Cipher Pharmaceuticals

CPH.TO

Drug Manufacturers - Specialty & Generic · Healthcare

Exchange

Toronto Stock Exchange

Winston Score

Winston is happy

A high-quality business with solid fundamentals.

Data as of Aug 23, 2026 · filings through Jun 30, 2026

How the score breaks down

Quality

Strong

Growth

Good

Cash Flow

Strong

Stability

Exceptional

Valuation

Good

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Winston Score History

The full picture

Cipher Pharmaceuticals is a small Canadian specialty drug company that licenses and sells prescription medicines for skin conditions and other niche medical needs. Its main products include Absorica, a treatment for severe acne, along with a small portfolio of other licensed drugs sold primarily in Canada and the United States. The company does not discover new drugs from scratch — instead, it acquires or licenses rights to existing medicines and brings them to market.

Cipher earns money through product sales and licensing fees, which helps explain its strong gross margins above 70%. It operates mainly in Canada, with some U.S. exposure through its acne drug, and its business model of licensing rather than running expensive research labs keeps costs relatively low. The key risk is that its revenue is concentrated in a small number of products, meaning a generic competitor entering the market or a licensing deal falling apart could meaningfully hurt its income.

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-12.1% YoY

YoY Growth Rate

Revenue declining

EPS Growth

-34.8% YoY

YoY Growth Rate

Earnings declining

Insider Activity

43.1%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

C$9M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Revenue declining

Cipher Pharmaceuticals's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale

Gross Margin

65.6%

Premium pricing power — 65.6% gross margin

Profit after running costs

Operating Margin

37.1%

Excellent — 37.1% operating margin

Return on the money invested

ROCE

13.9%

Good — 13.9% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales growth

Sales YoY

+3.6%

Slow sales growth (+3.6% YoY)

Profit growth

EPS YoY

+141.9%

Earnings growing fast (+141.9% YoY)

Earnings growing 25%+ a year. The compounder zone.

How steady the profit is

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Profit that turns into cash

Cash Conversion

93%

Modest — 93% of profit becomes cash

Spare cash per sale

FCF Margin

54.6%

Converts sales into free cash efficiently (54.6%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns

Debt / Equity

0.00

Conservative — low debt load (0.00)

Covers its interest

Interest Cover

118.77x

Comfortably covers interest (118.8x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

Price vs profit

P/E Ratio (TTM)

9.1x

no trend

Attractive valuation — P/E 9.1

P/E under 10. The price tag is small relative to last year's profit.

Cheaper or dearer next year

P/E vs Forward

-0.6

SLOWING

Earnings expected to fall — forward P/E higher than today

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Dividends

Not applicable for this business.

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