Derma Sciences Announces AMNIOEXCEL® Is Now Eligible For Reimbursement By Medicare Administrative Contractor CGS

Derma Sciences, Inc. (Nasdaq: DSCI), a tissue regeneration company focused on advanced wound and burn care, announces that CGS Administrators, LLC (CGS), a Medicare Administrative Contractor (MAC) for Parts A and B serving Kentucky and Ohio, has updated its local coverage determination (LCD) for cellular or tissue-based products (CTPs) of the lower extremity. As a result, the Company's AMNIOEXCEL ® Amniotic Allograft Membrane (AMNIOEXCEL ®) will be considered for reimbursement coverage with appropriate documentation of medical necessity for the treatment of chronic wounds of the lower extremity, including both diabetic foot ulcers (DFUs) and venous leg ulcers (VLUs). Coverage is effective as of April 1, 2016. CGS is the sixth MAC to issue local coverage determinations for AMNIOEXCEL ®.

"The addition of AMNIOEXCEL ® by CGS follows the submission of peer-reviewed published clinical evidence, including our recently published randomized controlled trial results, that demonstrates improved patient outcomes," said Barry Wolfenson, Group President, Advanced Wound Care at Derma Sciences. "We are very pleased to offer access to our amniotic tissue-based allografts to more than 2 million additional Medicare beneficiaries in CGS' coverage area for the treatment of chronic wounds. We are focused on working with the remaining two MACs to provide Medicare beneficiaries in their jurisdictions with access to our novel clinically beneficial and cost-effective technology."

Stephen T. Wills, Interim Executive Chairman and Principal Executive Officer of Derma Sciences, said, "For more than two years we have been focused on executing our strategy to gain MAC coverage for AMNIOEXCEL ® throughout the United States. The addition of CGS brings the total MACs covering AMNIOEXCEL ® to six of the eight, with 86% of Medicare beneficiaries now eligible for coverage. The LCD from CGS is an important validation of our efforts and is an encouraging event for our sales organization as we expand the market for AMNIOEXCEL ®."

CGS serves more than 2 million Medicare Part A and B beneficiaries in Kentucky and Ohio. In addition to processing claims, each MAC is also responsible for issuing LCDs that specify which healthcare products and services are reimbursable through the Medicare Fee-for-Service program in the regions under its jurisdiction.

About AMNIOEXCEL ® Membrane

AMNIOEXCEL ® Amniotic Allograft Membrane is a novel human placental-based tissue product. The membrane forms a protective covering over the wound while providing the key components found in human amnion including an intact ECM (extracellular matrix), cytokines and other growth factors. It easily integrates into the wound and helps provide the optimal environment to repair, reconstruct and replace wound tissue.

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 sells AMNIOEXCEL ® amniotic allograft membrane and AMNIOMATRIX ® amniotic allograft suspension into the $500 million market for skin substitute products. TCC-EZ ® is a gold-standard total contact casting system for diabetic foot ulcers. Derma Sciences' MEDIHONEY ® product line 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. 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. 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, 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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