Updated from 12:15 p.m. EDT

Two of the largest pharmaceutical makers in the world,

Merck

(MRK) - Get Report

and

Schering-Plough

(SGP)

, said Tuesday they would join forces to develop and market new cholesterol and asthma medicines involving some of their top drugs.

One partnership will focus on a once-daily cholesterol therapy that combines Merck's Zocor, the number one-selling statin -- or cholesterol drug -- in the world, with Schering-Plough's experimental cholesterol agent ezetimibe. A second partnership will focus on a once-daily hay fever and asthma treatment that combines Schering-Plough's top-selling allergy and cold medicine Claritin, with Merck's asthma medicine Singulair.

The two partnerships will be equally owned and managed by Merck, based in Whitehouse Station, N.J., and Schering-Plough, based in Madison, N.J.

"Merck and Schering-Plough have formed these agreements to bring new and better medicines to patients faster and more efficiently," said Richard Jay Kogan, chairman and chief executive of Schering-Plough, in a statement. "Given their potential and the size of the markets in which they would compete, we believe these products will be major contributors to future sales and earnings growth for Schering-Plough."

The cholesterol management market posted total U.S. sales of $5.9 billion in 1999, with growth of 25%. Meanwhile, the U.S. allergy market grew 17% in 1999, recording $4.9 billion in sales.

The news comes against the backdrop of rapid consolidation in the pharmaceutical industry. Last December,

Aventis

(AVE)

emerged from the union of

Rhone-Poulenc

and

Hoechst

. In April,

Pharmacia & Upjohn

completed its merger of

Monsanto

and renamed itself

Pharmacia

(PHA)

.

Imminent are the mergers of

Pfizer

(PFE) - Get Report

with

Warner-Lambert

(WLA)

and

Glaxo Wellcome

(GLX)

with

SmithKline Beecham

(SBH) - Get Report

.

Shares of Merck rose 15/16, or 1%, to 73 1/4 in midday Tuesday trading, while shares of Schering-Plough rose 1 9/16, or 4%, to 45 3/8. (Merck closed up 1 1/2, or 2%, at 73 13/16, while Schering-Plough closed up 1 11/16, or 4%, at 45 1/2.)