Mr. Graham Farrell reports

CIPHER PHARMACEUTICALS RECEIVES SUCCESSFUL ARBITRATION AWARD

Cipher Pharmaceuticals Inc. has received a favourable award from an extensive and comprehensive arbitration proceeding, related to a contractual dispute with Sun Pharmaceuticals Industries Inc. regarding Sun's breach of certain provisions of its supply and distribution agreement with the company. The contractual dispute involved Sun's launch of Absorica LD in Canada and Sun's claim of ownership of certain clinical data. The arbitration process, as outlined in the agreement, was mutually agreed upon by both Cipher and Sun from the outset as a binding method of dispute resolution. The arbitrator's award included a declaration that Cipher is the rightful owner of the clinical data in dispute. The arbitrator further determined that Sun breached the agreement by submitting Cipher's clinical data to Health Canada to obtain approval for Absorica LD.

As part of the binding decision, the arbitrator awarded Cipher: (i) compensatory damages of $4,242,360; (ii) a 15-per-cent royalty on net sales of Absorica LD in Canada commencing on Jan. 1, 2026, and ending on Dec. 31, 2040; and (iii) 80 per cent of Cipher's out-of-pocket attorney fees and certain expenses directly related to the arbitration process.

Sun recently filed a petition in New York federal court seeking to partially vacate the portions of the arbitrator's award that affirmed Cipher's ownership of its clinical data and granted remedies in Cipher's favour. Cipher will vigorously defend against the petition and seek to uphold the arbitrator's binding decision and award in its entirety, including the damages, future royalties and reimbursement of legal costs. In addition to opposing this petition and based on the award, Cipher also intends to pursue claims against Sun for its use of Cipher's clinical data in any other jurisdictions where such activity took place.

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.

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