Botox maker Allergan cuts forecasts amid downturn

* Cuts 2008 sales, profit view amid economic downturn

* Sees profit growth slowdown in 2009

* Q3 EPS 65 cents matches forecast

* Allergan shares rise 5 pct in midday trading

* Says to buy Spectrum, whose shares almost doubles

(Adds earnings details, analyst comment, byline)

By Ransdell Pierson

NEW YORK (Reuters) - Allergan Inc (AGN.N), maker of Botox anti-wrinkle treatment, on Wednesday said the economic downturn would lead to slowing company revenue growth next year and lower-than-expected sales and profit for full-year 2008.

"As the world economy recovers, Allergan intends to re-establish its mid- to high-teens" percentage growth, the Irvine, California-based company said in a release that detailed third-quarter earnings results.

Allergan said its third-quarter sales of Botox rose 7 percent to $318 million, but analysts said that was about $8 million lower than expected, due to economic weakness in the United States.

Allergan said its preliminary estimate of 2009 earnings profit, excluding special items, is for growth of 5 percent to 12 percent over this year, which would reflect a slowdown from typical mid-to high-teens percentage growth in past years.

Allergan lowered its full-year 2008 forecast of adjusted diluted earnings per share to between $2.53 and $2.57, from its earlier view of $2.57 to $2.59.

And it trimmed its 2008 sales forecast to between $4.29 and $4.34 billion, from an earlier prediction of $4.47 billion to $4.58 billion.

On the bright side, however, Allergan announced that its experimental Posurdex drug successfully treated macular edema -- swelling under the central area of the retina -- in late-stage studies and the company would therefore seek U.S. approval of the product in the fourth quarter.

Allergan's shares were up 5 percent in midday trading.

Leerink Swann analyst Gary Nachman said investors had been expecting Allergan to lower its earnings forecasts, in part because of economic conditions.

Nachman said company shares were helped by the favorable news about Posurdex, and noted the stock previously had been beaten down so badly by economic concerns that some investors may now consider them to be attractive.

Allergan shares are trading at about 12 to 13 times expected 2009 per-share earnings, which Nachman said was "still cheap" compared with their price to earnings ratio "in the 20s before the (economic) downturn."

"The company is going through a tough time and next year will definitely be a challenging year," Nachman said. Although sales of Botox and other company cosmetic products, including breast implants, are vulnerable to weakening economic conditions, Nachman speculated earnings growth would improve as the economy recovers.

Despite the worsening financial climate, Allergan said it would continue its longstanding tradition of acquiring other companies to fuel earnings growth.

Allergan said on Wednesday it would pay Spectrum Phamaceuticals Inc (SPPI.O) $41.5 million upfront and make future additional payments of up to $304 million for an exclusive collaboration to develop and sell apaziquone, Spectrum's experimental treatment for non-muscle invasive bladder cancer.

Allergan said it earned $169 million, or 55 cents per share, in the third quarter. That compared with $157 million, or 51 cents per share, in the year-ago quarter.

Excluding special items, the company earned 65 cents per share, matching the Reuters Estimates forecast.

Company sales rose 10.5 percent to $1.08 billion, a bit less than the Reuters Estimates forecast of $1.12 billion. Sales of the company's specialty pharmaceuticals rose 11.3 percent, while revenue from core medical devices rose 8.5 percent.

Spectrum's shares rose 80 cents, or 84 percent, to $1.75 in midday Nasdaq trading. Allergan shares were up $1.76 at $36.71, on the New York Stock Exchange.

(Editing by Maureen Bavdek)