Derma Sciences Begins Screening Patients in Second Phase 3 Trial with DSC127 for Healing Diabetic Foot Ulcers

Derma Sciences, Inc.

, a medical device and pharmaceutical company focused on advanced wound care, announces that patient screening has begun in the second of two Phase 3 clinical trials with the investigational topical drug candidate DSC127 for the treatment of diabetic foot ulcers. This second trial will have three arms of 211 patients each, and is evaluating a 0.03% formulation of DSC127 against a topical vehicle and against a standard of care hydrogel. The first Phase 3 trial, which commenced in February with two arms of 211 patients each, is evaluating the 0.03% formulation of DSC127 against a topical vehicle. Together these two pivotal trials are expected to enroll 1,055 patients, and are designed to assess the safety and efficacy of DSC127 in chronic, non-healing diabetic foot ulcers and to support the filing of a New Drug Application (NDA) with the U.S. Food and Drug Administration (FDA). In addition, approximately 200 patients will be enrolled in a chronic use safety study, which also began in February. “The full Phase 3 pivotal program is now underway and we are committed to supporting clinical investigators at the more than 90 sites that will be participating in this program,” said Edward J. Quilty, chairman and chief executive officer of Derma Sciences. “We affirm our expectation to announce top-line Phase 3 results in the first quarter of 2015. The number of pharmaceutical treatments for diabetic foot ulcers is limited, and we believe that should DSC127 continue to show the safety and efficacy exhibited in the Phase 2 trial and should the U.S. Food and Drug Administration approve our drug candidate, DSC127 will be well received in the marketplace with potential peak global sales of $900 million.” Mr. Quilty continued, “The addition of a pharmaceutical product is a compelling complement to the growing range of proprietary products our advanced wound care sales force is directing to the 1,200 advanced wound care clinics treating chronic, non-healing wounds, especially diabetic foot ulcers.” About DSC127 and the Phase 3 Clinical Trials DSC127 is a novel angiotensin analog formulated as a topical gel discovered by researchers at the University of Southern California and licensed to Derma Sciences for all dermal-related indications. Recent laboratory studies indicate that DSC127 may facilitate recruitment of stem cells to the site of tissue injury. It is theorized that this action may help to re-set the trajectory of healing. In the Phase 2 study, 54% of wounds treated with DSC127 0.03% were healed at 12 weeks, compared with 33% in the vehicle control group. The difference between the two groups continued to expand out to 24 weeks, the last time wounds were assessed, with 65% in the arm treated with DSC127 0.03% healed compared with 38% in the vehicle control group. There were no safety concerns observed in any of the preclinical, and human Phase 1 and Phase 2 studies of DSC127. DSC127 is covered by a number of issued U.S. patents, with expiration dates through 2032. Derma Sciences expects to enroll 211 patients into each of the five arms of the Phase 3 program, which ultimately will include more than 90 sites in the U.S. and Canada. The first trial will evaluate DSC127 0.03% against a topical vehicle, similar to the design of the Company's completed Phase 2 trial. The second trial will evaluate DSC127 0.03% against a topical vehicle and against a standard of care hydrogel dressing. In both trials patients will receive 14 days of standard of care, including debridement, cleansing, hydrogel dressing and an off-loading device. At the conclusion of this run-in period, patients with wounds that have not healed by more than 30% will then be randomized into one of five arms in a blinded trial design. Patients will receive drug, vehicle or placebo hydrogel once daily for four weeks, and will receive standard of care for up to six additional weeks. The primary endpoint of the Phase 3 trials is the proportion of ulcers healed at 10 weeks, which is defined as 100% epithelialized with no drainage, with a confirmation of healing two weeks after the first instance of complete closure. Secondary endpoints include rate of healing and safety. In addition, a chronic use safety study of up to 200 patients will be conducted, and will include patients randomized into the pivotal trials as well as those enrolled but not randomized. This study will assess the safety of DSC127 dosed for a longer duration than in the pivotal studies, up to 12 weeks. Additionally, safety after repeat applications will be assessed on those patients whose ulcers either recur or who develop additional diabetic foot ulcers after their initial treatment has concluded. Further information may be found at www.clinicaltrials.gov. About Diabetic Foot Ulcers According to the 2011 National Diabetes Fact Sheet, an estimated 25.8 million Americans – or approximately 10% of the population – are living with diabetes and nearly 1.6 million new cases of diabetes are diagnosed in people age 20 and older each year. The number of Americans with diabetes could triple by 2050, according to the Centers for Disease Control and Prevention. One in 10 U.S. adults has the disease now, which could increase to one in three in the next 40 years. According to the National Institutes of Health, an estimated 15% of people with diabetes develop a foot ulcer at some point. In 2009 about 68,000 non-traumatic lower-limb amputations were performed in people with diabetes in the U.S. According to the American Diabetes Association, in 2007 (latest available data) the treatment of diabetes and its complications in the U.S. generated at least $116 billion in direct costs, with at least one third associated with the treatment of foot ulcers. About Derma Sciences, Inc. Derma Sciences is a medical technology company focused on three segments of the wound care marketplace: pharmaceutical wound care products, advanced wound care dressings to address chronic wounds, including diabetic ulcers and traditional dressings. The Company has begun Phase 3 clinical trials in diabetic foot ulcer healing with DSC127, based on excellent Phase 2 data. Its MEDIHONEY® product 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 indications, and was the focus of a positive large-scale, randomized controlled trial involving 108 subjects with leg ulcers. 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 infection prevention. 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, uncertainty in clinical trial results, 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 SEC.