Mr. Craig Mull reports

CIPHER PHARMACEUTICALS RELEASES Q2 2023 RESULTS, ANNOUNCES LAUNCH OF EPURIS IN MEXICO

Cipher Pharmaceuticals Inc. today released its financial and operating results for the three and six month periods ended June 30, 2023. (All figures are presented in United States dollars unless otherwise stated.)

• Strong growth capital available with $36.3-million in cash and cash equivalents;
• Net income increased by 32 per cent year over year to $5.7-million;
• EPS (earnings per share) increased 35 per cent year over year to 23 cents per share.

Q2 2023 financial highlights

• MOB-015 pipeline product for nail fungus treatment obtained European Union approval;
• Commercial launch of Epuris in Mexico through partnerships with Italmex & Galephar;
• Total revenue was $5.3-million compared with $5.6-million in Q2 2022;
• Licensing revenue increased 6 per cent to $2.2-million compared with $2.0-million in Q2 2022;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $3.1-million compared with $3.6-million in Q2 2022;
• Ended the quarter with $36.3-million in cash ($48.1 (Canadian)) or $1.43 per share ($1.90 (Canadian)).

Management commentary

Craig Mull, interim chief executive officer. commented: "I am proud to announce further developments on our product pipeline, whereby Moberg Pharma recently obtained a significant European Union regulatory milestone, paving the way for commercial launch of their MOB-015 nail fungus treatment across 13 countries in Europe. Cipher holds the exclusive rights to MOB-015 in Canada and we believe approval in the European Union highly derisks the eventual regulatory approval in Canada, which is a market opportunity in excess of $80-million (Canadian).

"We also are proud to announce the official launch of Epuris in Mexico, making our isotretinoin product available to the many Mexicans who suffer from severe acne. In May, 2023, Epuris was commercially launched through Cipher's strong established partnerships with Galephar Pharmaceutical Research and Italmex Pharma S.A. Epuris has established itself as the No. 1 prescribed isotretinoin product dermatologists rely on in Canada, and we believe this is a tremendous step in further growth of the Epuris brand."

Bryan Jacobs, chief financial officer, commented: "During the second quarter, our business performed as expected with sequentially strong revenue, earnings and cash flows from operations compared with trailing quarters. Our EBITDA and adjusted EBITDA of $3.1-million during the quarter was highly correlated to the increase of our cash on hand by $2.9-million, which is indicative of a well-managed business. Cipher ended the quarter with $36.3-million in cash with access to a $35-million revolving credit facility, placing us in a formidable position to drive future growth of our business."

Q2 2023 financial review

• Total revenue was $5.3-million in Q2 2023, compared with $5.6-million in Q2 2022.
• Licensing revenue was $2.2-million in Q2 2023, compared with $2.0-million in Q2 2022.
• Product revenue was $3.1-million in Q2 2023, compared with $3.5-million in Q2 2022.
• Net income was $3.1-million, or 12 cents per diluted share in Q2 2023, compared with $2.2-million, or eight cents per diluted share in Q2 2022.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for Q2 2023 was $3.1-million, compared with $3.6-million in Q2 2022.
• The company had $36.3-million in cash and no debt as of the end Q2 2023.
• Cipher generated $2.9-million of additional cash on hand in Q2 2023 (YTD $7.5-million).

Business strategy and outlook

Cipher anticipates executing on its business strategy in 2023 to enhance long-term value, including:

• Focusing on acquiring cash flow positive pharmaceutical assets to further diversity the company's product portfolio;
• Continuing to collaborate with the company's partners to further development on its product pipeline, including MOB-015 for the treatment of nail fungus and CF-101 for the treatment of moderate to severe plaque psoriasis;
• Advancing the company's studies on DTR-001, the company's pipeline product for the removal of tattoos;
• Continuing to pursue opportunities to enhance long-term shareholder value;
• Operating the business in an efficient and prudent manner to deliver continued earnings, being the company's management philosophy.

Corporate developments:

• On July 5, 2023, Cipher announced that its partner, Moberg Pharma AB, has obtained European Union approval for its product MOB-015 for the treatment of nail fungus, paving the way for their commercial launch across 13 countries in Europe. Cipher believes this is an important precursor to the eventual approval in North America and Canada.
• In May, 2023, the Epuris product was launched commercially by Galephar's commercial partner in Mexico, Italmex. For the three months ended June 30, 2023, royalty revenue of $100,000 was earned on initial sales of Epuris in Mexico.
• In June, 2023, Cipher's partner, Canfite Biopharma, announced it had received a positive view from the Food and Drug Administration with respect to its registration plan for the pivotal phase III clinical trial of CF-101 for the treatment of moderate to severe psoriasis.
• In June, 2023, the company bolstered the pharmaceutical experience and expertise of its board with the appointment of two new directors to the company's board of directors, Douglas Deeth and Dr. Hubert Walinski.

Financial statements and MD&A

Cipher's financial statements for the three- and six-month periods ended June 30, 2023, and management's discussion and analysis (the MD&A) for the three- and six-month periods ended June 30, 2023, are available on the company's website in the investors section under financial reports and on SEDAR+.

Notice of conference call

Cipher will hold a conference call on Aug. 11, 2023, at 8:30 a.m. ET to discuss its financial results and other corporate developments. To access the conference call by telephone, dial 416-764-8650 or 888-664-6383 and use conference ID 71994934.

A live audio webcast will be available on-line (link available in the original version of this news release):

• Or the investor relations section of the company's website;
• An archived replay of the webcast will be available until Aug. 18, 2023.

About Cipher Pharmaceuticals Inc.

Cipher Pharmaceuticals (TSX: CPH) is a specialty pharmaceutical company with a robust and diversified portfolio of commercial and early to late-stage products. Cipher acquires products that fulfill unmet medical needs, manages the required clinical development and regulatory approval process, and currently markets those products either directly in Canada or indirectly through partners in Canada, the United States and South America.

We seek Safe Harbor.