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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0%">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>3.</b>  <b>Acquisitions and Acquisition-Related Costs</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 2%"><b><i>Aton Acquisition</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">On May 26, 2010, we acquired all of the outstanding stock of privately-held Princeton Pharma
Holdings LLC, and its wholly owned operating subsidiary, Aton Pharma, Inc. (collectively, “Aton”),
a U.S.-based specialty pharmaceutical company, which is focused on ophthalmology and certain orphan
drug indications. The purchase price consisted of $317.5 million in cash, net of cash acquired,
subject to certain closing adjustments, and contingent consideration with an aggregate fair value
at acquisition of $27.1 million. The contingent consideration consists of
future milestones predominantly based upon the achievement of approval and commercial targets
for certain pipeline products in development. The range of the undiscounted amounts we could be
obligated to pay as
contingent consideration ranges from $0 to $390.0 million. The fair value of
the contingent consideration was determined based on probability-weighted payments adjusted by a
probability of success (“POS”) factor corresponding to the POS factor for the respective pipeline
product, then discounted using a 4% discount rate. Each reporting period, we will estimate changes
in the fair value of the contingent consideration and any change in fair value will be recognized
in our consolidated statement of operations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">We accounted for the acquisition as a business combination. The purchase price was
provisionally allocated to tangible and intangible assets acquired and liabilities assumed based
upon their estimated fair value as of the date of acquisition. The allocation of intangible assets
and certain liabilities is provisional pending finalization of
the valuation of intangible assets and
certain contingent liabilities. The
excess of the purchase price over the estimated fair value of net assets acquired was allocated to
goodwill totaling $111.3 million, which is not deductible for
tax purposes, representing primarily the value of synergies expected
from the transaction. The following
table summarizes the estimated fair value of the net assets acquired:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accounts receivable
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">11,819</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Inventories
</div></td>
<td> </td>
<td> </td>
<td align="right">16,481</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other current assets
</div></td>
<td> </td>
<td> </td>
<td align="right">9,078</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Long-term assets
</div></td>
<td> </td>
<td> </td>
<td align="right">8,892</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Identifiable intangible assets:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Developed technologies (13.3-year weighted-average useful life)
</div></td>
<td> </td>
<td> </td>
<td align="right">341,300</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Tradenames (5-year useful life)
</div></td>
<td> </td>
<td> </td>
<td align="right">6,900</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Acquired in-process research and development
</div></td>
<td> </td>
<td> </td>
<td align="right">9,700</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Goodwill
</div></td>
<td> </td>
<td> </td>
<td align="right">111,328</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Current liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(28,234</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Long-term liabilities, primarily deferred taxes
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(142,632</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net assets acquired
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">344,632</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">The acquired in-process research and development (“IPR&D”) represents the fair value assigned
to incomplete research projects, which at the time of the acquisition, had not reached
technological feasibility. The amounts are accounted for as indefinite-lived intangible assets,
subject to impairment testing until completion or abandonment of the projects. Upon successful
completion of each project, we will make a determination as to the useful life of the asset and
begin amortization.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 2%"><b><i>VitalScience Acquisition</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">On May 19, 2010, we acquired all of the outstanding stock of VitalScience Corp.
(“VitalScience”), a privately-held over the counter (“OTC”) dermatology company located in Canada,
for a purchase price of approximately $9.9 million in cash, net of cash acquired. VitalScience is a
retail cosmeceuticals business, which includes the contract manufacture, distribution, sale,
research and development of skin care, body care and related specialty cosmetics products primarily
in Canada.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">We accounted for the acquisition as a business combination. The purchase price was
provisionally allocated to tangible and intangible assets acquired and liabilities assumed based
upon their estimated fair value as of the date of acquisition. The allocation of intangible assets,
consisting primarily of trade names and customer relationships each with useful lives of 10 years,
and certain liabilities is provisional pending finalization of the valuation of these items. Any
excess of the purchase price over the estimated fair value of net assets acquired will be allocated
to goodwill upon finalization of the valuation of intangible assets. The following table summarizes
the estimated fair value of the net assets acquired:
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0%">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div style="margin-top: 18pt; font-size: 1pt"> 
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom" style="font-size: 1pt">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Current assets
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,740</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Long-term assets
</div></td>
<td> </td>
<td> </td>
<td align="right">523</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Identifiable intangible assets
</div></td>
<td> </td>
<td> </td>
<td align="right">9,902</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Goodwill
</div></td>
<td> </td>
<td> </td>
<td align="right">2,970</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Current and long-term liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,250</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net assets acquired
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">9,885</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 2%"><b><i>Brazil Acquisitions</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">On April 20, 2010, we acquired all of the outstanding stock of a privately-held pharmaceutical
company located in Brazil for a purchase price of approximately $55.0 million in cash, net of cash
acquired. The company primarily focuses on branded generics and OTC dermatological products.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">On April 7, 2010, we acquired all of the outstanding stock of Instituto Terapeutico Delta Ltda
(“Delta”), a privately-held company located in Brazil, and additionally acquired a manufacturing
facility in Brazil for aggregate cash consideration of approximately $55.8 million, net of cash
acquired. Delta is a dermatology company whose product portfolio is primarily branded generics and
OTC products.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">The purchase price for each of the acquisitions is subject to certain closing adjustments. We
accounted for the acquisitions as business combinations. The purchase price was provisionally
allocated to tangible and intangible assets acquired and liabilities assumed based upon their
estimated fair value as of the date of acquisition. The allocation of intangible assets and certain
liabilities is provisional pending finalization of certain contingent liabilities. Amortizing
intangible assets aggregating $20.6 million, consist primarily of trade names with a
weighted-average amortization period of 14.4 years and customer relationships with an amortization
period of 10 years. The excess of the purchase price over the estimated fair value of net assets
acquired was allocated to goodwill totaling $54.9 million, which is not deductible for tax
purposes. The following table summarizes the aggregate estimated fair value of the net assets
acquired:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Current assets
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">22,682</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Property, plant and equipment
</div></td>
<td> </td>
<td> </td>
<td align="right">39,116</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other long-term assets
</div></td>
<td> </td>
<td> </td>
<td align="right">316</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Identifiable intangible assets
</div></td>
<td> </td>
<td> </td>
<td align="right">20,631</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Goodwill
</div></td>
<td> </td>
<td> </td>
<td align="right">54,888</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Current liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(18,476</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Long-term liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,363</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net assets acquired
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">110,794</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 2%"><b><i>Pro forma Results of Operations</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">The results of operations for each of the acquisitions discussed above are included in the
consolidated statements of operations from their respective acquisition dates. We do not consider
the historical results of operations of VitalScience or our Brazil acquisitions to be material to
our historical consolidated results of operations, either individually or in the aggregate.
Accordingly, the supplemental pro forma information presented below does not include any
adjustments related to these acquisitions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">Aton contributed revenues of $9.9 million and net income of $1.9 million in the six months
ended June 30, 2010. The following pro forma results of operations for the six months ended June
30, 2010 assume the Aton acquisition had occurred on January 1, 2010, and for the six months ended
June 30, 2009 assume the Aton acquisition had occurred on January 1, 2009. The pro forma results of
operations reflect the application of the following adjustments:
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="8%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Additional amortization expense that would have been recognized assuming fair value
adjustments to intangible assets;
</td>
</tr>
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0%">
<div style="margin-top: 0pt">
</div>
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div style="margin-top: 0pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="8%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Additional interest expense and financing costs that would have been incurred on
borrowing arrangements and loss of interest income on cash and short-term investments
used to fund the acquisition;</td>
</tr>
</table>
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="8%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Elimination of $1.1 million incurred in the six months ended June 30, 2010, related
to the fair value adjustment to acquisition-date inventory that has been sold, which is
considered non-recurring. There is no long-term continuing impact of the fair value
adjustments to acquisition-date inventory, and, as such, the impact of those adjustments
is not reflected in the pro forma operating results; and</td>
</tr>
</table>
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="8%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Elimination of transaction and integration costs totaling $3.2 million associated
with the acquisition, which do not have a continuing impact on the consolidated
operating results.</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">In addition, all of the above adjustments were adjusted for the applicable income tax impact.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six months ended June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Revenues
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">517,839</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">394,956</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income attributable to Valeant
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">64,117</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">57,932</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Basic net income per share attributable to Valeant
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.82</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.70</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Diluted net income per share attributable to Valeant
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.78</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.69</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">The pro forma information is not necessarily indicative of the actual results that would have
been achieved had the Aton acquisition occurred on the dates indicated, or the results that may be
achieved in the future.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 2%"><b><i>Acquisition-related costs</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">In the three and six months ended June 30, 2010, we incurred the following acquisition-related
costs:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Six Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>June 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>June 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Transaction costs
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">8,660</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">909</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,208</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">909</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Integration costs and other
</div></td>
<td> </td>
<td> </td>
<td align="right">1,996</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,374</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total acquisition-related costs
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">10,656</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">909</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,582</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">909</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">Transaction costs include legal, accounting and other costs directly related to our business
acquisitions. Integration costs and other primarily consist of severance for employees related to
acquired businesses, professional fees related to financial processes and information systems and
other integration activities and transitional expenses. These expenses are included in
restructuring and acquisition-related costs in the statements of operations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">Transaction costs in the three and six months ended June 30, 2010 include $4.8 million related
to our pending merger with Biovail Corporation (“Biovail”) (see Note 20). Certain transaction costs
are contingent upon successful completion of the merger. Additional contingent fees will be accrued
upon the successful completion of the merger.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 2%"><b><i>Asset Purchase in Poland</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; text-indent: 4%">On April 19, 2010, we completed the acquisition of rights to certain dermatology products in
Poland for a purchase price of approximately $17.9 million. We accounted for the acquisition as a
purchase of assets. A portion ($4.2 million) of the purchase price was paid upon signing of the
agreement in the fourth quarter of 2009 with the remaining balance payable at the closing. The
weighted-average useful life of the product rights was determined to be approximately 10 years.
</div>
</div>
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<!-- Begin Block Tagged Notefalsefalsefalseus-types:textBlockItemTypetextblockDescription of a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. This element may be used as a single block of text to encapsulate the entire disclosure (including data and tables) regarding business combinations, including leverage buyout transactions (as applicable).Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141
-Paragraph 51, 52
Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Emerging Issues Task Force (EITF)
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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