[August 14, 2014]

Targeted Medical Pharma Reports Second Quarter 2014 Financial Results

Targeted Medical Pharma, Inc. (OTCQB: TRGM), today announced financial results for its second quarter ended June 30, 2014. The Company posted increased revenues, gross profit and an increase in net income before interest, taxes, depreciation and amortization, and stock based compensation (Adjusted EBITDA^*) on a quarter-over-quarter basis.

Financial Overview

Quarter-over-Quarter Comparison:

Financial results for the three months ended June 30, 2014 compared to the three months ended June 30, 2013

• Total revenue of $2.2 million, a 16% improvement from $1.9 million during the three months ended June 30, 2013.
• Total gross profit of $1.7 million, a 45% improvement from $1.2 million during the three months ended June 30, 2013.
• Adjusted EBITDA of $0.04 million, a 103% improvement from -$1.6 million during the three months ended June 30, 2013.

Net loss for the three months ended June 30, 2014, was $0.42 million compared to a net loss of $7.84 million for the three months ended June 30, 2013. During the three months ended June 30, 2013, the Company decided to fully reserve its net deferred income tax assets resulting in income tax expense of $5.9 million. Exclusive of income tax expense, loss before income taxes for the three months ended June 30, 2014 and 2013, was $0.36 million and $1.94 million, respectively. This significant improvement reflects management's commitment to continued operational cost containment and execution of a multi-channel sales and marketing strategy. We believe that operational improvements will continue to drive overall profitability.

During the three months ended June 30, 2014 and 2013, the Company's net loss consisted of a significant amount of non-cash charges. Due to the impact of these non-cash charges on the Company's reported net loss, the Company places greater emphasis in Adjusted EBITDA.

A reconciliation of net loss to Adjusted EBITDA is reflected in the following table:

Management Comments

"The improvements in revenue, profit and EBITDA in the second quarter of 2014 reflect our continued focus on streamlining operations and expanding the number of revenue generating verticals," said William Shell, M.D., Chief Executive Officer and Chief Science Officer of Targeted Medical Pharma. "Developing a sustainable business model constructed of multiple revenue verticals will insulate the company from shifts in the healthcare industry, and provide a reliable source of revenue for the continued research and development of therapies for the treatment of Autism and Anemia."

A copy of Targeted Medical Pharma's quarterly report on Form 10-Q for the three months ended June 30, 2014, filed with the Securities and Exchange Commission on August 14, 2014, is accessible on the Company's website at www.tmedpharma.com and at the SEC's (News - Alert) website at www.sec.gov.

About Targeted Medical Pharma, Inc.

Targeted Medical Pharma, Inc. is a Los Angeles-based biotechnology company that is committed to drug discovery and development. The company currently develops and distributes medications for the treatment of chronic disease, including pain syndromes, peripheral neuropathy, hypertension, obesity, sleep and cognitive disorders. The company also develops a line of dietary supplements designed to support health and wellness. The company manufactures 10 proprietary medical foods, and recently launched its first dietary supplement, Clearwayz™. The products are sold directly to physicians and pharmacies in the U.S. The company also is developing nutrient-based systems for oral stimulation of progenitor stem cells that differentiate into neurons, red blood cells, pituitary hormones including IGF-I. Follow the Company on Twitter (News - Alert): @tmedpharma and on Facebook (News - Alert): www.facebook.com/TargetedMedicalPharma.

Forward Looking Statement

This press release may contain forward-looking statements related to the company's business strategy, outlook, objectives, plans, intentions or goals. The words "may," "will," "should," "plans," "explores," "expects," "anticipates," "continue," "estimate," "project," "intend," and similar expressions, identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, but their absence does not mean that the statement is not forward-looking. Forward-looking statements also include any other passages that relate to expected future events or trends that can only be evaluated by events or trends that will occur in the future. The forward-looking statements are based on the opinions and estimates of management at the time the statements were made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. These risks and uncertainties include, among others, the risk of unforeseen changes in customer budgets, unanticipated loss of customers or delays in anticipated orders, the potential failure to attract new customers due to the company's inability to competitively market its products and services, the risk of fluctuating demand for the company's product, the potential failure to maintain desired customer relationships, costs and risks related to development of technologies. More information about factors that could cause actual results to differ materially from those predicted in Targeted Medical Pharma's forward-looking statements is set out in its annual report on Form 10-K for the year ended December 31, 2013, filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance upon these forward-looking statements, which speak only as to the date of this release. Except as required by law, Targeted Medical Pharma, undertakes no obligation to update any forward-looking or other statements in this press release, whether as a result of new information, future events or otherwise.

*Adjusted EBITDA refers to a financial measure that is more fully defined as net loss before net interest and other income, interest expense, income taxes, depreciation and amortization, and stock based compensation. Adjusted EBITDA is a non-GAAP financial measure which management believes reflects the Company's ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in the Company's business, as they exclude certain income or other expenses that are not reflective of ongoing operating results. Adjusted EBITDA is commonly used to analyze companies on the basis of leverage and liquidity. However, Adjusted EBITDA is not a measure determined under GAAP in the United States of America and may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA should not be construed as a substitute for net loss or as a better measure of liquidity than cash flow from operating activities, which are determined in accordance with GAAP. Management believes that Adjusted EBITDA is a useful measure for analyzing operating results, and uses this non-GAAP financial measure to review past results and forecast future results.

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