BANGALORE (Reuters) - Specialty pharmaceutical company Alpharma Inc (ALO.N: Quote, Profile, Research) posted a higher first-quarter profit, reflecting a gain from the sale of its active pharmaceutical ingredients (API) business.

Excluding certain items, the company posted a loss that was narrower than what the market had estimated.

"The first-quarter loss is a result of the significant investments in selling, general and administrative (SG&A) expenses in our pharmaceuticals business in support of the Flector patch launch and the expansion of the franchise," Chief Financial Officer Jeffrey Campbell said on a conference call.

Alpharma has two units -- pharmaceuticals and animal health. The pharmaceuticals unit sells painkillers Kadian and Flector.

The company said it more than doubled its sales force to launch the Flector painkiller patch, which had first-quarter revenue of $24.3 million. SG&A expenses increased by $35.1 million compared to the same period last year, mainly due to the launch.

Cowen & Co analyst Ian Sanderson said Alpharma's SG&A spending is running above the quarterly rate implied by the company's outlook.

"Despite the strategic and balance sheet benefits of the API divestiture and the strong Flector Patch launch, we believe (Alpharma) shares are close to fairly valued pending application of the API sale proceeds to expand the pain management portfolio," he said in a note.

The company had said in February that it would sell its API business, which deals with fermentation-based products, to private equity firm 3i Group Plc (III.L: Quote, Profile, Research) for $395 million.

Sanderson kept a "neutral" rating on Alpharma stock.