UPDATE 3-Allergan profit falls; Botox, device sales lower

* Botox sales fall 5.8 percent

* Revenue down 6 percent

* Shares tumble 6.2 percent (Adds analyst comment, byline, updates shares)

By Ransdell Pierson

NEW YORK, May 1 (Reuters) - Allergan Inc (AGN.N) said first-quarter earnings fell by more than half as sales of its Botox anti-wrinkle drug and its medical devices fell, sending the company's shares down 6.2 percent.

Botox revenue was affected by the strong dollar, which lowers the value of overseas sales. As in recent quarters, Botox sales also fell victim to the economic downturn, which has deterred people from elective cosmetic procedures not covered by health insurance.

Botox this week began facing two new challenges: a new, strong safety warning required on the product and competition in the United States from a similar drug, Dysport, that has long been available in Europe. Both drugs are forms of botulinum toxin.

Lazard Capital Markets analyst Sean Lavin said: "Clearly, the economy will need to change for Allergan to resume significant growth, which we definitely believe is possible when the economy does improve."

He rates the company's shares "hold."

Allergan said it earned $45 million, or 15 cents per share, in the first quarter, compared with $108 million, or 35 cents per share, in the year-earlier period.

Excluding special items such as restructuring charges, the company earned 55 cents per share. Analysts on average expected 53 cents, according to Reuters Estimates.

Allergan's first-quarter revenue fell 6 percent to $1 billion, in line with the Reuters Estimates forecast.

Natixis Bleichroeder analyst Corey Davis said cost-cutting enabled Allergan to beat earnings forecasts, but he noted the company failed to raise its full-year profit view. Allergan stuck to its 2009 forecast of $2.69 to $2.75 per share, excluding special items.

"We are still sitting on the fence with the stock, as its (drug) pipeline continues to see delays," Davis said. "There is now an intense attack on its most profitable product and all earnings growth this year is coming from expense cuts."

Davis said it is critical that Allergan defend Botox against inroads from Dysport because it is responsible for one third of Allergan's revenue and half its profit. He forecast Allergan will try to deter patients from switching to Dysport by claiming it is not interchangeable with better-known Botox.

Dysport, to be sold by Medicis Pharmaceutical Corp (MRX.N) and Ipsen SA (IPN.PA), must also carry a strong warning about potential deadly complications if the toxin spreads in the body.