5X5 Report Card Our 5X5 Goals We recently entered the last year of our 5X5 strategy for growth, a set of five goals we outlined for the period 1999 through 2005. We continue to make solid progress on these ambitious goals.

1. 25 percent average annual non-GAAP EPS growth The first goal is the most important of the 5X5 plan, and we expect to exceed this goal given that our average annual non-GAAP⁽¹⁾ earnings per share (EPS) growth rate has been 29 percent for 1999 through 2004. Average annual GAAP earnings per share growth was 69 percent from 1999 through 2004. For 2005, we are currently expecting year-over-year non-GAAP⁽²⁾ EPS growth of greater than 25 percent.

2. 25 percent non-GAAP net income as a percentage of operating revenues The goal of 25 percent non-GAAP net income as a percentage of operating revenues will probably not be met due to the success of Rituxan® (Rituximab) and the impact of the related profit-sharing arrangement. For 2004, the non-GAAP⁽¹⁾ net income as a percentage of revenues was 19 percent. The GAAP net income as a percentage of revenues was 17 percent.

3. 5 new products/indications approved We have already exceeded our 5X5 goal of five new products or indications approved, with eight products or indications approved since 1999: Nutropin Depot® [somatropin (rDNA origin) for injectable suspension], TNKase™ (Tenecteplase), Cathflo® Activase® (Alteplase), Nutropin AQ Pen® (a delivery system), Xolair® (Omalizumab), RAPTIVA® (efalizumab), Avastin™ (bevacizumab) and Tarceva™ (erlotinib).

4. 5 significant products in late-stage clinical trials We are well positioned to exceed our 5X5 goal of five significant products in late-stage development. To name a few, we currently have in Phase III trials: Lucentis™ (ranibizumab) for age-related macular degeneration, Tarceva for pancreatic cancer, Rituxan for several immunology indications, and Avastin for several oncology indications.

5. $500 million in new revenues from strategic alliances or acquisitions We are uncertain whether we will meet the goal of $500 million in new revenues from strategic alliances or acquisitions. Importantly, due to our focus on earlier-stage opportunities, we have entered into more than 50 significant agreements and in-licensing agreements since 1999 which position us well for future growth.

(1) Genentech's non-GAAP earnings per share and non-GAAP net income exclude recurring charges related to the 1999 redemption of our stock by Roche, litigation-related special items, the cumulative effect of the change in an accounting principle in 2003, and all related tax effects. See pages 16-17 for the reconciliation to our GAAP numbers. All share and per share amounts reflect the May 2004 two-for-one split of Genentech common stock.

(2) Our 2005 GAAP EPS is not estimable at this time. The 2005 GAAP EPS would include recurring charges related to the 1999 redemption of our stock by Roche, which are estimated to be approximately $123 million on a pretax basis in 2005. In addition, the 2005 GAAP EPS would include litigation-related special charges for accrued interest and associated bond costs on the City of Hope judgment, which are currently estimated to be approximately $54 million on a pretax basis in 2005. The 2005 non-GAAP EPS estimate does not include the redemption-related recurring charges and the litigation-related special charges or any other potential special charges related to existing or future litigation or its resolution, or changes in accounting principles, all of which may be significant.