Product to be launched as Absorica™

Toronto Stock Exchange Symbol: DND

MISSISSAUGA, ON, May 27, 2012 /PRNewswire/ – Cipher Pharmaceuticals Inc. (TSX:
DND; OTC: CPHMF.PK) announced today that the U.S. Food and Drug
Administration (FDA) has approved Absorica™, Cipher’s novel, patented
brand formulation of the acne medication isotretinoin, for the
treatment of severe recalcitrant nodular acne. Absorica is expected to
be launched in the U.S. in Q4 2012.

“Approval of Absorica represents our third FDA approval and most
important milestone to date, reflecting the great work by our
Scientific Affairs team at Cipher and our partner, Galephar
Pharmaceutical Research,” said Larry Andrews, President and CEO of
Cipher. “We look forward to working closely with our partner, Ranbaxy
Laboratories Inc., in preparation for the upcoming U.S. launch of the
product through its dermatology sales force.”

“We are thrilled to make Absorica available as a valuable option for the
dermatologist and patients who need treatment for severe recalcitrant
nodular acne. Absorica is a critical milestone in our commitment to
serve the dermatology community and will be the flagship brand for
Ranbaxy’s specialized dermatology sales force,” said Venkat Krishnan,
Senior Vice President and Regional Director, Americas.

As a result of the FDA approval of Absorica, Cipher will receive a
US$9.0 million milestone from Ranbaxy, approximately US$4.5 million of
which will be shared with Galephar. This milestone will be reflected in
Cipher’s cash balance at the end of Q2 2012. Going forward, Cipher will
also receive royalties on net U.S. sales and is eligible for future
milestone payments based on sales targets. Under the agreement with
Ranbaxy, Cipher is responsible for product supply and manufacturing.

About Cipher Pharmaceuticals Inc.

Cipher Pharmaceuticals (TSX: DND; OTC: CPHMF.PK) is a growing specialty
pharmaceutical company that commercializes novel formulations of
successful, currently marketed molecules. Cipher’s strategy is to
in-license clearly differentiated products, advance them through the
clinical development and regulatory approval stages, and out-license to
international marketing partners. The Company’s first product is a
fenofibrate formulation marketed in the United States as Lipofen.
Cipher’s second product, an extended-release tramadol, is marketed in
the United States as ConZip™ and is marketed in Canada as Durela™.
Cipher’s third product, a novel formulation of the acne treatment
isotretinoin, was recently approved by the FDA and is expected to be
launched in Q4 2012 as Absorica™. The product is also currently being
reviewed by Health Canada. For more information, please visit www.cipherpharma.com.

About Ranbaxy Laboratories Inc.

Ranbaxy Laboratories Inc. (RLI) is a U.S. based wholly owned subsidiary
of Ranbaxy Laboratories Limited (RLL). RLI is focused on the promotion
of branded prescription products in the U.S. RLI has been expanding and
growing on the strength of Ranbaxy’s R&D efforts, and continuing
exploration of novel drug delivery systems (NDDS), licensing
activities, mergers and acquisitions. RLI is expanding the visibility
and presence of the Ranbaxy name by bringing value-added brand products
to the market. For more information, please visit www. ranbaxyusa.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. The words “may”, “will”,
“could”, “should”, “would”, “suspect”, “outlook”, “believe”, “plan”,
“anticipate”, “estimate”, “expect”, “intend”, “forecast”, “objective”,
“hope” and “continue” (or the negative thereof), and words and
expressions of similar import, are intended to identify forward-looking
statements. 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. These factors include,
but are not limited to losses; the applicability of patents and
proprietary technology; possible patent litigation; approval of
products in the Company’s pipeline; marketing of products; meeting
projected drug development timelines and goals; product liability and
insurance; dependence on strategic partnerships and licensees;
concentration of the Company’s revenue; substantial competition and
rapid technological change in the pharmaceutical industry; the
publication of negative results of clinical trials of the Company’s
products; the ability to access capital; the ability to attract and
retain key personnel; changes in government regulation or regulatory
approval processes; dependence on contract research organizations;
third party reimbursement; the success of the Company’s strategic
investments; the achievement of development goals and time frames; the
possibility of shareholder dilution; market price volatility of
securities; and the existence of significant shareholders. 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.