Exhibit 10.42

                              DERMA SCIENCES, INC.

                                 CODE OF ETHICS


         This Code of Ethics (the "Code of Ethics") has been unanimously adopted
by the Board of Directors of Derma Sciences, Inc. (the "Company") and is
intended to apply to the Company's Chief Executive Officer, Chief Financial
Officer, Controller, and any persons performing similar functions. References in
this Code of Ethics to the Company include Sunshine Products, Inc. and Dumex
Medical Canada Inc.

I.  PURPOSE OF CODE OF ETHICS

         The purpose of this Code of Ethics is to promote the honest and ethical
conduct of the senior executive, financial and accounting officers of the
Company ("Employees"), including: (i) the ethical handling of actual or apparent
conflicts of interest between personal and professional relationships; (ii)
full, fair, accurate, timely and understandable disclosure in periodic reports
required to be filed by the Company; (iii) compliance with all applicable
governmental rules and regulations; (iv) prompt internal reporting of violations
of this Code of Ethics; and, (v) accountability for adherence to this Code of
Ethics.

II.  CONFLICT OF INTEREST; CORPORATE OPPORTUNITY

         No Employee shall, directly or indirectly, engage or participate in, or
authorize, any transactions or arrangements involving, or raising questions of,
possible conflict, whether ethical or legal, between the interests of the
Company and the personal interests of the Employee or his or her family. No
Employee shall take for himself or herself personally any opportunity that
arises through the use of corporate property, information or position or shall
use corporate property, information or position for personal gain.

         No Employee or any member of his or her family shall, directly or
indirectly, acquire or hold any beneficial interest of any kind in any firm or
entity that does, or in the recent past did, business with the Company, or in
any firm or entity which is currently or prospectively competing in any manner
with the Company. This prohibition shall not apply to the acquisition or holding
of any security through a mutual fund or of any interest not in excess of 1% of
any class of securities listed on a national securities exchange or traded in an
established over-the-counter securities market. Activities and holdings that
have the appearance of impropriety are also to be avoided.

         For purposes of this policy, a member of an Employee's family shall
include a spouse, parents, step-parents, in-laws, siblings, children,
step-children and any other person residing in the Employee's residence. No
Employee or any member of his or her family shall, directly or indirectly, seek,
accept or retain gifts or other personal or business favors from any vendor,
supplier or customer of the Company or from any individual or organization
seeking to do business with the Company. A personal benefit means any type of
gift, gratuity, use of facilities, favor, entertainment, service, loan, fee or
compensation or anything of monetary value. Specific exceptions to this
prohibition will be made if there is no reasonable likelihood of improper
influence in the performance of duties on the part of the Employee on behalf of
the Company and if the personal benefit falls into one of the following
categories:

         (i) Normal business courtesies, such as meals, involving no more than
ordinary amenities;

         (ii) Paid trips or guest accommodations in connection with proper
Company business and with the prior approval of the President;

         (iii) Fees or other compensation received from any organization in
which membership or an official position is held only if approved by the
President;

         (iv) Loans from financial institutions made in the ordinary course of
their business on customary terms and at prevailing rates; or

         (v) Gifts of nominal value (less than $200) during the holiday season.

         No Employee or any member of his or her family may compete with the
Company. No Employee or any member of his or her family may serve as a director,
officer, employee or consultant of a competitor, vendor, supplier or other
business partner of the Company without the prior written approval of the
President.

         No Employee or any member of his or her family who directly or
indirectly owns a financial interest in, or has an obligation to, a competitor,
supplier, customer or other business partner of the Company, which interest or
obligation is significant to such Employee or family member, may conduct
business with such entity or person without the prior written approval of the
President.

         No Employee or any member of his or her family may act as a broker,
finder or other intermediary for his or her benefit or for the benefit of any
third party in a transaction involving the Company without the prior written
approval of the President.

         Gifts or entertainment that have an aggregate value in any year in
excess of $200 are generally considered to be excessive and shall not be
accepted by the Employee. This prohibition also applies to common courtesies and
hospitalities if their scale or nature would in any way appear to affect the
impartiality of the Employee or imply a conflict of interest. However, this
prohibition is not meant to preclude an Employee's acceptance of business
entertainment that is not intended to influence loyalty of the Employee to the
Company and that is reasonable in nature, frequency and cost. Examples of the
foregoing include lunch, dinner or occasional athletic, social or cultural
events, or participation in corporate promotional events.

         An Employee should make every effort to refuse to accept, or to return,
any gift or gifts from a supplier, customer or other business partner exceeding
$200 in value. If the Employee determines that the donor would be insulted or
embarrassed if the gift is refused or returned, a conflict can nevertheless be
avoided by promptly reporting the gift to the Employee's superior and delivering
to the Employee's superior the gift or a check payable to the Company for the
fair value of the gift (which the Company will donate to charity).

         It is imperative that Employees avoid any investment, interest or
association that interferes, might interfere, or might be thought to interfere,
with their independent exercise of judgment in the Company's best interest.

III.  PROPER ACCOUNTING AND FINANCIAL INTEGRITY; ACCURATE PERIODIC REPORTS

         All transactions must be executed only in accordance with management's
general or specific authorization. The Company's books, records and accounts
must reflect, accurately and fairly and within the Company's regular system of
accountability, all of the Company's transactions and the acquisition and
disposition of its assets. All transactions shall be accurately recorded to
permit the preparation of financial statements in conformity with generally
accepted accounting principles consistently applied and other applicable rules,
regulations and criteria, and to insure full accountability for all assets and
activities of the Company. Under no circumstances shall there be any unrecorded
funds or assets of the Company, regardless of the purposes for which such fund
or asset may have been intended, or any improper or inaccurate entry, knowingly
made on the books and records of the Company. No payment on behalf of the
Company shall be approved or made with the intention or understanding that any
part of such payment is to be used for a purpose other than that described by
the documents supporting the payment.

         Full, fair, accurate, timely and understandable disclosure in the
Company's periodic reports filed with the SEC is essential. Exercise the highest
standard of care in preparing such reports in accordance with the guidelines set
forth below, including, without limitation, the following:

         (i) All Company accounting records, as well as reports produced from
those records, must be kept and presented in accordance with the laws of each
applicable jurisdiction.

         (ii) All records must fairly and accurately reflect the transactions or
occurrences to which they relate.

         (iii) All records must fairly and accurately reflect in reasonable
detail the Company's assets, liabilities, revenues and expenses.

         (iv) The Company's accounting records must not contain any
intentionally false or intentionally misleading entries.

         (v) No transaction may be intentionally misclassified as to accounts,
departments or accounting periods.

         (vi) All transactions must be supported by accurate documentation in
reasonable detail and recorded in the proper account and in the proper
accounting period.

         (vii) No information may be concealed from internal financial personnel
or the independent auditors (or the Audit Committee or Board of Directors).

         (viii) Compliance with Generally Accepted Accounting Principles and the
Company's system of internal accounting controls is required at all times.


IV.  COMPLIANCE WITH LAWS, RULES AND REGULATIONS

         Recognition of the public interest must be a permanent commitment of
the Company in the conduct of its affairs. The activities of the Company's
personnel and those acting on its behalf must always be in full compliance with
both the letter and spirit of all laws, rules and regulations applicable to our
business. Furthermore, no Employee should assist any third party in violating
any applicable law, rule or regulation. This principle applies whether or not
such assistance is, itself, unlawful. Employees must respect and obey the laws
of the cities, states and countries in which the Company operates and avoid even
the appearance of impropriety. When there is a doubt as to the lawfulness of any
proposed activity, advice must be sought from the President, Chairman of the
Audit Committee of the Board of Directors and/or legal counsel.

         Violation of applicable laws, rules or regulations may subject the
Company, as well as any Employees involved, to severe adverse consequences,
including imposition of injunctions, monetary damages, fines and criminal
penalties, including imprisonment. In addition, actual or apparent violations of
applicable laws, rules and regulations by the Company or its Employees can
undermine the confidence of the Company's customers, investors, creditors and
bankers, as well as that of the general public. Employees who fail to comply
with this Code of Ethics and applicable laws will be subject to disciplinary
measures up to and including termination of employment from the Company.

V.  INTERNAL COMMUNICATION AND ENFORCEMENT OF POLICY

         Communication of the policies contained in this Code of Ethics will be
made to all applicable Employees of the Company who will be required to sign
acknowledgement of receipt and understanding of this Code of Ethics at least
annually.

         It is important that each Employee comply with both the letter and the
spirit of these policies. If you believe that one of the Company's Employees is
acting in a manner that is not in compliance with this policy, or that you have
been requested to so act in such a manner, you should immediately bring this
matter to the attention of the President or Chairman of the Audit Committee of
the Board of Directors. In order to encourage uninhibited communication of such
matters, such communications will be treated confidentially to the fullest
extent possible and no disciplinary or other retaliatory action will be taken
against an Employee who communicates such matters.


VI.  EFFECTS OF FAILURE TO COMPLY

         Any questions regarding this Code of Ethics or its application should
be discussed with the President or Chairman of the Audit Committee of the Board
of Directors.

         Conduct violative of this Code of Ethics is expressly outside the
Employee's scope of employment. Any Employee whose conduct violates this Code of
Ethics will be subject to disciplinary action by the Company, including, in the
Company's discretion, discharge and/or forfeiture of any benefits or rights
(including contractual rights) which, under applicable law, are forfeitable upon
discharge for cause, and to the enforcement of such other remedies as the
Company may have under applicable law.


VII. AMENDMENTS TO AND WAIVERS OF THE CODE OF ETHICS

         Any amendment to or waiver of this Code of Ethics will be made only by
the Board of Directors and will be promptly disclosed as required by applicable
law or regulation.