Genentech Reports Third Quarter Results

South San Francisco, Calif. -- October 15, 1992 -- Genentech, Inc. (NYSE: GNE) announced today that revenues for the third quarter 1992 increased 2 percent to $137.3 million, from $135.0 million in the same quarter of 1991. Earnings decreased to $7.7 million, or 7 cents per share, from earnings of $13.5 million, or 12 cents per share in the third quarter of the previous year.

As Genentech reported for the second quarter of 1992, the decrease in earnings despite increased revenues resulted primarily from continued large investment in research and development in pursuit of aggressive product development goals. R&D expenditures in the third quarter of 1992 were $69.6 million, up from $59.9 million in the third quarter of 1991.

Sales of Protropin® human growth hormone increased 7 percent to $51.0 million from $47.5 million in the third quarter of 1991. This market has continued to grow due to the increasing number of patients diagnosed as growth hormone inadequate.

Third quarter 1992 Activase® t-PA sales increased 6 percent to $49.4 million, from $46.7 million in the third quarter of 1991. "This increase in Activase sales stems largely from the recent introduction of a new Activase vial size," said G. Kirk Raab, Genentech's president and chief executive officer. "The new vial contains the standard Activase dose of 100 mg and it offers features to simplify and speed administration of Activase. Initial stocking of the new vial size by wholesalers and hospital pharmacies has had a temporary impact on sales." Genentech's U.S. thrombolytic market share remains at slightly over 50 percent, where it has stabilized over the past year.

The results of two recently reported clinical trials may have a favorable impact on Activase sales. Clinical investigators presented the results of the LATE trial in Barcelona in August. This international study of nearly 6,000 patients showed that Activase reduced mortality when administered up to 12 hours after the first symptoms of heart attack -- six hours later than thrombolytic therapy routinely is administered in the United States. Up to 30 percent of heart attack patients do not reach the hospital within six hours of the first symptoms of heart attack.

A data analysis reported in July in the New England Journal of Medicine suggested that heart attack patients over the age of 75 benefit even more from thrombolytic therapy than younger patients, though, in the United States, they are much less likely than younger patients to receive this therapy. About 100,000 Americans over the age of 75 are hospitalized each year as a result of heart attacks.

Consistent with the rarity of chronic granulomatous disease, which Actimmune® interferon gamma is approved to treat, third quarter 1992 sales of Actimmune were $0.8 million.

In clinical research, preliminary results of Phase I trials of an early version of Genentech's gp120 molecule, reported in July at the VIII International Conference on AIDS in Amsterdam, showed it is safe and it elicits an immune response. Further studies (using a modified gp120 more representative of HIV strains common in the United States and Europe) are underway to determine if the observed immune responses will translate into clinical benefits.

Raab said, "Progress toward our product development goals continues for our broad pipeline. The strength of Genentech's marketed products combined with the potential of the many products in our pipeline provide a promising outlook for Genentech's future. "

Genentech, Inc. is a leading biotechnology company that discovers, develops, manufactures and markets human pharmaceuticals for significant medical needs. The company has headquarters in South San Francisco, California and is traded on the New York and Pacific Stock exchanges under the symbol GNE.

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

	Three Months Ended September 30,

	1992		1991
Revenues
Product sales	$	101,151	$	94,671
Royalties	23,301		18,976
Contract and other	1,404		9,357
Interest	11,445		11,994
Total revenues	137,301		134,998

Costs and expenses
Cost of sales	17,316		16,622
Research and development	69,636		59,883
Marketing, general and administrative	41,509		43,293
Interest	739		1,157
Total costs and expenses	129,200		120,955

Income before taxes	8,101		14,043
Income tax provision	405		553

Net income	$	7,696	$	13,490

Net income per share	$	0.07	$	0.12

Weighted average number of shares used in computing per share amounts:	114,533		112,434

	Nine Months Ended September 30,

	1992		1991
Revenues
Product sales	$	290,436	$	291,475
Royalties	68,567		49,379
Contract and other	8,572		18,217
Interest	34,690		37,334
Total revenues	402,265		396,405

Costs and expenses
Cost of sales	49,881		52,397
Research and development	208,919		161,594
Marketing, general and administrative	125,067		132,551
Interest	2,996		3,804
Total costs and expenses	386,863		350,346

Income before taxes	15,402		46,059
Income tax provision	770		1,845

Net income	$	14,632	$	44,214

Net income per share	$	0.13	$	0.39

Weighted average number of shares used in computing per share amounts:	113,561		112,297

	September 30,
	1992		1991
Selected balance sheet data
Cash and short-term investments	$	464,300	$	504,406
Accounts receivable	83,320		86,385
Inventories	58,744		53,510
Long-term marketable securities	213,142		201,693
Property, plant and equipment, net	414,616		322,638
Other long-term assets	36,366		43,500
Total assets	1,284,022		1,220,245
Total current liabilities	137,931		110,697
Long-term debt	152,209		153,048
Total liabilities	301,916		274,416
Total stockholders' equity	982,106		945,829