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Cipher Pharmaceuticals announces U.S. distribution and supply agreement with Ranbaxy for CIP-ISOTRETINOIN
Date:8/6/2008

Toronto Stock Exchange Symbol: DND

MISSISSAUGA, ON, Aug. 6 /PRNewswire-FirstCall/ - 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 deducte
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