Northern Ireland

Research body AFBI in dispute with firm over £7m payment

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Image caption The Agri-Food and Biosciences Institute says it is owed the money

A government-backed research body is in dispute with a pharmaceutical company over demands for a £7m payment.

The Agri-Food and Biosciences Institute (AFBI), which provides scientific services to executive departments and private firms, says it is owed the money.

But there is a dispute over the interpretation of the deal.

NI's top auditor says there is no paperwork in AFBI's accounts to suggest that the firm agrees with the sum due.

As a result, the comptroller and auditor general Kieran Donnelly has flagged a question over AFBI's audited accounts.

The disputed deal is the result of an agreement between AFBI, Queen's University, a top Canadian research university and a vaccine company dating back to 1998.

Under it, the unnamed company agreed to pay a percentage of sales of a vaccine developed using the universities' research.

Queen's is then required to pass the money on to AFBI, less a management fee.

Image caption Kieran Donnelly is Northern Ireland's most senior auditor and leads the NI audit office

But although AFBI recorded income of £7m in its 2018-19 results, only one payment of £68,000 for royalties had actually been received.

In a report on AFBI's annual accounts Mr Donnelly said the £7m in income was an estimate.

He said that "as it is not probable that the amounts will be received", including the cash in the annual accounts was not in line with accounting rules.

Mr Donnelly said "while attempts by the universities to resolve the matter continue, with QUB acting as AFBI's agent, these have so far been unsuccessful".

"There is currently no documentation to suggest that the vaccine company agrees that £7m or any other sum is due to AFBI."

'All options considered'

Mr Donnelly added the money was "a significant level of income due to the public purse" and its recovery should be a priority.

AFBI said it would consider all its options to recover the cash, including going to court.

"The estimated £7m of overdue royalty income included in the 2018/19 Annual Report & Accounts is a significant level of income and its recovery remains a priority for AFBI," it said in a statement.

"Based on expert patent advice and the fact that sales of products derived from patents have occurred within that financial year, AFBI strongly believes the amounts included in the financial statements are payable and will ensure every effort will continue to be made to recover it."