This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Biotech Stock Mailbag: Derma Sciences

BOSTON ( TheStreet) -- I'll be attending the BIO CEO & Investor Conference on Feb. 14-15 in New York City. I'm planning live-blog coverage of the event, which will feature presentations from scores of small-cap biotech companies.

The BIO CEO agenda is online, so check it out and send me an email if there's a particular company you'd like to read about.

This week's Biotech Stock Mailbag opens with a tweet: "DSCI has some interesting foot news today."

Indeed, Derma Sciences (DSCI) shares were up 33% to $8.88 midday Thursday trading on what looked like strong top-line results from a phase II study of the experimental wound-healing drug DSC127 in patients with diabetic foot ulcers.

I knew nothing about the company before Thursday, but a quick scan shows Derma has an established albeit money-losing wound-care business that brought in revenue of $41.7 million through the September quarter, a year-over-year bump of 20%.

Derma's balance sheet is weak, however, with just $409,000 in cash and $1.2 million available from a line of credit as of the end of the September quarter. On a conference call Thursday to discuss DSC127, Derma management expressed interest in partnering the drug and a reluctance to sell stock to raise cash now because it feels the company is undervalued. That might be true, but it's going to be difficult to negotiate a strong partnership with so little cash as a bargaining chip.

I won't be surprised to see Derma raise money soon, especially with Rodman & Renshaw research coverage. Rodman had two people on Derma's Thursday conference call, so you just know the firm is trying to line up a deal as you read this.

With that said, Derma has only 10 million fully diluted shares outstanding, so the company is no bloated pig.

As for DSC127, the phase II results, as presented in Derma's press release, certainly warrant attention. The double-blind study enrolled 80 patients with diabetic foot ulcers resistant to healing with best standard of care. The patients were randomized to one of two doses of DSC127 (applied daily as a topical gel) or a placebo gel and treated for four weeks followed by eight weeks of observation.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,156.85 +24.88 0.15%
S&P 500 2,001.57 +2.59 0.13%
NASDAQ 4,562.1890 +9.43 0.21%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs