Tuesday, Jul 30, 1985

Genentech Reports Second Quarter Results

South San Francisco, Calif. -- July 30, 1985 --

Genentech, Inc. reported revenues of $21.4 million for the second quarter of 1985, compared to $17.3 million for the same period last year.

Net income for the quarter ended June 30, 1985 was $1.1 million or 7 cents per share, compared to $625,000 or 4 cents per share for the second quarter of 1984.

Nine month revenues for 1985 were $41.6 million, compared to $32.6 million for the same period last year. Six months net income was $1.8 million or 12 cents per share, compared to $1.0 million or 7 cents per share for the first half of 1984.

"We are consistently meeting our overall financial goals," said Robert A. Swanson, chief executive officer. "However, until several Genentech products reach the market, the company may experience significant quarter to quarter fluctuations in financial results due to variations in the timing of revenues for licensing and research benchmarks. These fluctuations have no impact on the company?s long-term growth."

"Genentech strengthened its international presence this past quarter," remarked Swanson."Genentech Canada, a Canadian marketing joint venture with Boehringer Ingelheim (Canada) Ltd., was formed to market human pharmaceuticals developed by Genentech." Swanson added, "Genentech and Boehringer Ingelheim GmbH also announced the establishment of a cancer research institute to be located in Vienna, Austria. The institute will conduct research focused on the oncogenes, the genes implicated in the cause of cancer. And in early July, Genentech licensed certain animal health care products to Ciba-Geigy Limited for worldwide manufacture and marketing. Terms of agreement call for cash payments to Genentech of $42 million under certain conditions as well as ongoing royalties of product sales."

Genentech 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 June 30,

1985 1984
Revenues
Contract $ 18,806 $ 16,137
Interest 2,606 1,132
Total revenues 21,412 17,269
Costs and expenses
Research and development 16,997 13,415
Marketing, general and administrative 3,151 3,139
Total costs and expenses 20,148 16,554
Income before taxes 1,264 715
Income tax provision 163 90
Net income $ 1,101 $ 625
Net income per share $ 0.07 $ 0.04
Weighted average number of shares used in
computing per share amounts:
16,335 14,363
Six Months
Ended June 30,

1985 1984
Revenues
Contract $ 37,817 $ 30,413
Interest 3,759 2,150
Total revenues 41,576 32,563
Costs and expenses
Research and development 32,113 25,592
Marketing, general and administrative 7,318 5,830
Total costs and expenses 39,431 31,422
Income before taxes 2,145 1,141
Income tax provision 329 131
Net income $ 1,816 $ 1,010
Net income per share $ 0.12 $ 0.07
Weighted average number of shares used in
computing per share amounts:
15,609 14,353