Thursday, Jul 14, 1988

Genentech Reports Increased Earnings, Sales in Second Quarter

South San Francisco, Calif. -- July 14, 1988 --

Genentech, Inc. today reported second quarter net income of $15.5 million, or 18 cents per share, compared to $5.3 million, or 6 cents per share, for the same period last year.

Revenues increased to $89.3 million from $47.5 million in the comparable 1987 period. Product sales for the quarter were $75.1 million, compared to $20.0 million last year.

For the six months ended June 30, 1988, net income was $30.7 million, or 36 cents per share, compared to $9.8 million, or 12 cents per share, for the 1987 period. Six month revenue were $163.7 million, compared to $86.1 million last year.

Robert A. Swanson, chief executive officer, said, "In June, the company launched new programs for our heart attack drug, Activase®, to assure its availability to needy patients and broaden distribution to community hospitals." These programs are now being implemented in the hospital marketplace and should impact sales in the latter part of 1988.

"We plan to spend over $120 millin this year in research and development. Many of our promising new products from research will enter the clinic during the coming year," Swanson said.

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 June 30,
	1988		1987
Revenues
Product sales	$	75,085	$	20,008
Contract	10,925		23,978
Interest	3,276		3,518
Total revenues	89,286		47,504
Costs and expenses
Cost of sales	13,422		3,945
Research and development	32,847		22,578
Marketing, general and administrative	24,180		12,820
Interest	1,864		2,203
Total costs and expenses	72,313		41,546
Income before taxes	16,973		5,958
Income tax provision	1,499		687
Net income	$	15,474	$	5,271
Net income per share	$	0.18	$	0.06
Weighted average number of shares used in    computing per share amounts:	84,732		85,223
	Six Months Ended June 30,
	1988		1987
Revenues
Product sales	$	138,606	$	36,518
Contract	18,847		44,413
Interest	6,257		5,179
Total revenues	163,710		86,110
Costs and expenses
Cost of sales	22,726		6,567
Research and development	59,228		44,413
Marketing, general and administrative	42,930		21,961
Interest	3,957		2,527
Total costs and expenses	128,841		75,468
Income before taxes	34,869		10,642
Income tax provision	4,184		827
Net income	$	30,685	$	9,815
Net income per share	$	0.36	$	0.12
Weighted average number of shares used in    computing per share amounts:	84,903		83,893