Derma Sciences Inc said foot ulcers in 85 percent of diabetic patients healed completely after being treated with its experimental drug at the end of a 24-week trial, improving its chances of licensing the drug to potential partners.

Shares of the company, which specializes in wound-care products, jumped 25 percent to a more than three-month high of $11.65 in afternoon trade on Wednesday on Nasdaq.

The data will help the company in outlicensing ex-U.S. rights of the drug, codenamed DSC127, to a potential partner, Chief Executive Edward Quilty said in an interview.

Rodman & Renshaw analyst Michael Higgins said, "I think, the 24-week data increases Derma's negotiating power with potential collaborators."

Higgins, who has a "market outperform" rating on the stock, said he was most impressed by the drug's ability to heal wounds 13.5 week sooner than the placebo.

Derma's Quilty said: "We certainly do not have the type of money necessary to complete this (late-stage) trial. We (told the) investment committee that we were looking at all options that are available to us to help finance the trial."

Other than outlicensing DSC127, Derma can raise up to $50 million from the equity market under its existing shelf registration statement.

Quilty said most of the potential partners wanted to look at the 24-week data and the complete mid-stage data, which will be submitted to the U.S. Food and Drug Administration.

He expects to partner the drug by the end of this year or early next year.

Barry Wolfenson, executive vice-president of global marketing & business development, said, "I think the real activity around partnering for this will commence this week as we announce the data and start putting a package together and reaching out to potential partners around the world."
If approved, Derma's drug will compete with Johnson & Johnson's Regranex for the treatment of deep neuropathic diabetic foot ulcers.

"We believe our data is stronger than Regranex," Wolfenson said.
If approved, DSC127 could rake in up to $500 million in annual sales in the United States alone, he said.


The company said 85 percent of patients who fulfilled the eligibility protocols, or per-protocol (PP) population, showed complete healing at 24 weeks, compared with 52 percent in the placebo group.

In the intent-to-treat population, where all patients are included, 73 percent showed complete healing at 24 weeks, compared with 46 percent in the placebo group.

Derma Sciences was testing the drug in two dose strengths and one placebo-controlled arm.
The trial also showed statistically significant difference in healing for the PP population at 24 weeks.