Genentech Third Quarter Profits Higher

South San Francisco, Calif. -- October 24, 1989 -- Genentech, Inc. today reported third quarter earnings of $11.4 million, or 13 cents per share, up 115 percent from $5.3 million, or 6 cents per share for the same period last year. Genentech said profits were higher primarily because net product sales this quarter were $76.0 million, compared with $57.5 million for the same quarter last year.

Total revenues for the quarter were $100.0 million, up 23 percent from $81.6 million for the same quarter last year. Net sales of Protropin®, human growth hormone, were $32.4 million, compared with $28.4 million in the same quarter last year. Net sales of Genentech's heart attack drug, Activase®, tissue plasminogen activator (t-PA), were $43.6 million, compared with $29.1 million for the same quarter in 1988. Activase®, t-PA, sales for the third quarter were lower than the previous quarter.

"We continue to be on target for meeting our goal of increasing sales 20-25 percent this year," said Robert A. Swanson, chief executive officer. Net sales of Activase®, t-PA, for the first nine months of this year were $139.7 million, up 20 percent from $116.7 million for the same period last year.

Genentech's research and development expenses increased from $36.1 million in the third quarter of 1988 to $38.5 million in the same period this year due to increased clinical trial expenditures. Since June, three new products have begun Phase I human clinical trials. Those products are Argatroban, a blood-clot inhibiting agent; CD4-IgG, a second generation potential AIDS therapeutic; and insulin-like growth factor (IGF-1), which will be studied for treatment of nutritional disorders.

Marketing, general and administrative expenses also were up, from $27.1 million to $32.0 million, mainly due to increasing the size of the sales force this year.

Genentech, Inc. is a biotechnology company focusing on the development, manufacture and marketing of pharmaceutical products produced by recombinant DNA technology.

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

	Three Months Ended September 30,

	1989		1988
Revenues
Product sales	$	76,011	$	57,519
Contract	19,388		21,026
Interest	4,648		3,074
Total revenues	100,047		81,619

Costs and expenses
Cost of sales	14,591		11,477
Research and development	38,505		36,065
Marketing, general and administrative	32,074		27,118
Interest	1,879		1,525
Total costs and expenses	87,049		76,185

Income before taxes	12,998		5,434
Income tax provision	1,583		132

Net income	$	11,415	$	5,302

Net income per share	$	0.13	$	0.06

Weighted average number of shares used in computing per share amounts:	86,711		84,268

	Nine Months Ended September 30,

	1989		1988
Revenues
Product sales	$	228,082	$	196,125
Contract	48,524		39,873
Interest	12,431		9,331
Total revenues	289,037		245,329

Costs and expenses
Cost of sales	43,170		34,203
Research and development	114,517		95,293
Marketing, general and administrative	93,222		70,048
Interest	5,808		5,482
Total costs and expenses	256,717		205,026

Income before taxes	32,320		40,303
Income tax provision	3,879		4,316

Net income	$	28,441	$	35,987

Net income per share	$	0.33	$	0.42

Weighted average number of shares used in computing per share amounts:	85,708		84,692

	September 30,
	1989		1988
Selected balance sheet data
Cash and short-term investments	$	205,445	$	151,003
Accounts receivable	59,289		76,847
Inventories	53,116		82,694
Total assets	718,379		683,799
Total stockholders' equity	448,742		412,263