June 4 (Bloomberg) -- Meda AB, Sweden's second-largest health-care company, plunged the most in six years in Stockholm trading after failing to win U.S. approval for an experimental nasal spray within the expected timeframe.

Meda dropped 11.5 kronor, or 13 percent, to 76.25 kronor, the decline was the biggest since Oct. 11, 2001. The stock has fallen 4.7 percent this year.

The Food and Drug Administration requested more information on a new formulation of azelastine hydrochloride nasal spray, Meda said in a statement yesterday. Meda had expected to get approval before July for the drug, intended to replace Astelin, which made up 16 percent of first-quarter sales. Apotex Inc. will sell a generic version as of March 2010.

``This is by far Meda's largest product and one of the products that's actually showing growth,'' Jenni Routtinen, an analyst at ABG Sundal Collier, said in a telephone interview. ``Without a follow-up, they'll lose all sales for that product franchise.''

Astelin, which had first-quarter sales of 405 million kronor ($67 million), is used to treat nose inflammations. In Europe, it's sold as Allergodil and Rhinolast for runny noses and nasal congestion. Meda agreed last month to permit Weston, Canada-based Apotex to begin making a generic version of Astelin prior to patent expiry in 2011 as part of a legal settlement.

``It's quite often now with regulatory agencies these days that you get these questions and delays,'' Anders Larnholt, vice president of investor relations, said in a telephone interview. ``We are in discussions. It will take some months before we know'' when the product may be introduced.

The development of other experimental drugs based on the main ingredient is unaffected by the FDA's request, Larnholt said.

Meda is testing another spray that combines azelastine and fluticasone, a corticosteroid. The treatment was 40 percent more effective than the treatments based on the individual components, Meda said in May. The company also is testing a second nasal spray acquired this year from Uppsala, Sweden-based Orexo AB.

To contact the reporter on this story: Frances Schwartzkopff in Copenhagen at fschwartzkop@bloomberg.net

Last Updated: June 4, 2008 12:50 EDT