Cosmo Pharmaceutical SpA, the Italian developer of treatments for digestive-tract infections, fell the most in almost three years in Zurich after Dutch regulators declined to approve its drug for inflammatory bowel disease.

Holland’s Medicine Evaluation Board rejected approval for the product, known as Cortiment, on grounds of “clinical relevance” and will send a formal letter detailing the reasons for the denial, Lainate, Italy-based Cosmo said in a statement. The drugmaker may appeal the decision, according to Chief Executive Officer Mauro Ajani.

“We believe that Cortiment is a clinically effective option for patients with mild to moderate ulcerative colitis,” Ajani said in the statement. “We are therefore assessing means to have MEB review its decision.”

As the European Union reference agency for Cortiment, the MEB’s decision is likely to slow the introduction of the drug in certain members of the bloc. The ruling shouldn’t influence the result of a review of Cortiment by the U.S. Food and Drug Administration, which is due to make a decision on the product by Oct. 19, Peter Welford, an analyst at Jefferies International Ltd., said in a note today. Jefferies maintains a buy recommendation on the stock.

Since 2009

Cosmo slumped as much as 12 percent, the biggest intraday decline since September 2009, pushing the company’s stock to 22.65 francs, the lowest level since July 4. The shares were down 5.2 percent to 24.50 Swiss francs at 3:48 p.m., giving Cosmo a market value of 367 million francs ($376 million).

“This was bad news from the Dutch authorities which they can appeal,” said Peter Braendle, who manages 500 million francs at Zurich-based Swisscanto Asset Management including Cosmo shares, which he said he’s keeping. “It won’t impact the FDA’s decision positively but it should not harm them much.”

The drugmaker reported on July 30 that first-half revenue rose by 24.4 million euros ($30 million) to 40.7 million euros, boosted by sales of its Lialda ulcerative colitis medicine, which is licensed to Shire Plc.

The company, which also develops drugs for Crohn’s disease, made 33.51 million euros in sales last year, according to data compiled by Bloomberg.

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