Newly Published Final CMS Payments for 2015 Favorably Impact Derma Sciences’ TCC-EZ® and AMNIOEXCEL®

PRINCETON, N.J.--()--Derma Sciences, Inc. (Nasdaq:DSCI), a tissue regeneration company focused on advanced wound and burn care, today announced that on October 31, 2014 the Centers for Medicare and Medicaid Services (CMS) issued the final rule for hospital outpatient prospective payment to take effect January 1, 2015. Included in the final rule are payment amounts associated with the use of the Company’s TCC-EZ® Total Contact Cast and its AMNIOEXCEL® skin substitute product.

“We commend CMS for moving forward and finalizing these new rates for 2015”

The hospital outpatient final 2015 payment associated with the application of TCC-EZ is $223.20 (CPT® Procedure Code 29445), representing an increase of 61%, compared with the 2014 payment of $138.31. The final 2015 bundled payment for skin substitutes is a bundled payment to the clinic, and will rise slightly to $1,406.87 (CPT® Procedure Code 15271) from the 2014 bundled payment of $1,371.19.

“We commend CMS for moving forward and finalizing these new rates for 2015,” said Edward J. Quilty, chairman and chief executive officer of Derma Sciences. “We are pleased that CMS has recognized the appropriate value of applying the TCC-EZ and the improved healing rates that result during the management of diabetic foot ulcers. The new payment rates should encourage utilization of this technology by clinicians. Our TCC-EZ is the market leading total contact casting system and its ease of use has been the primary driver for increased adoption of total contact casting. We expect for this to continue.”

Mr. Quilty continued, “Beginning in 2013, CMS established a bundled payment rate for skin substitutes for outpatient facilities. With the bundled rate in mind, we have purposely set pricing for our AMNIOEXCEL product line to be attractive in a cost-conscious environment, such as the hospital outpatient setting. We look forward to beginning 2015 with these new rates in place and a more competitive environment for our products.”

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 has been launched to customers and the Veterans Administration recently has included the product in its Federal Supply Schedule V797P-2000D. Derma Sciences’ 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, a patented active pharmaceutical ingredient (API) which is currently in Phase 3 clinical trials for the healing of diabetic foot ulcers. DSC127 is also in preclinical testing for scar prevention/reduction and is part of a BARDA grant program for the healing/prevention of tissue damage due to ionizing radiation exposure. 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 development and commercialization of DSC127, product demand, market acceptance, impact of competitive products and prices, product development, completion of an acquisition, 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.

Contacts

Derma Sciences, Inc.
Barry Wolfenson, 609-514-4744
Group President, Advanced Wound Care and Pharmaceutical Development
bwolfenson@dermasciences.com
or
Investors
LHA
Kim Sutton Golodetz, 212-838-3777
kgolodetz@lhai.com
or
Bruce Voss, 310-691-7100
bvoss@lhai.com
or
Media
Spectrum Science Communications
Leticia Diaz, 202-955-6222
ldiaz@spectrumscience.com

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