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o		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended           .
or
þ		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from July 1, 2005 to December 31, 2005

Delaware		52-1574808
(State of other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
8125 North Hayden Road, Scottsdale, Arizona (Address of principal executive office)		85258-2463 (Zip Code)

New York Stock Exchange		Preference Share Purchase Rights
(Name of each exchange on which registered)		(Title of each Class)

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PART I
	Item 1. Business
	Item 1A. Risk Factors
	Item 1B. Unresolved Staff Comments
	Item 2. Properties
	Item 3. Legal Proceedings
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
	Item 6. Selected Financial Data
	Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 7A. Quantitative and Qualitative Disclosure About Market Risk
	Item 8. Financial Statements and Supplementary Data
	Item 9. Changes in and Disagreements with Accountants and Financial Disclosure
	Item 9A. Controls and Procedures
	Item 9B. Other Information
PART III
	Item 10. Directors and Executive Officers of the Registrant
	Item 11. Executive Compensation
	Item 12. Security Ownership of Certain Beneficial Owners and Management
	Item 13. Certain Relationships and Related Transactions
	Item 14. Principal Accountant Fees and Services
PART IV
	Item 15. Exhibits, Financial Statement Schedules
SIGNATURES
MEDICIS PHARMACEUTICAL CORPORATION INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
	Report of Independent Registered Public Accounting Firm
		CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
CONSOLIDATED STATEMENTS OF CASH FLOWS
MEDICIS PHARMACEUTICAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
EX-10.40
EX-10.41
EX-12
EX-21.1
EX-23.1
Ex-31.1
EX-31.2
EX-32.1
EX-32.2

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Brand		Treatment		U.S. Market Impact
DYNACIN®		Oral adjunctive treatment for severe acne		The number one branded minocycline product in the U.S., DYNACIN® tablets and capsules are available in a range of strengths
LOPROX®		Topical treatment for certain fungal and yeast infections in adults		A leading antifungal agent, including the number one branded shampoo for seborrheic dermatitis
OMNICEF®		A patented oral cephalosporin for skin and skin-structure infections		Superior kill rate compared to most frequently prescribed antibiotic for this indication
PLEXION®		Topical treatments for acne vulgaris, acne rosacea and seborrheic dermatitis		Includes the leading branded prescription cleanser indicated for the treatment of rosacea, and the first prescription cleansing cloth for the treatment of acne and rosacea
RESTYLANE®		Injectable gel for treatment of severe facial wrinkles and folds, such as nasolabial folds		Launched on January 6, 2004, following approval by the Food and Drug Administration (“FDA”) on December 12, 2003, is the leading worldwide injectible dermal filler
TRIAZ®		Topical patented gel and cleanser and patent-pending pad treatments for acne		The leading branded prescription benzoyl peroxide product
VANOS tm		Super-high potency topical corticosteroid for the treatment of plaque-type psoriasis in adult patients affecting up to 10% body surface area		Launched on April 19, 2005 following FDA approval on February 11, 2005

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						Comparable
						Six-Month
		Transition				Period in				Fiscal				Fiscal				Fiscal
		Period				2004				2005				2004				2003
McKesson			54.9	%			50.8	%			51.2	%			36.9	%			20.2	%
Cardinal			18.9	%			19.7	%			21.8	%			23.8	%			25.4	%
Quality King			*				*				*				*				17.0	%
AmerisourceBergen			*				*				*				*				15.5	%

*	less than 10%

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Item 1A.	Risk Factors

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	We derive a majority of our sales from our core products, and any factor adversely affecting sales of these products would harm our business, financial condition and results of operations

	•	manufacturing or supply interruptions;
	•	the development of new competitive pharmaceuticals and technological advances to treat the conditions addressed by our core products, including the introduction of new products into the marketplace;
	•	marketing or pricing actions by one or more of our competitors;

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	•	regulatory action by the FDA and other government regulatory agencies;
	•	changes in the prescribing or procedural practices of dermatologists, plastic surgeons and/or podiatrists;
	•	changes in the reimbursement or substitution policies of third-party payors or retail pharmacies;
	•	product liability claims;
	•	the outcome of disputes relating to trademarks, patents, license agreements and other rights;
	•	changes in state and federal law that adversely affect our ability to market our products to dermatologists, plastic surgeons and/or podiatrists; and
	•	restrictions on travel affecting the ability of our sales force to market to prescribing physicians and plastic surgeons in person.

	Our operating results and financial condition may fluctuate

	•	development of new competitive products by others;
	•	the timing and receipt of FDA approvals;
	•	changes in the amount we spend to develop, acquire or license new products, technologies or businesses;
	•	untimely contingent research and development payments under our third-party product development agreements;
	•	changes in the amount we spend to promote our products;
	•	delays between our expenditures to acquire new products, technologies or businesses and the generation of revenues from those acquired products, technologies or businesses;
	•	changes in treatment practices of physicians that currently prescribe our products;
	•	changes in reimbursement policies of health plans and other similar health insurers, including changes that affect newly developed or newly acquired products;
	•	increases in the cost of raw materials used to manufacture our products;
	•	manufacturing and supply interruptions, including failure to comply with manufacturing specifications;
	•	changes in prescription levels and the effect of economic changes in hurricane and other natural disaster-affected areas;
	•	the impact on our employees, customers, patients, manufacturers, suppliers, vendors, and other companies we do business with and the resulting impact on the results of operations associated with the possible mutation of the avian form of influenza from birds or other animal species to humans, current human morbidity, and mortality levels persist following such potential mutation;
	•	the mix of products that we sell during any time period;

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	•	lower than expected demand for our products;
	•	our responses to price competition;
	•	expenditures as a result of legal actions;
	•	market acceptance of our products;
	•	the impairment and write-down of goodwill or other intangible assets;
	•	implementation of new or revised accounting or tax rules or policies;
	•	disposition of core products, technologies and other rights;
	•	termination or expiration of, or the outcome of disputes relating to, trademarks, patents, license agreements and other rights;
	•	increases in insurance rates for existing products and the cost of insurance for new products;
	•	general economic and industry conditions, including changes in interest rates affecting returns on cash balances and investments that affect customer demand;
	•	seasonality of demand for our products;
	•	our level of research and development activities;
	•	new accounting standards and/or changes to existing accounting standards that would have a material effect on our consolidated financial position, results of operations or cash flows;
	•	costs and outcomes of any tax audits or any litigation involving intellectual property, customers or other issues; and
	•	timing of revenue recognition related to licensing agreements and/or strategic collaborations.

	We will be unable to meet our anticipated development and commercialization timelines if clinical trials for our products are unsuccessful or delayed

	•	lack of efficacy during the clinical trials;
	•	unforeseen safety issues;
	•	slower than expected patient recruitment;
	•	government or regulatory delays; and
	•	unanticipated requests from the FDA for new or additional information.

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	If we are unable to secure and protect our intellectual property and proprietary rights, or if our intellectual property rights are found to infringe upon the intellectual property rights of other parties, our business could suffer

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	If Q-Med is unable to protect its intellectual property and proprietary rights with respect to our dermal aesthetic enhancement products, our business could suffer

	We may not be able to collect all scheduled license payments from BioMarin

	We depend upon our key personnel and our ability to attract, train, and retain employees

	Our continued growth depends upon our ability to develop new products

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	We may acquire companies in the future and these acquisitions could disrupt our business

	We may not be able to identify and acquire products, technologies and businesses on acceptable terms, if at all, which may constrain our growth

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	Our success depends on our ability to manage our growth

	We depend on licenses from others, and any loss of such licenses could harm our business, market share and profitability

	We depend on a limited number of customers, and if we lose any of them, our business could be harmed

	The consolidation of drug wholesalers could increase competition and pricing pressures throughout the pharmaceutical industry

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	We rely on others to manufacture our products

	Our reliance on third-party manufacturers and suppliers can be disruptive to our inventory supply

	We could experience difficulties in obtaining supplies of RESTYLANE®, PERLANETM, RESTYLANE FINE LINESTM and SubQTM

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	Supply interruptions may disrupt our inventory levels and the availability of our products

	•	timing, scheduling and prioritization of production by our contract manufacturers;
	•	labor interruptions;
	•	changes in our sources for manufacturing;
	•	the timing and delivery of domestic and international shipments;
	•	our failure to locate and obtain replacement manufacturers as needed on a timely basis;
	•	conditions affecting the cost and availability of raw materials; and
	•	hurricanes and other natural disasters.

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	Fluctuations in demand for our products create inventory maintenance uncertainties

	We selectively outsource certain non-sales and non-marketing services, and cannot assure you that we will be able to obtain adequate supplies of such services on acceptable terms

	Importation of products from Canada and other countries into the United States may lower the prices we receive for our products

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	If we become subject to product liability claims, our earnings and financial condition could suffer

	Rising insurance costs could negatively impact profitability

	If we suffer negative publicity concerning the safety of our products, our sales may be harmed and we may be forced to withdraw products

	RESTYLANE® is a consumer product and as such, it is susceptible to changes in popular trends and applicable laws, which could adversely affect sales or product margins of RESTYLANE®

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	We may not be able to repurchase the Old Notes and New Notes when required

	Our publicly-filed reports are reviewed by the Securities and Exchange Commission (the “SEC”) from time to time and any significant changes required as a result of any such review may result in material liability to us, and have a material adverse impact on the trading price of our common stock

	The growth of managed care organizations, other third-party reimbursement policies, state regulatory agencies and retailer fulfillment policies may harm our pricing, which may reduce our market share and margins

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	We are subject to extensive governmental regulation

	•	fines;
	•	changes to advertising;
	•	suspensions of regulatory approvals of products;
	•	product recalls;
	•	delays in product distribution, marketing and sale; and
	•	civil or criminal sanctions.

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	If we market products in a manner that violates health care fraud and abuse laws, we may be subject to civil or criminal penalties

	Obtaining FDA and other regulatory approvals is time consuming, expensive and uncertain

	•	testing and surveillance to monitor the product and its continued compliance with regulatory requirements;

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	•	submitting products for inspection and, if any inspection reveals that the product is not in compliance, prohibiting the sale of all products from the same lot;
	•	suspending manufacturing;
	•	switching status from prescription to over-the-counter drug;
	•	recalling products; and
	•	withdrawing marketing clearance.

	•	incurring substantial expenses, including fines, penalties, legal fees and costs to comply with the FDA’s requirements;
	•	changes in the methods of marketing and selling products;
	•	taking FDA-mandated corrective action, which may include placing advertisements or sending letters to physicians rescinding previous advertisements or promotion; and
	•	disruption in the distribution of products and loss of sales until compliance with the FDA’s position is obtained.

	We face significant competition within our industry

	•	developing and bringing new products to market before others;
	•	developing new technologies to improve existing products;
	•	developing new products to provide the same benefits as existing products at less cost; and
	•	developing new products to provide benefits superior to those of existing products.

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Item 1B.	Unresolved Staff Comments

Item 2.	Properties

Item 3.	Legal Proceedings

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Item 4.	Submission of Matters to a Vote of Security Holders

	1) Election of Directors
	The stockholders elected the following persons to serve as directors of the Company for a term of three years, or until their successors are duly elected and qualified or until their earlier resignation or removal. Votes were cast as follows:

		Number of Votes
		For				Withheld
Spencer Davidson			30,806,330				19,745,344
Stuart Diamond			29,640,722				20,910,952
Peter S. Knight, Esq.			30,874,639				19,677,035

	The directors of the Company whose terms of office continued were Mr. Jonah Shacknai, Mr. Arthur G. Altschul, Jr., Mr. Michael A. Pietrangelo, Mr. Philip S. Schein, M.D. and Ms. Lottie H. Shackelford.
	2) The stockholders approved the appointment of Ernst & Young LLP as independent auditors for the Transition Period ending December 31, 2005. Votes were cast as follows:

For		Against		Abstain
50,405,690		134,354		11,630

3) Three proposals contained in our proxy statement were not acted upon at the Annual Meeting as a result of the termination of our Agreement and Plan of Merger with Inamed Corporation, dated March 20, 2005. These proposals were: (i) the issuance of shares of Medicis Class A common stock pursuant to the agreement and plan of merger, (ii) an amendment to our certificate of incorporation to increase the number of authorized shares of Medicis Class A common stock from 150,000,000 to 300,000,000 and change our name from “Medicis Pharmaceutical Corporation” to “Medicis” and (iii) authorization to postpone or adjourn the Annual Meeting to permit further solicitation of proxies if there were not sufficient votes at the time of the Annual Meeting in favor of the other matters being voted upon.

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Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

											Dividends
			High				Low				Declared
TRANSITION PERIOD
	Three Months Ended September 30, 2005		$	35.45			$	31.08			$	0.03
	Three Months Ended December 31, 2005			35.16				26.30				0.03
FISCAL YEAR ENDED JUNE 30, 2005
	First Quarter		$	40.65			$	32.85			$	0.03
	Second Quarter			41.00				34.64				0.03
	Third Quarter			37.67				28.69				0.03
	Fourth Quarter			31.97				26.80				0.03
FISCAL YEAR ENDED JUNE 30, 2004
	First Quarter		$	32.00			$	27.27			$	0.025
	Second Quarter			36.01				27.81				0.025
	Third Quarter			41.50				33.86				0.025
	Fourth Quarter			45.26				38.45				0.025

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Item 6.	Selected Financial Data

							Six Months
							Ended				Year Ended
			Transition				December 31,				December 31,
			Period				2004				2005
			(In thousands, except per share amounts)
Statements of Operations Data:
Net product revenues			$	155,569			$	146,999			$	313,684
Net contract revenues				8,385				34,168				46,002
Net revenues				163,954				181,167				359,686
Gross profit(a)				139,843				153,897				307,398
Operating expenses:
	Selling, general and administrative			89,360	(b)			65,736	(e)			158,778	(g)
	Research and development			22,367	(c)			45,140	(f)			42,903	(h)
	Depreciation and amortization			12,420				10,222				24,548
Total operating expenses				124,147				121,098				226,229
Operating income				15,696				32,799				81,169
Other:
	Other income, net			59,801	(d)			—				59,801	(d)
	Net interest income (expense)			4,726				(248	)			5,804
	Income tax expense			(30,502	)			(11,328	)			(53,288	)
Net income			$	49,721			$	21,223			$	93,486
Basic net income per share			$	0.92			$	0.38			$	1.72
Diluted net income per share			$	0.76			$	0.34			$	1.44	(i)
Cash dividend declared per common share			$	0.06			$	0.06			$	0.12
Basic common shares outstanding				54,323				55,972				54,290
Diluted common shares outstanding				69,772				72,160				69,558	(i)

(a)		Amounts exclude $10.9 million, $8.9 million and $21.6 million of amortization expense related to acquired intangible assets for the Transition Period, the six months ended December 31, 2004, and the year ended December 31, 2005.
(b)		Includes approximately $13.9 million of compensation expense related to stock options and restricted stock recognized during the Transition Period, a charge of approximately $9.2 million for the write-down of a long-lived asset and approximately $0.7 million of integration planning costs incurred related to the proposed Inamed transaction during the three months ended September 30, 2005.
(c)		Includes approximately $11.9 million related to a research and development collaboration with Dow and approximately $1.0 million of compensation expense related to stock options and restricted stock.

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(d)		Represents a termination fee of $90.5 million received from Inamed upon the termination of the proposed merger with Inamed, net of a termination fee paid to an investment banker and the expensing of accumulated transactions costs of $27.0 million, and integration costs incurred during the three months ended December 31, 2005 of $3.7 million.
(e)		Includes approximately $1.3 million of professional fees related to research and development collaborations with Ansata and Q-Med.
(f)		Includes $5.0 million paid to Ansata related to an exclusive development and license agreement and $30.0 million paid to Q-Med related to an exclusive license agreement for the development of SubQtm.
(g)		Includes approximately $13.9 million of compensation expense related to stock options and restricted stock recognized during the Transition Period, a charge of approximately $9.2 million for the write-down of a long-lived asset and approximately $6.0 million of integration planning costs incurred related to the proposed Inamed transaction during the three months ended June 30, 2005 and three months ended September 30, 2005.
(h)		Includes approximately $8.3 million paid to aaiPharma related to a research and development collaboration, $11.9 million related to a research and development collaboration with Dow and approximately $1.0 million of compensation expense related to stock options and restricted stock.
(i)		Diluted net income per common share for the unaudited year ended December 31, 2005 was calculated by using the average of the periodic diluted common shares outstanding during the year. For the period from January 1, 2005 to June 30, 2005, diluted common shares outstanding was calculated using APB Opinion No. 25, while for the period from July 1, 2005 to December 31, 2005, diluted common shares outstanding was calculated using SFAS 123R. The Company adopted SFAS No. 123R effective July 1, 2005.

		December 31,
		2005				2004
		(In thousands)
Balance Sheet Data:
Cash, cash equivalents and short-term investments		$	742,532	(a)		$	532,518
Working capital			692,453				552,391
Total assets			1,145,954				979,871
Long-term debt			453,065				453,065
Stockholders’ equity			543,487				444,826

						Six Months
		Transition				Ended
		Period				Dec. 31, 2004
		(In thousands)
Cash Flow Data:
Net cash provided by operating activities		$	147,990			$	45,465
Net cash provided by investing activities			123,665				76,158
Net cash used in by financing activities			(2,792	)			(137,447	)

(a)		Increase in cash, cash equivalents and short-term investments from December 31, 2004 to December 31, 2005 includes the receipt of a termination fee of $90.5 million received from Inamed upon the termination of the proposed merger with Inamed, net of expenses related to the proposed transaction.

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			Fiscal Year Ended June 30,
			2005				2004				2003				2002				2001
			(In thousands, except per share amounts)
Statements of Operations Data:
Net product revenues			$	305,114			$	291,607			$	241,909			$	211,248			$	159,677
Net contract revenues				71,785				12,115				5,630				1,559				8,125
Net revenues				376,899				303,722				247,539				212,807				167,802
Gross profit(a)				321,452				257,116				209,279				177,042				137,105
Operating expenses:
	Selling, general and administrative			135,154	(b)			118,253				91,648				77,314				59,508
	Research and development			65,676	(c)			16,494	(d)			29,568	(e)			15,132	(f)			25,515	(g)
	In-process research and development			—				—				—				6,217				—
	Depreciation and amortization			22,350				16,794				10,125				7,928				8,261
Total operating expenses				223,180				151,541				131,341				106,591				93,284
Operating income				98,272				105,575				77,938				70,451				43,821
Other:
	Net interest income (expense)			830				(758	)			(278	)			8,533				15,504
	Loss on early extinguishment of debt			—				(58,660	)			—				—				—
	Income tax expense			(34,112	)			(15,317	)			(26,404	)			(28,960	)			(18,905	)
Net income			$	64,990			$	30,840			$	51,256			$	50,024			$	40,420
Basic net income per share			$	1.18			$	0.55			$	0.94			$	0.83			$	0.67
Diluted net income per share			$	1.01			$	0.52			$	0.84			$	0.79			$	0.64
Cash dividend declared per common share			$	0.12			$	0.10			$	0.025				—				—
Basic common shares outstanding				55,196				55,618				54,376				60,536				60,268
Diluted common shares outstanding				70,909				72,481				70,191				63,828				63,388

(a)		Amounts exclude $19.6 million, $14.9 million, $9.2 million, $7.1 million and $7.6 million for amortization expense related to acquired intangible assets in fiscal 2005, 2004, 2003, 2002 and 2001, respectively.
(b)		Includes approximately $5.3 million of business integration planning costs related to the proposed merger with Inamed, and approximately $1.3 million of professional fees related to research and development collaborations with aaiPharma, Ansata and Q-Med.

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(c)		Includes approximately $8.3 million paid to aaiPharma related to a research and development collaboration, $5.0 million paid to Ansata related to an exclusive development and license agreement and $30.0 million paid to Q-Med related to an exclusive license agreement for the development of SubQtm.
(d)		Includes approximately $2.4 million paid to Dow for a research and development collaboration.
(e)		Includes $14.2 million paid to Dow for a research and development collaboration and approximately $6.0 million paid to aaiPharma for a research and development collaboration.
(f)		Includes $7.7 million paid to aaiPharma for a research and development collaboration.
(g)		Includes $17.0 million paid to Corixa Corporation for a development, commercialization and licensing agreement.

		June 30,
		2005				2004				2003				2002				2001
		(In thousands)
Balance Sheet Data:
Cash, cash equivalents, restricted cash and short-term investments		$	603,568			$	634,040			$	552,663			$	577,576			$	334,157
Working capital			600,070				666,743				576,781				611,259				358,468
Total assets			1,043,251				1,078,384				932,841				876,273				550,007
Long-term debt			453,065				453,067				400,000				400,000				—
Stockholders’ equity			486,346				555,303				461,121				429,059				503,453

		Fiscal Year Ended June 30,
		2005				2004				2003				2002				2001
		(In thousands)
Cash Flow Data:
Net cash provided by operating activities		$	129,981			$	127,964			$	84,667			$	73,542			$	71,120
Net cash provided by (used in) investing activities			140,487				(166,341	)			(113,709	)			(341,660	)			(97,981	)
Net cash (used in) provided by financing activities			(139,793	)			40,621				(23,343	)			254,938				12,548

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Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

	Key Aspects of Our Business

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	•	Termination of the proposed definitive merger agreement with Inamed Corporation;
	•	Adoption of SFAS No. 123R; and
	•	Write-down of a long-lived asset due to impairment.

	Termination of the Proposed Definitive Merger Agreement with Inamed Corporation

Termination fee received from Inamed, including expense reimbursement fees		$	90.5
Less:
Transaction costs expensed, including legal and advisory fees			27.0
Integration planning costs			4.4
		$	59.1

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	Adoption of SFAS No. 123R

	Write-down of a Long-lived Asset Due to Impairment

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						Six Months
						Ended				Fiscal Year Ended
		Transition				December 31,
		Period(a)				2004(b)				2005(c)				2004(d)				2003(e)
						(Unaudited)
Net revenues			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%
Gross profit(f)			85.3				84.9				85.3				84.7				84.5
Operating expenses			75.7				66.8				59.2				49.9				53.1
Operating income			9.6				18.1				26.1				34.8				31.5
Other income, net			36.5				—				—				—				—
Interest income (expense), net			2.9				(0.1	)			0.2				(0.2	)			(0.1	)
Loss on early extinguishment of debt			—				—				—				(19.3	)			—
Income tax expense			(18.7	)			(6.3	)			(9.1	)			(5.0	)			(10.7	)
Net income			30.3	%			11.7	%			17.2	%			10.2	%			20.7	%

(a)		Included in operating expenses is $14.9 million (9.1%) of net revenues) of compensation expense related to stock options and restricted stock, a charge of approximately $9.2 million (5.6% of net revenues) for the write-down of a long-lived asset, and $0.7 million (0.4% of net revenues) related to integration planning costs incurred during the three months ended September 30, 2005 related to the proposed merger with Inamed. Included in other income, net, is $59.8 million (36.5% of net revenue) related to a termination fee of $90.5 million received from Inamed upon the termination of the proposed merger with Inamed, net of a fee paid to an investment banker and the expensing of accumulated transaction costs of $27.0 million, and integration planning costs incurred during the three months ended December 31, 2005 of $3.7 million.
(b)		Included in operating expenses is $5.5 million (3.1% of net revenues) related to our exclusive development and license agreement with Ansata for proprietary technology and $30.7 million (17.0% of net revenues) related to our exclusive license agreement with Q-Med for the development of SubQtm.
(c)		Included in operating expenses is $5.3 million (1.4% of net revenues) of business integration planning costs related to the proposed merger with Inamed, $8.3 million (2.2% of net revenues) related to a research and development collaboration with aaiPharma, $5.5 million (1.5% of net revenues) related to our exclusive development and license agreement with Ansata for proprietary technology and $30.7 million (8.2% of net revenues) related to our exclusive license agreement with Q-Med for the development of SubQtm.
(d)		Included in operating expenses is a $2.4 million payment (0.8% of net revenues) to Dow for a research and development collaboration.
(e)		Included in operating expenses is $14.2 million in payments (5.7% of net revenues) to Dow for a research and development collaboration and a $6.0 million payment (2.4% of net revenues) to aaiPharma for a research and development collaboration.
(f)		Gross profit does not include amortization of the related intangibles as such expense is included in operating expenses.

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	Six Months Ended December 31, 2005 Compared To Six Months Ended December 31, 2004

	Net Revenues

							Comparable
			Transition				2004				$				%
			Period				Six Months				Change				Change
Net product revenues			$	155.6			$	147.0			$	8.6				5.8	%
Net contract revenues				8.4				34.2				(25.8	)			(75.5	)%
	Net revenues		$	164.0			$	181.2			$	(17.2	)			(9.5	)%

							Comparable
			Transition				2004
			Period				Six Months				Change
Acne and acne-related dermatological products				28.1	%			32.8	%			(4.7	)%
Non-acne dermatological products				58.9	%			44.4	%			14.5	%
Non-dermatological products				13.0	%			22.8	%			(9.8	)%
	Total net revenues			100.0	%			100.0	%			—

	Gross Profit

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						Comparable
		Transition				2004				$				%
		Period				Six Months				Change				Change
Gross profit		$	139.8			$	153.9			$	(14.1	)			(9.1	)%
% of net revenues			85.3	%			84.9	%

	Selling, General and Administrative Expenses

						Comparable
		Transition				2004				$				%
		Period				Six Months				Change				Change
Selling, general and administrative		$	89.4			$	65.7			$	23.7				35.9	%
% of net revenues			54.5	%			36.3	%
Share-based compensation expense included in selling, general and administrative		$	13.9			$	0.3			$	13.6				5,416.1	%

	Research and Development Expenses

						Comparable
		Transition				2004				$				%
		Period				Six Months				Change				Change
Research and development		$	22.4			$	45.1			$	(22.7	)			(50.4	)%
Charges included in research and development			11.9				35.0				(23.1	)			(65.9	)%
Share-based compensation expense included in research and development			1.0				—				1.0				100.0	%

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	Depreciation and Amortization Expenses

	Other Income, net

Termination fee received from Inamed, including expense reimbursement fees		$	90.5
Less:
Transaction costs expensed, including legal and advisory fees			27.0
Integration planning costs incurred during the three months ended December 31, 2005			3.7
		$	59.8

	Interest Income

	Interest Expense

	Income Tax Expense

						Comparable
		Transition				2004				$				%
		Period				Six Months				Change				Change
Income tax expense		$	30.5			$	11.3			$	19.2				169.3%
Effective tax rate			38.0	%			34.8	%

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	Fiscal Year Ended June 30, 2005 Compared To Fiscal Year Ended June 30, 2004

	Net Revenues

		Fiscal				Fiscal				$				%
		2005				2004				Change				Change
Net revenues		$	376.9			$	303.7			$	73.2				24.1%

			Fiscal				Fiscal
			2005				2004				Change
Acne and acne-related dermatological products				29.5	%			30.5	%			(1.0	)%
Non-acne dermatological products				47.1	%			50.9	%			(3.8	)%
Non-dermatological products				23.4	%			18.6	%			4.8	%
	Total net revenues			100.0	%			100.0	%			—

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	Gross Profit

		Fiscal				Fiscal				$				%
		2005				2004				Change				Change
Gross profit		$	321.5			$	257.1			$	64.4				25.0%
% of net revenues			85.3	%			84.7	%

	Selling, General and Administrative Expenses

		Fiscal				Fiscal				$				%
		2005				2004				Change				Change
Selling, general and administrative		$	135.2			$	118.3			$	16.9				14.3%
% of net revenues			35.9	%			38.9	%

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	Research and Development Expenses

		Fiscal				Fiscal				$
		2005				2004				Change				% Change
Research and development		$	65.7			$	16.5			$	49.2				298.2%
Charges included in research and development associated with research and development transactions			43.3				2.4				40.9				1,686.2%

	Depreciation and Amortization Expenses

	Interest Income

	Interest Expense

	Income Tax Expense

		Fiscal				Fiscal				$				%
		2005				2004				Change				Change
Income tax expense		$	34.1			$	15.3			$	18.8				122.7%
Effective tax rate			34.4	%			33.2	%

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	Fiscal Year Ended June 30, 2004 Compared To Fiscal Year Ended June 30, 2003

	Net Revenues

		Fiscal				Fiscal				$				%
		2004				2003				Change				Change
Net revenues		$	303.7			$	247.5			$	56.2				22.7	%

			Fiscal				Fiscal
			2004				2003				Change
Acne and acne-related dermatological products				30.5	%			33.6	%			(3.1	)%
Non-acne dermatological Products				50.9	%			36.7	%			14.2	%
Non-dermatological products				18.6	%			29.7	%			(11.1	)%
	Total net revenues			100.0	%			100.0	%			—

	Gross Profit

		Fiscal				Fiscal				$				%
		2004				2003				Change				Change
Gross profit		$	257.1			$	209.3			$	47.8				22.9%
% of net revenues			84.7	%			84.5	%

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	Selling, General and Administrative Expenses

		Fiscal				Fiscal				$				%
		2004				2003				Change				Change
Selling, general and administrative		$	118.3			$	91.6			$	26.7				29.0%
% of net revenues			38.9	%			37.0	%

	Research and Development Expenses

		Fiscal				Fiscal				$				%
		2004				2003				Change				Change
Research and development		$	16.5			$	29.6			$	(13.1	)			(44.2	)%
Charges included in research and development associated with research and development transactions			2.4				20.2				(17.8	)			(88.0	)%

	Depreciation and Amortization Expenses

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	Interest Income

	Interest Expense

	Loss on Early Extinguishment of Debt

	Income Tax Expense

		Fiscal				Fiscal				$				%
		2004				2003				Change				Change
Income tax expense		$	15.3			$	26.4			$	(11.1	)			(42.0	)%
Effective tax rate			33.2	%			34.0	%

	Overview

							Comparable
			Transition				2004				$				%
			Period				Six Months				Change				Change
Cash provided by (used in):
	Operating activities		$	148.0			$	45.5			$	102.5				225.5	%
	Investing activities			123.7				76.2				47.5				62.4	%
	Financing activities			(2.8	)			(137.4	)			134.6				(98.0	)%

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		December 31,				June 30,				$				%
		2005				2005				Change				Change
Cash, cash equivalents, restricted cash and short-term investments		$	742.5			$	603.6			$	138.9				23.0	%
Working capital			692.5				600.1				92.4				15.4	%
2.5% contingent convertible senior notes due 2032			169.2				169.2				—				—
1.5% contingent convertible senior notes due 2033			283.9				283.9				—				—

			Fiscal				Fiscal								%
			2004				2003				$ Change				Change
Cash provided by (used in):
	Operating activities		$	130.0			$	128.0			$	2.0				1.6	%
	Investing activities			140.5				(166.3	)			306.8				184.5	%
	Financing activities			(139.8	)			40.6				(180.4	)			(444.1	)%

		June 30,				June 30,				$				%
		2005				2004				Change				Change
Cash, cash equivalents, restricted cash and short-term investments		$	603.6			$	634.0			$	(30.4	)			(4.8	)%
Working capital			600.1				666.7				(66.6	)			(10.0	)%
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

				December 31,				June 30,				$				%
				2005				2005				Change				Change
Cash, cash equivalents and short-term investments				$	742.5			$	603.6			$	138.9				23.0	%
Accounts receivable, net					46.7				47.2				(0.5	)			(1.1	)%
Inventories, net					19.1				20.7				(1.6	)			(7.9	)%
Deferred tax assets, net					12.7				11.0				1.7				15.8	%
Other current assets					12.3				16.4				(4.1	)			(25.5	)%
	Total current assets				833.3				698.9				134.4				19.2	%
Accounts payable					57.7				30.8				26.9				87.2	%
Short-term contract obligation					27.4				27.4				—				—	%
Income taxes payable					31.5				10.2				21.3				207.9	%
Other current liabilities					24.2				30.4				(6.2	)			(20.4	)%
	Total current liabilities				140.8				98.8				42.0				42.5	%
		Working capital		$	692.5			$	600.1			$	92.4				15.4	%

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			June 30,				June 30,				$				%
			2005				2004				Change				Change
Cash, cash equivalents and short-term investments			$	603.6			$	634.0			$	(30.4	)			(4.8	)%
Accounts receivable, net				47.2				47.9				(0.7	)			(1.3	)%
Inventories, net				20.7				19.5				1.2				5.9	%
Deferred tax assets, net				11.0				14.1				(3.1	)			(22.0	)%
Other current assets				16.4				18.3				(1.9	)			(10.3	)%
	Total current assets			698.9				733.8				(34.9	)			(4.8	)%
Accounts payable				30.8				13.9				16.9				121.6	%
Short-term contract obligation				27.4				17.9				9.5				53.2	%
Income taxes payable				10.2				0.7				9.5				1,337.3	%
Other current liabilities				30.4				34.6				(4.2	)			(12.2	)%
	Total current liabilities			98.8				67.1				31.7				47.3	%
Working capital			$	600.1			$	666.7			$	(66.6	)			(10.0	)%

	Operating Activities

	Investing Activities

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	Financing Activities

	Contingent Convertible Senior Notes and Other Long-Term Commitments

51

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	Repurchases of Common Stock

	Dividends

	Line of Credit

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	Off-Balance Sheet Arrangements

	Contractual Obligations

		Payments Due By Period
										More Than				More Than
										1 Year and				3 Years and
						Less Than				Less Than				Less Than				More Than
		Total				1 Year				3 Years				5 Years				5 Years
Long-term debt		$	453,065			$	—			$	—			$	—			$	453,065
Interest on long-term debt			229,178				8,488				16,975				16,975				186,740
Operating leases			10,605				2,112				4,217				4,276				—
Other purchase obligations and commitments			867				173				347				347				—
Total contractual obligations		$	693,715			$	10,773			$	21,539			$	21,598			$	639,805

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	Revenue Recognition

	Items Deducted From Gross Revenue

54

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	Product Returns and Exchanges

	Sales Discounts

	Contract Chargebacks

	Managed Care and Medicaid Rebates

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	Other

	Share-Based Compensation

	Long-lived Assets

56

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	Income Taxes

	Research and Development Costs and Accounting for Strategic Collaborations

	Legal Contingencies

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	Recent Accounting Pronouncements

Item 7A.	Quantitative and Qualitative Disclosure About Market Risk

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		Financial Instruments Mature During Year Ended December 31,
		2006				2007				2008				2009				2010				Thereafter
Available-for-sale securities		$	97,560			$	20,883			$	4,897			$	2,464			$	749			$	167,350
Weighted-average yield rate			2.91	%			3.89	%			2.64	%			3.62	%			3.09	%			4.33	%
Contingent convertible senior notes due 2032		$	—			$	—			$	—			$	—			$	—			$	169,155
Interest rate			—				—				—				—				—				2.5	%
Contingent convertible senior notes due 2033		$	—			$	—			$	—			$	—			$	—			$	283,910
Interest rate			—				—				—				—				—				1.5	%

Item 8.	Financial Statements and Supplementary Data

Item 9.	Changes in and Disagreements with Accountants and Financial Disclosure

Item 9A.	Controls and Procedures

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Item 9B.	Other Information

Item 10.	Directors and Executive Officers of the Registrant

Item 11.	Executive Compensation

Item 12.	Security Ownership of Certain Beneficial Owners and Management

Item 13.	Certain Relationships and Related Transactions

Item 14.	Principal Accountant Fees and Services

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Item 15.	Exhibits, Financial Statement Schedules

							Page
(a)		Documents filed as a part of this Report
		(1)		Financial Statements:
				Index to consolidated financial statements			F-1
				Reports of Independent Registered Public Accounting Firm			F-2
				Consolidated balance sheets as of December 31, 2005, June 30, 2005 and June 30, 2004			F-4
				Consolidated statements of income for the six months ended December 31, 2005 and 2004 (unaudited) and the fiscal years ended June 30, 2005, 2004 and 2003			F-6
				Consolidated statements of stockholders’ equity for the six months ended December 31, 2005 and the fiscal years ended June 30, 2005, 2004 and 2003			F-7
				Consolidated statements of cash flows for the six months ended December 31, 2005 and 2004 (unaudited) and the fiscal years ended June 30, 2005, 2004 and 2003			F-9
				Notes to consolidated financial statements			F-10
		(2)		Financial Statement Schedule:
				Schedule II — Valuation and Qualifying Accounts			S-1
					This financial statement schedule should be read in conjunction with the consolidated financial statements. Financial statement schedules not included in this Annual Report on Form 10-K/T have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
		(3)		Exhibits filed as part of this Report:

Exhibit No.				Description
	2	.1		Agreement of Merger by and between the Company, Medicis Acquisition Corporation and GenDerm Corporation, dated November 28, 1997(11)
	2	.2		Agreement of Plan of Merger, dated as of October 1, 2001, by and among the Company, MPC Merger Corp. and Ascent Pediatrics, Inc.(17)
	3	.1		Certificate of Incorporation of the Company, as amended(23)
	3	.2		Amended and Restated By-Laws of the Company(13)
	4	.1		Amended and Restated Rights Agreement, dated as of August 17, 2005, between the Company and Wells Fargo Bank, N.A., as Rights Agent(26)
	4	.2		Indenture, dated as of August 19, 2003, by and between the Company, as issuer, and Deutsche Bank Trust Company Americas, as trustee(23)
	4	.3		Indenture, dated as of June 4, 2002, by and between the Company, as issuer, and Deutsche Bank Trust Company Americas, as trustee(19)
	4	.4		Supplemental Indenture dated as of February 1, 2005 to Indenture dated as of August 19, 2003 between the Company and Deutsche Bank Trust Company Americas as Trustee(25)
	4	.5		Registration Rights Agreement, dated as of June 4, 2002, by and between the Company and Deutsche Bank Securities Inc.(19)
	4	.6		Form of specimen certificate representing Class A common stock(1)
	10	.1		Asset Purchase Agreement among the Company, Ascent Pediatrics, Inc., BioMarin Pharmaceutical Inc., and BioMarin Pediatrics Inc., dated April 20, 2004(23)
	10	.2		Merger Termination Agreement, dated as of December 13, 2005, by and among the Company, Masterpiece Acquisition Corp., and Inamed Corporation(31)

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Exhibit No.				Description
	10	.3		Securities Purchase Agreement among the Company, Ascent Pediatrics, Inc., BioMarin Pharmaceutical Inc. and BioMarin Pediatrics Inc., dated May 18, 2004(23)
	10	.4		Termination Agreement dated October 19, 2005 between the Company and Michael A. Pietrangelo(28)
	10	.5		License Agreement among the Company, Ascent Pediatrics, Inc. and BioMarin Pediatrics Inc., dated May 18, 2004(23)
	10	.6		Medicis Pharmaceutical Corporation 1995 Stock Option Plan (incorporated by reference to Exhibit C to the definitive Proxy Statement for the 1995 Annual Meeting of Shareholders previously filed with the SEC, File No. 0-18443)
	10	.7(a)		Employment Agreement between the Company and Jonah Shacknai, dated July 24, 1996(8)
	10	.7(b)		Amendment to Employment Agreement by and between the Company and Jonah Shacknai, dated April 1, 1999(15)
	10	.7(c)		Amendment to Employment Agreement by and between the Company and Jonah Shacknai, dated February 21, 2001(15)
	10	.7(d)		Third Amendment, dated December 30, 2005, to Employment Agreement between the Company and Jonah Shacknai(32)
	10	.8		Medicis Pharmaceutical Corporation 2001 Senior Executive Restricted Stock Plan(30)
	10	.9(a)		Medicis Pharmaceutical Corporation 2002 Stock Option Plan(20)
	10	.9(b)		Amendment No. 1 to the Medicis Pharmaceutical Corporation 2002 Stock Option Plan, dated August 1, 2005(29)
	10	.10(a)		Medicis Pharmaceutical Corporation 2004 Stock Incentive Plan(27)
	10	.10(b)		Amendment No. 1 to the Medicis Pharmaceutical Corporation 2004 Stock Option Plan, dated August 1, 2005(29)
	10	.11(a)		Medicis Pharmaceutical Corporation 1998 Stock Option Plan(33)
	10	.11(b)		Amendment No. 1 to the Medicis Pharmaceutical Corporation 1998 Stock Option Plan, dated August 1, 2005(29)
	10	.11(c)		Amendment No. 2 to the Medicis Pharmaceutical Corporation 1998 Stock Option Plan, dated September 30, 2005(29)
	10	.12(a)		Medicis Pharmaceutical Corporation 1996 Stock Option Plan(34)
	10	.12(b)		Amendment No. 1 to the Medicis Pharmaceutical Corporation 1996 Stock Option Plan, dated August 1, 2005(29)
	10	.13		Waiver Letter dated March 18, 2005 between the Company and Q-Med AB(27)
	10	.14		Supply Agreement, dated October 21, 1992, between Schein Pharmaceutical and the Company(2)
	10	.15		Amendment to Manufacturing and Supply Agreement, dated March 2, 1993, between Schein Pharmaceutical and the Company(3)
	10	.16(a)		Credit and Security Agreement, dated August 3, 1995, between the Company and Norwest Business Credit, Inc.(5)
	10	.16(b)		First Amendment to Credit and Security Agreement, dated May 29, 1996, between the Company and Norwest Bank Arizona, N.A.(8)
	10	.16(c)		Second Amendment to Credit and Security Agreement, dated November 22, 1996, by and between the Company and Norwest Bank Arizona, N.A. as successor-in-interest to Norwest Business Credit, Inc.(10)
	10	.16(d)		Third Amendment to Credit and Security Agreement, dated November 22, 1998, by and between the Company and Norwest Bank Arizona, N.A., as successor-in-interest to Norwest Business Credit, Inc.(12)

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Exhibit No.				Description
	10	.16(e)		Fourth Amendment to Credit and Security Agreement, dated November 22, 2000, by and between the Company and Wells Fargo Bank Arizona, N.A., formerly known as Norwest Bank Arizona, N.A., as successor-in-interest to Norwest Business Credit, Inc.(16)
	10	.16(f)		Fifth Amendment to Credit and Security Agreement, dated November 22, 2002, by and between the Company and Wells Fargo Bank Arizona, N.A., formerly known as Norwest Bank Arizona, N.A., as successor-in-interest to Norwest Business Credit, Inc.(23)
	10	.17(a)		Patent Collateral Assignment and Security Agreement, dated August 3, 1995, by the Company to Norwest Business Credit, Inc.(6)
	10	.17(b)		First Amendment to Patent Collateral Assignment and Security Agreement, dated May 29, 1996, by the Company to Norwest Bank Arizona, N.A.(8)
	10	.17(c)		Amended and Restated Patent Collateral Assignment and Security Agreement, dated November 22, 1998, by the Company to Norwest Bank Arizona, N.A.(12)
	10	.18(a)		Trademark Collateral Assignment and Security Agreement, dated August 3, 1995, by the Company to Norwest Business Credit, Inc.(7)
	10	.18(b)		First Amendment to Trademark Collateral Assignment and Security Agreement, dated May 29, 1996, by the Company to Norwest Bank Arizona, N.A.(8)
	10	.18(c)		Amended and Restated Trademark, Tradename, and Service Mark Collateral Assignment and Security Agreement, dated November 22, 1998, by the Company to Norwest Bank Arizona, N.A.(12)
	10	.19		Assignment and Assumption of Loan Documents, dated May 29, 1996, from Norwest Business Credit, Inc., to and by Norwest Bank Arizona, N.A.(8)
	10	.20		Multiple Advance Note, dated May 29, 1996, from the Company to Norwest Bank Arizona, N.A.(8)
	10	.21		Asset Purchase Agreement dated November 15, 1998, by and among the Company and Hoechst Marion Roussel, Inc., Hoechst Marion Roussel Deutschland GMHB and Hoechst Marion Roussel, S.A.(12)
	10	.22		License and Option Agreement dated November 15, 1998, by and among the Company and Hoechst Marion Roussel, Inc., Hoechst Marion Roussel Deutschland GMBH and Hoechst Marion Roussel, S.A.(12)
	10	.23		Loprox Lotion Supply Agreement dated November 15, 1998, by and between the Company and Hoechst Marion Roussel, Inc.(12)
	10	.24		Supply Agreement dated November 15, 1998, by and between the Company and Hoechst Marion Roussel Deutschland GMBH(12)
	10	.25		Asset Purchase Agreement effective January 31, 1999, between the Company and Bioglan Pharma Plc(14)
	10	.26		Stock Purchase Agreement by and among the Company, Ucyclyd Pharma, Inc. and Syed E. Abidi, William Brusilow, Susan E. Brusilow and Norbert L. Wiech, dated April 19, 1999(14)
	10	.27		Asset Purchase Agreement by and between the Company and Bioglan Pharma Plc, dated June 29, 1999(14)
	10	.28		Asset Purchase Agreement by and among The Exorex Company, LLC, Bioglan Pharma Plc, the Company and IMX Pharmaceuticals, Inc., dated June 29, 1999(16)
	10	.29		Medicis Pharmaceutical Corporation Executive Retention Plan(14)
	10	.30		Asset Purchase Agreement between Warner Chilcott, plc and the Company, dated September 14, 1999(14)
	10	.31(a)		Share Purchase Agreement between Q-Med International B.V. and Startskottet 21914 AB (under proposed change of name to Medicis Sweden Holdings AB), dated February 10, 2003(21)

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Exhibit No.				Description
	10	.31(b)		Amendment No. 1 to Share Purchase Agreement between Q-Med International B.V. and Startskottet 21914 AB (under proposed change of name to Medicis Sweden Holdings AB), dated March 7, 2003(21)
	10	.32		Supply Agreement between Q-Med AB and the Company, dated March 7, 2003(21)
	10	.33		Amended and Restated Intellectual Property Agreement between Q-Med AB and HA North American Sales AB, dated March 7, 2003(21)
	10	.34		Supply Agreement between Medicis Aesthetics Holdings Inc., a wholly owned subsidiary of the Company, and Q-Med AB, dated July 15, 2004(23) Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934
	10	.35		Intellectual Property License Agreement between Q-Med AB and Medicis Aesthetics Holdings Inc., dated July 15, 2004(23) Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934
	10	.36		Note Agreement, dated as of October 1, 2001, by and among Ascent Pediatrics, Inc., the Company, Furman Selz Investors II L.P., FS Employee Investors LLC, FS Ascent Investments LLC, FS Parallel Fund L.P., BancBoston Ventures Inc. and Flynn Partners(17)
	10	.37		Voting Agreement, dated as of October 1, 2001, by and among the Company, MPC Merger Corp., FS Private Investments LLC, Furman Selz Investors II L.P., FS Employee Investors LLC, FS Ascent Investments LLC and FS Parallel Fund L.P.(17)
	10	.38		Exclusive Remedy Agreement, dated as of October 1, 2001, by and among the Company, Ascent Pediatrics, Inc., FS Private Investments LLC, Furman Selz Investors II L.P., FS Employee Investors LLC, FS Ascent Investments LLC and FS Parallel Fund L.P., BancBoston Ventures Inc., Flynn Partners, Raymond F. Baddour, Sc.D., Robert E. Baldini, Medical Science Partners L.P. and Emmett Clemente, Ph.D.(17)
	10	.39		Medicis Pharmaceutical Corporation 1992 Stock Option Plan(35)
	10	.40+		Form of Stock Option Agreement for Medicis Pharmaceutical Corporation 2004 Stock Incentive Plan
	10	.41+		Form of Restricted Stock Agreement for Medicis Pharmaceutical Corporation 2004 Stock Incentive Plan
	12+			Computation of Ratios of Earnings to Fixed Charges
	21	.1+		Subsidiaries
	23	.1+		Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
	24	.1		Power of Attorney See signature page
	31	.1+		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended
	31	.2+		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended
	32	.1+		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32	.2+		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	(1)	Incorporated by reference to the Registration Statement on Form S-1 of the Registrant, File No. 33-32918, filed with the SEC on January 16, 1990
	(2)	Incorporated by reference to the Registration Statement on Form S-1 of the Company, File No. 33-54276, filed with the SEC on June 11, 1993

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	(3)	Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 1993, File No. 0-18443, filed with the SEC on October 13, 1993
	(4)	Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 1995, File No. 0-18443, previously filed with the SEC (the “1994 Form 10-K”)
	(5)	Incorporated by reference to the Company’s 1995 Form 10-K
	(6)	Incorporated by reference to the Company’s 1995 Form 10-K
	(7)	Incorporated by reference to the Company’s 1995 Form 10-K
	(8)	Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 1996, File No. 0-18443, previously filed with the SEC
	(9)	Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, File No. 0-18443, previously filed with the SEC

(10)	Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 1996, File No. 0-18443, previously filed with the SEC
(11)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 15, 1997
(12)	Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 1998, File No. 0-18443, previously filed with the SEC
(13)	Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1999, File No. 0-18443, previously filed with the SEC
(14)	Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 1999, File No. 0-18443, previously filed with the SEC
(15)	Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, File No. 0-18443, previously filed with the SEC
(16)	Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2001, File No. 0-18443, previously filed with the SEC
(17)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on October 2, 2001
(18)	Incorporated by reference to the Company’s registration statement on Form 8-A12B/ A filed with the SEC on June 4, 2002
(19)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on June 6, 2002
(20)	Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2002, File No. 0-18443, previously filed with the SEC
(21)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 10, 2003
(22)	Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2003, File No. 0-18443, previously filed with the SEC
(23)	Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2004, File No. 0-18443, previously filed with the SEC
(24)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 21, 2005
(25)	Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, File No. 0-18443, previously filed with the SEC
(26)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 18, 2005
(27)	Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2005, File No. 0-18443, previously filed with the SEC

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(28)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on October 20, 2005
(29)	Incorporated by reference to the Company’s Annual Report on Form 10-K/A for the fiscal year ended June 30, 2005, File No. 0-18443, previously filed with the SEC on October 28, 2005
(30)	Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, File No. 0-18443, previously filed with the SEC
(31)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 13, 2005
(32)	Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 3, 2006
(33)	Incorporated by reference to Appendix 1 to the Company’s definitive Proxy Statement for the 1998 Annual Meeting of Stockholders filed with the SEC on December 2, 1998
(34)	Incorporated by reference to Appendix 2 to the Company’s definitive Proxy Statement for the 1996 Annual Meeting of Stockholders filed with the SEC on October 23, 1996
(35)	Incorporated by reference to Exhibit B to the Company’s definitive Proxy Statement for the 1992 Annual Meeting of Stockholders previously filed with the SEC

(b)	The exhibits to this Form 10-K/T follow the Company’s Financial Statement Schedule included in this Form 10-K/T.
(c)	The Financial Statement Schedule to this Form 10-K/T appears on page S-1 of this Form 10-K/T.

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	MEDICIS PHARMACEUTICAL CORPORATION

	By:	/s/ JONAH SHACKNAI

	Jonah Shacknai
	Chairman of the Board and Chief Executive Officer

Signature				Title		Date
/s/ JONAH SHACKNAI Jonah Shacknai				Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer)		March 16, 2006
/s/ MARK A. PRYGOCKI, SR. Mark A. Prygocki, Sr.				Executive Vice President, Chief Financial Officer, Corporate Secretary and Treasurer (Principal Financial and Accounting Officer)		March 16, 2006
/s/ ARTHUR G. ALTSCHUL, JR. Arthur G. Altschul, Jr.				Director		March 16, 2006
/s/ SPENCER DAVIDSON Spencer Davidson				Director		March 16, 2006

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Signature				Title		Date
/s/ STUART DIAMOND Stuart Diamond				Director		March 16, 2006
/s/ PETER S. KNIGHT, ESQ. Peter S. Knight, Esq.				Director		March 16, 2006
/s/ MICHAEL A. PIETRANGELO Michael A. Pietrangelo				Director		March 16, 2006
/s/ PHILIP S. SCHEIN, M.D. Philip S. Schein, M.D.				Director		March 16, 2006
/s/ LOTTIE SHACKELFORD Lottie Shackelford				Director		March 16, 2006

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		Page
Reports of Independent Registered Public Accounting Firm			F-2
Consolidated Balance Sheets as of December 31, 2005, June 30, 2005 and June 30, 2004			F-4
Consolidated Statements of Income for the six months ended December 31, 2005 and 2004 (unaudited), and the fiscal years ended June 30, 2005, 2004 and 2003			F-6
Consolidated Statements of Stockholders’ Equity for the six months ended December 31, 2005 and the fiscal years ended June 30, 2005, 2004 and 2003			F-7
Consolidated Statements of Cash Flows for the six months ended December 31, 2005 and 2004 (unaudited) and the fiscal years ended June 30, 2005, 2004 and 2003			F-9
Notes to Consolidated Financial Statements			F-10
Schedule II — Valuation and Qualifying Accounts			S-1

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	/s/ Ernst & Young LLP

F-2

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	/s/ Ernst & Young LLP

F-3

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									June 30,
					December 31,
					2005				2005				2004
					(In thousands, except share amounts)
ASSETS
Current assets:
	Cash and cash equivalents				$	446,997			$	177,785			$	46,621
	Short-term investments					295,535				425,783				587,419
	Accounts receivable, less allowances:
		December 31, 2005: $18,160; June 30, 2005:
		$19,073; June 30, 2004: $15,955				46,697				47,220				47,858
	Inventories, net					19,076				20,701				19,540
	Deferred tax assets, net					12,738				11,001				14,104
	Other current assets					12,241				16,435				18,321
		Total current assets				833,284				698,925				733,863
Property and equipment, net						5,416				6,143				5,842
Intangible assets:
	Intangible assets related to product line acquisitions and business combinations					311,406				326,780				324,345
	Other intangible assets					4,888				4,507				3,647
						316,294				331,287				327,992
	Less: accumulated amortization					76,458				71,749				51,961
			Net intangible assets			239,836				259,538				276,031
Goodwill						63,094				64,672				55,113
Deferred financing costs, net						4,325				5,397				7,535
Other non-current assets						—				8,576				—
					$	1,145,955			$	1,043,251			$	1,078,384

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								June 30,
				December 31,
				2005				2005				2004
				(In thousands, except share amounts)
LIABILITIES
Current liabilities:
	Accounts payable			$	57,708			$	30,832			$	13,912
	Short-term contract obligation				27,407				27,407				17,891
	Income taxes payable				31,521				10,236				712
	Other current liabilities				24,195				30,379				34,605
		Total current liabilities			140,831				98,854				67,120
Long-term liabilities:
	Contingent convertible senior notes				453,065				453,065				453,067
	Deferred tax liability, net				8,572				4,986				2,894
Commitments and Contingencies
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: 67,052,326, 67,007,330, 65,419,460 at December 31, 2005, June 30, 2005 and 2004, respectively					938				938				916
Class B common stock, $0.014 par value; shares authorized: 1,000,000; issued and outstanding: 0, 0 and 758,032 at December 31, 2005, June 30, 2005 and 2004, respectively					—				—				10
Additional paid-in capital					550,006				539,443				517,468
Accumulated other comprehensive income					379				(606	)			(1,020	)
Deferred compensation					—				(697	)			(1,212	)
Accumulated earnings					334,894				288,474				230,049
Less: Treasury stock, 12,647,554, 12,620,554 and 8,681,468 shares at cost at December 31, 2005, June 30, 2005 and 2004, respectively					(342,730	)			(341,206	)			(190,908	)
		Total stockholders’ equity			543,487				486,346				555,303
				$	1,145,955			$	1,043,251			$	1,078,384

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			Six Months Ended
			December 31,								Year Ended June 30,
			2005				2004				2005				2004				2003
							(Unaudited)
			(In thousands, except per share data)
Net product revenues			$	155,569			$	146,999			$	305,114			$	291,607			$	241,909
Net contract revenues				8,385				34,168				71,785				12,115				5,630
	Net revenues			163,954				181,167				376,899				303,722				247,539
Cost of product revenue(1)				24,111				27,270				55,447				46,606				38,260
Gross profit				139,843				153,897				321,452				257,116				209,279
Operating expenses:
	Selling, general and administrative(2)			89,360				65,736				135,154				118,253				91,648
	Research and development(3)			22,367				45,140				65,676				16,494				29,568
	Depreciation and amortization			12,420				10,222				22,350				16,794				10,125
Operating income				15,696				32,799				98,272				105,575				77,938
Other income, net				59,801				—				—				—				—
Interest income				10,059				5,076				11,470				10,050				12,302
Interest expense				(5,333	)			(5,324	)			(10,640	)			(10,808	)			(12,580	)
Loss on early extinguishment of debt				—				—				—				(58,660	)			—
Income before income tax expense				80,223				32,551				99,102				46,157				77,660
Income tax expense				(30,502	)			(11,328	)			(34,112	)			(15,317	)			(26,404	)
Net income			$	49,721			$	21,223			$	64,990			$	30,840			$	51,256
Basic net income per common share			$	0.92			$	0.38			$	1.18			$	0.55			$	0.94
Diluted net income per common share			$	0.76			$	0.34			$	1.01			$	0.52			$	0.84
Cash dividend declared per common share			$	0.06			$	0.06			$	0.12			$	0.10			$	0.025
Basic common shares outstanding				54,323				55,972				55,196				55,618				54,376
Diluted common shares outstanding				69,772				72,160				70,909				72,481				70,191
(1) amounts exclude amortization of intangible assets related to acquired products			$	10,899			$	8,933			$	19,620			$	14,891			$	9,166
(2) amounts include share-based compensation expense			$	13,947			$	258			$	515			$	515			$	365
(3) amounts include share-based compensation expense			$	1,000				—				—				—				—

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																								Accumulated
				Class A								Class B												Other
				Common Stock								Common Stock								Additional				Comprehensive												Treasury Stock
																				Paid-In				Income				Deferred				Accumulated
				Shares				Amount				Shares				Amount				Capital				(Loss)				Compensation				Earnings				Shares				Amount				Total
				(In thousands)
Balance at June 30, 2002					61,552			$	862				758			$	10			$	429,515			$	790			$	(2,094	)		$	154,923				(6,824	)		$	(154,947	)		$	429,059
Comprehensive income:
	Net income				—				—				—				—				—				—				—				51,256				—				—				51,256
	Net unrealized gains on available- for-sale securities				—				—				—				—				—				1,396				—				—				—				—				1,396
	Net unrealized losses on foreign currency translation				—				—				—				—				—				214				—				—				—				—				214
		Comprehensive income																																											52,866
	Dividends declared				—				—				—				—				—				—				—				(1,362	)			—				—				(1,362	)
Restricted shares issued for deferred compensation, net of cancellations					—				—				—				—				(2	)			—				2				—				—				—				—
Amortization of deferred compensation, net of award reacquisitions					—				—				—				—				—				—				365				—				—				—				365
	Exercise of stock options				958				14				—				—				12,746				—				—				—				—				—				12,760
	Tax effect of stock options exercised				—				—				—				—				3,394				—				—				—				—				—				3,394
	Purchase of treasury stock				—				—				—				—				—				—				—				—				(1,858	)			(35,961	)			(35,961	)
Balance at June 30, 2003					62,510				876				758				10				445,653				2,400				(1,727	)			204,817				(8,682	)			(190,908	)			461,121
Comprehensive income:
	Net income				—				—				—				—				—				—				—				30,840				—				—				30,840
	Net unrealized gains on available- for-sale securities				—				—				—				—				—				(3,452	)			—				—				—				—				(3,452	)
	Net unrealized gains on foreign currency translation				—				—				—				—				—				32				—				—				—				—				32
		Comprehensive income																																											27,420
	Conversion of contingent convertible senior notes				—				—				—				—				6				—				—				—				—				—				6
	Dividends declared				—				—				—				—				—								—				(5,608	)			—				—				(5,608	)
	Amortization of deferred compensation, net of award reacquisitions				—				—				—				—				—				—				515				—				—				—				515
	Exercise of stock options				2,909				40				—				—				51,393				—				—				—				—				—				51,433
	Tax effect of stock options exercised				—				—				—				—				20,416				—				—				—				—				—				20,416
Balance at June 30, 2004					65,419				916				758				10				517,468				(1,020	)			(1,212	)			230,049				(8,682	)			(190,908	)			555,303

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																								Accumulated
				Class A								Class B												Other
				Common Stock								Common Stock								Additional				Comprehensive												Treasury Stock
																				Paid-In				Income				Deferred				Accumulated
				Shares				Amount				Shares				Amount				Capital				(Loss)				Compensation				Earnings				Shares				Amount				Total
				(In thousands)
Balance at June 30, 2004					65,419			$	916				758			$	10			$	517,468			$	(1,020	)		$	(1,212	)		$	230,049				(8,682	)		$	(190,908	)		$	555,303
Comprehensive income:
	Net income				—				—				—				—				—				—				—				64,990				—				—				64,990
	Net unrealized losses on available- for-sale securities				—				—				—				—				—				(75	)			—				—				—				—				(75	)
	Net unrealized gains on foreign currency translation				—				—				—				—				—				489				—				—				—				—				489
		Comprehensive income																																											65,404
Conversion of Class B common stock to Class A common stock					758				10				(758	)			(10	)			—				—				—				—				—				—				—
Conversion of contingent convertible senior notes					—				—				—				—				2				—				—				—				—				—				2
	Dividends declared				—				—				—				—				—				—				—				(6,565	)			—				—				(6,565	)
	Restricted shares issued for deferred compensation, net of cancellations				18				—				—				—				298				—				—				—				(18	)			(298	)			—
Amortization of deferred compensation, net of award reacquisitions					—				—				—				—				—				—				515				—				—				—				515
	Exercise of stock options				812				12				—				—				16,571				—				—				—				—				—				16,583
	Tax effect of stock options exercised				—				—				—				—				5,104				—				—				—				—				—				5,104
	Purchase of treasury stock				—				—				—				—				—				—				—				—				(3,920	)			(150,000	)			(150,000	)
Balance at June 30, 2005					67,007				938				—				—				539,443				(606	)			(697	)			288,474				(12,620	)			(341,206	)			486,346
Comprehensive income:
	Net income				—				—				—				—				—				—				—				49,721				—				—				49,721
	Net unrealized gains on available- for-sale securities				—				—				—				—				—				636				—				—				—				—				636
	Net unrealized gains on foreign currency translation				—				—				—				—				—				349				—				—				—				—				349
		Comprehensive income																																											50,706
Adjustment for adoption of FAS 123(R)					—				—				—				—				827				—				697				—				—				(1,524	)			—
	Share-based compensation				—				—				—				—				14,947				—				—				—				—				—				14,947
	Dividends declared				—				—				—				—				—				—				—				(3,301	)			—				—				(3,301	)
	Restricted shares issued for deferred compensation				27				—				—				—				—				—				—				—				(27	)			—				—
	Exercise of stock options				18				—				—				—				430				—				—				—				—				—				430
	Tax effect of stock options exercised				—				—				—				—				(5,641	)			—				—				—				—				—				(5,641	)
Balance at December 31, 2005					67,052			$	938				—			$	—			$	550,006			$	379			$	—			$	334,894				(12,647	)		$	(342,730	)		$	543,487

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					Six Months Ended
					December 31,								Year Ended June 30,
					2005				2004				2005				2004				2003
									(Unaudited)
					(In thousands)
Operating Activities:
Net income					$	49,721			$	21,223			$	64,990			$	30,840			$	51,256
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization					12,420				10,222				22,350				16,794				10,125
	Amortization of deferred financing fees					1,072				1,072				2,143				2,144				2,641
	Impairment of long-lived assets					9,171				—				—				—				—
	Loss (gain) on sale of property and equipment					34				39				52				(4	)			—
	Loss on sale of product rights					—				—				—				32				—
	Loss (gain) on sale of available-for-sale investments					599				103				882				(599	)			(380	)
	Write-off of Inamed transaction costs					14,042				—				—				—				—
	Share-based compensation expense					14,947				258				515				515				365
	Deferred income tax expense (benefit)					1,849				(3,060	)			5,369				(3,634	)			8,879
	Tax benefit from exercise of stock options					—				5,058				5,104				20,416				3,394
	Excess tax benefits from share-based payment arrangements					(73	)			—				—				—				—
	Provision for doubtful accounts and returns					(913	)			3,100				3,118				1,050				5,321
	Accretion of (discount) premium on investments					(418	)			5,010				6,528				7,284				3,657
	Loss on early extinguishment of debt					—				—				—				58,660				—
Changes in operating assets and liabilities:
		Accounts receivable				1,436				(957	)			(2,480	)			2,753				(11,318	)
		Inventories				1,625				2,621				(1,160	)			(5,535	)			(2,050	)
		Other current assets				4,194				(1,942	)			1,886				(1,472	)			(378	)
		Accounts payable				27,220				4,557				15,580				(4,655	)			4,553
		Income taxes payable				17,255				5,974				9,524				232				(979	)
		Other current liabilities				(6,191	)			(7,813	)			(4,420	)			3,143				9,581
			Net cash provided by operating activities			147,990				45,465				129,981				127,964				84,667
Investing Activities:
Purchase of property and equipment						(748	)			(1,829	)			(2,913	)			(4,594	)			(1,367	)
Proceeds from sale of property and equipment						—				—				—				131				—
Payment of direct merger costs						(5,811	)			(129	)			(7,454	)			(633	)			(1,511	)
Payment for purchase of product rights						(481	)			(3,085	)			(3,296	)			(84,116	)			(81,727	)
Proceeds from sale of product rights						—				—				—				12,100				—
Purchase of available-for-sale investments						(203,247	)			(440,602	)			(762,561	)			(888,152	)			(712,040	)
Sale of available-for-sale investments						159,597				489,352				846,143				622,006				566,080
Maturity of available-for-sale investments						174,355				32,451				70,568				123,072				138,975
Decrease (increase) in restricted cash						—				—				—				53,837				(22,153	)
Change in other assets						—				—				—				8				34
			Net cash provided by (used in) investing activities			123,665				76,158				140,487				(166,341	)			(113,709	)
Financing Activities:
Payment of financing costs						—				(6	)			(6	)			(5,276	)			(142	)
Payment of dividends						(3,295	)			(3,115	)			(6,370	)			(5,536	)			—
Purchase of treasury stock						—				(150,000	)			(150,000	)			—				(35,961	)
Excess tax benefits from share-based payment arrangements						73				—				—				—				—
Proceeds from the exercise of stock options						430				15,674				16,583				51,433				12,760
			Net cash (used in) provided by financing activities			(2,792	)			(137,447	)			(139,793	)			40,621				(23,343	)
Effect of exchange rate on cash and cash equivalents						349				724				489				31				214
Net increase (decrease) in cash and cash equivalents						269,212				(15,100	)			131,164				2,275				(52,171	)
Cash and cash equivalents at beginning of period						177,785				46,621				46,621				44,346				96,517
Cash and cash equivalents at end of period					$	446,997			$	31,521			$	177,785			$	46,621			$	44,346

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NOTE 1.	THE COMPANY AND BASIS OF PRESENTATION

	The Company

	Basis of Presentation

NOTE 2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

	Cash and Cash Equivalents

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							June 30,
			December 31,
			2005				2005				2004
Raw materials			$	6,436			$	5,283			$	8,785
Finished goods				13,925				16,518				11,105
Valuation reserve				(1,285	)			(1,100	)			(350	)
	Total inventories		$	19,076			$	20,701			$	19,540

						June 30,
		December 31,
		2005				2005				2004
Furniture, fixtures and equipment		$	10,064			$	9,377			$	7,268
Leasehold improvements			1,994				1,989				2,018
			12,058				11,366				9,286
Less: accumulated depreciation			(6,642	)			(5,223	)			(3,444	)
		$	5,416			$	6,143			$	5,842

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						December 31, 2005												June 30, 2005												June 30, 2004
		Weighted								Accumulated												Accumulated												Accumulated
		Average Life				Gross				Amortization				Net				Gross				Amortization				Net				Gross				Amortization				Net
Related to product line acquisitions			22.4			$	306,324			$	(73,879	)		$	232,445			$	321,698			$	(69,727	)		$	251,971			$	319,263			$	(50,724	)		$	268,539
Related to business combinations			7.5				5,082				(1,824	)			3,258				5,082				(1,346	)			3,736				5,082				(730	)			4,352
Patents and trademarks			17.8				4,888				(755	)			4,133				4,507				(676	)			3,831				3,647				(507	)			3,140
Total intangible assets						$	316,294			$	(76,458	)		$	239,836			$	331,287			$	(71,749	)		$	259,538			$	327,992			$	(51,961	)		$	276,031

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						June 30,
		December 31,
		2005				2005				2004
Accrued incentives		$	6,506			$	9,505			$	8,069
Deferred revenue			1,237				1,862				3,545
Managed care and Medicaid reserves			6,081				5,365				11,671
Other accrued expenses			10,371				13,647				11,320
		$	24,195			$	30,379			$	34,605

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										Weighted
						Weighted				Average
						Average				Remaining				Aggregate
		Number of				Exercise				Contractual				Intrinsic
		Shares				Price				Term				Value
Balance at June 30, 2005			13,648,378			$	26.89
Granted			843,550			$	32.43
Exercised			(17,996	)		$	23.87
Terminated/expired			(94,596	)		$	28.85
Balance at December 31, 2005			14,379,336			$	27.21				6.5			$	87,396,722

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										Weighted
						Weighted				Average
						Average				Remaining				Aggregate
		Number of				Exercise				Contractual				Intrinsic
		Shares				Price				Term				Value
Outstanding			13,816,174			$	27.19				6.5			$	84,119,298
Exercisable			7,067,028			$	24.24				5.4			$	58,262,667

		Six Months				Six Months
		Ended				Ended
		December 31,				December 31,
		2005				2004
						(Unaudited)
Expected dividend yield			0.4	%			0.3	%
Expected stock price volatility			0.36				0.44
Risk-free interest rate			4.1% to 4.2%				3.6	%
Expected life of options			6 to 8 Years				5 Years

		Twelve Months				Twelve Months				Twelve Months
		Ended				Ended				Ended
		June 30,				June 30,				June 30,
		2005				2004				2003
Expected dividend yield			0.3	%			0.3	%			0.3	%
Expected stock price volatility			0.44				0.49				0.49
Risk-free interest rate			3.6	%			3.3	%			2.5	%
Expected life of options			5 Years				5 Years				5 Years

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			Six Months				Twelve Months				Twelve Months				Twelve Months
			Ended				Ended				Ended				Ended
			December 31,				June 30,				June 30,				June 30,
			2004				2005				2004				2003
			(Unaudited)
Net income, as reported			$	21,223			$	64,990			$	30,840			$	51,256
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects				10,195				21,813				17,078				18,056
Pro-forma net income			$	11,028			$	43,177			$	13,762			$	33,200
Net income per common share:
	Basic, as reported		$	0.38			$	1.18			$	0.55			$	0.94
	Basic, pro forma		$	0.20			$	0.78			$	0.25			$	0.61
	Diluted, as reported		$	0.34			$	1.01			$	0.52			$	0.84
	Diluted, pro forma		$	0.20			$	0.70			$	0.23			$	0.59

						Weighted-
						Average
						Grant-Date
Nonvested Shares		Shares				Fair Value
Nonvested at June 30, 2005			92,000			$	23.41
Granted			147,710			$	32.41
Vested			(27,000	)		$	23.44
Forfeited			(450	)		$	32.41
Nonvested at December 31, 2005			212,260			$	29.65

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NOTE 3.	CHANGE IN ESTIMATE

NOTE 4.	SEGMENT AND PRODUCT INFORMATION

		Six Months Ended
		December 31,
										Fiscal				Fiscal				Fiscal
		2005				2004				2005				2004				2003
						(Unaudited)
McKesson			54.9	%			50.8	%			51.2	%			36.9	%			20.2	%
Cardinal			18.9	%			19.7	%			21.8	%			23.8	%			25.4	%
Quality King			*				*				*				*				17.0	%
AmerisourceBergen			*				*				*				*				15.5	%

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			Six Months Ended								Fiscal Year Ended
			December 31,								June 30,
			2005				2004				2005				2004				2003
							(Unaudited)
Acne and acne-related dermatological products				28	%			33	%			30	%			30	%			33	%
Non-acne dermatological products				59				44				47				51				37
Non-dermatological products				13				23				23				19				30
	Total net revenues			100	%			100	%			100	%			100	%			100	%

NOTE 5.	STRATEGIC COLLABORATIONS

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NOTE 6.	TERMINATION OF DEFINITIVE MERGER AGREEMENT WITH INAMED CORPORATION

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Termination fee received from Inamed, including expense reimbursement fees		$	90.5
Less:
Transaction costs expensed, including legal and advisory fees			27.0
Integration planning costs			4.4
		$	59.1

NOTE 7.	LICENSE OF ORAPRED® TO BIOMARIN

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NOTE 8.	ACQUISITION OF DERMAL AESTHETIC ENHANCEMENT PRODUCTS FROM THE Q-MED GROUP

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NOTE 9.	LICENSE AND SALE OF PRODUCTS TO TARO PHARMACEUTICAL INDUSTRIES, LTD.

NOTE 10.	MERGER OF ASCENT PEDIATRICS, INC.

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NOTE 11.	SHORT-TERM INVESTMENTS

			December 31, 2005
							Gross				Gross				Gross
							Unrealized				Unrealized				Fair
			Cost				Gains				Losses				Value
U.S. corporate securities			$	73,398			$	92			$	274			$	73,216
Other debt securities				222,736				2				419				222,319
	Total securities		$	296,134			$	94			$	693			$	295,535

			June 30, 2005
							Gross				Gross				Gross
							Unrealized				Unrealized				Fair
			Cost				Gains				Losses				Value
U.S. corporate securities			$	144,017			$	20			$	476			$	143,561
Other debt securities				283,372				7				1,157				282,222
	Total securities		$	427,389			$	27			$	1,633			$	425,783

			June 30, 2004
							Gross				Gross				Gross
							Unrealized				Unrealized				Fair
			Cost				Gains				Losses				Value
U.S. corporate securities			$	123,848			$	224			$	360			$	123,712
Other debt securities				465,070				164				1,527				463,707
	Total securities		$	588,918			$	388			$	1,887			$	587,419

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			December 31, 2005
							Estimated
			Cost				Fair Value
Available-for-sale
	Due in one year or less		$	99,662			$	99,192
	Due after one year through five years			29,123				28,993
	Due after five years through 10 years			4,000				4,000
	Due after 10 years			163,348				163,350
			$	296,133			$	295,535

NOTE 12.	LINE OF CREDIT

NOTE 13.	CONTINGENT CONVERTIBLE SENIOR NOTES

	•	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

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		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.

	•	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 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;

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	•	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.

NOTE 14.	COMMITMENTS AND CONTINGENCIES

	Occupancy Arrangements

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Year Ending December 31,
2006		$	2,112
2007			2,079
2008			2,138
2009			2,138
2010			2,138
		$	10,605

	Research and Development and Consulting Contracts

	Litigation

NOTE 15.	INCOME TAXES

				Six Months Ended
				December 31,								Year Ended June 30,
				2005				2004				2005				2004				2003
								(Unaudited)
Current
	Federal			$	26,780			$	13,392			$	27,516			$	15,831			$	17,123
	State				1,543				822				1,215				861				1,305
	Foreign				750				110				156				109				14
					29,073				14,324				28,887				16,801				18,442
Deferred
	Federal				1,366				(2,854	)			4,456				(1,404	)			7,532
	State				45				(142	)			787				(80	)			430
	Foreign				18				—				(18	)			—				—
					1,429				(2,996	)			5,225				(1,484	)			7,962
		Total		$	30,502			$	11,328			$	34,112			$	15,317			$	26,404

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		Six Months Ended								Year Ended
		December 31,								June 30,
		2005				2004				2005				2004				2003
						(Unaudited)
Statutory federal income tax rate			35.0	%			35.0	%			35.0	%			35.0	%			35.0	%
State tax rate, net of federal benefit			1.3				1.4				1.4				1.1				1.5
Share-based payments			1.6				—				—				—				—
Tax-exempt interest			—				(2.4	)			(1.0	)			(4.2	)			(2.1	)
Other			0.1				0.8				(1.0	)			1.3				(0.4	)
			38.0	%			34.8	%			34.4	%			33.2	%			34.0	%

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											June 30,
			December 31, 2005								2005								2004
			Current				Long-term				Current				Long-term				Current				Long-term
Deferred tax assets:
	Net operating loss carryforwards		$	—			$	22,584			$	—			$	23,161			$	—			$	25,691
	Reserves and liabilities			11,810				—				10,415				—				10,390				—
	Unrealized losses on securities			215				—				586				—				555				—
	Research and development credits			—				1,246				—				1,246				—				1,920
	Excess of net book value over tax basis of intangible assets			—				8,885				—				6,613				—				—
	Share-based payment awards			—				4,200				—				—				—				—
	Foreign tax credit			713				—				—				—				—				—
	Capital loss carryover			—				892				—				—				—				—
	Charitable contributions, other			—				824				—				4,455				3,159				834
	Valuation allowance			—				(17,515	)			—				(17,473	)			—				(17,492	)
				12,738				21,116				11,001				18,002				14,104				10,953
Deferred tax liabilities:
	Depreciation on property and equipment			—				(455	)			—				(611	)			—				(175	)
	Bond interest			—				(29,233	)			—				(22,377	)			—				(9,068	)
	Excess of net book value over tax basis of intangible assets			—				—				—				—				—				(4,604	)
Net deferred tax assets (liabilities)			$	12,738			$	(8,572	)		$	11,001			$	(4,986	)		$	14,104			$	(2,894	)

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NOTE 16.	STOCK TRANSACTIONS

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NOTE 17.	DIVIDENDS DECLARED ON COMMON STOCK

NOTE 18.	STOCK OPTION PLANS

						Weighted				Weighted								Weighted
						Average				Average								Average
		Number				Contractual				Exercise				Number				Exercise
Range of Exercise Prices		Outstanding				Life				Price				Exercisable				Price
$ 6.06 - $14.42			1,191,709				3.20			$	11.27				1,191,709			$	11.27
$14.50 - $18.33			2,284,364				6.35			$	18.22				1,035,222			$	18.08
$18.57 - $23.53			288,138				6.36			$	21.69				174,008			$	21.11
$23.65 - $26.95			2,108,662				5.62			$	26.75				1,474,284			$	26.75
$26.98 - $27.63			1,985,128				4.60			$	27.63				1,966,808			$	27.63
$27.70 - $29.13			138,410				7.01			$	28.34				44,110			$	28.20
$29.20 - $29.20			2,361,070				7.58			$	29.20				588,621			$	29.20
$29.25 - $36.06			1,330,505				7.76			$	31.76				360,945			$	30.34
$38.45 - $38.45			2,544,350				8.54			$	38.45				320,038			$	38.45
$39.04 - $39.04			147,000				8.75			$	39.04				147,000			$	39.04
			14,379,336				6.49			$	27.21				7,302,745			$	24.24

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														Weighted
														Average
		Qualified				Non-Qualified				Total				Price
Balance at June 30, 2002			3,956,382				7,179,224				11,135,606			$	21.08
Granted			12,340				3,476,376				3,488,716			$	19.11
Exercised			(451,596	)			(505,234	)			(956,830	)		$	13.33
Terminated/expired			(310,664	)			(575,236	)			(885,900	)		$	22.32
Balance at June 30, 2003			3,206,462				9,575,130				12,781,592			$	21.11
Granted			10,272				3,403,248				3,413,520			$	29.32
Exercised			(1,383,395	)			(1,526,179	)			(2,909,574	)		$	17.68
Terminated/expired			(275,772	)			(985,822	)			(1,261,594	)		$	25.41
Balance at June 30, 2004			1,557,567				10,466,377				12,023,944			$	23.82
Granted			—				2,795,890				2,795,890			$	38.48
Exercised			(269,554	)			(542,216	)			(811,770	)		$	20.43
Terminated/expired			(62,896	)			(296,790	)			(359,686	)		$	28.82
Balance at June 30, 2005			1,225,117				12,423,261				13,648,378			$	26.89
Granted			—				843,550				843,550			$	32.43
Exercised			(9,552	)			(8,444	)			(17,996	)		$	23.87
Terminated/expired			(10,626	)			(83,970	)			(94,596	)		$	28.85
Balance at December 31, 2005			1,204,939				13,174,397				14,379,336			$	27.21

NOTE 19.	NET INCOME PER COMMON SHARE

		Six Months Ended
		December 31,								Fiscal Year Ended June 30,
		2005				2004				2005				2004				2003
						(Unaudited)
BASIC
Net income		$	49,721			$	21,223			$	64,990			$	30,840			$	51,256
Weighted average number of common shares outstanding			54,323				55,972				55,196				55,618				54,376
Basic net income per common share		$	0.92			$	0.38			$	1.18			$	0.55			$	0.94

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			Six Months Ended
			December 31,								Fiscal Year Ended June 30,
			2005				2004				2005				2004				2003
							(Unaudited)
DILUTED
Net income			$	49,721			$	21,223			$	64,990			$	30,840			$	51,256
Add:
	Tax-effected interest expense and issue costs related to Old Notes			1,677				1,675				3,347				3,884				7,901
	Tax-effected interest expense and issue costs related to New Notes			1,677				1,677				3,353				2,925				—
Net income assuming dilution			$	53,075			$	24,575			$	71,690			$	37,649			$	59,157
Weighted average number of common shares				54,323				55,972				55,196				55,618				54,376
Effect of dilutive securities:
	Old Notes			5,823				5,823				5,823				6,777				13,770
	New Notes			7,325				7,325				7,325				6,446				—
	Stock options and restricted stock			2,301				3,040				2,565				3,640				2,045
Weighted average number of common shares assuming dilution				69,772				72,160				70,909				72,481				70,191
Diluted net income per common share			$	0.76			$	0.34			$	1.01			$	0.52			$	0.84

NOTE 20.	FINANCIAL INSTRUMENTS — CONCENTRATIONS OF CREDIT AND OTHER RISKS

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NOTE 21.	FAIR VALUE OF FINANCIAL INSTRUMENTS

NOTE 22.	DEFINED CONTRIBUTION PLAN

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NOTE 23.	QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

		(For the Quarters Ended)
		September 30,				December 31,
		2005(a)				2005(b)
Net revenues		$	83,264			$	80,690
Gross profit(1)			71,240				68,603
Net income			12,460				37,261
Basic net income per common share		$	0.23			$	0.69
Diluted net income per common share		$	0.20			$	0.56

		(For the Quarters Ended)
		September 30,				December 31,				March 31,				June 30,
		2004(c)				2004(d)				2005(e)				2005(f)
Net revenues		$	88,818			$	92,349			$	95,188			$	100,544
Gross profit(1)			74,985				78,911				81,274				86,282
Net income			1,023				20,201				19,371				24,395
Basic net income per common share		$	0.02			$	0.37			$	0.36			$	0.45
Diluted net income per common share		$	0.02			$	0.31			$	0.30			$	0.38

		(For the Quarters Ended)
		September 30,				December 31,				March 31,				June 30,
		2003				2003(g)				2004				2004
Net revenues		$	63,295			$	70,633			$	81,839			$	87,954
Gross profit(1)			53,114				59,396				68,721				75,885
Loss on early extinguishment of debt			(58,660	)			—				—				—
Net (loss) income			(27,164	)			13,627				20,671				23,705
Basic net (loss) income per common share		$	(0.50	)		$	0.25			$	0.37			$	0.42
Diluted net (loss) income per common share		$	(0.50	)		$	0.21			$	0.31			$	0.34

(1)	Gross profit does not include amortization of the related intangibles.

	(a)	Operating expenses included approximately $7.7 million of compensation expense related to stock options and restricted stock, and approximately $0.7 million of business integration planning costs related to the proposed merger with Inamed.
	(b)	Operating expenses included approximately $11.9 million paid to Dow related to a research and development collaboration, a charge of approximately $9.2 million for the write-down of a long-lived asset and approximately $7.3 million of compensation expense related to stock options and restricted stock. Other income included approximately $60.0 million related to a termination fee received from

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		Inamed related to the termination of the proposed merger with Inamed, net of the expensing of accumulated transaction costs and business integration planning costs incurred.
	(c)	Operating expenses included approximately $30.0 million paid to Q-Med related to an exclusive license agreement for the development of SubQtm, and approximately $0.7 million of professional fees related to the agreement.
	(d)	Operating expense included approximately $5.0 million paid to Ansata related to an exclusive development and license agreement, and approximately $0.5 million of professional fees related to the agreement.
	(e)	Operating expenses included approximately $8.3 million paid to aaiPharma related to a research and development collaboration. Effective January 1, 2005, the Company changed the estimated useful life for certain intangible assets related to its merger with Ascent. This change increased amortization expense by approximately $0.8 million during the quarter ended March 31, 2005.

	(f)	Operating expenses included approximately $5.3 million of business integration planning costs related to the proposed merger with Inamed. Effective January 1, 2005, the Company accelerated the estimated useful life for certain intangible assets related to its merger with Ascent. This change increased amortization expense by approximately $0.8 million during the quarter ended June 30, 2005.

	(g)	Operating expenses included approximately $2.4 million paid to Dow for a research and development collaboration.

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				Balance at				Charged to				Charged to
				Beginning				Costs and				Other								Balance at End
Description				of Year				Expenses				Accounts				Deductions				of Year
				(In thousands)
Six Months Ended December 31, 2005
	Deducted from Asset Accounts:
	Accounts Receivable:
		Allowances		$	19,073			$	42,755				—			$	(43,668	)		$	18,160
Year Ended June 30, 2005
	Deducted from Asset Accounts:
	Accounts Receivable:
		Allowances		$	15,955			$	95,979				—			$	(92,861	)		$	19,073
Year Ended June 30, 2004
	Deducted from Asset Accounts:
	Accounts Receivable:
		Allowances		$	15,079			$	96,263				—			$	(95,387	)		$	15,955
Year Ended June 30, 2003
	Deducted from Asset Accounts:
	Accounts Receivable:
		Allowances		$	10,628			$	78,044				—			$	(73,593	)		$	15,079

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Exhibit No.				Description
	12+			Computation of Ratios of Earnings to Fixed Charges
	21	.1+		Subsidiaries
	23	.1+		Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
	24	.1		Power of Attorney See signature page
	31	.1+		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended
	31	.2+		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended
	32	.1+		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32	.2+		Certification of 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