UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                  FORM 10-K

(Mark One)
X      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934
       For the fiscal year ended December 31, 1999

       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934
       For the transition period from   to   .

                    Commission file number:  1-9813

                                GENENTECH, INC.


    A Delaware Corporation                                  94-2347624
(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                        identification number)

                1 DNA Way, South San Francisco, California 94080-4990
                (Address of principal executive offices and zip code)

                                    (650) 225-1000
                 (Registrant's telephone number, including area code)

         Securities registered pursuant to Section 12(b) of the Act:

=============================================================================
  Title of Each Class               Name of Each Exchange on Which Registered
-----------------------------------------------------------------------------
Common Stock, $0.02 par value                New York Stock Exchange
=============================================================================
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes  X    No

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  [ X ]

The approximate aggregate market value of voting stock held by nonaffiliates
of the registrant is $11,769,690,559 as of December 31, 1999. (A)

Number of shares of Common Stock outstanding as of December 31, 1999:
  258,110,279

             Documents incorporated by reference:
                                                          PARTS INCORPORATED
                       DOCUMENT                               BY REFERENCE

(1) Annual Report to stockholders for the year ended                 II
    December 31, 1999 (specified portions)

(2) Definitive Proxy Statement with respect to the 2000             III
    Annual Meeting of Stockholders to be filed by Genentech,
    Inc. with the Securities and Exchange Commission
    (hereinafter referred to as "Proxy Statement")
-----------------------------------------------------------------------------
(A) Excludes 87,506,993 shares of Common Stock held by Directors, Officers
    and stockholders whose ownership exceeds five percent of the Common Stock
    outstanding at December 31, 1999 and Roche Holdings, Inc. which was
    calculated based on their filings as of December 31, 1999, with the
    Securities and Exchange Commission pursuant to Section 13(g) of the
    Securities Exchange Act of 1934.  As of February 7, 2000, it is
    unconfirmed whether any other person or entity holds greater than five
    percent of the registrant's Common Stock.  Exclusion of shares held by
    any person should not be construed to indicate that such person possesses
    the power, direct or indirect, to direct or cause the direction of the
    management or policies of the registrant, or that such person is
    controlled by or under common control with the registrant.

    In this Form 10-K, "Genentech," "we," "us" and "our" refer to Genentech,
    Inc., "Common Stock" refers to Genentech's Common Stock, par value $0.02
    per share, and "Special Common Stock" refers to Genentech's callable
    putable Common Stock, par value $0.02 per share.  In addition, all
    numbers relating to the number of shares and price per share of Common
    Stock and Special Common Stock give effect to the two-for-one split of
    our Common Stock on November 2, 1999.




                                    PART I

ITEM 1.   BUSINESS

Genentech is a leading biotechnology company that uses human genetic
information to discover, develop, manufacture and market human
pharmaceuticals for significant unmet medical needs.  Thirteen of the
approved products of biotechnology stem from our science.  Of these products,
we manufacture and market seven products directly in the United States and we
are preparing to begin manufacturing and marketing our eighth product.  See
the "Products" section below for further information.


REDEMPTION OF OUR SPECIAL COMMON STOCK


On June 30, 1999, we redeemed all of our outstanding Special Common Stock
held by stockholders other than Roche Holdings, Inc., known as Roche, at a
price of $41.25 per share in cash with funds deposited by Roche for that
purpose.  We refer to this event as the "Redemption."  As a result of the
Redemption, Roche's percentage ownership of our outstanding Common Stock
increased from 65% to 100%.  Consequently, push-down accounting was required
under U.S. generally accepted accounting principles to reflect in our
financial statements the amounts paid for our stock in excess of our net book
value.  Push-down accounting required us to record goodwill and other
intangible assets of $1,706.0 million and $1,499.0 million, respectively,
onto our balance sheet in the second quarter of 1999.  Also, as a result of
push-down accounting, we recorded special charges related to the Redemption
of $1,207.7 million in 1999.  For more information about special charges and
push-down accounting, you should read the "Forward-Looking Information and
Cautionary Factors that May Affect Future Results" below and the "Redemption
of Our Special Common Stock" note in the Notes to Consolidated Financial
Statements.  Roche subsequently made public offerings of our Common Stock as
described below.


PUBLIC OFFERINGS

On July 23, 1999 and October 26, 1999, Roche completed public offerings of
our Common Stock.  As a result, Roche's percentage ownership of our
outstanding Common Stock was reduced to approximately 66.1% at December 31,
1999.  We did not receive any of the net proceeds from the offerings.  Our
Common Stock began trading on the New York Stock Exchange under the symbol
DNA on July 20, 1999.

As a result of the Redemption and the subsequent public offerings, changes
occurred with respect to our stock options as discussed below in "Stock
Options Changes."  In addition, we amended our certificate of incorporation
and bylaws, amended our licensing and marketing agreement with Hoffmann-La
Roche, and entered into or amended certain agreements with Roche, which are
discussed below in "Relationship with Roche."

Stock Split

On November 2, 1999, we effected a two-for-one stock split of our Common Stock
in the form of a dividend of one share of Genentech Common Stock for each
share held at the close of business on October 29, 1999.  Our stock began
trading on a split-adjusted basis on November 3, 1999.  In addition, all
numbers relating to the number of shares and price per share of Common Stock
and Special Common Stock give effect to the two-for-one split of our Common
Stock on November 2, 1999.  We currently intend to retain all future income
for use in the operation of our business and to fund future growth and,
therefore we do not intend to declare or pay any cash dividends on our Common
Stock in the foreseeable future.

Products

Of the following eight products, we manufacture and market seven directly in
the United States, and we are preparing to begin manufacturing and marketing
the eighth product:

-  Herceptin, registered trademark, (trastuzumab) antibody for the treatment
   of certain patients with metastatic breast cancer whose tumors overexpress
   the human epidermal growth factor receptor2, or HER2, protein;

-  Rituxan, registered trademark, (rituximab) antibody for the treatment of
   patients with relapsed or refractory low-grade or follicular, CD20-
   positive B-cell non-Hodgkins lymphoma;

-  Activase, registered trademark, (alteplase) tissue plasminogen activator,
   or t-PA, for the treatment of heart attack, acute ischemic stroke within
   three hours of the onset of symptoms, and acute massive pulmonary
   embolism;

-  Protropin, registered trademark, (somatrem for injection) growth hormone
   for the treatment of inadequate endogenous growth hormone secretion, or
   growth hormone deficiency, in children;

-  Nutropin, registered trademark, (somatropin (rDNA origin) for injection)
   growth hormone for the treatment of growth hormone deficiency in children
   and adults, growth failure associated with chronic renal insufficiency
   prior to kidney transplantation and short stature associated with Turner
   syndrome;

-  Nutropin AQ, registered trademark, (somatropin (rDNA origin) injection)
   liquid formulation growth hormone for the same indications as Nutropin;

-  Pulmozyme, registered trademark, (dornase alfa, recombinant) inhalation
   solution for the management of cystic fibrosis; and

-  Nutropin Depot, trademark, (somatropin (rDNA origin) for
   injectable suspension) encapsulated sustained-release growth hormone for
   the treatment of pediatric growth hormone deficiency.  We have received
   regulatory approval from the U.S. Food and Drug Administration, commonly
   known as the FDA, to market Nutropin Depot, and we expect to launch the
   product in the first half of 2000.

We receive royalties on sales of rituximab outside of the United States
(excluding Japan), on sales of Pulmozyme and Herceptin outside of the United
States and on sales of certain products in Canada from F. Hoffmann-La Roche
Ltd, an affiliate of Roche that is referred as Hoffmann-La Roche.  See
"Relationship with Roche" below for further information regarding our
licensing agreement with Hoffmann-La Roche.  We receive royalties on sales of
rituximab in Japan from another licensee.  We receive royalties on sales of
growth hormone products and t-PA outside of the United States and Canada
through other licensees.  We also receive worldwide royalties on seven
additional licensed products that are marketed by other companies.  Six of
these products originated from our technology.

Herceptin

In September 1998, we received FDA approval to market Herceptin in the United
States for use as a first line therapy in combination with Taxol, registered
trademark, (paclitaxel), a product made by Bristol-Myers Squibb Company, or
Bristol-Myers, and as a single agent in second and third line therapy in
patients with metastatic breast cancer who have tumors that overexpress the
HER2 protein.

     Herceptin is the first humanized monoclonal antibody for the treatment
of HER2 overexpressing metastatic breast cancer and the second U.S. approval
in this new class of monoclonal antibody biotherapeutic cancer drugs.  We
have granted Hoffmann-La Roche exclusive marketing rights to Herceptin
outside of the United States.

     In September 1999, Hoffmann-La Roche announced it had obtained
authorization to sell Herceptin in Switzerland as a treatment for breast
cancer.  This is the product's first European approval and comes shortly
after authorization of the product in Canada for treatment of metastatic or
advanced breast cancer, alone, and in combination with Taxol.

Rituxan

Rituxan is marketed in the United States for the treatment of relapsed or
refractory low-grade or follicular, CD20-positive B-cell non-Hodgkin's
lymphoma, a cancer of the immune system.  We co-developed Rituxan with IDEC
Pharmaceuticals, Inc., or IDEC, from whom we license Rituxan.  In November
1997, Rituxan was cleared for marketing in the United States by the FDA.
Rituxan was the first monoclonal antibody approved in the United States to
treat cancer.  We are jointly promoting Rituxan with IDEC in the United
States and until recently, we shared responsibility with IDEC for
manufacturing the product.  By the end of the third quarter of 1999, IDEC had
transferred all bulk manufacturing responsibilities for rituximab to us.
Hoffmann-La Roche is responsible for marketing MabThera, registered
trademark, (rituximab) in the rest of the world, excluding Japan.  In 1999,
Genentech and IDEC, in consultation with the FDA, updated the warning section
of the package insert for Rituxan to include information on infusion-related
reactions and cardiovascular events.  IDEC filed a supplemental Biologics
License Application, or BLA, in October 1999 relating to use of Rituxan in
expanded dosing, including retreatment, times 8 and bulky disease for the
treatment of B-cell non-Hodgkin's lymphoma.

Activase

Tissue plasminogen activator, or t-PA, is an enzyme that is produced
naturally by the body to dissolve blood clots.  However, when a blood clot
obstructs blood flow in the coronary artery and causes a heart attack, the
body is unable to produce enough t-PA to dissolve the clot rapidly enough to
prevent damage to the heart.  We produce Activase, a recombinant form of t-
PA, in sufficient quantity for therapeutic use.  The FDA approved Activase
for marketing in the United States in 1987 for the treatment of acute
myocardial infarction (heart attack); in 1990 for use in the treatment of
acute pulmonary embolism (blood clots in the lungs); and in June 1996 for the
treatment of acute ischemic stroke or brain attack (blood clots in the brain)
within three hours of symptom onset.  Activase is also approved for the
treatment of acute ischemic stroke within three hours of symptom onset.

     In exchange for royalty payments, we have licensed marketing rights to a
recombinant t-PA in Japan to Kyowa Hakko Kogyo, Ltd., or Kyowa, and
Mitsubishi Kasei Corporation, or Mitsubishi.  Kyowa and Mitsubishi are
marketing forms of a recombinant t-PA under the trademarks Activacin,
registered trademark, and GRTPA, registered trademark, respectively.  In a
number of countries outside of the United States, Canada and Japan, we have
licensed t-PA marketing and manufacturing rights to Boehringer Ingelheim,
GmbH.  We have also licensed certain rights to Boehringer Ingelheim regarding
future sales of a second generation t-PA, TNKase, trademark.  On July 30,
1999, we submitted U.S. regulatory filings seeking marketing approval for
TNKase, and we are currently awaiting regulatory clearance.  Boehringer
Ingelheim, which markets a recombinant t-PA under the trademark Actilyse,
registered trademark, filed a marketing application for TNKase with European
regulatory authorities in September 1999.

Protropin

Human growth hormone is a naturally occurring human protein produced in the
pituitary gland that regulates metabolism and is responsible for growth in
children.  We developed a recombinant growth hormone product, Protropin, that
was approved by the FDA in 1985 for marketing in the United States for the
treatment of growth hormone inadequacy in children.

     In exchange for royalty payments, we licensed rights to manufacture and
market recombinant growth hormone to Pharmacia & Upjohn, Inc., which
manufactures and markets recombinant growth hormone under the trademarks
Somatonorm, trademark, and Genotropin, trademark.

Nutropin

Nutropin is a human growth hormone similar to Protropin; however, it does not
have the additional N-terminal amino acid, methionine, found in the Protropin
chemical structure.  Nutropin was approved in November 1993 and launched in
January 1994 for marketing in the United States for the treatment of growth
failure in children associated with chronic renal insufficiency up to the
time of renal transplantation.  Nutropin has been designated as a U.S. Orphan
Drug for treatment of growth failure in children with chronic renal
insufficiency.  This status will terminate in November 2000.  Nutropin was
approved by the FDA in March 1994 for the treatment of growth hormone
inadequacy in children.  In December 1996, the FDA approved Nutropin for the
treatment of short stature associated with Turner syndrome.  In December
1997, we received FDA approval to market Nutropin for the treatment of growth
hormone deficiency in adults.

Nutropin AQ

In December 1995, we received regulatory approval to market Nutropin AQ, a
liquid formulation of Nutropin, aimed at providing improved convenience in
administration.  Nutropin AQ is the first and only liquid (aqueous)
recombinant human growth hormone product available in the United States.
Nutropin AQ was approved for the treatment of growth hormone inadequacy in
children, growth hormone failure in children associated with chronic renal
insufficiency up to the time of renal transplantation and short stature
associated with Turner syndrome.  In December 1997, we received FDA approval
to market Nutropin AQ for the treatment of growth hormone deficiency in
adults.

Nutropin Depot

In December 1999, we received regulatory approval to market Nutropin Depot
(somatropin (rDNA origin) for depot suspension), the first long-acting dosage
form of recombinant growth hormone.  We expect to launch this product during
the first half of 2000.  Nutropin Depot is a long-acting form of our
recombinant human growth hormone using ProLease, registered trademark, an
injectable extended-release drug delivery system, which was developed by our
partner Alkermes Controlled Therapeutics, Inc., or Alkermes.  This new
formulation was designed to reduce the frequency of injections by
encapsulating the drug in biodegradable microspheres.

     During the first quarter of 1999, we entered into an agreement with
Schwarz Pharma AG, for the development and distribution of Nutropin AQ and
the sustained-release Nutropin Depot for the treatment of certain pediatric
and adult growth disorders in Europe and certain other countries outside of
the United States, Canada and Japan.  With our partner, Alkermes, we will
manufacture these products for sale by Schwarz Pharma.  The agreement also
entitles us to receive additional benchmark payments upon achievement of
certain product development milestones.  As part of a strategic alliance with
Sumitomo Pharmaceuticals Co., Ltd., or Sumitomo, we have agreed to provide
Sumitomo exclusive rights to develop, import and distribute in Japan,
Nutropin Depot.

Pulmozyme

Pulmozyme is marketed in the United States for the management of cystic
fibrosis, for which it has U.S. Orphan Drug designation.  This status will
terminate in December 2000.  It was first approved for use in 1993.  In
November 1996, Pulmozyme was cleared for marketing by the FDA for the
management of cystic fibrosis patients with advanced disease.  In February
1998, we received approval from the FDA for a label extension that includes
the safety and alternative administration of Pulmozyme in children with
cystic fibrosis under the age of five, adding to the product's previous
approvals for patients five years of age and older.

Actimmune

Actimmune interferon gamma-lb is approved in the United States for the
treatment of chronic granulomatous disease.  In 1998, we licensed certain
U.S. marketing and development rights to interferon gamma, including
Actimmune to Connetics Corporation in return for a royalty on net sales.
Thereafter, Connetics sublicensed all of its rights to InterMune
Pharmaceuticals, Inc., or InterMune.  After a transition period, as of
January 1999, we no longer sell Actimmune directly in the United States.  We
have agreed to supply bulk materials to InterMune at cost plus a mark-up.  We
receive royalty payments from Boehringer Ingelheim from the sale of
interferon gamma in certain countries outside of the United States, Canada
and Japan and The People's Republic of China.

Licensed Products

In addition to the royalties mentioned above, we also receive royalties on
the following products:


<TABLE>
<CAPTION>
Product                           Trademark       Company
----------------------------      ----------      -----------------------------------
<S>                               <C>             <C>
Human growth hormone              Humatrope       Eli Lilly and Company
Recombinant interferon alpha      Roferon-A       Hoffmann-La Roche
Hepatitis B vaccine               Recombivax      Merck and Company, Inc.
Hepatitis B vaccine               Engerix-B       SmithKline Beecham Biologicals S.A.
Factor VIII                       Kogenate        Bayer Corporation
Bovine growth hormone             Posilac         Monsanto Company
Interferon gamma-1b               Actimmune       InterMune Pharmaceuticals, Inc.
Rheumatoid Arthritis              Enbrel          Immunex Corporation
</TABLE>


In May 1999, we entered into a license agreement with Immunex Corporation.
We granted to Immunex a worldwide, co-exclusive license under our
immunoadhesin patents to make, use and sell Enbrel, registered trademark,
Immunex's product to treat moderately to severely active rheumatoid
arthritis.  Immunex paid us an initial license fee and has agreed to pay
royalties on sales of Enbrel from November 6, 1998, the date of product
launch, through the life of our patents.

Products in Development

A number of other products are in various stages of research and development.
Our product development efforts cover a wide range of medical conditions,
including cancer, respiratory disorders, cardiovascular diseases, endocrine
disorders and inflammatory and immune problems.

Below is a summary of products in clinical development:


<TABLE>
<CAPTION>
Product                           Description
------------------------------    -------------------------------------------
<S>                               <C>
Awaiting Regulatory Approval
----------------------------

TNKase second generation t-PA     A second generation t-PA that is a
                                  selectively mutated version of a wild-type
                                  t-PA.  This t-PA version may be faster
                                  acting and easier to administer and may
                                  restore blood flow faster.  On July 30,
                                  1999, we submitted U.S. regulatory filings
                                  seeking marketing approval for TNKase.  We
                                  are currently awaiting regulatory
                                  clearance.  This product is being developed
                                  in collaboration with Boehringer Ingelheim,
                                  which filed a marketing application with
                                  European regulatory authorities in
                                  September 1999.

Preparing BLA
-------------

Anti-IgE (rhuMab E25) antibody    An anti-IgE monoclonal antibody designed to
                                  interfere early in the process that leads
                                  to symptoms of allergic asthma and seasonal
                                  allergic rhinitis.  This product is being
                                  developed in collaboration with Novartis
                                  Pharmaceuticals Corporation, or Novartis,
                                  and Tanox, Inc.  Phase III clinical trials
                                  have been completed in patients with
                                  allergic asthma and in patients with
                                  seasonal allergic rhinitis.

Phase III
---------

Anti-CD11a (hu1124) antibody      An antibody designed to block certain
                                  immune cells as a potential treatment for
                                  psoriasis.  We are currently conducting a
                                  Phase III trial in psoriasis, which we
                                  are developing in collaboration with Xoma
                                  Corporation.

Activase t-PA                     A protein that is an approved treatment for
                                  heart attack, acute ischemic stroke within
                                  three hours of symptom onset, and acute
                                  massive pulmonary embolism.  We have
                                  initiated Phase III trials of this product
                                  for intravenous catheter clearance.

Pulmozyme inhalation solution     A recombinant human protein that is an
                                  approved treatment for the management of
                                  cystic fibrosis.  We are conducting a trial
                                  to determine the effect of Pulmozyme on
                                  pulmonary function in patients with early-
                                  stage cystic fibrosis.

Rituxan antibody                  A monoclonal antibody approved for the
                                  treatment of relapsed or refractory low-
                                  grade or follicular, CD20-positive B-cell
                                  non-Hodgkin's lymphoma, a cancer of the
                                  immune system.  We are in Phase III
                                  clinical trials for the treatment of
                                  intermediate- and high-grade non-Hodgkin's
                                  lymphoma.  This product is being developed
                                  in collaboration with IDEC.

Thrombopoietin (TPO)              A protein that is being studied for
                                  treatment of thrombocytopenia, a reduction
                                  in platelets, in cancer patients treated
                                  with chemotherapy.  This molecule has been
                                  exclusively licensed to Pharmacia & Upjohn.

Preparing for Phase III trials
------------------------------

Anti-VEGF antibody                An antibody developed to inhibit
                                  angiogenesis (the formation of new blood
                                  vessels) as a potential treatment for
                                  several types of solid-tumor cancers.  In
                                  pre-clinical studies, the anti-VEGF
                                  antibody resulted in decreased
                                  vascularization and a decline in growth and
                                  metastasis of a variety of solid tumors.
                                  We are preparing for Phase III trials in
                                  non-small cell lung cancer and colorectal
                                  cancer.  Phase II studies are ongoing in
                                  breast and renal cell carcinoma.

Herceptin antibody                An antibody that is an approved treatment
                                  for metastatic breast cancer.  In
                                  collaboration with Hoffmann-La Roche and
                                  U.S. national cooperative groups, we are
                                  preparing for Phase III trials for adjuvant
                                  treatment of early-stage breast cancer in
                                  patients who overexpress the HER2 protein.

Phase II
--------

Anti-CD18 antibody                An antibody designed to block certain
                                  immune cells that may impact blood flow.
                                  We are conducting a Phase II clinical trial
                                  aimed at increasing blood flow in patients
                                  with acute myocardial infarction.

Herceptin antibody                An antibody that is an approved treatment
                                  for metastatic breast cancer.  Herceptin
                                  will also be evaluated for broader
                                  application in other tumor types in which
                                  the HER2 protein is overexpressed.  We are
                                  planning to conduct Phase II studies alone
                                  or in collaboration with Hoffmann-La Roche,
                                  the National Cancer Institute or other
                                  clinical research groups.

Dornase alfa inhalation           A recombinant human protein used for the
  solution with Aradigm's         management of cystic fibrosis.  Aradigm
  delivery system                 Corporation filed an Investigational New
                                  Drug Application, or IND, in December, 1999
                                  and recently began a Phase IIa clinical
                                  trial of dornase alfa delivery via
                                  Aradigm's AERx, trademark, delivery system.

LDP-02                            A monoclonal antibody for the treatment of
                                  inflammatory bowel diseases.  This product
                                  is licensed from and being developed in
                                  collaboration with LeukoSite, Inc., or
                                  LeukoSite.  LeukoSite recently initiated
                                  Phase II clinical trials in Canada in
                                  patients with Crohn's disease.

INS365                            A second generation P2Y2 agonist, for the
                                  potential treatment of patients with
                                  chronic bronchitis.  We are currently
                                  initiating a Phase IIa study in
                                  collaboration with Inspire Pharmaceuticals,
                                  Inc.

Phase I
-------

AMD Fab                           A customized fragment of an anti-VEGF
                                  antibody for the potential treatment of
                                  age-related macular degeneration, or AMD.
                                  In this condition, excessive blood vessel
                                  growth in the retina of the eye can lead to
                                  blindness.  On October 6, 1999, we filed an
                                  IND and we recently initiated Phase I
                                  clinical trials.

Preparing for Phase I trials
----------------------------

Apo2 Ligand/TRAIL                 A protein, also known as tumor necrosis
                                  factor-related apoptosis-inducing ligand,
                                  for the potential treatment of cancer.  We
                                  are currently preparing for Phase I
                                  clinical trials for this product, which we
                                  are developing in collaboration with
                                  Immunex.

Anti-CD11a Antibody               An antibody designed to block certain
                                  immune cells as a potential treatment to
                                  prevent solid organ transplant rejection.
                                  Our collaborator, Xoma, has filed an IND
                                  for this indication and is preparing to
                                  initiate Phase I trials.
</TABLE>


In conjunction with our amended licensing and marketing agreement with
Hoffmann-La Roche in July, 1999, Hoffmann-La Roche was granted an option
until at least 2015 for licenses to use and sell certain of our products in
non-U.S. markets (the License Agreement).  See "Relationship with Roche"
below for further information.

In general, with respect to our products, Hoffmann-La Roche pays us a royalty
on aggregate sales outside of the United States.  Hoffmann-La Roche has
rights to, and pays us royalties for, Canadian sales of Activase, Protropin,
Nutropin, Nutropin AQ, Pulmozyme, Actimmune and Rituxan, and outside of
United States, excluding Japan, sales of Pulmozyme, Herceptin and Rituxan.
We supply the products to Hoffmann-La Roche, and have agreed to supply the
products for which Hoffmann-La Roche has exercised its option, for sales
outside of the United States.

In addition to the products described above, we are working on additional
products and new indications for currently marketed products.  Also, we
retain certain rights to gp120, a recombinant form of the gp120 envelope
glycoprotein of human immunodeficiency virus, which may serve as the basis
for the development of a prophylactic HIV/AIDS vaccine.  Under a license
agreement entered into with VaxGen, Inc. we are responsible for supplying
specified amounts of clinical quantities of gp120 and we have an option to
supply additional clinical supplies.  VaxGen is responsible for conducting
all clinical trials necessary for worldwide product approvals.  Currently,
VaxGen is conducting Phase III trials with gp120.  We have separate options
for worldwide marketing rights and commercial supply of gp120 in the event
that gp120 is approved as an AIDS vaccine.

In May 1999, we entered into a license and collaboration agreement with
Aradigm Corporation to develop an advanced pulmonary delivery system for our
Pulmozyme product in the United States.  As part of the agreement, we agreed
to provide Aradigm a loan of up to $10.4 million for development costs.  As
of December 31, 1999, Aradigm's outstanding loan was $2.3 million.

In November 1997, we entered into a research collaboration agreement with
CuraGen Corporation, whereby we made a $5.0 million equity investment in
CuraGen and agreed to provide a convertible equity loan to CuraGen of up to
$26.0 million.  In October 1999, CuraGen exercised its right to borrow $16.0
million.  Simultaneously, with this draw down, CuraGen repaid the loan by
issuing 977,636 shares of CuraGen stock valued at $16.37 per share at such
issuance, or an aggregate of $16.0 million.  At December 31, 1999, there were
no outstanding loans to CuraGen.

In December 1997, we entered into a collaboration agreement with Alteon Inc.
to develop and market pimagedine, an advanced glycosylation end-product
formation inhibitor to treat kidney disease in diabetic patients, and
invested $37.5 million in Alteon stock.  In 1998, as a result of the decline
in Alteon's stock value and the unsuccessful clinical trials with pimagedine,
we wrote down $24.2 million of our investment in Alteon.  In 1999, due to the
continued decline of Alteon's stock value and unsuccessful negotiations with
Alteon, we wrote-off our remaining $10.8 million investment in Alteon.

In December 1997, we entered into a collaboration agreement with LeukoSite,
Inc. to develop and commercialize LeukoSite's LDP-02, a humanized monoclonal
antibody for the potential treatment of inflammatory bowel diseases.  Under
the terms of the agreement, we made a $4.0 million equity investment in
LeukoSite and have agreed to provide a convertible equity loan for
approximately $15.0 million to fund Phase II development costs.  Upon
successful completion of Phase II, if LeukoSite agrees to fund 25% of Phase
III development costs, we have agreed to provide a second loan to LeukoSite
for such funding.  As of December 31, 1999, there were no outstanding loans
to LeukoSite.

On August 6, 1999, Hoffmann-La Roche announced that the preliminary results
from its Phase III trial of Xubix, trademark, had not shown that Xubix was
better than aspirin in preventing recurrent ischemic events in patients
suffering from acute coronary syndrome.  Hoffmann-La Roche has terminated its
development of Xubix based on these unsuccessful results.

Distribution

We have a U.S.-based pharmaceutical marketing, sales and distribution
organization.  Our sales efforts are focused on specialist physicians at
major medical centers in the United States.  In general, our products are
sold to distributors or directly to hospital pharmacies or medical centers.
We utilize common pharmaceutical company marketing techniques, including
advertisements, professional symposia, direct mail, public relations and
other methods.

Our products are available at no charge to qualified patients under our
uninsured patient programs in the United States.  We have established the
Genentech Endowment for Cystic Fibrosis to assist cystic fibrosis patients in
the United States with obtaining Pulmozyme.

During 1999, we provided certain marketing programs relating to Activase,
including comprehensive wastage replacement and expired product programs for
Activase that, subject to specific conditions, provides customers the right
to return Activase to us for replacement related to both patient-related
product wastage and product expiration.  We maintain the right to renew,
modify or discontinue the above programs.

As discussed in the Notes to Consolidated Financial Statements of our 1999
Annual Report to Stockholders (Part II, Item 8 of this Form 10-K), we had
four major customers, including Hoffmann-La Roche, who provided over 10% of
our total revenues in at least one of the last three years.  Also discussed
in the note are material foreign sources of revenues in 1999, 1998 and 1997.

Raw Materials

Raw materials and supplies required for the production of our principal
products are generally available in quantities adequate to meet our needs.

Proprietary Technology - Patents and Trade Secrets

We seek patents on inventions originating from our ongoing research and
development activities.  Patents issued or applied for cover inventions
ranging from basic recombinant DNA techniques to processes relating to
specific products and to the products themselves.  We have either been
granted patents or have patent applications pending that relate to a number
of current and potential products including products licensed to others.  We
consider that in the aggregate our patent applications, patents and licenses
under patents owned by third-parties are of material importance to our
operations.  Important legal issues remain to be resolved as to the extent
and scope of available patent protection for biotechnology products and
processes in the United States and other important markets outside of the
United States.  We expect that litigation will likely be necessary to
determine the validity and scope of certain of our proprietary rights.  We
are currently involved in a number of patent lawsuits, as either a plaintiff
or defendant, and administrative proceedings relating to the scope of
protection of our patents and those of others.  These lawsuits and
proceedings may result in a significant commitment of our resources in the
future.  We cannot assure you that the patents we obtain or the unpatented
proprietary technology we hold will afford us significant commercial
protection.

In general, we have obtained licenses from various parties that we deem to be
necessary or desirable for the manufacture, use or sale of our products.
These licenses (both exclusive and non-exclusive) generally require us to pay
royalties to the parties on product sales.

Our trademarks, Actimmune, Activase, Herceptin, Nutropin, Nutropin AQ,
Nutropin Depot, Protropin, Pulmozyme, Rituxan and TNKase (licensed by
Boehringer Ingelheim), in the aggregate are considered to be of material
importance.  All are registered in the U.S. Patent and Trademark Office and
in other countries, other than Nutropin Depot and TNKase, for which
applications are pending with the U.S. Patent and Trademark Office.

Our royalty income for patent licenses, know-how and other related rights
amounted to $189.3 million in 1999, $229.6 million in 1998 and $241.1 million
in 1997.  Royalty expenses were $88.8 million in 1999, $66.3 million in 1998
and $58.9 million in 1997.

Competition

We face competition, and believe significant long-term competition can be
expected, from large pharmaceutical companies and pharmaceutical divisions of
chemical companies as well as biotechnology companies.  This competition can
be expected to become more intense as commercial applications for
biotechnology products increase.  Some competitors, primarily large
pharmaceutical companies, have greater clinical, regulatory and marketing
resources and experience than us.  Many of these companies have commercial
arrangements with other companies in the biotechnology industry to supplement
their own research capabilities.

The introduction of new products or the development of new processes by
competitors or new information about existing products may result in price
reductions or product replacements, even for products protected by patents.
However, we believe our competitive position is enhanced by our commitment to
research leading to the discovery and development of new products and
manufacturing methods.  Other factors that should help us meet competition
include ancillary services provided to support our products, customer
service, and dissemination of technical information to prescribers of our
products and to the health care community, including payers.

Over the longer term, our and our collaborators' ability to successfully
market current products, expand their usage and bring new products to the
marketplace will depend on many factors, including but not limited to the
effectiveness and safety of the products, FDA and foreign regulatory
agencies' approvals for new indications, the degree of patent protection
afforded to particular products, and the effect of managed care as an
important purchaser of pharmaceutical products.

Herceptin

Herceptin is the first humanized monoclonal antibody for the treatment of
HER2 overexpressing metastatic breast cancer and the second United States
approval in this new class of monoclonal antibody biotherapeutic cancer
drugs.  The first was Rituxan.  We are aware of other potentially competitive
biologic therapies in development.

Rituxan

Rituxan received designation as a U.S. Orphan Drug by the FDA in 1994 for the
treatment of relapsed or refractory low grade or follicular, CD20-positive B-
cell non-Hodgkin's lymphoma.  We are aware of other potentially competitive
biologic therapies in development.  Coulter Pharmaceuticals, Inc., or
Coulter, is expected to file a Biologics License Application, or BLA, in
2001, for a product that may compete with our product Rituxan.  We are also
aware of other potentially competitive biologic therapies for non-Hodgkin's
lymphoma in development.

Activase

We continue to face competition in the thrombolytic market.  Activase has
lost market share and could lose additional market share to Centocor Inc.'s
Retavase, registered trademark, either alone or in combination with the use
of another Centocor product, ReoPro, registered trademark; the resulting
adverse effect on sales could be material.  Retavase received approval from
the FDA in October 1996 for the treatment of acute myocardial infarction.  In
addition, the market for thrombolytic therapy has declined as there is an
increasing use of mechanical reperfusion in lieu of thrombolytic therapy for
the treatment of acute myocardial infarction.  In July 1999, we submitted
U.S. regulatory filings seeking marketing approval for our second generation
t-PA, TNKase, to be used in treating heart attack patients, and we are
currently waiting for regulatory clearance.

Protropin, Nutropin, Nutropin AQ and Nutropin Depot

Lilly received FDA approval in 1987 to market its growth hormone product for
treatment of growth hormone inadequacy in children.  Three other companies-
Bio-Technology General Corporation, Novo Nordisk A/S, or Novo, and Pharmacia
& Upjohn-received FDA approval in 1995 to market their growth hormone
products in the United States.  Bio-Technology General was preliminarily
enjoined from selling its product, but it is now free to enter the market.  A
fifth competitor, Serono Laboratories, Inc., or Serono, received FDA approval
in October 1996 to market its growth hormone product.  In the first quarter
of 1997, Serono, Novo and Pharmacia & Upjohn began selling their growth
hormone products in the United States.  On July 12, 1999, Novo announced the
filing of a NDA, for Norditropin, registered trademark, SimpleXx, trademark,
a liquid form of its recombinant somatropin product, seeking approval for the
long-term treatment of children who have growth hormone failure due to
inadequate secretion of endogenous growth hormone.  In addition, three of our
competitors have received approval to market their existing human growth
hormone products in the United States for additional indications.

     In December 1999, we received FDA approval for Nutropin Depot, the first
long-acting dosage form of recombinant growth hormone for pediatric growth
hormone deficiency.  We expect to launch the product in the first half of
2000.  We are not aware of any competing sustained-release formulations of
human growth hormone in clinical development.

Pulmozyme

Pulmozyme is used for the management of cystic fibrosis, including cystic
fibrosis in children under the age of five.  We are not aware of any directly
competing products in development.

Stock Options Changes

In connection with the Redemption of our Special Common Stock, the following
changes occurred with respect to our stock options that were outstanding as
of June 30, 1999:

-  Options for the purchase of approximately 13.6 million shares of Special
   Common Stock were canceled in accordance with the terms of the applicable
   stock option plans, and the holders received cash payments in the amount
   of $41.25 per share, less the exercise price;

-  Options for the purchase of approximately 8.0 million shares of Special
   Common Stock were converted into options to purchase a like number of
   shares of Common Stock at the same exercise price; and

-  Options for the purchase of approximately 9.8 million shares of Special
   Common Stock were canceled in accordance with the terms of our 1996 Stock
   Option/Stock Incentive Plan (the "1996 Plan").  With certain exceptions,
   we granted new options for the purchase of 2.666 times the number of
   shares under the previous options with an exercise price of $48.50 per
   share, which was the July 23, 1999 public offering price of the common
   stock.  The number of shares that were the subject of these new options,
   which were issued under our 1999 Stock Plan (the "1999 Plan"), was
   approximately 10.0 million.  Alternative arrangements were provided for
   certain holders of some of the unvested options under the 1996 Plan.

Of the approximately 8.0 million shares of converted options, options with
respect to approximately 4.8 million shares were outstanding at December 31,
1999, all of which are currently exercisable except for options with respect
to approximately 356,000 shares.  These outstanding options are held by 1,850
employees; no non-employee directors hold these options.

Our board of directors and Roche, then our sole stockholder, approved the
1999 Plan on July 16, 1999.  Under the 1999 Plan, we granted new options to
purchase approximately 13.0 million shares (including the 10.0 million shares
referred to above) of Common Stock to approximately 2,400 employees at an
exercise price of $48.50 per share, with the grant of such options made
effective as of July 16, 1999.  Of the options to purchase these 13.0 million
shares, options to purchase approximately 12.0 million shares were
outstanding at December 31, 1999, of which options to purchase approximately
1.3 million shares are currently exercisable.

In connection with these stock option transactions, we recorded:

-  (1) cash compensation expense of approximately $284.5 million associated
   with the cash-out of such stock options and (2) non-cash compensation
   expense of approximately $160.1 million associated with the remeasurement,
   for accounting purposes, of the converted options, which non-cash amount
   represents the difference between each applicable option exercise price
   and the redemption price of the Special Common Stock; and

-  Over a two-year period beginning July 1, 1999, an aggregate of
   approximately $27.4 million of deferred cash compensation available to be
   earned by a limited number of employees who elected the alternative
   arrangements described above.  As of December 31, 1999, $7.3 million of
   compensation expense has been recorded related to these alternative
   arrangements.


RELATIONSHIP WITH ROCHE

As a result of the Redemption of our Special Common Stock, the then-existing
governance agreement between us and Roche terminated, except for provisions
relating to indemnification and stock options, warrants and convertible
securities.  In July 1999, we entered into certain affiliation arrangements
with Roche, amended our licensing and marketing agreement with Hoffmann-La
Roche, and entered into a tax sharing agreement with Roche as follows:

Affiliation Arrangements

Our board of directors consists of two Roche directors, three independent
directors nominated by a nominating committee currently controlled by Roche,
and one Genentech employee.  However, under the affiliation agreement, Roche
has the right to obtain proportional representation on our board at any time.
Roche intends to continue to allow our current management to conduct our
business and operations as we have done in the past.  However, we cannot
ensure that Roche will not implement a new business plan in the future.

Except as follows, the affiliation arrangements do not limit Roche's ability
to buy or sell our Common Stock.  If Roche and its affiliates sell their
majority ownership of shares of our Common Stock to a successor, Roche has
agreed that it will cause the successor to purchase all shares of our Common
Stock not held by Roche as follows:

-  with consideration, if that consideration is composed entirely of either
   cash or equity traded on a U.S. national securities exchange, in the same
   form and amounts per share as received by Roche and its affiliates; and

-  in all other cases, with consideration that has a value per share not less
   than the weighted average value per share received by Roche and its
   affiliates as determined by a nationally recognized investment bank.

If Roche owns more than 90% of our Common Stock for more than two months,
Roche has agreed that it will, as soon as reasonably practicable, effect a
merger of Genentech with Roche or an affiliate of Roche.

Roche has agreed, as a condition to any merger of Genentech with Roche or the
sale of our assets to Roche, that either:

-  the merger or sale must be authorized by the favorable vote of a majority
   of non-Roche stockholders, provided no person will be entitled to cast
   more than 5% of the votes at the meeting; or

-  in the event such a favorable vote is not obtained, the value of the
   consideration to be received by non-Roche stockholders would be equal to
   or greater than the average of the means of the ranges of fair values for
   the Common Stock as determined by two nationally recognized investment
   banks.

We have agreed not to approve, without the prior approval of the directors
designated by Roche:

-  any acquisition, sale or other disposal of all or a portion of our
   business representing 10% or more of our assets, net income or revenues;

-  any issuance of capital stock except under certain circumstances; or

-  any repurchase or redemption of our capital stock other than a redemption
   required by the terms of any security and purchases made at fair market
   value in connection with any of our deferred compensation plans.

Licensing Agreement

In 1995, we entered into a licensing and marketing agreement with Hoffmann-La
Roche and its affiliates granting it a ten-year option to license to use and
sell products in non-U.S. markets.  In July 1999, we amended that agreement,
the major provisions of which include:

-  extending Hoffmann-La Roche's option until at least 2015;

-  Hoffmann-La Roche may exercise its option to license our products upon the
   occurrence of any of the following:  (1) our decision to file a IND for a
   product, (2) completion of a Phase II trial for a product or (3) if
   Hoffmann-La Roche previously paid us a fee of $10 million to extend its
   option on a product, completion of a Phase III trial for that product;

-  we agreed, in general, to manufacture for and supply to Hoffmann-La Roche
   its clinical requirements of our products at cost, and its commercial
   requirements at cost plus a margin of 20%; however, Hoffmann-La Roche will
   have the right to manufacture our products under certain circumstances;

-  Hoffmann-La Roche has agreed to pay, for each product for which Hoffmann-
   La Roche exercises its option upon either a decision to file a IND with
   the FDA or completion of the Phase II trials, a royalty of 12.5% on the
   first $100 million on its aggregate sales of that product and thereafter a
   royalty of 15% on its aggregate sales of that product in excess of $100
   million until the later in each country of the expiration of our last
   relevant patent or 25 years from the first commercial introduction of that
   product; and

-  Hoffmann-La Roche will pay, for each product for which Hoffmann-La Roche
   exercises its option after completion of the Phase III trials, a royalty
   of 15% on its sales of that product until the later in each country of the
   expiration of our relevant patent or 25 years from the first commercial
   introduction of that product; however, $5 million of any option extension
   fee paid by Hoffmann-La Roche will be credited against royalties payable
   to us in the first calendar year of sales by Hoffmann-La Roche in which
   aggregate sales of that product exceed $100 million.

Tax Sharing Agreement

Since the redemption of our Special Common Stock, and until Roche completed
its public offering of our Common Stock in October 1999, we were included in
Roche's U.S. federal consolidated income tax group.  Accordingly, we entered
into a tax sharing agreement with Roche, pursuant which, we and Roche are to
make payments such that the net amount paid by us on account of consolidated
or combined income taxes is determined as if we had filed separate, stand-
alone federal, state and local income tax returns as the common parent of an
affiliated group of corporations filing consolidated or combined federal,
state and local returns.

     Effective with the consummation of the second public offering on October
26, 1999, we ceased to be a member of the consolidated federal income tax
group (and certain consolidated or combined state and local income tax
groups) of which Roche is the common parent.  Accordingly, our tax sharing
agreement with Roche now pertains only to the state and local tax returns in
which we will be consolidated or combined with Roche.  We will continue to
calculate our tax liability or refund with Roche for these state and local
jurisdictions as if we were a stand-alone entity.

Roche's Right to Maintain its Percentage Ownership Interest in Our Stock

We expect from time to time to issue additional shares of common stock in
connection with our stock option and stock purchase plans, and we may issue
additional shares for other purposes.  The affiliation agreement requires us
to, among other things, establish a stock repurchase program designed to
maintain Roche's percentage ownership interest in our common stock.  In
addition, Roche will have a continuing option to buy stock from us at
prevailing market prices to maintain its percentage ownership interest.  To
ensure that, with respect to any issuance of common stock by us in the
future, the percentage of our common stock owned by Roche immediately after
such issuance will be no lower than Roche's lowest percentage ownership of
our common stock at any time after the offering of common stock occurring in
July 1999 and prior to the time of such issuance, except that we may issue
shares up to an amount that would cause Roche's lowest percentage ownership
to be no more than 2% below the "Minimum Percentage."  The Minimum Percentage
equals the lowest number of shares of our common stock owned by Roche since
the July 1999 offering (to be adjusted in the future for dispositions of
shares of our common stock by Roche) divided by 254,597,176 (to be adjusted
in the future for stock splits or stock combinations), which is the number of
shares of our Common Stock outstanding at the time of the July 1999 offering
adjusted for the two-for-one split of our common stock in November 1999.  As
long as Roche's percentage ownership is greater than 50%, prior to issuing
any shares, we must repurchase a sufficient number of shares of our common
stock to ensure that, immediately after our issuance of shares, Roche's
percentage ownership will be greater than 50%.  We have also agreed, upon
Roche's request, to repurchase shares of our common stock to increase Roche's
ownership to the Minimum Percentage.  In addition, Roche has a continuing
option to buy stock from us at prevailing market prices to maintain its
percentage ownership interest.  Roche owned approximately 66.1% of our common
stock at December 31, 1999.


FORWARD-LOOKING INFORMATION AND CAUTIONARY FACTORS THAT MAY AFFECT FUTURE
RESULTS

The following section contains forward-looking information based on our
current expectations.  Because our actual results may differ materially from
this and any other forward-looking statements made by or on behalf of
Genentech, this section also includes a discussion of important factors that
could affect our actual future results, including our product sales,
royalties, contract revenues, expenses and net income.

Our Operating Results May Fluctuate

Our operating results may vary from period to period for several reasons
including, but not limited to:

-  the overall competitive environment for our products;

-  the amount and timing of sales to customers in the United States;

-  the amount and timing of our sales to Hoffmann-La Roche and the amount and
   timing of its sales to its customers;

-  the timing and volume of bulk shipments to licensees;

-  the availability of third-party reimbursements for the cost of therapy;

-  the effectiveness and safety of our products;

-  the rate of adoption and use of our products for approved indications and
   additional indications;

-  the potential introduction of new products and additional indications for
   existing products in 2000 and beyond; and

-  the ability to manufacture sufficient quantities of any particular
   marketed product.

The Results of Our Research and Development Are Unpredictable

Successful pharmaceutical product development is highly uncertain and is
dependent on numerous factors, many of which are beyond our control.
Products that appear promising in the early phases of development may fail to
reach the market for numerous reasons, including, but not limited to:

-  they may be found to be ineffective or to have harmful side effects in
   preclinical or clinical testing;

-  they may fail to receive necessary regulatory approvals;

-  they may turn out to be uneconomical because of manufacturing costs or
   other factors; or

-  they may be precluded from commercialization by the proprietary rights of
   others or by competing products or technologies for the same indication.

Success in preclinical and early clinical trials does not ensure that large-
scale clinical trials will be successful.  Clinical results are frequently
susceptible to varying interpretations that may delay, limit or prevent
regulatory approvals.  The length of time necessary to complete clinical
trials and to submit an application for marketing approval for a final
decision by a regulatory authority varies significantly and may be difficult
to predict.

Factors affecting our research and development expenses include, but are not
limited to:

-  the number of and the outcome of clinical trials currently being conducted
   by us and/or our collaborators;

-  the number of products entering into development from late-stage research;

-  Hoffmann-La Roche's decisions whether to exercise its options to develop
   and sell our future products in non-U.S. markets and the timing and amount
   of any related development cost reimbursement;

-  in-licensing activities, including the timing and amount of related
   development funding or milestone payments; and

-  future levels of revenues.

Roche, Our Controlling Stockholder, May Have Interests That Are Adverse to
Other Stockholders

As our majority stockholder, Roche controls the outcome of actions requiring
the approval of our stockholders.  Our bylaws provide, among other things,
that the composition of our board of directors shall consist of two Roche
directors, three independent directors nominated by a nominating committee
and one Genentech employee nominated by the nominating committee.  As long as
Roche owns in excess of 50% of our Common Stock, Roche directors will
comprise two of the three members of the nominating committee.  However, at
any time until Roche owns less than 5% of our stock, Roche will have the
right to obtain proportional representation on our board.  Roche intends to
continue to allow our current management to conduct our business and
operations as we have done in the past.  However, we cannot assure you that
Roche will not institute a new business plan in the future.  The interests of
Roche may conflict with the interests of other holders of Common Stock.  You
should also read "Relationship with Roche" above for further information.

The affiliation agreement between us and Roche requires the approval of the
directors designated by Roche to make any acquisition or any sale or disposal
of all or a portion of our business representing 10% or more of our assets,
net income or revenues.  Moreover, the affiliation agreement also contains
provisions that are designed to enable Roche to maintain a certain percentage
ownership interest in our Common Stock.  These provisions may have the effect
of limiting our ability to make acquisitions.  The affiliation agreement
requires us to, among other things, establish a stock repurchase program
designed to maintain Roche's percentage ownership interest in our Common
Stock.  While the dollar amounts associated with these future purchases
cannot currently be estimated, such stock repurchases could have a material
adverse impact on our liquidity.  For more information, see above
"Relationship with Roche - Roche's Right to Maintain its Percentage Ownership
Interest in Our Stock."

Our certificate of incorporation includes provisions relating to competition
by Roche with us, allocations of corporate opportunities, transactions with
interested parties and intercompany agreements and provisions limiting the
liability of certain people.  Our certificate of incorporation provides that
any person purchasing or acquiring an interest in shares of our capital stock
shall be deemed to have consented to the provisions in the certificate of
incorporation relating to competition with Roche, conflicts of interest,
corporate opportunities and intercompany agreements, and such consent may
restrict such person's ability to challenge transactions carried out in
compliance with such provisions.  Persons who are directors and/or officers
of ours and who are also directors and/or officers of Roche may choose to
take action in reliance on such provisions rather than act in a manner that
might be favorable to us but adverse to Roche.  Two of our directors
currently serve as directors, officers and employees of Roche Holding Ltd and
its affiliates.

We Depend on Skilled Personnel and Key Relationships

The success of our business depends, in large part, on our continued ability
to attract and retain highly qualified management, scientific, manufacturing
and sales and marketing personnel, and on our ability to develop and maintain
important relationships with leading research institutions and key
distributors.  Competition for such personnel and relationships is intense.
In connection with the redemption of our Special Common Stock, two of our
existing employee stock option plans terminated and a number of employee
options, including many of those held by senior management, were canceled.
We have issued new employee stock options to attract and retain employees.
However, certain provisions of our affiliation agreement with Roche are
designed to enable Roche to maintain its percentage ownership interest in our
Common Stock, which may limit our flexibility as to the number of shares we
are able to grant under our stock option plans.  We cannot assure you that we
will be able to attract or retain such personnel or maintain such
relationships.  You should read "Roche's Right to Maintain its Percentage
Ownership Interest on our Stock" above.

We Face Growing and New Competition

We face growing competition in two of our therapeutic markets and expect new
competition in a third market.  First, in the thrombolytic market, Activase
has lost market share and could lose additional market share to Centocor's
Retavase, either alone or in combination with the use of another Centocor
product, ReoPro, (abciximab); the resulting adverse effect on sales could be
material.  Retavase received approval from the FDA in October 1996 for the
treatment of acute myocardial infarction.  There is also an increasing use of
mechanical reperfusion in lieu of thrombolytic therapy for the treatment of
acute myocardial infarction, which we expect to continue.

Second, in the growth hormone market, we continue to face increased
competition from four other companies with growth hormone products.  One
additional company had been preliminarily enjoined from selling its product,
but it is now free to enter the market.  As a result of this competition, we
have experienced a loss in new patient market share.  The four competitors
have also received approval to market their existing human growth hormone
products for additional indications.  As a result of this competition, our
sales of Protropin, Nutropin and Nutropin AQ may decline, perhaps
significantly.

Third, in the non-Hodgkin's lymphoma market, Coulter has filed a BLA, for a
product that may compete with our product Rituxan.  We are also aware of
other potentially competitive biologic therapies for non-Hodgkin's lymphoma
in development.

Other Competitive Factors Could Affect Our Product Sales

Other competitive factors that could affect our product sales include, but
are not limited to:

-  the timing of FDA approval, if any, of competitive products;

-  our pricing decisions and the pricing decisions of our competitors;

-  the degree of patent protection afforded to particular products;

-  the outcome of litigation involving our patents and patents of other
   companies for products and processes related to production and formulation
   of those products;

-  the increasing use and development of alternate therapies; and

-  the rate of market penetration by competing products.

In Connection with the Redemption of Our Special Common Stock We Recorded
Substantial Goodwill and Other Intangibles, the Amortization of Which Will
Adversely Affect Our Earnings

As a result of the redemption of our Special Common Stock, Roche owned all of
our outstanding stock.  Consequently, push-down accounting under generally
accepted accounting principles was required.  Push-down accounting required
us to establish a new accounting basis for our assets and liabilities, based
on Roche's cost in acquiring all of our stock.  In other words, Roche's cost
of acquiring Genentech was "pushed down" to us and reflected in our financial
statements.  Push-down accounting required us to record goodwill and other
intangible assets of approximately $1,706.0 million and $1,499.0 million,
respectively, during the second quarter of 1999.  The amortization of this
goodwill and other intangible assets will have a significant negative impact
on our financial results in future years.  In addition, we will continuously
evaluate whether events and circumstances have occurred that indicate the
remaining balance of this and other intangible assets may not be recoverable.
When factors indicate that assets should be evaluated for possible
impairment, we may be required to reduce the carrying value of our intangible
assets, which could have a material adverse effect on our financial condition
and results of operations during the periods in which such a reduction is
recognized.  For more information about push-down accounting, see the
"Redemption of Our Special Common Stock" note in the Notes to Consolidated
Financial Statements.

Our Royalty and Contract Revenues Could Decline

Royalty and contract revenues in future periods could vary significantly.
Major factors affecting these revenues include, but are not limited to:

-  Hoffmann-La Roche's decisions whether to exercise its options and option
   extensions to develop and sell our future products in non-U.S. markets and
   the timing and amount of any related development cost reimbursements;

-  variations in Hoffmann-La Roche's sales and other licensees' sales of
   licensed products;

-  the conclusion of existing arrangements with other companies and Hoffmann-
   La Roche;

-  the timing of non-U.S. approvals, if any, for products licensed to
   Hoffmann-La Roche and other licensees;

-  fluctuations in foreign currency exchange rates;

-  the initiation of new contractual arrangements with other companies;

-  whether and when contract benchmarks are achieved;

-  the failure of or refusal of a licensee to pay royalties; and

-  the expiration or invalidation of patents or other licensed intellectual
   property.

Protecting Our Proprietary Rights is Difficult and Costly

The patent positions of pharmaceutical and biotechnology companies can be
highly uncertain and involve complex legal and factual questions.

Accordingly, the breadth of claims allowed in these companies' patents cannot
be predicted.  Patent disputes are frequent and can preclude
commercialization of products.  We have in the past been, are currently, and
may in the future be involved in material patent litigation.  Patent
litigation is costly in its own right and could subject us to significant
liabilities to third-parties and, if decided adversely, we may need to obtain
third-party licenses at a material cost or cease using the technology or
product in dispute.  The presence of patents or other proprietary rights
belonging to other parties may lead to the termination of the research and
development of a particular product.  We believe that we have strong patent
protection or the potential for strong patent protection for a number of our
products that generate sales and royalty revenue or that we are developing.
However, the courts will determine the ultimate strength of patent protection
of our products and those on which we earn royalties.  You should read the
"Legal Proceedings" note below and the "Leases, Commitments and
Contingencies" note in the Notes to Consolidated Financial Statements.

We May Incur Material Litigation Costs

We are subject to legal proceedings, including those matters described in the
"Legal Proceedings" note below and the "Leases, Commitments and
Contingencies" note in the Notes to Consolidated Financial Statements.
Litigation to which we are currently or have been subject relates to, among
other things, our patent and intellectual property rights, licensing
arrangements with other persons, product liability and financing activities.
We cannot predict with certainty the eventual outcome of pending litigation,
and we could be required to incur substantial expense in defending these
lawsuits.  We have in the past taken substantial special charges relating to
certain litigations, including special charges of $230.0 million in 1999.

We May Incur Material Product Liability Costs

The testing and marketing of medical products entail an inherent risk of
product liability.  We maintain limited product liability insurance coverage.
Our business may be materially and adversely affected by a successful product
liability claim in excess of our insurance coverage.  We cannot assure you
that product liability insurance coverage will continue to be available to us
in the future on reasonable terms or at all.

Our Products Are Subject to Governmental Regulations and Approvals

The pharmaceutical industry is subject to stringent regulation with respect
to product safety and efficacy by various federal, state and local
authorities.  Of particular significance are the FDA's requirements covering
research and development, testing, manufacturing, quality control, labeling
and promotion of drugs for human use.  A pharmaceutical product cannot be
marketed in the United States until it has been approved by the FDA, and then
can only be marketed for the indications and claims approved by the FDA.  As
a result of these requirements, the length of time, the level of expenditures
and the laboratory and clinical information required for approval of a New
Drug Application, or NDA, or a BLA, are substantial and can require a number
of years.  We cannot be sure that we can obtain necessary regulatory
approvals on a timely basis, if at all, for any of the products we are
developing, and all of the following could have a material adverse effect on
our business:

-  significant delays in obtaining or failing to obtain required approvals;

-  loss of or changes to previously obtained approvals; and

-  failing to comply with existing or future regulatory requirements.

Moreover, it is possible that the current regulatory framework could change
or additional regulations could arise at any stage during our product
development, which may affect our ability to obtain approval of our products.

A Variety of Factors Could Affect Our Liquidity

We believe that our cash, cash equivalents and short-term investments,
together with funds provided by operations and leasing arrangements, will be
sufficient to meet our foreseeable operating cash requirements.  In addition,
we believe we could access additional funds from the debt and, under certain
circumstances, capital markets.  Factors that could negatively affect our
cash position include, but are not limited to, future levels of our product
sales, royalty and contract revenues, expenses, in-licensing activities,
including the timing and amount of related development funding or milestone
payments, acquisitions, capital expenditures and the amount of any stock
repurchased under any stock repurchase program.  The affiliation agreement
with Roche requires us to, among other things, establish a stock repurchase
program designed to maintain Roche's percentage ownership interest in our
Common Stock.  While the dollar amounts associated with these future
purchases cannot currently be estimated, such stock repurchases could have a
material adverse impact on our liquidity.  You should read "Roche's Right to
Maintain its Percentage Ownership Interest in our Stock" above.

We Are Subject to a Tax Sharing Agreement with Roche, and a Variety of
Factors Could Affect Our Income Tax Rate

Since the redemption of our Special Common Stock, and until Roche completed
its public offering of our Common Stock in October 1999, we were included in
Roche's U.S. federal consolidated income tax group.  Accordingly, we entered
into a tax sharing agreement with Roche, pursuant which, we and Roche are to
make payments such that the net amount paid by us on account of consolidated
or combined income taxes is determined as if we had filed separate, stand-
alone federal, state and local income tax returns as the common parent of an
affiliated group of corporations filing consolidated or combined federal,
state and local returns.

     Effective with the consummation of the second public offering on October
26, 1999, we ceased to be a member of the consolidated federal income tax
group (and certain consolidated or combined state and local income tax
groups) of which Roche is the common parent.  Accordingly, our tax sharing
agreement with Roche now pertains only to the state and local tax returns in
which we will be consolidated or combined with Roche.  We will continue to
calculate our tax liability or refund with Roche for these state and local
jurisdictions as if we were a stand-alone entity.

     Our effective tax rate increased in 1999 from 1998 as a result of non-
deductible goodwill amortization, a charge for in-process research and
development and legal settlements.  Beyond 1999, the current effective tax
rate will increase due to goodwill amortization.  In addition, our effective
tax rate is dependent upon several other factors including, but not limited
to, changes in tax laws and rates, interpretation of existing tax laws,
future levels of research and development spending, the outcome of clinical
trials of certain development products, our success in commercializing such
products, and potential competition regarding the products and non-deductible
items.

We May Lose Revenue or Incur Significant Costs if Year 2000 Compliance Issues
Are Not Properly Addressed

We use and rely on a wide variety of information technologies, computer
systems and scientific and manufacturing equipment containing computer-
related components (such as programmable logic controllers and other embedded
systems).  Some of our older computer software programs and equipment were
unable to distinguish between the year 1900 and the year 2000, potentially
causing those software programs and equipment to misinterpret dates after
January 1, 2000.

We have had a Year 2000 Project in place to address potential problems with
our business critical systems and equipment resulting from this issue and, as
of December 31, 1999, all phases of this project were essentially complete.
To date, we have not experienced any significant Year 2000 related problems.

It is possible that we may experience Year 2000 related problems in the
future, particularly with our non-business critical systems, which may result
in failures or miscalculations resulting in inaccuracies in computer output
or disruptions of operations.  However, we believe that the Year 2000 issue
will not pose significant operational problems for our business critical
computer systems and equipment.

The financial impact of future remediation activities that may become
necessary, if any, cannot be known precisely at this time, but it is not
expected to be material.

We Are Exposed to Market Risk

We are exposed to market risk, including changes to interest rates, foreign
currency exchange rates and equity investment prices.  To reduce the
volatility relating to these exposures, we enter into various derivative
investment transactions pursuant to our investment and risk management
policies and procedures in areas such as hedging and counterparty exposure
practices.  We do not use derivatives for speculative purposes.

We maintain risk management control systems to monitor the risks associated
with interest rates, foreign currency exchange rates and equity investment
price changes, and our derivative and financial instrument positions.  The
risk management control systems use analytical techniques, including
sensitivity analysis and market values.  Though we intend for our risk
management control systems to be comprehensive, there are inherent risks that
may only be partially offset by our hedging programs should there be
unfavorable movements in interest rates, foreign currency exchange rates or
equity investment prices.

The estimated exposures discussed below are intended to measure the maximum
amount we could lose from adverse market movements in interest rates, foreign
currency exchange rates and equity investment prices, given a specified
confidence level, over a given period of time.  Loss is defined in the value
at risk estimation as fair market value loss.  The exposures to interest
rate, foreign currency exchange rate and equity investment price changes are
calculated based on proprietary modeling techniques from a Monte Carlo
simulation value at risk model using a 30-day holding period and a 95%
confidence level.  The value at risk model assumes non-linear financial
returns and generates potential paths various market prices could take and
tracks the hypothetical performance of a portfolio under each scenario to
approximate its financial return.  The value at risk model takes into account
correlations and diversification across market factors, including interest
rates, foreign currencies and equity prices.  Market volatilities and
correlations are based on J.P. Morgan Riskmetrics, trademark, dataset as of
December 31, 1999.

Our Interest Income is Subject to Fluctuations in Interest Rates

Our interest income is sensitive to changes in the general level of interest
rates, primarily U.S. interest rates.  In this regard, changes in U.S.
interest rates affect the interest earned on our cash equivalents, short-term
investments, convertible preferred stock investments, convertible loans and
long-term investments.  To mitigate the impact of fluctuations in U.S.
interest rates, we may enter into swap transactions, which involve the
receipt of fixed rate interest and the payment of floating rate interest
without the exchange of the underlying principal.

Based on our overall interest rate exposure at December 31, 1999, and at
December 31, 1998, including derivative and other interest rate sensitive
instruments, a near-term change in interest rates, within a 95% confidence
level based on historical interest rate movements would not materially affect
the fair value of interest rate sensitive instruments.

We Are Exposed to Risks Relating to Foreign Currency Exchange Rates and
Foreign Economic Conditions

We receive royalty revenues from licensees selling products in countries
throughout the world.  As a result, our financial results could be
significantly affected by factors such as changes in foreign currency
exchange rates or weak economic conditions in the foreign markets in which
our licensed products are sold.  We are exposed to changes in exchange rates
in Europe, Asia (primarily Japan) and Canada.  Our exposure to foreign
exchange rates primarily exists with the Euro.  When the U.S. dollar
strengthens against the currencies in these countries, the U.S. dollar value
of non-U.S. dollar-based revenue decreases; when the U.S. dollar weakens, the
U.S. dollar value of the non-U.S. dollar-based revenues increases.
Accordingly, changes in exchange rates, and in particular a strengthening of
the U.S. dollar, may adversely affect our royalty revenues as expressed in
U.S. dollars.  In addition, as part of our overall investment strategy, a
portion of our portfolio is primarily in non-dollar denominated investments.
As a result, we are exposed to changes in the exchange rates of the countries
in which these non-dollar denominated investments are made.

To mitigate this risk, we hedge certain of our anticipated revenues by
purchasing option contracts with expiration dates and amounts of currency
that are based on 25% to 90% of probable future revenues so that the
potential adverse impact of movements in currency exchange rates on the non-
dollar denominated revenues will be at least partly offset by an associated
increase in the value of the option.  Currently, the duration of these
options is generally one to three years.  We may also enter into foreign
currency forward contracts to lock in the dollar value of a portion of these
anticipated revenues.  To hedge the non-dollar denominated investments in the
portfolio, we enter into forward contracts.

Based on our overall currency rate exposure at December 31, 1999, and at
December 31, 1998, including derivative and other foreign currency sensitive
instruments, a near-term change in currency rates within a 95% confidence
level based on historical currency rate movements would not materially affect
the fair value of foreign currency sensitive instruments.

Our Investments in Equity Securities Are Subject to Market Risks

As part of our strategic alliance efforts, we invest in equity instruments of
biotechnology companies.  These investments are subject to fluctuations from
market value changes in stock prices.  To mitigate this risk, certain equity
securities are hedged with costless collars.  A costless collar is a
purchased put option and a written call option in which the cost of the
purchased put and the proceeds of the written call offset each other;
therefore, there is no initial cost or cash outflow for these instruments at
the time of purchase.  The purchased put protects us from a decline in the
market value of the security below a certain minimum level (the put "strike"
level); while the call effectively limits our potential to benefit from an
increase in the market value of the security above a certain maximum level
(the call "strike" level).  In addition, as part of our strategic alliance
efforts, we hold dividend-bearing convertible preferred stock and have made
interest-bearing loans that are convertible into the equity securities of the
debtor.

Based on our overall exposure to fluctuations from market value changes in
marketable equity prices at December 31, 1999, a near-term change in equity
prices within a 95% confidence level based on historic volatilities could
result in a potential loss in fair value of the equity securities portfolio
of $43.2 million.  However, the change in 1999 has resulted in a material
benefit to our consolidated financial statements.  On December 31, 1998, we
estimated that the potential loss in fair value of the equity securities
portfolio was $10.6 million.

New Accounting Standards Could Impact Our Financial Position and Results of
Operations

In July 1999, the Financial Accounting Standards Board announced the delay of
the effective date of Statement of Financial Accounting Standards 133, or FAS
133, "Accounting for Derivative Instruments and Hedging Activities," for one
year, to the first quarter of 2001.

FAS 133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities.  It requires companies to recognize
all derivatives as either assets or liabilities on the balance sheet and
measure those instruments at fair value.  Gains or losses resulting from
changes in the values of those derivatives would be accounted for depending
on the use of the derivative and whether it qualifies for hedge accounting
under FAS 133.  The impact of FAS 133 on our financial position and results
of operations is not expected to be material.

We Are Exposed to Credit Risk of Counterparties

We could be exposed to losses related to the financial instruments described
above under "We are Exposed to Market Risk" should one of our counterparties
default.  We attempt to mitigate this risk through credit monitoring
procedures.

Government Regulation

Regulation by governmental authorities in the United States and other
countries is a significant factor in the manufacture and marketing of our
products and in ongoing research and product development activities.  All of
our products require regulatory approval by governmental agencies prior to
commercialization.  In particular, our products are subject to rigorous
preclinical and clinical testing and other premarket approval requirements by
the FDA and regulatory authorities in other countries.  Various statutes and
regulations also govern or influence the manufacturing, safety, labeling,
storage, record keeping and marketing of such products.  The lengthy process
of seeking these approvals, and the subsequent compliance with applicable
statutes and regulations, require the expenditure of substantial resources.
We believe that we are currently in compliance with such statutes and
regulations.  Any failure by us to obtain, or any delay in obtaining,
regulatory approvals could materially adversely affect our business.

The activities required before a pharmaceutical product may be marketed in
the United States begin with preclinical testing.  Preclinical tests include
laboratory evaluation of product chemistry and animal studies to assess the
potential safety and efficacy of the product and its formulations.  The
results of these studies must be submitted to the FDA as part of an IND
application, which must be reviewed by the FDA before proposed clinical
testing can begin.  Typically, clinical testing involves a three-phase
process.  In Phase I, clinical trials are conducted with a small number of
subjects to determine the early safety profile and the pattern of drug
distribution and metabolism.  In Phase II, clinical trials are conducted with
groups of patients afflicted with a specified disease in order to provide
enough data to statistically evaluate the preliminary efficacy, optimal
dosages and expanded evidence of safety.  In Phase III, large scale,
multicenter, comparative clinical trials are conducted with patients
afflicted with a target disease in order to provide enough data to
statistically evaluate the efficacy and safety of the product, as required by
the FDA.  The results of the preclinical and clinical testing of a chemical
pharmaceutical product are then submitted to the FDA in the form of a NDA, or
for a biological pharmaceutical product in the form of a BLA, for approval to
commence commercial sales.  In responding to a NDA or a BLA, the FDA may
grant marketing approval, request additional information or deny the
application if it determines that the application does not provide an
adequate basis for approval.  We can not assure you that any approval
required by the FDA will be obtained on a timely basis, if at all.

Among the conditions for a NDA or a BLA approval is the requirement that the
prospective manufacturer's quality control and manufacturing procedures
conform on an ongoing basis with Good Manufacturing Practices, or GMP.
Before approval of the BLA, the FDA will perform a prelicensing inspection of
the facility to determine its compliance with GMP and other rules and
regulations.  In complying with GMP, manufacturers must continue to expend
time, money and effort in the area of production and quality control to
ensure full compliance.  After the establishment is licensed for the
manufacture of any product, manufacturers are subject to periodic inspections
by the FDA.

The requirements that we must satisfy to obtain regulatory approval by
governmental agencies in other countries prior to commercialization of our
products in such countries can be as rigorous, costly and uncertain.

We are also subject to various laws and regulations relating to safe working
conditions, laboratory and manufacturing practices, the experimental use of
animals and the use and disposal of hazardous or potentially hazardous
substances, including radioactive compounds and infectious disease agents,
used in connection with our research.  We believe we are currently in
compliance with all these laws and regulations.  The extent of governmental
regulation that might result from any legislative or administrative action
cannot be accurately predicted.

The levels of revenues and profitability of biopharmaceutical companies may
be affected by the continuing efforts of government and third party payers to
contain or reduce the costs of health care through various means.  For
example, in certain foreign markets pricing or profitability of therapeutic
and other pharmaceutical products is subject to governmental control.  In the
United States there have been, and we expect that there will continue to be,
a number of federal and state proposals to implement similar governmental
control.  While we cannot predict whether any such legislative or regulatory
proposals will be adopted, the adoption of such proposals could have a
material adverse effect on our business, financial condition and
profitability.  In addition, in the United States and elsewhere, sales of
therapeutic and other pharmaceutical products are dependent in part on the
availability of reimbursement to the consumer from third party payers, such
as government and private insurance plans.  Third party payers are
increasingly challenging the prices charged for medical products and
services.  We cannot assure you that any of our products will be considered
cost effective and that reimbursement to the consumer will be available or
will be sufficient to allow us to sell our products on a competitive and
profitable basis.

Research and Development

A major portion of our operating expenses to date are related to the research
and development of products either on our own behalf or under contracts.
During 1999, 1998 and 1997, our research and development expenses were $367.3
million, $396.2 million and $470.9 million, respectively.

Our research and development efforts have been the primary source of our
products.  We intend to maintain our strong commitment to research and
development as an essential component of our product development effort.
Licensed technology developed by outside parties is an additional source of
potential products.

Human Resources

As of December 31, 1999, we had 3,883 employees.

Environment

We seek to comply with all applicable statutory and administrative
requirements concerning environmental quality.  We have made, and will
continue to make, expenditures for environmental compliance and protection.
Expenditures for compliance with environmental laws have not had and are not
expected to have a material effect on our capital expenditures, results of
operation, financial position or competitive position.


ITEM 2.   PROPERTIES

Our primary facilities are located in a research and industrial park in South
San Francisco, California in both leased and owned properties.  We currently
occupy twenty-five buildings for our research and development, manufacturing,
marketing and administrative activities.  Fourteen of the buildings are owned
property and eleven are leased.  We have made and continue to make
improvements to these properties to accommodate our growth.  In addition, we
own approximately seventeen acres adjacent to our current facilities that may
be used for future expansion.  In 1995, we began development of a new
manufacturing facility of approximately 300,000 square feet in Vacaville,
California under an operating lease arrangement.  The facility is operational
and we expect to gain licensure by the second quarter of 2000.  We also have
leases for certain additional office facilities in several locations in the
United States.

We believe our facilities are in good operating condition and that the real
property owned or leased, combined with the new Vacaville site, (currently
awaiting FDA licensure), are adequate for all present and near term uses.
Additional manufacturing capacity may be added in the South San Francisco or
on the Vacaville site dependent on the success of products in clinical
trials.  We believe any additional facilities could be obtained or
constructed with our capital resources.


ITEM 3.   LEGAL PROCEEDINGS

We are a party to various legal proceedings, including patent infringement
litigation relating to our human growth hormone products and antibody
products, licensing and contract disputes, and other matters.

In 1990 and 1997, the Regents of the University of California, or UC, filed
patent infringement lawsuits against Genentech, alleging that the
manufacture, use, and sale of our Protropin and Nutropin human growth hormone
products infringe a patent known as the "Goodman patent" that is owned by UC.
On November 19, 1999, we and UC announced a proposed settlement of those
lawsuits, and on or about December 17, 1999, the parties entered into a
definitive written agreement on the terms of the settlement.  Under the terms
of the settlement, Genentech agreed to pay UC $150 million and agreed to make
a contribution in the amount of $50 million toward construction of the first
biological sciences research building at the University of California, San
Francisco Mission Bay campus, and Genentech and UC granted certain releases
to one another and dismissed with prejudice the 1990 and 1997 patent
infringement lawsuits and related appeals.  Such amounts were included in
other liabilities at December 31, 1999.  The settlement resolves all
outstanding litigation between Genentech and UC relating to our growth
hormone products.

On May 28, 1999, Glaxo Wellcome Inc. filed a patent infringement lawsuit
against us in the U.S. District Court in Delaware.  The suit asserts that we
infringe four U.S. patents owned by Glaxo Wellcome.  Two of the patents
relate to the use of specific kinds of monoclonal antibodies for the
treatment of human disease, including cancer.  The other two patents asserted
against us relate to preparations of specific kinds of monoclonal antibodies
which are made more stable and the methods by which such preparations are
made.  We have been served with the complaint.  The complaint fails to
specify which of our products or methods of manufacture are allegedly
infringing the four patents at issue.  However, we believe that the suit
relates to the manufacture, use and sale of our Herceptin and Rituxan
antibody products.  On July 19, 1999, we filed our answer to Glaxo Wellcome's
complaint, and in our answer we also stated counterclaims against Glaxo
Wellcome.  The judge has scheduled the trial of this suit to begin January
29, 2001.  On or about January 10, 2000, Glaxo filed a request with the Court
to add additional patent infringement claims to the suit under Glaxo's U.S.
Patent No. 5,633,162.  We intend to oppose that request; the Court has not
yet made a decision whether to grant Glaxo's request.

We and the City of Hope Medical Center are parties to a 1976 agreement
relating to work conducted by two City of Hope employees, Arthur Riggs and
Keiichi Itakura, and patents that resulted from that work, which are referred
to as the "Riggs/Itakura Patents."  Since that time, Genentech has entered
into license agreements with various companies to make, use and sell the
products covered by the Riggs/Itakura Patents.  On August 13, 1999 the City
of Hope filed a complaint against us in the Superior Court in Los Angeles
County, California alleging that we owe royalties to the City of Hope in
connection with these license agreements, as well as product license
agreements that involve the grant of licenses under the Riggs/Itakura
Patents.  The complaint states claims for declaratory relief, breach of
contract, breach of implied covenant of good faith and fair dealing, and
breach of fiduciary duty.  On December 15, 1999, we filed our answer to the
City of Hope's complaint.  The judge has scheduled the trial of this suit to
begin February 5, 2001.

     On December 1, 1994, Genentech filed suit against Bio-Technology General
Corporation, or BTG, in the United States District Court in Delaware charging
BTG with infringement of two Genentech patents applicable to its human growth
hormone product.  On February 28, 1995, Genentech filed an Amended Complaint
against BTG alleging infringement of an additional Genentech patent.  On
January 6, 1995, BTG filed suit against Genentech in the United States
District Court for the Southern District of New York seeking declaratory
judgements that those patents and another Genentech patent are invalid and
not infringed by BTG.  Genentech's suit in Delaware was then transferred to
New York and consolidated with BTG's suit there.

     At the time of filing its suit and thereafter, BTG alleged various
antitrust, abuse of process, civil rights, malicious prosecution, and unfair
competition claims against Genentech.  All of those claims were dismissed by
the District Court.

     On August 10, 1995, the District Court issued a preliminary injunction
which prohibited BTG, pending the Court's final determination of the action,
from importing, making, using, selling, offering for sale or distributing in
the United States BTG's human growth hormone products except for certain
ongoing FDA approved clinical trials.  BTG filed an appeal from the District
Court's issuance of the preliminary injunction to the United States Court of
Appeals for the Federal Circuit.  On April 8, 1996, the Federal Circuit
affirmed the preliminary injunction granted by the District Court.  On May
20, 1996, the Federal Circuit denied BTG's petition for rehearing, and on
October 7, 1996, the United States Supreme Court declined to review the case.

     In 1999, the case was transferred to a different judge of the District
Court for further proceedings.  A jury trial of BTG's patent invalidity claim
began on January 10, 2000.  On January 18, 2000, the jury returned a verdict
in Genentech's favor on a certain factual issue underlying BTG's invalidity
claim, but the judge nevertheless entered judgement in favor of BTG and
lifted the preliminary injunction that had been in effect against BTG since
1995.  Genentech intends to promptly file a request with the Federal Circuit
for the injunction to be reinstated pending appeal and for an expedited
appeal.  In the event that the injunction is not reinstated or if Genentech's
appeal is not successful, BTG could enter the United States market with its
human growth hormone product.

     Based upon the nature of the claims made and the information available
to date to us and our counsel through investigations and otherwise, we
believe the outcome of these actions is not likely to have a material adverse
effect on our financial position, result of operations or cash flows.
However, were an unfavorable ruling to occur in any quarterly period, there
exists the possibility of a material impact on the net income of that period.

     In addition to the above, in April 1999, we agreed to pay $50 million to
settle a federal investigation relating to our past clinical, sales and
marketing activities associated with human growth hormone.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.



                                GENENTECH, INC.

                              EXECUTIVE OFFICERS

The executive officers of the Company and their respective ages (ages as of
December 31, 1999) and positions with the Company are as follows:


<TABLE>
<CAPTION>
Name                                     Age    Position
--------------------------------------   ---    -----------------------------------------
<S>                                       <C>   <C>
Arthur D. Levinson, Ph.D.                 49    Chairman and Chief Executive Officer
Louis J. Lavigne, Jr.                     51    Executive Vice President and
                                                  Chief Financial Officer
Susan D. Desmond-Hellmann, M.D., M.P.H.   42    Executive Vice President-Development and
                                                  Product Operations, Chief Medical Officer
Dennis J. Henner, Ph.D.                   48    Senior Vice President-Research
Judith A. Heyboer                         50    Senior Vice President-Human Resources
Stephen G. Juelsgaard                     51    Senior Vice President-General Counsel and
                                                  Secretary
James P. Panek                            46    Senior Vice President-Product Operations
W. Robert Arathoon, Ph.D.                 47    Vice President-Process Sciences
Joffre B. Baker, Ph.D.                    52    Vice President-Research Discovery
J. Joseph Barta                           52    Vice President-Quality
Stephen G. Dilly, M.D., Ph.D.             40    Vice President-Medical Affairs
David Ebersman                            30    Vice President-Product Development
Robert L. Garnick, Ph.D.                  50    Vice President-Regulatory Affairs
Paula M. Jardieu, Ph.D.                   49    Vice President-Pharmacological Sciences
Sean A. Johnston, Ph.D.                   41    Vice President-Intellectual Property
Cynthia J. Ladd                           44    Vice President-Corporate Law and
                                                  Assistant Secretary
Laura Leber                               37    Vice President-Corporate Communications
Walter K. Moore                           48    Vice President-Government Affairs
Diane L. Parks                            47    Vice President-Marketing
Kimberly J. Popovits                      41    Vice President-Sales
Nicholas J. Simon                         45    Vice President-Business and
                                                  Corporate Development
Daniel S. Sulzbach, Ph.D.                 50    Vice President-Information Resources
John M. Whiting                           44    Controller and Chief Accounting Officer
</TABLE>


All officers are elected annually by the Board of Directors.  There is no
family relationship between or among any of the officers or directors.

Business Experience

Arthur D. Levinson, Ph.D. was appointed Chairman of the Board in June 1999
and President and Chief Executive Officer of Genentech in July 1995.  He
previously served as Senior Vice President of Genentech from January 1993.
Dr. Levinson has held various other positions, including Vice President,
Research, Vice President, Research Technology, Director, Cell Genetics
Department and Staff Scientist subsequent to joining Genentech in May 1980 as
a Senior Scientist.

Louis J. Lavigne, Jr. was appointed Executive Vice President of Genentech in
March 1997 and Chief Financial Officer in August 1988.  He previously served
as Senior Vice President from July 1994 to March 1997 and as Vice President
from July 1986 to July 1994.  Mr. Lavigne joined Genentech in July 1982 from
Pennwalt Corporation and became Controller in May 1983 and an officer of
Genentech in February 1984.

Susan D. Desmond-Hellmann, M.D., M.P.H. was appointed Executive Vice
President, Development and Product Operations in September 1999.  She has
served as Chief Medical Officer since December 1996.  She previously served
as Senior Vice President, Development from December 1997 until September
1999, among other positions, since joining Genentech in March 1995 as a
Clinical Scientist.  Prior to joining Genentech, she held the positions of
Associate Director at Bristol-Myers Squibb from February 1993 to February
1995 and Medical Oncologist at Lexington Oncology Associates from June 1992
to February 1993.

Dennis J. Henner, Ph.D. was appointed Senior Vice President, Research in May
1998.  He previously served as Vice President, Research from April 1996 to
May 1998, Vice President, Research Technology from July 1994 to April 1996,
and as Senior Director, Research Technology from December 1990 to July 1994
and was Director and Senior Scientist, Cell Genetics Department from May 1990
to December 1990.  He joined Genentech in 1981, as a Scientist in Research
from Scripps Clinic and Research Foundation.

Judith A. Heyboer joined Genentech as Senior Vice President, Human Resources
in August 1996.  Prior to joining Genentech, she held the positions of Vice
President, Employee Relations and Senior Vice President at Acuson Corporation
from October 1983 to July 1996.

Stephen G. Juelsgaard was appointed Senior Vice President in April 1998, Vice
President and General Counsel in July 1994 and Secretary in April 1997.  He
joined Genentech in July 1985 as Corporate Counsel and subsequently served as
Senior Corporate Counsel from 1988 to 1990, Chief Corporate Counsel from 1990
to 1993, Vice President, Corporate Law from 1993 to 1994, and Assistant
Secretary from 1994 to 1997.

James P. Panek was appointed Senior Vice President, Product Operations in
August 1999.  He previously served as Vice President, Manufacturing,
Engineering and Facilities from July 1997 to August 1999, Vice President,
Engineering and Facilities from July 1993 to July 1997 and Senior Director,
Engineering and Facilities from July 1991 to July 1993.

W. Robert Arathoon, Ph.D. was appointed Vice President, Process Sciences in
April 1996.  He previously served as Senior Director, Process Sciences from
November 1994 to April 1996, among other positions, since joining Genentech
in 1983 from The Wellcome Foundation.

Joffre B. Baker, Ph.D. was appointed Vice President, Research Discovery in
February 1997.  He previously served as Senior Director, Process Science from
November 1994 to April 1996 among other positions since joining Genentech in
1983 from The Wellcome Foundation.

J. Joseph Barta was appointed Vice President, Quality in October 1998.  He
previously served as Senior Director, Quality from March to October 1998,
Senior Director, Quality Assurance from January 1994 to February 1998, Senior
Director, Pharmaceutical Manufacturing from September to December 1993,
Director, Pharmaceutical Manufacturing from September 1989 to August 1993,
and Associate Director, Validation and Technical Services from June to
September 1989.  He joined Genentech in March 1988 as Manager, Validation.

Stephen G. Dilly, M.D., Ph.D. joined Genentech as Vice President, Medical
Affairs in December 1998.  Prior to joining Genentech he held various
positions with SmithKline Beecham Pharmaceuticals from August 1988, including
Director and Vice President Neurosciences Therapeutic Unit from December 1996
to December 1998, Director and Vice President CardioPulmonary Therapeutic
Team from December 1994 to December 1996 and Group Director Neurosciences
Therapeutic Unit from April 1993 to December 1994.

David Ebersman was appointed Vice President, Product Development in February
1999.  He joined Genentech in February 1994 as a Business Development Analyst
and subsequently served as Manager, Business Development from February 1995
to February 1996, Director, Business Development from February 1996 to March
1998 and Senior Director, Product Development from March 1998 to February
1999.  Prior to joining Genentech, he held the position of Research Analyst
at Oppenheimer & Company, Inc. beginning in 1991.

Robert L. Garnick, Ph.D. was appointed Vice President, Regulatory Affairs in
February 1998.  He previously served as Vice President, Quality from April
1994, Senior Director, Quality Control from 1990 to 1994 and Director,
Quality Control from 1988 to 1990.  He joined Genentech in August 1984 from
Armour Pharmaceutical, where he worked from 1980.

Paula M. Jardieu, Ph.D. was appointed Vice President, Pharmacological
Sciences in February 1997.  She previously served as Senior Director,
Pharmacological Sciences from 1996 to February 1997, Staff Scientist from
1992 to 1996, Senior Scientist from 1989 to 1992 and Scientist from 1986 to
1989.

Sean A. Johnston, Ph.D. was appointed Vice President, Intellectual Property
in June 1998.  He joined Genentech in October 1990 as Patent Counsel and
subsequently served as Senior Patent Counsel from October 1993 to October
1995, Senior Patent Counsel and Manager of Patent Litigation from October
1995 to April 1998, and Associate General Counsel, Patent Law from April 1998
to June 1998.  Prior to joining Genentech, he served as a Law Clerk at the
United States District Court for the Central District of California from
September 1989 to September 1990 and was a Research Scientist at
International Genetic Engineering, Inc. from December 1984 to August 1986.

Cynthia J. Ladd was appointed Vice President, Corporate Law in February 1996
and Assistant Secretary in April 1997.  She joined Genentech in 1989 as
Corporate Counsel and subsequently served as Senior Corporate Counsel from
November 1990 to June 1993 and Chief Corporate Counsel from June 1993 to
February 1996.

Laura Leber was appointed Vice President, Corporate Communications in August
1999.  She joined Genentech in 1992 as Director of Corporate Communications,
and previously served as Senior Director of Corporate Communications from
January 1996 to August 1999.  Prior to joining Genentech, Ms. Leber was an
Associate Director of Corporate Communications at G.D. Searle and Co., a
division of Monsanto Company.

Walter K. Moore was appointed Vice President, Government Affairs in May 1998.
He joined Genentech in September 1993 as Senior Director of Government
Affairs.  Prior to joining Genentech, Mr. Moore served as Manager of
Governmental Relations at Eli Lilly and Company.

Diane L. Parks joined Genentech as Vice President, Marketing in June 1999.
Prior to joining Genentech, she held various positions with Marion
Laboratories (formerly, Marion Merrell Dow and Hoeschst Marion Roussel) from
1982, including Vice President, Marketing from March 1998 to June 1999, Group
Product Director, Respiratory and Metabolism from November 1994 to March 1998
and Director, U.S. Commercial Development from July 1993 to November 1994.

Kimberly J. Popovits was appointed Vice President, Sales in October 1994.
She previously served as Director, Field Sales from January 1993 to October
1994 and Regional Manager, Northeast Region from October 1989 to January
1993.  Prior to joining Genentech in November 1987, she served as Division
Manager, Southeast Region for American Critical Care, a Division of American
Hospital Supply.

Nicholas J. Simon was appointed Vice President of Business and Corporate
Development in December 1995.  He previously served as Vice President of
Business Development from December 1994 to December 1995, and was Senior
Director of Business Development from December 1993 to December 1994.  He
joined Genentech in 1989 as Director of Business Development from Xoma
Corporation.

Daniel S. Sulzbach, Ph.D. was appointed Vice President, Information Resources
in September 1999.  He joined Genentech in March 1994 as Director of
Scientific Computing and subsequently served as Head and Senior Director of
Information Resources from March 1998 to September 1999.  Prior to joining
Genentech, he served as Executive Director of the San Diego Supercomputer
Center from August 1985 to March 1994.

John M. Whiting was appointed Controller and Chief Accounting Officer in
October 1997.  He previously served as Director, Financial Planning and
Analysis from January 1997 to October 1997, Director, Operations, Financial
Planning and Analysis from December 1996 to January 1997, Associate Director,
Operations, Financial Planning and Analysis from March 1996 to December 1996,
Plant Controller from April 1993 to March 1996, and Group Controller from
July 1991 to April 1993.



                                    PART II


ITEM 5.   MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
           MATTERS

     The section labeled "Redemption of our Special Common Stock," Stock
Split," and footnotes labeled "Relationship with Roche Holdings, Inc.,"
"Roche's Right to Maintain its Percentage Ownership Interest in Our Stock"
and "Capital Stock" in the Notes to Consolidated Financial Statements of our
1999 Annual Report to Stockholders are incorporated herein by reference.


ITEM 6.   SELECTED FINANCIAL DATA

     The section labeled "11-Year Financial Summary" of our 1999 Annual
Report to Stockholders is incorporated herein by reference.


ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATION

     The section labeled "Financial Review" of our 1999 Annual Report to
Stockholders is incorporated herein by reference.


ITEM 8.   CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The Consolidated Financial Statements and Notes to Consolidated
Financial Statements, the Report of Ernst & Young LLP, Independent Auditors
and the section labeled "Quarterly Financial Data (unaudited)" of our 1999
Annual Report to Stockholders are incorporated herein by reference.


ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
           FINANCIAL DISCLOSURE

     Not applicable.



                                    PART III


ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     (a) The sections labeled "Nominees" and "Section 16(a) Beneficial
Ownership Reporting Compliance" of our Proxy Statement in connection with the
2000 Annual Meeting of Stockholders are incorporated herein by reference.

     (b) Information concerning our Executive Officers is set forth in Part I
of the Form 10-K.


ITEM 11.   EXECUTIVE COMPENSATION

     The sections labeled "Executive Compensation," "Compensation of
Directors," "Compensation of Executive Officers," "Summary of Compensation,"
"Summary Compensation Table," "Stock Option Grants and Exercises," "Option
Grants in Last Fiscal Year," "Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values," "Long-Term Incentive Plans," "Long-Term Incentive
Plans - Awards in Last Fiscal Year," "Loans and Other Compensation,"
"Compensation Committee Report," and "Compensation Committee Interlocks and
Insider Participation" of our Proxy Statement in connection with the 2000
Annual Meeting of Stockholders are incorporated herein by reference.


ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The sections labeled "Relationship with Roche Holdings, Inc.," "Security
Ownership of Certain Beneficial Owners" and "Security Ownership of
Management" of our Proxy Statement in connection with the 2000 Annual Meeting
of Stockholders are incorporated herein by reference.


ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The section labeled "Certain Relationships and Related Transactions" of
our Proxy Statement in connection with the 2000 Annual Meeting of
Stockholders is incorporated herein by reference.



                                    PART IV


ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) 1. Index to Financial Statements

     The following Financial Statements and supplementary data are included
in our 1999 Annual Report to Stockholders and are incorporated herein by
reference pursuant to Item 8 of this Form 10-K.

     Consolidated Statements of Income for each of the three years in the
       period ended December 31, 1999

     Consolidated Statements of Cash Flows for each of the three years in the
       period ended December 31, 1999

     Consolidated Balance Sheets at December 31, 1999 and 1998

     Consolidated Statements of Stockholders' Equity for each of the three
       years in the period ended December 31, 1999

     Notes to Consolidated Financial Statements

     Report of Ernst & Young LLP, Independent Auditors

     Quarterly Financial Data (unaudited)


    2. Financial Statement Schedule

     The following schedule is filed as part of this Form 10-K:

Schedule II- Valuation and Qualifying Accounts for each of the three years in
the period ended December 31, 1999.

All other schedules are omitted because they are not applicable, or not
required, or because the required information is included in the consolidated
financial statements or notes thereto.


3. Exhibits

Exhibit No.   Description
-----------   -----------

   3.1        Amended and Restated Certificate of Incorporation.(1)

   3.2        Restated By-Laws.(2)

   4.1        Indenture, dated March 27, 1987 ("Indenture") for U.S.
              $150,000,000 5% Convertible Subordinated Debentures due
              2002.(3)

   4.2        First Supplemental to Indenture, dated August 17, 1990.(4)

   4.3        Second Supplemental to Indenture, dated October 18, 1995.(5)

   4.4        Form of Common Stock Certificate.(2)

  10.1        Patent License Agreement with Columbia University dated October
              12, 1988.(6)

  10.2        Amended and Restated Contract for the Sale and Distribution of
              Protropin dated as of March 1, 1991.(7)

  10.3        Agreement and Plan of Merger, dated as of May 23, 1995, as
              amended and restated, among Genentech, Roche Holdings, Inc. and
              Hoffmann-La Roche (U.S.) II, Inc. with exhibits.(8)

  10.4        Form of Affiliation Agreement, dated as of July 22, 1999,
              between Genentech and Roche Holdings, Inc.(2)

  10.5        Amendment No. 1, dated October 22, 1999, to Affiliation
              Agreement between Genentech and Roche Holdings, Inc.(16)

  10.6        Form of Amended and Restated Agreement, dated as of October 25,
              1995, between Genentech, Inc. and F. Hoffmann-La Roche Ltd
              regarding Commercialization of Genentech's Products outside the
              United States.(2)

  10.7        Tax Sharing Agreement, dated as of July 22, 1999, between
              Genentech, Inc. and Roche Holdings, Inc.(2)

  10.8        Guaranty Agreement between Genentech and Roche Holding, Ltd
              dated as of October 25, 1995.(8)

  10.9        Amended and Restated Lease Agreement, dated December 8, 1995,
              between Genentech and BNP Leasing Corporation.(5)

  10.10       Amended and Restated Purchase Agreement, dated December 8,
              1995, between Genentech and BNP Leasing Corporation.(5)

  10.11       Guiding Principles for the Genentech/Roche Relationship.(9)

  13.1        A portion of the 1999 Annual Report to Stockholders.(16)

  23.1        Consent of Ernst & Young LLP, Independent Auditors.(16)

  27.1        Financial Data Schedule.(16)

  28.1        Description of the Company's capital stock.(10)

  99.1*       Restated Relocation Loan Program.(7)

  99.2*       Genentech, Inc. Tax Reduction Investment Plan.(11)

  99.3*       Amendment No. 1 to the Genentech, Inc. Tax Reduction Investment
              Plan.(12)

  99.4*       Amendment No. 2 to the Genentech, Inc. Tax Reduction Investment
              Plan.(12)

  99.5*       Amendment No. 3 to the Genentech, Inc. Tax Reduction Investment
              Plan.(12)

  99.6*       Trust Agreement.(12)

  99.7*       Amendment No. 1 to Trust Agreement.(12)

  99.8*       Amendment No. 2 to Trust Agreement.(12)

  99.9*       Amendment No. 3 to Trust Agreement.(12)

  99.10*      Amendment No. 4 to Trust Agreement.(12)

  99.11*      Amendment No. 5 to Trust Agreement.(12)

  99.12*      Amendment No. 6 to Trust Agreement.(12)

  99.13*      Amendment No. 7 to Trust Agreement.(12)

  99.14*      Supplemental Plan to the 401(k) Plan.(7)

  99.15*      1990 Stock Option/Stock Incentive Plan, as amended and restated
              as of October 16, 1996.(13)

  99.16*      1994 Stock Option Plan, as amended and restated as of October
              16, 1996.(13)

  99.17*      1996 Stock Option/Stock Incentive Plan, as amended and restated
              as of October 16, 1996.(13)

  99.18*      1999 Stock Plan, dated as of July 1999.(15)

  99.19*      1991 Employee Stock Plan, as amended April 10, 1997.(14)

  99.20*      Long-Term Key Employee Incentive Program, effective as of
              July 1, 1999.(16)

  99.21       UC Settlement Agreement, dated as of December 17, 1999.(16)

* As required by Item 14(a)(3) of Form 10-K, Genentech identifies this
  Exhibit as a management contract or compensatory plan or arrangement of
  Genentech.



----------------

(1)   Filed as an exhibit to our current report on Form 8-K filed with the
      Commission on July 28, 1999 and incorporated herein by reference.

(2)   Filed as an exhibit to Amendment No. 3 to our Registration Statement
      (No. 333-80601) on Form S-3 filed with the Commission on July 16, 1999
      and incorporated herein by reference.

(3)   Filed as an exhibit to our Annual Report on Form 10-K for the year
      ended December 31, 1987 filed with the Commission and incorporated
      herein by reference.

(4)   Filed as an exhibit to our Annual Report on Form 10-K for the year
      ended December 31, 1990 filed with the Commission and incorporated
      herein by reference.

(5)   Filed as an exhibit to our Annual Report on Form 10-K for the year
      ended December 31, 1995 filed with the Commission and incorporated
      herein by reference.

(6)   Filed as an exhibit to our Annual Report on Form 10-K for the year
      ended December 31, 1988 filed with the Commission and incorporated
      herein by reference.

(7)   Filed as an exhibit to our Annual Report on Form 10-K for the year
      ended December 31, 1991 filed with the Commission and incorporated
      herein by reference.

(8)   Filed as an exhibit to our Registration Statement (No. 33-59949) on
      Form S-4 dated October 25, 1995 and incorporated herein by reference.

(9)   Filed as an exhibit to our Annual Report on Form 10-K for the year
      ended December 31, 1996 filed with the Commission and incorporated
      herein by reference.

(10)  Incorporated by reference to the description under the heading
      "Description of Capital Stock" relating to our Common Stock in the
      prospectus included in our Amendment No. 2 to the Registration
      Statement on Form S-3 (No. 333-88651) filed with the Commission on
      October 20, 1999, and the description under the heading "Description of
      Capital Stock" relating to the Common Stock in the our final prospectus
      filed with the Commission on October 21, 1999 pursuant to Rule 424(b)
      under the Securities Act of 1933, as amended, including any amendment
      or report filed for the purpose of updating that description.

(11)  Filed as an exhibit to our Registration Statement (No. 333-08055) on
      Form S-8 filed with the Commission on July 12, 1996 and incorporated
      herein by reference.

(12)  Filed as an exhibit to our Registration Statement (No. 333-94749) on
      Form S-8 filed with the Commission on January 14, 2000 and incorporated
      herein by reference.

(13)  Filed as an exhibit to our Registration Statement (No. 333-83157) on
      Form S-8 filed with the Commission on July 19, 1999 and incorporated
      herein by reference.

(14)  Filed as an exhibit to our Post-Effective Amendment No. 1 to our
      Registration Statement on Form S-8 (No. 333-83989) filed with the
      Commission on November 2, 1999.

(15)  Filed as an exhibit to our Registration Statement on Form S-8 (No. 333-
      83989) filed with the Commission on July 29, 1999.

(16)  Filed with this document.


(b) Reports on Form 8-K

    On November 3, 1999, Genentech filed a current report on Form 8-K dated
    November 2, 1999 and on January 14, 2000, Genentech filed a current
    report on Form 8-K dated November 19, 1999.  There were no other reports
    filed for the quarter ended December 31, 1999.



                                  SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.


                                        GENENTECH, INC.
                                        Registrant

Date:  February 7, 2000
                                        By:  /s/JOHN M. WHITING
                                            ---------------------------------
                                                John M. Whiting
                                                Controller and
                                                Chief Accounting Officer
                                               (Principal Accounting Officer)



                              POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Louis J. Lavigne, Jr., Executive Vice
President and Chief Financial Officer, and John M. Whiting, Controller and
Chief Accounting Officer, and each of them, his true and lawful attorneys-in-
fact and agents, with the full power of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, to sign any
amendments to this report, and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto each said attorney-in-fact and agent full power and
authority to do and perform each and every act in person, hereby ratifying
and confirming all that said attorney-in-fact and agent, or either of them,
or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.


Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:


         Signature                         Title                    Date
----------------------------    ---------------------------   ----------------


Principal Executive Officer:


 /s/ARTHUR D. LEVINSON          Chairman, Chief Executive     February 7, 2000
---------------------------     Officer and Director
    Arthur D. Levinson


Principal Financial Officer:


 /s/LOUIS J. LAVIGNE, JR.       Executive Vice President      February 7, 2000
---------------------------     and Chief Financial Officer
    Louis J. Lavigne, Jr.



Director:


 /s/HERBERT W. BOYER            Director                      February 7, 2000
---------------------------
    Herbert W. Boyer


 /s/JONATHAN K.C. KNOWLES       Director                      February 7, 2000
---------------------------
    Jonathan K.C. Knowles


 /s/FRANZ B. HUMER              Director                      February 7, 2000
---------------------------
    Franz B. Humer


 /s/MARK RICHMOND               Director                      February 7, 2000
---------------------------
    Mark Richmond


 /s/CHARLES A. SANDERS          Director                      February 7, 2000
---------------------------
    Charles A. Sanders




<TABLE>
<CAPTION>
                                                                                SCHEDULE II

                                       GENENTECH, INC.
                              VALUATION AND QUALIFYING ACCOUNTS
                        Years Ended December 31, 1999, 1998 and 1997
                                       (in thousands)

                                                     Additions
                                     Balance at     Charged to                  Balance at
                                    Beginning of     Costs and                    End of
                                       Period        Expenses    Deductions(1)    Period
                                     ----------     ----------    ----------    ----------
<S>                                  <C>            <C>           <C>           <C>
Allowance for doubtful accounts
 and returns:

  Year Ended December 31, 1999:      $   17,418     $    8,303    $   (6,770)   $   18,951
                                     ==========     ==========    ==========    ==========
  Year Ended December 31, 1998:      $   14,535     $   11,389    $   (8,506)   $   17,418
                                     ==========     ==========    ==========    ==========
  Year Ended December 31, 1997:      $    7,869     $   13,976    $   (7,310)   $   14,535
                                     ==========     ==========    ==========    ==========

Inventory reserves:


  Year Ended December 31, 1999:      $   14,904     $   13,283    $  (11,803)   $   16,384
                                     ==========     ==========    ==========    ==========
  Year Ended December 31, 1998:      $   12,055     $    5,405    $   (2,556)   $   14,904
                                     ==========     ==========    ==========    ==========
  Year Ended December 31, 1997:      $    9,279     $    5,901    $   (3,125)   $   12,055
                                     ==========     ==========    ==========    ==========

Reserve for nonmarketable
 equity securities and
 convertible equity loans:


  Year Ended December 31, 1999:      $   12,143     $   16,902    $        -    $   29,045
                                     ==========     ==========    ==========    ==========
  Year Ended December 31, 1998:      $    5,490     $    7,958    $   (1,305)   $   12,143
                                     ==========     ==========    ==========    ==========
  Year Ended December 31, 1997:      $    4,990     $      500    $        -    $    5,490
                                     ==========     ==========    ==========    ==========

<FN>

(1)  Represents amounts written off or returned against the allowance or reserves.
</FN>
</TABLE>




                     INDEX OF EXHIBITS FILED WITH FORM 10-K
                      FOR THE YEAR ENDED DECEMBER 31, 1999


Exhibit No.   Description
-----------   -----------


   10.5       Amendment No. 1, dated October 22, 1999, to Affiliation
              Agreement between Genentech and Roche Holdings, Inc.

   13.1       1999 Annual Report to Stockholders

   23.1       Consent of Ernst & Young LLP, Independent Auditors

   27.1       Financial Data Schedule

   99.19      Long-Term Key Employee Incentive Program, effective as of
              July 1, 1999

   99.21      UC Settlement Agreement, dated as of December 17, 1999