Valeant Pharmaceuticals and Metabasis Therapeutics License Rights to Hepatitis B Compound Pradefovir to Schering-Plough Corporation.

COSTA MESA, Calif. & SAN DIEGO -- Valeant Pharmaceuticals International (NYSE:VRX) and Metabasis Therapeutics, Inc. (Nasdaq:MBRX) today announced the signing of definitive agreements for the assignment and license of development and commercial rights to pradefovir to Schering-Plough Corporation (NYSE:SGP). The transaction is expected to close in the first quarter of 2007 subject to expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the satisfaction of other customary closing conditions. Valeant licensed pradefovir from Metabasis in 2000 and has been conducting clinical trials to evaluate the safety and efficacy of pradefovir for the treatment of compensated chronic hepatitis B. Pradefovir is a pro-drug of PMEA, an antiviral compound that uses Metabasis' HepDirect[R] technology to enable higher concentrations of the drug in the liver, the primary site of replication for the hepatitis B virus (HBV) and lower concentrations elsewhere.

Under the terms of the agreements, Schering-Plough will make an upfront payment of $19.2 million to Valeant and $1.8 million to Metabasis and will pay up to an additional $90 million in aggregate fees upon the achievement of certain development and regulatory milestones to Valeant and Metabasis. Approximately $65 million of the additional fees would be paid to Valeant and $25 million to Metabasis. The amount to be paid to Metabasis includes the remaining $16 million in milestone payments that could have been realized under the previous agreement between Metabasis and Valeant. Schering-Plough will also pay royalties to Valeant and Metabasis in the event pradefovir is commercialized.

Timothy C. Tyson, Valeant's president and chief executive officer, said, "We are very pleased to license pradefovir to Schering-Plough, a partner with a global reach and commitment to developing medicines for treating life-threatening diseases like hepatitis B. Our development program for pradefovir has produced encouraging results. The compound's Phase 2 results showed significant reductions in viral load, which if confirmed in Phase 3 trials, could demonstrate a potential advantage over current therapies."

Dr. Paul Laikind, Metabasis' president and chief executive officer, said, "Based on the clinical results to date, we believe pradefovir's profile could make it best-in-class should it be approved. The agreements announced today with Schering-Plough, a company with a strong commitment to providing innovative treatments for hepatitis, further validate this product candidate's potential. Like our colleagues at Valeant, we are very pleased with the fact that pradefovir is moving to a team that can complete development and maximize the commercial potential of the product."

About Hepatitis B

Hepatitis B is a potentially fatal disease that can lead to complications such as cirrhosis and primary liver cancer. Approximately 2 billion people worldwide are estimated to have hepatitis B, with 350-400 million people estimated to be chronically infected. According to a recent study, the HBV market currently represents more than $1 billion in annual sales, and is expected to grow to over $2.8 billion by 2012.

Pradefovir is an investigational compound that has not been found by the Food and Drug Administration (FDA) or any other regulatory agency to be safe or effective in the diagnosis, mitigation, treatment or cure of any disease or illness. It may not be sold or promoted in the United States unless and until the FDA has approved its New Drug Application. Similar restrictions apply in other countries.

About Valeant

Valeant Pharmaceuticals International (NYSE:VRX) is a global specialty pharmaceutical company that develops, manufactures and markets a broad range of pharmaceutical products primarily in the areas of neurology, infectious disease and dermatology. More information about Valeant can be found at www.valeant.com.

About Metabasis (www.mbasis.com):

Metabasis Therapeutics is a biopharmaceutical company focused on the discovery, development and commercialization of novel drugs to address some of the world's most widespread and costly chronic diseases. The Company has established a pipeline that includes clinical stage and preclinical product candidates targeting major diseases with significant unmet medical needs. Targeted diseases include metabolic diseases such as diabetes, hyperlipidemia and obesity as well as liver diseases such as hepatitis and primary liver cancer. Metabasis has developed several proprietary technologies for use in discovering and optimizing drugs, including the NuMimetic(TM) and HepDirect(R) technologies. Metabasis is continuing to identify and develop new product candidates using its proprietary technologies and expertise.

Forward-looking Statement 

This press release contains forward-looking statements, including, but not limited to, statements regarding the expected closing of the assignment and license to Schering-Plough as well and the anticipated benefits and potentially successful development of pradefovir. These statements are based upon the current expectations and beliefs of management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to, the risk that the assignment and license will not close as currently anticipated, as well as risks and uncertainties relating to the future development of pradefovir, dependence on Schering-Plough relating to the development and regulatory approval of pradefovir, approval of pradefovir by the FDA and other similar governmental authorities outside the United States, and the receipt of milestone and other payments under the pradefovir license agreement, and other cautionary statements discussed in the companies' filings with the U.S. Securities and Exchange Commission. Valeant and Metabasis wish to caution the reader that these factors are among the factors that could cause actual results to differ materially from the expectations described in the forward-looking statements. Valeant and Metabasis also caution the reader that undue reliance should not be placed on any of the forward-looking statements, which speak only as of the date of this release. The companies undertake no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this release or to reflect actual outcomes.