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Derma Sciences Enrolls First Patient in DSC127 Phase II Study

November 3, 2008

PRINCETON, N.J., Nov. 3 /PRNewswire-FirstCall/ — Derma Sciences, Inc. (BULLETIN BOARD: DSCI) announced today the first study patient has been entered into the company’s Phase II study of its drug candidate, DSC127. Enrollment of the 75-patient study, looking into the drug’s ability to accelerate healing in diabetic foot ulcers, is expected to be completed within 12 months. Currently, 4 US facilities have signed on as clinical study sites, with an additional 15 sites pending contract negotiations and internal review board approvals. All sites are based in the United States and include top-tier academic institutions and large, highly regarded wound care clinics. Derma Sciences acquired the global rights to the product and to the patent portfolio surrounding it – for wound care and scar prevention applications – in November, 2007.

Extensive pre-clinical studies have shown that DSC127 – a biologically active angiotensin analog – significantly increases wound healing rates, notably in reliable and validated diabetic animal models. Diabetic ulcerations represent a large and growing portion of the overall chronic wound care market. More than simply a blister on a patient’s foot, non-healing diabetic foot ulcerations can lead to a cascade of events including infection, amputation of the patient’s limb, and even death. In the United States alone, there are an estimated 2.4 million diabetic foot ulcers and over 60,000 diabetes-related amputations each year. Depending on the study, 5-year mortality rates following a diabetic ulcer related amputation have been shown to range from 39% to 68%. Ulcers are present in 3% to 6% of all hospital stays in which diabetes is listed on the discharge record. The average length of these hospital stays is 59% greater than stays in which diabetes is listed on the discharge record but when an ulceration is not present. In 2001, the financial costs to US healthcare payers for the management of diabetic ulcers and associated amputations were over $10 billion.

Not merely a problem in the United States, the World Health Organization has recognized that there is a “global epidemic of obesity”, with a sharp rise in the incidence of diabetes around the world as part of that epidemic. The International Diabetes Federation has stated that in 2006 there were 246 million people living with diabetes, and that this number is expected to increase to 380 million within 20 years.

Speaking about the first patient entered into this Phase II study, CEO Ed Quilty stated, “I am excited to say that, based on the exceptional results of multiple pre-clinical studies, some of the top wound care researchers in the US have signed on as investigators for this trial. Diabetic foot ulcerations are a major problem in the US and worldwide, as the incidence of diabetes continues to grow rapidly. A significant portion of diabetic ulcerations leads to lower limb amputation, which itself is associated with a high long-term mortality rate.” Quilty continued, “Our recent launch of MedEfficiency’s EZ-Cast and the investment we are making into DSC127 for diabetic ulcers speaks volumes to our commitment to help reduce the number of these amputations. We are confident that taking a leadership position in this area will help us reach our goal as a leader in advanced wound care, which in turn will drive shareholder value. A drug that is as effective in humans as DSC127 has been shown to be in validated animal models could have blockbuster potential.”

DSC127, a topically applied pharmaceutical, has been shown to promote healing in a variety of ways; by increasing keratinocyte proliferation, extracellular matrix production, and vascularization.

Peer reviewed articles on the technology as applied to wound healing and scar reduction have appeared in such journals as the Journal of Peptide Research, Wound Repair and Regeneration, Experimental Dermatology, Plastic and Reconstructive Surgery, the Annals of Plastic Surgery, and the Journal of Burn Care and Rehabilitation.

Derma Sciences Chief Scientific Advisor, Laura Bolton, Ph.D, whose involvement in wound care began in 1974 as a Johnson & Johnson Scientist and continued in Wound Care R&D before retiring in 2006 as Global Director of Scientific Affairs at ConvaTec, a Bristol-Myers Squibb company, said, “This is the most rigorously researched, most promising active wound healing agent I have seen. The clinical studies are well-designed to test the promise of this unusually versatile and effective molecule in diabetic foot ulcers. If results match the pre-clinical findings, surpassing moisture-retentive dressing and growth factor effects, diabetic patients will have a sterling option they can count on to help them heal their foot ulcers…”

About DSC127

The skin represents one of the few human tissues with a high turnover rate. Upon injury, the expression of receptors in injuried skin is upregulated and down regulates as the skin heals. In human skin, angiotensin II type 1 (AT1) and angiotensin II type 2 (AT2) receptors are found in the epidermis and in dermal vessel walls. DSC127, a novel angiotensin analog, has been shown to accelerate skin healing in a variety of animal models including wound repair after full-thickness excision in normal rats, in adriamycin or steroid-treated rats, in diabetic mice, after partial thickness thermal injuries in guinea pigs, and after random flap injuries in rats.

DSC127 upregulates a cassette of genes at the site of skin healing. These genes are involved in energy metabolism (glycolysis and electron transport), oxidative stress, and production of cytoskeletal proteins, all of which could be involved in the growth of new skin during wound healing. This finding suggests that DSC127 produces different actions at the wound site during various stages of healing. DSC127 appears to stimulate production of dermal progenitor cells following injury.

Acute and chronic administration of DSC127 in rodents and dogs failed to demonstrate any meaningful toxicity to major organ systems. No mutagenic effects of DSC127 were observed in standard test panels. Pre-clinical and human Phase 1 studies of DSC127 have demonstrated safety in FDA monitored studies.

About Derma Sciences

Derma Sciences is a global manufacturer and marketer of advanced wound-care products. Its key product, MEDIHONEY(TM), is sold throughout the world by Derma Sciences and Comvita New Zealand — the licensor of the patented honey- based technology — and is the leading brand of honey-based dressings for the management of wounds and burns. The product has been shown to be effective in a variety of wounds and burns, and was recently the focus of a large-scale randomized controlled trial on leg ulcers. Derma has two products in development: the BIOGUARD(TM) line of barrier gauze dressings, and DSC127, the company’s novel angiotensin analog for accelerated wound healing and scar reduction. The barrier technology was licensed from Quick-Med in Q1 of 2007 and is pending its initial FDA marketing clearance. DSC127 was licensed from the University of Southern California in Q4 of 2007. For more information about Derma Sciences, Inc., visit its home page on the Internet at http://www.dermasciences.com/.

Forward-looking Statements

Statements contained in this release that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,”"will,”"expect,”"believe,”"anticipate,”"intend,”"could,”"estimate” or “continue” are intended to identify forward-looking statements. Readers are cautioned that certain important factors may affect the Company’s actual results and could cause such results to differ materially from any forward-looking statements which may be made in this release or which are otherwise made by or on behalf of the Company. Factors which may affect the Company’s results include, but are not limited to, product demand, market acceptance, impact of competitive products and prices, product development, completion of an acquisition, commercialization or technological difficulties, the success or failure of negotiations and trade, legal, social and economic risks. Additional factors that could cause or contribute to differences between the Company’s actual results and forward-looking statements Include but are not limited to, those discussed in the Company’s filings with the Securities and Exchange Commission.

   Contact:  Derma Sciences, Inc.                 Allen & Caron Inc             Edward J. Quilty                     Rudy Barrio (US Investors)             Chairman and CEO                     r.barrio@allencaron.com             equilty@dermasciences.com             (609) 514-4744                       Brian Kennedy (media)                                                  brian@allencaron.com                                                  (212) 691-8087  

Derma Sciences, Inc.

CONTACT: Edward J. Quilty, Chairman and CEO of Derma Sciences, Inc.,+1-609-514-4744, equilty@dermasciences.com; or US Investors, Rudy Barrio,r.barrio@allencaron.com, or media, Brian Kennedy, +1-212-691-8087,brian@allencaron.com, both of Allen & Caron Inc, for Derma Sciences, Inc.

Web Site: http://www.dermasciences.com/




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