GlaxoSmithKline plc and Pfizer Inc, two of the world's biggest pharmaceutical companies, will combine their HIV drugs businesses into a new company, GSK has said.

The new HIV-focused company will sell the 11 existing drugs produced by the two firms and also undertake research and development of new HIV drugs and formulations, including the six new drugs already in the pipeline, GSK said in a statement.

The new company will do contract research for GSK and Pfizer and also invest in HIV-related R&D activities at GSK and Pfizer, as per the alliance agreement. The new firm will also have exclusive rights of first negotiation on all products.

The two companies together hold a fifth of the global market for HIV drugs, with annual sales of about 1.6 billion pounds (1.8 billion euros, $2.4 billion), UK-based GSK said.

The new company will initially be controlled 85 per cent by GSK and 15 per cent by Pfizer. The deal will marginally dilute GSK earnings in the first two years but will benefit GSK shareholders in the longer term, group CEO Andrew Witty said.

The company will be restructured  with the achievement of specific sales and regulatory milestones, he added.

''At the core of this specialist business is a broad portfolio of products and pipeline assets, which can be more effectively leveraged through the new company's strong revenue base and dedicated research capability,'' Witty said.

The transaction while expanding GSK's product portfolio, will also help reduce the impact of future patent expiries of several HIV products. For Pfizer, the collaboration will provide new pipeline assets and access to GSK's global HIV distribution network.

''We are creating a new global leader in HIV and reaffirming our ongoing commitment to the treatment of the disease,'' added Pfizer chief Jeff Kindler.

The 11 approved products of GSK and Pfizer, including Combivir, Kivexa, and Selzentry/Celsentri had sales of £1.6 billion ($2.38 billion) in 2008, says GSK.

With six new drugs are in the new firm's pipeline, four of which are in Phase II development, the new company will have 17 molecules at its disposal to develop in fixed-dose combinations as possible new HIV treatments.