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Derma Sciences announces Veterans Administration adds AMNIOEXCEL® to its Federal Supply Schedule

Derma Sciences, Inc. (Nasdaq:DSCI), a tissue regeneration company focused on advanced wound care, announces that AMNIOEXCEL®, its novel human amniotic membrane allograft, has been approved by the Veterans Administration (VA) for inclusion in its Federal Supply Schedule V797P-2000D. The announcement marks Derma Sciences’ official launch with its expanded U.S. sales force to sell AMNIOEXCEL into VA and military medical centers, outpatient clinics and community living centers across the U.S. AMNIOEXCEL has been rapidly adopted by clinicians in several test facilities for use in patient care and a 10-patient case series has been submitted for publication in a peer-reviewed journal. In addition, Derma Sciences expects to begin a randomized clinical trial with AMNIOEXCEL in August to further support marketing into additional channels.

“Inclusion in the Federal Supply Schedule is an important milestone for our newly acquired AMNIO product line as we continue to position Derma Sciences as a leading wound care company specializing in tissue regeneration,” said Edward J. Quilty, chief executive officer of Derma Sciences. “Amniotic tissue technology facilitates excellent clinical outcomes with difficult, non-healing wounds and we are delighted that active military personnel and veterans will benefit from access to another of our advanced products. Based on the early clinical evaluations of AMNIOEXCEL in certain VA hospitals, we are confident that our product will offer clinicians a best-in-class product with a compelling combination of clinical efficacy and ease-of-use.”

“In addition, AMNIOEXCEL meets Centers for Medicare & Medicaid Services (CMS) guidelines for placement into the high cost tier skin substitutes,” Mr. Quilty continued. “This product is priced to be in line with the new CMS bundled payment initiative for skin substitute guidelines that became effective January 1, 2014, thus ensuring cost savings. Given the positive clinical results achieved following thorough product evaluations on patients, prosthetics purchasing departments in many VA facilities have acknowledged that the resultant savings from using AMNIOEXCEL will allow them to help more veterans and active military personnel with other important healthcare needs.”

Barry J. Wolfenson, group president of advanced wound care and drug development at Derma Sciences, added, “With this approval, we can now implement the next part of our business plan by achieving more widespread utilization of AMNIOEXCEL in this $500 million market. This will help us to develop an even broader base of key opinion leaders, which will be critical as we work diligently to secure coverage from the Medicare Administrative Contractors. We look forward to announcing our progress in this area in the coming months.”

About AMNIOEXCEL

AMNIOEXCEL® is a human amniotic membrane allograft used on challenging and non-healing wounds. As a dehydrated human amnion-derived tissue allograft, AMNIOEXCEL® maintains the natural, inherent properties of the native tissue including an intact extracellular matrix and growth factors. It provides a structural tissue for the repair, replacement or reconstruction of damaged skin. AMNIOEXCEL® is a natural alternative to synthetics and xenografts, is flexible and conformable to the wound bed, and is not side-specific in its application.

About Derma Sciences, Inc.

Derma Sciences is a tissue regeneration company focused on advanced wound and burn care. It offers a line of products with patented technologies to help better manage chronic and hard-to-heal wounds, many of which result from diabetes and poor vascular functioning. The company recently entered the $500 million market for skin substitute products with its licensing of AMNIOEXCEL® and AMNIOMATRIX® in the first quarter of 2014. AMNIOEXCEL® was launched to customers in March 2014 and AMNIOMATRIX ® was launched in the second quarter. Its MEDIHONEY® product is the leading brand of honey-based dressings for the management of wounds and burns. The product has been shown in clinical studies to be effective in a variety of indications. TCC-EZ® is its gold-standard total contact casting system for diabetic foot ulcers. Other novel products introduced into the $14 billion global wound care market include XTRASORB® for better management of wound exudate, and BIOGUARD® for barrier protection against microbes and other contaminants. Its pharmaceutical wound care products include DSC127, which is currently in Phase 3 clinical trials for the healing of diabetic foot ulcers. The drug candidate is also part of a BARDA grant program for the healing/prevention of tissue damage due to ionizing radiation exposure. The patented API peptide used in DSC127 is also in preclinical testing for scar prevention/reduction. The company also offers a full product line of traditional dressings.

For more information please visit www.dermasciences.com.

Forward-Looking Statements

Statements contained in this news 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 that may be made in this news release or that are otherwise made by or on behalf of the company. Factors that 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 U.S. Securities and Exchange Commission.

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