Friday, Apr 24, 1987

Genentech Reports First Quarter Results

South San Francisco, Calif. -- April 24, 1987 --

Genentech, Inc. (NASDAQ: GENE) reported revenues of $38.6 million for the first quarter of 1987, up 33 percent from $29.0 million for the same period last year. Protropin® sales increased to $16.5 million for the quarter.

Net income for the quarter ended March 31, 1987 was $4.5 million or 6 cents per share, after an extraordinary tax credit, compared to $1.8 million or 3 cents per share for the first quarter of 1986.

"This quarter Genentech completed a successful offering of $150 million convertible subordinated debentures in Europe at excellent terms -- a five percent coupon rate and a conversion price of $74," said Robert A. Swanson, chief executive officer. "This transaction enables Genentech to accelerated its investment in facilities and capital equipment for the growth opportunities that are ahead."

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 and anti-viral indications and tumor necrosis factor, an 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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(in thousands, except per share amounts)

Three Months
Ended March 30,

1987 1986
Product sales $ 16,510 $ 7,311
Contract 20,435 19,747
Interest 1,661 1,984
Total revenues 38,606 29,042
Costs and expenses
Research and development 21,835 17,397
Marketing, general and administrative 12,087 9,425
Total costs and expenses 33,922 26,822
Income before taxes and extraordinary item 4,684 2,220
Income tax provision 1,453 467
Income before extraordinary item 3,231 1,753
Extraordinary item--tax benefit of operating loss carrying forward 1,313 -
Net income $ 4,544 $ 1,753
Income per share:
???Income before extraordinary item $ 0.04 $ 0.03*
Extraordinary item 0.02 -
Net income $ 0.06 $ 0.03*
Weighted average number of shares used in
computing per share amounts:
82,563 68,845*

* All share and per share amounts reflect the January 1987 two-for-one stock split.