(Adds analyst comments, details on Allergan approach to Shire)
By Ransdell Pierson
NEW YORK May 7 (Reuters) - Allergan Inc reported better-than-expected first-quarter profit on strong sales of Botox and other products and said it was reviewing an unsolicited $47 billion takeover bid from Valeant Pharmaceuticals International Inc.
In reporting its quarterly results on Wednesday, Allergan noted it has in place a one-year stockholder rights plan, commonly called a poison pill, meant to give the company more time to weigh the offer.
Excluding special items, Allergan earned $1.18 per share, well above the average analysts' forecast of $1.13 per share compiled by to Thomson Reuters I/B/E/S.
The company also raised its full year profit forecast, excluding special items, to between $5.64 and $5.73 per share. In February, it had predicted $5.36 to $5.48 per share.
"Allergan reported a solid start to 2014," Wells Fargo analyst Larry Biegelsen said in a research note. But he said Wall Street's focus will remain on Valeant's hostile bid.
Allergan earned $257 million, or 85 cents per share, in the quarter. That compared with $12.5 million, or 4 cents, in the year-earlier period, when it took a big charge for discontinued operations.
David Maris, an analyst with BMO Capital Markets, said Allergan's strong performance shows the company is well suited to remain independent.
"With Allergan hitting on all cylinders and topping expectations, we think that it is obvious that tinkering with Allergan's formula will only prove to be a distraction and, in our opinion, damage a business that is already performing well," Maris said.
Global company sales rose 13 percent to $1.62 billion, topping Wall Street expectations of $1.60 billion. Botox sales rose 9.6 percent to $502 million in the quarter, while prescription eye care drugs rose 9.2 percent to $730 million.
Company shares slipped 1.3 percent in morning trading on the New York Stock Exchange amid sharp declines for the drug sector.
Valeant teamed up with activist investor William Ackman on April 21 to make the offer for Allergan. Ackman's Pershing Square Capital Management had accumulated 9.7 percent of Allergan's common stock, making it the company's largest shareholder.
Valeant, which is based in Canada and therefore has a far lower corporate tax rate than the United States, has been on a buying spree since 2010 and last year acquired contact lens maker Bausch & Lomb Holdings.
Months before Valeant's offer, Allergan itself had approached drugmaker Shire Plc about a possible takeover but was rebuffed, Reuters reported last month, citing people familiar with the matter.
The preliminary approach for Shire, which is based in Ireland, did not progress to serious discussions between the two companies, the sources said. By buying Shire and relocating to Ireland, Allergan would have been able to lower its own tax rate, sources said.
Representatives for Allergan and Shire declined to comment on the Reuters report.
(Reporting by Ransdell Pierson; Editing by Jeffrey Benkoe and W Simon)