Toronto Stock Exchange Symbol: DND

    MISSISSAUGA, ON, July 10 /CNW/ - Cipher Pharmaceuticals Inc. (TSX: DND)
("Cipher" or "the Company") today announced that it has entered into a
definitive licensing and distribution agreement with ProEthic Pharmaceuticals
Inc ("ProEthic"), under which Cipher has granted ProEthic the exclusive right
to market, sell and distribute Lipofen(TM) in the United States, its
territories and possessions. Lipofen is a novel, patented formulation of the
active ingredient fenofibrate, which is used in the treatment of
hyperlipidemia, a cholesterol disorder.
    "Completing this agreement was a top priority and represents an important
milestone for our organization," said Larry Andrews, President and Chief
Executive Officer of Cipher Pharmaceuticals. "ProEthic is a young, rapidly
growing company with a particular focus on primary care physicians, which is a
key target audience for Lipofen. We look forward to working with ProEthic's
sales and marketing team to commercialize this product in the fast-growing,
$1.1 billion dollar U.S. fenofibrate market."
    Carl Whatley, Chairman and Chief Executive Officer of ProEthic, added,
"Lipofen will be the lead product for the company as we seek to build our
presence in the important primary care space. Total fenofibrate prescriptions
have increased strongly over the past several years, with U.S. prescriptions
rising 18% in 2006. Demand for the molecule is expected to grow in the coming
years based on demographic trends and the increasing awareness of the need to
aggressively manage a patient's total cholesterol profile."
    Under the terms of the agreement, Cipher will receive an up-front
licensing fee of US$2 million. Cipher could receive additional milestone
payments of up to US$20 million based on the achievement of certain net sales
targets. Cipher will also receive a royalty on a percentage of net sales,
which escalates from the mid-teens to mid-twenties based on annual sales
targets and the level of promotional support provided by ProEthic. The
agreement is for a period of ten years, and ProEthic has the right to extend
the term for additional two-year periods. ProEthic expects to launch the
product in the early part of the fourth quarter of 2007.

    About Lipofen

    Lipofen is a novel, patented formulation of the active ingredient
fenofibrate, which is used in the treatment of hyperlipidemia, a cholesterol
disorder. Hyperlipidemia is a condition characterized by high levels of
low-density lipoprotein (LDL) cholesterol and/or triglycerides (a type of fat
found in the blood). Fenofibrate is known to lower triglycerides and LDL
cholesterol and increase high-density lipoproteins (HDL), known as "good
cholesterol."
    Lipofen received FDA approval for three unique fenofibrate dosages: 50,
100 and 150 mg, with the 150 mg strength equivalent to Tricor(R) 160 mg under
fed conditions. With Lipofen, the extent of absorption is increased under
high-fat conditions relative to low-fat conditions.

    About ProEthic Pharmaceuticals

    ProEthic is an emerging specialty pharmaceutical company enhancing
treatment strategies through innovative technologies. Founded in 2001, the
privately held company focuses its efforts on the acquisition, development,
licensing, and marketing of pharmaceutical products directed at the primary
care physician. ProEthic's growing primary care sales force currently operates
in approximately 22 states with plans to attain national sales coverage by
year end 2008. ProEthic has experienced annual revenue growth of over 50% in
each year since 2002. For more information, please visit the ProEthic website
at: www.proethic.com.

    About Cipher Pharmaceuticals Inc.

    Cipher Pharmaceuticals is a drug development company focused on
commercializing novel formulations of successful, currently marketed molecules
using advanced drug delivery technologies. Cipher's strategy is to in-license
products that incorporate proven drug delivery technologies and advance them
through the clinical development and regulatory approval stages, after which
the products are out-licensed to international partners. Because Cipher's
products are based on proven technology platforms applied to currently
marketed drugs, they are expected to have lower approval risk, shorter
development timelines and significantly lower development costs. Cipher
currently has three late-stage drugs in its pipeline. The Company's lead
compound, CIP-FENOFIBRATE, received final approval from the U.S. Food and Drug
Administration and Health Canada in the first quarter of 2006. In addition,
Cipher is developing formulations of the pain reliever tramadol (currently
under regulatory review by the FDA) and the acne treatment isotretinoin
(currently under regulatory review by the FDA).

    Cipher is listed on the Toronto Stock Exchange under the symbol 'DND' and
has approximately 24 million shares outstanding. For more information, please
visit www.cipherpharma.com.

    Forward-Looking Statements

    Statements made in this news release, other than those concerning
historical financial information, may be forward-looking and therefore subject
to various risks and uncertainties. Some forward-looking statements may be
identified by words like "may", "will", "anticipate", "estimate", "expect",
"intend", or "continue" or the negative thereof or similar variations. Certain
material factors or assumptions are applied in making forward-looking
statements and actual results may differ materially from those expressed or
implied in such statements. Factors that could cause results to vary include
those identified in the Company's Annual Information Form and other filings
with Canadian securities regulatory authorities, such as the applicability of
patents and proprietary technology; possible patent litigation; regulatory
approval of products in the Company's pipeline; changes in government
regulation or regulatory approval processes; government and third-party payer
reimbursement; dependence on strategic partnerships for product candidates and
technologies, marketing and R&D services; meeting projected drug development
timelines and goals; intensifying competition; rapid technological change in
the pharmaceutical industry; anticipated future losses; the ability to access
capital to fund R&D; and the ability to attract and retain key personnel. All
forward-looking statements presented herein should be considered in
conjunction with such filings. The Company does not undertake to update any
forward-looking statements; such statements speak only as of the date made.

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