Genentech Reports Third Quarter Results

South San Francisco, Calif. -- October 16, 1986 -- Genentech, Inc. reported of $35.5 million for the third quarter of 1986, compared to $22.2 million for the same period last year.

Net income for the quarter ended September 30, 1986 was $3.7 million or 10 cents per share, compared to $1.6 million or 5 cents per share for the third quarter of 1985.

As in the past, significant quarter-to-quarter income and revenue fluctuations may occur. These fluctuations have non impact on the company's long-term growth, which will come from growing product sales revenues.

"Since the Food and Drug Administration approved Protropin growth hormone a year ago, more children who need it are receiving growth hormone therapy than ever before," reported Robert A. Swanson, chief executive officer. Sales of Protropin reached $12.4 million for the quarter and $29.1 million for the first nine months of 1986.

Genentech products in clinical trials include Activase tissue plasminogen activator, used to dissolve life-threatening blood clots, a second generation recombinant human growth hormone, gamma interferon for anti-cancer agent.

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 September 30,

	1986		1985
Revenues
Product sales	$	12,372	$	-
Contract	21,937		19,727
Interest	1,240		2,426
Total revenues	35,549		22,153

Costs and expenses
Research and development	20,794		16,065
Marketing, general and administrative	10,289		4,182
Total costs and expenses	31,083		20,247

Income before taxes	4,466		1,906
Income tax provision	804		804

Net income	$	3,662	$	1,609

Net income per share	$	0.10	$	0.05*

Weighted average number of shares used in computing per share amounts:	35,409		32,763

	Nine Months Ended September 30,

	1986		1985
Revenues
Product sales	$	29,144	$	-
Contract	63,057		57,544
Interest	5,039		6,185
Total revenues	97,240		63,729

Costs and expenses
Research and development	58,806		48,178
Marketing, general and administrative	28,388		11,500
Total costs and expenses	87,194		59,678

Income before taxes	10,046		4,051
Income tax provision	1,808		626

Net income	$	8,238	$	3,425

Net income per share	$	0.23	$	0.11*

Weighted average number of shares used in computing per share amounts:	35,169		31,738

* All share and per share amounts reflect the February 1986 two-for-one stock split.