There was plenty of good news in the second quarter for Valeant Pharmaceuticals International (NYSE:VRX). Revenue and earnings beat expectations. The company even upped its full-year revenue and earnings guidance. On Nov. 19, the Canadian drugmaker releases its third-quarter financial and operational results. Will Valeant impress yet again? Here are three things to watch.

1. The elephant in the room
While investors will want to know how well Valeant performed in the third quarter, their pressing concern right now is over two federal subpoenas. The company announced this week that the U.S. Attorney's Office for the District of Massachusetts and the U.S. Attorney's Office for the Southern District of New York issued subpoenas related to Valeant's drug pricing and assistance to patients.

Valeant CEO Michael Pearson stated that the company believes that it has complied with regulatory and financial controls and is cooperating with the federal investigation. He also has responded to a letter from Senator Claire McCaskill (D-MO) about drug pricing. 

What's behind the furor? Valeant has greatly increased the price of two heart drugs acquired earlier this year. Isuprel's price tag tripled since February, and the company raised the price of Nitropress six times during the same period.

The reality for investors is that even positive financial performance could easily be outweighed by worries about what the investigations could mean for Valeant down the road. The stock dropped as much as 9% on Thursday after news broke about the subpoenas. Valeant's shares are down 30% over the last three months due in large part to concerns about potential future government actions about soaring drug prices. 

2. Performance of top drugs 
Although there will no doubt be plenty of questions spoken and unspoken about the latest negative headlines, how well Valeant's top drugs performed during the third quarter will also be under the microscope. Irritable bowel syndrome with diarrhea (IBS-D) drug Xifaxan stands at the top of the list.

Xifaxan is Valeant's biggest seller. The drug made up around 5% of the company's total revenue in the second quarter after winning FDA approval in May. A strong start for Xifaxan played a key role in Valeant's move to increase its full-year guidance for 2015. Expect strong numbers for third quarter from the drug.

However, Xifaxan could face stiff competition in the near future from Allergan's Viberzi. The FDA approved both drugs on the same day, but Allergan awaits DEA scheduling. The company anticipates launching Viberzi in the first quarter of 2016. 

Classification of Viberzi as a controlled substance could give Valeant a competitive edge over Allergan in the battle of IBS-D drugs. On the other hand, the entrance of the rival drug on the market early next year could impact sales growth for Xifaxan.

3. Assimilation of acquisitions
The importance of drugs like Xifaxan for Valeant underscores another key thing to watch: the assimilation of acquisitions. Valeant picked up Xifaxan with its buyout of Salix Pharmaceuticals. Expect the Salix deal to continue to have an impact on Valeant's GAAP numbers, particularly with cash flow as a result of more severance payments. 

Dendreon's performance is another item to keep your eyes on. Valeant bought the assets of the biotech in the first quarter for $495 million. That's looking to be a good investment so far. Valeant chalked up $74 million in revenue during the second quarter from Dendreon's Provenge with gross margins of around 64%.    

As with Dendreon, Valeant's other acquisitions seem to be paying off for the most part. The company says that its big deals, including buying Bausch & Lomb, Biovail, and Salix, are meeting or exceeding goals. Only one of Valeant's 11 mid-sized acquisitions in the $300 million to $1 billion range isn't performing as hoped for. And the drugmaker has scored quite a few home runs with smaller deals like Coria, which has produced internal rates of returns above 35%. 

Because Valeant's business strategy has heavily emphasized mergers and acquisitions, assimilation of the companies that it picks up is key to its success. Things have gone well overall thus far. Valeant's third-quarter results will tell if these winning ways are still on track. 

Keith Speights has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Valeant Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.