MILAN (Reuters) – An Italian administrative court has canceled a contract between diagnostics group Diasorin and a hospital in the northern region on Lombardy for the development of a coronavirus antibody test, a ruling seen by Reuters showed on Monday.

Diasorin, which said it would appeal against the ruling, saw its shares fall as much as 6.9%. They closed down 3.9% at 159.6 euros per share, underperforming a roughly flat Milan All-Share index.

The deal with Policlinico San Matteo hospital, which both treats patients and is a research institute at the heart of one of Europe’s worst outbreaks of the coronavirus, was part of a broader push to set up widespread testing system.

It was challenged in court by Diasorin’s rival Technogenetics.

The court said the agreement had been reached without a public procedure, giving Diasorin a competitive advantage over other industry players.

It added that it would send the documents of the proceedings to Italy’s audit court to assess any possible damage to state accounts.

Diasorin said the court had misinterpreted the nature of its agreement with the hospital, adding it had always acted in a correct manner and in full compliance with the rules.

The company added it had “already given its lawyers a mandate to immediately appeal (the decision) before the Council of State”.

The tests developed by Diasorin in conjunction with the hospital identify antibodies in the blood developed by the immune system in reaction to the presence of the coronavirus. They have been in use since mid-April. It was not immediately clear if the ruling would have any impact on their use.