Friday, Apr 16, 1993

Genentech Reports First Quarter Results

South San Francisco, Calif. -- April 16, 1993 --

Genentech, Inc. (NYSE: GNE) announced today that earnings for the first quarter of 1993 increased to $14.3 million, or 12 cents per share, from $3.5 million, or 3 cents per share, in the same quarter of 1992. Revenues for the first quarter of 1993 were $153.0 million, up from $129.0 million in the same quarter of 1992, an increase of 19 percent. This increase was due to higher product sales, royalty income, and contract revenues.

"These financial results are very good, but even more important is our filing for approval to market Pulmozyme in the United States, Europe and Canada in less than 5 years from identifying the scientific idea," said G. Kirk Raab, Genentech's president and chief executive officer. "This achievement is testimony to what can be accomplished through excellent science conducted by dedicated people."

In line with the company's continued strong investment in research and development (R&D) Genentech's R&D expenses in the first quarter of 1993 increased to $74.2 million from $66.0 million in the first quarter of 1992.

Marketed Products

Protropin® (somatrem for injection) human growth hormone sales in the first quarter of 1993 increased 8 percent to $52.2 million from $48.4 million in the first quarter of 1992. Genentech believes the sales growth of Protropin is due to an increased number of patients diagnosed with growth hormone inadequacy.

Net sales of Activase® (Alteplase, recombinant) t-PA for the first quarter of 1993 increased 11 percent to $49.2 million from $44.5 million in the first quarter of 1992. As part of the completion of the GUSTO (Global Utilization of Streptokinase and t-PA for Occluded Coronary Arteries) trial in February of 1993 the number of patients in the commercial market increased in the first quarter of 1993 versus the first quarter of 1992.

The recently completed international 41,000-patient GUSTO trial was undertaken to determine whether rapid and sustained patency (opening) of blocked coronary arteries can increase patient survival. GUSTO compared the mortality of heart attack patients treated with Activase, streptokinase or a combination of the two drugs in conjunction with the anticoagulation therapy most frequently used in the United States. The results of GUSTO will be reported April 30 at an American Federation of Clinical Research Meeting in Washington, D.C.

Sales for Actimmune® (interferon gamma-1b) in the first quarter of 1993 increased to $1.3 million from $0.6 million in the first quarter of 1992. This increase is due primarily to sales of interferon gamma to licensee Boehringer Ingelheim, which received approval to market interferon gamma for treating chronic granulomatous disease in 11 countries in Europe, Africa and South America. Overall sales remain modest due to the very small number of patients with chronic granulomatous disease.

Clinical Development Products

Important progress was made in Genentech's pipeline in the first quarter of 1993:

  • Genentech filed for approval to market Pulmozyme for treating cystic fibrosis in the United States, Canada and Europe. A 968-patient Phase III clinical trial of Pulmozyme for treating cystic fibrosis, completed in 1992, demonstrated Pulmozyme reduces the rate of respiratory infection and improves lung function in patients with cystic fibrosis. No major adverse effects were noted. Approximately 53,000 people in the United States, Canada and Europe have cystic fibrosis.

  • Genentech began Phase III clinical trials with Actimmune for treating renal cell carcinoma, cancer of the kidneys.

  • The company began Phase II trials with humanized HER2 monoclonal antibody in women with advanced breast cancer.

  • Genentech began Phase II trials with gp120 as a therapeutic for HIV-infected individuals and the National Institutes of Health began Phase II trials with gp120 as an HIV prophylactic vaccine in a diverse population of uninfected volunteers.

In addition, as part of Genentech's continued commitment to cystic fibrosis, the company entered into an agreement with GenVec, Inc. a company developing gene therapy techniques, to license all of its cystic fibrosis gene therapy products in all relevant markets. Genentech may make a future equity investment in the company.

Genentech, Inc. is a leading biotechnology company that discovers, develops, manufactures and markets human pharmaceuticals for significant medical needs. The company has headquarters in South San Francisco, California and is traded on the New York and Pacific Stock exchanges under the symbol GNE.

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(in thousands, except per share amounts)

Three Months
Ended March 30,

1993 1992
   Product sales $ 102,658 $ 93,525
   Royalties 29,342 21,752
   Contract and other 10,529 1,848
   Interest 10,468 11,889
      Total revenues 152,997 129,014
Costs and expenses
   Cost of sales 16,599 16,366
   Research and development 74,222 65,987
   Marketing, general and administrative 46,503 41,659
   Interest 1,339 1,268
      Total costs and expenses 138,663 125,280
Income before taxes 14,334 3,734
Income tax provision - 197
Net income $ 14,334 $ 3,537
Net income per share $ 0.12 $ 0.03
Weighted average number of shares used in
   computing per share amounts:
115,827 112,961
March 30,
1993 1992
Selected balance sheet data
   Cash and short-term investments $ 431,767 $ 435,323
   Accounts receivable 103,013 81,343
   Inventories 67,511 55,195
   Long-term marketable securities 227,147 247,699
   Property, plant and equipment, net 445,645 362,814
   Other long-term assets 45,360 38,386
   Total assets 1,344,854 1,233,622
   Total current liabilities 144,934 111,529
   Long-term debt 151,831 152,570
   Total liabilities 309,684 276,301
   Total stockholders' equity 1,035,170 957,321