The deal allows the two companies to merge their strengths in the HIV drugs business – Glaxo is a big seller of HIV treatments but its products are relatively old and its pipeline of future drugs is also relatively weak. Pfizer, on the other hand, has a significant store of drugs in development but few products on the market.

London-based Glaxo will initially hold an 85 percent equity interest in the new company, with New York-based Pfizer holding the remaining 15 percent.

The two companies said that the new business “will be more sustainable and broader in scope than either company’s individually,” adding that it will hold a 19 percent share of the growing market.

The new company will have a broad product portfolio of 11 marketed products including market-leading therapies such as Combivir, Kivexa and Selzentry/Celsentri. Based on 2008 results, the combined portfolio generates sales of around 1.6 billion pounds ($2.4 billion).

The companies said revenues at that level will provide the new company with financial stability and support investment in its pipeline.

“By combining Pfizer’s and GlaxoSmithKline’s complementary strengths and capabilities, we are creating a new global leader in HIV and reaffirming our ongoing commitment to the treatment of the disease,” said Pfizer Chief Executive Officer Jeff Kindler in a joint statement issued to the London Stock Exchange.

“With the strength of the companies’ current HIV products, as well as the complementary fit of Pfizer’s HIV pipeline and GSK’s global distribution capabilities, the new company is well positioned to bring new and improved medicines to patients with more speed and efficiency,” Kindler added.

The company will have a pipeline of 6 innovative and targeted medicines, including 4 compounds in phase II development. Altogether, the new company will have 17 molecules at its disposal to develop in fixed-dose combinations as possible new HIV treatments.

The new company will contract research and development services directly from Glaxo and Pfizer to develop new medicines.

The application was submitted in late December, Merck spokeswoman Amy Rose said this week.

It was long planned as part of Whitehouse Station, N.J.-based Merck’s strategy to increase the market for Gardasil. It prevents infection with the sexually transmitted virus and thus cancers of the genital organs.

Gardasil, launched in 2006 for girls and young women, quickly became one of Merck’s top-selling vaccines, thanks to aggressive marketing and attempts to get states to require girls to get the vaccine as a requirement for school attendance.

However, it is one of the priciest vaccines on the market, typically costing $360 for a three-dose regimen.

Gardasil had 2007 sales of $1.5 billion, but sales began slowing in the second half of 2008, after a government-funded Harvard study concluded it was cost-effective for girls but not for women in their 20s.

The U.S. Food and Drug Administration has two months to decide whether the application for use in males meets its standards. Reviews can then take 10 months or more.

The application includes research data from a Merck study including about 4,000 males, ages 16 to 26; Gardasil prevented 90 percent of cases of penile cancer and genital warts caused by the four common virus strains targeted by the vaccine.

The agency approved use of Gardasil in females ages 9 to 26 years old in June 2006, but last June rejected expanding that to include women ages 27 to 45. The vaccine has since been approved for use by young women in dozens of foreign countries.

A rival vaccine called Cervarix, made by Britain’s GlaxoSmithKline, is approved in many foreign markets, but generally lags behind Gardasil in sales. It is still awaiting approval in this country.