AstraZeneca receives FDA setback for high potassium drug

(Adds reaction, shares)

LONDON, March 17 (Reuters) - U.S. regulators have dealt a fresh blow to AstraZeneca (NYSE: AZN - news) 's new medicine to treat high potassium levels, indicating it still has concerns over the manufacturing process of the drug.

AstraZeneca said it had been issued with what is known as a complete response letter (CRL) from the U.S. Food and Drug Administration for its ZS-9 drug. Such letters typically outline concerns and conditions that must be addressed to gain U.S. approval.

The intervention -- the second in the United States for this drug -- came after an inspection of the manufacturing facility in Texas. AstraZeneca acquired ZS-9 when it bought ZS Pharma (NasdaqGM: ZSPH - news) for $2.7 billion in 2015.

The issue has been around the validation of the manufacturing process.

ZS-9 treats hyperkalaemia, or high potassium levels, which is typically associated with chronic kidney disease and chronic heart failure.

"The CRL does not require the generation of any new clinical data," the British company said.

"AstraZeneca and ZS Pharma are committed to working with the FDA to resolve the remaining matters under review as soon as possible."

Its shares were down 0.5 percent in early trading.

A spokesman for the company said it would seek to meet the FDA as soon as possible. He could not predict what impact the intervention would have on the timing of the drug's launch.

The pharmaceuticals group expects its profit and revenue to fall in 2017 after it lost exclusivity on many of its top-selling drugs, but it believes it is about to turn the corner.

Buying ZS Pharma was one of several bolt-on acquisitions by AstraZeneca designed to help build up its pipeline of new drugs.

"Given ZS-9 has received a positive recommendation for approval in the EU, we don't think there can be any fundamental issues with the data and believe the drug ultimately gets on the market in the U.S.," analysts at Liberum said.

"However, it does mean AstraZeneca falls further behind Relypsa (NasdaqGS: RLYP - news) 's Veltassa which was approved in 2015."

Separately, AstraZeneca struck a $230 million deal to license two of its respiratory drugs to British pharmaceutical company Circassia (Stuttgart: 23863607.SG - news) on Friday.

The news drove shares in biotech Circassia more than 25 percent higher. (Reporting by Kate Holton; editing by Costas Pitas/Keith Weir)