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Cipher Pharmaceuticals announces U.S. distribution and supply agreement with Ranbaxy for CIP-ISOTRETINOIN

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 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

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.

SOURCE Cipher Pharmaceuticals Inc.
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