Our Horizon 2010 vision and goals will help ensure that we are solidly positioned to continue our 33-year mission of discovering, developing, manufacturing and commercializing life-enhancing and life-saving medicines to treat people with serious or life-threatening medical conditions. We are investing now to achieve the kind of revenue and earnings growth necessary to remain a leading company through 2010 and beyond. Originally announced in March 2004, the company provided an update to its Horizon 2010 goals in March 2006.

Our Vision Utilize the science of biotechnology to become a leader in revolutionizing the treatment of patients with cancer, immunological diseases and angiogenic disorders.

Our Goals

• To bring at least 20 new molecules into clinical development.
• To bring at least 15 major new products or indications onto the market.
• To become the number one U.S. oncology company in sales.
• To achieve an average compound annual non-GAAP earnings per share¹ growth rate of 25 percent.
• To achieve cumulative free cash flow² of $12 billion.

Our Guiding Principles Scientific Excellence

• Continue to be recognized for our scientific innovation, excellence, and integrity
• Be a leader in translating basic scientific discoveries into novel therapeutics for significant unmet medical needs

Long-Term Planning

• Manage the business with a primary intent of building sustainable, long-term growth in shareholder value
• Apply disciplined decision-making in managing our portfolio of R&D investments, and be smart about every dollar we spend in the company

Execution

• Set aggressive goals with confidence that our employees have the ability and perseverance to achieve them
• Insist on single points of accountability and on single decision-makers who effectively balance speed and input and successfully deliver results
• Insist on effective collaboration across disciplines
• Be thoughtfully opportunistic - innovate and take risks where appropriate
• Recognize that compliance is essential to the success of our business

People and Culture

• Embrace our unique culture: our commitment to patients, our passion for scientific excellence, and our respect for the contribution of every individual
• Keep what is best for patients at the top of our minds
• Hire only the best people and maintain high standards in managing performance
• Set high expectations for our leaders

¹ The non-GAAP EPS goal for 2006 through 2010 excludes the after-tax effects of the following items: employee stock-based compensation expense associated with our adoption of FAS 123R, recurring charges related to the redemption of our special common stock by Roche, litigation-related special charges for accrued interest and associated bond costs on the City of Hope judgment and other potential special charges related to existing or future litigation or its resolution, and changes in accounting principles, all of which may be significant. GAAP EPS for 2006 through 2010 would include the items described above.
² Our free cash flow measure is defined as cash from ongoing operations less gross capital expenditures. Cash from ongoing operations is derived from the "net cash provided by operating activities" line in our consolidated statements of cash flows, but this number may be adjusted for items that would allow the measure to better reflect our operational performance. These adjustments include, for example, cash receipts or payments related to litigation settlements, investments in trading securities and other potential items, any of which may be significant.

Our Corporate Growth Strategy contains forward-looking statements regarding adding 20 molecules into clinical development by 2010, bringing 15 major new products/indications onto the market by 2010, becoming the number one U.S. oncology company in sales by 2010, and Genentech's long-term growth, including growth in non-GAAP earnings per share (EPS) and cumulative free cash flow by 2010. Such statements are predictions and involve risks and uncertainties such that actual results may differ materially. Among other things, adding molecules into clinical development could be affected by a number of factors, including unexpected safety, efficacy or manufacturing issues, additional time requirements for data analysis, BLA preparation and decision making, need for additional clinical studies, and FDA actions or delays; bringing new products/indications to market could be affected by all of the foregoing and by a number of other factors, including failure to obtain or maintain FDA approval; becoming a leader in oncology sales could be affected by all of the foregoing and by a number of other factors, including competition, pricing, reimbursement, intellectual property or contract rights, the ability to supply product, product withdrawals and new product approvals and launches, and Genentech's growth, including growth in non-GAAP EPS and cumulative free cash flow, could be affected by all of the foregoing and by a number of other factors, including achieving sales revenue consistent with internal forecasts, costs of sales, R&D and MG&A expenses, stock-based compensation expense, unanticipated expenses such as litigation or legal settlement expenses or equity securities writedowns, royalties and contract revenues, and fluctuations in tax and interest rates. Please also refer to Genentech's periodic reports filed with the Securities and Exchange Commission. Genentech disclaims, and does not undertake any obligation to, update or revise any forward-looking statements in this Corporate Growth Strategy.