Mr. James Bowen reports

CIPHER PHARMACEUTICALS ANNOUNCES INTENTION TO COMMENCE SUBSTANTIAL ISSUER BID, AGGREGATE PRICE UP TO $6 MILLION CANADIAN DOLLARS

Cipher Pharmaceuticals Inc. intends to commence a substantial issuer bid pursuant to which the company will offer to purchase for cancellation up to $6-million of its outstanding common shares. The offer commences on Sept. 6, 2023, and will expire on Oct. 11, 2023, unless extended, varied or withdrawn.

The offer is being made by way of a modified Dutch auction, which will allow shareholders who choose to participate in the offer to individually select the price, within a range of not less than $3.95 per common share and not more than $4.75 per common share (in increments of five cents per common share), at which they are willing to sell their common shares. Upon expiry of the offer, the company will determine the lowest purchase price (which will not be more than $4.75 per common share and not less than $3.95 per common share) that will allow it to purchase the maximum number of common shares tendered to the offer, and not withdrawn, having an aggregate purchase price not exceeding $6-million.

The board of directors of Cipher believes that the SIB is in the best interests of our shareholders and the company given, among other things, its significant level of interest generating cash on hand, and future access to financing with a $35-million revolving credit facility, both expected to drive the company's future growth plans. Considering the company's broad product pipeline and the present day market opportunities for acquisitions, the board and the company's management believe the current market price of the common shares does not currently reflect the fundamental value of the company. The company intends to finance the SIB with a portion of its reported cash on hand of $36.3-million (U.S.) as of June 30, 2023.

The price range offered for the common shares pursuant to the SIB represents a negative-0.50-per-cent to 19.65-per-cent premium to the closing price of the common shares on the Toronto Stock Exchange (TSX) on Sept. 1, 2023. During the six months ended Sept. 1, 2023, the closing prices of the common shares on the TSX have ranged from a low of $3.21 to a high of $4.10. The closing price of the common shares on the TSX on Sept. 1, 2023 (the last full trading day before the company announced its intention to make the offer), was $3.97.

Shareholders who wish to participate in the offer will be able to do so through (i) auction tenders in which they specify the number of common shares being tendered at a specific price per common share, or (ii) purchase price tenders in which they agree to have a specified number of common shares purchased at the purchase price to be determined pursuant to the auction and have their common shares considered as having been tendered at the minimum price of $3.95 for the purposes of determining the purchase price. Shareholders who validly deposit common shares without specifying the method in which they are tendering their common shares will be deemed to have made a purchase price tender.

If the offer would result in an aggregate purchase price of more than $6-million, the company will purchase a pro-rated portion of the common shares so tendered pursuant to auction tenders at or below the purchase price and purchase price tenders (after giving preferential treatment to "odd lot" holders).

The offer is optional for all shareholders, who are free to choose whether to participate, how many common shares to tender and, in the case of auction tenders, at what price to tender within the specified range. Any shareholders who do not deposit their common shares (or whose common shares are not repurchased under the offer) will realize a proportionate increase in their equity interest in the company, to the extent that common shares are purchased under the offer.

The offer will not be conditional upon any minimum number of common shares being tendered. The offer will, however, be subject to other conditions and the company reserves the right, subject to applicable laws, to withdraw or amend the offer, if, at any time prior to the payment of deposited common shares, certain events occur.

The formal offer to purchase and issuer bid circular, letter of transmittal. and notice of guaranteed delivery containing the terms and conditions of the offer and instructions for tendering common shares which are expected to be mailed to registered shareholders, filed with applicable Canadian Securities Administrators and made available free of charge on or about Sept. 6, 2023. on SEDAR+.

The company has engaged Research Capital Corp. as dealer manager for the SIB and Computershare Investor Services Inc. to act as depositary for the SIB. Shareholders who have questions regarding the offer or require any assistance tendering common shares may contact Computershare Investor Services by e-mail at corporateactions@computershare.com.

None of the company, board, the dealer manager or the depositary makes any recommendation to shareholders as to whether to tender or refrain from tendering any or all of their common shares to the offer. This press release is neither an offer to purchase nor a solicitation of an offer to sell any common shares. The solicitation and the offer to purchase common shares by the company is being made only pursuant to the offer documents. Shareholders of the company are urged to read the offer documents carefully and to consult with their own financial, tax and legal advisers prior to making any decision with respect to the offer.

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.

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