Derma Sciences, Inc. (the “Company”) (Nasdaq: DSCI), a medical device and pharmaceutical company focused on advanced wound care, today announced the closing of an underwritten public offering of 3,521,300 shares of common stock at a price to the public of $10.34 per share, which includes the exercise of the underwriters’ option to purchase 459,300 shares of common stock to cover over-allotments. Piper Jaffray & Co. was the sole book-running manager in the offering, with Oppenheimer & Co. Inc. and Canaccord Genuity Inc. acting as co-managers and Roth Capital Partners acting as financial advisor to the Company.

Total net proceeds to the Company were approximately $33.8 million after deducting the underwriting discount and estimated offering expenses. The Company plans to use these proceeds for the continued development of its drug candidate DSC127 for the treatment of diabetic foot ulcers and for general corporate purposes.

“The closing of this offering is a significant achievement in supporting our strategy of leadership in advanced wound care,” said Edward J. Quilty, president and chief executive officer of the Company. “We plan to begin our Phase 3 studies with DSC127 in diabetic patients with non-healing foot ulcers in the coming weeks and we believe the capital raised through this offering provides the Company with the financial strength and opportunistic flexibility to maximize shareholder value.

“In the meantime,” Mr. Quilty continued, “we continue to focus activities on our commercial advanced wound care product line, and our dedicated sales force continues to offer a wide variety of technologically innovative, high-margin products to the 1,200 wound care centers across the U.S. and select international markets.”

The offering was made pursuant to a shelf registration statement (No. 333-173870) that was previously filed with and declared effective by the U.S. Securities and Exchange Commission (“SEC”) and a registration statement (No. 333-185298) filed with and declared effective by the SEC pursuant to Rule 462(b) promulgated under the Securities Act of 1933, as amended.

A final prospectus supplement and accompanying prospectus relating to the offering was filed with the SEC on December 7, 2012. Electronic copies of the prospectus supplement and accompanying prospectus can be obtained through the website of the SEC at www.sec.gov. When available, copies of the prospectus supplement and accompanying prospectus relating to the offering may also be obtained from Piper Jaffray & Co., 800 Nicollet Mall, J12S03, Minneapolis, MN 55402, or email prospectus@pjc.com, or by telephone at (800) 747-3924.

This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This offering may be made only by means of a prospectus supplement and accompanying base prospectus.

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 and traditional dressings. Derma Sciences has successfully completed a Phase 2 clinical trial in diabetic foot ulcer healing with DSC127, an investigational pharmaceutical drug under development for accelerated wound healing and scar reduction, and is preparing to begin Phase 3 clinical trials. 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. Other novel products introduced into the $14 billion global wound care market include XTRASORB® for better management of wound exudate, BIOGUARD® for infection prevention and TCC-EZ™, a gold-standard treatment for diabetic foot ulcers.

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 SEC.