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.

# # #

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