(Adds details, background, shares and CEO quote)

By Pratik Jain

Feb 28 (Reuters) - Cytokinetics Inc said on Tuesday the U.S health regulator declined to approve its oral drug for a type of heart failure, citing lack of sufficient data to show the drug was effective, and sending shares down 3% after the market trade.

The U.S. Food and Drug Administration's decision comes after a panel of outside experts in December recommended against allowing the use of the drug due to safety concerns.

The health regulator in its so-called "complete response letter" said the company needs to have an additional trial of the drug, omecamtiv mecarbil, to establish its effectiveness for the treatment of heart failure due to reduced ejection fraction, the company said.

The chronic condition is caused by abnormal contractions in the main pumping chamber of the heart.

Cytokinetics' application to the FDA was based on results from a late-stage study of more than 8,000 patients in which the drug met trial goals of reducing the risk of heart-failure related death or the need for hospitalization and other urgent care.

The regulator's decision is a setback to the company that had long been waiting for a nod on its drug, omecamtiv mecarbil, after the FDA extended its review period in June.

Piper Sandler analyst Yasmeen Rahimi said in December Cytokinetics should divert its resources to its other late-stage heart drug, aficamten, which she believes has a better probability of approval.

Late-stage data from aficamten's trial as a treatment for another heart condition known as hypertrophic cardiomyopathy is due later this year.

The company is prepared to redirect its focus to aficamten and other drugs in its pipeline, in the event that the FDA rejected omecamtiv mecarbil, Chief Executive Officer Robert Blum told Reuters in an interview before the decision.

(Reporting by Pratik Jain and Bhanvi Satija in Bengaluru; Editing by Shinjini Ganguli and Sherry Jacob-Phillips)