Genentech Reports Substantial Increase in 1985 Revenues and Income

South San Francisco, Calif. -- February 12, 1986 -- Genentech, Inc. reported today that 1985 revenues and net income increased substantially over 1984.

Revenues for the fiscal year ending December 31, 1985 were $89.6 million, up 28 percent from $69.8 million in 1984. Net income was $5.6 million in 1985, or 18 cents per share, compared with $2.7 million, or 9 cents per share reported for the previous year.

The earnings per share reflect the 2 for 1 stock split announced by Genentech on January 21, 1986, for shareholders of record February 1. Shareholders will receive their additional stock after the payment date which is February 28. The post-split stock price will be quoted beginning March 3. Fourth quarter revenues were $25.9 million in 1985, compared with $18.1 million in 1984. Fourth quarter net income was $2.2 million or 7 cents per share, compared with $612,000 or 2 cents per share in 1984.

Robert A. Swanson, chief executive officer, said, "We are proud of our record of achieving growth and revenue objectives. 1985 was our seventh consecutive year of increased profitability."

As in the past, significant quarter-to-quarter income and revenue fluctuations may occur during 1986, due to variations in the timing of revenues for licensing and research benchmarks. These fluctuations have no impact on the company's long-term growth.

1985 was a year of significant achievements for Genentech. The first recombinant human pharmaceutical to be manufactured and marketed by a biotechnology company, Protropin® growth hormone, was approved by the Food and Drug Administration. The launch of the product was a major success.

"Spearheaded by marketing and manufacturing people, the October launch resulted in over $5 million in sales in the fourth quarter and the first profits Genentech has earned from the sales of our own products," Swanson said.

Genentech is a leading biotechnology company, focusing on the development, manufacture and marketing of pharmaceuticals produced by recombinant DNA technology

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GENENTECH, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share amounts)
(unaudited)

	Three Months Ended December 31,

	1984		1983
Revenues
Contract	$	17,155	$	12,222
Interest	979		1,240
Total revenues	18,134		13,462

Costs and expenses
Research and development	14,625		10,594
Marketing, general and administrative	2,831		2,566
Total costs and expenses	17,456		13,160

Income before taxes	678		302
Income tax provision	66		76

Net income	$	612	$	226

Net income per share	$	0.04	$	0.02

Weighted average number of shares used in computing per share amounts:	14,396		14,334

	Twelve Months Ended December 31,

	1984		1983
Revenues
Contract	$	65,627	$	42,373
Interest	4,159		4,630
Total revenues	69,786		47,003

Costs and expenses
Research and development	54,892		36,661
Marketing, general and administrative	11,794		8,876
Total costs and expenses	66,776		45,537

Income before taxes	3,010		1,466
Income tax provision	290		338

Net income	$	2,720	$	1,128

Net income per share	$	0.19	$	0.08

Weighted average number of shares used in computing per share amounts:	14,370		14,158

All the earnings per share numbers reflect the two-for-one stock split announced January 21, 1986. The post-split price will be quoted beginning March 3.