Starboard Trims Office Depot Stake Amid FTC Challenging Merger with Staples; Broadfin Capital Buys More Derma Sciences Inc. (DSCI)

In a separate 13D filing, Kevin Kotler’s Broadfin Capital reported owning 2.56 million shares of Derma Sciences Inc. (NASDAQ:DSCI), accounting for 9.9% of the company’s outstanding common stock. This compares with the 2.36 million-share position disclosed through the latest round of 13F filings. The tissue regeneration company focuses on three main segments of the wound care marketplace: advanced wound care, traditional wound care, and pharmaceutical wound care products. The company’s gross sales for the nine-month period that ended September 30 added up to $72.50 million, which compares with $68.53 million reported for the same period a year ago. Although Derma Sciences Inc. (NASDAQ:DSCI)’s net loss for the first nine months of 2015 tightened to $28.86 million from $30.20 million a year earlier, the company is still a long way from profitability. Nonetheless, the company intends to invest more resources into its sales and marketing activities in an attempt to spur demand for higher-margin advanced wound care products and reach more presence in Asia, the Pacific, and Latin America. At the same time, Derma Sciences anticipates that its drug candidate Aclerastide, which is pending the New Drug Application approval and is expected to be launched in three years, has great market potential. This product candidate is designed to treat diabetic foot ulcers. In the meantime, the shares of the company are 50% in the red year-to-date, which might represent a good point of entry for interested investors.

It appears that the smart money sentiment towards the stock did not change substantially during the third quarter, as the number of hedge funds with positions in the company remained unchanged quarter-on-quarter at 17. Nevertheless, the value of their investments declined to $59.65 million from $113.18 million during the three-month period, mainly on the back of a disappointing stock performance. These smart money investors amassed 49.10% of the company’s outstanding shares at the end of September. Baker Bros. Advisors, founded by Julian and Felix Bakers, is the largest equity holder of Derma Sciences Inc. (NASDAQ:DSCI) among the hedge funds tracked by our team, holding 3.46 million shares as of September 30.

Disclosure: None