Mr. Craig Mull reports

CIPHER PHARMACEUTICALS SECURES MEDICAID STEP-THROUGH PREFERRED STATUS FOR NATROBA IN THE STATE OF ILLINOIS

The State of Illinois has updated its preferred drug listing (PDL), where Cipher Pharmaceuticals Inc.'s product, Natroba, for the treatment of scabies and head lice, has obtained preferred drug status on Medicaid state plans, and whereby its main competitive product, permethrin 5 per cent, has been downgraded to non-preferred status. As a result of this change, all Medicaid treatments for scabies and permethrin 5 per cent prescriptions in the state must first step through Natroba being the preferred treatment in Illinois.

Cipher's management team worked diligently with Illinois state pharmacy directors, who made their clinical choice and prefer Natroba as the standard of care in the treatment of scabies and head lice. Studies have shown parasites have developed resistance to permethrin-based products, which are no longer effective, and Cipher believes this was a key factor in the decision made by the State of Illinois.

Medicaid PDLs typically influence the prescribing habits of physicians as they generally represent the most restrictive formulary plans. Cipher believes that changes to Medicaid PDLs, such as the recent change in Illinois, will influence prescribing habits of physicians for commercial patients and other payer plans.

Craig Mull, interim chief executive officer, commented: "The medical decision made by the State of Illinois is just another example of the effectiveness of Natroba (spinosad) and what clear growth potential for the product remains ahead of us. We believe it is only a matter of time until more state pharmacy directors require step-through of Natroba representing the standard of care in the treatment of scabies and head lice. We are in active discussions with other U.S. states to build upon this recent success, and we continue to believe there is significant potential outside the U.S. to outlicense Natroba whereby lice resistance to permethrin-based products is a pervasive worldwide issue and whereby Natroba fills an unmet need."

About Cipher Pharmaceuticals Inc.

Cipher Pharmaceuticals is a specialty pharmaceutical company with a robust and diversified portfolio of commercial and early-to-late-stage products, mainly in dermatology. Cipher acquires products that fulfill unmet medical needs, manages the required clinical development and regulatory approval process, and currently markets those products in Canada, the United States and South America.

We seek Safe Harbor.