Toronto Stock Exchange Symbol: DND

    MISSISSAUGA, ON, Aug. 6 /eMediaWorld/ - 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 http://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.