October 2011

2

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 objectivesand 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 ourforward-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)

54 clinical trials

5 new drug applications

4 Distributor partnerships

2final FDA approvals

2growing revenue streams

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

Pipeline

Launch expected Q4

2012 (Ranbaxy Pharma)

4

5

• Kowa Pharmaceuticals - U.S. Distributor

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

• Expanded to 250 reps in the field in 2010

• Lipofen in P2 position on each call

• Patent-protected until 2015

Lipofen® Status Report

6

Lipofen® Royalty Growth

$0

$50

$100

$150

$200

$250

$300

$350

$400

Jan-0

9

Mar

-09

May

-09

Jul-0

9

Sep-0

9

Nov-09

Jan-1

0

Mar

-10

May

-10

Jul-1

0

Sep-1

0

Nov-10

Jan-1

1

Mar

-11

May

-11

Jul-1

1

Tho

usa

nd

s

Monthly Royalties (US$)

7

U.S. Fenofibrate Opportunity

Source: IMS Health

US$2.0 Billion Market

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Jul-0

4

Jan-0

5Ju

l-05

Jan-0

6Ju

l-06

Jan-0

7Ju

l-07

Jan-0

8Ju

l-08

Jan-0

9Ju

l-09

Jan-1

0Ju

l-10

Jan-1

1Ju

l-11

Thou

sand

s

TRx NRx

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

Pipeline

Launch expected Q4

2012 (Ranbaxy Pharma)

CIP-Tramadol ER

8

9

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: Fast Onset

Bioequivalence 200 mg multi-dose (fasted)

CIP-TRAMADOL ER

ULTRAM ER

4 8 20 241612

100

300

200

Concentration(ng/mL) Mean Plasma Concentration (0-24 hours) Tramadol N=38

Time (hours)

11

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

• Launching in Q1 2012 as Durela™

U.S. Tramadol Opportunity

Source: IMS Health

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Feb-06 Sep-06 Apr-07 Nov-07 Jun-08 Jan-09 Aug-09 Mar-10 Oct-10 May-11

Tho

usa

nd

s

Total Tramadol TRx vs. ER TRx

ER TRx Total Tramadol TRx

~US$160 Million Extended-Release Market

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Market /

Indication

Phase

I/II

Phase

III

Regulatory

approval Commercial

Lipofen®

CIP-

IsotretinoinSevere acne

Launched Q4 2007

(Kowa Pharma)

Launched Q3 2011

(Vertical Pharma)

Moderate to moderately severe

chronic pain

Hyperlipidemia

Pipeline

Launch expected Q4

2012 (Ranbaxy Pharma)

CIP-

Tramadol ER

13

14

CIP-ISOTRETINOIN: Opportunity

Best in Class Formulation and First to Market

• 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 depending on dietary intake causing inconsistency in getting drug on board

• Demonstrated much greater absorption consistency with or without food, giving physicians assurance that target accumulative dose will be achieved regardless of diet

• Expected to be the only promoted isotretinoin product in U.S.

CIP-ISOTRETINOIN: Profile

AUC: 252.60

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

CIP-Isotretinoin (20mg X 2) Fed Condition

AUC: 106.0

Cmax: 100.6

Accutane® 40mg

CIP-Isotretinoin 2 x 20mg

Mean Plasma Isotretinoin Conc. (ng/mL)

Time (hours)

CIP-ISOTRETINOIN: Profile

16

Phase I: Study No. 2003-627Single dose study Accutane 40mg vs.

CIP-Isotretinoin (20mg X 2)Fast Condition

AUC: 178.8

Cmax: 200.2

Accutane® 40mg

CIP-Isotretinoin 2 x 20mg

Mean Plasma Isotretinoin Conc. (ng/mL)

Time (hours)

CIP-ISOTRETINOIN: Profile

17

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U.S. Isotretinoin Opportunity

US$0.5 Billion Market (Generic)

Source: IMS Health

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Jun-04 Feb-05 Oct-05 Jun-06 Feb-07 Oct-07 Jun-08 Feb-09 Oct-09 Jun-10 Feb-11

Total Isotretinoin Market

19

CIP-ISOTRETINOIN: Status Report

Clinical – Phase III Safety Study

• 900+ patients in the U.S. and Canada

• Approved under SPA

• Top-line results released in Q3 2011

• Positive safety data: both drugs showed similar adverse event profiles

• Efficacy data:

• Under PP analysis, both efficacy endpoints met non-inferiority margins

• In mixed LOCF analysis of ITT population, both efficacy endpoints met non-inferiority margins

• In the LOCF analysis of the ITT population, the first primary endpoint was achieved while the second fell slightly outside non-inferiority target

Regulatory/Commercial

• FDA and Health Canada submissions planned for Q4 2011

• Pre-commercial preparation has commenced

CIP-ISOTRETINOIN: U.S. Distribution

Ranbaxy Pharmaceuticals (owned by Daiichi Sankyo)

• Subsidiary of global pharmaceutical company

• Dermatology sales presence in U.S. isotretinoin market

• Funded majority of Phase III study

• Up to $24M in pre- and post-commercial milestones

• Royalty in the mid-teens on net sales

• P1 detail position in Year 1 and primarily P1 in Years 2 and 3

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Lipofen®

CIP-ISOTRETINOIN

CIP-TRAMADOL ER

New opportunities

• Continued royalty revenue

• Initial royalty revenue from U.S. agreement

• Canadian launch: Q1 2012

• Canadian commercialization opportunities

• Out-license current products in other markets

• Product portfolio expansion

• FDA submission: Q4 2011

• Health Canada submission: Q4 2011

• Additional $1.0 million milestone payment: Q4 2011

What’s Next?

Growing Portfolio ValueR

even

ue

($

)

Q3 2011 Health Canada

approval

Q3 2011 U.S. launch

Q2 2012 FDA Response

Q4 2012 U.S. launch

CIP-Isotretinoin

CIP-Tramadol

Lipofen

2011 2012 2013 2014

Q1 2012 Cdn launch

Q4 2011 FDA Submission

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(In 000’s of CDN$ H1 2011 H1 2010 2010 2009

Royalty Revenue 1,114 981 2,067 1,107

Milestone Revenue 287 2,155 3,318 2,072

R&D Expenses 1,125 523 743 956

OG&A Expenses 1,774 1,941 3,895 4,252

Income / (loss) (1,594) 310 172 (2,715)

Income / (loss) per share

(0.07) 0.01 0.00 (0.11)

Financial Review

Solid financial position

• No debt, cash at June 30, 2011: $8.6 million

• Shares outstanding: Approx 24.2 million (basic), 26 million (fully diluted)

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Summary

• Steady revenue stream from Lipofen®

• ConZip™ / Durela™ provide second royalty revenue stream

• CIP-ISOTRETINOIN offers significant financial upside

• Solid financial position

• Strong core management team

Questions