Thursday, Oct 24, 1985

Genentech Reports Third Quarter Results

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

Genentech, Inc. reported revenues of $22.2 million for the third quarter of 1985, compared to $19.1 million for the same period last year.

Net income for the quarter ended September 30, 1985 was $1.6 million or 10 cents per share, compared to $1.1 million or 8 cents per share for the third quarter of 1984.

Nine month revenues for 1985 were $63.7 million, compared to $51.7 million for the same period of 1984. Nine month net income was $3.4 million or 22 cents per share, compared to $2.1 million or 15 cents per share for the first nine months of 1984.

"Protropin growth hormone was approved for marketing last week by the Food and Drug Administration," reported Robert A. Swanson, chief executive officer. "Protropin is the first biosynthetic pharmaceutical to be developed, manufactured and marketed in the U.S. by a biotechnology firm."

Genentech's clinical program for its other priority products was expanded recently with the commencement of human clinical testing of tumor necrosis factor (TNF). The seventh Genentechdeveloped product to enter human clinical trials, TNF is being tested as a potential anti-cancer treatment at two leading U.S. cancer research hospitals.

Clinical trials on gamma interferon and ACTIVASE™, Genentech's tissue plasminogen activator (t-PA) are continuing. To date, more than 700 patients have been treated with ACTIVASE, used to dissolve life-threatening blood clots. The manufacturing scaleup of ACTIVASE was recently completed and the company is now producing product at the scale which will be used when the product is marketed.

Additionally, the results of the first human clinical tests of Genentech's hepatitis-B vaccine conducted by the Natlonal Institutes of Health (NIH) were announced recently. In a statement to the press, the NIH said the vaccine, produced by recombinant DNA technology, was "as safe as the currently licensed vaccine and even more effective in stimulating the immune system."

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 September 30,

1985 1984
Revenues
   Contract $ 19,727 $ 18,059
   Interest 2,426 1,030
      Total revenues 22,153 19,089
     
Costs and expenses
   Research and development 16,065 14,765
   Marketing, general and administrative 4,182 3,133
      Total costs and expenses 20,247 17,898
     
Income before taxes 1,906 1,191
Income tax provision 297 93
     
Net income $ 1,609 $ 1,098
     
Net income per share $ 0.10 $ 0.08
     
Weighted average number of shares used in
   computing per share amounts:
16,381 14,380
 
Nine Months
Ended September 30,

1985 1984
Revenues
   Contract $ 57,544 $ 48,472
   Interest 6,185 3,180
      Total revenues 63,729 51,652
     
Costs and expenses
   Research and development 48,178 40,357
   Marketing, general and administrative 11,500 8,963
      Total costs and expenses 59,678 49,320
     
Income before taxes 4,051 2,332
Income tax provision 626 224
     
Net income $ 3,425 $ 2,108
     
Net income per share $ 0.22 $ 0.15
     
Weighted average number of shares used in
   computing per share amounts:
15,869 14,362