Cipher Pharmaceuticals Reports Third Quarter 2026 Results

(All figures are presented in U.S. Dollars)

• Epuris® sales were $3.9 million during the quarter, a year-over-year increase of 15% compared to Q3 2025
• Epuris® market share reached 48.7%¹ of the Canadian isotretinoin market, up 2.9% since December 31, 2025
• Expanded public reimbursement and patient access to Epuris® have taken effect in three additional key markets – the provinces of British Columbia, Québec and Alberta
• Natroba™ sales were $7.1 million during the quarter, a sequential increase of 14% compared to Q2 2026
• Adjusted EBITDA² of $21.8 million for the year-to-date 2026, a year-over-year increase of 3% compared to the year-to-date Q3 2025
• $8.5 million in positive operating cash flows during the quarter, continuing the buildup of growth capital available for deployment
• $5.7 million in additional cash collected after the quarter, in connection with the recently confirmed Arbitration Award, settling the related amounts outstanding as of September 30, 2026 and increasing the total cash balance to approximately $20.0 million following the end of the quarter

MISSISSAUGA, ON, Nov. 12, 2026 /CNW/ -- Cipher Pharmaceuticals Inc. (TSX: CPH) (OTCQX: CPHRF) ("Cipher" or the "Company") today announced its financial and operating results for the three and nine months ended September 30, 2026.

Third Quarter 2026 Financial Highlights

(All figures in U.S. dollars, compared to Q3 2025, unless otherwise noted)

• Net revenue was $12.7 million in Q3 2026, compared to $12.8 million in Q3 2025, a decrease of 1%, and a sequential increase of 5% compared to Q2 2026
• Net income of $10.9 million, compared to $5.5 million in Q3 2025, an increase of 98%, including $4.9 million of non-recurring income, cost recoveries and interest recognized in connection with the Arbitration Award
• Adjusted EBITDA², which excludes the non-recurring income and cost recoveries from the Arbitration Award, was $7.2 million, compared to $7.3 million in Q3 2025, a decrease of 1%
• Basic earnings per share of $0.43, compared to $0.22 in Q3 2025, an increase of $0.21 or 95%
• Cash balance of $15.3 million and $nil long-term debt at September 30, 2026
• Positive operating cash flows of $8.5 million, compared to $10.8 million in Q3 2025, a decrease of 21%

Management Commentary

"Natroba™ delivered a meaningful improvement in the third quarter. Revenue for Natroba™ grew 14% over the second quarter, well ahead of the 4% sequential increase we saw over the same period last year. The commercial initiatives we put in place this year, including expanded awareness campaigns and broader retail pharmacy availability, are beginning to take effect, and we expect them to continue to gain traction as we work through the impact of lower Medicaid enrollment," said Craig Mull, Interim CEO of Cipher. "In Canada, Epuris® continued to gain ground, with market share up 2.9% since the start of the year. Public reimbursement for Epuris® is now in effect in British Columbia, Québec and Alberta, among other jurisdictions, as a result of the Product Listing Agreements we finalized following our pCPA Letter of Intent. Broader public coverage improves patient access, and we expect it to support further market share gains from our current 48.7%² share of the isotretinoin market in Canada."

"Our core business continues to generate strong cash flow. We generated $8.5 million in cash from operating activities in the third quarter, bringing our cash balance to $15.3 million, with no debt, at the end of the quarter, and, year-to-date repurchased $2.1 million of our common shares under our normal course issuer bid. In October, we collected a further $5.7 million on the court-confirmed Arbitration Award, and we are entitled to a 15% royalty on Canadian net sales of Absorica LD® through 2040, which we will recognize once the amounts can be determined," said Ryan Mailling, CFO of Cipher. "Excluding the non-recurring benefit of the Arbitration Award, Adjusted EBITDA was $7.2 million for the quarter and $21.8 million year-to-date, up 3%. With a growing cash balance, an undrawn $65.0 million revolving credit facility and a further $25.0 million accordion feature subject to lender approval, we have significant capacity to execute on our growth strategy."

Corporate Highlights

• On July 6, 2026, the Company announced that it had successfully completed negotiations with the pan-Canadian Pharmaceutical Alliance ("pCPA"), resulting in a Letter of Intent ("LOI") for Epuris® (isotretinoin). The execution of this LOI represents a critical milestone toward securing expanded public reimbursement and enhancing patient access to Epuris® across Canada. Following this achievement, Cipher has collaborated with federal, provincial, and territorial public drug plans to finalize Product Listing Agreements to ensure timely access for eligible Canadian patients.
• Product Listing Agreements for Epuris®, expanding public reimbursement for and enhancing public access to the product, were finalized for three key markets, among others. Accordingly, public reimbursement took effect in the Province of British Columbia on August 17, 2026, in the Province of Québec on August 27, 2026 and in the Province of Alberta on October 1, 2026.
• During Q3 2026, the Company implemented a stocking program to make Natroba™ and/or its authorized generic Spinosad available at all Walmart pharmacy locations across the U.S. This is a component of Cipher's increased focus on growing the commercial side of the business.
• On September 1, 2026, the Company announced the receipt of a favourable decision from the New York federal court (the "Court") regarding the petition filed by Sun Pharmaceutical Industries, Inc. ("Sun") in October 2025, in connection with arbitration proceedings for a contractual dispute with Sun regarding Sun's breach of certain provisions of its supply and distribution agreement with the Company. Sun's petition sought to partially vacate the portions of an arbitrator's award that affirmed Cipher's ownership of the clinical data involved in Sun's launch of Absorica LD® in Canada and awarded Cipher (i) compensatory damages of CAD $4,242,360, (ii) a 15% royalty on Net Sales of Absorica LD® in Canada commencing on January 1, 2026 and ending on December 31, 2040, and (iii) 80% of Cipher's out-of-pocket attorneys' fees and certain expenses directly related to the arbitration process (the "Arbitration Award"). The Court's decision denied Sun's petition and granted Cipher's cross-petition for an order confirming the Arbitration Award. In addition, the Court awarded Cipher interest on the damages and Cipher's out-of-pocket attorneys' fees and certain expenses directly related to the arbitration process, from the date of the Arbitration Award to the date of the Court's judgment, payable at a rate of 9% per annum. The Court also awarded Cipher additional interest from the date of entry of the Court's judgment to the date on which the judgment is satisfied. In October 2026, Cipher received payment of $5.7 million in respect of the compensatory damages, attorneys' fees and expenses, and related interest. No amounts have been recognized for the 15% royalty, as the Company requires additional information to reliably estimate the royalty earned to-date.
• On September 21, 2026, the Company announced the appointment of Rajiv De Silva to the Company's Board of Directors (the "Board"), expanding Cipher's Board to four members, three of whom are independent. Mr. De Silva has over 30 years of experience in the healthcare sector, including positions at the board and executive leadership levels of both publicly traded and privately held companies and has a proven track record of guiding high-growth organizations through key value inflection points and complex mergers and acquisitions ("M&A"). Mr. De Silva's extensive background in the healthcare sector and in M&A is expected to provide considerable benefit to Cipher as it continues to execute its growth strategy.

Q3 2026 Financial Review

(All figures in U.S. dollars, compared to Q3 2025, unless otherwise noted)

• Net revenue was $12.7 million, a sequential increase of 5% compared to $12.1 million in Q2 2026; however, a decrease of 1% compared to $12.8 million in Q3 2025.
• Revenue from the Canadian product portfolio was $4.3 million, compared to $4.0 million in Q3 2025, an increase of 8%, driven by growth in Epuris®, which generated revenue of $3.9 million, an increase of 15%.
• Revenue from Natroba™ was $7.1 million, a sequential increase of 14% compared to $6.3 million in Q2 2026; however, a decrease of 12% compared to $8.1 million in Q3 2025, impacted by lower sales volumes to Medicaid-covered patients, reflecting overall reductions in the number of lives covered under Medicaid programs.
• Licensing revenue was $1.2 million, an increase of $0.4 million or 62%, compared to $0.8 million in Q3 2025, primarily due to higher product shipments to licensing partners.
• Total gross profit was $10.4 million, compared to $10.5 million in Q3 2025, a decrease of 1%.
• Gross margin of 82% remained consistent with Q3 2025.
• Selling, general and administrative expenses were reduced by $2.5 million or 68%, to $1.2 million in Q3 2026, compared to $3.7 million in Q3 2025, primarily as a result of a recovery of legal costs resulting from the Arbitration Award, further contributed to by reduced employee-related costs, partially offset by increased sales and marketing costs. Excluding the recovery of legal costs, selling, general and administrative expenses were $3.3 million, a decrease of 10%.
• Net income and earnings per common share were $10.9 million and $0.43, respectively, compared to $5.5 million and $0.22, respectively, in Q3 2025, positively impacted by the recognition of amounts from the Arbitration Award.
• Adjusted EBITDA² in Q3 2026 was $7.2 million, compared to $7.3 million in Q3 2025, a decrease of $0.1 million or 1%.
• Adjusted EBITDA² per common share in Q3 2026 was $0.28 compared to $0.29 in Q3 2025, a decrease of $0.01 per common share or 3%.

Q3 2026 Year-to-Date Financial Review

(All figures in U.S. dollars, compared to the year-to-date Q3 2025, unless otherwise noted)

• Net revenue was $37.3 million year-to-date Q3 2026, compared to $38.2 million year-to-date Q3 2025, a decrease of 3%.
• Total gross profit was $30.4 million year-to-date Q3 2026, compared to $30.5 million year-to-date Q3 2025, a decrease of 1%.
• Gross margin increased by 1% to 81% year-to-date Q3 2026, from 80% year-to-date Q3 2025, primarily due to the impact of non-cash fair value adjustments on acquired inventory included in the cost of products sold in the prior year-to-date period.
• Selling, general and administrative expenses were reduced by $5.3 million or 41%, to $7.5 million year-to-date Q3 2026, compared to $12.8 million year-to-date Q3 2025, as a result of non-recurring legal costs incurred during year-to-date Q3 2025 related to contractual dispute arbitration proceedings, for which a recovery associated with the Arbitration Award was recognized during the year-to-date Q3 2026. This year-over-year reduction in expenses resulting from non-recurring items was further contributed to by a reduced cost structure for the U.S. commercial operations during the current year-to-date period.
• Net income and earnings per common share were $21.1 million and $0.83, respectively, year-to-date Q3 2026, compared to $14.0 million and $0.55, respectively, year-to-date Q3 2025, with the increase primarily attributable to reduced selling, general and administrative costs, combined with other operating income recognized in connection with the Arbitration Award.
• Adjusted EBITDA² was $21.8 million year-to-date Q3 2026, compared to $21.1 million year-to-date Q3 2025, an increase of $0.7 million or 3%.
• Adjusted EBITDA² per common share year-to-date Q3 2026 was $0.86 compared to $0.83 year-to-date Q3 2025, an increase of $0.03 per common share or 4%.

Business Strategy & Outlook

Cipher expects to continue to execute on its business strategy through the remainder of 2026 and into 2027, and remains focused on profitability and driving shareholder value. Key areas of focus include:

• Driving market share growth of Natroba™ in the U.S. anti-parasitic market, where market leader Permethrin is no longer an effective treatment due to the loss of efficacy resulting from resistance, yet still holds 74%¹ market share – representing a substantial, well-defined conversion opportunity for Natroba™, a proven single application treatment.
• Acquiring or in-licensing complementary products to add to our North American platform to enhance the profitability, size and scale of the business.
• Out-licensing our products globally, including Natroba™, to markets where there is high unmet need.
• Obtaining Health Canada regulatory approval for Natroba™ and commercializing the product directly in the Canadian market by leveraging Cipher's existing infrastructure in Canada.
• Pursuing acquisitions of companies or products with specific strategic value, while remaining disciplined on valuation and terms.

Financial Statements and MD&A

Cipher's financial statements for the three and nine months ended September 30, 2026, and management's discussion and analysis (the "MD&A") for the three and nine months ended September 30, 2026, are available on the Company's website at www.cipherpharma.com in the "Investors" section under "Financial Reports" and on SEDAR+ at www.sedarplus.ca.

Notice of Conference Call

Cipher will hold a conference call on November 13, 2026, at 8:30 a.m. (ET) to discuss its financial results and other corporate developments.

• To access the conference call by telephone, dial (416) 945-7677 or (888) 699-1199
• A live audio webcast will be available at https://app.webinar.net/50JpGlZgr6y
• An archived replay of the webcast will be available until November 20, 2026, and can be accessed by dialing (289) 819-1450 or (888) 660-6345 and entering conference replay code 04102#

About Cipher Pharmaceuticals Inc.

Cipher Pharmaceuticals (TSX: CPH) (OTCQX: CPHRF) is a specialty pharmaceutical company with a robust and diversified portfolio of commercial and early to late-stage products. Cipher acquires products that fulfill unmet medical needs, manages the required clinical development and regulatory approval process, and currently markets those products either directly or indirectly in Canada, the U.S., and South America. For more information, visit www.cipherpharma.com.

Forward-Looking Statements and Non-IFRS Measures

This press release includes forward-looking statements within the meaning of applicable securities laws. These forward-looking statements include, among others, statements with respect to objectives and goals and strategies to achieve those objectives and goals, as well as statements with respect to our beliefs, plans, expectations, anticipations, estimates and intentions.  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. Forward-looking statements in this press release include statements relating to Cipher's strategy to expand product offerings through acquisitions and in-licensing; the pursuit of growth through accretive acquisitions of companies or products of strategic value; Cipher's financial position, expected strong cash flows, and ability to execute its growth strategy utilizing its $65.0 million undrawn revolving credit facility and a further $25.0 million accordion feature, subject to lender approval; the intent to obtain Health Canada regulatory approval for Natroba™ and commercialize it directly in the Canadian market using existing infrastructure; expectations for driving market share growth for Natroba™ in the U.S. anti-parasitic market; plans to acquire complementary products to enhance the profitability, size, and scale of the North American platform; intentions to out-license Natroba™ globally in regions with high unmet need; expectations regarding the successful execution and implementation of Product Listing Agreements with federal, provincial, and territorial public drug plans following the Letter of Intent with the pan-Canadian Pharmaceutical Alliance; and expectations for continued market share growth for Epuris® in Canada as a result of expanded public reimbursement and enhanced patient access.

By their 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. These assumptions include, but are not limited to: the Company's ability to successfully identify, evaluate, and complete accretive acquisitions and in-licensing opportunities that fit its strategic goals; the timely and successful receipt of regulatory approval from Health Canada for Natroba™; the continued generation of strong cash flows from operations and the continued availability of the $65.0 million revolving credit facility and the $25.0 million accordion feature, subject to lender approval; the ability of Natroba™ to effectively compete against existing treatments, such as Permethrin, and capture significant market share in the U.S.; the adequacy of Cipher's existing Canadian sales and distribution infrastructure to commercialize Natroba™; the existence of favourable market conditions and global partners willing to enter into out-licensing agreements for Natroba™; the successful negotiation and finalization of Product Listing Agreements with federal, provincial, and territorial public drug plans on terms consistent with the Letter of Intent; and the ability of expanded public reimbursement to increase patient access to Epuris® and drive continued market share growth in the Canadian isotretinoin market.

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 inability to identify suitable business development or acquisition targets, or the failure to successfully integrate acquired businesses and achieve expected synergies; delays, restrictions, or the ultimate failure to obtain necessary regulatory approvals, including Health Canada approval for Natroba™; intense competition in the pharmaceutical industry and the U.S. anti-parasitic market, which may hinder Natroba™'s market share growth; changes in macroeconomic conditions, interest rates, or the Company's financial performance that could negatively impact cash flows or restrict access to capital and debt financing; challenges in negotiating favourable out-licensing agreements globally or failure of international partners to successfully commercialize products; our ability to enter into 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; our dependency on protection from patents that will expire; the extent and impact of health pandemic outbreaks on our business; 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 by regulators which can be highly unpredictable; the timing of completion of clinical trials, regulatory submissions and regulatory approvals; reliance on third parties to manufacture our products and events outside of our control that could adversely impact the ability of our manufacturing partners to supply products to meet our demands; we may be subject to future 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 Company's performance depends, in part, on the performance of its distributors and suppliers; the pharmaceutical industry is highly competitive with new competing product entrants; requirements for additional capital to fund future operations; products may be subject to pricing regulation; dependence on key managerial personnel and external collaborators; the ability to receive regulatory approvals for products in development or future products; certain of our products are subject to regulation as controlled substances; limitations on reimbursement in the healthcare industry; the ability to convince public payors and hospitals to include our products on the approved formulary lists; ability to receive timely payment from certain customers; application of various laws pertaining to health care fraud and abuse; the Company's 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 healthcare industry generally; 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; success in applying tax loss carryforwards; inability to meet covenants under our long-term debt arrangement; compliance with privacy and security regulation; our policies regarding product returns, allowances and chargebacks may reduce revenues; additional regulatory burden and controls over financial reporting; application of regulations that could restrict our activities and abilities to generate revenues as planned; reliance on third parties to perform distribution, logistics, invoicing, regulatory and sales services; general commercial litigation, class actions, arbitration proceedings, enforcement or challenge of arbitration awards, other litigation claims and regulatory actions; the difficulty for shareholders to realize in the United States upon judgments of U.S. courts predicated upon civil liability of the Company and its directors and officers who are not residents of the United States; increases in tariffs, trade restrictions or taxes on our products; 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; inability to protect our trademarks from infringement; shareholders may be further diluted if we issue securities to raise capital; volatility of our share price; the fact that we have a significant shareholder; our operating results may fluctuate significantly; and our debt obligations will have priority over the common shares of the Company in the event of a liquidation, dissolution or winding up.  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 "Risk Factors" section of our MD&A for the year ended December 31, 2025 and the Company's Annual Information Form, and elsewhere in our filings with Canadian securities regulators. Except as required by Canadian securities law, 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.

1) IQVIA market data as at September 30, 2026. IQVIA Inc. ("IQVIA") is globally recognized as a leading independent provider of pharmaceutical market intelligence, prescription tracking and healthcare analytics.

2) EBITDA and Adjusted EBITDA are non-IFRS financial measures.  These non-IFRS measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are unlikely to be comparable to similar measures presented by other companies. Management uses non-IFRS measures such as Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") and Adjusted EBITDA to provide investors with supplemental measures of the Company's operating performance and thus highlight trends in the Company's core business that may not otherwise be apparent when relying solely on IFRS financial measures.  The Company defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation of property and equipment, amortization of intangible assets, non-cash share-based compensation, changes in fair value of derivative financial instruments, recoveries, arbitration related costs and recoveries, gain or loss on disposal of assets and gain or loss on extinguishment of leases, impairment of intangible assets, acquisition costs, restructuring costs, fair value adjustments to acquired inventory and unrealized foreign exchange gains and losses.

The following is a summary of how EBITDA and Adjusted EBITDA are calculated:

Consolidated statements of income and comprehensive income

Consolidated statements of financial position

SOURCE Cipher Pharmaceuticals Inc.