"AmericanWarner will be No. 1 globally in sales of pharmaceutical products," Warner-Lambert spokeswoman Carol Goodrich told Reuters after the deal was announced early on Thursday.

Goodrich said Warner-Lambert and AHP expected combined 1999 pharmaceuticals sales of more than $17 billion, a figure she predicted would slightly exceed those of their New Jersey neighbour Merck. She said Merck drug sales would likewise fall short of AmericanWarner's in 2000, when the merger was completed.

Merck was not immediately available for comment. For decades it has enjoyed a reputation of developing "first-in-class" medicines -- those that develop blockbuster sales as a result of being deemed best by prescribing physicians in different therapeutic areas.

By the late 1970s, Merck introduced arthritis drug Clinoril, the muscle relaxant Flexeril and glaucoma treatment Timoptic. Spurred by former chief executive Roy Vagelos, a biochemist, it launched 10 major drugs in the 1980s, including Vasotec for hypertension and cholesterol-lowering agent Mevacor.

It introduced a crop of eight new drugs in 1995 and 1996, including the popular hypertension drug Cozaar. And in 1998, Merck launched five new drugs developed by its scientists, including Singulair for asthma. Earlier this year, it introduced arthritis and pain drug Vioxx -- a pill that some analysts expect to eventually garner annual sales of more than $3 billion.

"Merck managed to become a giant organically, by developing its own drugs through its formidable research strength. It has remained the sales leader even after other biggies, such as Bristol-Myers Squibb and Glaxo Wellcome, were created through mergers," said Gruntal & Co. analyst David Saks.

Although Merck could now slip into the No. 2 position in terms of global drug sales, Saks predicted it would keep its oft-stated vow of remaining independent.

"Merck will resist walking to the altar with another company because of its culture, which is to go it alone with its own people," he said.

Jack Lamberton, a drug analyst for Cape Bojador Capital Management in New York, said Merck would indeed likely fall into second place -- in part because of generic competition once US patents expire on four of its key drugs in 2000 and 2001.

"But it's highly likely Merck will catch back up by 2005" if its fabled research engine continues to develop blockbuster new drugs, Lamberton said.

Hemant Shah, an independent New Jersey drug analyst, said Merck can be counted on to remain a top player in the industry for years to come.

"It is by far the best innovator in the industry and has developed more novel drugs than anyone else," he said.

In fact, Shah said he was not personally convinced Merck's No. 1 ranking would be overtaken by AmericanWarner next year.

"It will be a horse race," he predicted.

Warner-Lambert's drug roster is dominated by Lipitor, a potent cholesterol-lowering drug with current annual sales of about $3.5 billion. It also sells the anticonvulsant Neurontin, hypertension drug Accupril and diabetes treatment Rezulin.

American Home Products markets Premarin, the best-selling female hormone replacement therapy, antidepressant Effexor and recently approved drugs Sonata for insomnia and Rapamune for organ transplant patients.

Its pipeline of experimental drugs is considered one of the best in the industry and includes three medicines awaiting approval from US regulators -- haemophilia treatment ReFacto, ulcer drug Protonix and a vaccine against seven common strains of pneumococcal bacteria.