Rodman & Renshaw to Underwrite Follow-on Offering

PRINCETON, N.J., Nov. 16 /PRNewswire-FirstCall/ — Derma Sciences, Inc. (OTC Bulletin Board: DSCI) a specialty medical device/pharmaceutical company focused on advanced wound care, announced today that it has filed an S-1 Registration Statement to offer 1,500,000 shares of its common stock. Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw Capital Group, Inc. (Nasdaq: RODM) will act as sole book-running manager for the transaction.

Along with the raise, Derma has applied to list its shares on the NASDAQ under the symbol “DSCI.” To meet the exchange’s price requirement, Derma will hold a special shareholders’ meeting on November 23, 2009 to vote on a reverse split of the Company’s stock.

Derma Sciences will use the net offering proceeds to complete the purchase of the world-wide licensing rights to Medihoney, retire debt, purchase cost savings-related equipment, fund ongoing product development initiatives, and for general working capital purposes.

For more news and information on Derma Sciences, Inc., please visit www.IRGnews.com/coi/DSCI where you can find the CEO’s video, a fact sheet on the company, investor presentations, and more. You can find further information at www.dermasciences.com.

A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.

The offering will be made only by means of a prospectus, copies of which may be obtained from Rodman & Renshaw, LLC, 1251 Avenue of the Americas, New York, NY 10020, or by calling 212-430-1710. An electronic copy of the prospectus is also available on the web site of the Securities and Exchange Commission (the “SEC”) at http://www.sec.gov.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Derma Sciences

Derma Sciences is a specialty medical device / pharmaceutical company focusing on advanced wound care. Its key product, MEDIHONEY®, 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 the focus of a positive large-scale randomized controlled trial on leg ulcers. Derma’s recently FDA cleared BIOGUARD(TM) Barrier Dressing is the Company’s latest new product entrant into the $14 billion global wound care market. The barrier technology was licensed from Quick-Med Technologies, Inc. in Q1 of 2007. Derma also has in development DSC127, a novel angiotensin analog for accelerated wound healing and scar reduction. DSC127 was licensed from the University of Southern California in Q4 of 2007. Patient enrollment for a Phase II study began in Q4 of 2008. Results from this study are expected to be submitted to the FDA in Q2 of 2010.

For more information about Derma Sciences, Inc., visit 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 fillings with the Securities and Exchange Commission.

    Contacts:  Derma Sciences, Inc.
Edward J. Quilty
Chairman and CEO
 equilty@dermasciences.com
(609) 514-4744
The Investor Relations Group
Jason Strominger  (Investor Relations)
Michael Crawford (Investor Relations)
Enrique Briz (Public Relations)
212-825-3210

Conference Call Scheduled for 11 am Today

PRINCETON, N.J., Nov. 16 /PRNewswire-FirstCall/ — Derma Sciences, Inc. (OTC Bulletin Board: DSCI) a specialty medical device / pharmaceutical company focused on advanced wound care, reported financial and operating results today for the three months and nine months ended September 30, 2009.

Highlights for the three months ended September 30, 2009:

• Net sales totaled $12,882,425 in the third quarter of 2009, an 11.4% increase compared to $11,563,341 in the second quarter of 2009, and a 0.4% increase compared to $12,832,574 in the third quarter of 2008.
• Net income of $139,603, or $0.00 per share (basic and diluted) was generated in the third quarter of 2009, compared to a net loss of $560,502, or $0.01 per share (basic and diluted), in the second quarter of 2009, and compared to a net loss of $701,619, or $0.02 per share (basic and diluted) in the third quarter of 2008.
• Cash flow from operations increased by $1,407,115 during the third quarter of 2009. These funds were used to pay down our line of credit balance by $945,792 and increase working capital. We had $1,725,641 available for borrowing as of September 30, 2009, compared to $495,766 available as of June 30, 2009.
• The DSC127 Phase II trial is over 50% enrolled and continues to be on track for the announcement of clinical results within the third quarter of 2010.

Edward Quilty, CEO, commented, “We are pleased to announce that we achieved profitability in the third quarter – the culmination of three straight quarters of steady improvement.”

“Our sales team has done an outstanding job of boosting our Advanced Wound Care product revenues. Sales of MEDIHONEY(®) continue to grow at a rapid pace, and BIOGUARD(TM) sales have made a significant impact since the product was launched in June. Sales of XTRASORB(TM) and MedEfficiency Total Contact Cast systems also accelerated in the quarter.”

“We generated significant cash flow during the third quarter, enabling us to substantially pay down our debt and increase our liquidity. It is important to note that our financial health has improved during a very challenging economic period. We are now well-positioned to take advantage of the opportunities that are beginning to emerge for us.”

2009 Year-to-Date Results

• Net sales totaled $34,877,658 in the first nine months of 2009, a 7.3% decrease compared to $37,641,362 in the first nine months of 2008.
• A net loss of $1,178,978, or $0.03 per share (basic and diluted) was generated in the first nine months of 2009, compared to a net loss of $3,381,895, or $0.09 per share (basic and diluted), in the first nine months of 2008.
• Advanced Wound Care sales totaled $5,340,216 in the first nine months of 2009, a 60% increase compared to $3,338,783 in the first nine months of 2008.
• Consolidated gross profit margin increased to 31.0% during the first nine months of 2009, compared to 27.9% in the first nine months of 2008.

Quilty continued, “The past two years were a transitional period for our company. For example, we made a substantial investment in our Advanced Wound Care business knowing there would be a temporary negative impact on earnings. Taking the long-term view, we knew that developing higher margin proprietary brands would drive the overall value of the company. As expected, it has taken us several quarters to ramp up, but as our performance indicates, our efforts are beginning to pay off.”

“During the first nine months of 2009, we experienced a decline in First Aid product sales. We believe this decline is temporary, as First Aid product sales tend to correlate with the general economy. On the positive side, our First Aid product margins improved by 5.3% due to improvement in our manufacturing.”

Quilty concluded, “Moving forward, our goal is to continue to grow our top line sales and to improve our financial performance.”

Conference Call/Webcast

Derma Science’s management team will hold a conference call on Monday, November 16, 2009 to discuss the results at 11:00 am EST. Interested parties should call (866) 788-0546 (domestic) or (857) 350-1684 (international), with passcode 81416481 to access the call. You may also access this call via the Internet at:

http://phx.corporate-ir.net/playerlink.zhtml?c=107533&s=wm&e=2539678

For those who are unavailable to listen to the live broadcast, a replay will be available through December 16, 2009 and can be accessed by dialing 888-286-8010 (domestic), and 617-801-6888 (international). The passcode is 43541503.

For more news and information on Derma Sciences, Inc., please visit www.IRGnews.com/coi/DSCI where you can find the CEO’s video, a fact sheet on the company, investor presentations, and more.

About Derma Sciences

Derma Sciences is a specialty medical device / pharmaceutical company focusing on advanced wound care. Its key product, MEDIHONEY®, 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 the focus of a positive large-scale randomized controlled trial on leg ulcers. Derma’s recently FDA cleared BIOGUARD(TM) Barrier Dressing is the Company’s latest new product entrant into the $14 billion global wound care market. Derma also has in development DSC127; a novel angiotensin analog for accelerated wound healing and scar reduction. Patient enrollment for the Phase II diabetic foot ulcer study is expected to be completed in the first quarter of 2010, with clinical results being reported within the third quarter of 2010.

For more information about Derma Sciences, Inc., visit 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 fillings with the Securities and Exchange Commission.

    Contacts:  Derma Sciences, Inc.
Edward J. Quilty
Chairman and CEO
 equilty@dermasciences.com
(609) 514- 4744
The Investor Relations Group
Jason Strominger  (Investor Relations)
Michael Crawford (Investor Relations)
Enrique Briz (Public Relations)
212-825-3210

                    DERMA SCIENCES, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS

                                              September 30,  December 31,
                                                  2009         2008
    ASSETS                                     (Unaudited)
    ---------------------------------------------------------------------
    Current Assets
      Cash and cash equivalents                   $399,998     $391,038
      Accounts receivable, net                   3,743,290    3,892,523
      Inventories                               10,789,282   12,423,042
      Prepaid expenses and other
       current assets                              477,712      397,117
    ---------------------------------------------------------------------
    Total current assets                        15,410,282   17,103,720
    Cash - restricted                            2,029,563    2,014,422
    Equipment and improvements, net              3,873,046    3,977,853
    Goodwill                                     7,119,726    7,119,726
    Other intangible assets, net                 4,322,750    5,310,129
    Other assets, net                              579,216      681,472
    ---------------------------------------------------------------------
    Total Assets                               $33,334,583  $36,207,322
    ---------------------------------------------------------------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
    ---------------------------------------------------------------------
    Current Liabilities
      Line of credit borrowings                  2,835,589    3,446,605
      Current maturities of long-term
       debt                                      1,773,401    1,298,207
      Accounts payable                           2,902,190    3,614,764
      Accrued expenses and other
       current liabilities                       1,233,958    2,004,493
    ---------------------------------------------------------------------
    Total current liabilities                    8,745,138   10,364,069
    Long-term debt                               2,614,503    4,065,036
    Other long-term liabilities                    104,674       44,848
    Deferred tax liability                         363,141      340,871
    ---------------------------------------------------------------------
    Total Liabilities                           11,827,456   14,814,824
    ---------------------------------------------------------------------
    Shareholders' Equity
    Convertible preferred stock, $.01 par
     value; 11,750,000 shares authorized;
     issued and outstanding: 2,280,407 shares
     (liquidation preference of $4,210,231
     at September 30, 2009)                         22,804       22,804
    Common stock, $.01 par value;
     150,000,000 authorized; issued and
     outstanding:  40,315,743 at September 30,
     2009; 40,140,743 at December 31, 2008         403,157      401,407
    Additional paid-in capital                  40,709,352   40,027,645
    Accumulated other comprehensive
     income - cumulative translation
     adjustments                                 1,214,615      604,465
    Accumulated deficit                        (20,842,801) (19,663,823)
    ---------------------------------------------------------------------
    Total Shareholders' Equity                  21,507,127   21,392,498
    ---------------------------------------------------------------------
    Total Liabilities and
     Shareholders' Equity                      $33,334,583  $36,207,322
    ---------------------------------------------------------------------

                        DERMA SCIENCES, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (UNAUDITED)

                                                    Three Months ended
                                                       September 30,
                                                 ------------------------
                                                     2009         2008
    ---------------------------------------------------------------------
    Net Sales                                    $12,882,425  $12,832,574
    Cost of sales                                  8,838,154    9,006,021
    ---------------------------------------------------------------------
    Gross Profit                                   4,044,271    3,826,553
    ---------------------------------------------------------------------
    Operating Expenses
      Selling, general and administrative          3,677,182    4,115,154
      Research and development                        70,412       84,891
    ---------------------------------------------------------------------
        Total operating expenses                   3,747,594    4,200,045
    ---------------------------------------------------------------------
    Operating income (loss)                          296,677     (373,492)
    ---------------------------------------------------------------------
    Other expense, net:
      Interest expense                               220,839      251,256
      Other income                                   (69,002)      (1,419)
    ---------------------------------------------------------------------
        Total other expense                          151,837      249,837
    ---------------------------------------------------------------------
    Income (loss) before provision for income
     taxes                                           144,840     (623,329)
    Provision for income taxes                         5,237       78,290
    ---------------------------------------------------------------------
    Net Income (Loss)                                139,603     (701,619)
    ---------------------------------------------------------------------
    Net income (loss) per common share - basic
     and diluted                                       $0.00       ($0.02)
    ---------------------------------------------------------------------
    Shares used in computing net income (loss)
     per common share - basic                     40,315,743   40,140,743
    ---------------------------------------------------------------------
    Shares used in computing net income (loss)
     per common share - diluted                   42,931,301   40,140,743
    ---------------------------------------------------------------------

                                                      Nine Months ended
                                                        September 30,
                                                  ------------------------
                                                      2009         2008
    ----------------------------------------------------------------------
    Net Sales                                     $34,877,658  $37,641,362
    Cost of sales                                  24,051,984   27,141,628
    ----------------------------------------------------------------------
    Gross Profit                                   10,825,674   10,499,734
    ----------------------------------------------------------------------
    Operating Expenses
      Selling, general and administrative          11,244,347   12,919,124
      Research and development                        288,338      239,199
    ----------------------------------------------------------------------
        Total operating expenses                   11,532,685   13,158,323
    ----------------------------------------------------------------------
    Operating  loss                                  (707,011)  (2,658,589)
    ----------------------------------------------------------------------
    Other expense, net:
      Interest expense                                631,909      748,743
      Other income                                   (112,791)     (21,897)
    ----------------------------------------------------------------------
        Total other expense                           519,118      726,846
    ----------------------------------------------------------------------
    Loss before benefit for income taxes           (1,226,129)  (3,385,435)
    Benefit for income taxes                          (47,151)      (3,540)
    ----------------------------------------------------------------------
    Net Loss                                       (1,178,978)  (3,381,895)
    ----------------------------------------------------------------------
    Net loss per common share - basic and diluted      ($0.03)      ($0.09)
    ----------------------------------------------------------------------
    Shares used in computing net loss per common
     share - basic and diluted                     40,231,128   38,091,726
    ----------------------------------------------------------------------

http://phx.corporate-ir.net/playerlink.zhtml?c=107533&s=wm&e=2539678

For those who are unavailable to listen to the live broadcast, a replay will be available through December 16, 2009 and can be accessed by dialing 888-286-8010 (domestic), and 617-801-6888 (international). The passcode is 43541503.

About Derma Sciences

Derma Sciences is a specialty medical device / pharmaceutical company focusing on advanced wound care. Its key product, MEDIHONEY®, 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 the focus of a positive large-scale randomized controlled trial on leg ulcers. Derma’s recently FDA cleared BIOGUARD(TM) Barrier Dressing is the Company’s latest new product entrant into the $14 billion global wound care market. The barrier technology was licensed from Quick-Med Technologies, Inc. in Q1 of 2007. Derma also has in development DSC127, a novel angiotensin analog for accelerated wound healing and scar reduction. DSC127 was licensed from the University of Southern California in Q4 of 2007. Patient enrollment for a Phase II study began in Q4 of 2008. Results from this study are expected to be submitted to the FDA in Q2 of 2010.

For more information about Derma Sciences, Inc., visit http://www.dermasciences.com.

    Contact:

        Derma Sciences, Inc.
        Edward J. Quilty
        Chairman and CEO
        equilty@dermasciences.com
        (609) 514-4744

        The Investor Relations Group
        212-825-3210
        Investor Relations:
        Jason Strominger
        Or
        Media Relations:
        Susan Morgenbesser

SOURCE Derma Sciences, Inc.

PRINCETON, N.J., Sept. 2 /PRNewswire-FirstCall/ — Derma Sciences, Inc. (OTC Bulletin Board: DSCI), a provider of advanced wound care products, will present at Rodman & Renshaw’s Eleventh Annual Healthcare Conferencetaking place September 9 – 11, 2009, at the New York Palace Hotel. Edward J. Quilty, Chairman and Chief Executive Officer will give the company presentation on Friday, September 11, 2009, 9:10AM EDT in the Fahnestock Salon (fifth floor). Additional information regarding the conference can be found at http://rodm.com/conferences?id=30.

Expected to welcome 3,500 guests and include presentations by over five hundred companies, the Conference will be attended by investors, venture capitalists, company executives, medical experts, scientists, and other industry leaders. To access a live audio webcast or the subsequent archived recording, log on to http://www.wsw.com/webcast/rrshq15/dsci.ob. Please connect to the website several minutes prior to the start of the live webcast to ensure adequate time for any software download that may be necessary.

About Derma Sciences

Derma Sciences is a global manufacturer and marketer of advanced wound care products. Its key product, MEDIHONEY(R), 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 the focus of a positive large-scale randomized controlled trial on leg ulcers. Derma’s recently FDA cleared BIOGUARD(TM) Barrier Dressing is the Company’s latest new product entrant into the $14 billion global wound care market. The barrier technology was licensed from Quick-Med Technologies, Inc. in Q1 of 2007. Derma also has in development DSC127, a novel angiotensin analog for accelerated wound healing and scar reduction. DSC127 was licensed from the University of Southern California in Q4 of 2007. Patient enrollment for a Phase II study began in Q4 of 2008. Results from this study are expected to be submitted to the FDA in Q2 of 2010.

For more news and information on Derma Sciences, Inc., please visit www.IRGnews.com/coi/DSCI where you can find the CEO’s video, a fact sheet on the company, investor presentations, and more.

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 fillings with the Securities and Exchange Commission.

    Contact:

        Derma Sciences, Inc.
        Edward J. Quilty
        Chairman and CEO
        equilty@dermasciences.com
        (609) 514- 4744

        Contact:

        The Investor Relations Group
        212-825-3210
        Investor Relations:
        Rachel Olson
        or
        Michael Crawford
        Or
        Media Relations:
        Susan Morgenbesser

SOURCE Derma Sciences, Inc.

PRINCETON, N.J., Aug. 17 /PRNewswire-FirstCall/ — Derma Sciences, Inc. (OTC Bulletin Board: DSCI), a provider of advanced wound care products, reports results today for the second quarter and six months ended June 30, 2009.

Highlights for second quarter and six months ended June 30, 2009:

    --  Gross U.S. MEDIHONEY(R) sales increased $394,451, or 125%, to $664,766
        in second quarter 2009, versus $295,315 in 2008. For the six months
        ended June 30, 2009, gross U.S. MEDIHONEY sales increased $555,042, or
        94%, to $1,143.944 in 2009, from $588,902 in 2008.
    --  BIOGUARD(TM), the Company's new novel anti-microbial advanced wound
        care product, was launched in June and recorded gross sales of $58,458
        in just one month's time. This represents the strongest first-month
        sales for any of Derma's new products.
    --  Combined gross sales of key new advanced wound care products in the U.S.
        for the six months ended June 30, 2009, were $2,141,065, versus
        $1,109,282 in 2008, representing an increase of $1,031,783 or 93%.
    --  Gross profit margin percentage increased to 29.6% in second quarter
        2009, from 27% in second quarter 2008. Gross profit margin for the
        six-month period increased to 30.8% in 2009, from 26.9% in 2008. The
        increase in gross profit margin percentage is principally attributable
        to the successful establishment of quality, cost-effective manufacturing
        for the First Aid Division, coupled with the growth of the higher margin
        advanced wound care business.
    --  Selling, general and administrative expenses decreased $780,518, or
        17.4%, in the second quarter 2009, versus the same period in 2008.
        Selling, general and administrative expenses for the six months
        decreased $1,236,807 million, or 14%, in 2009 versus 2008.
    --  The Company's 2009 second quarter operating results improved by
        $709,986 as the net loss for the quarter was $560,502, or $0.01 per
        share, compared to a net loss of $1,270,488 million, or $0.03 per share,
        in 2008. Operating results for the first six months of 2009 improved by
        $1,361,695 million as the net loss was $1,318,581 million, or $0.03 per
        share, compared to a net loss of $2,680,276 million, or $0.07 per share,
        for the same period in 2008.

    --  The Company's overall cash flow has improved significantly in the
        first half 2009 versus 2008. This turn around is principally
        attributable to the Company's positive cash flow from operating
        activities of $198,492 in 2009 versus a use of cash of $5,258,033 from
        operating activities in 2008.

For the three months ended June 30, 2009, the Company reported net sales of $11.6 million versus $13.1 million in the second quarter 2008. For the six months ended June 30, 2009, net sales were $22 million versus $24.8 million for the six months ended June 30, 2008. The decrease of $1.5 million in sales for the quarter and $2.8 million for the six months in 2009 versus 2008, was principally driven by lower sales from the First Aid Division, attributed to a weakening of the economy. In addition there was a decrease in Canadian net sales attributable to unfavorable exchange and inventory rationalization on the part of the Company’s exclusive Canadian distributor.

Ed Quilty, Chief Executive Officer of Derma Sciences, commented, “A steady performance from our core business during the second quarter generated improvement in operating results and cash flow, allowing us to continue to focus on driving revenue for some of our newer products such as MEDIHONEY and BIOGUARD. As our results indicate, our Advanced Wound Care Line is gaining traction through the efforts of our sales team. The decrease in year over year sales is mostly related to our First Aid Division, which has experienced recession-related challenges. Though sales decreased, our gross margins on the First Aid Division products have improved, putting Derma in a favorable position to see strong growth from this division in the future.”

Mr. Quilty continued, “We expect the positive Advanced Wound Care revenue growth to continue going forward, and we plan to expand our sales force to leverage this opportunity. Additionally, we will look for development and partnership opportunities in markets where the company does not currently have coverage. With regard to R&D, we continue to move forward with the clinical trial of DSC127, our novel pharmaceutical in development. DSC127 has the potential to be only the second approved drug on the market for accelerated healing. We are well on our way to completing enrollment in the Phase II trial and are very excited about the prospect of this product, which addresses a large unmet need. In summary, we are pleased with our progress this quarter and believe our new advanced wound care products will continue to gain momentum.”

Conference Call/Webcast

Today at 11:00am EDT (8:00am PDT), a conference line will be held to review the DSCI results; interested parties should call 866-383-8108 (domestic) or 617-597-5343 (international), with passcode 38260746 to access the call. You may also access this call via the Internet at:

http://phx.corporate-ir.net/playerlink.zhtml?c=107533&s=wm&e=2367468

For those who are unavailable to listen to the live broadcast, a replay will be available through September 17, 2009 and can be accessed by dialing 888-286-8010 (domestic), and 617-801-6888 (international). The passcode is 10578911.

For more news and information on Derma Sciences, Inc., please visit www.IRGnews.com/coi/DSCI where you can find the CEO’s video, a fact sheet on the company, investor presentations, and more.

About Derma Sciences, Inc.

Derma Sciences is a global manufacturer and marketer of advanced wound care products. Its key product, MEDIHONEY(R), 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 the focus of a positive large-scale randomized controlled trial on leg ulcers. Derma’s recently FDA cleared BIOGUARD(TM) Barrier Dressing is the Company’s latest new product entrant into the $14 billion global wound care market. The barrier technology was licensed from Quick-Med Technologies, Inc. in Q1 of 2007. Derma also has in development DSC127, a novel angiotensin analog for accelerated wound healing and scar reduction. DSC127 was licensed from the University of Southern California in Q4 of 2007. Patient enrollment for a Phase II study began in Q4 of 2008. Results from this study are expected to be submitted to the FDA in Q2 of 2010.

For more information about Derma Sciences, Inc., visit 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 fillings with the Securities and Exchange Commission.

    Contact:

    Derma Sciences, Inc.
    Edward J. Quilty
    Chairman and CEO
    equilty@dermasciences.com
    (609) 514- 4744

    Contact:

    The Investor Relations Group
    212-825-3210
    Investor Relations:
    Rachel Olson
    or
    Michael Crawford
    Or
    Media Relations:
    Susan Morgenbesser

- Financial Tables Follow -

                        DERMA SCIENCES, INC AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (UNAUDITED)

                                                       Three Months Ended
                                                             June 30,
                                                       2009           2008
    Net Sales                                      $11,563,341    $13,083,966
    Cost of sales                                    8,135,574      9,552,991
    Gross Profit                                     3,427,767      3,530,975
    Operating Expenses
      Selling, general and administrative            3,703,038      4,483,556
      Research and development                          87,580        106,200
          Total operating expenses                   3,790,618      4,589,756
    Operating loss                                    (362,851)    (1,058,781)
    Other expense:
      Interest expense                                 239,600        232,572
      Other income                                     (42,252)       (29,092)
          Total other expense                          197,348        203,480
    Loss  before  provision for income taxes          (560,199)    (1,262,261)
    Provision for income taxes                             303          8,227
    Net Loss                                         $(560,502)   $(1,270,488)
    Loss per common share- basic and diluted            $(0.01)        $(0.03)
    Shares used in computing loss per
     common share - basic and diluted               40,234,974     40,073,710

                                                         Six Months Ended
                                                             June 30,
                                                       2009           2008
    Net Sales                                      $21,995,232    $24,808,788
    Cost of sales                                   15,213,830     18,135,606
    Gross Profit                                     6,781,402      6,673,182
    Operating Expenses
      Selling, general and administrative            7,567,164      8,803,971
      Research and development                         217,926        154,308
        Total operating expenses                     7,785,090      8,958,279
    Operating loss                                  (1,003,688)    (2,285,097)
      Other expense:
        Interest expense                               411,070        497,487
        Other income                                   (43,789)       (20,478)
          Total other expense                          367,281        477,009
    Loss before benefit for income taxes            (1,370,969)    (2,762,106)
    Benefit for income taxes                           (52,388)       (81,830)
    Net Loss                                       $(1,318,581)   $(2,680,276)
    Loss per common share - basic and diluted           $(0.03)       $ (0.07)
    Shares used in computing loss per
     common share - basic and diluted               40,188,119     37,055,958

                      DERMA SCIENCES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

    ASSETS                                            June 30,    December 31,
                                                        2009           2008
                                                    (Unaudited)
    Current Assets
      Cash and cash equivalents                       $167,040       $391,038
      Accounts receivable, net                       3,171,963      3,892,523
      Inventories                                   11,479,212     12,423,042
      Prepaid expenses and other current assets        359,117        397,117
    Total current assets                            15,177,332     17,103,720
    Cash - restricted                                2,025,722      2,014,422
    Equipment and improvements, net                  3,789,741      3,977,853
    Goodwill                                         7,119,726      7,119,726
    Other intangible assets, net                     4,651,249      5,310,129
    Other assets, net                                  611,308        681,472
    Total Assets                                   $33,375,078    $36,207,322
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities
      Line of credit borrowings                      3,781,381      3,446,605
      Current maturities of long-term debt           1,787,278      1,298,207
      Accounts payable                               2,596,861      3,614,764
      Accrued expenses and other
       current liabilities                           1,049,480      2,004,493
    Total current liabilities                        9,215,000     10,364,069
    Long-term debt                                   2,923,009      4,065,036
    Other long-term liabilities                         91,661         44,848
    Deferred tax liability                             333,300        340,871
    Total Liabilities                               12,562,970     14,814,824
    Shareholders' Equity
    Convertible preferred stock, $.01 par value;
     11,750,000 shares authorized; issued and
     outstanding: 2,280,407 shares (liquidation
     preference of $4,210,231 at June 30, 2009)         22,804         22,804
    Common stock, $.01 par value; 150,000,000
     authorized; issued and outstanding:
     40,315,743 at June 30, 2009; 40,140,743 at
     December 31, 2008                                 403,157        401,407
    Additional paid-in capital                      40,517,884     40,027,645
    Accumulated other comprehensive income -
     cumulative translation adjustments                850,667        604,465
    Accumulated deficit                            (20,982,404)   (19,663,823)
    Total Shareholders' Equity                      20,812,108     21,392,498
    Total Liabilities and Shareholders' Equity     $33,375,078    $36,207,322

SOURCE Derma Sciences, Inc.