Wednesday, Apr 24, 1985

Genentech Reports First Quarter Results

South San Francisco, Calif. -- April 24, 1985 --

Genentech, Inc. reported revenues of $20.2 million for the first quarter of 1985, up 32 percent from $15.3 million for the same period last year.

Net income for the quarter ended March 31, 1985 was $715,000 or 5 cents per share, compared to $385,000 or 3 cents per share for the first quarter of 1984.

Operating revenue, which includes contract research, licensing revenues and product sales for clinical use, represented over 90 percent of total revenues for the quarter.

"Until several Genentech products have reached the market, the Company may experience quarter to quarter fluctuations in financial results due to variations in the timing of revenues for licensing and research benchmarks," according to Robert A. Swanson, chief executive officer. "These variations have no significance for the long-term earnings of the Company."

"Several milestones were achieved this quarter," Swanson said. "In preliminary tests, the National Institute of Health found Genentech's t-PA to be twice as effective in dissolving blood-clots as the currently used heart-attack treatment; we raised over $9O million of additional equity for expansion and working capital; and we added G. Kirk Raab as our new president and chief operating officer."

Other products Genentech has under development and in clinical trials include recombinant human growth hormone, for the treatment of short stature due to growth hormone deficiency; gamma interferon for anticancer and antiviral indications; Factor VIII, a blood-clotting agent for treating hemophilia; and tumor necrosis factor, an anticancer agent normally produced in minute quantities by the body's immune system.

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

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GENENTECH, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS

(in thousands, except per share amounts)
(unaudited)

Three Months
Ended September 30,

1985 1984
Revenues
   Contract $ 19,011 $ 14,276
   Interest 1,153 1,018
      Total revenues 20,164 15,294
     
Costs and expenses
   Research and development 15,116 12,177
   Marketing, general and administrative 4,167 2,691
      Total costs and expenses 19,283 14,868
     
Income before taxes 881 426
Income tax provision 166 41
     
Net income $ 715 $ 385
     
Net income per share $ 0.05 $ 0.03
     
Weighted average number of shares used in
   computing per share amounts:
14,874 14,342