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A file photo of a drug dispensary at a Shoppers Drug Mart location in Toronto, Ontario, Canada in Toronto, Feb. 7, 2011.

Deborah Baic/The Globe and Mail/Deborah Baic/The Globe and Mail

Valeant Pharmaceuticals International Inc. reported a third-quarter profit of $40.9-million (U.S.) Thursday as it narrowed its 2011 financial guidance due to a delay in the U.S. launch of a new drug to treat adult seizures.

The company, which was formed by the merger of Toronto-area Biovail and California-based Valeant, said it now expected to launch Potiga in the U.S. and receive a $45-million milestone payment in the first quarter of 2012 instead of the fourth quarter of 2011.

Valeant said it expected cash earnings per share between $2.80 and $2.95 per share, compared with earlier guidance of $2.70 to $3 which included the launch and milestone payment.

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The drug received approval from the U.S. Federal Drug Administration in the summer but, since it's deemed a controlled substance, it also requires approval from the Federal Drug Enforcement Administration.

For the quarter ended Sept. 30, the company said it earned 13 cents per share. That compared with a loss of $207.9-million or $1.27 in the third quarter of 2010.

Adjusted earnings, using the company's own measures of profitability, were $212.1-million or 66 cents per share in the third quarter of 2011 up from $72.6-million or 42 cents per share in the year-earlier period.

Some of Valeant's other products have been doing better than expected, which helped move up the bottom end of its guidance range.

"Our operations delivered strong double-digit organic revenue growth in the third quarter and we remain on track to deliver eight per cent plus pro forma organic growth for the year," chairman and chief executive Michael Pearson said.

"We are especially pleased with the performance of our U.S. dermatology division, which is outpacing our expectations, as well as both of our branded generic divisions that continue to outperform their respective markets."

Valeant's third-quarter revenue jumped to $600.6-million from $208.3-million last year, which included only the former Biovail sales before the merger.

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The company also announced Thursday that its board has authorized repurchases of up to $1.5-billion of its outstanding debt and equity securities, beginning Nov. 8.

Valeant said it initially plans to buy up to 15.4 million common shares through the New York Stock Exchange, or about five per cent of its outstanding common stock, and may also make purchases on the Toronto Stock Exchange.

Based on Valeant's stock price at midday Thursday on the NYSE, 15.4 million shares would be worth nearly $658.8-billion. However, the company said it will pay market prices and isn't obliged to buy back the stock.

In the year since its previous buyback program began Nov. 8, 2010, Valeant spent $634.2-million to buy nearly 16 million shares and $872.7-million to redeem some of its convertible debt.

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