GENENTECH, INC.
                         460 Point San Bruno Boulevard
                         South San Francisco, CA 94080



As of July 7, 1995



Mr. G. Kirk Raab
2250 Reddington Road
Hillsborough, CA  


Dear Kirk:

This Letter Agreement sets forth certain changes to the letter agreement 
between you and Genentech, Inc. (the "Company") dated October 25, 1989 (the 
"1989 Letter"), as  amended by the letter agreement between you and the 
Company dated July 31, 1990 (the "1990 Letter") and the letter agreement 
between you and the Company dated October 17, 1991 (the "1991 letter") (the 
1989 Letter, as amended by the 1990 letter and the 1991 Letter, being 
hereinafter referred to as the "Prior Letter Agreement").  These changes are 
being made in connection with your resignation, effective as of today, from 
your employment with the Company and from the Board of Directors of the 
Company.  It is agreed that this resignation will be treated as an Involuntary 
Termination under the Prior Letter Agreement occurring on the date of this 
Letter Agreement.

1.  The last sentence of Paragraph 3.A.(b) of the Prior Letter Agreement is 
amended to read in its entirety as follows:

Such health and life insurance coverage will continue through the earlier of 
(i) the date of your death and (ii) any date on which you breach either of the 
Covenants (as defined below).

2.  Paragraph 3.A.(c) of the Prior Letter Agreement (as set forth in the 1991 
Letter Agreement) is amended to read in its entirety as follows:

Loan Payments.  You have currently outstanding from the Company the following 
loans (the "Loans"):  a loan in the principal amount of $1.5 million pursuant 
to a promissory note dated April 14, 1995 (the "Note") and a loan from the 
Company in the principal amount of $450,000 pursuant to a memorandum to you 
from Bob Swanson dated May 14, 1985, as amended February 7, 1995 (the "Amended 
Memo").  The first sentence of Paragraph 1 of the Note is hereby amended to 
read in its entirety as follows:  "Unless extended by Genentech's Board of 
Directors, the entire principal amount of this promissory note and any accrued 
but unpaid interest ("Note") shall be due and payable on the earliest of (i) 
April 15, 1998, (ii) any date on which the undersigned breaches either of the 
Covenants (as defined in the Letter Agreement dated July 7, 1995 between 
Genentech and the undersigned), and (iii) the date Roche Holdings, Inc. or any 
affiliate thereof causes Genentech to redeem its Special Common Stock ("SCS") 
or any other security issued in exchange for such SCS."  Paragraph 4 of the 
Amended Memo is hereby deleted and Paragraph 3 of the Amended Memo is hereby 
amended to read in its entirety as follows:  "The loan described in paragraph 
2 above shall be repaid on the earliest of:  (1) the date Roche Holdings, Inc. 
or any affiliate thereof causes Genentech to redeem its Special Common Stock 
("SCS") or any other security issued in exchange for such SCS, (2) April 15, 
1998, and (3) any date on which you breach either of the Covenants (as defined 
in the Letter Agreement dated July 7, 1995, between Genentech and you)."  In 
consideration of such extension of the terms of the Loans, you agree that with 
respect to such of your stock options as may vest after the Involuntary 
Termination of your employment (the "Pledged Options"), (i) you will give the 
Company a security interest for repayment of the Loans, in a form satisfactory 
to the Company, in all stock acquired by exercise of the Pledged Options and 
shall not dispose of such stock unless you simultaneously repay to the Company 
the lesser of (x) the excess of the then fair market value of such stock over 
the aggregate exercise price paid by you to acquire such stock (the "Spread") 
and (y) the then outstanding balance of the Loans (including accrued 
interest), and (ii) if as of the close of business on the date the Loans 
become due and payable there is an outstanding balance (including accrued 
interest) due with respect thereto, the Company shall have the right, at its 
election, to take immediate possession of any stock then in your possession 
that you acquired by exercise of the Pledged Options having a fair market 
value equal to such balance, or cancel any then outstanding Pledged Options 
(whether then vested or unvested) having a Spread equal to such unpaid 
balance, or a combination thereof, in satisfaction of such balance.  In 
addition, you further agree that if any payments are made or other 
consideration given in respect of a cancellation or disposition of any of the 
Pledged Options, such payments or other consideration shall, if requested by 
the Company, be applied to the reduction of the Loans.  Without limiting the 
foregoing, the Company shall be entitled to place a legend on the certificates 
representing shares issued upon exercise of Pledged Options and/or upon the 
Pledged Options to reflect the foregoing and any such security interest and/or 
to make arrangements in connection with any disposition of such shares and/or 
Pledged Options to assure the application of the proceeds thereof as 
aforesaid.

3.  The following additional provisions are added to the Prior Letter 
Agreement:

(a)  Following the Involuntary Termination of your employment, the Company 
shall provide you with outplacement services, consistent with its past 
practice with other departing executives of the Company, for a period not 
greater than six months and at a cost to the Company not to exceed $50,000; 
provided, that such coverage shall cease in any event upon the earliest of (i) 
the date you obtain new employment, (ii) any date on which you breach either 
of the Covenants (as defined below) and (iii) the Company's incurring expenses 
of $50,000 for such purposes as aforesaid.

(b)  For a period of five years following the Involuntary Termination of your 
employment, you shall be subject to the following covenants (the "Covenants") 
in the manner set forth below:  (i) you will not in any capacity work for, or 
knowingly acquire or maintain a financial interest, over which you have 
investment control, that is in excess of 5% of the outstanding equity in, any 
business or entity, wherever located, that (1) markets or is developing a 
product that is or competes with one of the following, or any analogs thereof:  
human growth hormone; tPA; DNase; and gamma interferon; (2) markets or is 
developing one of the following that Genentech markets or is developing, or 
any analogs thereof: inhibitors of the gP IIbIIIa receptor; IGF-1; anti-HER2; 
ANP; anti-CD2O; nerve growth factor; anti-IgE; gP120 vaccine; TNF; and TNF 
receptor-IgG; or (3) markets or is developing (including research activities) 
one of the following that Genentech markets or is developing (including 
research activities), or any analogs thereof:  VEGF; anti-VEGF; lymphotoxin; 
TNK; anti-CD11a; and thrombopoietin (the "Noncompetition Covenant") (for 
purposes of the foregoing, an "analog" shall mean:  (a) in the instance of 
nonproteinous molecules, two or more chemical compounds each sharing a core 
chemical structure that is the same or substantially and functionally similar; 
and (b) in the instance of proteinous molecules, any compound with either (i) 
greater than eighty-five (85%) amino acid sequence homology and specificity 
for the same binding site(s) or (ii) with respect to an antibody to a 
molecule, the receptor to that molecule and with respect to a receptor to a 
molecule, the antibody to that molecule); (ii) you will not (1) solicit, 
attempt to solicit, induce or otherwise cause any person who is at that time 
an employee of the Company to terminate his or her employment in order to 
become an employee, consultant, or independent contractor to or for any entity 
by whom you are employed, with whom you are affiliated, or in whom you or any 
entity with which you are affiliated, have any financial interest or with whom 
you or any entity with which you are affiliated are discussing the possibility 
of taking a financial interest, or (2) use, reproduce, or disclose to any 
other person or company any confidential or proprietary information belonging 
to the Company that would enable or assist that person or company to solicit, 
attempt to solicit, induce or otherwise cause any person who is at the time an 
employee of the Company to terminate his or her employment with the Company 
(the "No-Raid Covenant").  From and after any date on which you breach the 
Non-competition Covenant, the cessation of health and life insurance coverage 
and outplacement services and the acceleration of your loans set forth above 
in this Letter Agreement shall occur, but the Company's other obligations to 
you under the Prior Letter Agreement as amended by this Letter Agreement 
(including without limitation the obligation to provide you with severance pay 
and benefits and to permit the continued vesting and exercisability of your 
options) shall continue in effect.  From and after any date on which you 
breach the No-Raid Covenant, the cessation of health and life insurance 
coverage and outplacement services and the acceleration of your loans set 
forth above in this Letter Agreement shall occur, and in addition the 
Company's other obligations to you under the Prior Letter Agreement as amended 
by this Letter Agreement (including without limitation the obligation to 
provide you with severance pay and benefits and to permit the continued 
vesting and exercisability of your options) shall cease and be of no further 
force and effect.  In addition, you and the Company agree that your breach of 
either of the Covenants would cause harm to the Company that is not capable of 
remedy through money damages and accordingly that the Company shall be 
entitled to injunctive relief from a court of competent jurisdiction against 
such a breach.  Notwithstanding anything else in this Letter Agreement, the 
Company shall not assert that you have breached either of the Covenants unless 
its Board of Directors so determines.  The Company shall give you oral or 
written notice either (i) that management is considering recommending to the 
Board that the Board make such a determination, or (ii) that the Board is 
considering whether to make such a determination, which notice shall describe 
the breach or possible breach in question and shall give you at least three 
business days to provide a response to such notice and/or propose a remedy for 
such breach or possible breach to the Chief Executive Officer of the Company 
(in the case of a notice described in clause (i) above) or the Board (in the 
case of a notice described in clause (ii) above).  Notwithstanding the 
foregoing, in no event shall any failure or alleged failure of the Company to 
comply with the requirements of the preceding sentence or any aspect thereof 
preclude the Company from enforcing, or delay the enforcement of, any remedy 
for such breach to which it may otherwise be entitled, or relieve you of any 
obligation for any such breach; except that the Company shall not enforce the 
remedies set forth in the second and third sentences of this paragraph until 
the expiration of three business days from the date on which it gives you 
notice pursuant to the preceding sentence.

(c)  Counsel for the parties in In Re Genentech Shareholder Litigation, C.A. 
No. 14265 (Cons.) (the "Actions"), have today entered into a Memorandum of 
Understanding with respect to the settlement of the Actions, which Memorandum 
of Understanding provides for the entry of judgment and a release of all 
claims against you and other defendants.  The provisions of this paragraph 
shall not become effective unless and until you are released from the claims 
asserted in the Actions pursuant to final court approval of the proposed 
settlement.  In consideration of the Company's execution of this Letter 
Agreement, and except with respect to such obligations as the Company may have 
(i) pursuant to the Prior Letter Agreement as amended by this Letter 
Agreement, (ii) your stock option agreements, (iii) the Company's Tax 
Reduction Investment Plan, (iv) the Company's Supplemental Plan, (v) to 
indemnify you pursuant to its charter, by-laws or Delaware law, (vi) under any 
other existing written agreement pursuant to which it may be obligated to pay 
you any compensation for services and (vii) with respect to Directors and 
Officers insurance, you hereby waive and release any common law, statutory or 
other complaints, claims, charges or causes of action, both known and unknown, 
in law or in equity, which you may now have or ever had against the Company, 
any directors or officers of the Company, and any of their respective 
predecessors, successors, parents, subsidiaries, affiliates and agents 
(including, without limitation, any investment bankers or attorneys) 
("Claims").  You and the Company stipulate and agree that you shall be deemed 
to have, and by operation of the releases contemplated hereby shall have, 
waived and relinquished, to the fullest extent permitted by law, the 
provisions, rights, and benefits of section 1542 of the California Civil Code, 
which provides

     A general release does not extend to claims which the
     creditor does not know or suspect to exist in his
     favor at the time of executing the release, which if
     known by him must have materially affected his
     settlement with the debtor.

You shall be deemed to have, and by operation of the releases contemplated 
hereby shall have, waived any and all provisions, rights and benefits 
conferred by any law of any state or territory of the United States, or 
principle of common law, which is similar, comparable or equivalent to 
section 1542 of the California Civil Code.  You acknowledge that you may 
hereafter discover facts in addition to or different from those which you 
now know or believe to be true with respect to the subject matter of the 
releases contemplated hereby, but you shall be deemed to have, and by 
operation of the releases contemplated hereby shall have, fully, finally, 
and forever settled and released any and all Claims, known or unknown, 
suspected or unsuspected, contingent or non-contingent, whether or not 
concealed or hidden, which now exist, or heretofore have existed upon any 
theory of law or equity now existing or coming into existence in the 
future, including, but not limited to, claims arising under the Age 
Discrimination in Employment Act, conduct which is negligent, intentional, 
with or without malice, or a breach of any duty, law or rule, without 
regard to the subsequent discovery or existence of such different or 
additional facts.  You acknowledge that the foregoing waiver was separately 
bargained for and is an integral element of this Letter Agreement of which 
this release is a part and that you were represented by counsel in 
connection with your execution of this Letter Agreement.

4.  Any notice by the Company to you pursuant to paragraph 3(b) of this 
Letter Agreement shall be given orally by telephone or in person, or in 
writing as set forth below.  Any notice by you to the Company or by you to 
the Company designating a different facsimile number or address shall be 
given in writing as set forth below.  Written notices to either party to 
this Letter Agreement shall be given:  

(i) by facsimile to the party's facsimile number set forth below, or such 
other facsimile number as such party may designate in accordance with this 
paragraph 4, in which event such notice shall be considered to have been 
given at the time it is transmitted by the party giving notice; 

(ii) by U.S. mail to the party's address set forth below, or such other 
address as such may designate in accordance with this paragraph 4, in which 
event such notice shall be considered to have been given two business days 
after it is sent; 

(iii) by Federal Express or another overnight courier service to the 
party's address set forth below, or such other address as such party may 
designate in accordance with this paragraph 4, in which event such notice 
shall be considered to have been given one business day after it is sent; 
or

(iv) by hand delivery to the party's address at the address set forth 
below, or such other address as such party may designate in accordance with 
this paragraph 4, in which event such notice shall be considered to have 
been given when delivered to such address.

Your present address and facsimile number are:

           Mr. G. Kirk Raab
           999 Mountain Home Rd.
           Woodside, CA  94062  

           Facsimile number:  (415) 


The Company's present address and facsimile number are:

           Genentech, Inc.
           460 Point San Bruno Boulevard
           South San Francisco, CA  94080

           Facsimile number:  (415) 952-9881

           Attention:  General Counsel



5.  Except as modified by this Letter Agreement, the terms and provisions 
of the Prior Letter Agreement will continue in full force and effect.

Please indicate your acceptance of the foregoing by signing and dating the 
enclosed copy of this Letter Agreement and returning it to the Company at 
your earliest convenience.


                                    Very truly yours,


                                    GENENTECH, INC.



                                    /S/ JOHN P. MCLAUGHLING
                                    _______________________

                                    By:  John P. McLaughlin


AGREED TO AND ACCEPTED BY:


/S/  G. KIRK RAAB
__________________

G. Kirk Raab

Dated:  As of July 7, 1995




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