by us, at our discretion, and is collateralized by certain short-term investments. Any outstanding balance of the credit facility bears interest at a floating rate of 150 basis points in excess of the 30-day London Interbank Offered Rate and expires in November 2006. The agreement requires us to comply with certain covenants, including covenants relating to our financial condition and results of operation; we are in compliance with such covenants. We have never drawn on this credit facility.

Off-Balance Sheet Arrangements

     As of March 31, 2006, we are not involved in any off-balance sheet arrangements, as defined in Item 3(a)(4)(ii) of Securities and Exchange Commission (“SEC”) Regulation S-K.

Critical Accounting Policies and Estimates

     The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in conformity with U.S. generally accepted accounting principles. The preparation of the condensed consolidated financial statements requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates related to sales allowances, chargebacks, rebates, returns and other pricing adjustments, depreciation and amortization and other contingencies and litigation. We base our estimates on historical experience and various other factors related to each circumstance. Actual results could differ from those estimates based upon future events, which could include, among other risks, changes in the regulations governing the manner in which we sell our products, changes in the health care environment and managed care consumption patterns. Our significant accounting policies are described in Note 2 to the consolidated financial statements included in our Form 10-K/T for the six-month transition period ended December 31, 2005. We believe the following critical accounting policies affect our most significant estimates and assumptions used in the preparation of our condensed consolidated financial statements and are important in understanding our financial condition and results of operations.

Revenue Recognition

     Revenue from our product sales is recognized pursuant to Staff Accounting Bulletin No. 104 (SAB 104), “Revenue Recognition in Financial Statements.” Accordingly, revenue is recognized when all four of the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery of the

29

products has occurred; (iii) the selling price is both fixed and determinable; and (iv) collectibility is reasonably assured. Our customers consist primarily of large pharmaceutical wholesalers who sell directly into the retail channel.

     We do not provide any forms of price protection to our wholesale customers and permit product returns if the product is damaged, or, depending on the customer, if it is returned within six months prior to expiration or up to 12 months after expiration. Our customers consist principally of financially viable wholesalers, and depending on the customer, revenue is recognized based upon shipment (“FOB shipping point”) or receipt (“FOB destination”), net of estimated provisions.

     We enter into licensing arrangements with other parties whereby we receive contract revenue based on the terms of the agreement. The timing of revenue recognition is dependent on the level of our continuing involvement in the manufacture and delivery of licensed products. If we have continuing involvement, the revenue is deferred and recognized on a straight-line basis over the period of continuing involvement. In addition, if our licensing arrangements require no continuing involvement and payments are merely based on the passage of time, we assess such payments for revenue recognition under the collectibility criteria of SAB 104.

Items Deducted From Gross Revenue

     Provisions for estimates for product returns and exchanges, sales discounts, chargebacks, managed care and Medicaid rebates and other adjustments are established as a reduction of product sales revenues at the time such revenues are recognized. These deductions from gross revenue are established by us as our best estimate at the time of sale based on historical experience adjusted to reflect known changes in the factors that impact such reserves. These deductions from gross revenue are generally reflected either as a direct reduction to accounts receivable through an allowance, or as an addition to accrued expenses if the payment is due to a party other than the wholesale or retail customer.

     Our accounting policies for revenue recognition have a significant impact on our reported results and rely on certain estimates that require complex and subjective judgment on the part of our management. If the levels of product returns and exchanges, cash discounts, chargebacks, managed care and Medicaid rebates and other adjustments fluctuate significantly and/or if our estimates do not adequately reserve for these reductions of gross product revenues, our reported net product revenues could be negatively affected.

Product Returns and Exchanges

     We account for returns and exchanges of product in accordance with SFAS 48, “Revenue Recognition When Right of Return Exists,” whereby an allowance is established based on our estimate of revenues recorded for which the related products are expected to be returned in the future. We determine our estimate of product returns and exchanges based on historical experience and other qualitative factors that could impact the level of future product returns and exchanges. These factors include estimated shelf life, competitive developments including introductions of generic products, product discontinuations and our introduction of new formulations of our products. Typically, these other factors that influence our allowance for product returns and exchanges do not change significantly from quarter to quarter. Historical experience and the other qualitative factors are assessed on a product-specific basis as part of our compilation of our estimate of future product returns and exchanges. Estimates for returns and exchanges of new products are based on historical experience of new products at various stages of their life cycle.

     Our actual experience and the qualitative factors that we use to determine the necessary allowance for future product returns and exchanges are susceptible to change based on unforeseen events and uncertainties. We review our allowance for product returns and exchanges quarterly to assess the trends being considered to estimate the allowance, and make changes to the allowance as necessary.

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Sales Discounts

     We offer cash discounts to our customers as an incentive for prompt payment, generally approximately 2% of the sales price. We account for cash discounts by establishing an allowance reducing accounts receivable by the full amount of the discounts expected to be taken by the customers.

Contract Chargebacks

     We have agreements for contract pricing with several entities, whereby pricing on products is extended below wholesaler list price. These parties purchase products through wholesalers at the lower contract price, and the wholesalers charge the difference between their acquisition cost and the lower contract price back to us. We account for chargebacks by establishing an allowance reducing accounts receivable based on our estimate of chargeback claims attributable to a sale. We determine our estimate of chargebacks based on historical experience and changes to current contract prices. We also consider our claim processing lag time, and adjust the allowance periodically throughout each quarter to reflect actual experience.

Managed Care and Medicaid Rebates

     We establish and maintain reserves for amounts payable by us to managed care organizations and state Medicaid programs for the reimbursement of portions of the retail price of prescriptions filled that are covered by these programs. The amounts estimated to be paid relating to products sold are recognized as deductions from gross revenue and as additions to accrued expenses at the time of sale based on our best estimate of the expected prescription fill rate to these managed care and state Medicaid patients, using historical experience adjusted to reflect known changes in the factors that impact such reserves, including changes in formulary status and contractual pricing.

Other

     In addition to the significant items deducted from gross revenue described above, we deduct other items from gross revenue. For example, we offer consumer rebates on many of our products and a consumer loyalty program for our RESTYLANE^® dermal filler product. We generally account for these other items deducted from gross revenue by establishing an accrual based on our estimate of the adjustments attributable to a sale. We generally base our estimates for the accrual of these items deducted from gross sales on historical experience and other relevant factors. We adjust our accruals periodically throughout each quarter based on actual experience and changes in other factors, if any.

     We believe that our allowances and accruals for items that are deducted from gross revenue are reasonable and appropriate based on current facts and circumstances. However, it is possible that other parties applying reasonable judgment to the same facts and circumstances could develop different allowance and accrual amounts for items that are deducted from gross revenue. Additionally, changes in actual experience or changes in other qualitative factors could cause our allowances and accruals to fluctuate. A five percent change in the expenses related to the allowances and accruals described above would lead to an approximate $5.9 million annual effect on our income before income tax expense, based on the amount of expense we recognized during the year ended June 30, 2005 related to the allowances and accruals described above.

Share-Based Compensation

     As part of our adoption of SFAS No. 123R as of July 1, 2005, we are required to recognize the fair value of share-based compensation awards as an expense. We apply the Black-Scholes option-pricing model in order to determine the fair value of stock options on the date of grant, and we apply judgment in estimating key assumptions that are important elements in the model such as the expected stock-price volatility, expected stock option life and expected forfeiture rates. Our estimates of these important assumptions are based on historical data and judgment regarding market trends and factors.

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     If actual results are not consistent with our assumptions and judgments used in estimating these factors, we may be required to record additional stock-based compensation expense or income tax expense, which could be material to our results of operations.

Long-lived Assets

     We assess the impairment of long-lived assets when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Factors that we consider in deciding when to perform an impairment review include significant under-performance of a product line in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in our use of the assets. Recoverability of assets that will continue to be used in our operations is measured by comparing the carrying amount of the asset grouping to our estimate of the related total future net cash flows. If an asset carrying value is not recoverable through the related cash flows, the asset is considered to be impaired. The impairment is measured by the difference between the asset grouping’s carrying amount and its fair value, based on the best information available, including market prices or discounted cash flow analysis.

     When we determine that the useful lives of assets are shorter than we had originally estimated, and there are sufficient cash flows to support the carrying value of the assets, we accelerate the rate of amortization charges in order to fully amortize the assets over their new shorter useful lives.

Income Taxes

     Income taxes are determined using an annual effective tax rate, which generally differs from the U.S. Federal statutory rate because of state and local income taxes, tax-exempt interest, charitable contribution deductions, nondeductible expenses and research and experimentation tax credits available in the U.S. Our effective tax rate may be subject to fluctuations during the year as new information is obtained which may affect the assumptions we use to estimate our annual effective tax rate, including factors such as our mix of pre-tax earnings in the various tax jurisdictions in which we operate, valuation allowances against deferred tax assets, reserves for tax audit issues and settlements, utilization of research and experimentation tax credits and changes in tax laws in jurisdictions where we conduct operations. We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. We record valuation allowances against our deferred tax assets to reduce the net carrying value to an amount that management believes is more likely than not to be realized.

     Based on the Company’s historical pre-tax earnings, management believes it is more likely than not that the Company will realize the benefit of the existing net deferred tax assets at March 31, 2006. Management believes the existing net deductible temporary differences will reverse during periods in which the Company generates net taxable income; however, there can be no assurance that the Company will generate any earnings or any specific level of continuing earnings in future years. Certain tax planning or other strategies could be implemented, if necessary, to supplement income from operations to fully realize recorded tax benefits.

Research and Development Costs and Accounting for Strategic Collaborations

     All research and development costs, including payments related to products under development and research consulting agreements, are expensed as incurred. We may continue to make non-refundable payments to third parties for new technologies and for research and development work that has been completed. These payments may be expensed at the time of payment depending on the nature of the payment made.

     Our policy on accounting for costs of strategic collaborations determines the timing of our recognition of certain development costs. In addition, this policy determines whether the cost is classified as development expense or capitalized as an asset. We are required to form judgments with respect to the commercial status of such products in determining whether development costs meet the criteria for immediate expense or capitalization. For example, when we acquire certain products for which there is

32

already an ANDA or NDA approval related directly to the product, and there is net realizable value based on projected sales for these products, we capitalize the amount paid as an intangible asset. In addition, if we acquire product rights that are in the development phase and as to which we have no assurance that the third party will successfully complete its developmental milestones, we expense such payments.

Recent Accounting Pronouncements

     In November 2005, the FASB issued FSP FAS 115-1 and FAS 124-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments (“FSP 115-1”), which provides guidance on determining when investments in certain debt and equity securities are considered impaired, whether that impairment is other-than-temporary, and on measuring such impairment loss. FSP 115-1 also includes accounting considerations subsequent to the recognition of other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. FSP 115-1 is required to be applied to reporting periods beginning after December 15, 2005, and is required to be adopted by us in the first quarter of 2006. We adopted FSP 115-1 beginning on January 1, 2006, and the adoption of FSP 115-1 did not have a material impact on our consolidated results of operations and financial condition.

33

Forward Looking Statements

     This Quarterly Report on Form 10-Q and other documents we file with the SEC include forward looking statements. These include statements relating to future actions, prospective products or product approvals, future performance or results of current and anticipated products, sales and marketing efforts, expenses, the outcome of contingencies, such as legal proceedings, and financial results. From time to time, we also may make forward-looking statements in press releases or written statements, or in our communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls, and conference calls. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are based on certain assumptions made by us based on our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. We caution you that actual outcomes and results may differ materially from what is expressed, implied, or forecast by our forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will,” “should,” “outlook,” “could,” “target,” “intend,” “plan,” and other words and terms of similar meaning in connection with any discussion of future operations or financial performance. Among the factors that could cause actual results to differ materially from our forward-looking statements are the following:

• the success of research and development activities and the speed with which regulatory authorizations and product launches may be achieved;

• changes in our product mix;

• changes in prescription levels and the effect of economic changes in hurricane-effected areas;

• manufacturing or supply interruptions;

• competitive developments affecting our current growth products, such as the recent FDA approval of HYLAFORM^®, HYLAFORM PLUS^® and CAPTIQUE^®, competitors to RESTYLANE^®, a generic form of our DYNACIN^® Tablets product and generic forms of our LOPROX^® TS and LOPROX^® Cream products;

• importation of other dermal filler products;

• changes in the prescribing or procedural practices of dermatologists, podiatrists and/or plastic surgeons;

• the ability to successfully market both new and existing products;

• difficulties or delays in manufacturing;

• the ability to compete against generic and other branded products;

• trends toward managed care and health care cost containment;

• our ability to protect our patents and other intellectual property;

• possible U.S. legislation or regulatory action affecting, among other things, pharmaceutical pricing and reimbursement, including Medicaid and Medicare and involuntary approval of prescription medicines for over-the-counter use;

34

• legal defense costs, insurance expenses, settlement costs and the risk of an adverse decision or settlement related to product liability, patent protection, government investigations, and other legal proceedings;

• changes in U.S. generally accepted accounting principles;

• additional costs related to compliance with changing regulation of corporate governance and public financial disclosure;

• any changes in business, political and economic conditions due to the threat of future terrorist activity in the U.S. and other parts of the world;

• access to available and feasible financing on a timely basis;

• the risks and uncertainties normally incident to the pharmaceutical and medical device industries, including product liability claims;

• the risks and uncertainties associated with obtaining necessary FDA approvals;

• growth in costs and expenses; and

• the impact of acquisitions, divestitures and other significant corporate transactions.

     We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to review any future disclosures contained in the reports that we file with the SEC. Our Transition Report on Form 10-K/T for the six-month period ended December 31, 2005 contains discussions of various risks relating to our business that could cause actual results to differ materially from expected and historical results, which is incorporated herein by reference and which you should review. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list or discussion to be a complete set of all potential risks or uncertainties.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     As of March 31, 2006, there were no material changes to the information previously reported under Item 7A in our Transition Report on Form 10-K/T for the six-month period ended December 31, 2005.

Item 4. Controls and Procedures

     We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to ensure that information required to be disclosed in reports filed by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer, with the participation of other members of management, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2006 and have concluded that, as of such date our disclosure controls and procedures were effective to ensure that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

     Although the management of our Company, including the Chief Executive Officer and the Chief Financial Officer, believes that our disclosure controls and internal controls currently provide reasonable assurance that our desired control objectives have been met, management does not expect that our disclosure controls or internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource

35

constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

     During the three months ended March 31, 2006, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

     The government notified us on December 14, 2004, that it is investigating claims that we violated the federal False Claims Act. We are fully cooperating with the government in its investigation, which relates to our marketing and promotion of LOPROX^® products to pediatricians prior to our May 2004, disposition of the Company’s pediatric sales division. In April 2006, we offered $6.0 million to resolve the government’s civil claims contingent on the execution of appropriate releases. The Justice Department countered with a demand of $12.8 million to resolve the civil claims that the government is prepared to pursue. We are continuing to hold settlement discussions with the government in an effort to resolve their claims, and these discussions may or may not result in a monetary settlement with the government. Accordingly, we have accrued a loss contingency of $6.0 million as of March 31, 2006, related to this matter.

     On October 27, 2005, we filed suit against Upsher-Smith Laboratories, Inc. of Plymouth, Minnesota and against Prasco Laboratories of Cincinnati, Ohio for infringement of Patent No. 6,905,675 entitled “Sulfur Containing Dermatological Compositions and Methods for Reducing Malodors in Dermatological Compositions” covering our sodium sulfacetamide/sulfur technology. This intellectual property is related to our PLEXION^® Cleanser product. The suit was filed in the U.S. District Court for the District of Arizona, and seeks an award of damages, as well as a preliminary and a permanent injunction. We are in the midst of accelerated discovery. A hearing on our preliminary injunction motion was heard on March 8 and March 9, 2006. The Court has declined to grant a preliminary injunction at this time.

     We and certain of our subsidiaries are parties to other actions and proceedings incident to our business, including litigation regarding our intellectual property, challenges to the enforceability or validity of our intellectual property and claims that our products infringe on the intellectual property rights of others. We record contingent liabilities resulting from claims against us when it is probable (as that word is defined in Statement of Financial Accounting Standards No. 5) that a liability has been incurred and the amount of the loss is reasonably estimable. We disclose material contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. Estimating probable losses requires analysis of multiple factors, in some cases including judgments about the potential actions of third-party claimants and courts. Therefore, actual losses in any future period are inherently uncertain. In all of the cases noted where we are the defendant, we believe we have meritorious defenses to the claims in these actions and resolution of these matters will not have a material adverse effect on our business, financial condition, or results of operation; however, the results of the proceedings are uncertain, and there can be no assurance to that effect.

Item 1A. Risk Factors

     There are no material changes from the risk factors previously disclosed in Part I of Item 1A in our Transition Report on Form 10-K/T for the six month period ended December 31, 2005.

36

Item 6. Exhibits

Exhibit 10.1+*	Development and Distribution Agreement by and between Aesthetica, Ltd. and Ipsen, Ltd.
Exhibit 10.2+*	Trademark License Agreement by and between Aesthetica, Ltd. and Ipsen, Ltd.
Exhibit 10.3+*	Trademark Assignment Agreement by and between Aesthetica, Ltd. and Ipsen, Ltd.
Exhibit 12+	Computation of Ratios of Earnings to Fixed Charges
Exhibit 31.1+	Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2+	Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1+	Certification by the Chief Executive Officer and the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

+	Filed herewith
*	Confidential portions omitted and filed separately with the U.S. Securities and Exchange Commission pursuant to Rule 24b-2 promulgated under the Securities and Exchange Act of 1934, as amended.

37

SIGNATURES

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

	MEDICIS PHARMACEUTICAL CORPORATION
Date: May 10, 2006	By:	/s/ Jonah Shacknai      Jonah Shacknai
		Chairman of the Board and
		Chief Executive Officer
		(Principal Executive Officer)
Date: May 10, 2006	By:	/s/ Mark A. Prygocki, Sr.      Mark A. Prygocki, Sr.
		Executive Vice President
		Chief Financial Officer, Corporate
		Secretary and Treasurer
		(Principal Financial and Accounting Officer)

38

EXHIBIT INDEX

Exhibit 10.1+*	Development and Distribution Agreement by and between Aesthetica, Ltd. and Ipsen, Ltd.
Exhibit 10.2+*	Trademark License Agreement by and between Aesthetica, Ltd. and Ipsen, Ltd.
Exhibit 10.3+*	Trademark Assignment Agreement by and between Aesthetica, Ltd. and Ipsen, Ltd.
Exhibit 12+	Computation of Ratios of Earnings to Fixed Charges
Exhibit 31.1+	Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2+	Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1+	Certification by the Chief Executive Officer and the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

+	Filed herewith
*	Confidential portions omitted and filed separately with the U.S. Securities and Exchange Commission pursuant to Rule 24b-2 promulgated under the Securities and Exchange Act of 1934, as amended.

39

EX-10.1

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

                                  EXHIBIT 10.1

                      DEVELOPMENT & DISTRIBUTION AGREEMENT

                                 BY AND BETWEEN

                                   IPSEN LTD.

                                       AND

                                AESTHETICA, LTD.



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

                      DEVELOPMENT & DISTRIBUTION AGREEMENT

                                                                                                               
1.       DEFINITIONS.............................................................................................     1
2.       APPOINTMENT.............................................................................................     5
3.       DEVELOPMENT AND REGULATORY PROGRAM......................................................................     6
4.       REVIEW COMMITTEE........................................................................................    12
5.       PRODUCT MANUFACTURE AND SUPPLY..........................................................................    14
6.       CONSIDERATION...........................................................................................    18
7.       FUTURE PRODUCTS.........................................................................................    22
8.       MARKETING AND PROMOTION OF THE PRODUCT..................................................................    23
9.       REPORTS.................................................................................................    25
10.      Ipsen PROMOTION OF THE PRODUCTS IN THE TERRITORY........................................................    26
11.      PROCEDURES REGARDING TECHNICAL MATTERS..................................................................    26
12.      INTELLECTUAL PROPERTY...................................................................................    27
13.      NON COMPETITION.........................................................................................    30
14.      WARRANTIES..............................................................................................    30
15.      Ipsen DELIVERY COVENANT.................................................................................    32
16.      LIABILITIES - INDEMNIFICATION...........................................................................    33
17.      CONFIDENTIALITY.........................................................................................    36
18.      PUBLICATION - ANNOUNCEMENT..............................................................................    37
19.      TERM - TERMINATION......................................................................................    37
20.      MISCELLANEOUS...........................................................................................    40



                                                                                             
APPENDICES:

APPENDIX 1 - CURRENT PRODUCT SPECIFICATIONS (9 pages omitted)

APPENDIX 2 - U.S. PROGRAM (NON-U.S. PROGRAM to be attached in accordance with
             Article 3.3.1) (4 pages omitted)

APPENDIX 3 - [INTENTIONALLY DELETED]

APPENDIX 4 - PRODUCT DATA FORWARDED TO MEDICIS

APPENDIX 5 - TRADEMARK(S)

APPENDIX 6 - MEDICIS DISTRIBUTION SYSTEM

APPENDIX 7 - LIST OF INITIAL MEMBERS OF REVIEW COMMITTEE

APPENDIX 8 - PRODUCT SUPPLY PRICE

APPENDIX 9 - TRADEMARK(S) LICENSE AGREEMENT [FILED AS EXHIBIT 10.2 TO FORM 10-Q]

APPENDIX 10 - [INTENTIONALLY DELETED]

APPENDIX 11 - TRADEMARK ASSIGNMENT AGREEMENT [FILED AS EXHIBIT 10.3 TO FORM 10-Q]

APPENDIX 12 - LIST OF AGREEMENTS TO BE TRANSFERRED (7 pages omitted)





CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

                      DEVELOPMENT & DISTRIBUTION AGREEMENT

This Development & Distribution Agreement (Agreement) is entered into by and
between Ipsen Ltd., a company organized and existing under the laws of England,
with registered offices located at 190 Bath Road, Slough, Berkshire SL1 3XE,
United Kingdom ("Ipsen"), and Aesthetica Ltd., a company organized under the
laws of Bermuda, located at Dorchester House, 7 Church Street, Hamilton HM 11,
Bermuda ("Medicis"), a wholly owned subsidiary of Medicis Pharmaceutical
Corporation, a Delaware corporation

WHEREAS Ipsen has exclusive rights to certain Know-How related to formulation(s)
of botulinum toxin(s).

WHEREAS Ipsen is engaged, directly or through companies affiliated to the Ipsen
Group, in the development, registration, distribution and promotion world-wide
of said formulations in the form of pharmaceutical specialties for human use,
and has acquired valuable and proprietary Know-How in connection therewith.

WHEREAS Medicis is engaged in the development, registration, manufacture,
distribution and promotion of pharmaceuticals and medical devices and has
acquired experience and Know-How in the development, registration, distribution
and promotion of products for aesthetic uses.

WHEREAS Medicis wishes to develop, have registered with regulatory authorities,
distribute and promote in the U.S.A., Canada and Japan, Ipsen's current and any
future formulations of botulinum toxin(s) in the form of pharmaceutical
specialty for aesthetic use.

WHEREAS Medicis is well informed about the present stage of development,
distribution and promotion of formulations of botulinum toxin(s) competing with
Ipsen's formulations, and about the potential progress thereof as well as about
the overall situation as to competition among botulinum toxin based products,
and Medicis has taken such facts into consideration before signing this
Agreement.

WHEREAS Ipsen shall remain free to undertake research, development,
registration, distribution and promotion worldwide of Ipsen's formulations of
botulinum toxin(s) for all human uses except as expressly provided for in this
Agreement.

NOW THEREFORE, IN CONSIDERATION OF THE PREMISES SET FORTH ABOVE AND INTENDING TO
BE LEGALLY BOUND, THE PARTIES HAVE AGREED AS FOLLOWS:

1. DEFINITIONS

As used in this Agreement, the following terms have the meanings indicated
below:

Affiliate         means, in relation to any party, any person, corporation or
                  entity which directly or indirectly controls, is controlled by
                  or under common control with such party. Control shall be
                  deemed to exist if a party beneficially owns more than 50% of
                  the share capital and/or of the voting rights of such a
                  person, corporation or entity. An Affiliate shall not be
                  considered a Third Party under this Agreement.

Bundled           Product(s) means Product(s) sold or otherwise transferred or
                  delivered to a Third Party with one or more other products or
                  services in circumstances where the price of the Product(s) is
                  either not shown separately on the invoice, or is shown as nil
                  (free of charge) on a separate document in relation to the
                  Product(s) or to a portion of the quantities of Product(s)
                  vials.

                                       1



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

cGMP              means the current interpretation and implementation of Good
                  Manufacturing Practices.

Commercial        Sale means the transfer, delivery, or sale, whether at retail,
                  wholesale or otherwise, of Product(s) or Bundled Product(s) to
                  (i) by Medicis or its Affiliates to McKesson or any other
                  approved equivalent full-service distributor or (ii) in the
                  event Commercial Sales of Products hereunder are not made
                  through McKesson (or any other approved equivalent
                  full-service distributor) by Medicis, or its Affiliates or an
                  appointed distributor to a Third Party.

Confidentiality   mean the confidentiality agreement of September 19, 2005
Agreements        between Ipsen Biopharm Ltd and Medicis and the mutual
                  confidentiality agreement of December 21, 2005 between Ipsen
                  Ltd and Medicis.

Cost of Goods     means the invoice price paid by Medicis to Ipsen for the
Sold              Product and/or any future Product, together with all royalties
                  paid by Medicis to Ipsen pursuant to this Agreement.

Current Product   means, with respect to each country of the Territory the
                  Product which is the object of the Development and Regulatory
                  Program and which is then the object of a first Regulatory
                  Approval in such country. The Current Product could, for
                  example and without limitation, be vials containing either ***
                  units, *** units, or *** units of botulinum toxin type A
                  activity per vial. The specifications of the vials containing
                  *** of botulinum toxin type A activity per vial are set forth
                  in Appendix 1 hereto, and made a part hereof. The parties
                  acknowledge that, as regards the *** units, the actual content
                  of the vial may vary depending on the requirements of the
                  relevant regulatory authorities and may, for example, contain
                  ***units or ***units of clostridium botulinum type A toxin
                  instead of ***units.

Development and   means all development activities, including clinical trials
Regulatory        with respect to any Product in order to obtain Regulatory
Program           Approvals for such Product in one or more indications selected
                  in the Field by Ipsen after prior consultation with Medicis,
                  in any or all countries of the Territory, as agreed upon by
                  the parties as of the Effective Date and from time to time
                  after the Effective Date in accordance with Articles 3 and 4
                  hereof.

Effective Date    means the Termination Date under that certain Termination
                  Agreement dated as of December 20, 2005, by and between Ipsen
                  and Inamed Corporation.

FDA               means the United States Food and Drug Administration.

Field Customers   means plastic surgeons, dermatologists, and any other
                  persons practicing aesthetic medicine and located in the
                  Territory, including, but not limited to, ear, nose and throat
                  specialists, ophthalmologists, obstetric and gynecology
                  specialists and general practitioners constituting the Medicis
                  Customer Base at any time.

Field             ***

GAAP              means United States of America generally accepted accounting
                  principles.

                                       2



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

Good              means the requirements found in the legislations, regulations,
Manufacturing     and administrative provisions for methods to be used in, and
Practice          the facilities or controls to be used for, the manufacturing,
                  processing, packing, and/or holding of a drug to assure that
                  such drug meets the requirements as to safety, and has the
                  identity and strength, and meets the quality characteristics
                  that it purports or is represented to possess, all of which as
                  defined by the competent authorities of each country of the
                  Territory where and at the time Medicis sells the Product in
                  each such country.

Gross Profit      means Net Sales minus Cost of Goods Sold,  divided by Net
Margin            Sales, expressed as a percentage, all calculated in accordance
                  with then-current GAAP applied in a consistent manner in
                  accordance with the accounting practices of Medicis.

Medicis Customer  means those Field Customers identified by Medicis to Ipsen
Base              prior to the Effective Date, together with such additional
                  Field Customers as are identified for inclusion by Medicis and
                  accepted by Ipsen, on or after the Effective Date, in
                  accordance with the quarterly update procedure set forth in
                  Article 8.6 of this Agreement.

Know-How          means any information, whether patented, patentable or not,
                  developed or obtained by or on behalf of Ipsen, its
                  Affiliates, authorized licensees, sub-licensees, or Ipsen's or
                  any Ipsen Affiliate's Third Party partners or contractors,
                  which relates to the research, development, manufacture,
                  registration, distribution and promotion of the Current
                  Product and any future Products and which is reasonably
                  necessary for the purpose of this Agreement, including but not
                  limited to the data listed in Appendix 4 hereto, as well as
                  any data contained in the documentation disclosed to Medicis
                  under Confidentiality Agreements or under this Agreement.

Net Sales         means the actual amount invoiced for Commercial Sale of
                  a Product under this Agreement (A) by Medicis or its
                  Affiliates to McKesson or any other equivalent full-service
                  distributor (with Ipsen's prior written approval as further
                  detailed in this paragraph) or (B) in the event Commercial
                  Sales of Products hereunder are not made through McKesson (or
                  any other approved equivalent full-service distributor) by
                  Medicis, or its Affiliates or an appointed distributor to a
                  Third Party, in each case of clause (A) or (B), after
                  deducting the following, to the extent actually incurred or
                  allowed with respect to such sale: (i) normal and customary
                  trade, cash and/or quantity discounts, credits or rebates,
                  including any volume, formulary or other positioning
                  discounts, credits or rebates paid or credited to the Third
                  Party; (ii) import, export, sales, use, excise and other
                  consumption taxes and custom duties or tariffs, to the extent
                  and up to the amount mentioned in that respect on the invoice,
                  and any other governmental charges imposed upon the
                  importation, use or sale of a Product; (iii) actual freight,
                  insurance and other transportation charges; (iv) compulsory
                  discounts, rebates, or payments (including retroactive price
                  reductions or statutorily required reimbursement) mandated by,
                  granted, credited, accrued, or paid for compliance with local,
                  state, provincial or federal law or regulation; (v) allowances
                  or credits to customers on account of recalls, rejection or
                  return of Product (including for spoiled, damaged and/or
                  outmoded goods) in the ordinary course of business; and (vi)
                  the bad debts actually incurred by Medicis in respect of the
                  resale of the Products, computed in accordance with
                  then-current GAAP applied in a consistent manner in accordance
                  with the

                                       3



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

                  accounting practices of Medicis. Medicis will provide Ipsen
                  with a complete and accurate summary of its accounting
                  practices as in effect from time to time relating to the write
                  down and write off of bad debts, for Ipsen's reasonable
                  comments (if any) which Medicis shall use its commercial
                  reasonable efforts to take into account when determining Net
                  Sales. Net Sales will not include any Product supplied free of
                  charge as commercial samples or used free of charge for
                  testing, training or for clinical or marketing studies. Any
                  other Product sold or otherwise transferred other than in an
                  arm's-length transaction or in exchange for other property
                  (e.g., barter), and any Bundled Product, shall be deemed
                  invoiced at the Product market price established by the seller
                  in its general conditions of sales, in the relevant country of
                  sale, or failing such general conditions, at the arm's length
                  price that the seller would generally or in the average
                  invoice for such Product alone.

                  In the event discounts or rebates to the gross invoiced or
                  charged price are given in connection with the sale of goods
                  or services other than the Products, or for consideration or
                  purposes other than the sale, transfer or delivery of the
                  Products, the gross sales price invoiced for the concerned
                  Products shall be deemed to be increased to an amount equal to
                  the concerned Product's market price or arm's length price as
                  described above.

                  The parties agree, with respect to Products sold hereunder, in
                  the event Medicis enters into a distribution agreement with
                  McKesson similar to the one entered into in with McKesson on 1
                  April 2004, that the sale margin made by McKesson on the
                  Product shall be inferior or equal to ***%.

                  In case Medicis wishes to enter into a full-service agreement
                  with another distributor, with respect to Products sold
                  hereunder, Medicis shall obtain Ipsen's prior written approval
                  as to the identity of such distributor and the terms of the
                  proposed distribution agreement (such approval being not
                  unreasonably withheld or delayed).

Non-U.S. Program  means the portion of the Development and Regulatory Program
                  applicable to the Current Product in Canada and Japan, as
                  initially agreed upon by the parties after the Effective Date
                  in accordance with Article 3.3.1 and set forth in Appendix 2
                  to this Agreement.

Product           means any and all existing (as on the Effective Date) and/or
                  all future formulations of botulinum toxin(s), regardless of
                  type, in finished saleable form, developed, manufactured,
                  distributed or marketed by Ipsen or its Affiliates.

Product           shall have the meaning ascribed to it in Article 7.1 of this
Extension         Agreement.

Regulatory        means all approvals and decisions from the relevant regulatory
Approval(s)       authorities in the Territory (or such supra-national
                  authorities that may have jurisdiction in the Territory)
                  necessary to lawfully import, distribute, promote, and
                  administer to humans, the Product(s) for indications within
                  the Field in the Territory.

Review Committee  means the committee established by the parties pursuant to
                  Article 4 below.

Specifications    means the Product(s) specification(s) set out in any
                  Regulatory Approval.

                                       4



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

Territory           means Canada, Japan, and the United States of America,
                    including Puerto Rico and including the territories,
                    possessions or commonwealths of Canada, Japan and the United
                    States as of the Effective Date.

Third Party         means any entity or individual other than Medicis or Ipsen
                    or their respective Affiliates.

Trademark(s)        shall mean the trademarks listed in Appendix 5. Trademark(s)

Trademark(s)        shall have the meaning set forth in Article 12.3 herein.
Assignment
Agreement

Trademark(s)        shall have the meaning set forth in Article 12.3 herein.
License
Agreement

U.S. Program        means the portion of the Development and Regulatory Program
                    applicable to the Current Product in the United States for a
                    selected indication in the Field, as set forth in Appendix 2
                    of this Agreement as of the Effective Date.
2.    APPOINTMENT

2.1   Ipsen hereby entrusts Medicis with the performance of the Development and
      Regulatory Program so as to obtain, as soon as reasonably practicable from
      the Effective Date, Regulatory Approvals in each country of the Territory
      for use of the Current Product in the Field under one or more Trademarks.

      Subject to Medicis obtaining one or more Regulatory Approvals for the
      Current Product in the Field in each country of the Territory, in respect
      of each country where such Regulatory Approval is obtained, Ipsen hereby
      appoints Medicis as its sole and exclusive distributor and promoter of the
      Current Product for use thereof in the Field in the concerned country(ies)
      of the Territory and under the Trademarks. Such appointment includes the
      right to use, import, offer for sale, sell, distribute and promote the
      Current Product in the Field in the Territory and use the Know-How and the
      Regulatory Approvals for the purpose of importing, offering for sale,
      selling, distributing and promoting the Current Product in the Field in
      the Territory and under the Trademark(s).

      For so long as this Agreement shall remain in effect and except as
      provided for under Article 6.1.8 herein, the appointments contained in
      this Article 2.1 shall be exclusive to Medicis, even as to Ipsen, any of
      its Affiliates and any Third Party.

      Medicis shall distribute the Current Product solely to Field Customers
      included in the Medicis Customer Base, to the exclusion of any
      distribution aimed at customers not in the Medicis Customer Base, except
      customers practicing in the Field which Medicis reasonably intends to
      propose for inclusion in the Medicis Customer Base at the next quarterly
      update of the Medicis Customer Base in accordance with the quarterly
      update procedure set forth in Article 8.6 of this Agreement.

2.2   Medicis hereby accepts the appointments under Article 2.1 above, first and
      second paragraph.

      Medicis may appoint distributors and/or promoters for the Current Product
      in the Field in the Territory, under Medicis's sole responsibility, within
      the scope of Medicis's appointment under Article 2.1, provided that should
      such distributors and/or promoters not belong to Medicis's current
      distribution system for the Current Product as described in Appendix 6
      attached hereto, Medicis shall promptly notify Ipsen in writing of the
      identities of any new distributor or promoter in

                                       5



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      Medicis's distribution system for the Current Product for Ipsen's consent,
      which consent shall not be unreasonably withheld.

2.3   The appointments under Article 2.1 by Ipsen of Medicis are strictly
      restricted to those mentioned herein.

      Medicis hereby acknowledges that Ipsen shall remain free to undertake
      research, development, registration, distribution and promotion of the
      Products under different and non-confusingly similar trademarks and trade
      dress for all uses which do not pertain to the Field in the Territory, and
      under any trademarks (including the Trademarks) and trade dress for all
      uses without restriction outside the Territory.

      Ipsen shall remain free to undertake research and development activities
      in the Territory in connection with the Products for uses in the Field
      provided that Medicis's exclusive distribution and promotion rights in the
      Field are not affected thereby in the Territory. In the event Ipsen or any
      Ipsen Affiliate conducts such development activities in the Field and in
      the Territory, Ipsen shall inform Medicis fully as to the nature and scope
      of the development and shall permit (or, in the case of an Ipsen
      Affiliate, cause such Affiliate to permit) Medicis to participate in such
      development to the extent reasonably practicable. Ipsen shall not, and
      shall ensure that Ipsen's Affiliates do not, contact any Field Customers,
      in connection with any such development, without Medicis's consent, which
      consent shall not be unreasonably withheld.

2.4   Medicis acknowledges and agrees that Ipsen shall perform its obligations
      under this Agreement directly or through some of Ipsen's Affiliates.
      Unless and until advised otherwise in writing by Ipsen, Medicis may rely,
      without inquiry, on all actions taken by Ipsen's Affiliates or their
      employees in connection with this Agreement, which purport to be on behalf
      of Ipsen. All rights vested in or created to the benefit of Ipsen or of
      any of Ipsen's Affiliates under this Agreement, shall benefit to and may
      be assigned to any other Ipsen's Affiliates or to Ipsen.

2.5   Ipsen acknowledges and agrees that Medicis shall perform its obligations
      under this Agreement directly or through some of Medicis's Affiliates.
      Unless and until advised otherwise in writing by Medicis, Ipsen may rely,
      without inquiry, on all actions taken by Medicis's Affiliates or their
      employees in connection with this Agreement, which purport to be on behalf
      of Medicis. All rights vested in or created to the benefit of Medicis or
      of any of Medicis's Affiliates under this Agreement, shall benefit to and
      may be assigned to any other Medicis's Affiliates or to Medicis. If either
      party delegates any of its obligations to an Affiliate (by assignment or
      otherwise), it shall provide timely written notice of the delegation and
      the identity of the Affiliate to the other party, but shall remain
      responsible for the performance of the obligation delegated.

3.    DEVELOPMENT AND REGULATORY PROGRAM

3.1   Medicis shall perform the Development and Regulatory Program in compliance
      with all applicable regulatory requirements and guidelines of each country
      of the Territory where the Development and Regulatory Program is
      conducted, and shall set up a project team for this purpose.

      Medicis and Ipsen shall agree upon a detailed procedure regarding how to
      handle the reporting of adverse events from the clinical activities
      conducted by Medicis under each of the U.S. Program and the Non-U.S.
      Program. The parties shall agree upon such procedure as soon as practical
      after the Effective Date as regards the U.S. Program, and as soon as
      practical after the parties agreed upon the Non-U.S. Program applicable to
      Canada and/or Japan, as applicable, as regards such Program. Medicis and
      Ipsen shall in particular discuss and agree upon such procedure on the
      basis of Ipsen's pharmacovigilance Standard Operating Procedures in force
      as

                                       6



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      on the Effective Date for the U.S. Program, or as on the date Medicis and
      Ipsen agree upon the Non-U.S. Program for Canada or Japan, and subsequent
      updates thereof, as applicable.

      Ipsen shall use its commercially reasonable efforts to transfer to Medicis
      the agreements listed in Appendix 12 relating to the development of the
      Products (the "Current Agreements") promptly as from the Effective Date
      and Medicis agrees to such transfer. For each Current Agreement, (a) until
      its transfer to Medicis or (b) in the event the contractor of a Current
      Agreement validly refuses such transfer and therefore until the expiry or
      termination of such Current Agreement, Ipsen will act on behalf of Medicis
      and under Medicis' instructions. Ipsen will be reimbursed by Medicis for
      all costs and expense incurred while acting on behalf of Medicis.

3.2   U.S. Program:

3.2.1 Pursuant to the Confidentiality Agreements, Ipsen has disclosed to Medicis
      information which pertains to the Know-How prior to the Effective Date.
      Medicis has reviewed all such information thoroughly, has reviewed the US
      Program taking into account such information and is satisfied that it can
      as of the Effective Date assume responsibility for and complete the US
      Program as required hereunder.

      Appendix 2 sets out the time periods and a schedule of estimated costs for
      the completion of the U.S. Program. As set out in Appendix 2, the parties
      contemplate that the clinical development component of the U.S. Program
      will be completed within *** after the Effective Date. The parties
      recognize, however, that despite their efforts to anticipate both the
      likely scope of such clinical development activities and their likely
      cost, there may be delays, cost overruns and/or increased costs due to
      additional development activities not included in the U.S. Program. The
      parties therefore have agreed to the following Articles 3.2.2 to 3.2.3

3.2.2 As of the Effective Date, Medicis shall fund, and shall use its
      commercially reasonable efforts to perform, the U.S. Program as set out in
      Appendix 2 in such manner as is reasonably required in order to obtain
      Regulatory Approval for the Current Product in the United States. Medicis
      shall pay all costs related to the performance of the U.S. Program as on
      the Effective Date and obtaining and maintaining the Regulatory Approvals
      in the U.S.A., including any cost overruns arising in connection with
      completing those development activities included in the U.S. Program as of
      the Effective Date, and including Medicis's share of all reproductive
      toxicity studies requested by the FDA, it being understood that Ipsen and
      Medicis shall equally share the costs of reproductive toxicity studies as
      may be required specifically by the FDA to support Regulatory Approvals
      for use of the Current Product in the Field in the U.S.A. Medicis will
      have the primary responsibility for planning, conducting, and to the
      extent provided in this Article 3.2 for funding all clinical trials
      included in the U.S. Program that are necessary to file for and obtain the
      Regulatory Approvals in the U.S.A. in the Field.

3.2.3 If it becomes necessary, as determined by the Review Committee, to revise
      the U.S. Program, as a result of requests from the FDA or otherwise, to
      include additional development activities not included in the U.S. Program
      as of the Effective Date (Additional Activities), then Medicis shall be
      responsible for the first USD *** (USD ***) of any Third Party costs (U.S.
      Base Cost Amount) arising in connection with the performance of such
      Additional Activities. If the Third Party costs expected to be incurred in
      connection with the performance of such Additional Activities, as
      reasonably estimated by Medicis at the time the U.S. Program is first or
      thereafter revised by the Review Committee, would exceed the U.S. Base
      Cost Amount, Medicis may, at its sole right and option, either (a) deliver
      written notice to Ipsen that it intends nevertheless to perform such
      Additional Activities, in which event Ipsen and Medicis shall each be
      responsible for funding *** percent (***%) of all Third Party costs
      incurred in connection with the performance of such

                                       7



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      Additional Activities which exceed the U.S. Base Cost Amount and are less
      than an amount equal to *** times the U.S. Base Cost Amount(1), or (b)
      terminate this Agreement in accordance with Article 19.2(iv). Medicis
      shall notify Ipsen in writing of its decision under this Article 3.2.3,
      within 30 days after the date of any meeting of the Review Committee at
      which action is taken to revise the U.S. Program to include Additional
      Activities of its election. If Medicis fails to so notify Ipsen, Medicis
      shall be deemed to have elected not to terminate this Agreement pursuant
      to Article 19.2(iv).

3.2.4 Ipsen, at its sole right and option, may terminate this Agreement
      (notwithstanding any cost-sharing decision under Article 3.2.3(a))
      pursuant to Article 19.2(v) at any time after the sixth anniversary of the
      Effective Date if the clinical development component of the U.S. Program,
      as contemplated as of the Effective Date, is not completed for any reason
      whatsoever. If it becomes necessary, as determined by the Review
      Committee, to revise the U.S. Program, as a result of requests from the
      FDA or otherwise, to include Additional Activities (as defined in Section
      7.1) which contain clinical development activities, the Review Committee
      will revise the anticipated completion date for the whole clinical
      development component of the U.S. Program taking into account such
      clinical Additional Activities, which will be incorporated in a revised
      Appendix 2 to this Agreement, and Ipsen will have the option
      (notwithstanding any cost-sharing decision under Article 3.2.3(a)) to
      terminate this Agreement pursuant to Article 19.2(v) if Medicis fails to
      complete the whole clinical development component of the U.S. Program as
      revised to include the Additional Activities, prior to the expiration of a
      time period that is twice the time period anticipated to be required to
      complete the whole clinical development component as set forth in such
      revised Appendix 2.

3.3   Non-U.S. Program:

3.3.1 Within *** at the latest following the date Regulatory Approval for the
      Current Product is obtained in the U.S.A., Medicis shall determine and
      submit to Ipsen for discussion and approval the Non-U.S. Program, which
      shall include a time table and a schedule of estimated costs necessary for
      the completion of the Non-U.S. Program. The parties shall revise Appendix
      2 to this Agreement to include the agreed details of the Non-U.S. Program
      promptly following the date they reach such agreement.

      However, if either (a) the Third Party costs required to complete the
      clinical component of the Non-U.S. Program in Canada or Japan, as
      reasonably estimated by Medicis on the date the details of the Non-U.S.
      Program are agreed upon by the parties, would exceed the equivalent of USD
      *** (USD ***) for Canada and USD *** (USD ***) for Japan, or (b) the time
      required to complete the clinical development component of the Non-U.S.
      Program in Canada or Japan, as reasonably estimated by Medicis on the date
      the details of the Non-U.S. Program are agreed upon by the parties, would
      be more than *** after such date, then Medicis may, at its sole right and
      option, terminate this Agreement with respect to Canada or Japan, as
      applicable, in accordance with Article 19.2(vi). Medicis shall notify
      Ipsen in writing within 2 (two) months after the date the details of the
      Non-U.S. Program are agreed upon by the parties as to whether it intends
      to exercise is termination rights pursuant to this Article 3.3.1. If
      Medicis fails to so notify Ipsen, Medicis shall be deemed to have elected
      not to terminate this Agreement with respect to Canada or Japan, as
      applicable, pursuant to this Article 3.3.1 and Article 19.2(vi).

- ----------
(1)   Example: If the total costs for Additional Activities in the U.S. are ***
      times the US Base Cost Amount (i.e., USD ***), Medicis would pay all of
      the first USD *** (i.e., the US Base Cost Amount) and Medicis and Ipsen
      would ***.

                                       8


CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

3.3.2 Unless it has elected to exercise its termination rights in accordance
      with Articles 3.3.1 and 19.2(vi), Medicis shall fund and shall use its
      commercially reasonable efforts to perform, the Non-U.S. Program in such
      manner as is reasonably required in order to obtain Regulatory Approval
      for the Current Product in Canada and Japan as soon as reasonably
      practicable following the Effective Date. Medicis shall pay all costs
      related to the performance of the Non-U.S. Program as initially agreed
      upon by the parties and obtaining and maintaining the Regulatory Approvals
      in the Territory, including any cost overruns arising in connection with
      completing those development activities included in the Non-U.S. Program
      as of the date it is agreed upon by the parties. In particular, Medicis
      will have the primary responsibility for planning and conducting at its
      own expense all clinical trials included in the Non-U.S. Program that are
      necessary to file for and obtain the Regulatory Approvals in each of
      Canada and Japan for use of the Current Product in the Field.

3.3.3 If it becomes necessary, as determined by the Review Committee, to revise
      the Non-U.S. Program, as a result of requests from the applicable
      regulatory authorities in Canada or Japan or otherwise, to include
      additional development activities not included in the Non-U.S. Program as
      of the date it is agreed upon by the parties (Additional Non-U.S.
      Activities), then Medicis shall be responsible for any Third Party costs
      arising in connection with the performance of such Additional Non-U.S.
      Activities in Canada or Japan, as applicable, to the extent such costs do
      not exceed in an amount (for each country, the Non-U.S. Base Cost Amount)
      equal to *** percent (***%) of the cost estimate for the Non-U.S. Program
      applicable to each of Canada and Japan as originally agreed by the
      parties. If the Third Party costs expected to be incurred in connection
      with the performance of such Additional Non-U.S. Activities with respect
      to Canada or Japan, as reasonably estimated by Medicis on the date the
      Non-U.S. Program is first or thereafter revised by the Review Committee,
      would exceed the Non-U.S. Base Cost Amount for such country, Medicis may,
      at its sole right and option, either (a) deliver written notice to Ipsen
      that it intends nevertheless to perform such Additional Non-U.S.
      Activities, in which event Ipsen and Medicis shall each be responsible for
      funding *** percent (***%) of all Third Party costs incurred in connection
      with the performance of such Additional Non-U.S. Activities which exceed
      the Non-U.S. Base Cost Amount for the applicable country and are less than
      an amount equal to four times the Non-U.S. Base Cost Amount for the
      applicable country, or (b) terminate this Agreement with respect to Canada
      or Japan, as applicable, in accordance with Article 19.2(vii). Medicis
      shall notify Ipsen in writing of its decision under this Article 3.3.3,
      within 30 days after the date of any meeting of the Review Committee at
      which action is taken to revise the Non-U.S. Program to include Additional
      Non-U.S. Activities in excess of or which would exceed the applicable
      Non-U.S. Base Cost Amount. If Medicis fails to so notify Ipsen, Medicis
      shall be deemed to have elected not to terminate this Agreement with
      respect to Canada or Japan, as applicable, pursuant to this Article 3.3.3
      and Article 19.2(vii).

3.3.4 Ipsen, at its sole right and option, may terminate this Agreement with
      respect to Canada or Japan, as applicable (notwithstanding any
      cost-sharing decision under Article 3.3.3(a)), pursuant to Article
      19.2(viii) at any time after the expiration of the time period that is
      twice the estimated time period required to complete the clinical
      development component of the Non-U.S. Program for such country as
      originally agreed by the parties if such component is not completed by
      such date for any reason whatsoever. If it becomes necessary, as
      determined by the Review Committee, to revise the Non-U.S. Program, as a
      result of requests from the applicable regulatory authorities in Canada or
      Japan or otherwise, to include Additional Non-U.S. Activities which
      contain clinical development activities, the Review Committee will revise
      the anticipated completion date for the whole clinical development
      component of the Non-U.S. Program for such country taking into account the
      time period necessary to perform such clinical Additional Non-U.S.
      Activities, which will be incorporated in a revised Appendix 2 to this
      Agreement, and Ipsen will have the option (notwithstanding any
      cost-sharing decision under Article 3.3.3(a)) to terminate

                                       9



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      this Agreement with respect to Canada or Japan, as applicable, pursuant to
      Article 19.2(viii) if Medicis fails to complete the whole clinical
      development component of the Non-U.S. Program for the concerned country as
      revised to include the Additional Non-U.S. Activities, prior to the
      expiration of a time period that is twice the time period anticipated to
      be required to complete the whole clinical development component for such
      country as set forth in such revised Appendix 2.

3.4   For purposes of paying any costs Ipsen may become obligated to fund
      pursuant to Article 3.2.3(a) or 3.3.3(a), in lieu of paying cash, Ipsen
      may issue credits, on a dollar-for-dollar basis, against future royalties
      owed by Medicis to Ipsen under Article 6 of this Agreement. Despite
      Ipsen's issuance of credits under the previous sentence, however, in no
      event, for any Royalty Year for any country in the Territory, shall
      Medicis remit in cash less than *** percent (***%) of the royalties due
      for that Royalty Year for such country. In no event shall Ipsen be
      responsible for funding, whether in cash or by issuance of royalty
      credits, more than the maximum amounts set forth in Articles 3.2.3(a) and
      3.3.3(a).

      Any of Ipsen's obligation to reimburse Medicis a share of Third Party
      costs under Articles 3.2.3(a) or 3.3.3(a), whether in cash or by issuance
      of royalty credits, shall be subject to Medicis forwarding evidence of
      existence and payment thereof.

3.5   In case of the termination of this Agreement in its entirety or as to one
      or more countries in the Territory by either party pursuant to this
      Article 3, Medicis will promptly transfer to Ipsen, for Ipsen's
      unrestricted usage and exploitation, exclusive ownership and possession of
      all of the data including but not limited to clinical data, in whatever
      form or medium, generated in connection with the performance of the
      Development and Regulatory Program in the applicable country or countries
      through the date of termination. In case Ipsen terminates this Agreement
      under Article 3.2.4 or Article 3.3.4 Ipsen shall pay to Medicis, in
      consideration for such data, an amount in U.S. Dollars equal to (a) ***%
      (***percent) of any Third Party costs for the country concerned, actually
      paid or incurred by Medicis with respect to activities contained in the
      U.S. Program or Non-U.S. Program for the country concerned, as applicable,
      below and inclusive of the U.S. Base Cost Amount or Non-U.S. Base Cost
      Amount for the country concerned, as applicable, and (b) ***% of any Third
      Party costs for the country concerned, actually paid or incurred by
      Medicis with respect to Additional Activities in excess of the U.S. Base
      Cost Amount and Non-U.S. Base Cost Amounts, as applicable. Medicis will
      give Ipsen notice of the amount and computation of the foregoing payment,
      with a computer-generated summary of the date, amount and payee supporting
      the computation, in writing, within ten (10) days of the date after its
      receipt of Ipsen's termination notice.

3.6   Medicis undertakes to enable and assist Ipsen to file for Regulatory
      Approval of the Current Product in the Field first in the U.S. and to use
      commercially reasonable efforts to obtain said Regulatory Approval first
      in the U.S. and simultaneously or thereafter in the other countries of the
      Territory.

      Ipsen shall file the Regulatory Approvals submissions for the Development
      and Regulatory Program. For this purpose, Medicis shall forward to Ipsen
      all necessary documents and data so as to enable Ipsen to file for the
      Regulatory Approvals submissions in each country of the Territory. In
      particular without limitation, Medicis will provide necessary reports of
      clinical trials contained in the Development and Regulatory Program and
      bear the external costs of the filings or reimburse Ipsen in respect of
      any customary and reasonable Third Party expenses borne by Ipsen as a
      result of such filings.

      Medicis shall pay all customary and reasonable costs related to
      maintaining the Regulatory Approvals in the Territory.

                                       10



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      Ipsen shall not reach final agreement with the FDA or the competent
      authorities of Canada and Japan on the Product labeling, as long as
      Medicis has reasonable objections to the proposed labeling and provided
      Medicis objects in writing and within reasonable time to any proposed
      labeling.

3.7   Ipsen and Medicis will mutually cooperate to obtain the Regulatory
      Approvals. Without limiting the foregoing sentence, Ipsen shall (a)
      consult with Medicis regarding the regulatory strategy in each country of
      the Territory and consider in good faith Medicis's comments regarding the
      same, (b) promptly provide Medicis with copies of all correspondence from
      regulatory authorities copies of any draft response, and consider in good
      faith Medicis's comments thereon prior to filing any such response, and
      (c) allow Medicis to have a reasonable number of representatives attend
      and participate in all meetings with regulatory authorities that affect
      Medicis' rights or obligations under this Agreement as discussed and
      agreed by the Review Committee. Upon Regulatory Approval, Ipsen shall
      promptly appoint Medicis as Ipsen's regulatory agent for the approved
      glabellar line BLA and for other approved aesthetic indications as and
      when approved. When Medicis is appointed agent, Medicis shall (a) consult
      with Ipsen regarding the regulatory strategy in each country of the
      Territory and consider in good faith Ipsen comments regarding the same,
      (b) promptly provide Ipsen with copies of all correspondence from
      regulatory authorities copies of any draft response, and consider in good
      faith Ipsen's comments thereon prior to filing any such response, and (c)
      allow Ipsen to have a reasonable number of representatives attend and
      participate in all meetings with regulatory authorities that affect
      Ipsen's rights or obligations under this Agreement as discussed and agreed
      by the Review Committee.

      Ipsen will cross reference any Ipsen FDA Master File for the Current
      Product promptly after such file is established and any open U.S.
      Investigational New Drug Applications (INDs) or equivalent in Canada and
      Japan, that upon or after the Effective Date of this Agreement may exist
      for the Current Product in the Territory. Ipsen shall make available any
      other existing non-clinical, clinical or safety data required to support
      the Current Product Regulatory Approvals filing, to the extent necessary
      to achieve the Development and Regulatory Program.

      Medicis shall provide Ipsen with reasonable details of the results of the
      performance of the Development and Regulatory Program after the accrual
      thereof in a format to be agreed between the parties, and shall upon prior
      request from Ipsen deliver all such documentation as may be necessary to
      enable Ipsen to use the same in accordance with the terms of Article 2
      above, which in particular includes Ipsen's right to use such results
      together with the Regulatory Approval files provided that Medicis's rights
      under this Agreement are not affected thereby in the Territory.

3.8   It is both parties' intention that the performance of the Development and
      Regulatory Program, as it may be revised by the Review Committee, or as
      may be drafted in connection with future Products, be coordinated and
      consistent with Ipsen's regulatory programs for the Products. On this
      basis, Medicis shall at all times take into account Ipsen's reasonable
      requests to achieve this goal.

3.9   Medicis shall not conduct or sponsor any clinical trial with the Products
      other than: (i) through an agreed Development and Regulatory Program, (ii)
      Phase III(b) or Phase IV studies or trials in the Field, (iii) studies or
      trials within the labeling of the approved Product, in the Field and
      Territory, or (iv) with Ipsen's prior written consent.

3.10  Applications for Regulatory Approvals in all countries of the Territory
      shall be made in the name of Ipsen or any of its Affiliates or its
      nominee, or if not possible, filed in the name of Medicis and transferred
      to Ipsen or its nominee at the earliest date possible after filing. Ipsen
      shall solely own all Regulatory Approvals submissions and issued
      certificates in the Territory, together with all

                                       11



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      data, information, files developed, gathered and drafted by Medicis or any
      Third Party partner or contractor, in the course of the Development and
      Regulatory Program. All licenses and authorizations whatsoever in
      connection with the performance by Medicis of the Development and
      Regulatory Program shall be submitted and owned by Ipsen.

4.    REVIEW COMMITTEE

4.1   The parties shall establish a Review Committee which shall be comprised of
      six (6) members, three (3) of whom shall be appointed by Medicis and three
      (3) of whom shall be appointed by Ipsen. The initial members of the Review
      Committee are listed in Appendix 7. At any time during this Agreement,
      each party may appoint one or more new members on the Review Committee in
      replacement of one or more of such party's appointed members on the Review
      Committee, with immediate effect upon written notice to the other party of
      such replacement.

      The Review Committee shall act in good faith at all times and shall be
      responsible for the following:

      (a) Provide guidance to and monitor the progress of the Development and
      Regulatory Program, debate and decide any adjustments or changes to the
      Development and Regulatory Program.

      (b) Establish and implement the strategy for Regulatory Approvals and
      monitor the status of all such Regulatory Approvals. The Review Committee
      shall place its priority on ensuring that Medicis sets up and delivers to
      Ipsen the clinical study reports and associated summaries for submission
      by Ipsen to the FDA and granting of the first Regulatory Approval for the
      Current Product in the U.S.A. as soon as possible following the Effective
      Date.

      (c) Evaluate and put forward as appropriate to Ipsen and Medicis
      management, product development plans for any new formulations or other
      line extensions, improvements, new indications and/or new delivery systems
      so as to stay competitive in the marketplace.

4.2   The Review Committee shall meet for the first time within one (1) month
      after the Effective Date; thereafter, it shall meet at least once every
      four (4) months, or more often if reasonably deemed necessary by either
      party, until the Development and Regulatory Program has been completed.
      Meetings of the Review Committee shall alternately be hosted by each
      party, either in Phoenix, Arizona (U.S.A.) or Slough, Berkshire (United
      Kingdom) as the hosting party shall select, and may be held in other
      locations agreed by the Review Committee. Meetings of the Review Committee
      may be held in person, by videoconference, or by teleconference.

4.3   The Review Committee shall be chaired by one of its members nominated by
      Medicis; the initial Chairperson is set forth on Appendix 7. The
      Chairperson shall be responsible for compiling all meeting agendas,
      conducting all meetings, and keeping minutes of the meetings of the Review
      Committee; the Chairperson shall also be responsible for providing a copy
      of the minutes of such meetings to the members of the Review Committee.

      The Chairperson shall call regular meetings of the Review Committee once
      every four (4) months, by sending a written notice by email and facsimile
      with receipt confirmed to the parties at least two (2) weeks prior to the
      proposed meeting date. In addition, the Chairperson shall, without delay
      by email and facsimile with receipt confirmed, call a special meeting of
      the Review Committee upon written request for the same by any member of
      the Review Committee, which meeting shall in no event be held later than
      thirty (30) days from such written request. In the event that the
      Chairperson shall fail to call a regular or special meeting in accordance
      with the obligations imposed upon him or her under the two previous
      sentences within ten (10) calendar

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      days after the required date for performance, any member of the Review
      Committee may call the meeting in accordance with the procedures
      prescribed in the two previous sentences. No later than one (1) week prior
      to any Review Committee meeting, the Chairperson shall send to the parties
      the agenda of the meeting, reasonable details relating to all matters and
      decisions to be discussed and/or voted during the meeting, together with a
      written report, in a mutually-agreed format, showing the progress and
      results of the Development and Regulatory Program and the status of the
      proceedings before the relevant regulatory authorities with respect to the
      Regulatory Approvals.

      If, following receipt of the written notice of meeting set forth in this
      Article 4.3, a meeting cannot be attended by at least one (1)
      representative of each party hereunder, a second meeting shall be
      organized for a date no later than one (1) month from the initial proposed
      meeting date.

      If the second planned meeting cannot be attended by at least one (1)
      representative of each party, a third meeting shall be organized for a
      date no later than ten (10) business days after the second proposed
      meeting date. Except if due to a force majeure event affecting the
      non-attending party, if a third planned meeting cannot be attended by at
      least one (1) representative of a party, the attending party may hold the
      meeting so long as such meeting is conducted in accordance with the
      written notice of such meeting, and the business of such meeting is
      limited to the items in the agenda accompanying such notice.

      Except to the extent set forth above in connection with a third planned
      meeting, in order to validly hold meetings and vote on decisions, a quorum
      consisting of at least one (1) member from each party must be present at
      each meeting. Any party nominating such member shall have the right to
      appoint a replacement or substitute member. In addition, each party shall
      have the right to have one (1) secretary participate in all meetings of
      the Review Committee; each party may also invite any of its respective
      employees or consultants to such meetings as a guest, provided that such
      participation is consistent with the matters to be discussed by the Review
      Committee and prior notice of each such attendee is provided to the other
      party. Secretaries or guests invited in accordance with the foregoing
      shall have no vote but may express opinions on any matters addressed by
      the Review Committee.

      Notwithstanding the fact that each party shall have three (3) members on
      the Review Committee, each party shall have one (1) collective vote on all
      matters presented for vote to the Review Committee, regardless of the
      number of persons from each party attending the meeting.

      All decisions to be taken by the Review Committee shall be taken
      unanimously. In the event that the parties do not reach a unanimous
      decision and are in a "deadlock", either party may refer the matter to be
      voted upon to a senior executive of each party with relevant knowledge and
      authority with respect to the subject matter of the deadlock immediately
      upon "deadlock", who shall render a conclusive decision within fifteen
      (15) days from the date of the referral of the matter thereto. Each party
      shall disclose to the other party within three (3) business days following
      request therefor by either party, the identity and business address of the
      senior executive appointed by each such party for the purpose of this
      deadlock resolution procedure. A copy of any referral to said senior
      executives by either party shall be forwarded to the other party. In the
      absence of agreement between said senior executives of the parties,
      Ipsen's appointed senior executive for the purpose of the deadlock
      resolution procedure may take the decision he or she reasonably believes
      will best comply with the terms of this Agreement (the Casting vote) and
      such decisions shall have the same effect as if agreed by the Review
      Committee. Decisions by the Review Committee whether agreed unanimously or
      through the Casting vote are subject to Medicis's right and option under
      and in accordance with Articles 3.2.3 (a) and (b), and 3.3.3 (a) and (b).

                                       13



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AND EXCHANGE COMMISSION.

4.4   Adequate minutes of each meeting of the Review Committee shall be prepared
      by the Chairperson of the Review Committee and sent within seven (7)
      business days from the date of each meeting to all of its members for
      comment or approval in writing within ten (10) business days from the date
      of receipt thereof. Minutes of meetings shall contain, at a minimum, a
      list of all actions agreed upon and of issues in deadlock, and the
      positions expressed by the members of the Review Committee on all matters
      covered by the Review Committee during the meeting.

4.5   The Review Committee may, in the discretion of the Chairperson, cease to
      hold meetings on the schedule set forth in this Article 4 after Medicis
      has launched the Current Product in all countries of the Territory;
      however, in such event the Committee shall meet at least annually. The
      Review Committee shall resume meetings and activities in accordance with
      the provisions of this Article 4 as soon as the parties elect to apply for
      a Regulatory Approval in the Territory in connection with a future Product
      in the Field.

5.    PRODUCT MANUFACTURE AND SUPPLY

5.1   During the term of this Agreement, Medicis shall purchase or otherwise
      obtain exclusively from Ipsen or from any Affiliate or Third Party
      appointed by Ipsen, all of the Product requirements for the Products
      Medicis, its Affiliates, or appointed distributors distribute under this
      Agreement.

5.2   Ipsen shall use commercially reasonable efforts to manufacture or have
      manufactured and deliver to Medicis clinical batches of Current Product
      and agreed future Products which are the subject of a Development and
      Regulatory Program, in those quantities indicated by Medicis to Ipsen
      prior to the Effective Date and further agreed by the Review Committee as
      reasonably sufficient to enable Medicis to perform the Development and
      Regulatory Program, according to instructions received with reasonable
      notice from the Review Committee. The agreed quantities of clinical trial
      supplies of Current Product will be provided by Ipsen without cost to
      Medicis.

5.3   Ipsen shall use commercially reasonable efforts to ensure that each
      clinical batch and marketing batch of the Current Product shall be
      manufactured in conformity with the specifications attached in Appendix 1
      as existing at the Effective Date or as modified pursuant to a change
      required under applicable regulations or by the Review Committee. Such
      changes shall be notified to Medicis prior to implementation. Ipsen shall
      use commercially reasonable efforts not to delay the delivery of clinical
      or marketing batches of Current Product so that any such changes do not
      affect the delivery thereof to Medicis. Ipsen shall use commercially
      reasonable efforts to ensure that each clinical batch or marketing batch
      of any future agreed Products be manufactured in conformity with agreed
      specifications.

5.4   Ipsen shall use commercially reasonable efforts to supply Medicis or its
      designees with all such ordered quantities of marketing batches of
      Products in a timely manner as follows:

      - Products shall be delivered in a finished, packed and labeled form as
      agreed between the parties taking into account applicable regulatory
      constraints in the United Kingdom and in the Territory;

      - Conditions of sales shall be CIP (Carriage and Insurance Paid -
      Incoterms 2000 of International Chamber of Commerce), at one of Medicis's
      principal distribution points within each of the three countries of the
      Territory, which distribution points shall be reasonably agreed upon by
      the parties.

      - Ipsen will use commercially reasonable efforts to deliver Products to
      Medicis as promptly as possible with as much shelf life remaining as
      possible.

                                       14



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AND EXCHANGE COMMISSION.

      Ipsen shall provide Medicis with the regulatory content which shall appear
      on packaging materials for the Products, and with the packaging materials
      format and specifications, in order (by way of example) for Medicis to
      conceive the artwork for the packaging materials for the Products,
      including but not limited to outer and inner packaging, leaflets and
      labels. Medicis shall start working on said artwork for the Products
      forthwith as from receipt of the regulatory content provided by Ipsen,
      without prejudice to final changes to the artwork which Medicis shall
      implement on the basis of the final regulatory content as shall be
      determined by the corresponding Regulatory Approvals in the Territory.

      The artwork conceived by Medicis shall be consistent with the
      Specifications set forth in Appendix 1 hereof with respect to the Current
      Product, and with the packaging materials format and specifications
      provided by Ipsen. In particular, Medicis shall make commercially
      reasonable efforts to use artwork tools and software compatible with
      Ipsen's technical standards concerning pre-printed packaging components.
      Ipsen shall inform Medicis of such standards. Medicis shall provide Ipsen
      with all the artwork, including the layouts and films (if possible on
      disc), relating to the Products packaging materials for Ipsen to pack the
      Product into final saleable form. The packaging materials for the Products
      conceived by Medicis shall include all the applicable regulatory contents
      provided by Ipsen, subject to changes required by the Regulatory Approvals
      issued in the Territory.

      Medicis and Ipsen shall each provide the other with appropriate and
      updated information related to the legal and regulatory requirements in
      the Territory with regards to the Products (including but not limited to
      quality, therapeutic use, packaging, labeling and storage). Such
      information shall be forwarded by one party to the other forthwith upon
      its becoming aware of the same. Final decision on whether to proceed to
      the regulatory modification of the content of any of the Products
      packaging materials, including all Product labels, shall be vested
      exclusively in Ipsen subject to Medicis's reasonable objection in writing
      to the proposed modification, within reasonable time.

      All Products sales boxes and leaflets shall bear the mentions referred to
      in Article 8.8(iii).

      Medicis shall provide Ipsen with reasonable relevant technical assistance
      if so requested by Ipsen for the operations contemplated under this
      Article 5.4.

5.5   Medicis shall provide warehouse facilities in the Territory adequate to
      store the Products in accordance with the relevant prescriptions of the
      Specifications and with standard requirements related to pharmaceutical
      products storage and handling.

5.6   For Ipsen manufacturing operations planning purposes only of clinical
      batches and marketing batches of the Current Product and agreed future
      Products, Medicis will use commercially reasonable efforts to provide
      Ipsen with

      5.6.1 a thirty six month rolling order forecast updated and complemented
            by an additional six month forecast simultaneously with the placing
            of each semester binding offer,

      5.6.2 a rolling twelve-month order forecasts updated and complemented each
            month by an additional monthly forecast, and

      5.6.3 a firm order for clinical batches and marketing batches of the
            Current Product and agreed future Products that shall cover a period
            of six months and which shall provide for delivery dates.

                                       15



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      Ipsen shall use commercially reasonable efforts so as to meet the
      requested delivery dates; provided however that should any of Medicis's
      firm purchase orders for the Product differ by more than ten percent (10%)
      from the quantities appearing in the applicable rolling forecast, Ipsen
      will not be responsible in case of delays in the delivery of excess
      quantities.

Detailed procedure as to such forecast and ordering processes is set forth in
the technical agreement referred to in Article 5.14 hereof.

5.7   In consideration for the supply of the Current Products by Ipsen to
      Medicis, Medicis shall pay to Ipsen the price set forth in Appendix 8
      hereto or as later determined as a result of the following Article 5.7 and
      as a result of Article 6.4.

      Such prices are based on *** units of toxin activity per vial, being
      functionally equivalent to approximately ***units of the competing product
      of the Current Product (Botox(R) by Allergan) as such competing product
      exists at the Effective Date.

      Without prejudice to either party's right to seek price adjustment under
      and in accordance with Article 6.4, in the event that, through the dose
      ranging studies which Medicis shall perform under the Development and
      Regulatory Program, and to the extent further analysis reveals that the
      functional equivalent of the Current Product and of its competing
      formulation as at the Effective Date is not 3:1, the prices set forth in
      Appendix 8 hereto will be adjusted proportionately, either up or down.

      Agreed quantities of promotional marketing samples will be provided by
      Ipsen to Medicis at a fixed price set forth in Appendix 8 (and without
      royalty nor inclusion in Net Sales) for Medicis's use for promotional
      purposes.

5.8   In case of Product shortage resulting in Product supplies insufficient to
      fill both Ipsen's world-wide sales requirements and Medicis's requirements
      for Products for the Territory, whether as a consequence of force majeure
      or any other cause, Ipsen and Medicis will each receive a pro rata share,
      based on the relative proportion of the last six (6) months of Ipsen's
      world-wide sales to Medicis's Product sales in the Territory, each
      expressed in number of vials, of available quantities of Product for as
      long as the shortage lasts.

      Ipsen will use its commercially reasonable efforts at all times to supply
      Medicis with enough Product for Medicis to maintain a safety stock
      corresponding to Medicis's Product sales in the Territory during the three
      (3) months preceding any Product delivery. Medicis undertakes to
      permanently hold such three-month safety stock unless such safety stock
      cannot be constituted owing to Ipsen's failure to supply Products in
      sufficient quantities. In the event of complete stock-out in a country of
      the Territory, except in case of force majeure and provided Medicis
      previously complied with its obligation to maintain a three-month safety
      stock, for each five (5) business days of stock out, Medicis shall receive
      a credit towards future royalties in an amount equal to *** percent (***%)
      of the royalties accrued over the last four (4) weeks Medicis was able to
      fully supply the market in the concerned country of the Territory.

5.9   Ipsen covenants with Medicis that:

      - Ipsen shall use commercially reasonable efforts to manufacture the
      Products in accordance with cGMP regulations, if applicable, or in
      accordance with applicable law and

                                       16



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      regulations in the case of samples of Product supplied for use in the
      Development and Regulatory Program;

      - the Products shall be manufactured to meet the specifications therefor
      submitted to any regulatory authority having jurisdiction over such
      Products in the Territory and to be of satisfactory quality as specified
      in the applicable Regulatory Approval.

5.10  Ipsen shall, with each delivery of Product to Medicis, supply a
      certificate of analysis related to each batch delivered and a signed
      statement that each such batch conforms with the Specifications and
      accords in all other respects with the relevant Regulatory Approvals in
      the Territory, that the Product meets all stability requirements and that
      the manufacturing procedures have been checked in conformity with cGMP or,
      in the case of samples of the Products supplied for use in the Development
      and Regulatory Program, in conformity with applicable law.

5.11  Medicis shall notify Ipsen of any defective material or workmanship of the
      Product in writing as follows:

      - claims in respect of visible nonconformity shall be made within fifteen
      (15) days after arrival of the concerned Products at Medicis's principal
      distribution points,

      - claims in respect of any hidden nonconformity shall be made within
      thirty (30) days after Medicis became aware of the same,

      - defects which could involve product liability for Ipsen, Medicis, or any
      of their Affiliates or distributors, shall be notified promptly upon
      becoming aware of the same,

      - Third Party claims relating to product liability matters shall be
      notified promptly upon becoming aware of the same.

5.12  In the event of any claim with respect to the quality of the Product or
      its conformity to the Specifications which is not due to events that
      occurred after delivery of the Product by Ipsen to the first carrier,
      Ipsen will use commercially reasonable efforts to make available to
      Medicis the necessary quantity of samples of the defective/non-conforming
      Product together with Ipsen's own certificate of analysis and, if
      requested by either party, the unsold quantities of the concerned batch of
      defective Product and said samples, shall be retained intact for
      inspection by the other party or any agent appointed by such party to
      which the other party has made no reasonable objection.

      In case of non-conformity to the Specifications of any quantity of the
      Product delivered to Medicis which is not due to events that occurred
      after delivery of the Product by Ipsen to the first carrier, Ipsen shall
      take back, at its own expense, the quantities concerned and shall replace
      them as soon as commercially practicable so as to avoid any disruption of
      supply in the Territory. If Ipsen does not replace any non-conforming
      quantities of Product promptly, Ipsen shall promptly refund the price paid
      by Medicis in respect of such quantities.

      Any dispute between the parties regarding the conformity to the
      Specifications of any quantity of the Product delivered hereunder shall be
      resolved in accordance with the dispute resolution procedures set forth in
      the technical agreement referred to in Articles 5.14 of this Agreement.

5.13  In the event either party has reason to believe that one or more batch(es)
      of Product supplied hereunder should be recalled from distribution in the
      Territory, or that any Product supplied

                                       17



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      hereunder should be withdrawn from the Territory, such party shall
      promptly inform the other in writing.

      Upon Ipsen's reasonable request, Medicis shall implement any Product batch
      recall or Product withdrawal from the Territory in accordance with the
      applicable procedure as shall be agreed under Article 11.

5.14  A technical agreement covering all technical, quality and logistical
      aspects of manufacturing for the supply by Ipsen to Medicis of the
      necessary quantities of Current Product and any other agreed Products,
      shall be agreed as soon as practical and no later than one hundred and
      twenty (120) days after the Effective Date. With regards to clinical trial
      supplies of Current Product, the technical agreement shall be agreed upon
      between the parties as soon as possible after the Effective Date. All such
      technical agreements will detail a change control policy with the
      obligation to communicate prior to implementation any planned changes in
      the manufacturing of the Product. On reasonable notice to Ipsen and
      subject to any obligations owed or limitations on access agreed to with
      any Third Parties, Ipsen shall grant Medicis and its authorized
      representatives reasonable access to Ipsen's present and future
      manufacturing facilities in order to inspect and evaluate Ipsen's
      facilities for Current Product and any other agreed Products in order to
      satisfy any regulatory requirements or requests.

6.    CONSIDERATION

6.1   The appointment of Medicis under Article 2 hereof is made in consideration
      of (i) the performance by Medicis of all its obligations herein, in
      particular Medicis's undertaking under Article 5.1, and (ii) Medicis
      making the following payments to Ipsen:

6.1.1 Non Refundable One Time Milestone Payments:

- -     Ninety million and one hundred thousand USD (90,100,000 USD) on ***

- -     Twenty five million USD (25,000,000 USD) on ***.

- -     One million and five hundred thousand USD (1,500,000 USD) on ***.

- -     Seventy five million USD (75,000,000 USD) on Regulatory Approval of the
Current Product in the U.S.A. for use of such Current Product in the Field.

- -     Two million USD (2,000,000 USD) on Regulatory Approval of the Current
Product in Japan for use of such Current Product in the Field.

For the purpose of this Article 6.1.1, a milestone shall be deemed to be
achieved by the party concerned if achieved by any of its Affiliates or Third
Party contractor.

Each milestone payment shall be due and payable as indicated in this Agreement
and no later than thirty (30) calendar days following the achievement of the
milestone event to which it relates. For the avoidance of doubt, Medicis will
not be obligated to make any milestone payment more than once.

Ipsen's wire instructions are as follows:

Account name: Ipsen Limited

Account number: ***

                                       18



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AND EXCHANGE COMMISSION.

BIC: ***

Sort code: ***

IBAN: ***

Bank name: HSBC

Bank address: Poultry & Princes Street, London EC2P 2BX

6.1.2 Running Royalties:

      Medicis shall pay to Ipsen a royalty of ***% (***percent) on Net Sales of
      the Product achieved in each and every country in the Territory as from
      the date of first Commercial Sale hereunder of a Product in the Territory
      (each, a Running Royalty). No more than one Running Royalty shall be
      levied on an individual Product.

      Each Running Royalty shall be payable at the expiry of each calendar
      quarter, on the basis of the Net Sales achieved during the preceding
      quarter in such country in the Territory. Royalties shall be due and
      payable within forty-five (45) calendar days after the end of each
      calendar quarter, simultaneously with remittance of the quarterly market
      sales report described in Article 9 below.

      All royalty payments pursuant to this Agreement shall be made in U. S.
      Dollars (USD), by wire transfer (net of bank charges which shall be borne
      by the paying party) to an account designated by Ipsen.

      Conversion from currencies other than USD shall be made using the
      arithmetic average of the spot rates on the last business day of each
      month of the fiscal quarter in which the Net Sales were made. The middle
      market exchange rates of National Westminster Bank PLC or any other
      exchange rate reference agreed to by the parties, shall be used as the
      source of spot rates to calculate the average as defined in the preceding
      sentence.

6.1.3 Minimum Royalties. In addition to the Running Royalties described in
      Article 6.1.2 of this Agreement, for each country in the Territory in and
      for which Medicis obtains a Regulatory Approval to sell the Product in the
      Field, and for each Royalty Year as defined below, Medicis shall pay Ipsen
      a Minimum Royalty to be determined in accordance with Articles 6.1.3,
      6.1.4 and 6.1.5. For each country and for each Royalty Year for which
      Medicis has an obligation to pay a Minimum Royalty under this Article
      6.1.3, it shall receive a credit equal to all Running Royalties timely
      paid by Medicis on Net Sales in and for such country for such Royalty
      Year. Medicis shall pay each Minimum Royalty owed under this Article
      annually as provided for in Article 6.1.6. For purposes of the United
      States, a Royalty Year shall begin on January 1st of the calendar year
      immediately following the calendar year (the Year of Initial Approval) in
      which Medicis obtains a Regulatory Approval to sell the Product in the
      Field, if such Regulatory Approval was obtained in the first six months of
      the Year of Initial Approval, or on January 1st of the second calendar
      year following the Year of Initial Approval, if such Regulatory Approval
      was obtained in the last six months of the Year of Initial Approval. For
      purposes of Japan and Canada, a Royalty Year shall begin on January 1st of
      the calendar year immediately following the calendar year in which a
      Regulatory Approval is received in and for that country.

6.1.4 With respect to the United States, the Minimum Royalty shall be USD ***
      for the ***, USD *** for the ***, and USD *** (***) for the ***. The
      Minimum Royalty for each of Japan and Canada, and for each Royalty Year
      applicable to the United States after the first ***Royalty Years specified

                                       19



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      above, shall subject to the following sentence, be determined in
      accordance with the provisions of Article 6.1.5. If and when a new
      competitor enters the market with a botulinum toxin-based product in the
      Territory in the Field, the parties shall consider reasonably expected
      changes to the market and appropriate changes to the Medicis' projections
      and, following any such changes, the parties' shall negotiate in good
      faith equitable adjustments to the Minimum Royalties to reflect the
      modifications to the projections.

6.1.5 Minimum Royalties shall be determined for a *** period. In order to ensure
      the timely determination and payment of Minimum Royalties under this
      Article 6.1.5, the parties agree that they shall start their negotiation,
      in respect of the U.S., not later than July 1st of the ***Royalty Year
      (and of each subsequent, *** anniversary year), and as respects Japan and
      Canada not later than July 1st of the calendar year in which a Regulatory
      Approval was received or is expected to be received and subsequently, not
      later than July 1st of the *** Royalty Year (and of each subsequent,
      ***anniversary year) applicable to such country.

      For the purpose of negotiating Minimum Royalties, the parties shall
      consider, among other things, published analysts' reports regarding
      projected total sales of botulinum toxin of all kinds for use in the Field
      in such country over the *** Royalty Year period under consideration. In
      addition, for the period of the first *** Royalty Years applicable to
      Canada and Japan, the parties shall determine the Minimum Royalty
      applicable to such country on the assumption that Medicis will capture a
      minimum of ***%, ***% and then ***% of total sales of botulinum
      toxin-based products for use in the Field in such country in each of the
      *** Royalty Years of such *** Royalty Year period. For each subsequent
      three Royalty Year period applicable in the United States, Canada or
      Japan, the parties shall determine the Minimum Royalty applicable to such
      country on the assumption that Medicis will capture a minimum of ***% of
      total sales of botulinum toxin based products in such country in each
      Royalty Year of such *** -year period.

      If the negotiation is not successful by August 31st of such year, then
      either party may request the resolution of such matter by a Third Party
      expert pursuant to Article 20.12. By November 1st of such year, each of
      the parties shall submit a single letter brief, of not more than ten (10)
      pages, stating its position as to the applicable Minimum Royalty for the
      *** Royalty Year period for the country in question (which must be a sum
      certain, expressed in U.S. Dollars, per annum). The expert shall issue his
      or her report by December 31st of such year, and shall select either
      Medicis's or Ipsen's Minimum Royalty figure for each Royalty Year
      comprising the *** Royalty Year period in question, i.e., the Third Party
      expert shall not select any compromise figures or any figures not proposed
      by one of the parties.

6.1.6 Medicis shall make any and all payments required to be made in respect of
      Minimum Royalties for any and all countries net of credits for or, if
      applicable, together with (and on the date when due) payment of Running
      Royalties corresponding to the last calendar quarter of the concerned
      Royalty Year.

6.1.7 In the event that Running Royalties arising from the Net Sales in any
      country in any Royalty Year shall exceed the Minimum Royalty applicable to
      such country, and Medicis shall have properly computed and timely paid
      such amounts under Article 6.1.2, Medicis shall not owe Ipsen any Minimum
      Royalty for such country for such Royalty Year.

6.1.8 In the event that, for any Royalty Year, Medicis owes and fails to pay the
      applicable Minimum Royalty when due, upon Ipsen's written notice of such
      failure or deficiency to Medicis delivered within thirty (30) days after
      the date on which such payment is due, and upon Medicis's failure within
      thirty (30) days to cure such deficiency, Ipsen may elect to convert
      Medicis's exclusive distribution rights under Article 2 (solely with
      respect to the concerned country for which Medicis

                                       20



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      failed to pay the applicable Minimum Royalty), into non-exclusive rights,
      whereupon Medicis shall be relieved from its obligations to pay Minimum
      Royalties to Ipsen with respect to that country of the Territory, and in
      which case this Agreement will automatically terminate with respect to
      that same country at the expiry of a *** period as from the date of
      Ipsen's notice to Medicis that the rights for the country concerned were,
      under this Article, turned into non exclusive rights. If Ipsen elects to
      convert the rights under Article 2 into non-exclusive rights for a
      concerned country of the Territory, such conversion shall be Ipsen's sole
      and exclusive remedy for any failure by Medicis to pay Minimum Royalties
      for the country concerned. Medicis shall not be considered to be in
      default of its Minimum Royalty obligations at any time, and for so long
      as, any force majeure event, any failure by Ipsen to deliver required
      quantities of conforming Product in a timely fashion, or any other
      material breach of this Agreement by Ipsen, either of which was a
      substantial factor in Medicis's failure to satisfy its Minimum Royalty
      obligations as of such time.

6.1.9 In the event that, for any period of *** consecutive Royalty Years
      applicable to a country in the Territory for which a Minimum Royalty is
      due, Medicis fails to pay such Minimum Royalty, upon Ipsen's written
      notice of such failure or deficiency to Medicis delivered within thirty
      (30) days after the date on which such payment is due for the *** such
      Royalty Year, and upon Medicis's failure within thirty (30) days to cure
      such deficiency for the entire *** period, Ipsen may elect to terminate
      Medicis's appointment pursuant to Article 19.2(ix) with respect to such
      country, and such termination of appointment shall, in effect, be treated
      as a termination of this Agreement by Ipsen for cause, albeit with respect
      to such country only.

6.2   Medicis shall pay all taxes that by law (including existing treaties for
      bilateral taxation) it is required to pay on payments accruing under this
      Agreement and shall withhold from the sums payable to Ipsen all such taxes
      or levies and Medicis shall forward to Ipsen withholding tax certificates
      whenever possible.

6.3   Late payments of all monies provided for in this Agreement shall bear
      interest, on a daily basis, from the due date to the date of actual
      payment, at a rate equal to 1.5% above EURIBOR. The accrual and payment of
      such late payment interest shall not prejudice the suffering party's other
      rights and remedies that may arise from breach of this Agreement by the
      defaulting party.

6.4   The parties acknowledge that it is their intent that Medicis will realize
      a Gross Profit Margin of approximately *** percent (***%) on its Net Sales
      of the Product in each country of the Territory, and the parties therefore
      agree as follows:

6.4.1 In the event that it appears, after the commencement of Commercial Sales
      in a country in the Territory, that, because of a significant change in
      market conditions or other factors, Medicis has failed, for a period of
      four (4) consecutive fiscal quarters, to realize a Gross Profit Margin in
      respect of Commercial Sales in such country of at least *** percent (***%)
      cumulatively over such period, or Medicis has, for a period of four (4)
      consecutive quarters, realized a Gross Profit Margin of more than ***
      percent (***%) cumulatively in respect of Commercial Sales in such country
      over such period, Ipsen and Medicis will negotiate in good faith a revised
      supply price for the Product which will restore Medicis to a Gross Profit
      Margin of ***percent (***%).

6.4.2 During such negotiation period and only in case Medicis made use of this
      Article 6.4, if a Gross Profit Margin of less than ***percent (***%)
      results over any period of four (4) consecutive fiscal quarters, then ***
      percent (***%) of all payments due by Medicis under this Agreement shall
      be made to an escrow account in a bank mutually agreed to by the parties;
      the balance, *** percent (***%), being paid to Ipsen. Allocation between
      or to either of Medicis or Ipsen of the amounts paid to the escrow account
      shall be decided on the basis of the outcome of revisions to the supply
      price for the Product, it being understood that the revisions shall be
      retroactive to the date

                                       21



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      Medicis effectively ceased achieving a Gross Profit Margin of at least ***
      percent (***%) or effectively began to achieve a Gross Profit Margin in
      excess of *** percent (***%).

6.4.3 In case the parties do not agree upon a mutually acceptable revised
      Product supply price within four (4) months from the date on which a party
      gave notice pursuant to this Article 6.4, either party may refer the
      matter for resolution by a Third Party expert pursuant to Article 20.12.
      If the matter is referred to a Third Party expert, pending the expert
      decision and only in case Medicis made use of this Article 6.4 for
      achieving a Gross Profit Margin of less than *** percent (***%), Medicis
      shall continue to pay *** percent (***%) of amounts otherwise due to Ipsen
      into escrow. Escrowed amounts shall be distributed to the parties hereto,
      in accordance with a final determination under Article 20.12 of this
      Agreement, and within thirty (30) days after the issuance of the final
      determination. In determining the revised Product supply price, the Third
      Party expert may consider any and all factors which he/she deems
      appropriate including, without limitation, competition in the relevant
      markets within the Territory, and sales levels and trends for the
      Products. If none of the parties referred the matter for resolution by a
      Third Party expert, escrowed amounts shall be distributed to Ipsen.

6.4.4 Neither party shall seek an adjustment of the Gross Profit Margin more
      frequently than once in any period of four (4) consecutive fiscal
      quarters. In no event shall any expert determine a revised Product supply
      price of less than USD *** (USD ***) per vial for the Current Product (or
      its equivalent) and, even if he or she does, in no event shall Medicis pay
      Ipsen less than USD *** (USD***) per vial (or its equivalent).

6.4.5 Upon request from time to time, Medicis agrees to provide Ipsen with
      adequate data for Ipsen to calculate the Gross Profit Margin if such
      calculation is not feasible based on the reports to be delivered to Ipsen
      pursuant to Article 9.

7.    FUTURE PRODUCTS

7.1   Ipsen hereby declares that it is currently working to develop ***. Ipsen
      will use commercially reasonable efforts to make available Product
      Extensions available to Medicis within the time schedule of any
      modification of the Development and Regulatory Program adopted by the
      Review Committee. However, Ipsen explicitly makes no assurance or warranty
      regarding the outcome of any such developments.

      ***

      In the event that Ipsen or any Ipsen Affiliate shall develop or consider
      licensing-out to a Third Party (or setting-up a joint-venture with a Third
      Party for) ***, in each instance Ipsen shall, and shall cause such Ipsen
      Affiliate to, before approaching any Third Party, first offer Medicis the
      opportunity to assume responsibility for a development and regulatory plan
      for the New Product, and to take appointment as sole and exclusive
      distributor and promoter of the New Product, within the Field and in the
      Territory. If Medicis elects to negotiate for such rights, then Ipsen
      agrees to negotiate, and Ipsen shall cause such Ipsen Affiliate to
      negotiate, in good faith, exclusively with Medicis, for a period of ***
      after Ipsen's or such Ipsen Affiliate's above mentioned opportunity offer
      to Medicis, the commercially reasonable terms of an exclusive Development
      and Distribution Agreement for the New Product. All material terms of
      Ipsen's or such Ipsen Affiliate's best offer shall be memorialized in a
      written outline prepared by Ipsen. If Medicis does not elect to negotiate
      for such rights within *** after Ipsen's or such Ipsen Affiliate's above
      mentioned offer to Medicis, or if Medicis and Ipsen or such Ipsen
      Affiliate are unable to reach agreement with respect to a new Development
      and Distribution Agreement within the above mentioned *** period, then
      Ipsen or such Ipsen Affiliate shall be free to negotiate with any Third
      Party with respect to

                                       22



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      the development and distribution of any New Product, provided that neither
      Ipsen nor such Ipsen Affiliate may enter into any agreement with a Third
      Party for such New Product which would provide for terms which are more
      favorable in the aggregate to the Third Party than Ipsen's or such Ipsen
      Affiliate's best offer to Medicis.

8.    MARKETING AND PROMOTION OF THE PRODUCT

8.1   Medicis shall have sole responsibility to determine first Commercial Sales
      timing and dates in the Territory, provided however that Medicis shall
      perform or have performed the first Commercial Sale of the Current Product
      and any agreed future formulations of the Product, in each country of the
      Territory in which the first corresponding Regulatory Approval is granted
      without delay after the grant of such Regulatory Approval, but no later
      than three (3) months after such Regulatory Approval has been obtained;
      provided that Ipsen shall have made available sufficient supplies of such
      Product for Commercial Sales to commence.

8.2   Medicis will have sole responsibility for establishing the Product pricing
      for use in the Field, subject to applicable government regulations.

8.3   Medicis shall promote, distribute and sell the Product in the Territory
      through its established distribution systems as appearing in Appendix 6
      hereto and/or through other Affiliates and/or Third Parties in accordance
      with the provisions of Article 2.2 above.

8.4   Medicis shall use its best endeavors comparable to the manner Medicis
      applies to its own leading aesthetic products in the Field in the
      Territory, or if not applicable, in other therapeutic or commercial areas,
      to promote, distribute and sell the Product in the Territory.

8.5   Medicis shall commit to a high level of quality and scientific excellence
      in its marketing, promotion and distribution of the Product in the
      Territory consistent with Medicis's highest standard of quality and
      scientific excellence. To that end, Medicis shall make sure that the sales
      representatives used by Medicis or any of Medicis's Affiliates,
      distributors or Third Party contractors are well trained in order to
      maintain a high level of quality and scientific excellence in all
      marketing activities.

      Medicis will use commercially reasonable efforts to provide Field
      Customers included in the Medicis Customer Base with technical support,
      training with the Product and instructions for use of the Product, in a
      manner consistent with Medicis's current practices in the provision of
      such support to its present customer base for its hyaluronic acid-based
      products.

8.6   Medicis shall promote the Products only within the Field and solely to
      Field Customers located in the Territory, to the exclusion of any contacts
      with or promotional visits to health professionals who do not pertain to
      the Field Customers; however, Medicis's marketing and promotion over the
      internet, radio, television or other broad-based media that spills over
      into countries outside the Territory shall not be a breach of this
      provision.

      Medicis shall promote, distribute and sell the Products solely under one
      or more of the Trademarks.

      Medicis shall supply the Product in response to orders received only from
      Field Customers within the Medicis Customer Base. For purposes of this
      Agreement, the Medicis Customer Base shall include any and all
      practitioners, groups, clinics and institutions located in the Territory,
      identified as such on a list of customers prepared and maintained by
      electronic means on the Effective Date and thereafter, who have practiced
      or may reasonably be expected to practice in the Field

                                       23



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      and become customers for the Product. Such list shall disclose the name of
      the practitioner, group, clinic or other institution, its primary address
      any affiliation, and any practice specialties. Promptly after the end of
      each fiscal quarter, Medicis shall transmit the complete, revised list in
      electronic form to Ipsen, which list shall be marked to clearly indicate
      the identities of any Field Customers who have been added or removed from
      the list in the prior quarter. Ipsen shall have the right to approve the
      list as it exists on the Effective Date, and to approve all additions and
      subtractions to the list thereafter, which approval shall not be
      unreasonably withheld. Ipsen may reasonably retract its consent as to a
      particular Field Customer if it receives information about such Field
      Customer's use of any Current Products or agreed future Product that
      requires such removal. Medicis may deliver Product for use in the Field to
      a Field Customers whose names do not appear on the list so long as Medicis
      includes such customer's identifying information in the next quarterly
      update of the list. Medicis shall refer to Ipsen all enquiry's and orders
      received other than from the Medicis Customer Base. Ipsen shall refer to
      Medicis all inquiries and orders received from the Medicis Customer Base
      or from Field Customers whom Ipsen has reason to believe desire to use the
      Products in the Field. Ipsen acknowledges and agrees that the Medicis
      Customer Base is a trade secret of Medicis and is subject to the
      confidentiality provisions of Section 17. Accordingly, the Parties shall
      cause the Review Committee or their designees to develop promptly a
      written plan to limit access to and safeguard the Medicis Customer
      Database.

8.7   Medicis shall pay for all costs related to and shall bear all
      responsibility for all marketing, promotion, sale and distribution
      activities of Medicis and Medicis's Affiliates under this Agreement in the
      Territory.

8.8   Medicis shall decide on the strategy to adopt regarding its Product
      promotion activities in the Field in the Territory, provided however that
      (i) Medicis shall meet with Ipsen at least once a year by September 30th,
      to review a written report documenting Medicis's actual and proposed
      strategies and promotional activities, together with the results thereof,
      (ii) Medicis shall implement any reasonable modifications to its actual or
      proposed strategies which Ipsen may reasonably request so as to safeguard
      consistency with Ipsen's Product promotional or marketing strategies;
      provided that such modifications do not impose unreasonable costs,
      burdens, or other limitations on Medicis, or otherwise conflict with
      Medicis's overall marketing strategies, and (iii) if required by Ipsen,
      the packaging of the Product in the Territory shall indicate that such
      Product is manufactured by Ipsen and/or such other company or group name
      as may be reasonably requested by Ipsen; the parties shall agree on the
      way such mention shall appear on the packaging.

      Promptly following the Effective Date, each of the parties shall use
      commercially reasonable efforts to jointly develop and implement a plan to
      detect and seek prevention, of unauthorized parallel imports of Products
      and counterfeit Products into the Territory throughout the term of this
      Agreement to the extent permitted by applicable law, including permitting
      Medicis to enforce its exclusivity rights as to unauthorized third party
      parallel importers.

8.9   Each party undertakes that it will use commercially reasonable efforts to
      substantially comply with all applicable laws and regulations when
      developing, testing, manufacturing, marketing, promoting, storing,
      packaging, shipping, selling and/or distributing the Products.

      Each party further undertakes to use commercially reasonable efforts to
      substantially comply with all applicable proceedings or documentation
      required by regulations in force in the United Kingdom, in the European
      Union or in the Territory applicable to the developing, testing,
      manufacturing, storing, packaging, shipping, distribution, promotion, sale
      and administration of botulinum toxin-based products in accordance with
      this Agreement.

                                       24



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

9.    REPORTS

9.1   Within forty-five (45) calendar days after the end of each calendar
      quarter, simultaneously with payment of royalties mentioned in Article 6
      above, Medicis shall provide Ipsen with a written report indicating the
      Commercial Sales of the Product achieved during the preceding calendar
      quarter including all details setting forth all Net Sales by Medicis and
      its Affiliates and the calculation of Net Sales, the percentage of
      royalties applicable for such quarter, and the amount of royalties due
      under Article 6.

      Such quarterly report shall include without limitation the following
      items:

      - Products Commercial Sales records expressed in value and volume (in
      number of Product vials), in aggregate and broken down by groups and
      agreed types of Field Customers, as well as in each country of the
      Territory, and agreed areas or sub-zones;

      - Products stock movements reports;

      - Products returns from customers by Territory.

      Medicis agrees that it shall keep, during the whole duration of this
      Agreement and thereafter for a period of at least (i) six (6) calendar
      years, or (ii) the duration corresponding to commercial prescription under
      U.S. laws, whichever of (i) and (ii) is shorter, after each Commercial
      Sale, accurate records of each Commercial Sale in sufficient detail,
      including but not limited to details of the price at which the Product was
      sold by Medicis, and of any and all deductions applicable in determining
      the Net Sales, in order to enable assessment and control of the amounts
      due to the other party under Article 6.

      Upon Ipsen's request, which request shall not be made more frequently than
      once per any twelve-month period, Ipsen may have an inspection performed
      by an independent auditor selected by Ipsen and to which Medicis has no
      reasonable objection during ordinary business hours, of such Medicis's
      records, books and accounts as may be necessary to verify the accuracy of
      information submitted under this Article 9 to Ipsen in respect of all
      royalty payments from Medicis to Ipsen under this Agreement. All expenses
      related to such verification shall be borne by Ipsen except where it is
      determined by the auditor that Medicis has made an annual underpayment of
      five percent (5%) or more, in which event such expenses shall be borne by
      Medicis only. If Medicis disagrees with any determination made by the
      auditor pursuant to this Article 9.1, it may refer such disagreement for
      resolution pursuant to the dispute resolution procedures set forth in
      Articles 20.11 and 20.12. Any under or overpayment shall be balanced
      within fifteen (15) days after the later of (i) the date of the auditor's
      examination or (ii) resolution of any disputes with respect to the
      auditor's examination pursuant to the processes set forth in Article 20.11
      and 20.12, together with accrued late payment interest calculated in
      accordance with Article 6.3.

9.2   Within ninety (90) calendar days before the end of each calendar year,
      Medicis shall provide Ipsen with a written report indicating annual
      Commercial Sales forecasts for the following calendar year, and reports on
      the impact of competitive products, acceptance of the Product by the Field
      Customers in the Territory, results and analysis thereof, of implemented
      promotional strategies during the current calendar year, and detail of
      planned promotion strategy for the following calendar year, and other
      information Medicis deems relevant.

                                       25



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

9.3   Medicis shall advise Ipsen in writing of any known complaints from
      competitors or regulatory authorities regarding promotional activities,
      within ten (10) days or sooner if the regulatory agency rules specify a
      shorter period.

10.   IPSEN PROMOTION OF THE PRODUCTS IN THE TERRITORY

10.1  Ipsen shall not, and Ipsen shall ensure that its Affiliates do not,
      promote the Products in the Territory with respect to indications
      pertaining to the Field or using the same or confusingly similar brand
      names, packaging, or trade dress as used by Medicis or its Affiliates or
      distributors. Furthermore, Ipsen shall not, and Ipsen shall ensure that
      its Affiliates do not, promote the Products in the Territory to the
      Medicis Customer Base except in connection with new use(s) for the
      Products outside the Field which Ipsen registered in the Territory after
      the Effective Date and which might be prescribed or used by customers
      within the Medicis Customer Base. Ipsen and its Affiliates may promote or
      have the Products promoted in the Territory outside the Field and to
      ophtalmologists who practice medical treatment outside the Field.

10.2  The parties recognize that a Field Customer may wish to use the Product
      for at least one use within the Field and at least one use outside the
      Field. With respect to each such Field Customer, Medicis and Ipsen shall
      use their commercially reasonable efforts to come to an individual
      agreement appropriately allocating the sales revenues pertaining to such
      Field Customer's use to each of Medicis and Ipsen, in proportion to such
      Field Customer's actual use.

10.3  Either party may require that the other provide reasonable access during
      ordinary business hours to the other party's records, books of account,
      other documents, employees, consultants, Affiliates, Third Party
      contractors and facilities in order to verify the other party's compliance
      with this Article 10. Any dispute regarding either party's compliance with
      this Article 10 shall be subject to the dispute resolution procedures set
      forth in Articles 20.11 and 20.12.

10.4  In the event that either party to this Agreement violates its obligation
      to remit agreed funds to the other under this Article 10, such party shall
      promptly pay the non-breaching party the amount owed, plus interest, as
      agreed to by the parties through negotiation or as conclusively determined
      by the Third Party expert.

11.   PROCEDURES REGARDING TECHNICAL MATTERS

      Ipsen and Medicis shall agree in writing as soon as possible and no later
      than within one hundred and twenty (120) days after the Effective Date,
      upon a Safety Data Exchange Agreement which will describe the process for
      adverse event and reporting.

      Discussions between Ipsen and Medicis regarding such Safety Data Exchange
      Agreement, shall be initiated on the basis of the Standard Operating
      Procedures in force at the time of the signing of this Agreement and
      subsequent updates, which are in effect on the Effective Date within
      Ipsen's organization and of which Ipsen will send a copy to Medicis for
      the purpose of these discussions.

      The Safety Data Exchange Agreement which Ipsen and Medicis shall
      agree-upon shall be consistent with the provisions of this Agreement.

      During the 120 days during which the Safety Data Exchange Agreement is
      being finalised, Ipsen and Medicis agree to exchange all serious adverse
      event reports received from clinical trials and serious spontaneous
      reports received by either party. CIOMS I or MedWATCH forms will be

                                       26



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      used to exchange such reports within five (5) calendar days of receipt
      (life-threatening or fatal reports) or ten (10) calendar days for all
      other serious reports.

12.   INTELLECTUAL PROPERTY

12.1  Medicis agrees that it shall not gain title of any kind in Ipsen's or any
      Ipsen Affiliate's intellectual property rights in the Products, the
      Products Regulatory Approval files and data contained in any applications
      for Regulatory Approvals or Ipsen's or any Ipsen Affiliate's Know-How
      including patents, which rights and titles shall all remain Ipsen's or
      Ipsen's Affiliates' sole property.

12.2  All results whether patentable or not of the Development and Regulatory
      Program shall be the sole property of Ipsen. Ipsen may independently,
      after prior confidential consultation with Medicis and with Medicis's
      reasonable assistance, seek at its own expense any patent or other
      protection available in relation to such results and to the Products
      (including without limitation any new use for any of the same).

12.3  Ipsen shall assign to Medicis the Trademark and goodwill (if any)
      associated therewith in accordance with the terms of a Trademark
      Assignment Agreement substantially in the form set out in Appendix 11.
      Medicis may further select and include in Appendix 5 hereto, other trade
      name(s) and trademark(s), to register, distribute and promote the
      Product(s) or agreed future Product(s) in the Territory, and to which
      Ipsen has no reasonable objection.

      The Trademarks shall be the sole property of Medicis.

12.3.1 Subject to Article 8.8, Medicis grants to Ipsen a license to use the
       Trademark(s) in accordance with the terms of the Trademark(s) License
       Agreement attached as Appendix 9.

      Any trademark further included in Appendix 5 in accordance with the terms
      of this Article 12.3 shall be referred to herein as the Trademark(s) and
      shall be deemed to be automatically licensed by Medicis to Ipsen under the
      terms of the Trademark(s) License Agreement. Medicis undertakes to sign
      any amendment as Ipsen may request to the Trademark(s) License Agreement
      so as to formalize the inclusion of any such new Trademark in the scope of
      the Trademark(s) License Agreement.

      Any Product Extension included in Medicis's scope of appointment under
      Article 2 in accordance with the provisions of Article 7.1 herein, and any
      New Product which is the subject of an Agreement between Ipsen and Medicis
      for its development and/or distribution in accordance with the provisions
      of Article 7.2 of this Agreement, shall be deemed to be automatically
      included in Exhibit B to the Trademark(s) License Agreement. Medicis
      undertakes to sign any amendment as Ipsen may request to the Trademark(s)
      License Agreement so as to formalize the inclusion of any such Product
      Extension and/or New Product in the scope of the Trademark(s) License
      Agreement.

      In case the Trademark(s) License Agreement terminates or expires while
      this Agreement is still in force, Medicis shall not grant any right under
      the Trademark(s) to any Third Party or Affiliate outside the Territory,
      nor shall Medicis make any use of the Trademark(s) outside the Territory.

      The Trademark(s) License Agreement shall continue in full force and effect
      notwithstanding the termination or expiry of this Agreement unless
      otherwise expressly provided for in the Trademark(s) License Agreement.

                                       27



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

12.3.2  Ipsen shall not, and Ipsen shall ensure that its Affiliates do not,
        register or use a trademark or trade name the same as or confusingly
        similar to the Trademarks in the Territory, or outside the Territory but
        in the Field. Neither party shall register or use, and each party shall
        ensure that its respective Affiliates do not register or use, a
        trademark or trade name the same as or confusingly similar to any
        trademark or trade name proprietary to the other party or any of such
        other party's Affiliates, or under which the other party or any of any
        of its Affiliates markets Products or similar aesthetic products whether
        in or outside the Territory.

12.3.3  Medicis hereby grants Ipsen, during the term of this Agreement, an
        exclusive option which Ipsen may exercise from time to time during this
        Agreement, to acquire the Trademarks in one or more countries outside
        the Territory as indicated from time to time by Ipsen, under reasonable
        commercial purchase conditions to be negotiated in good faith between
        Medicis and Ipsen. Should Medicis and Ipsen be unable to reach agreement
        with respect to such purchase conditions, Ipsen's option shall not be
        extinguished and may be further exercised by Ipsen for the same and/or
        other country/ies outside the Territory whenever Ipsen deems appropriate
        during this Agreement

12.4    Each party shall notify the other in accordance with this Agreement
        promptly upon becoming aware of the same that:

        (i) there exists an actual or potential infringement or misappropriation
        by Third Parties in the Territory of intellectual property rights
        covering the Products, including the Know-How and the results of the
        Regulatory and Development Program;

        (ii) the Products or any intellectual property rights covering the
        Products, including the Know-How and the results of the Regulatory and
        Development Program, might or actually infringe or misappropriate, or
        are dependent upon a Third Party intellectual property right in the
        Territory.

12.4.1  With respect to the notification referenced in Article 12.4(i) above
        and except if the actual or potential infringement relates to the
        Trademark(s):

        Ipsen shall have the right, but not the obligation, at its own
        discretion and at its own expense, to institute, prosecute, and control
        any action or proceedings with respect to such actual or potential
        infringement or misappropriation. Medicis shall provide Ipsen with all
        reasonable assistance for such purposes; further, Medicis shall have the
        right to participate at its own expense in any such action or
        proceedings in order to obtain damages for any loss or prejudice
        suffered by its business but the control of such action or proceedings
        shall remain with Ipsen. Any monetary remedy obtained by Ipsen as a
        result of any proceedings taking place pursuant to the present Article,
        shall belong solely to Ipsen, provided however that in case of Medicis's
        participation in any such actions or proceedings at Medicis's cost,
        Medicis shall be entitled to receive that portion of the remedy
        corresponding to compensation of Medicis's prejudice reduced according
        to the proportion of Medicis's financial contribution to the costs borne
        by Ipsen for the entire action or proceeding.

        In the event that Ipsen does not within a reasonable time period
        intervene in relation to an infringement or misappropriation under
        Article 12.4(i) above, then Medicis may, at its own discretion after
        having liaised with Ipsen to this effect, commence such proceedings on
        its own behalf, in which case Ipsen shall provide Medicis with all
        reasonable assistance and support for such purposes including joining
        the action where reasonably requested. Medicis shall be responsible for
        the control of such proceedings and shall pay all expenses incurred in
        connection therewith, subject however to permanent consultation and
        co-ordination with Ipsen to take into account Ipsen's world-wide
        strategy and image for the Products, including circulation to Ipsen of

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

        any planned binding settlement so as to enable Ipsen to reasonably
        comment thereupon. Any monetary remedy obtained by Medicis as a result
        of such proceedings shall belong solely to Medicis.

12.4.2  With respect to the notification referenced in Article 12.4(ii) above:

        Ipsen shall have the right but not the obligation, at its own discretion
        and at its own expense to defend and control any action or proceedings
        with respect to such actual or potential infringement or
        misappropriation and Medicis shall provide Ipsen with all reasonable
        assistance for such purposes including joining the action where
        reasonably requested. Any monies that may be due to the Third Party as a
        consequence of actions or proceedings under Article 12.4(ii) above,
        shall be borne by the parties as set out in Article 12.6 hereof.

12.5    Each party shall notify the other in accordance with this Agreement
        promptly upon becoming aware of the same that:

        (i) there exists an actual or potential infringement by Third Parties in
        the Territory of the Trademark(s);

        (ii) the Trademark(s) might or actually infringe, or is dependent from,
        a Third Party intellectual property right in the Territory.

12.5.1  With respect to the notification referenced in Article 12.5 (i) above:

        Medicis shall have the right, but not the obligation, at its own
        discretion and at its own expense, to institute, prosecute, and control
        any action or proceedings with respect to such actual or potential
        infringement. Ipsen shall provide Medicis with all reasonable assistance
        for such purposes including joining such action where reasonably
        requested; further, Ipsen shall have the right to participate at its own
        expense in any such action or proceedings in order to obtain damages for
        any loss or prejudice suffered by its business but the control of such
        action or proceedings shall remain with Medicis. Any monetary remedy
        obtained by Medicis as a result of any proceedings taking place pursuant
        to the present Article, shall belong solely to Medicis, provided however
        that in case of Ipsen's participation in any such actions or proceedings
        at Ipsen's costs, Ipsen shall be entitled to receive that portion of the
        remedy corresponding to compensation of Ipsen's prejudice reduced
        according to the proportion of Ipsen's financial contribution to the
        costs borne by Medicis for the entire action or proceeding.

        In the event that Medicis does not within a reasonable time period
        intervene in relation to an infringement under Article 12.5(i) above,
        Ipsen may, at its own discretion after having liaised with Medicis to
        this effect, commence such proceedings on its own behalf, in which case
        Medicis shall provide Ipsen with all reasonable assistance and support
        for such purposes including joining such action where reasonably
        requested. Ipsen shall be responsible for the control of such
        proceedings and shall pay all expenses incurred in connection therewith,
        subject however to permanent consultation and co-ordination with Medicis
        to take into account Medicis's strategy and image for the Trademark(s)
        in the Territory, and subject to Ipsen seeking Medicis's written
        approval prior to entering into any binding settlement or prior to
        taking any irreversible decision applicable to, or omitting to perform
        any action which could irreversibly affect, ongoing proceedings. Any
        monetary remedy obtained by Ipsen as a result of such proceedings shall
        belong solely to Ipsen.

12.5.2  With respect to the notification referenced in Article 12.5(ii) above:

                                       29



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      Medicis shall have the right but not the obligation, at its own discretion
      and at its own expense to defend and control any action or proceedings
      with respect to such actual or potential infringement and Ipsen shall
      provide Medicis with all reasonable assistance for such purposes including
      joining such action where reasonably requested, subject to written notice
      to Ipsen of any planned binding settlement or definitive actions or
      omission so as to enable Ipsen to reasonably comment thereupon. Any monies
      that may be due to the Third Party as a consequence of actions or
      proceedings under Article 12.5(ii) above, shall be borne by the parties as
      set out in Article 12.6 hereof.

12.6  In case Ipsen is by virtue of a final court decision or binding settlement
      entered into in compliance with the terms of this Agreement under actions
      or proceedings referred to in Article 12.4(ii) and/or Article 12.5(ii)
      under the obligation to pay any monies to a Third Party, Medicis shall
      reimburse Ipsen the portion of the payment obligations which correspond to
      Medicis's infringing sales or activities in the Territory.

      In case Medicis is by virtue of a final court decision or binding
      settlement achieved or entered into in compliance with the terms of this
      Agreement under actions or proceedings referred to in Article 12.5(ii)
      above under the obligation to pay any monies to a Third Party, Ipsen shall
      reimburse Medicis the portion of the payment obligations which are based
      upon Ipsen's infringing sales achieved under the Trademark(s) outside the
      Territory.

12.7  The provisions of this Article 12 shall survive the termination or
      expiration of this Agreement for a period of ten (10) years.

13.   NON COMPETITION

13.1  For the whole duration of this Agreement, Medicis undertakes not directly
      nor indirectly (such as through any Medicis Affiliate) to seek purchasers
      for the Product outside the Territory, nor sell nor offer for sale the
      Product for any use whatsoever outside the Territory, nor to seek
      purchasers for nor sell, nor offer for sale the Product for use outside
      the Field within the Territory; however, Medicis's marketing and promotion
      over the internet, radio, television or other broad-based media that
      spills over into countries outside the Territory shall not be a breach of
      this provision.

13.2  Except to the extent permitted by Article 20.5(b), ***, neither Medicis
      nor its Affiliates will promote or distribute, either directly or
      indirectly, any product for sale in the Territory in the Field having the
      same indications in the Field, the same active ingredient as the Products,
      or a directly competing muscle paralyzing effect (hereinafter referred to
      as Competitor). As an exception to this Article 13.2, Medicis and its
      Affiliates may directly or indirectly promote or distribute Competitors
      for sale in the Territory in the Field during the above defined duration,
      in case this Agreement is terminated by Medicis under Article 19.2(ii) due
      to Ipsen's fundamental breach under this Agreement, and Ipsen did not
      contest being in fundamental breach.

14.   WARRANTIES

14.1  Medicis represents and warrants to Ipsen that:

      - it is duly incorporated under the laws of Bermuda and has the power and
      authority to execute and deliver this Agreement as well as to perform its
      obligations hereunder, and that it has taken all corporate action
      necessary to ratify such power and authority,

                                       30



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      - it or its Affiliates have the necessary qualified personnel, equipment
      and other means to perform Medicis's duties under this Agreement in a
      timely manner in accordance with the terms hereof and further covenants
      that it will continue to do so throughout the term of this Agreement,

      - it is not directly or indirectly through Affiliates of Medicis or
      otherwise, presently involved in any manner whatsoever in the development,
      registration, distribution, and/or promotion, of products containing
      botulinum toxin other than for the purpose and under the terms of this
      Agreement, nor is it in the process of becoming so, nor does it have the
      benefit of an option to acquire rights thereon.

      - the execution and delivery of this Agreement does not conflict with or
      constitute a default under any applicable laws or regulations or under any
      contract, agreement, policy, other arrangement or understanding to which
      it is a party or by which it is bound,

      - no approval of any governmental body or consent of any person not a
      party to this Agreement is required or advisable on the part of Medicis or
      Medicis's Affiliates for the due execution and delivery of this Agreement
      by Medicis and the performance of its obligations hereunder, and

      - when executed and delivered by Medicis, this Agreement will be the
      legally valid and binding obligation of Medicis, enforceable against
      Medicis in accordance with its terms, except as may be limited by
      bankruptcy, insolvency, reorganization, moratorium or other similar laws
      relating to or affecting creditors' rights generally.

14.2  Ipsen represents and warrants to Medicis that:

      - it is duly incorporated under the laws of England and has the power and
      authority to execute and deliver this Agreement as well as to perform its
      obligations hereunder, and that it has taken all corporate action
      necessary to ratify such power and authority,

      - it has the necessary qualified personnel, equipment and other means to
      perform its duties under this Agreement in a timely manner in accordance
      with the terms hereof and further covenants that it will continue to do so
      throughout the term of this Agreement,

      - the execution and delivery of this Agreement does not conflict with or
      constitute a default under any applicable laws or regulations or under any
      contract, agreement, policy, other arrangement or understanding to which
      it is a party or by which it is bound,

      - no approval of any governmental body or consent of any person not a
      party to this Agreement is required or advisable on the part of Ipsen for
      the due execution and delivery of this Agreement by Ipsen and the
      performance of its obligations hereunder, or the exercise by Medicis of
      its rights under this Agreement,

      - when executed and delivered by Ipsen, this Agreement will be the legally
      valid and binding obligation of Ipsen, enforceable against Ipsen in
      accordance with its terms, except as may be limited by bankruptcy,
      insolvency, reorganization, moratorium or other similar laws relating to
      or affecting creditors' rights generally,

      - it has, and during the term of this Agreement will maintain, ownership
      and possession of all necessary rights to use all Know-How or other
      intellectual property to grant the rights to Medicis under this Agreement
      and shall maintain all regulatory files and Regulatory Approvals for
      Products,

                                       31



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      - neither it nor any Ipsen Affiliate has granted or assigned, and during
      the term of this Agreement neither Ipsen nor any Ipsen Affiliate will
      grant or assign, to any Third Party or Affiliate any rights that will
      conflict with Medicis's rights under this Agreement.

      Ipsen warrants that to the best of Ipsen's reasonable knowledge as on the
      Effective Date:

      - the conception, development, and reduction to practice of the Current
      Product was not a willful misappropriation of any Third Party's or
      Affiliate's trade secrets or other intellectual property,

      - the conception, development, and reduction to practice of the Current
      Product was not a misappropriation of any trade secrets or other
      intellectual property covered by the HPA License,

      - the Know-How necessary for the conception, development and manufacturing
      of the Current Product does not violate or infringe any patent, copyright
      or trademark issued by any country that is a member of the Paris
      Convention for the Protection of Industrial Property.

      - that there is no litigation, claims, disputes or actions pending or
      threatened, and no interference, no nullity actions pending or threatened
      with respect to (i) the Know-How, or adversely affecting the Know-How, or
      (ii) Ipsen's ability to undertake and perform its obligations under this
      Agreement.

14.3  The provisions of this Article 14 shall survive termination or expiration
      of this Agreement for a period of 18 months except when by its terms a
      representation or warranty sets forth a different duration.

14.4  EACH OF THE PARTIES AGREES THAT THE REPRESENTATIONS AND WARRANTIES OF THE
      OTHER PARTY CONTAINED IN THIS AGREEMENT ARE THE EXCLUSIVE REPRESENTATIONS
      AND WARRANTIES MADE BY THE OTHER PARTY IN CONNECTION WITH THIS AGREEMENT
      AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THAT SUCH OTHER
      REPRESENTATIONS AND WARRANTIES ARE IN LIEU OF ALL OTHER REPRESENTATIONS
      AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY
      IMPLIED WARRANTIES OR MERCHANTABILITY, FITNESS OR NON-INFRINGEMENT, ALL OF
      WHICH ARE HEREBY EXPRESSLY EXCLUDED AND DISCLAIMED.

      No employee or agent of either party is authorized to make any
      modification, extension or addition to the representations and warranties
      of such party contained in this Agreement or to modify or expand the
      remedies available in connection with any breach of this Agreement.

      Medicis agrees that it and its Affiliates will not make any representation
      or warranty to the purchaser of any Product manufactured by or on behalf
      of Ipsen pursuant to this Agreement that is more extensive than, or that
      is otherwise inconsistent with, Ipsen's representations and warranties
      contained in this Agreement or in Ipsen's standard terms and conditions
      applicable to the Products.

15.   IPSEN DELIVERY COVENANT

      In the event Ipsen fails to have at least one manufacturing facility for a
Product FDA-inspected and FDA-approved, at the time marketing batches of the
Product are reasonably required by Medicis for distribution in the Field in the
Territory, and except as long as and while such failure is due to a Force
Majeure event or to FDA's failure to inspect the manufacturing facility or to
notify Ipsen of FDA's decision with this respect, Medicis shall have the right
to terminate this Agreement pursuant to Article 19.2(x)

                                       32



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

below and Ipsen shall pay Medicis*** USD (***) in liquidated damages, it being
understood that such payment shall be Medicis's sole and exclusive remedy for
Ipsen's failure under this Article 15.

16.   LIABILITIES - INDEMNIFICATION

16.1  Medicis shall defend, indemnify and hold Ipsen (and its Affiliates and
      their directors, officers, employees and representatives) harmless from
      and against any and all losses, liabilities, claims, damages, suits, costs
      and expenses any of them suffers, including the cost and expense of
      handling, defending and settling claims and suits, if and to the extent
      arising from (a) clinical studies involving the Products including without
      limitation clinical studies to be performed under the Development and
      Regulatory Program and development works under Current Agreements
      conducted by Ipsen on behalf of Medicis and in conformity with Medicis's
      instructions pursuant to Article 3.1, (b) the marketing, promotion,
      advertising, transportation, handling, storage or distribution of Products
      by Medicis, any of its Affiliates or any of their respective
      subcontractors or agents, (c) any defect or alleged defect in labeling of
      the Products, (d) any defect or alleged defect in the design of the
      Products to the extent such design results from the clinical studies
      performed under the Development and Regulatory Program, or (e) the
      material breach by Medicis of its obligations or warranties under this
      Agreement, except in each case for: (i) any such loss, liability, claims,
      damages, costs or expenses to the extent caused by a breach by Ipsen of
      its obligations and warranties under this Agreement, (ii) such claims,
      damages and expenses to the extent caused by the gross negligence or
      willful misconduct of Ipsen, Ipsen's Affiliates or Ipsen's Third Party
      contractors, and (iii) such matters expressly described in Article 16.2 of
      this Agreement with respect to which Ipsen is obligated to defend,
      indemnify and hold Medicis harmless.

      Medicis shall inform Ipsen, promptly upon becoming aware of the same, of
      any claim or action against Medicis or Ipsen for which Medicis is
      obligated to defend, indemnify and hold Ipsen harmless.

16.2  Ipsen shall defend, indemnify and hold Medicis (and its Affiliates and
      their directors, officers, employees and representatives) harmless from
      any and all losses, liabilities, claims, damages, suits, costs and
      expenses any of them suffers, including the cost and expense of handling,
      defending and settling claims and suits, if and to the extent arising from
      any defect or alleged defect or mishandling in the packaging, storage,
      manufacturing, testing or formulation of the Products, or the material
      breach by Ipsen of its obligations or warranties under this Agreement,
      except in each case for: (i) any such loss, liability, claims, damages,
      costs or expenses to the extent caused by a breach by Medicis of its
      obligations and warranties under this Agreement, (ii) such claims, damages
      and expenses to the extent caused by the gross negligence or willful
      misconduct of Medicis, Medicis's Affiliates or Medicis's Third Party
      contractors, and (iii) such matters expressly described in Article 16.1 of
      this Agreement with respect to which Medicis is obligated to defend,
      indemnify and hold Ipsen harmless.

16.3  Medicis shall, during the term of this Agreement and for a period of six
      (6) years thereafter, maintain insurance coverage pursuant to one or more
      insurance policies in form reasonably satisfactory to Ipsen and
      underwritten by financially sound and reputable insurers reasonably
      satisfactory to Ipsen, against errors and omissions, contractual
      liability, product liability relating to the design or labeling of the
      Products, including but not limited to those hazards specified in Article
      16.1., and other hazards specified by Ipsen.

      All such insurance policies shall:

                                       33



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      (i) provide for insurance coverage in an aggregate amount per year of not
      less than USD 10 (ten) million for those matters described in Article 16.1
      and in Article 16.3 first paragraph of this Agreement, arising before the
      Product is first sold by Medicis in the Territory, and not less than USD
      20 (twenty) million for those matters described in Article 16.1 and 16.3
      first paragraph of this Agreement arising after the Product is first sold
      by Medicis in the Territory;

      (ii) include Ipsen as an additional named insured;

      (iii) contain provisions that with respect to Ipsen, the insurance
      policies may be cancelled only for nonpayment of premiums by Medicis after
      not less than thirty (30) days notice of intent to cancel provided to
      Ipsen; and,

      (iv) contain provisions that the insurer will make payment to Ipsen as its
      interests may appear under any such policy notwithstanding any defense
      which such insurer may have against any of the other insureds on such
      policy.

      Medicis will furnish to Ipsen certificates of all such insurance policies:

      - On the Effective Date (and within thirty (30) days of the date of each
      anniversary of the related insurance certificate date), evidencing
      coverage in accordance with this Article 16.3 including but not limited
      to, insurance coverage in an aggregate amount per year of not less than
      USD 10 (ten) million; and,

      - at least sixty (60) days prior to the first Product sale by Medicis in
      the Territory (and within thirty (30) days of the date of each anniversary
      of the related insurance certificate date), evidencing insurance coverage
      in accordance with this Article 16.3 including but not limited to,
      insurance coverage in an aggregate amount per year of not less than USD 20
      (twenty) million.

      All such insurance certificates shall, among others, duly show that the
      hazards referred to in this Article 16.3 are covered and insured, all of
      which in compliance with the terms of this Article 16.3. Medicis shall not
      commence work on any clinical trial with the Product nor achieve the first
      Product sale in the Territory, without Ipsen's prior approval on Medicis's
      related insurance coverage which Ipsen's consent to such policies shall
      not be unreasonably withheld.

      If Medicis is unable to secure or maintain all such insurance policies and
      coverage as provided for herein, Ipsen may terminate this Agreement in
      accordance with and subject to the cure periods under the provisions of
      Article 19.2(ii).

16.4  Ipsen shall, commencing on the sixtieth (60th) day prior to the first
      Product sale by Medicis in the Territory and then during the remainder of
      the term of this Agreement and for a period of six (6) years thereafter,
      maintain insurance coverage in an aggregate amount not less than USD ***,
      pursuant to one or more insurance policies in form reasonably satisfactory
      to Medicis and underwritten by financially sound and reputable insurers
      reasonably satisfactory to Medicis, against errors and omissions,
      contractual liability and products liability relating to the manufacture,
      packaging, handling, storage, testing or formulation of the Products and
      will furnish to Medicis certificates of all such insurance policies which
      shall, among others, duly show that the hazards referred to in this
      Article 16.4 are covered and insured, in compliance with the terms of this
      Article 16.4.

16.5  Except as otherwise provided herein, in connection with any Third Party
      claim for which either party hereto intends to seek indemnification from
      the other party, the party requested to provide indemnification pursuant
      to this Article 16 (the Indemnifying Party) shall have the sole control of

                                       34



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      the defense, litigation or settlement of such claim, including the right
      to intervene as co-defendant in legal proceedings and to conduct the
      defense of any legal action on behalf of the other party, and shall have
      the right to select the legal counsel who shall assist the parties with
      respect to such claim. The Indemnifying Party shall consult with the other
      party on the advancement of the proceedings and keep such other party
      fully informed of all material developments in the proceedings. The
      Indemnifying Party shall be excused from its obligation to defend and hold
      harmless the other party with respect to Third Party claims, should such
      other party:

      (i)   fail to give prompt notice to the Indemnifying Party of any such
            claim and continuing information thereon, which failure materially
            prejudices the defense of such claim; or

      (ii)  obtain release or indemnification from a Third Party from such
            claim, but only to the extent of such other release or
            indemnification.

      The non-indemnifying party shall be entitled to undertake all protective
      measures or actions this party may deem reasonably appropriate in order to
      secure its factual or legal position, or to prevent the situation from
      aggravating; provided that the non-indemnifying party may not settle,
      consent to any judgment or otherwise admit liability in connection with
      any claim without the prior written consent of the Indemnifying Party,
      which consent shall not be unreasonably withheld.

      Notwithstanding the foregoing, if Ipsen determines in good faith that a
      claim or action by a Third Party with respect to which it may be entitled
      to seek indemnification from Medicis pursuant to this Article 16 is
      reasonably likely to have a material adverse effect on any Regulatory
      Approval held by Ipsen outside the Territory or Field, or on Ipsen's
      marketing or distribution of the Products outside the Territory or Field,
      then upon delivering notice of such determination to Medicis (i) Ipsen
      shall be entitled to control the defense of such claim or action
      (including any settlement of such claim or action) with counsel selected
      by Ipsen, (ii) Ipsen shall consult with Medicis on the advancement of the
      proceedings and keep Medicis fully informed of all material developments
      in the proceedings, (iii) Medicis shall be entitled to participate in (but
      not control) the defense of such claim or action at its expense with
      separate counsel of Medicis's choosing and (iv) Ipsen shall be entitled,
      without impairing its rights to indemnification hereunder, to settle or
      compromise such claim or action without the consent of Medicis provided
      that it does so in a commercially reasonable manner and such settlement or
      compromise does not involve any admission of liability or fault of any
      kind on the part of Medicis or its Affiliates.

16.6  Notwithstanding any provision of this Agreement to the contrary, neither
      party shall be entitled in connection with any breach or violation of this
      Agreement to recover from the other party any [(i) punitive, exemplary or
      other special damages or (ii) any indirect, incidental or consequential
      damages, or (iii) damages relating to loss of profit, business opportunity
      or business reputation. Each party, as a material inducement to the other
      party to enter into and perform its obligations under this Agreement,
      hereby expressly waives its right to assert any claim against the other
      party relating to such damages and agrees not to seek to recover such
      damages in connection with any action, suit or proceeding relating to this
      Agreement. The foregoing shall not limit the right of either party to be
      indemnified in accordance with the provisions of this Article 16 with
      respect to all components of any claim, award or judgment against such
      party by any Third Party not affiliated with either party to this
      Agreement or recover direct damages.

16.7  The provisions of this Article 16 shall survive expiration or termination
      of this Agreement..

16.8  EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, THE REMEDIES
      FOR BREACH OF THIS AGREEMENT SET FORTH IN THIS ARTICLE 16 CONSTITUTE THE
      SOLE AND EXCLUSIVE RECOURSE AND REMEDY OF EACH PARTY FOR MONETARY

                                       35



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      DAMAGES WITH RESPECT TO ANY BREACH OF THE OBLIGATIONS OR WARRANTIES OF THE
      OTHER PARTY PROVIDED IN THIS AGREEMENT.

17.   CONFIDENTIALITY

17.1  Medicis shall keep absolutely secret and confidential and shall not use or
      disclose for purposes other than the performance of the present Agreement,
      all confidential or trade secret information communicated to it by Ipsen
      whatever its nature or form, and all information to which Medicis has
      access, or which comes to Medicis' knowledge, whether before or after the
      Effective Date, concerning without limitation the Product, the Know-How,
      the Development and Regulatory Program and results thereof, or Ipsen's
      activities whatever the field and any information related to this
      Agreement.

17.2  Ipsen shall keep absolutely secret and confidential and shall not use or
      disclose for purposes other than the performance of the present Agreement,
      all confidential or trade secret information communicated to it by
      Medicis' whatever its nature or form, and all information to which Ipsen
      has access, or which comes to Ipsen knowledge, whether before or after the
      Effective Date, concerning without limitation the Medicis Customer Base,
      or Medicis's activities whatever the field and any information related to
      this Agreement.

17.3  Without limiting Section 17.2, each party shall give access to the above
      mentioned information only to those of its directors, officers, employees,
      attorneys, agents, auditors, lenders, actual or prospective financing
      sources, distributors, Third Party contractors and Affiliates (hereinafter
      all referred to as Recipients), who have a need to know such confidential
      information, and who have agreed to confidentiality obligations no less
      constraining than those contained herein and each party shall require
      compliance by those Recipients with the confidentiality obligations
      mentioned in this Article 17.

      Medicis undertakes that its distributors and Third Party contractors
      engaged in activities relating to this Agreement, will be bound by and
      respect the confidentiality obligations mentioned in this Article 17.

      Notwithstanding anything contained in this Agreement, Medicis and Ipsen
      shall be free to disclose information regarding this Agreement and the
      transactions contemplated herein as may be necessary to comply with the
      applicable rules of the U.S. Securities Exchange Commission (SEC), the
      French Autorites des Marches Financiers (AMF), and/or any securities
      exchange or quotation system on which its securities may be listed or
      quoted, subject to prior notice to the other party and, whenever
      reasonably feasible, to proceeding to such disclosure under
      confidentiality measures available with the concerned authority or system.
      In case Medicis determines that it must disclose this document pursuant to
      SEC rules in the United States, it shall use commercially reasonable
      efforts to obtain confidential status for the terms and conditions of this
      Agreement to the greatest extent possible under applicable law. Medicis
      shall notify Ipsen of its decision to make such disclosure, shall consult
      with Ipsen on such issue to the extent reasonably practicable and shall
      keep Ipsen fully informed as to the status of Medicis's efforts to
      maintain the confidential character of the terms and conditions hereof. In
      case Ipsen determines that it must disclose this document pursuant to the
      listing rules of the AMF, it shall use commercially reasonable efforts to
      obtain confidential status for the terms and conditions of this Agreement
      to the greatest extent possible under applicable law. Ipsen shall notify
      Medicis of its decision to make such disclosure, shall consult with
      Medicis on such issue to the extent reasonably practicable and shall keep
      Medicis fully informed as to the status of Ipsen's efforts to maintain the
      confidential character of the terms and conditions hereof.

                                       36



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

17.4  Each party shall have no obligation to maintain the confidentiality of any
      specific item of information that is:

      - in the public domain or otherwise available to the public without
      restriction on its use, or,

      - publicly known through no fault of such party or the Affiliates and
      Third Parties identified in Article 17.3 above, or,

      - available to the concerned party without restriction on its use, from a
      person not having a direct or indirect confidential relationship with the
      other party.

17.5  The confidentiality obligations mentioned hereabove shall survive the
      expiration or termination of this Agreement for so long as each item of
      confidential obligation does not meet any of the criteria identified in
      Article 17.4.

18.   PUBLICATION - ANNOUNCEMENT

18.1  Each party or its Affiliates may make public communication or scientific
      publications relating to the existence and subject matter of this
      Agreement, to the Development and Regulatory Program and the results
      thereof, or to their activities under this Agreement, but only provided
      they have both agreed on the draft publication or announcement, which
      agreement shall not be unreasonably withheld by either party.

      Each party shall endeavor to control publications by Third Parties in this
      respect and shall endeavor to insert appropriate wording in its agreements
      with such Third Parties to this effect.

18.2  All publications shall be submitted to the other party at least thirty
      (30) days prior to the intended communication or publication date.

      All publications and communications made by a party or its Affiliates
      shall state each party's collaboration to the Development and Regulatory
      Program unless the concerned party otherwise decides, and shall state the
      origin of the Product in a wording agreeable to Ipsen unless Ipsen decides
      otherwise.

      Unless expressly approved in advance and in writing such approval not to
      be unreasonably withheld, neither party shall make reference to this
      Agreement (including without limitation its financial terms) in any
      publicly available statement.

18.3  Notwithstanding the provisions of this Article 18, neither party may take
      any action including but not limited to disclosing any information to any
      Third Party which will or might jeopardize the ability of either party to
      obtain any patent or other protection which that party is entitled to
      obtain pursuant to this Agreement.

18.4  This Article 18 shall survive termination or expiration of this Agreement
      for a period of ten (10) years).

19.   TERM - TERMINATION

19.1  This Agreement shall come into force as of the Effective Date. Unless
      earlier terminated as expressly permitted herein, the term of this
      Agreement shall expire on 28 September 2019. Ipsen shall use its
      commercially reasonable efforts to negotiate an extension of the duration
      of its ***, beyond 28 September 2019. If and when Ipsen obtains such
      extension, the term of this

                                       37



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      Development and Distribution Agreement will be automatically adjusted to
      the same duration (the Initial Term).

      Recognizing that if the Agreement is not terminated before expiry of the
      Initial Term, Medicis will have made substantial investments in developing
      the Current Product sales in the Territory in the Field, Medicis shall
      have a first right of refusal over Third Parties to renew this Agreement
      after the Initial Term for subsequent additional periods of *** each,
      under the following conditions:

      - Medicis shall notify in writing to Ipsen of its intention to renew this
      Agreement at least one (1) year prior to the expiry of the Initial Term or
      of any subsequent *** period;

      - Ipsen and Medicis shall mutually agree upon and execute any required
      amendment to this Agreement at least six (6) months prior to the expiry of
      the Initial Term or of any subsequent *** period, during which period the
      parties shall negotiate in good faith with respect to any such amendment;

      - Failing execution by both Ipsen and Medicis of the necessary amendment
      to this Agreement within the above delay, Ipsen shall be free to entrust
      any Third Party or Affiliates with the promotion, distribution and sale of
      the Products (including the Current Products) in the Territory in the
      Field or to conduct such activities itself.

19.2  Early Termination by either Party: This Agreement may be terminated prior
      to expiration of the term hereof in accordance with the following:

      (i)   by either party, with immediate effect, if the other party becomes
            insolvent, is declared bankrupt, put into liquidation, whether
            voluntarily or by court decision, is obliged to make an assignment
            of its assets to the benefit of its creditors, or requests the
            appointment of a receiver or is subject to a similar procedure, upon
            written notice with immediate effect;

      (ii)  by either party, if the other party is in breach of any of its
            fundamental obligations hereunder and, where that breach is capable
            of remedy has not cured such breach, within sixty (60) days from the
            receipt of a notice sent to it to that effect by the terminating
            party without further notice; provided that the terminating party is
            not itself in breach of any of its fundamental obligations under
            this Agreement;

      (iii) by either party, immediately upon notice to the other party, if
            force majeure events, as hereinafter defined, prevent either party
            from fulfilling its obligations hereunder during a period of more
            than six (6) consecutive months;

      (iv)  by Medicis, in accordance with Article 3.2.3 above;

      (v)   by Ipsen in accordance with Article 3.2.4 above;

      (vi)  by Medicis, as to the rights and obligations of the parties under
            this Agreement with respect to Canada or Japan, as applicable, in
            accordance with Article 3.3.1 above;

      (vii) by Medicis, as to the rights and obligations of the parties under
            this Agreement with respect to Canada or Japan, as applicable, in
            accordance with Article 3.3.3 above;

      (viii)by Ipsen, as to the rights and obligations of the parties under
            this Agreement with respect to Canada or Japan, as applicable, in
            accordance with Article 3.3.4 above;

                                       38



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

      (ix)  by Ipsen, in accordance with Article 6.1.9 above;

      (x)   by Medicis, in accordance with Article 15 above; and

      (xi)  as to a Product Extension or New Product, by either party,
            immediately upon notice to the other party, if the terminating party
            in good faith reasonably believes, based on objective, demonstrable
            evidence that serious adverse effects not known on the Effective
            Date or at the time Ipsen grants rights to Medicis on any such
            Product Extension or New Product, attributable to the Product are
            likely to occur or have occurred; in such case, the terminating
            party shall provide to the non-terminating party written evidence
            warranting such belief.

19.3    If the relevant government authorities of the Territory suspend,
        withdraw or cancel any of the Products Regulatory Approvals for any
        reason whatsoever, Ipsen and Medicis shall discuss in good faith the
        necessary amendments to the terms and conditions of this Agreement in
        connection with the concerned Product, and Ipsen shall have the right to
        withdraw the countries concerned from the Territory or to terminate this
        Agreement should all Regulatory Approvals be withdrawn, cancelled, or
        suspended and not reinstated within 365 days.

19.4    Any and all amounts outstanding at the date of termination or expiry of
        this Agreement, shall remain due and be paid by Medicis or Ipsen, as
        appropriate, in due time.

19.5    Consequences of termination or expiration:

        This Article 19.5 shall apply in case this Agreement is terminated or
        expires in accordance with its terms.

19.5.1  (i) In the event of early termination or expiry of this Agreement
        Medicis shall (and Medicis shall cause its Affiliates to) forthwith,
        upon Ipsen's request: (a) refrain from developing, using, promoting,
        selling and distributing, directly or indirectly, the Product in the
        Territory, or using any of the Know-How or of the results of the
        Development and Regulatory Program; and (b) perform, on behalf of Ipsen
        and at Ipsen's expense, for a period of six (6) weeks from the date of
        receipt of the termination notice, all on-going studies of the
        Development and Regulatory Program, or subcontract such on-going studies
        of the Development and Regulatory Program, to a Third Party to which
        Ipsen has no reasonable objection, so as to smoothly transfer all such
        commitments to Ipsen during such six (6) week period;

        (ii) In the event of early termination or expiry of this Agreement
        Medicis shall transfer to Ipsen within three (3) months at the latest as
        from the date of termination or expiration of this Agreement: (a) all
        artwork including layout, print pattern, and films, relating to the
        Products promotional material conceived by Medicis for purposes of this
        Agreement; (b) all Products promotional material supplied by Ipsen to
        Medicis; (c) a list of Medicis's (and/or Medicis's distributors' or
        Third Party contractors') Field Customers; and (d) a report on Medicis's
        (and/or Medicis's distributors' or Third Party contractors') sales and
        promotional activities, if such report has not been issued within the
        twelve-month period preceding the date of termination or expiration of
        this Agreement.

19.5.2  Upon the termination or expiration of this Agreement (for reasons other
        than Ipsen's bankruptcy or Ipsen's uncured fundamental breach), Medicis
        hereby grants Ipsen and Ipsen's Affiliates, for a period of ninety (90)
        days a royalty-free right to use and reproduce the Products promotional
        artworks and other promotional items conceived by Medicis for the
        purpose of this Agreement, for the promotion by Ipsen or any Affiliated
        or appointed Third Party, of the Products in the Territory

                                       39

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

         in the Field, provided however that Ipsen shall adapt such artwork so
         as to avoid any reproduction of Medicis's logo or name, as well as to
         avoid any reproduction of the Trademark(s) in the Territory except as
         otherwise permitted in accordance with the Trademark(s) License
         Agreement.

19.5.3   Ipsen and Medicis shall discuss in good faith and agree, within thirty
         (30) days after notice of termination is served by one party to the
         other or within the three (3) months before expiry of this Agreement,
         upon a time table for rapid transfer of the Products physical
         distribution in the Territory from Medicis to Ipsen or any of Ipsen's
         designee (to the exception of the Products promotion which shall be
         governed by the provisions of Article 19.5.5) in order to avoid any
         interruption of the Products distribution in the Territory. Unless this
         Agreement is terminated by Medicis for fundamental breach by Ipsen
         under this Agreement, in which case the following provisions shall be
         at Medicis's option, should Ipsen so requests, Medicis undertakes to
         keep distributing the Products in the Territory during a minimum period
         of six (6) weeks as from the date when this Agreement expires.

19.5.4   In all cases, when Medicis ceases distributing the Products in the
         Territory (whether immediately upon termination of after the
         transitional period referred to in Article 19.5.3), Medicis shall, at
         Ipsen's option, destroy all unsold quantities of Products and provide
         to Ipsen the corresponding certificate of destruction hereof, or return
         any unsold stock to Ipsen or its nominee provided said stock is in good
         saleable condition. Conditions for destruction of the stocks of
         Products shall be defined in the Technical Agreement specified in
         Article 5.14 and shall be binding on Medicis.

         All expenses and costs of such return shall be borne by Ipsen unless
         termination of this Agreement occurs as a result of Medicis being in
         uncured fundamental breach under this Agreement.

         Ipsen shall repurchase all such returned stock of Products at the
         Products sale price from Ipsen to Medicis referred to in Article 5
         above (or as further revised under Article 6.4), plus a *** percent
         (***%) stocking fee, to be paid to Medicis within thirty (30) days
         after invoice for return of unsold Products. Should the Products not be
         in good saleable condition, Medicis shall destroy all such remaining
         stock subject to Ipsen's prior written agreement, and provide to Ipsen
         the corresponding certificate of destruction hereof.

19.5.5   Unless Ipsen waives application of this Article 19.5.5, Medicis shall
         have the option to continue or to cease the promotion of the Products
         in the Territory during the term of the notice of termination (if any).
         Medicis shall inform Ipsen of its decision within two (2) weeks after
         the date of the notice of termination. Should Medicis decide not to
         promote the Products during such term of notice (i) Medicis hereby
         grants Ipsen or Ipsen's designee for the promotion of the Products in
         the Territory, during the term of the notice plus three (3) months, a
         royalty free right to use all Medicis's Products promotional materials,
         even though such materials bear Medicis's name and logo or the
         Trademark(s), and (ii) Medicis shall provide Ipsen with sufficient
         quantities of Products promotional materials to cover the promotion of
         the Products during the aforesaid period.

         This Article 19.5.5 is without prejudice to any further rights which
         Medicis may grant to Ipsen on the Trademark(s) in the Territory under
         the Trademark(s) License Agreement.

19.6     Termination of this Agreement by either Party under this Article 19
         shall not require resort to any court or compliance with any other
         formality than as provided for herein, and shall not prejudice the
         right of either party to recover any damages for breach of the present
         Agreement.

                                       40


CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

20.      MISCELLANEOUS

20.1     Except where otherwise noted, correspondence, notices and payments
         pursuant to this Agreement shall be in writing and shall be sent by
         international overnight courier and by fax, addressed to the following
         attention:

          -       For Ipsen:

         Ipsen Ltd, 190 Bath Road, Slough, Berkshire SL1 3XE, United Kingdom -
         Attention Company Secretary

         Copy to: SCRAS S.A.S., Attention General Counsel, 24 rue Erlanger,
         75016 Paris, France

          -       For Medicis:

         Aesthetica Ltd., Dorchester House, 7 Church Street, Hamilton HM 11,
         Bermuda - Attention President

         Copy to: General Counsel, Medicis Pharmaceutical Corporation, 8125
         North Hayden Road, Scottsdale, Arizona 85258, United States of America

         Or such other address, email or facsimile as a party shall from time to
         time advise at the above address.

         Such correspondence and notice shall be deemed to have been received on
         the earlier of the date of the confirmed transmission of any fax or two
         business days after the date when sent by international overnight
         courier.

20.2     This Agreement will be executed in duplicate originals and may be
         executed in two counterparts, and all of such counterparts taken
         together shall be deemed to constitute one and the same agreement.

20.3     This Agreement, together with the Appendices hereto, sets forth the
         complete and final agreement between Ipsen and Medicis with regard to
         its subject matter and supersedes and terminates all prior agreements,
         arrangement, undertakings, and understandings, arrangements with regard
         to the same or related subject matter between the parties, whether oral
         or in writing, other than the letter signed by the parties of even date
         herewith.

20.4     The waiver by any party of any default under this Agreement or of any
         covenant, agreement or condition contained herein shall not be
         construed to constitute a waiver of any other default or breach whether
         similar or not.

20.5     (a) Subject to Section 20.5(b), neither party shall have the right to
         assign or delegate any of its obligations hereunder to any Third Party
         without the prior written consent of the other, which will not be
         unreasonably withheld or delayed. Notwithstanding the foregoing, in
         connection with a Change-of-Control of either party, the party subject
         to the Change-of-Control transaction may assign this Agreement, and/or
         delegate its obligations hereunder, to the Third Party assuming control
         of such party without the consent of the other party unless the Third
         Party seeking to obtain control is an actual or potential competitor
         whether inside or outside the Territory for the Product, i.e., is
         either marketing or promoting a product having the same active
         ingredient or having a directly competing muscle paralyzing effect, or
         is developing one or more formulations of botulinum toxins for
         aesthetic or other medical applications and/or has announced a plan or
         intention to market such a product whether inside or outside the
         Territory. For purposes of this Agreement, a Change-of-Control means
         (i) the acquisition by any person of a majority of the

                                       41


CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

         voting securities of a party , (ii) a merger, reorganization or other
         business combination in which the stockholders of the party
         beneficially own less than a majority of the voting securities of the
         surviving entity, (iii) the sale, conveyance transfer, lease or other
         disposition of all or substantially all of the assets of a party to a
         non-Affiliate party, or (iv) the sale, conveyance, transfer, lease or
         other disposition of the party's botulinum toxin products business.

         (b) Before giving effect to the prohibitions of Section 20.5(a) and
         before giving effect to Article 13.2, in the event that Medicis or
         Medicis's Affiliate is subject to a Change-of-Control or comes under
         common control with a Third Party that has direct or indirect ownership
         or control of a product that contains botulinum toxin, then within
         ninety (90) days following such event, unless extended by mutual
         consent with Ipsen, (i) Medicis (or, if applicable, Medicis's
         Affiliate) and such Third Party shall seek and complete divestiture of
         such Third Party's product that contains botulinum toxin or (ii) the
         parties and such Third Party shall use commercially reasonable efforts
         to ascertain whether they can, and, if so, negotiate in good faith
         towards a mutually acceptable arrangement whereby they can, in
         compliance with applicable laws, jointly exploit such Third Party's
         product that contains botulinum toxin together with the Product. In the
         event that neither (i) nor (ii) is capable of completion, Ipsen shall
         have the right to terminate this Agreement and Ipsen shall be entitled
         to retain all such consideration and/or milestone payments that shall
         have been paid by Medicis to Ipsen under this Agreement, prior to any
         such termination, it being understood that, in such event, Medicis
         shall not be entitled to any compensation or restitution, whatsoever.

20.6     This Agreement does not constitute an agency, joint venture or
         partnership and does not entitle a party to bind the other or to hold
         itself out as the representative of the other.

20.7     If any provision of this Agreement shall for any reason be held to be
         void, invalid, illegal or unenforceable in any respect, no other
         portion of this Agreement shall be affected thereby; provided however,
         that the parties shall in such case promptly negotiate in good faith
         such adjustments in this Agreement as shall be necessary to make it
         fair and equitable to the parties.

20.8     Each party shall, without further charge, perform all such acts and/or
         execute all such documents (or, where necessary procure the same) as
         are necessary to give full effect to this Agreement.

20.9     Force majeure: Non-performance of a party (other than for the payment
         of money) shall be excused to the extent that performance is rendered
         commercially impracticable by strike, fire, earthquake, flood,
         governmental acts or orders or restrictions, terrorist acts, war,
         failure of suppliers, or any other reason where failure to perform
         could not be reasonably foreseen, is beyond the reasonable control, and
         is not caused by the negligence, intentional conduct or misconduct of
         the non-performing party; provided, however, that the non-performing
         party shall use commercially reasonable efforts to resume performance
         as soon as reasonably practicable.

20.10    This Agreement shall be governed and construed in accordance with the
         laws of the State of New York (United States of America) as if all
         parties and actions occurred within New York, i.e., without the
         application of New York's law regarding choice of external law.

20.11    The parties agree that all disputes arising in connection with or
         related to this Agreement, including failure by the parties to reach
         agreement with respect to the matters described in Article 5.12, 9.1 or
         10.3 (a Dispute), shall be resolved in accordance with this Article
         20.11 and Articles 20.12 and 20.13, as applicable. Failure by the
         parties to reach agreement with respect to matters described in
         Articles 6.1.5 and 6.4 shall be resolved solely in accordance with
         Article 20.12.

                                       42


CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

         Upon the written request of either party, both parties shall appoint a
         designated representative, who shall be a senior executive of such
         party with relevant knowledge and authority with respect to the subject
         matter of the Dispute, whose task it will be to meet for the purpose of
         endeavoring to resolve such Dispute (Level 1 Review). The designated
         representatives, together with any other attendants or secretaries
         appointed by either party, shall meet as often as the parties
         reasonably deem necessary to discuss the Dispute and negotiate in good
         faith in an effort to resolve the Dispute without the necessity of any
         formal proceeding. Any resolutions reached as to any Dispute pursuant
         to the Level 1 Review process shall be binding, final and conclusive on
         the parties.

20.12    In the case of any Dispute arising under Article , 6.1.5, 6.4, 9.1 or
         10.3, if resolution of the Dispute cannot be reached within thirty (30)
         days after the first Level 1 Review meeting when applicable (the Level
         1 Termination Date) or within the time period assigned for discussions
         in Articles 6.1.5 and 6.4, the parties shall refer such Dispute to a
         Third Party expert jointly appointed by the parties. In the case of any
         Dispute arising under Article 6.4, 9.1 or 10.3, the Third Party expert
         appointed by the parties shall be a qualified accounting firm not the
         regular accounting firm of either party. In the case of any Dispute
         arising under Article 5.12, the Third Party expert shall be a
         pharmaceutical industry qualified consulting legal entity or
         individual, with adequate knowledge in the matters covered by such
         Article 5.12. In the case of any Dispute arising under Article 6.1.5,
         the Third Party expert shall be a qualified pharmaceutical industry
         business consulting legal entity or individual with adequate knowledge
         in the matters covered by Article 6.1.5. Should the parties fail to
         agree upon a Third Party expert, either party may request the American
         Arbitration Association to appoint the Third Party expert, which
         appointment shall be made by the American Arbitration Association
         within 15 (fifteen) calendar days at the latest after either party's
         request thereto.

         For purposes of resolving Disputes submitted to the Third Party expert,
         the parties may retain such professionals and experts, and submit such
         documentary evidence or testimony, as they may reasonably require,
         subject to the directions and orders of the Third Party expert and
         subject to compliance with the procedures and limitations specified in
         Articles 6.1.5 and 6.4, which shall govern and control the resolution
         of any Dispute arising under such Articles. Any determinations by the
         Third Party expert shall be binding, final and conclusive on the
         parties. Each of the parties shall bear their own costs and expenses
         and shall share the expert's expenses equally. In his or her
         discretion, the expert may award the prevailing party its reasonable
         fees, costs and other expenses from the other party.

20.13    In the case of any Dispute not subject to Third Party expert resolution
         pursuant to Article 20.12, if resolution of the Dispute cannot be
         reached within thirty (30) days after the Level 1 Termination Date, the
         parties shall submit the Dispute to mediation in accordance with the
         Commercial Mediation Rules of the American Arbitration Association
         (AAA) and shall bear equally the costs of the mediation. The parties
         will act in good faith to jointly appoint a mutually acceptable
         mediator, seeking assistance in such regard from the AAA within thirty
         (30) days after the Level 1 Termination Date. The parties agree to
         participate in good faith in the mediation and negotiations related
         thereto for a period of thirty (30) days commencing with the selection
         of the mediator and any extension of such period as may be mutually
         agreed to by the parties.

         If the parties cannot agree to a mediator within thirty (30) days after
         the Level 1 Termination Date or if the Dispute is not resolved within
         forty-five (45) days after the beginning of the mediation and any
         extension of such periods as mutually agreed to by the parties, the
         Dispute shall be referred to and conclusively resolved by arbitration
         under the Rules of Commercial Arbitration of the AAA, which rules are
         deemed to be incorporated by reference herein.

                                       43


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CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

         The arbitration shall be conducted by a single arbitrator who shall be
         chosen jointly by the parties or, in the event they cannot agree, in
         accordance with the then-applicable AAA rules. The place of arbitration
         shall be in New York, New York, or such other place as the parties may
         agree upon in writing and the arbitration shall be conducted in the
         English language.

         Either party may file any award rendered by the AAA arbitrator, and may
         obtain enforcement of it, in any court of competent jurisdiction.

         Notwithstanding the referral of any Dispute arising out of or in
         connection with this Agreement to mediation or arbitration pursuant to
         this Article 20.13, both parties shall remain free to apply to any
         competent judicial authority for interim, injunctive or conservatory
         relief, provided that the making of any order by the relevant judicial
         authority in this regard shall not in any way prejudice the above
         tribunals' powers to make a determination on the matter referred to
         them in accordance with the Rules of Commercial Arbitration of the AAA.

         Each party acknowledges that monetary damages may not be a sufficient
         remedy for the violation of the non-competition covenants set forth in
         Article 13 of this Agreement or the unauthorized disclosure of
         information in violation of the covenants set forth in Article 17 of
         this Agreement, and that the other party be entitled, without waiving
         any other rights or remedies, to such injunctive and other equitable
         relief (without bond and without the necessity of showing actual
         monetary damages) as may be deemed proper by a court of competent
         jurisdiction.

         If either party employs attorneys to enforce any rights arising out of
         or relating to this Agreement, the prevailing party shall be entitled
         to recover reasonable attorneys' fees.

20.14    Articles 20.10 to 20.14 shall survive termination or expiry of this
         Agreement.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement,
         through their duly appointed and authorized representatives, to be
         executed in duplicate.

                            [Signature Page Follows]

                                       44


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CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

Ipsen Ltd.

/s/ Alistair Stokes
- ----------------------------------------
Name: Alistair Stokes
Title: Chief Executive Officer
Date:  March 17, 2006

                                         Aesthetica, Ltd.

                                         /s/ Mark A. Prygocki, Sr.
                                         ---------------------------------------
                                         Name:  Mark A. Prygocki, Sr.
                                         Title:  President
                                         Date:  March 17, 2006



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

                                   APPENDIX 1

                             IPSEN BIOPHARM LIMITED

                   SPECIFICATIONS FOR DYSPORT FINISHED PRODUCT

***



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

                            APPENDIX 2 - U.S. PROGRAM

       (NON-U.S. PROGRAM TO BE ATTACHED IN ACCORDANCE WITH ARTICLE 3.3.1)

***



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

                                   APPENDIX 4

                        PRODUCT DATA FORWARDED TO MEDICIS

***



                            APPENDIX 5 - TRADEMARK(S)



                                             Serial/Application     Registration
 Trademark       Country         Status           Number               Number
- ----------    -------------    ----------    ------------------     ------------
                                                        
RELOXIN       United States    Registered        78267163              2920018
RELOXIN       Australia        Registered        1031310               1031310
RELOXIN       Hong Kong        Registered        300325449             300325449
RELOXIN       Japan            Registered        2004-107417           4883778
RELOXIN       New Zealand      Registered        721857                721857
RELOXIN       Singapore        Registered        T0420477B             T0420477B
RELOXIN       Argentina        Pending           2,556,368
RELOXIN       Brazil           Pending           826989420
RELOXIN       Canada           Pending           1225120
RELOXIN       China            Pending           4404754
RELOXIN       European         Pending           3550878
              Community
RELOXIN       Mexico           Pending           689658
RELOXIN       Russian          Pending           2004727366
              Federation
RELOXIN       South Korea      Pending           40-2004-53609
RELOXIN       Taiwan           Pending           093054832




                    APPENDIX 6 - MEDICIS DISTRIBUTION SYSTEM

Medicis contracts with McKesson for distribution services.



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

            APPENDIX 7 - LIST OF INITIAL MEMBERS OF REVIEW COMMITTEE

IPSEN's appointed members on the Review Committee :

***

MEDICIS's appointed members on the Review Committee :

***



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

                    APPENDIX 8 - CURRENT PRODUCT SUPPLY PRICE

      For the first *** vials of *** units of botulinum toxin type A activity
      per vial delivered to MEDICIS in any calendar year: USD *** per vial.

      For the next *** vials of *** units of botulinum toxin type A activity per
      vial delivered to MEDICIS in the same calendar year: USD *** per vial.

      For any vial of *** units of botulinum toxin type A activity per vial in
      excess of *** vials of *** units of botulinum toxin type A activity per
      vial delivered to MEDICIS in a same calendar year: USD ** per vial.

      The Current Product supply price is expressed before any valued added tax
      (VAT) or other taxes whatsoever based on the supply price.



CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

                    APPENDIX 12 - LIST OF CURRENT AGREEMENTS

            INAMED CORPORATION RELOXIN-RELATED THIRD PARTY CONTRACTS

***

EX-10.2

                                  EXHIBIT 10.2

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

                   APPENDIX 9 - TRADEMARK(S) LICENSE AGREEMENT

                           TRADEMARK LICENSE AGREEMENT

This Trademark License Agreement (this "Agreement") is made and entered into as
of the 17th day of March, 2006 (the "EFFECTIVE DATE") by and between Aesthetica
Ltd., a Bermuda corporation and subsidiary of Medicis Corporation, a Delaware
corporation ("LICENSOR") and Ipsen Ltd., a company organized and existing under
the laws of England ("LICENSEE").

                                    RECITALS

      1. Licensor is the owner of certain trademarks and applications to
register the trademarks in various jurisdictions ("Licensed Marks," as defined
below), and

      2. Licensee wishes to obtain a license from Licensor to use the Licensed
Marks in connection with the manufacture, promotion, and distribution of
formulations of botulinum toxins as set forth in the parties' Development and
Distribution Agreement (as defined below) and this Agreement, and

      4. Licensor has agreed to license to Licensee the Licensed Marks for such
purposes, subject to certain restrictions and quality control standards set
forth herein.

                                    AGREEMENT

      In consideration of the mutual representations, warranties, covenants and
conditions contained herein, and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:

1.    DEFINITIONS.

      For purposes of this Agreement, the terms defined in this Article shall
have the meanings specified below. All capitalized terms not defined in this
Article shall have the meanings set forth in the parties' Development and
Distribution Agreement whether the Development and Distribution Agreement is in
force, terminated or expired.

      1.1 DEVELOPMENT AND DISTRIBUTION AGREEMENT shall mean the parties'
development and distribution agreement for Licensee's current and future
formulations of botulinum toxins of even date.



      1.2 LICENSED MARKS shall mean the trademarks, service marks, stylized
marks, and logos as listed on Exhibit A attached hereto, as amended by the
parties from time to time, and any and all applications and registrations
related thereto.

      1.3 RESERVED TERRITORY shall mean Canada, Japan, and the United States of
America, including Puerto Rico and including the territories, possessions or
commonwealths of Canada, Japan and the United States as of the date of signature
of the Development and Distribution Agreement.

      1.4 LICENSED TERRITORY shall mean all countries in the world except the
Reserved Territory.

      1.5 EXTENDED LICENSED TERRITORY shall mean both the Licensed Territory and
the Reserved Territory.

      1.6 REDUCED LICENSED TERRITORY shall mean solely those countries of the
Licensed Territory where a Regulatory Approval has been applied for or is issued
using a Licensed Mark, as on the relevant date indicated in this Agreement in
connection with the Reduced Licensed Territory.

      1.7 REGULATORY APPROVAL shall mean all approvals and decisions from the
relevant regulatory authorities in a country (or such supra-national authorities
that may have jurisdiction in such country) necessary to lawfully import,
distribute, promote, and administer to humans, the Product(s).

      1.8 LICENSEE'S NET SALES shall mean the actual amount invoiced by Licensee
or its sub-licensees to a third party other than a sub-licensee, for the sale of
a Product bearing a Licensed Mark for final sale in a country where a Licensed
Mark is registered and enforceable, after deducting the following, to the extent
actually incurred or allowed with respect to such sale: (i) normal and customary
trade, cash and/or quantity discounts, including any volume, formulary or other
positioning discounts paid or credited to the third party; (ii) import, export,
sales, use, excise and other consumption taxes and custom duties or tariffs, to
the extent and up to the amount mentioned in that respect on the invoice, and
any other governmental charges imposed upon the importation, use or sale of a
Product; (iii) actual freight, insurance and other transportation charges; (iv)
compulsory discounts, rebates, or payments (including retroactive price
reductions or statutorily required reimbursement) mandated by, granted,
credited, accrued, or paid for compliance with local, state, provincial or
federal law or regulation; (v) allowances or credits to customers on account of
recalls, rejection or return of Product (including for spoiled, damaged and/or
outmoded goods) in the ordinary course of business; and (vi) the bad debts
actually incurred by Licensee in respect of the resale of the Products, computed
in accordance with accounting regulations in force in the United Kingdom. Net
Sales will not include any Product supplied free of charge as commercial samples
or used free of charge for testing or clinical or marketing studies. Any other
Product sold or otherwise transferred other than in an arm's-length transaction
or in exchange for other property (e.g., barter), and any Bundled Product, shall
be deemed invoiced at the Product market price established by Licensee or its
sub-licensees in its applicable general conditions of sales or failing such
general conditions, at the arm's length price that the Licensee or its
sublicensees would generally or in the average invoice for such Product alone.
In the event discounts or rebates to the gross invoiced or charged price are
given in connection with the sale of goods or services other than the Products,
or for consideration or purposes other than the sale, transfer or delivery of
the Products, the gross sales price invoiced for the concerned Products shall be
deemed to be increased to an amount equal to the concerned Product's market
price or arm's length price as described above.



2.    LICENSE.

      2.1 License Grant. Subject to the terms and conditions of this Agreement,
Licensor hereby grants to Licensee : (A) In the Licensed Territory: a
royalty-free, exclusive, nontransferable (except as provided for in Section 7.1
herein), license to use the Licensed Marks in the Licensed Territory for the
manufacture, registration, promotion and/or distribution of Products under the
Licensed Marks; provided that in case the Development and Distribution Agreement
is terminated due to IPSEN being in breach under the Development and
Distribution Agreement and as from the date the Development and Distribution
Agreement is terminated for said reason, the license granted under this Section
2.1(A) will be limited to the Reduced Licensed Territory as constituted on the
date of termination of the Development and Distribution Agreement, and will be
granted in consideration for payment by Licensee to Licensor of a royalty of
***% (*** percent) of Licensee's Net Sales achieved in the Reduced Licensed
Territory, and,

(B) In the Reserved Territory: in case the Development and Distribution
Agreement is terminated due to MEDICIS being in breach under the Development and
Distribution Agreement and as from the date the Development and Distribution
Agreement is terminated for said reason, an exclusive, nontransferable (except
as provided for in Section 7.1 herein), license to use the Licensed Marks in the
Reserved Territory for the manufacture, registration, promotion and/or
distribution of Products under the Licensed Marks in consideration for payment
by Licensee to Licensor of a royalty of ***% (*** percent) of Licensee's Net
Sales achieved in the Reserved Territory.

      Licensor undertakes to sign any amendment to this Agreement promptly upon
Licensee's request so as to include :

(a) in Exhibit A attached hereto, any trademark added to Appendix 5 of the
Development and Distribution Agreement,

(b) in Exhibit B attached hereto, any Product Extension and/or New Product which
is either included in MEDICIS's scope of appointment under Article 2 of the
Development and Distribution Agreement in accordance with the provisions of
Article 7.1 of the Development and Distribution Agreement, or which is the
subject of an agreement between IPSEN and MEDICIS for its development and/or
distribution in accordance with the provisions of Article 7.2 of the Development
and Distribution Agreement.

Subject to Licensor's prior written approval (which shall not be unreasonably
withheld), Licensee may sublicense the foregoing rights only to sublicensees who
will use the Licensed Marks to manufacture, promote and distribute the Products,
except that Licensee shall be free to grant any sublicenses, without the
necessity of Licensor's prior approval, (i) to Licensee's or Licensee's
Affiliates' third-party licensees or distributors for Licensee's or Licensee's
Affiliates' products in the Licensed Territory, as appointed on the date of
signature of this Agreement, and (ii) to Licensee's Affiliates. Licensee shall
cause any sub-licensees under the Licensed Marks to comply with the terms and
conditions of this Agreement as applicable.

Nothing herein shall be construed as an obligation for Licensee to use the
Licensed Marks in connection with the manufacture, registration, promotion
and/or distribution of the Products in the Licensed Territory (or in the
Extended Licensed Territory or Reduced Licensed Territory as applicable).

For the avoidance of doubt, Licensee is hereby entitled to have any Product
manufactured under the Licensed Marks in any country worldwide as long as it is
intended for registration, promotion and/or distribution thereof under the
Licensed Marks in the Licensed Territory or, as applicable, in



the Extended Licensed Territory or in the Reduced Licensed Territory in
accordance with the provisions of this Agreement.

      2.2 Reservation of Rights. Licensee acknowledges that Licensor is the sole
owner of all right, title and interest in and to the Licensed Marks, and that
Licensee has not acquired, and shall not acquire, any right, title or interest
in or to the Licensed Marks except the right to use such Licensed Marks as
expressly set forth in this Agreement. All rights of Licensor in and to the
Licensed Marks not expressly granted under this Agreement are reserved by
Licensor. Should any right, title or other ownership in the Licensed Marks
become vested in Licensee against Licensor's will, Licensee agrees to assign
should Licensor so requests, and hereby assigns, all such right, title, and
other ownership to Licensor free of additional consideration. Licensee shall
provide and execute all documents reasonably necessary to effectuate and record
such assignment to Licensor.

      Nothing herein shall prohibit Licensor from using the Licensed Marks
within the Reserved Territory except as expressly provided for in Section 2.1 in
case of termination of the Development and Distribution Agreement for Licensor's
breach under the Development and Distribution Agreement.

2.3   Option :

MEDICIS hereby grants IPSEN, during the term of this Agreement :

- - the exclusive option to acquire the Licensed Marks in the Licensed Territory
as provided for in Article 12.3 of the Development and Distribution Agreement,

- - the exclusive option to acquire the Licensed Marks after termination or expiry
of the Development and Distribution Agreement, in the Licensed Territory, or as
applicable according to Section 2.1(A) or (B) of this Agreement, in the Extended
Licensed Territory or in the Reduced Licensed Territory, in accordance with the
following : IPSEN may exercise the option from time to time after termination or
expiry of the Development and Distribution Agreement, to acquire the Licensed
Marks in one or more countries of the Licensed Territory, or as applicable
according to Section 2.1(A) or (B) of this Agreement, the Extended Licensed
Territory or Reduced Licensed Territory, as indicated from time to time by
IPSEN, under reasonable commercial purchase conditions to be negotiated in good
faith between MEDICIS and IPSEN. Should MEDICIS and IPSEN be unable to reach
agreement with respect to such purchase conditions, IPSEN's option shall not be
extinguished and may be exercised for the same and/or other country/ies of the
Licensed Territory (or as applicable according to Section 2.1(A) or (B) of this
Agreement, of the Extended Licensed Territory or Reduced Licensed Territory),
whenever IPSEN deems it appropriate during the term of this Agreement.

      2.4 Registration Rights and Expenses - Maintenance and renewal. Licensor
shall retain the exclusive right to apply for, obtain, and maintain
registrations for the Licensed Marks solely in Licensor's name throughout the
world, provided however that (i) Licensor shall apply for the Licensed Marks
registration solely in those countries of the Licensed Territory (or as
applicable, in those countries of the Extended Licensed Territory or Reduced
Licensed Territory) as Licensee shall indicate from time to time to Licensor,
and (ii) should Licensor fail to apply for or maintain any such registration
within 30 days as from any Licensee's written request thereto (or within shorter
delay in case a Licensed Mark registration or application would expire failing
Licensor's immediate intervention), Licensee shall be entitled to proceed to
such applications or maintenance in the name of Licensor.

Licensor shall bear the costs and expenses for applying for and maintaining any
such registrations in the Reserved Territory until and if Licensee is granted
rights under the Licensed Marks in the Reserved Territory as provided for under
Section 2.1 (B) above, in which last case Licensee shall



bear the related expenses accrued as from the date of termination of the
Development and Registration Agreement. Licensee shall reimburse Licensor for
all evidenced third-party expenses incurred by Licensor in connection with the
application for and maintenance of Licensed Marks registrations in the Licensed
Territory (or as applicable according to Section 2.1(A) only in the Reduced
Licensed Territory).

      Licensee agrees to provide all reasonable assistance and cooperation with
Licensor's preparation and filing of applications, renewals or other
documentation necessary or useful to maintain Licensor's intellectual property
rights in the Licensed Marks in the Licensed Territory or, as applicable
according to Section 2.1(A) or (B), in the Extended Licensed Territory or in the
Reduced Licensed Territory.

2.5 Restrictions. All use of the Licensed Marks as permitted herein shall be
subject to the following restrictions:

      2.5.1 Licensee shall not, and shall ensure that Licensee's Affiliates do
      not, use the Licensed Marks in connection with the manufacture,
      registration, promotion and distribution of products not listed on Exhibit
      B hereto without the prior written approval of Licensor. Any such use
      shall constitute a material breach of this Agreement and is grounds for
      termination pursuant to Section 4.2.

      2.5.2 Licensee shall not, directly, indirectly or otherwise: (i)
      facilitate activities which jeopardize, dilute or otherwise adversely
      affect the Licensed Marks, or (ii) attack, dispute or challenge (nor aid
      or encourage others to do so) Licensor's right, title and interest in and
      to the Licensed Marks, or the validity of the Licensed Marks.

      2.5.3 Licensee shall not create, nor shall it permit third parties to
      create a unitary composite mark involving the Licensed Marks or use the
      Licensed Marks (i) as a portion or in combination with any other
      trademarks, service marks or logos, (ii) as all or part of a corporate
      name, trade name or any other designation used by Licensee to identify its
      products, services or business or (iii) for any other purpose other than
      as expressly permitted herein. Except for Licensor, both during and after
      the term of this Agreement, neither Licensee nor any parent, subsidiary,
      nor any person or entity owned or controlled by Licensee (including any
      sublicensee) or under common ownership or control as Licensee shall use
      any name, trademark, service mark, trade name, trade dress or logo which
      is confusingly similar or identical to any of the Licensed Marks. Nothing
      herein shall prevent Licensee from using or affixing other trademarks to
      the Products simultaneously with the Licensed Mark as long as such usage
      is not inconsistent with the requirements of this Section 2.5.3; provided,
      however that, when appearing simultaneously with the Licensed Marks in no
      event shall any such other trademark be of unreasonably greater prominence
      than the Licensed Marks or obscure the Licensed Marks.

2.6 Notice. In connection with the use of the Licensed Marks, Licensee will for
each page or product surface on which a Licensed Mark is used, mark the use of
the Licensed Marks with the appropriate trademark symbol in accordance with
applicable law (e.g., "(TM)", or "(R)").

2.7 Enforcement.

      Licensee and Licensor shall provide each other written notice promptly as
from becoming aware of the same, of any actual or threatened infringement,
misappropriation or unauthorized use of any Licensed Mark of which Licensee or
Licensor becomes aware in the Licensed Territory, or as applicable, in the
Extended Licensed Territory or in the Reduced Licensed Territory.



      Licensor may at its sole option bring any action for any past, present
and/or future infringement of the Licensed Marks. Licensee shall cooperate and
offer all reasonable assistance in connection with any efforts by Licensor in
the Licensed Territory (or as applicable according to Section 2.1(A) or (B), in
the Extended Licensed Territory or in the Reduced Licensed Territory) to enforce
and/or maintain its rights in the Licensed Marks at Licensor's expense for any
out-of-pocket costs actually incurred by Licensee directly related to such
cooperation. Should Licensee so requests, Licensor shall enable Licensee to
intervene in any such action at Licensee's expenses and benefits. Licensor shall
retain any and all damages and other monies awarded or otherwise paid in
connection with any such action except in case of Licensee's intervention, for
all monies which compensate Licensee's (or Licensee's sub-licensees') damages
suffered as a result of the Licensed Marks infringement, which monies shall be
paid to Licensee.

      If Licensor declines or fails to exercise the option referred to in the
previous paragraph within appropriate time as from Licensor's knowledge of the
past, present and/or future infringement of the Licensed Marks, Licensee may at
its sole expense bring any action for any such infringement in the Licensed
Territory, or as applicable, in the Extended Licensed Territory or in the
Reduced Licensed Territory, in which event Licensee shall retain any and all
damages and other monies awarded or otherwise paid in connection with any such
action.

3. QUALITY CONTROL. All use of the Licensed Marks as permitted herein, shall
comply with the following quality control standards:

      3.1 Guidelines. Use of the Licensed Marks hereunder shall be in accordance
with the provisions of this Agreement, in particular Sections 2.5 and 2.6 and
this Section 3. Licensee shall not reproduce or use the Licensed Marks in any
manner whatsoever other than as expressly authorized by this Agreement.

      3.2 Quality Control. Licensee represents and warrants that to the best of
its reasonable knowledge all use of the Licensed Marks as permitted herein shall
(i) be in accordance with applicable law in the applicable jurisdictions, and
(ii) conform to at least the standards of quality currently prevailing in
Licensee's Products, (iii) not be offensive, disparaging or misleading as to the
origin or quality of the Products, and (iv) be consistent with the general
advertising practices in the industry. Licensor shall be allowed, at its own
expense and upon reasonable advance notice to Licensee, to inspect the Products
bearing the Licensed Marks and related promotional materials or other items
bearing the Licensed Marks being offered in connection with the Products to
ensure they meet the standards specified herein. Licensee shall not engage
directly, indirectly or otherwise, in any practice or other activity that is or
is likely to be detrimental to the goodwill associated with the Licensed Marks
or the goodwill or reputation of the Licensor or its services or products, or
that constitutes a deceptive trade practice or unfair competition or that
violates any applicable fair trade laws, privacy protections or advertising
rules and regulations or that would disparage the Licensed Marks.

      3.3 Oversight Authority: From time to time and upon Licensor's request,
Licensee shall submit to Licensor samples of all Products and other materials
bearing the Licensed Marks, including, without limitation, any advertising,
packaging and other publicly disseminated materials bearing the Licensed Marks.
If Licensor discovers in Licensor's reasonable opinion any use of the Licensed
Marks on any such submission which is not consistent with the provisions of this
Agreement, including association of the Licensed Marks with an activity that
Licensor deems in its reasonable opinion to be outside the scope of the license
granted herein or inconsistent with the quality control standards in Section 3.2
above, Licensor has the right after good faith consultation and discussion with
Licensee on the matter concerned, to deny use or display of the Licensed Marks



in such a manner. If Licensor chooses to allow Licensee to remedy such improper
use or display of the Licensed Marks, and delivers a writing describing in
detail the improper use to Licensee, Licensee shall use its reasonable
commercial efforts to promptly remedy the improper use. If Licensor fails to
provide Licensee with written notice of disapproval within thirty (30) days of
Licensor's receipt of any sample, such sample shall be deemed approved by
Licensor.

4.    TERM AND TERMINATION.

      4.1 Term. The term of this Agreement shall commence on the Effective Date
(as defined in the Development and Distribution Agreement)and shall continue in
full force and effect until terminated pursuant to this Section 4.

      For the avoidance of doubt, termination of the Development and
Distribution Agreement for any reason whatsoever shall not affect the validity
and duration of this Agreement which shall continue in full force and effect
until terminated pursuant to this Section 4 or by mutual agreement between
Licensor and Licensee.

      4.2 Termination for Cause. Either party may terminate this Agreement and
the licenses granted herein (reserving cumulatively all other remedies and
rights under this Agreement and in law and in equity) in the event of a material
breach of this Agreement by the other party, by giving the breaching party
thirty (30) days' written notice thereof; provided, however, that any such
termination shall not be effective (i) if the breach has been cured prior to the
expiration of said thirty (30) days, and (ii) until the non-breaching party
confirms in writing to the other party that this Agreement is terminated under
this Section 4.2.

      4.3 Termination by Licensee: Licensee may terminate this Agreement at any
time with 3 (three) months prior written notice to Licensor.

      4.4 Automatic Termination. This Agreement shall automatically terminate
and all rights shall automatically revert to Licensor if Licensee commences or
becomes the subject of any case or proceeding under the bankruptcy, insolvency
or equivalent laws, or if a court appoints a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) for Licensee or for
any substantial part of Licensee's property, or if Licensee makes and assignment
for the benefit of creditors without Licensor's prior approval, or if Licensee
takes corporate action in furtherance of any of the foregoing.

      4.5 Effect of Termination. Upon termination of this Agreement, all rights
and licenses granted hereunder shall immediately terminate, except that Sections
2.2, 4.5, 5.1, 6, and 7 shall survive. Upon termination of this Agreement,
Licensee shall immediately cease all use and display of the Licensed Marks,
provided that if Licensee is not in breach of this Agreement and is properly
using the Licensed Marks in accordance with Section 3 above, Licensee shall have
a limited right to sell off any Products bearing the Licensed Marks manufactured
prior to the termination of this Agreement for a period of thirty (30) days
following the termination of this Agreement ("Sell-Off Period"), with Licensor's
prior written approval, which shall not be unreasonably withheld. During the
Sell-off Period, Licensee shall be bound by all the provisions of this
Agreement.

5.    INDEMNIFICATION; INSURANCE.

      5.1 Indemnification. Licensee, at its own expense, shall indemnify, hold
harmless and defend Licensor, its affiliates, its successors and assigns, and
its and their directors, officers, employees and agents, against any claim,
demand, cause of action, debt, expense or liability



(including attorney's fees and costs), to the extent that the foregoing (a) is
based on a claim resulting from any products or services offered, provided,
manufactured, marketed, distributed, advertised, promoted or issued by or on
behalf of Licensee in the Licensed Territory, or as applicable according to
Section 2.1(A) or (B), in the Extended Licensed Territory or in the Reduced
Licensed Territory, including without limitation the Products, (b) results from
a breach, or is based on a claim that, if true, would be a breach, of this
Agreement by Licensee, or (c) is based upon use of the Licensed Marks by or on
behalf of Licensee in the Licensed Territory, or as applicable according to
Section 2.1(A) or (B), in the Extended Licensed Territory or in the Reduced
Licensed Territory.

      Licensor, at its own expense, shall indemnify, hold harmless and defend
Licensee, its affiliates, its successors and assigns, and its and their
directors, officers, employees and agents, against any claim, demand, cause of
action, debt, expense or liability (including attorney's fees and costs), to the
extent that the foregoing results from a breach, or is based on a claim that, if
true, would be a breach, of this Agreement by Licensor.

      5.2 Insurance. Licensee shall maintain commercial general liability
policies as from the date of first sale by Licensee (or any of its
sub-licensees) of a Product bearing the Licensed Marks and then during the
remainder of the term of this Agreement, that will cover any and all claims for
which Licensee will provide indemnity as set forth in Section 5.1 above and
shall cause Licensor to be added as an additional named insured on all such
commercial general liability policies maintained by Licensee during the term of
this Agreement.

6.    LIMITATION OF WARRANTY AND LIABILITY.

      6.1 LICENSOR DOES NOT MAKE WARRANTIES OF ANY KIND, WHETHER EXPRESS OR
IMPLIED, RELATED TO OR ARISING OUT OF THE LICENSED MARKS. THE LICENSED MARKS ARE
PROVIDED "AS IS," AND LICENSOR SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT AND TITLE,
AND ALL OTHER WARRANTIES THAT MAY OTHERWISE ARISE FROM COURSE OF DEALING, USAGE
OF TRADE OR CUSTOM.

      6.2 EACH OF THE PARTIES AGREES THAT THE REPRESENTATIONS AND WARRANTIES OF
THE OTHER PARTY CONTAINED IN THIS AGREEMENT ARE THE EXCLUSIVE REPRESENTATIONS
AND WARRANTIES MADE BY THE OTHER PARTY IN CONNECTION WITH THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THAT SUCH OTHER REPRESENTATIONS AND
WARRANTIES ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OR MERCHANTABILITY,
FITNESS OR NON-INFRINGEMENT, ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED AND
DISCLAIMED.

      Neither party shall be entitled in connection with any breach or violation
of this Agreement to recover any punitive, exemplary or other special damages or
any indirect, incidental or consequential damages, including without limitation
damages relating to loss of profit, business opportunity or business reputation.
Each party, as a material inducement to the other party to enter into and
perform its obligations under this Agreement, hereby expressly waives its right
to assert any claim relating to such damages and agrees not to seek to recover
such damages in connection with any action, suit or proceeding relating to this
Agreement. The foregoing shall not limit the right of either party to
indemnification in accordance with Section 5 above, with respect to all



components of any claim, award or judgment against such party by any third party
not an Affiliate with either party to this Agreement.

7.    MISCELLANEOUS.

      7.1 Assignment. Neither party may assign this Agreement and/or any rights
and/or obligations hereunder without the prior written consent of the other
party and any such attempted assignment shall be void, except when such
assignment is to the benefit of an Affiliate of the assignor party in which case
this Agreement may be assigned with prior written notice to the non-assignor
party. This Agreement shall be binding upon the parties' permitted assigns and
successors and references to each party shall include such assigns and
successors.

      Notwithstanding the foregoing, in connection with a Change-of-Control of
either party, the party subject to the Change-of-Control transaction may assign
this Agreement, and/or delegate its obligations hereunder, to the Third Party
assuming control of such party without the consent of the other party, unless
the Third Party seeking to obtain control is an actual or potential competitor
(as defined in Article 20.5 of the Development and Distribution Agreement) for
the Products, whether in the Licensed Territory or in the Reserved Territory.
For purposes of this Agreement, Change-of-Control shall have the meaning set
forth in Article 20.5 of the Development and Distribution Agreement.

      7.2 Injunctive Relief. Each of Licensor and Licensee agree that in the
event of breach or threatened breach by either party of its obligations under
this Agreement, in addition to remedies at law, the non-breaching party shall
have the right to injunctive or other equitable relief to prevent the other
party's violations of its obligations hereunder, and hereby consents to the
entry of temporary restraints, a preliminary injunction, a permanent injunction
and such other equitable relief as the court may deem appropriate.

      7.3 Amendment and Waiver; Interpretation. No modification, course of
conduct, amendment, supplement to, or waiver of this Agreement or any provisions
hereof shall be binding upon the parties unless made in writing and duly signed
by both parties. At no time shall any failure or delay by either party in
enforcing any provisions, exercising any option, or requiring performance of any
provisions, be construed to be a waiver of same. If any of the provisions of
this Agreement are held invalid, illegal or unenforceable, the remaining
provisions shall be unimpaired. Headings are for reference only and shall not
affect the meaning of any of the provisions of this Agreement. For the purposes
of this Agreement, the term "including" means "including but not limited to"
unless otherwise expressly indicated.

      7.4 Independent Contractor Status. Nothing in this Agreement will be
construed as creating a joint venture, partnership or employment relationship
between Licensor and Licensee. Licensor and Licensee are independent
contractors. Neither party will have the right, power or implied authority to
create any obligation or duty on behalf of the other party, unless pursuant to a
separate written agreement between the parties.

      7.5 Notices. Unless otherwise specified in this Agreement, all notices
shall be in writing and delivered personally, mailed, first class mail, postage
prepaid, or delivered by confirmed electronic or digital means, to the addresses
set forth at the beginning of this Agreement and to the attention of the
undersigned. Either party may change the addresses or addressees for notice by
giving notice to the other. All notices shall be deemed received on the date
personally delivered, three (3) days after being placed in the mail as
specified, or when electronic or digital confirmation is received.



      7.6 Force Majeure: Non performance of a party (other than for the payment
of money) shall be excused to the extent that performance is rendered
commercially impracticable by strike, fire, earthquake, flood, governmental acts
or orders or restrictions, terrorist acts, war, failure of suppliers, or any
other reason where failure to perform could not be reasonably foreseen, is
beyond the reasonable control, and is not caused by the negligence, intentional
conduct or misconduct of the non-performing party; provided, however, that the
non-performing party shall use commercially reasonable efforts to resume
performance as soon as reasonably practicable.

      7.7 Counterparts. This Agreement may be executed in counterparts, by
manual or facsimile signature, each of which will be deemed an original and all
of which together will constitute one and the same instrument.

      7.8 This Agreement shall be governed and construed in accordance with the
laws of the State of New York (United States of America), subject however to any
and all statutes, laws and/or regulations in force in the United Kingdom
applicable to the manufacturing, promotion, distribution and sale of the
Products. All disputes between the parties shall be settled in accordance with
the provisions of Articles 20.11 second paragraph and 20.13 of the Development
and Distribution Agreement.

                            [SIGNATURE PAGE FOLLOWS]



IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first set forth above.

AESTHETICA LTD.                       IPSEN LTD.

/s/ Mark A. Prygocki, Sr.             /s/ Alistair Stokes
- -------------------------             -------------------
(Signature)                           (Signature)

- ----------------------------------    -------------------------------------
Mark A. Prygocki, Sr.                 Alistair Stokes

- ----------------------------------    -------------------------------------
President                             Chief Executive Officer



***
EXHIBIT A
LICENSED MARKS

RELOXIN

EXHIBIT B

NEW PRODUCTS AND PRODUCT EXTENSIONS

EX-10.3

                                  EXHIBIT 10.3

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY A TRIPLE ASTERISK
(***). THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION.

                  APPENDIX 11 - TRADEMARK ASSIGNMENT AGREEMENT
                              TRADEMARK ASSIGNMENT

            THIS TRADEMARK ASSIGNMENT is made on this 17th day of March 2006, by
and between Ipsen Ltd., a company organized and existing under the laws of
England, with registered offices located at 190 Bath Road, Slough, Berkshire SL1
3XE, United Kingdom ("Assignor"), and Aesthetica Ltd., a Bermuda corporation, a
wholly owned subsidiary of Medicis Pharmaceutical Corporation, a Delaware
corporation, located at 8125 North Hayden Road, Scottsdale, Arizona 85258,
United States of America ("Assignee").

            WHEREAS, Assignor owns all right, title, and interest in and to the
trademark RELOXIN throughout the world, including all translations and
localizations of the word RELOXIN and including those registrations and
applications for registration listed on the attached Schedule "A", and all
common law rights therein, together with all goodwill associated with said
trademarks and with the portion of the business to which the marks pertain as
required by 15 U.S.C. 1060 (collectively, the "Trademarks"); and

            WHEREAS, in connection with that certain Development and
Distribution Agreement of even date (the "DDA"), and in consideration of the
payments from Assignee to Assignor thereunder, Assignor has agreed to assign,
and Assignee has agreed to acquire, all of Assignor's right, title and interest
in and to the Trademarks, together with all rights, demands, claims, actions, or
causes of action of Assignor for misappropriation, infringement or dilution,
against third parties relating thereto;

            NOW, THEREFORE, Effective as of the Effective Date (as defined in
the DDA) for $*** and other good and valuable consideration, the receipt and
sufficiency of which the Parties hereby acknowledge., Assignor does hereby
assign, sell, transfer and convey to Assignee, the trademark RELOXIN throughout
the world, including those registrations and applications for registration
listed on the attached Schedule "A", in all classes of use (including those
indicated on Schedule "A"), and all common law rights therein, together with all
goodwill associated and with the portion of the business to which the marks
pertain as required by 15 U.S.C. 1060 with said Trademarks.

            Assignor undertakes and agrees to execute, at the expense of the
Assignee, such further assurances as may reasonably be required in order to
permit the Assignee (or its successors and assigns) to hold and enjoy the
Trademarks assigned hereunder and to obtain recording of this Trademark
Assignment. The Parties agree to reiterate their consent to this Agreement by
confirmatory acts or contracts which might be required after the date of
execution of this Agreement to complete the necessary formalities for its
execution, particularly, the filing of the assignments of the Trade Marks and
the Trade Mark Applications at national and international trade mark agencies.



            This Assignment shall be governed by New York substantive law and
may be executed in duplicate originals and may be executed in two counterparts,
and all of such counterparts taken together shall be deemed to constitute one
and the same agreement.



            IN WITNESS WHEREOF, Assignor and Assignee have caused this Trademark
Assignment to be executed by duly authorized officers as of the day and year
first above written.

                          IPSEN LTD.

                          By: /s/ Alistair Stokes
                              -------------------------

                          Name: Alistair Stokes

                          Title: Chief Executive Officer

                          AESTHETICA LTD.

                          By: /s/ Mark A. Prygocki, Sr.
                              -------------------------

                          Name: Mark A. Prygocki, Sr.

                          Title: President



                                  SCHEDULE "A"

                                  TRADE-MARKS



                                             Serial/Application    Registration
 Trademark    Country          Status               Number             Number       Class
- ----------    -------------    ----------    ------------------    -------------    -----
                                                                     
RELOXIN       United States    Registered       78267163            2920018         5
RELOXIN       Australia        Registered       1031310             1031310         5
RELOXIN       Hong Kong        Registered       300325449           300325449       5
RELOXIN       Japan            Registered       2004-107417         4883778         5
RELOXIN       New Zealand      Registered       721857              721857          5
RELOXIN       Singapore        Registered       T0420477B           T0420477B       5
RELOXIN       Argentina        Pending          2,556,368                           5
RELOXIN       Brazil           Pending          826989420                           5
RELOXIN       Canada           Pending          1225120                             NA
RELOXIN       China            Pending          4404754                             5
RELOXIN       European         Pending          3550878                             3,5,44
              Community
RELOXIN       Mexico           Pending          689658                              5
RELOXIN       Russian          Pending          2004727366                          5
              Federation
RELOXIN       South Korea      Pending          40-2004-53609                       5
RELOXIN       Taiwan           Pending          093054832                           5

EX-12

Exhibit 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands)

																Six			Three
																Months			Months
																Ended			Ended
	Fiscal Year Ended June 30,															Dec. 31,			Mar.31,
	2001			2002			2003			2004			2005			2005			2006
EARNINGS:
Income (loss) before income tax expense	$	59,325		$	78,984		$	77,660		$	46,157		$	99,102		$	80,223		$	(86,956	)
Add: Fixed charges		2,801			2,967			14,375			13,161			12,993			6,547			3,241
Earnings as defined	$	62,126		$	81,951		$	92,035		$	59,318		$	112,095		$	86,770		$	(83,715	)
FIXED CHARGES:
Interest expense	$	1,263		$	1,376		$	10,038		$	8,663		$	8,488		$	4,253		$	2,122
Amortization of deferred financing fees		—			—			2,542			2,145			2,152			1,080			536
Interest expense as reported		1,263			1,376			12,580			10,808			10,640			5,333			2,658
Portion of rent expense as interest		1,538			1,591			1,795			2,353			2,353			1,214			583
Fixed charges as defined	$	2,801		$	2,967		$	14,375		$	13,161		$	12,993		$	6,547		$	3,241
Ratio of earnings to fixed charges		22.2	x		27.6	x		6.4	x		4.5	x		8.6	x		13.3	x		(25.8)	x

     For purposes of computing the ratios of earnings to fixed charges, earnings represent pretax income from continuing operations plus fixed charges. Fixed charges represent interest expense and the portion of rents representative of interest related to continuing operations.

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Jonah Shacknai, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Medicis Pharmaceutical Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2006

JONAH SHACKNAI

/s/ JONAH SHACKNAI

(Jonah Shacknai)

Chairman of the Board and

Chief Executive Officer

EX-31.2

Exhibit 31.2

     I, Mark A. Prygocki, Sr., certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Medicis Pharmaceutical Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2006

MARK A. PRYGOCKI, SR.

/s/ MARK A. PRYGOCKI, SR.

(Mark A. Prygocki, Sr.)

Executive Vice President, Chief Financial Officer,

Corporate Secretary and Treasurer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)

     In connection with the quarterly report of Medicis Pharmaceutical Corporation (the “Company”) on Form 10-Q for the quarter ended March 31, 2006, as filed with the Securities and Exchange Commission (the “Report”), Jonah Shacknai, Chief Executive Officer of the Company, and Mark A. Prygocki, Sr., Chief Financial Officer of the Company, respectively, do each hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that to his knowledge:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company.

/s/ JONAH SHACKNAI

Jonah Shacknai

Chairman of the Board and

Chief Executive Officer

May 10, 2006

/s/ MARK A. PRYGOCKI, SR.

Mark A. Prygocki, Sr.

Executive Vice President, Chief Financial Officer,

Corporate Secretary and Treasurer

May 10, 2006

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. This certification will not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Nor will this certification be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.