Interpharm Announces Financial Results for the Three Month Period Ended March 31, 2007

Share Name	Share Symbol	Market	Type
Interpharm Holdings, Inc.	AMEX:IPA	AMEX	Ordinary Share

Interpharm (AMEX:IPA)
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Interpharm Holdings, Inc. (Amex: IPA), a manufacturer and distributor of generic pharmaceutical products, reported net sales of $19.91 million and a net loss of ($1.85) million for the quarter ended March 31, 2007. For the quarter ended March 31, 2006, Interpharm had net sales of $16.11 million and a net loss of ($1.50) million. The Company has continued to increase sales of existing products by opening many top tier accounts in retail, wholesale, distributor, and managed care trade classes, and by increasing finished goods throughput year over year. In addition, the Company launched seven controlled substance products during the March 2007 quarter. The net loss in the March 2007 quarter resulted from higher selling, general and administrative expenses, related to expansion of the Company�s infrastructure, and increased research and development (�R&D�) expenses. The Company�s gross profit percentage improved to 32.0% for the quarter ended March 31, 2007 as compared to 24.8% for the quarter ended March 31, 2006. The favorable change in gross profit percentage was the result of several factors. First, the Company made progress in obtaining adequate raw material supplies for several finished products, which facilitated an increase in manufacturing throughput. Second, increased throughput enabled the Company to improve production efficiencies, satisfy backorders, generate higher sales and increase inventory levels. Further details of Interpharm�s financial performance for the quarter are set forth in its Form 10-Q filed with the SEC on May 15, 2007. Following an FDA inspection in February 2007, the Company is packaging and has now commenced some manufacturing at its Yaphank, NY facility, and the Company plans to file almost all new product ANDAs from this facility as well. The Company has now commissioned its oral contraceptives facility and will now start the manufacture of clinical supplies for the purpose of filing the related ANDAs. As previously described in our Annual Report on Form 10-K, part of the Company�s business plan is to focus on development of products which present high barriers to entry for other market participants. In furtherance of this plan, the Company has commissioned a specialized facility for the manufacture of high potency products (i.e., products which exhibit medicinal or toxic effects at low doses) and anticipate the commencement of manufacturing for clinical supplies shortly. Interpharm continues its investment in new product development with $4.71 million of R&D spending in the March 2007 quarter. As previously reported, the Company will file fewer than the previously announced 37 ANDA filings for the 24 month period ending June 30, 2007, but will exceed its originally announced commitment for 25 ANDAs over this period. The Company�s R&D efforts have progressed in the areas of oral contraceptives, soft gelatin capsules and high potency products, and the Company is planning to manufacture clinical supplies to commence bioequivalence studies in each of these areas by June 2007. Management believes that the R&D program is also progressing well in the product areas of special release, controlled substances, and products coming off patent. Cameron Reid, Interpharm�s Chief Executive Officer, stated: �To date, the Company has been successful in increasing sales of existing products, and opening up primary accounts. The R&D pipeline is coming to fruition and is generating approved products to drive future sales growth.� 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 over 600 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, its Form 10-Q filed on February 14, 2007 and its Form 10-Q filed on May 15, 2007. All information in this release is as of May 15, 2007. 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-Q for the quarter ended March 31, 2007, filed with the SEC on May 15, 2007, and should be read in conjunction with the information provided therein. INTERPHARM HOLDINGS, INC. AND SUBSIDIARIES � CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) � ASSETS � March 31, June 30, 2007� � 2006� CURRENT ASSETS (Unaudited) � Cash $ 184� $ 1,438� Accounts receivable, net 14,109� 14,212� Inventories 12,117� 8,706� Prepaid expenses and other current assets 1,564� 1,316� Assets held for sale 538� --� Deferred tax assets � 83� � 1,321� � Total Current Assets 28,595� 26,993� � Land, building and equipment, net 32,385� 29,069� Deferred tax assets 7,744� 4,849� Investment in APR, LLC 1,023� 1,023� Other assets � 1,168� � 933� � TOTAL ASSETS $ 70,915� $ 62,867� INTERPHARM HOLDINGS, INC. AND SUBSIDIARIES � CONDENSED CONSOLIDATED BALANCE SHEETS � (In thousands) � � LIABILITIES AND STOCKHOLDERS� EQUITY � March 31, June 30, 2007� � 2006� CURRENT LIABILITIES (Unaudited) Current maturities of long-term debt $ 2,090� $ 1,686� Accounts payable, accrued expenses and other liabilities 15,027� 12,650� Liabilities held for sale 377� --� Deferred revenue � --� � 3,399� Total Current Liabilities � 17,494� � 17,735� � OTHER LIABILITIES Long-term debt, less current maturities 14,585� 13,952� Contract termination liability 1,330� --� Other liabilities � --� � 125� � Total Other Liabilities � 15,915� � 14,077� � TOTAL LIABILITIES � 33,409� � 31,812� � COMMITMENTS AND CONTINGENCIES � Series B-1 Redeemable Convertible Preferred Stock: 15 shares authorized; issued and outstanding � 10 at March 31, 2007 and June 30, 2006; liquidation preference of $10,000 � 8,155� � 8,225� � Series C-1 Redeemable Convertible Preferred Stock: �10 shares authorized; issued and outstanding � 10 at March 31, 2007; liquidation preference of $10,000 � 8,352� � --� � STOCKHOLDERS� EQUITY Preferred stocks, 10,000 shares authorized; issued and outstanding � 5,132 and 5,141 at March 31, 2007 and June 30, 2006, respectively; aggregate liquidation preference of $3,588 and $4,291 at March 31, 2007 and June 30, 2006, respectively 51� 51� Common stock, $0.01 par value, 150,000 and 65,569 shares authorized and issued, respectively, at March 31, 2007, and 70,000 and 64,537 shares authorized and issued, respectively, at June 30, 2006 656� 645� Additional paid-in capital 28,885� 24,196� Stock subscription receivable --� (90) Accumulated other comprehensive income 114� 98� Accumulated deficit � (8,707) � (2,070) � TOTAL STOCKHOLDERS� EQUITY � 20,999� � 22,830� � TOTAL LIABILITIES AND STOCKHOLDERS� EQUITY $ 70,915� $ 62,867� INTERPHARM HOLDINGS, INC. AND SUBSIDIARIES � CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) � (In thousands, except per share data) � Three Months Ended March 31, Nine Months Ended March 31, 2007� � 2006� � 2007� � 2006� � SALES, Net $ 19,910� $ 16,110� $ 60,215� $ 46,869� � COST OF SALES (including related-party rent expense of $204 and $446 for the three and nine months ended March 31, 2007 and $102 and $306 for the three and nine months ended March 31, 2006, respectively) � � 13,535� � � 12,111� � � 40,828� � � 33,708� � GROSS PROFIT � 6,375� � 3,999� � 19,387� � 13,161� � OPERATING EXPENSES Selling, general and administrative 3,882� 3,263� 9,675� 7,901� Related party rent 36� 18� 79� 54� Research and development � 4,711� � 2,975� � 13,001� � 7,006� � TOTAL OPERATING EXPENSES � 8,629� � 6,256� � 22,755� � 14,961� � OPERATING LOSS � (2,254) � (2,257) � (3,368) � (1,800) � OTHER (EXPENSE) INCOME Contract termination expense --� --� (1,655) --� Interest expense, net (289) (170) (816) (359) Asset impairment (101) --� (101) --� Other � 46� � 2� � (75) � (5) � TOTAL OTHER EXPENSE � (344) � (168) � (2,647) � (364) � LOSS BEFORE INCOME TAXES (2,598) (2,425) (6,015) (2,164) � BENEFIT FROM INCOME TAXES � (746) � (926) � (1,668) � (828) � NET LOSS (1,852) (1,499) (4,347) (1,336) � Series C-1 preferred stock beneficial conversion feature --� --� 1,094� --� Preferred stock dividends � 454� � 98� � 1,196� � 181� � NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (2,306) $ (1,597) $ (6,637) $ (1,517) � EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS � Basic and diluted loss per share $ (0.04) $ (0.05) $ (0.10) $ (0.05) � Basic and diluted weighted average shares and equivalent shares��Outstanding � 65,380� � 32,464� � 65,052� � 32,423�

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IPA Interpharm Holdings, Inc.