Toronto Stock Exchange Symbol: DND

    MISSISSAUGA, ON, Aug. 6 /CNW/ - Cipher Pharmaceuticals Inc. (TSX: DND)
("Cipher" or "the Company") today announced that it has entered into a
definitive development, distribution and supply agreement with Ranbaxy
Pharmaceuticals Inc. ("RPI"), a wholly owned subsidiary of Ranbaxy
Laboratories Limited, under which Cipher has granted RPI the exclusive right
to market, sell and distribute CIP-ISOTRETINOIN in the United States, its
territories and possessions.
    CIP-ISOTRETINOIN is a novel, patented formulation of isotretinoin, which
is used in the treatment of severe nodular acne. The product received
approvable letters from the U.S. Food and Drug Administration ("FDA") in
May 2006 and April 2007 in which the FDA requested that Cipher provide
additional clinical safety data. Cipher and its advisors are currently in
discussions with the FDA's Division of Dermatology and Dental Products
regarding the appropriate design of a safety study.
    Under the terms of the agreement with RPI, Cipher received an initial
upfront milestone payment of US$1 million. The agreement includes additional
pre- and post-commercialization milestone payments of up to US$23 million,
contingent upon the achievement of certain milestone targets. Once the product
is successfully commercialized, Cipher will also receive a royalty in the
mid-teens on net sales. In addition, RPI will reimburse Cipher for all costs
associated with the clinical studies required to obtain FDA approval, up to a
predetermined cap. Any additional development costs associated with initial
FDA approval will be shared equally. Cipher is responsible for all product
development activities, including management of the clinical studies required
by the FDA to secure NDA approval. Cipher is also responsible for product
supply and manufacturing, which would be fulfilled by its partner, Galephar
Pharmaceutical Research. After product-related expenses are deducted,
approximately 50% of all milestone and royalty payments received by Cipher
under the agreement will be paid to Galephar.
    "Ranbaxy has a well-established, leading presence in the U.S.
isotretinoin market through the Sotret(R) brand, and their sales, marketing
and IPLEDGE risk management expertise make them an ideal partner for
CIP-ISOTRETINOIN," said Larry Andrews, President and Chief Executive Officer
of Cipher Pharmaceuticals. "This agreement provides us with the financial
resources to complete CIP-ISOTRETINOIN's clinical development program while
also achieving attractive commercialization terms post-FDA approval."
    Ashish Anvekar, Director Sales and Marketing for Ranbaxy, said, "We are
pleased to add a promising late-stage product to our portfolio as we build our
branded dermatology pharmaceutical business. We believe this product's unique
attributes, particularly the more consistent absorption profile, would provide
a significant advancement in the treatment of severe, nodular acne. With U.S.
sales of $314 million for the 12 months ending June 2008(*), there is continued
strong demand for the molecule, and we see a substantial market opportunity
for this innovative formulation."
    Ranbaxy currently markets a version of isotretinoin under the brand name
Sotret. As of May 31, 2008, Sotret prescriptions exceeded 50 % of the total
U.S. market for isotretinoin(*).

    (*) Source: IMS Health

    About Ranbaxy Pharmaceuticals Inc.

    Ranbaxy Pharmaceuticals Inc. (RPI) based in Jacksonville, Florida, is a
wholly owned subsidiary of Ranbaxy Laboratories Limited, India's largest
pharmaceutical company. RPI is engaged in the sale and distribution of generic
and branded prescription products in the U.S. healthcare system.
    Ranbaxy Laboratories Limited, headquartered in India, is an integrated,
research based, international pharmaceutical company producing a wide range of
quality, affordable generic medicines, trusted by healthcare professionals and
patients across geographies. Ranbaxy's continued focus on R&D has resulted in
several approvals in developed markets and significant progress in New Drug
Discovery Research. The company's foray into Novel Drug Delivery Systems has
led to proprietary "platform technologies", resulting in a number of products
under development. The company is serving its customers in over 125 countries
and has an expanding international portfolio of affiliates, joint ventures and
alliances, ground operations in 49 countries and manufacturing operations in
11 countries.

    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. 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. The
product is being marketed in the United States by ProEthic Pharmaceuticals
under the label Lipofen(R). In addition, Cipher is developing formulations of
the pain reliever tramadol (FDA approvable letter in May 2007) and the acne
treatment isotretinoin (FDA approvable letter in April 2007).
    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. Except as required by Canadian securities laws,
the Company does not undertake to update any forward-looking statements; such
statements speak only as of the date made.

    %SEDAR: 00020415E