Investor PresentationJune 2012

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Forward-looking Statements

This presentation may contain forward-looking statements within the meaning of certain securities laws, including the “safe harbour” provisions of the Securities Act (Ontario) and other provincial securities law in Canada. These forward-looking statements include, among others, statements with respect to our objectives, goals and strategies to achieve those objectives and goals, as well as statements with respect to our beliefs, plans, objectives, expectations, anticipations, estimates and intentions. The words “may”, “will”, “could”, “should”, “would”, “suspect”, “outlook”, “believe”, “plan”, “anticipate”, “estimate”, “expect”, “intend”, “forecast”, “objective” and “continue” (or the negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which give rise to the possibility that predictions, forecasts, projections and other forward-looking statements will not be achieved. 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. We caution readers not to place undue reliance on these statements as a number of important factors, many of which are beyond our control, could cause our actual results to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, the applicability of patents and proprietary technology; possible patent litigation; regulatory approval of products in the Company’s pipeline; changes in government regulation or regulatory approval processes; government and third-party payer reimbursement; dependence on strategic partnerships for product candidates and technologies, marketing and R&D services; meeting projected drug development timelines and goals; intensifying competition; rapid technological change in the pharmaceutical industry; anticipated future losses; the ability to access capital to fund R&D; and the ability to attract and retain key personnel.

We caution that the foregoing list of important factors that may affect future results is not exhaustive. When reviewing our forward-looking statements, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Additional information about factors that may cause actual results to differ materially from expectations, and about material factors or assumptions applied in making forward-looking statements, may be found in the body of this presentation, in the “Risk Factors” section of our Annual Information Form, under “Business Risks” and elsewhere in the Management’s Discussion and Analysis of Operating Results and Financial Position in our most recent annual and quarterly financial statements and elsewhere in our filings with Canadian securities regulators, 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. We do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf; such statements speak only as of the date made. The forward-looking statements included herein are expressly qualified in their entirety by this cautionary language.

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Commercial-stage specialty pharma

company focused on improving drugs for

better results

Cipher Pharmaceuticals (TSX:DND; OTC: CPHMF)

54 clinical trials

6 new drug applications

4 Distributor partnerships

5final FDA & HC approvals

3 growing revenue streams

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Senior Management & Board

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Management Board of Directors

Larry Andrews• President and CEO

Norman Evans, C.A.• Chief Financial Officer

Jason A. Gross, Pharm.D.• Vice President, Scientific Affairs

William Garriock (Chair)

Stefan Aigner

Larry Andrews

William Claypool

Gerald McDole

John Mull

Stephen Wiseman

Market / Indication

Phase I/II

Phase III

Regulatory approval Commercial

Lipofen®

CIP-Isotretinoin

CIP-Tramadol ER

Severe acne

Launched Q4 2007 (Kowa Pharma)

Launched Q3 2011(Vertical Pharma)

Moderate to moderately severe chronic pain

Hyperlipidemia

Product Portfolio

Launch expected Q4 2012 (Ranbaxy Pharma)

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• U.S. distributor: Kowa Pharmaceuticals

• Strong presence in lipid management market with Lipofen and Livalo (pitavastatin)

• 250 primary care representatives

• Enhanced promotional effort in the latter half of 2011 has been rewarded with increased Rx penetration in the $2 billion fenofibrate market.

• Lipofen patent-protected until 2015

Lipofen® Status Report

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U.S. Fenofibrate Opportunity

Source: IMS Health

US$2.0 Billion Market

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Lipofen® Monthly Prescription Performance

Source: IMS HealthSource: IMS Health

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Lipofen® Quarterly Royalty Revenue

Market / Indication

Phase I/II

Phase III

Regulatory approval Commercial

Lipofen®

CIP-Isotretinoin Severe acne

Launched Q4 2007 (Kowa Pharma)

Launched Q3 2011(Vertical Pharma)

Moderate to moderately severe chronic pain

Hyperlipidemia

Product Portfolio

Launch expected Q4 2012 (Ranbaxy Pharma)

CIP-Tramadol ER

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CIP-TRAMADOL ER: Best in Class Profile

Ultram ER® RyzoltTM CIP-Tramadol ER

Time to reach therapeutic levels (100ng/ml plasma levels)

240 minutes 60 minutes 60 minutes

Food Effect Yes Yes No

Therapeutically Active Dosages

100 mg Yes No Yes

200 mg Yes Yes Yes

300 mg Yes Yes Yes

Dosage Format Tablets Tablets Capsules

Significant differentiation to drive promotional success

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CIP-TRAMADOL ER: Status Report

U.S.• Final FDA approval May 2010• U.S. patent issued Dec 2010• Completed licensing agreement

with Vertical Pharmaceuticals• US$1.5 million upfront, potential for

US$5.5 million in pre- and post-commercial milestones

• Royalty in mid-teens• ~60 reps currently, plans for

further expansion in H1 2012

• Launched in Q3 2011 as ConZip™

Canada• Final TPD approval Sept 2011• Patent issued July 2011• Completed licensing agreement

with Medical Futures• US$0.3 million upfront, additional

cumulative sales milestones• Double-digit royalty• ~22 reps for launch, plans for

further expansion

• Launched in Q1 2012 as Durela™

U.S. Tramadol Opportunity

Source: IMS Health

~US$130 Million Extended-Release Market

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Total ER Segment

Total Tramadol Market

U.S. Tramadol Opportunity: ConZipTM

14Source: IMS Health

Market / Indication

Phase I/II

Phase III

Regulatory approval Commercial

Lipofen®

CIP-Isotretinoin

Severe acne

Launched Q4 2007 (Kowa Pharma)

Launched Q3 2011(Vertical Pharma)

Moderate to moderately severe chronic pain

Hyperlipidemia

Product Portfolio

Launch expected Q4 2012 (Ranbaxy Pharma)

CIP-Tramadol ER

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CIP-ISOTRETINOIN: Opportunity

• Effective treatment requires reaching 120 to 150 mg per kg over a 5-6 month course of treatment

• Current products have 70% variability in absorption under different dietary conditions causing inconsistency in getting drug on board

• CIP-Isotretinoin has demonstrated much greater absorption consistency with or without food, giving physicians assurance that target accumulative dose will be achieved regardless of diet

• Currently available isotretinoin products are not promoted to Dermatologists –a monopoly on promotion!

CIP-ISOTRETINOIN: ProfileAUC: 252.60

Cmax: 267.53Phase I: Study No. 2003-627Single dose study of Accutane 40mg

Fed vs. Fast Condition

Time (hours)

Accutane® 40mg (Fed)

Accutane® 40mg (Fast)

Mean Plasma Isotretinoin Conc. (ng/mL)

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CIP-ISOTRETINOIN: Opportunity

• FDA Approval May 25, 2012

• To be marketed as Absorica™

• Package Insert Highlights

• While “Bioequivalent with Accutane when both drugs are taken with a high fat meal”

• “83% greater absorption than Accutane under fasted conditions”

• Therefore “Not Interchangeable with generic products of Accutane”

• Therefore “dosed Without Regard to Meals”

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US$0.4+ Billion Market (Generic)

Source: IMS Health

CIP-ISOTRETINOIN: U.S. Market

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CIP-ISOTRETINOIN: U.S. Distribution Partner

Ranbaxy Pharmaceuticals (owned by Daiichi Sankyo)• Subsidiary of a global pharmaceutical company• Existing sales force presence in U.S. isotretinoin market• FDA approval triggers a $9 million milestone payment • Royalty in the mid-teens on net sales + additional $10

million sales milestone (cumulative sales post launch )• Minimum commitment of 50 dermatology representatives• P1 detail position in Year 1 and P1/P2 in Years 2 and 3

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CIP-ISOTRETINOIN: U.S. Distribution Partner

“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 theflagship brand for Ranbaxy’s specialized dermatology sales force,” said Venkat Krishnan, Senior Vice President and Regional Director, Americas”

Source: Ranbaxy Press Release

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CIP-ISOTRETINOIN: Canadian Opportunity

Regulatory• New Drug Submission in Q4 2011• Health Canada response expected in Q1 2013

Commercial• Plan to establish commercial footprint to market the product• Plan to license in complementary late-stage products

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CIP-Isotretinoin

CIP-Tramadol

Lipofen

Tramadol‐Q3 2011 Health Canada 

approval

Tramadol‐Q3 2011 U.S. launch

Iso‐Q4 2011 FDA Submission

Tramadol‐Q1 2012 Cdn launch

Iso‐Q2 2012 FDA Response

Iso‐Q4 2012 U.S. Launch

Growing Portfolio Value

Potential Reven

ue  ($)

Note: This is intended to illustrate market opportunity; this is not a forecast

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(In 000’s of CDN$)Q1

2012Q4

2011Q3

2011Q2

2011Q1

2011

Net Revenue/Gross Margin 1,811 1,047 1,120 727 675

R&D Expenses 471 612 468 578 547

OG&A Expenses 1,016 724 667 618 1,177

Income / (loss) 125 (490) (227) (509) (1,085)

Income / (loss) per share 0.01 (0.02) (0.01) (0.02) (0.05)

Cash at quarter end 10,113 9,636 9,235 8,573 9,147

Financial Review

• Shares outstanding: Approx 24.3 million (basic), 26 million (fully diluted)

• Over $90 million in loss carry forwards

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Lipofen®

CIP-ISOTRETINOIN

CIP-TRAMADOL ER

New opportunities

• Continued royalty revenue growth

• New revenue streams from U.S. and Canadian distribution partners

• Product portfolio expansion – primary focus on later stage products for North American market

• Establish commercial footprint in Canada anchored by CIP-ISOTRETINOIN

• Out-license current products in other international markets

• $9 million milestone payment

• Commercial batch manufacturing: Q3 2012

• Absorica™ U.S. launch: Q4 2012

• Health Canada approval: Q1 2013

• Canadian commercial launch: Q2 2013

What’s Next?