Genentech Reports Fourth Quarter and Year End Results

South San Francisco, Calif. -- January 20, 1993 -- Genentech, Inc. today reported revenues for 1992 were $544.3 million, up six percent from $515.9 million in 1991. Fourth quarter revenues were $142 million, up 19 percent from $119.5 million in the fourth quarter of 1991.

Due to an anticipated increase in research and development expenses, Genentech profits for 1992 were $20.8 million (18 cents per share), compared to profits of $44.3 million (39 cents per share) in 1991. Profits for the fourth quarter were $6.2 million, compared to essentially break-even in the fourth quarter of 1991.

The decline in earnings for the full year despite increased revenues resulted primarily from continued large investment in research and development consistent with the company's aggressive product development goals of getting new products on the market as well as new indications for existing products. A major clinical project underway is the international 41,000 patient GUSTO trial (Global Utilization of Streptokinase and t-PA in Occluded Coronary Arteries), which is investigating the comparison of Activase (Alteplase, recombinant) t-PA and streptokinase in opening blocked coronary arteries early and keeping them open after a heart attack.

Genentech's research and development expenditures for 1992 were $278.6 million, up 26 percent from $221.3 million in 1991. The 1992 research and development expenses represent 51 percent of total revenues compared to 43 percent in 1991.

"Genentech's continued heavy investment in research and development is consistent with our fundamental business plan to insure introductions of significant new products to treat important unmet medical needs. It is made possible by our strong financial position," said G.Kirk Raab, Genentech's president and chief executive officer.

1992 Marketed Product Performance

Protropin® (somatrem for injection) human growth hormone sales continued to grow steadily in 1992, with net sales of $205.9 million, up 11 percent from $185.1 million in 1991. The company believes sales growth of human growth hormone to be due to an increased number of diagnosed growth hormone inadequate patients.

Net sales of Activase were $182.1 million for fiscal 1992, down seven percent from $196.5 million in 1991. The decline in Activase sales for the year ended 1992 in relation to 1991 is primarily due to the lack of bulk sales to Genentech's Japanese licensees. The North American market share has remained steady at about 50 percent for 1992

Sales for Actimmune® (interferon gamma-1b) were $2.9 million. Sales have remained modest due to the small number of patients who have chronic granulomatous disease, the drug's current indication.

Movement of Key Clinical Development Products in 1992

Chief among several clinical milestones met in 1992 was the completion of important Phase III clinical trials of Pulmozyme™ (rhDNase) for treating cystic fibrosis. The results of the 968-patient study demonstrated Pulmozyme improves lung function and reduces the rate of respiratory infection in patients with cystic fibrosis. No major adverse side effects were noted. Genentech expects to file for marketing approval in the U.S. and Canada by the end of the first quarter of 1993 and soon thereafter in Europe.

Additional significant progress was made in clinical trials during 1992:

Initiated Phase II trials of Pulmozyme for chronic bronchitis in the
Conducted Phase I trials for humanized HER2 monoclonal antibody in women with advanced breast and ovarian cancer
Conducted Phase I trials using the most common virus strain (MN) for gp120 AIDS vaccine as both an immunotherapeutic and a prophylactic
Began Phase I trials for Nerve Growth Factor (NGF) for treating peripheral neuropathy associated with cancer chemotherapy and diabetes

In addition, the company:

Moved Anti-lgE for treating allergic rhinitis and asthma from research into development
Moved Anti-CD 18 for treating inflammatory disease from research into development
Filed an NDA for second generation growth hormone, Nutropin? (somatropin for injection), for the Turner Syndrome indication

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 December 31,

	1992		1991
Revenues
Product sales	$	100,539	$	91,785
Royalties	23,115		14,005
Contract and other	8,155		2,284
Interest	10,191		11,445
Total revenues	142,000		119,519

Costs and expenses
Cost of sales	16,943		16,040
Research and development	69,696		59,676
Marketing, general and administrative	47,419		42,726
Interest	1,410		967
Total costs and expenses	135,468		119,409

Income before taxes	6,532		110
Income tax provision	327		2

Net income	$	6,205	$	108

Net income per share	$	0.05	$	-

Weighted average number of shares used in computing per share amounts:	115,283		113,301

	Year Ended December 31,

	1992		1991
Revenues
Product sales	$	390,975	$	383,260
Royalties	91,682		63,384
Contract and other	16,727		20,501
Interest	44,881		48,779
Total revenues	544,265		515,924

Costs and expenses
Cost of sales	66,824		68,437
Research and development	278,615		221,270
Marketing, general and administrative	172,486		175,277
Interest	4,406		4,771
Total costs and expenses	522,331		469,755

Income before taxes	21,934		46,169
Income tax provision	1,097		1,847

Net income	$	20,837	$	44,322

Net income per share	$	0.18	$	0.39

Weighted average number of shares used in computing per share amounts:	113,992		112,548

	December 31,
	1992		1991
Selected balance sheet data
Cash and short-term investments	$	391,895	$	515,088
Accounts receivable	93,909		69,042
Inventories	65,315		56,174
Total current assets	580,499		649,995
Long-term marketable securities	255,031		196,303
Property, plant and equipment, net	432,525		342,468
Other long-term assets	37,076		42,666
Total assets	1,305,131		1,231,432
Total current liabilities	133,543		118,606
Long-term debt	152,023		152,878
Total liabilities	297,810		281,730
Total stockholders' equity	1,007,321		949,702