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Tactile pays initial $4M to license certain compression therapy assets

Tactile Systems Technology Inc., which develops and sells at-home therapy devices to treat chronic swelling conditions, signed an exclusive deal to license certain intellectual property of Sun Scientific Inc. in the U.S. and Canada.

Tactile paid Sun Scientific an initiation fee worth $4 million and also agreed to pay a royalty based on future sales. The pact includes Sun Scientific's gradient compression products, which are approved by the U.S. Food and Drug Administration and sold under the Aero-Wrap brand.

Dobbs Ferry, N.Y.-based Sun Scientific develops wound care and compression therapy products to treat chronic conditions such as lymphedema and chronic venous insufficiency.

Lymphedema is the swelling of the arms or legs due to the build-up of lymph fluid under the skin. It frequently occurs as a complication of cancer treatments or can be caused by a parasitic infection. Meanwhile, chronic venous insufficiency occurs when valves of the leg veins are not properly functioning, causing blood to pool or collect in the veins.

Minneapolis, Minn.-based Tactile noted that the transaction will be immaterial to its fiscal year 2018 and fiscal year 2019 GAAP net income.