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Via Facsimile and U.S. Mail
Mail Stop 03-09

April 25, 2005

Mr. John E. Yetter
Vice President and
Chief Financial Officer
Derma Sciences, Inc.
214 Carnegie Center, Suite 100
Princeton, NJ  08540

Re:	Derma Sciences, Inc.
	Form 10KSB for the fiscal year ended December 31, 2004
	File No. 1-13070

Dear Mr. Yetter:

      We have reviewed your filing and have the following
comments.
We have limited our review of the above referenced filing to only
those issues addressed. Where our comments call for disclosure, we
think you should amend your document in response to these
comments.
In some of our comments, we ask you to provide us with
supplemental
information so we may better understand your disclosure.  Please
amend your Form 10KSB for the fiscal year ended December 31, 2004
and
respond to these comments within 15 business days or tell us when
you
will provide us with a response prior to the expiration of the 15-
day
period.  If we have requested additional information as well as an
amendment or if you disagree with any comment that calls for
disclosure, we will consider your explanation as to why our
comments
are inapplicable or a revision is unnecessary. Please provide this
letter prior to your amendment.  You may wish to provide us with
marked copies of the amendment to expedite our review.  Your
letter
should key your responses to our comments.  Detailed letters
greatly
facilitate our review.  Please file your letter on EDGAR under the
form type label CORRESP.  Please understand that we may have
additional comments after reviewing your amendment and responses
to
our comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Form 10KSB for the fiscal year ended December 31, 2004

Management`s Discussion and Analysis or Plan of Operations

Results of Operations

Sales and Gross Profit, pages 15-16

1. We note that one of the reasons for a reduction in Dermagran
sales
was the result of a 2003 year end promotion.  Please expand your
disclosure to address the following and explain to us:

* The terms of the promotion including the nature of any
incentives
offered to distributors and the rights of return for this
promotion;
* Discuss if the promotion resulted in excess inventory at
distributors.  Quantify the normal amount of inventory levels held
by
distributors and the amount of excess inventory held by these
customers at the end of 2003.  Tell why how you are able to make a
reasonable and reliable estimate of product returns for this
promotion.  Please address the factors that may affect or preclude
the ability to make reasonable and reliable estimates of product
returns in the Interpretive Response to Question 1 of SAB Topic
13.A.4(b).

* Discuss whether you had changes in your estimates of product
returns related to this promotion and disclose the impact, if any,
on
your net sales and operations in 2004.

Critical Accounting Policies

Revenue Recognition and Adjustments to Revenue, page 23

2. We believe your disclosure related to estimates of items that
reduce gross revenue such as product returns and trade rebates
could
be improved as follows:

a. Disclose the nature and amount of each accrual at the balance
sheet date and the effect that could result from using other
reasonably likely assumptions than what you used to arrive at each
accrual such as a range of reasonably likely amounts or other type
of
sensitivity analysis.
b. Disclose the factors that you consider in estimating each
accrual
such as historical return of products, levels of inventory in the
distribution channel, estimated remaining shelf life, price
changes
from competitors and introductions of generics and/or new
products.
c. To the extent that information you consider in b) is
quantifiable,
disclose both quantitative and qualitative information and discuss
to
what extent information is from external sources, such as end-
customer prescription demand, third-party market research data
comparing wholesaler inventory levels to end-customer demand. For
example, in discussing your estimate of product that may be
returned,
consider disclosing and discussing, preferably by product and in
tabular format, the total amount of product in sales dollars that
could potentially be returned as of the balance sheet date and
disaggregated by expiration period.
d. If applicable, discuss any shipments made as a result of
promotions/incentives and/or in excess of your customer`s ordinary
course of business inventory level.  Discuss your revenue
recognition
policy for such shipments.
e. You should consider disclosing a roll forward of the accrual
for
each estimate for each period presented showing the following:
* Beginning balance,
* Current provision related to sales made in current period,
* Current provision related to sales made in prior periods,
* Actual returns or credits in current period related to sales
made
in current period,
* Actual returns or credits in current period related to sales
made
in prior periods, and
* Ending balance.

f. In your discussion of results of operations for the period to
period revenue comparisons, discuss the amount of and reason for
fluctuations for each type of reduction of gross revenue, i.e.
product returns, customer rebates and other discounts and
allowances,
including the effect that changes in your estimates of these items
had on your revenues and operations.

Consolidated Financial Statements

Consolidated Statement of Operations, page 28
3. It appears that amortization and write-off of product rights is
classified as an operating expense. We believe amortization and
impairment related to acquired developed products should be
included
in cost of sales.  Alternatively, include a parenthetical
disclosure
after the caption `cost of sales` indicating that amortization and
impairment of developed products is excluded and disclose the
amount
of amortization and impairment of developed product rights
excluded
from cost of sales. Please refer to SAB Topic 11:B.  Please note
that
the discussion of gross profit excluding amortization and
impairment
of developed product rights should be avoided.

*    *    *    *

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that

* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Todd Sherman, staff accountant, at 202-824-
5358
or Don Abbott, senior accountant, at 202-942-2819 if you have
questions regarding the comments. In this regard, do not hesitate
to
contact me, at (202) 942-1803.

								Sincerely,

								Jim B. Rosenberg
								Senior Assistant Chief
Accountant
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John E. Yetter
Derma Sciences, Inc.
Page 4

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