Special Committee of Cipher Pharmaceuticals Responds to Early Warning Report Filed by 1207407 Ontario Limited

MISSISSAUGA, ON, July 6, 2016 /CNW/ - A special committee (the "Special Committee") of the board of directors (the "Board") of Cipher Pharmaceuticals Inc. (NASDAQ:CPHR; TSX:CPH) ("Cipher") responded today to an Early Warning Report (the "EWR") filed on July 5, 2016 by 1207407 Ontario Limited ("1207407"), a company wholly owned by Dr. John D. Mull.  The Special Committee, comprised of directors Stephen Wiseman, Thomas Wellner, William Claypool and Stefan Aigner, was established to address issues of the type referred to in the EWR.

Cipher welcomes the opinions of its shareholders and actively seeks opportunities to enhance shareholder value. The Board takes its fiduciary responsibilities seriously. The Special Committee is disappointed that Dr. Mull has chosen to use a public forum to claim ownership of a series of initiatives, many of which were already under active ongoing discussion by the members of the Board, including Dr. Mull. The directors of Cipher share many of the concerns enumerated in the EWR, and have proactively sought to address those concerns, including through the formation of the Special Committee.

The Special Committee and the Board will continue to meet to consider further steps to advance the evaluation of initiatives.

About Cipher Pharmaceuticals Inc.

Cipher Pharmaceuticals (NASDAQ:CPHR; TSX:CPH) is a rapidly growing specialty pharmaceutical dermatology company with a diversified portfolio of commercial-stage products with the goal of becoming the most customer-centric dermatology company in North America.

Through multiple transactions, including the acquisition of Innocutis and its nine branded dermatology products, Cipher has built its U.S. commercial presence, expanded its Canadian dermatology franchise and broadened its pipeline. Cipher is well-capitalized to drive long-term, sustained earnings growth by leveraging its proven clinical development capabilities and efficient commercial execution. For more information, visit www.cipherpharma.com.

Forward-Looking Statements

Statements made in this news release 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, Form 40‑F and other filings with Canadian and U.S. securities regulatory authorities. These factors include, but are not limited to, our ability to enter into in-licensing, development, manufacturing and marketing and distribution agreements with other pharmaceutical companies and keep such agreements in effect; our dependency on a limited number of products; integration difficulties and other risks if we acquire or in-license technologies or product candidates; reliance on third parties for the marketing of certain products; the product approval process is highly unpredictable; the timing of completion of clinical trials; reliance on third parties to manufacture our products; we may be subject to product liability claims; unexpected product safety or efficacy concerns may arise; we generate license revenue from a limited number of distribution and supply agreements; the pharmaceutical industry is highly competitive; requirements for additional capital to fund future operations; dependence on key managerial personnel and external collaborators; no assurance that we will receive regulatory approvals in the U.S., Canada or any other jurisdictions; certain of our products are subject to regulation as controlled substances; limitations on reimbursement in the healthcare industry; limited reimbursement for products by government authorities and third-party payor policies; various laws pertaining to health care fraud and abuse; reliance on the success of strategic investments and partnerships; the publication of negative results of clinical trials; unpredictable development goals and projected time frames; rising insurance costs; ability to enforce covenants not to compete; risks associated with the industry in which it operates; we may be unsuccessful in evaluating material risks involved in completed and future acquisitions; we may be unable to identify, acquire or integrate acquisition targets successfully; operations in the U.S.; inability to meet covenants under our debt obligations; compliance with privacy and security regulation; our policies regarding returns, allowances and chargebacks may reduce revenues; certain regulations could restrict our activities; additional regulatory burden and controls over financial reporting; reliance on third parties to perform certain services; general commercial litigation, class actions, other litigation claims and regulatory actions; being a foreign private issuer may limit the information available to U.S. shareholders; we may lose our foreign private issuer status which could result in significant additional costs; the potential violation of intellectual property rights of third parties; our efforts to obtain, protect or enforce our patents and other intellectual property rights related to our products; changes in U.S., Canadian or foreign patent laws; litigation in the pharmaceutical industry concerning the manufacture and supply of novel and generic versions of existing drugs; inability to protect our trademarks from infringement; shareholders may be further diluted; volatility of our share price; a significant shareholder; we do not currently intend to pay dividends; our operating results may fluctuate significantly; and our debt obligations will have priority over the Common Shares in the event of a liquidation, dissolution or winding up. All forward-looking statements presented herein should be considered in conjunction with such filings. Except as required by Canadian or U.S. 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.

Investors: In Canada: Craig Armitage, LodeRock Advisors, (416) 347‑8954, [email protected]; In the United States: Thomas Hoffmann, The Trout Group LLC, (646) 378‑2931, [email protected]; Media: Mike Beyer, Sam Brown Inc., (312) 961‑2502, [email protected]