The U.S. pharmaceutical market generated sales of approximately $260 billion in 2005 and has grown at a compound annual growth rate of approximately 7.5% since 2001, according to IMS.

Large pharmaceutical companies have been consolidating and are focusing on developing and marketing “blockbuster” drugs that have the potential of generating more than $1 billion in annual revenues.

The focus by large pharmaceutical companies on blockbuster products creates opportunities for specialty pharmaceutical companies to compete effectively in smaller but lucrative therapeutic markets.

In June 2001, the Company acquired Estrace Tablets, a branded estrogen therapy product, from Bristol-Myers and in March 2002, it acquired Duricef, a cephalosporin antibiotic, and Moisturel, a skin moisturizing cream, also from Bristol-Myers.

In January 2003, the Company acquired the U.S. sales and marketing rights for Sarafem, a selective serotonin reuptake inhibitor for the treatment of PMDD, which is a severe form of premenstrual syndrome, from Lilly.

In March 2003, the Company acquired the oral contraceptives Loestrin and Estrostep, and in April 2003, it acquired femhrt, an oral estrogen-progestogen therapy, from Pfizer. In March 2004, the Company granted Duramed an exclusive license in the United States and Canada to market, distribute and sell its then-marketed Loestrin and Minestrin oral contraceptive products.

On January 1, 2006 the Compny purchased the rights to exclusively market and sell Dovonex in the United States from Bristol-Myers.

In April 2006, the Company launched Loestrin 24 Fe, an oral contraceptive with a novel patented 24-day dosing regimen. The majority of oral contraceptive products currently used in the United States are based on a regimen of 21 days of active hormonal pills followed by seven days of placebo. By contrast, with Loestrin 24 Fe women take the active pills for 24 consecutive days followed by four days of placebo. In a national survey of women aged 18 - 49 conducted by Harris Interactive, 85% of women who currently use or have ever used a birth control pill felt that having a shorter period would make a positive difference. The clinical data show that at the end of the sixth cycle, women who took Loestrin 24 Fe had periods that averaged 2.7 days, compared to 3.9 days with the traditional 21-day regimen.

In April 2006, the Company launched Taclonex, the first and only dual-action therapy of its kind. Taclonex is a once-a-day topical psoriasis treatment that combines betamethasone dipropionate with calcipotriene, the active ingredient in Dovonex. In clinical trials, 81% of patients using Taclonex achieved a significant reduction in disease severity after only 4 weeks of use as compared to 49% of patients using Dovonex alone and 64% of patients using betamethasone dipropionate alone. Many patients with psoriasis have adopted complicated dosing regimens including daily and intermittent use of multiple products. The once-daily dosing of Taclonex provides an opportunity to enhance patient compliance.

Reported gross profit on product net sales increased $47.8 million or 55.0% in the quarter ended March 31, 2006 compared with the prior year quarter.

Investment in research and development totaled $9.6 million in the quarter compared with $4.9 million in the prior year quarter.

Amortization expense in the quarters ended March 31, 2006 and 2005 was $58.8 million and $61.3 million, respectively.

Net interest expense for the quarter ended March 31, 2006 was $45.1 million, an increase of $16.5 million from $28.6 million in the prior year period.

Net losses were $27.3 million and $368.1 million in the quarters ended March 31, 2006 and 2005, respectively.