Valeant Pharmaceuticals International has signed a definitive agreement to acquire Dow Pharmaceutical Sciences, Inc., a privately held company that specializes in the development of topical drug products for pharmaceutical and biotechnology clients.

Under the agreement, Valeant will make a payment of $250 million at the close of the deal. The purchase is expected to be completed during first quarter of 2009.

In the six months following closing, Valeant will fund an escrow account of $35 million. Additionally, Valeant will make milestone payment going forward.

The transaction was approved by the boards of directors for both companies and is subject to customary closing conditions. The transaction is expected to close at year end.

Dow recently received nod from the Food and Drug Administration (FDA) for Acanya(TM), a novel topical prescription medication indicated for the treatment of mild to moderate acne. Acanya(TM) is expected to be launched in the United States in early 2009.

Aliso Viejo-based Valeant develops, manufactures and markets a broad range of pharmaceutical products primarily in the areas of neurology and dermatology.