Sillajen has agreed to pay $4.85 million to Fortis Advisors LLC, which filed a $34-million suit against the company for a milestone payment, according to the Financial Supervisory Service on Monday.

With Sillajen’s agreement, Fortis Advisors dropped the case on Oct. 16. Fortis Advisors represents the old shareholders of Jennerex Biotherapeutics, the original developer of the anticancer virus Pexa-Vec, currently owned by Sillajen.

Sillajen promised to make a down payment to the old shareholders of the U.S. company at the time of its acquisition and provide an additional milestone fee worth 75 percent of the stake in Jennerex. However, Fortis Advisors filed a suit with the Delaware Superior Court in September 2018, claiming that Sillajen did not pay the $34-million milestone.

According to the Sillajen’s 2018 annual report, the company was conducting four phase 2 clinical trials, including Pexa-Vec. Sillajen insisted that it had no obligation to make the payment because the company was running the trials without marketing right.

The clinical study that included Pexa-Vec was an investigator-initiated study (IIS) jointly performed by the U.S. National Cancer Institute and Sillajen, which was not intended for submission to the regulator. The other three studies going on at that time were clinical trials conducted exclusively by Transgene, which held the sales right of Pexa-Vec in European markets.

“We did pay the milestone to the old shareholders of Jennerex, and there were no phase 2 studies in progress for regulatory approval in 2018,” a Sillajen official said. “However, we considered the risk if the case dragged on and decided to pay $4.85 million.”