Thursday, Oct 16, 1986

Genentech Reports Third Quarter Results

South San Francisco, Calif. -- October 16, 1986 --

Genentech, Inc. reported of $35.5 million for the third quarter of 1986, compared to $22.2 million for the same period last year.

Net income for the quarter ended September 30, 1986 was $3.7 million or 10 cents per share, compared to $1.6 million or 5 cents per share for the third quarter of 1985.

As in the past, significant quarter-to-quarter income and revenue fluctuations may occur. These fluctuations have non impact on the company's long-term growth, which will come from growing product sales revenues.

"Since the Food and Drug Administration approved Protropin growth hormone a year ago, more children who need it are receiving growth hormone therapy than ever before," reported Robert A. Swanson, chief executive officer. Sales of Protropin reached $12.4 million for the quarter and $29.1 million for the first nine months of 1986.

Genentech products in clinical trials include Activase tissue plasminogen activator, used to dissolve life-threatening blood clots, a second generation recombinant human growth hormone, gamma interferon for anti-cancer agent.

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,

1986 1985
Revenues
   Product sales $ 12,372 $ -
   Contract 21,937 19,727
   Interest 1,240 2,426
      Total revenues 35,549 22,153
     
Costs and expenses
   Research and development 20,794 16,065
   Marketing, general and administrative 10,289 4,182
      Total costs and expenses 31,083 20,247
     
Income before taxes 4,466 1,906
Income tax provision 804 804
     
Net income $ 3,662 $ 1,609
     
Net income per share $ 0.10 $ 0.05*
     
Weighted average number of shares used in
   computing per share amounts:
35,409 32,763
 
Nine Months
Ended September 30,

1986 1985
Revenues
   Product sales $ 29,144 $ -
   Contract 63,057 57,544
   Interest 5,039 6,185
      Total revenues 97,240 63,729
     
Costs and expenses
   Research and development 58,806 48,178
   Marketing, general and administrative 28,388 11,500
      Total costs and expenses 87,194 59,678
     
Income before taxes 10,046 4,051
Income tax provision 1,808 626
     
Net income $ 8,238 $ 3,425
     
Net income per share $ 0.23 $ 0.11*
     
Weighted average number of shares used in
   computing per share amounts:
35,169 31,738

* All share and per share amounts reflect the February 1986 two-for-one stock split.