Fourth quarter and full-year earnings were posted by Merck and GlaxoSmithKline today, and both companies suffered financial losses due to patent expiries, drug safety issues and ongoing litigation.

Merck reported a $531 million loss in the fourth quarter, due in part to $1.7 billion in costs related to vorapaxar, an experimental blood thinner. Merck halted one of two clinical studies on the drug in January, do to safety concerns. Full-year combined prescription drug sales for Merck and Schering-Plough were down 1% to $39.8 billion, from $40.1 billion in 2009, according to Merck’s figures, created by adjusting the Schering-Plough merger completion date to January 2009, for a year-to-year comparison.

Merck’s Singulair, Januvia, Janumet, Remicade and Isentress contributed a combined 15% growth year over year, CEO Ken Frazier said on a conference call this morning. Singulair, an asthma drug and Merck’s best seller at almost $5 billion in global sales for 2010, will face patent expiration next year.

Frazier, told investors that the company would “remain committed to pursuing innovative R&D programs,” adding that boceprevir, an oral hepatitis C drug, and once-daily Janumet XR for diabetes, had been submitted for FDA approval. Boceprevir was granted an accelerated review by FDA in January.

GlaxoSmithKline’s total sales were down 1% to $38.6 billion in 2010. The company continues to deal with ongoing litigation over bad marketing practices, and set aside an additional $3.4 billion to cover those costs in the fourth quarter. Additionally, GSK was dealt a blow by European and American regulators this year, when the company’s blockbuster diabetes drug Avandia proved more dangerous than originally assumed. Avandia sales went down by 44% in 2010, ending the year at $713 million in global sales.

GSK’s US pharmaceutical sales dropped by 11% in 2009, primarily due to Avandia sales and Valtrex’s patent expiry. US Sales for Valtrex, a herpes treatment, plummeted to $408 million, a 73% decrease, according to GSK data.

In a note to investors today, Tim Anderson at Bernstein Research said Merck stock deserved an upgrade, “predicated on Merck being a comparatively good R&D organization, with a solid long-term R&D track record that hopefully foretells future new product flow that is meaningful.”

Regarding GSK’s prospects, Anderson said in a separate note that “some traction is finally being made” with respect to the company’s pipeline, which includes “several compounds having moved into phase III development.” Anderson said GSK’s “nearest-term new product is likely to be Benlysta,” for lupus.