Interpharm Announces Record Revenues for the Fiscal Year Ended June 30, 2006.

HAUPPAUGE, N.Y. -- Interpharm Holdings, Inc. (Amex: IPA), a manufacturer and distributor of generic pharmaceutical products, today announced its financial results for the fiscal year ended June 30, 2006.

As a result of the continued successful implementation of its expansion plan, Interpharm's revenues increased to a record $63.4 million from $39.9 million in the prior year. Interpharm's gross margin dollars increased to $17.4 million for fiscal 2006 from $9.1 million for 2005. Gross profit percentage for fiscal 2006 increased to 27.5% from 22.7%, or 4.8 percentage points.

Interpharm's growth was a direct result of its increased research and development spending which is projected to continue, and accelerate, for the fiscal year ending June 30, 2007. During fiscal 2006, Interpharm spent approximately $10.7 million on research and development, as compared with $4.0 million for 2005 and $0.5 million for 2004. While research and development spending is also the cause of Interpharm's $3.8 million net loss, it allowed Interpharm to file 17 new ANDAs and obtain eight new approvals since July 1, 2005. Interpharm had previously projected only 25 total filings by June 30, 2007, but reports that it is now on a pace for at least 37.

With funding obtained through a previously announced $41.5 million credit line and two previously announced $10 million sales of preferred stock, Interpharm reported that it will continue to pursue development and FDA approvals for higher margin products in each of its six targeted product areas and seek to successfully commercialize those products. In addition, Interpharm believes that it now has sufficient funds to complete its current business plan, as well as to allocate funds for additional projects.

During the fiscal year ended June 30, 2006, Interpharm launched two products: sulfamethoxazole and trimethoprim single and double strength combination tablets (generic versions of Bactrim[R] and Bactrim DS[R]) and two strengths of a female hormone product. In the aggregate, both of these product launches resulted in sales of approximately $12.3 million, and contributed to Interpharm's overall increase in gross profits.

Since July 1, 2005, Interpharm also continued to hire key personnel, including additional research and development personnel, two national sales managers and other sales personnel, with the goal of independently marketing its products to a broad base of customers including major chains, wholesalers, distributors, managed care entities and government agencies, without relying on outside parties.

Cameron Reid, Chief Executive Officer of Interpharm Holdings, stated: "Interpharm's transformation into a full-service generic pharmaceuticals provider is near completion - we now have the ability to develop, manufacture, distribute and market a growing line of products. In the coming fiscal year, I believe Interpharm should continue its strong performance in revenue growth and gross margin improvement. Research and development efforts resulted in 17 new ANDA filings this past fiscal year and we believe we will exceed 20 additional new ANDA filings over the course of the next fiscal year. With the recent addition of two national sales account managers, Interpharm is now positioned to expand its sales base with a growing portfolio of products, strengthen its market position and make more direct sales to generic trade customers including national retailers, wholesalers, managed care and distributors."

About Interpharm Holdings Inc.

Interpharm currently develops, manufactures and distributes generic prescription strength and over-the-counter pharmaceutical products. Interpharm will continue to focus on growing organically through internal product development and leveraging its strength in efficient and cost effective manufacturing. In addition, Interpharm will also continue to seek consummation of mutually beneficial strategic alliances and collaborations. Headquartered on Long Island, New York, Interpharm presently employs nearly 500 people.

FORWARD-LOOKING STATEMENTS

Statements made in this news release, contain forward-looking statements concerning Interpharm's business and products involving risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. The actual results may differ materially depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, development, shipment, market acceptance, and additional competition from existing and new competitors, changes in technology, and various other factors beyond Interpharm's control. Other risks inherent in Interpharm's business are set forth in its filings with the SEC, including, but not limited to, its Form 10-K, filed on September 28, 2006.

All information in this release is as of September 28, 2006. Interpharm undertakes no duty to update any forward-looking statements to conform the release to actual results or changes in its circumstances or expectations after the date of this release.

The financial information stated above and in the tables below has been abstracted from the Company's Form 10-K for the fiscal year ended June 30, 2006, filed with the SEC on September 28, 2006, and should be read in conjunction with the information provided therein.

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