UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC  20549

                                    FORM 10-Q

(Mark One)

X      Quarterly report pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934. For the quarterly period ended September 30, 1997.

       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.
               (Exact name of registrant as specified in its charter)

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

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

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

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 the number of shares outstanding of each of the issuer's classes of 
common stock, as of the latest practicable date.

Common Stock $0.02 par value                76,621,009                    
Class                                       Outstanding at September 30, 1997

Special Common Stock $0.02 par value        46,992,604                    
Class                                       Outstanding at September 30, 1997






                                   GENENTECH, INC.
                                        INDEX


PART I.     FINANCIAL INFORMATION                                    PAGE NO.

Condensed Consolidated Statements of Income -
for the three months and nine months ended 
September 30, 1997 and 1996                                               3

Condensed Consolidated Statements of Cash Flows -
for the nine months ended September 30, 1997 and 1996                     4

Condensed Consolidated Balance Sheets -
September 30, 1997 and December 31, 1996                                  5

Notes to Condensed Consolidated Financial Statements                   6-10

Financial Review                                                      11-19 

Independent Accountants' Review Report                                   20

PART II.     OTHER INFORMATION                                           21

SIGNATURES                                                               22




































                                      

<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION
ITEM 1.  Financial Statements

                                  GENENTECH, INC.
                    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                       (thousands, except per share amounts)
                                    (unaudited)


                                               Three Months          Nine Months
                                           Ended September 30     Ended September 30
                                          --------------------  --------------------
                                             1997       1996       1997       1996
                                          ---------  ---------  ---------  ---------
<S>                                       <C>        <C>        <C>        <C>
Revenues:
  Product sales (including amounts 
    from related parties: three months -
    1997-$5,720; 1996-$1,659; nine 
    months - 1997-$14,718; 1996-$11,151)  $ 142,306  $ 142,463  $ 441,537  $ 443,105
  Royalties (including amounts from
    related parties: three months -
    1997-$5,385; 1996-$6,812; nine 
    months - 1997-$18,408; 1996-$19,325)     59,632     54,429    180,323    160,546
  Contract and other (including 
    amounts from related parties: 
    three months - 1997-$29,910; 
    1996-$35,977; nine months - 
    1997-$56,311; 1996-$79,409)              29,385     38,859     67,453     87,991
  Interest                                   17,594     15,956     50,382     46,711
                                          ---------  ---------  ---------  ---------
     Total revenues                         248,917    251,707    739,695    738,353

Costs and expenses:
  Cost of sales (including amounts 
    from related parties: three months -
    1997-$4,750; 1996-$1,244; nine 
    months - 1997-$12,313; 1996-$9,085)      26,565     24,836     79,817     77,868 
  Research and development (including                  
    contract related: three months -
    1997-$29,910; 1996-$10,251; nine
    months - 1997-$56,311; 1996-$34,695)    118,146    114,772    351,779    343,008
  Marketing, general and administrative      65,450     61,864    190,504    174,893
  Interest                                      542      1,094      2,446      3,986
                                          ---------  ---------  ---------  ---------
    Total costs and expenses                210,703    202,566    624,546    599,755

Income before taxes                          38,214     49,141    115,149    138,598
 
Income tax provision (benefit)                6,092     (1,801)    27,634     27,720
                                          ---------  ---------  ---------  ---------
Net income                                $  32,122  $  50,942  $  87,515  $ 110,878
                                          =========  =========  =========  =========
Net income per share                      $    0.25  $    0.41  $    0.69  $    0.90
                                          =========  =========  =========  =========
Weighted average number of shares used
  in computing per share amounts            126,776    123,589    126,326    123,402
                                          =========  =========  =========  =========
<FN>
              See notes to condensed consolidated financial statements.
</FN>
</TABLE>
                                     Page 3
<TABLE>
<CAPTION>                                  
                                   GENENTECH, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     (thousands)
                                     (unaudited)

                                                                   Nine Months
                                                                Ended September 30
                                                              ----------------------
                                                                 1997        1996
                                                              ----------  ----------
<S>                                                           <C>         <C>
Cash flows from operating activities:
  Net income                                                   $  87,515  $  110,878
  Adjustments to reconcile net income to net cash 
   (used in) provided by operating activities:
   Depreciation and amortization                                  49,887      46,189
   Deferred income taxes                                          (4,445)    (13,278)
   Gain on sales of securities available-for-sale                 (6,641)       (472)
   Loss on sales of securities available-for-sale                  1,821         263
   Loss on fixed asset dispositions                                  318         601
  Changes in assets and liabilities:
     Trading securities                                         (107,150)     (5,727)
     Receivables and other current assets                        (10,301)    (24,748)
     Inventories                                                  (6,950)      1,603
     Accounts payable, other current liabilities 
       and other long-term liabilities                            32,067     (10,291)
                                                              ----------  ----------
  Net cash provided by operating activities                       36,121     105,018

Cash flows from investing activities:
  Purchases of securities held-to-maturity                      (360,698)   (543,833)
  Proceeds from maturities of securities held-to-maturity        396,543     580,304
  Purchases of securities available-for-sale                    (297,730)   (237,803)
  Proceeds from sales of securities available-for-sale           301,507     134,814 
  Purchases of non-marketable equity securities                        -      (7,523)
  Capital expenditures                                          (121,350)    (86,574)
  Change in other assets                                         (33,822)      3,130
                                                              ----------  ----------
  Net cash used in investing activities                         (115,550)   (157,485)

Cash flows from financing activities:
  Stock issuances                                                 67,116      61,821
  Repayment of long-term debt, including
   current portion                                                     -        (358)
                                                              ----------  ----------
  Net cash provided by financing activities                       67,116      61,463
                                                              ----------  ----------
Net (decrease) increase in cash and cash equivalents             (12,313)      8,996
  Cash and cash equivalents at beginning of period               207,264     137,043
                                                              ----------  ----------
  Cash and cash equivalents at end of period                  $  194,951  $  146,039
                                                              ==========  ==========

<FN>

              See notes to condensed consolidated financial statements.
</FN>
</TABLE>
                                     
                                     Page 4



<TABLE>
<CAPTION>
                                   GENENTECH, INC.
                        CONDENSED CONSOLIDATED BALANCE SHEETS
                                     (thousands)
                                     (unaudited)

                                                      September 30     December 31
                                                          1997             1996
                                                      ------------     ------------
<S>                                                   <C>              <C>
ASSETS
Current assets:
  Cash and cash equivalents                           $    194,951     $    207,264
  Short-term investments                                   617,961          415,900
  Accounts receivable, net (including amounts
    from related party: 1997-$51,640; 
    1996-$33,377)                                          207,805          197,612
  Inventories                                               98,893           91,943
  Prepaid expenses and other current assets                 39,980           42,365
                                                      ------------     ------------
     Total current assets                                1,159,590          955,084

Long-term marketable securities                            444,839          535,916
Property, plant and equipment, less accumulated      
  depreciation (1997-$362,063; 1996-$320,100)              663,779          586,167
Other assets                                               182,815          149,205
                                                      ------------     ------------
Total assets                                          $  2,451,023     $  2,226,372
                                                      ============     ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                    $     56,155    $      45,501
  Accrued liabilities - related party                        9,653            9,908
  Other accrued liabilities                                203,937          194,542
                                                      ------------     ------------
     Total current liabilities                             269,745          249,951

Long-term debt                                             150,000          150,000
Other long-term liabilities                                 45,549           25,362
                                                      ------------     ------------
     Total liabilities                                     465,294          425,313

Commitments and contingencies
Stockholders' equity:
  Preferred stock                                                -                -
  Special common stock                                         940              896
  Common stock                                               1,532            1,532
  Additional paid-in capital                             1,444,371        1,362,585
  Retained earnings (since October 1, 1987
     quasi-reorganization)                                 469,614          382,097
  Net unrealized gain on securities
     available-for-sale                                     69,272           53,949
                                                      ------------     ------------
     Total stockholders' equity                          1,985,729        1,801,059
                                                      ------------     ------------
Total liabilities and stockholders' equity            $  2,451,023     $  2,226,372
                                                      ============     ============

<FN>
            See notes to condensed consolidated financial statements.
</FN>
</TABLE>
                                   Page 5
                                     

                                GENENTECH, INC.
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

Note 1.     Statement of Accounting Presentation and Significant Accounting
            Policies

In the opinion of Genentech, Inc. (the Company), the accompanying unaudited 
condensed consolidated financial statements have been prepared in accordance 
with generally accepted accounting principles for interim financial 
information and with the instructions to Form 10-Q and Article 10 of 
Regulation S-X.  Accordingly, they do not include all of the information and 
footnotes required by generally accepted accounting principles for complete 
financial statements.  In the opinion of management, all adjustments 
(consisting only of adjustments of a normal recurring nature) considered 
necessary for a fair presentation have been included.  Operating results for 
the three-month and nine-month periods ended September 30, 1997 and 1996 are 
not necessarily indicative of the results that may be expected for the year 
ending December 31, 1997.  The condensed consolidated balance sheet as of 
December 31, 1996 has been derived from the audited financial statements as 
of that date.  For further information, refer to the consolidated financial 
statements and notes thereto included in the Company's Annual Report to 
Stockholders for the year ended December 31, 1996.

In January 1997, the Securities and Exchange Commission issued new 
derivatives and exposures to market risk disclosure requirements.  To comply 
with these new requirements, the following supplements the disclosures 
included in the Company's 1996 Form 10-K and Annual Report to Stockholders.

Trading:  The Company uses external money managers to manage part of its 
investment portfolio that is held for trading purposes.  When the money 
managers purchase securities denominated in a foreign currency, they enter 
into foreign currency forward contracts which are recorded at fair value 
with the related gain or loss recorded in interest income.

Foreign Currency Instruments:  Simple foreign currency put options (options) 
are generally terminated, or offsetting contracts are entered into, upon 
determination that purchased options no longer qualify as a hedge or are 
determined to exceed probable anticipated net foreign revenues.  The 
realized gains and losses are recorded as a component of other revenues.  
For early termination of options that qualify as hedges, the gain or loss on 
termination will be deferred through the original term of the option and 
then recognized as a component of the hedged revenues.  Changes in the fair 
value of hedging instruments that qualify as a hedge are not recognized and 
changes in the fair value of instruments that do not qualify as a hedge 
would be recognized through earnings.

Interest Rate Swaps:  The accrued net settlement amount on the interest rate 
swaps (swaps) are reflected on the balance sheet as other accounts 
receivable or other accrued liabilities.  For early termination of swaps 
where the underlying asset is not sold, the amount of the terminated swap is 
deferred and amortized over the remaining life of the original swap.  For 
early termination of swaps with the corresponding termination or sale of the 
underlying asset, the amounts are recognized through interest income.  
Changes in the fair value of swap hedging instruments that qualify as a 
hedge are not recognized and changes in the fair value of swap instruments 
that do not qualify as a hedge would be recognized through earnings.

Equity Collar Instruments:  Equity collar instruments that do not qualify 
for hedge accounting and early termination of these instruments with the 
sale of the underlying security would be recognized through earnings.  For 
early termination of these instruments without the sale of the underlying 

                                    Page 6
                                GENENTECH, INC.
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

security, the time value would be recognized through earnings and the 
intrinsic value will adjust the cost basis of the underlying security.

The preparation of financial statements in conformity with generally accepted 
accounting principles requires management to make estimates and assumptions 
that affect the amounts reported in the financial statements and accompanying 
notes. Actual results could differ from those estimates.


Note 2.     New Accounting Standards

In February 1997, the Financial Accounting Standards Board (FASB)issued 
Statement of Financial Accounting Standards (FAS) 128, "Earnings per Share," 
and FAS 129, "Disclosure of Information about Capital Structure," which are 
required to be adopted on December 31, 1997.  At that time, the Company will 
be required to change the method currently used to compute earnings per 
share (EPS) and to restate all prior periods as required by FAS 128.  Under 
the new requirements for calculating EPS, the dilutive effect of stock 
options will be excluded from a new EPS measure, Basic EPS.  The impact is 
expected to result in an increase in Basic EPS for the three- and nine-month 
periods ended September 30, 1997 and September 30, 1996; however, this 
impact is expected to be immaterial.  The impact of FAS 128 on the 
calculation of the second new EPS measure, Diluted EPS, for these quarters 
is also expected to be immaterial.

Also, FAS 129 consolidates existing guidance relating to disclosure about a 
company's capital structure.  Since the Company has been in compliance with 
existing disclosure requirements of its capital structure, adoption of FAS 
129 is not expected to have a material impact on the financial position, 
results of operations or cash flows of the Company.

The FASB also issued FAS 130, "Reporting Comprehensive Income," and FAS 131, 
"Disclosures about Segments of an Enterprise and Related Information," in 
June 1997, which requires additional disclosures to be adopted on December 
31, 1998.  Under FAS 130, the Company is required to display comprehensive 
income and its components as part of the Company's full set of financial 
statements.  

FAS 131 requires that the Company report financial and descriptive 
information about its reportable operating segments.  The Company is 
evaluating the impact on its disclosures, if any.


Note 3.     Relationship with Roche Holdings, Inc.

On October 25, 1995, the Company and Roche Holdings, Inc. (Roche) entered 
into a new agreement (the Agreement).  Each share of the Company's common 
stock not held by Roche or its affiliates on that date automatically 
converted to one share of callable putable common stock (special common 
stock).  The Agreement extends until June 30, 1999, Roche's option to cause 
the Company to redeem (call) the outstanding special common stock of the 
Company at predetermined prices.  Should the call be exercised, Roche will 
concurrently purchase from the Company a like number of shares of common 
stock for a price equal to the Company's cost to redeem the special common 
stock.  During the quarter beginning October 1, 1997, the call price is 
$73.50 per share and increases by  $1.50 per share each quarter through the 
end of the option period on June 30, 1999, on which date the price is $82.50 
per share.  If Roche does not cause the redemption as of June 30, 1999, the 
Company's stockholders will have the option (the put) to cause the Company 

                                    Page 7
                                GENENTECH, INC.
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

to redeem none, some, or all of their shares of special common stock at 
$60.00 per share (and Roche will concurrently provide the necessary 
redemption funds to the Company by purchasing a like number of shares of 
common stock at $60.00 per share) within thirty business days commencing 
July 1, 1999.  Roche Holding Ltd, a Swiss corporation, has guaranteed 
Roche's obligation under the put.

In conjunction with the Agreement, F. Hoffmann-La Roche Ltd (HLR) was granted 
an option for ten years for licenses to use and sell certain of the Company's 
products in non-United States (U.S.) markets.  In the second quarter of 1997, 
the Company and HLR agreed in principle to changes to their 1995 ex-U.S. 
license agreement (license agreement).  Key changes to the license agreement 
are summarized as follows:  (1) For future products, HLR may choose to 
exercise its option either when the Company determines to move a product into 
development, or at the end of Phase II (as in the 1995 agreement).  U.S. and 
European development costs will be shared (discontinuing the distinction 
regarding location or purpose of studies). (2) If HLR exercises its option at 
the development determination point, U.S. and European development costs will 
be shared 50/50. (3) If HLR exercises its option at the end of Phase II, HLR 
will reimburse the Company for 50 percent of any development costs incurred, 
and subsequent U.S. and European development costs will be shared 75/25, 
HLR/Genentech. (4) For nerve growth factor (NGF), which HLR has already 
exercised its option to develop, prospective U.S. and European development 
costs will be shared 60/40, HLR/Genentech. (5) HLR will assume development of 
the oral IIbIIIa antagonist globally on its own.  The Company will provide 
clinical and scientific input for the IIbIIIa program and may subsequently 
opt-in and join development at any time up to the New Drug Application (NDA) 
filing for the first indication.  If the Company chooses to opt-in, it will 
reimburse HLR for 50 percent of the U.S. and European IIbIIIa development 
costs incurred to that date.  HLR and Genentech will co-promote IIbIIIa in 
the U.S. with a 60/40, Genentech/HLR, profit-sharing if the NDA filing for 
the first indication is for acute therapy or a 50/50 profit-sharing if the 
NDA filing for the first indication is for chronic therapy.  If the Company 
does not opt-in, it will receive from HLR a 6.0% royalty on worldwide sales 
of the oral IIbIIIa antagonist.

In general, HLR pays a royalty of 12.5% until a product reaches $100 million 
in aggregate sales outside of the U.S., at which time the royalty rate 
increases to 15%.  In addition, HLR has exclusive rights to, and pays the 
Company 20% royalties on, Canadian sales of the Company's existing products 
and European sales of Pulmozyme, registered trademark.  The Company supplies 
its products to HLR, and has agreed to supply products for which HLR has 
exercised its option, for sales outside of the U.S. at cost plus 20%.

Under the Agreement, independent of its right to cause the Company to redeem 
the special common stock, Roche may increase its ownership of the Company up 
to 79.9% by making purchases on the open market.  Roche holds approximately 
67.2% of the outstanding common equity of the Company as of September 30, 
1997.

Contract revenue for the reimbursement of ongoing development expenses for 
the three development projects - Rituxan, trademark, (the C2B8 antibody), 
insulin-like growth factor in diabetes (IGF-I) and NGF - that HLR exercised 
its development option for under the Agreement in 1996 were $17.2 million 
and $37.2 million for the quarter ended September 30, 1997, and on a year-
to-date basis, respectively.  Development of IGF-I was discontinued in 
September 1997 due to the amount of additional clinical effort and the 
greater period of time that would be required to address potential concerns 
about retinopathy when using IGF-I in Type I and Type II diabetes mellitus.

                                    Page 8
                                GENENTECH, INC.
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

Note 4.     Legal Proceedings 

The Company is a party to various legal proceedings including patent 
infringement cases involving human growth hormone products and Activase, 
registered trademark, product liability cases, and employment related cases.
In addition, in July 1997, an action was filed in the U.S. District Court 
for the Northern District of California alleging that the Company's 
manufacture, use and sale of its Nutropin, registered trademark, human 
growth hormone products infringed a patent (the Goodman Patent) owned by the 
Regents of the University of California (UC).  This action is substantially 
the same as a previous action filed in 1990 against the Company by UC 
alleging that the Company's manufacture, use and sale of its Protropin, 
registered trademark, human growth hormone products infringed the Goodman 
Patent. In February 1997, the Company received another grand jury document 
subpoena from the U.S. District Court for the Northern District of 
California for documents relating to the Company's clinical, sales and 
marketing activities associated with human growth hormone.  The Company 
believes that the government is actively investigating this matter.

Based upon the nature of the claims made and the investigations completed to 
date by the Company and its counsel, the Company believes that the outcome 
of these cases will not have a material adverse effect on the financial 
position, results of operations or cash flows of the Company.  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.

Note 5.     Note Receivable

Pursuant to its research and development collaboration agreement entered 
into with Scios Inc. (Scios) in 1995, the Company established a line of 
credit for $30 million that Scios may draw down at Scios' discretion through 
2002.  This commitment was supported by a bank letter of credit under which 
Scios could draw up to $30 million directly from the bank with repayment of 
the funds due to the bank by the Company.  On March 31, 1997, Scios drew 
down the entire $30 million with replacement of funds paid to the bank by 
the Company on April 1, 1997.  The $30 million drawn by Scios under the bank 
letter of credit plus interest (which accrues at the prime rate of interest) 
is repayable in the form of cash or Scios common stock (at the average 
market price over the thirty day period before the date of repayment) at 
Scios' option any time through December 30, 2002.  On April 2, 1997, Scios 
suspended development of Auriculin, registered trademark, anaritide based 
upon the results of an interim analysis of data from the Phase III study in 
oliguric acute renal failure.  Auriculin was under development in 
collaboration with the Company.

Note 6.     Inventories

Inventories at September 30, 1997, and December 31, 1996, are summarized 
below:
                                           1997       1996
                                         --------   --------
                                             (thousands)

         Raw materials and supplies      $ 19,595   $ 17,971
         Work in process                   68,079     61,368
         Finished goods                    11,219     12,604
                                         --------   --------
                Total                    $ 98,893   $ 91,943
                                         ========   ========

                                   Page 9
                                GENENTECH, INC.
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

Note 7.     Change in Effective Tax Rate

The Company's effective tax rate was 16% for the third quarter of 1997 
resulting in a year-to-date effective tax rate of 24% for 1997.  This year-
to-date effective tax rate is less than the 28% effective tax rate for the 
first six months of 1997 due to the legislative extension of research and 
development tax credits for the remainder of 1997.  The income tax provision 
for the third quarter of 1997 was $6.1 million compared to a net $1.8 
million tax benefit for the third quarter of 1996.   This net tax benefit 
was the result of a reduction in the tax provision of $11.6 million in the 
third quarter of 1996 to adjust the year-to-date effective tax rate from 33% 
to 20%.  The change in the 1996 effective tax rate resulted from an 
operating plan review in 1996 in which the Company decided not to implement 
a previously announced approach for research and development funding and 
manufacturing by international subsidiaries of certain of its development 
products.  


Note 8.     Subsequent Event

In October 1997, an action was filed in the U.S. District Court for the 
District of New Jersey alleging that the Company's manufacture, use and sale 
of its Nutropin and Nutropin AQ, registered trademark, human growth hormone 
products infringe U.S. Patent No. 5,633,352 (the '352 Patent) owned by Novo 
Nordisk A/S (Novo).  The suit seeks to permanently enjoin the Company from 
the alleged infringement of the '352 Patent and seeks damages to compensate 
Novo for such alleged infringement.

Based upon the nature of the claims made and the investigations completed to 
date by the Company and its counsel, the Company believes that the outcome 
of this case will not have a material adverse effect on the financial 
position, results of operations or cash flows of the Company.  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.






















                                    Page 10


ITEM 2.  FINANCIAL REVIEW


RELATIONSHIP WITH ROCHE HOLDINGS, INC.

On October 25, 1995, Genentech, Inc. (the Company) and Roche Holdings, Inc. 
(Roche) entered into a new agreement (the Agreement) to extend until June 
30, 1999, Roche's option to cause the Company to redeem (call) the 
outstanding callable putable common stock (special common stock) of the 
Company at predetermined prices.  Should the call be exercised, Roche will 
concurrently purchase from the Company a like number of shares of common 
stock for a price equal to the Company's cost to redeem the special common 
stock.  If Roche does not cause the redemption as of June 30, 1999, the 
Company's stockholders will have the option to cause the Company to redeem 
none, some, or all of their shares of special common stock (and Roche will 
concurrently provide the necessary redemption funds to the Company by 
purchasing a like number of shares of common stock) within thirty business 
days commencing July 1, 1999.  See the Relationship with Roche Holdings, 
Inc. note in the Notes to Condensed Consolidated Financial Statements for 
further information.

In conjunction with the Agreement, F. Hoffmann-La Roche Ltd (HLR) was 
granted an option for ten years for licenses to use and sell certain of the 
Company's products in non-United States (U.S.) markets.  In the second 
quarter of 1997, the Company and HLR agreed in principle to changes to their 
1995 ex-U.S. license agreement (license agreement).  In general, these 
changes will allow for the sharing of U.S. and European development costs 
regardless of location or purpose of studies.  Under these changes, HLR 
could exercise its option either when the Company determines to move a 
product into development or at the end of Phase II.  U.S. and European 
development costs will be shared 50/50 if HLR exercises its option at the 
development determination point or 75/25, HLR/Genentech, of subsequent costs 
if HLR exercises its option at the end of Phase II, with 50% of any 
development costs incurred to date by the Company to be reimbursed by HLR.  
For nerve growth factor (NGF), which HLR has already exercised its option to 
develop, prospective U.S. and European development costs will be shared 
60/40, HLR/Genentech.  HLR will assume development of the oral IIbIIIa 
antagonist globally on its own.  The Company may subsequently opt-in and 
join development of IIbIIIa at any time up to the New Drug Application 
filing for the first indication.  See the Relationship with Roche Holdings, 
Inc. note in the Notes to Condensed Consolidated Financial Statements for 
further information on the key changes to the license agreement.

As a result of the Agreement, contract revenue for the reimbursement of 
ongoing development expenses for the three development projects - Rituxan, 
trademark, (the C2B8 antibody), insulin-like growth factor in diabetes (IGF-
I) and NGF - that HLR exercised its development option for under the 
Agreement in 1996 were $17.2 million and $37.2 million for the quarter ended 
September 30, 1997, and on a year-to-date basis, respectively. Development 
of IGF-I was discontinued in September 1997 due to the amount of additional 
clinical effort and the greater period of time that would be required to 
address potential concerns about retinopathy when using IGF-I in Type I and 
Type II diabetes mellitus.




                                    Page 11



RESULTS OF OPERATIONS
(dollars in millions, except per share amounts)

                             Quarter ended            Nine months ended
                              September 30               September 30
                         ----------------------    ------------------------
REVENUES                  1997   1996  % Change     1997    1996   % Change
-------------------      ------ ------ --------    ------  ------  --------

Revenues                 $248.9 $251.7     (1)%    $739.7  $738.4       0 %
                         ====== ====== ========    ======  ======  ========
PRODUCT SALES
-------------------
Activase                 $ 60.7 $ 65.4     (7)%    $204.0  $214.3      (5)%
Protropin and Nutropin     57.0   57.6     (1)      168.5   167.6       1  
Pulmozyme                  23.8   18.0     32        66.3    57.7      15
Actimmune                   0.8    1.5    (47)        2.7     3.5     (23)
                         ------ ------ --------    ------  ------  --------
Total product sales      $142.3 $142.5      0 %    $441.5  $443.1       0 %
                         ====== ====== ========    ======  ======  ========


Although the product mix was different, the overall product sales were 
comparable to the three-month period ended September 30, 1996 and slightly 
decreased on a year-to-date basis compared to 1996.

Net sales of Activase, registered trademark, (Alteplase, recombinant), a 
tissue plasminogen activator (t-PA), decreased in the three- and nine-month 
periods ended September 30, 1997, compared to the same periods of 1996.  
This decrease was due to lower U.S. sales attributable to competition from 
Boehringer Mannheim's (BM) Retavase, registered trademark, and a decrease in 
the size of the thrombolytic market. As a result of competition from 
Retavase,  Activase's market share declined to approximately 76% in the 
third quarter of 1997 compared to approximately 80% in the same quarter of 
1996 and approximately 79% in the second quarter of 1997.  In addition, the 
overall size of the market has declined due to the increasing use of 
angioplasty rather than thrombolytic therapy.  In March 1997, results from 
the GUSTO III clinical trial which involved a head-to-head comparison of 
Activase and Retavase, failed to achieve its primary endpoint that Retavase 
has a statistically significant lower mortality rate than Activase.

Net sales of the Company's three growth hormone products - Protropin, 
registered trademark, (somatrem for injection), Nutropin, registered 
trademark, [somatropin (rDNA origin) for injection] and Nutropin AQ, 
registered trademark, [somatropin (rDNA origin) injection] - were comparable 
in the three- and nine-month periods ended September 30, 1997 over the same 
periods in 1996.  The Company continues to maintain a 67% share of the U.S. 
market for treatment of children with growth hormone inadequacy.  In the 
first quarter of 1997, Serono Laboratories, Inc. and Novo Nordisk A/S (Novo) 
began selling their human growth hormone products.  

Net sales of Pulmozyme, registered trademark, were higher in the third 
quarter of 1997 and on a year-to-date basis primarily due to continued 
penetration in the early and mild cystic fibrosis (CF) patient population 
for U.S. sales, and  the timing of orders related to Europe and Canada 
sales.






                                    Page 12

<TABLE>
<CAPTION>
                                   Quarter ended            Nine months ended 
                                    September 30               September 30
ROYALTIES, CONTRACT AND        ----------------------    ------------------------
  OTHER, AND INTEREST INCOME    1997   1996  % Change     1997    1996   % Change
-----------------------------  ------ ------ --------    ------  ------  --------
<S>                            <C>    <C>     <C>        <C>     <C>      <C>
Royalties                       $59.6  $54.4      10%    $180.3  $160.5       12%
Contract and other               29.4   38.9     (24)      67.5    88.0      (23)
Interest income                  17.6   16.0      10       50.4    46.7        7 
</TABLE>

Royalty income increased by 10% and 12% in the three- and nine-month 
periods, respectively, ended September 30, 1997, over the comparable periods 
of 1996 primarily due to higher than expected sales from a licensee in the 
first half of 1997.  Additional increases on a year-to-date comparison to 
prior year included, increased sales from various licensees and a reversal 
of a $2.2 million reserve against certain royalty revenues for 1996 due to 
the favorable outcome of certain patent proceedings. 

Contract and other revenues were lower in the third quarter of 1997 and on a 
year-to-date basis compared to the same periods of 1996 due primarily to the 
absence in 1997 of Roche opt-in revenues.  Contract and other revenues for 
1996 included, $17.1 million in the first quarter from Roche for the 
exercise of its development option regarding Rituxan, $19.3 million from 
Roche in the second quarter for the exercise of its development option 
regarding IGF-1 and $28.4 million in the third quarter from Roche for the 
exercise of its development option regarding NGF.  The decrease from 1996 
was partly offset by $22.3 million and $37.7 million for the three- and 
nine-month periods, respectively, of higher ongoing development cost 
reimbursements in 1997 from Roche for various development products, and 
approximately $5.4 million of gains from the sale of biotechnology equity 
securities primarily in the second quarter of 1997. 

Interest income increased in the third quarter of 1997 compared to the same 
period in 1996 due to an increase in the average yield on the portfolio and 
a higher portfolio balance.  On a year-to-date basis, the increase from last 
year was primarily due to an increase in the average yield on the portfolio. 
The total investment portfolio, consisting of cash and cash equivalents, and 
short- and long-term marketable securities, increased to $1,257.8 million as 
of September 30, 1997 from $1,176.2 million as of September 30, 1996 and 
increased from $1,159.1 million as of December 31, 1996. 

<TABLE>
<CAPTION>
                                   Quarter ended             Nine months ended
                                    September 30                September 30
                               ----------------------    ------------------------
COSTS AND EXPENSES              1997   1996  % Change     1997    1996   % Change
-----------------------------  ------ ------ --------    ------  ------  --------
<S>                            <C>    <C>     <C>        <C>     <C>      <C>
Cost of sales                  $ 26.6 $ 24.8       7%    $ 79.8  $ 77.9        2%
Research and development        118.1  114.8       3      351.8   343.0        3 
Marketing, general and                  
  administrative                 65.5   61.9       6      190.5   174.9        9 
Interest expense                  0.5    1.1     (55)       2.4     4.0      (40)
                               ------ ------ --------    ------  ------  --------
   Total costs and expenses    $210.7 $202.6       4%    $624.5  $599.8        4%
                               ====== ====== ========    ======  ======  ========
</TABLE>
                                    Page 13

Cost of sales as a percent of product sales was 19% in the third quarter of 
1997 compared to 17% in the same period in 1996 due to the change in the 
product mix.  On a year-to-date basis, cost of sales as a percent of product 
sales was 18% in 1997 which was comparable to the same period in 1996.

Research and development (R&D) expenses increased 3% in both the third 
quarter and on a year-to-date basis for 1997, primarily due to higher costs 
related to collaborative arrangements with Boehringer Ingelheim 
International Gmbh to develop TNK, a second-generation t-PA, for acute 
myocardial infarction, and with Alkermes, Inc., to develop ProLease, 
registered trademark, human growth hormone, a sustained-release growth 
hormone product, in children with growth hormone inadequacy.  Additional 
increases on a year-to-date basis included higher costs for additional 
large-scale clinical trials for products in late-stage development and 
continued testing of products currently in late-stage clinical testing.  The 
third quarter and year-to-date increases from last year were partly offset 
by higher costs to license technology from collaborative partners in 1996.

Marketing, general and administrative expenses increased in the third 
quarter and on a year-to-date basis for 1997 due primarily to increased 
marketing and sales (M&S) expenses related to the oncology area for 
promoting Roferon-A, registered trademark, in the U.S. for its approved 
oncology indications and pre-launch activities for Rituxan, and for programs 
to address competition in the Activase market.

Interest expense declined in the third quarter and year-to-date periods of 
1997 over the comparable periods in 1996 due to higher capitalized interest 
resulting from an increase in construction projects.


                           Quarter ended           Nine months ended 
                            September 30              September 30
                       ---------------------    ------------------------
INCOME TAXES              1997       1996          1997          1996
---------------------  ----------  ---------    ----------    ----------

Income taxes            $  6.1      $(1.8)       $ 27.6        $ 27.7 


The Company's effective tax rate was 16% for the third quarter of 1997 
resulting in a year-to-date effective tax rate of 24% for 1997.  This year-
to-date effective tax rate is less than the 28% effective tax rate for the 
first six months of 1997 due to the legislative extension of research and 
development tax credits for the remainder of 1997.  The income tax provision 
for the third quarter of 1997 was $6.1 million compared to a net $1.8 
million tax benefit for the third quarter of 1996.  This net tax benefit was 
the result of a reduction in the tax provision of $11.6 million in the third 
quarter of 1996 to adjust the year-to-date effective tax rate from 33% to 
20%.  The change in the 1996 effective tax rate resulted from an operating 
plan review in 1996 in which the Company decided not to implement a 
previously announced approach for research and development funding and 
manufacturing by international subsidiaries of certain of its development 
products.  


                            Quarter ended             Nine months ended 
                             September 30               September 30
                        ----------------------     ------------------------
NET INCOME               1997   1996  % Change      1997    1996   % Change
----------------------  ------ ------ --------     ------  ------  --------

Net income              $ 32.1 $ 50.9    (37)%     $ 87.5  $110.9     (21)%
Earnings per share      $  .25 $  .41              $  .69  $  .90  


                                    Page 14

Net income declined in the third quarter of 1997 over the same period last 
year due primarily to an increase in the Company's income tax provision,  
lower contract and other revenues and higher M&S expenses.  On a year-to-
date basis, net income in 1997 decreased compared to last year due to lower 
contract and other revenues and higher M&S and R&D expenses, partially 
offset by increased royalty revenues.



LIQUIDITY AND CAPITAL
  RESOURCES                    September 30, 1997      December 31, 1996
---------------------------   --------------------    -------------------

Cash and cash equivalents,         $  1,257.8             $  1,159.1     
  short-term investments
  and long-term marketable
  securities

Working capital                         889.8                  705.1 


Cash generated from operations, maturing investments and stock issuances 
were used to make investments in marketable securities and capital 
additions.  Cash and cash equivalents at September 30, 1997, were lower 
compared to December 31, 1996, and working capital increased by $184.7 
million in 1997.

Capital expenditures totaled $121.4 million for 1997 compared to $86.6 
million in the same period of 1996.  The increase was related to 
improvements to existing manufacturing and office facilities and 
manufacturing equipment in 1997. 


FORWARD-LOOKING STATEMENTS

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

Total Product Sales:  Product sales will be dependent on the overall 
competitive environment.  Factors affecting the Company's total product 
sales include, but are not limited to, the amount of sales to customers in 
the U.S., increased competition in the growth hormone and thrombolytic 
markets, the amount and timing of the Company's sales to HLR, the timing and 
volume of bulk shipments to licensees, the possibility of the introduction 
of Rituxan in late 1997 and the potential introduction of additional new 
products and indications for existing products in 1998 and beyond.

On July 25, 1997, the U.S. Food and Drug Administration (FDA) advisory panel 
unanimously recommended the agency grant marketing clearance to Rituxan for 
the treatment of patients suffering from relapsed or refractory low-grade 
non-Hodgkin's lymphoma.  If Rituxan receives FDA approval, it will be the 
first monoclonal antibody sold for treating cancer in the U.S.  A final FDA 
decision is expected later this year.




                                   Page 15

Activase Sales:  The Company is facing new competition in the thrombolytic 
market. BM received FDA approval in October 1996 to market its product, 
Retavase, for the treatment of acute myocardial infarction (AMI) in the U.S. 
and Activase has been losing market share to this product.  The Company has 
brought suit against BM for patent infringement.  In addition, there is an 
increasing use of angioplasty for the treatment of AMI patients in lieu of 
thrombolytic therapy.  The Company expects such competition to continue to 
have an adverse effect on its sales of Activase and such effect could be 
material.  Other factors affecting the Company's Activase sales include, but 
are not limited to, the timing of FDA approval, if any, of additional 
competitive products, pricing decisions made by the Company, the outcome of 
litigation against BM involving the Company's patents for t-PA and processes 
related to its production and formulation, ongoing physician response to the 
outcome of the GUSTO III clinical trial, the increasing use of other 
therapies such as angioplasty techniques for the treatment of AMI, the rate 
of market penetration by Retavase, and the rate of adoption and use of 
Activase for the treatment of acute ischemic stroke.  

Growth Hormone Sales:  The Company continues to face increased competition 
in the growth hormone market.  Three companies received FDA approval in 
1995, and a fourth company received FDA approval in October 1996 to market 
their growth hormone products for treatment of growth hormone inadequacy in 
children; although one of those companies has been preliminarily enjoined 
from selling its product.  In the first quarter of 1997, two of those 
companies began selling their growth hormone products. 

Three of the Company's competitors have received approval to market their 
existing human growth hormone products for additional indications.  The 
Company expects such competition to have an adverse effect on its sales of 
Protropin, Nutropin and Nutropin AQ which, depending on the extent and type 
of competition, could be material.  Other factors affecting the Company's 
growth hormone sales include, but are not limited to, the timing of FDA 
approval, if any, of other new competitive products, the outcome of 
litigation involving the Company's patents and patents of others for human 
growth hormone and related processes, pricing decisions made by the Company, 
the availability of third-party reimbursement for the cost of growth hormone 
therapy, and the impact of sales of Nutropin as a treatment for short 
stature associated with Turner syndrome, and the timing and likelihood of 
FDA approval of Nutropin for the treatment of growth hormone inadequacy in 
adults.

Pulmozyme Sales:  Factors that may influence the future sales of Pulmozyme 
include, but are not limited to, physician perception of the number and 
kinds of patients who will benefit from such therapy, the availability of 
third-party reimbursement for the costs of therapy, the timing of the 
development of alternative therapies for the treatment and care of CF, the 
outcome of the Phase III clinical trial in patients with early CF, whether 
and when additional indications are approved, and the cost of therapy.

Royalty and Contract Revenues:  Royalty and contract revenues in future 
periods could vary significantly from 1996 levels.  Major factors affecting 
these revenues include, but are not limited to:  HLR's decisions to exercise 
or not to exercise its option to develop and sell the Company's future 
products in non-U.S. markets and the timing and amount of related 
development cost reimbursement, if any; variations in HLR's sales of 
Genentech products, and other licensees' sales of licensed products; the 
expiration of royalties from Eli Lilly and Company in 1998; fluctuations in 
foreign currency exchange rates; the timing of non-U.S. approvals, if any, 
for products licensed to HLR; whether and when contract benchmarks are 
achieved; the initiation of other new contractual arrangements; and the 
conclusion of existing arrangements with other companies and HLR.

                                    Page 16

R&D Expenses:  The Company intends to continue its commitment to aggressive 
investment in R&D.  As it continues late-stage clinical testing of products, 
the Company anticipates that its R&D expenses will continue at a high 
percentage of revenues over the short-term.  Over the long-term, however, as 
revenues increase, R&D as a percent of revenues should decrease to the 20 to 
25% range.  Factors affecting the Company's R&D expenses include, but are 
not limited to: the outcome of clinical trials currently being conducted; 
the number of products entering into development from late-stage research; 
future levels of the Company's product sales (including the impact of 
competition), royalty and contract revenues; the possibility of competition 
with respect to products or technologies under development; and decisions by 
HLR to exercise or not to exercise its option to develop and sell potential 
products of the Company in non-U.S. markets and the timing of such 
decisions.

As part of the Company and HLR's agreed upon changes to their license 
agreement, HLR will assume development of the oral IIbIIIa antagonist on its 
own.  As a result, the Company will not be incurring future IIbIIIa related 
R&D costs unless it decides to opt-in on the development of this product.  
Such costs were approximately $4.5 million for 1997.

In September 1997, the Company decided to discontinue development of IGF-I 
in Type I and Type II diabetes mellitus.  As a result, the Company will not 
be incurring future IGF-I related R&D costs of which were approximately 
$13.5 million for the nine-months ended September 30, 1997.

In addition, the Company announced in early October 1997 that it will opt-
out of development and will return to IDEC Pharmaceuticals Corporation 
(IDEC) Genentech's marketing rights for IDEC-Y2B8, a radioimmunotherapy 
under investigation for the treatment of relapsed or refractory non-
Hodgkin's B-cell lymphoma.  As a result, the Company will discontinue its 
R&D funding to IDEC for the development of IDEC-Y2B8.  Such funding for the 
nine-months ended September 30, 1997, were immaterial.

Income Tax Provision:  The Company expects its effective tax rate to be 24% 
in 1997 and between 25% and 35% for the next several years dependent upon 
several factors.  These factors include, but are not limited to, changes in 
tax laws and rates, future levels of R&D spending, the outcome of clinical 
trials of certain development products, the Company's success in 
commercializing such products, and potential competition regarding the 
products. 

Successful Development of Products:  The Company intends to continue to 
develop new products.  Successful pharmaceutical product development is 
highly uncertain and is dependent on numerous factors, many of which are 
beyond the Company's control. Products that appear promising in the early 
phases of development may fail to reach the market for numerous reasons: 
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 which 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.



                                    Page 17


Uncertainties Surrounding Proprietary Rights:  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 such companies' patents cannot be predicted. Patent 
disputes are frequent and can preclude commercialization of products.  The 
Company has in the past, is currently and may in the future be involved in 
material patent litigation.  Such litigation is costly in its own right and 
could subject the Company to significant liabilities to third-parties and, 
if decided adversely, the Company may need to obtain third-party licenses 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 R&D of a particular product.  The Company believes it has 
strong patent protection or the potential for strong patent protection for a 
number of its products that generate sales and royalty revenue or that the 
Company is developing; however, the courts will determine the ultimate 
strength of patent protection of the Company's products and those on which 
the Company earns royalties.

Liquidity:  The Company believes that its cash, cash equivalents, and short-
term investments, together with funds provided by operations and leasing 
arrangements, will be sufficient to meet its foreseeable operating cash 
requirements.  In addition, the Company believes it could access additional 
funds from the capital markets.  Factors affecting the Company's cash 
position include, but are not limited to, future levels of the Company's 
product sales, royalty and contract revenues, in-licensing activities, 
expenses and capital expenditures.

Market Potential/Risk:  Over the longer term, the Company's (and its 
partners') 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 products 
and new indications, and the degree of patent protection afforded to 
particular products.

Roche Holdings, Inc.:  The Company expects to continue to have material 
transactions with Roche, including royalty and contract development 
revenues, product sales and joint product development.

Foreign Exchange:  The Company receives royalty revenues from countries 
throughout the world.  As a result, the Company's financial results could be 
materially affected by factors such as changes in foreign currency exchange 
rates or weak economic conditions in the foreign markets in which the 
Company's products are sold.  The Company is exposed to changes in exchange 
rates in Europe, Asia and Canada.  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 the Company's royalty revenues as expressed in U.S. 
dollars.

To mitigate this risk, the Company hedges certain of these anticipated 
revenues by purchasing foreign currency put option contracts with expiration 
dates and amounts of currency that are based on a portion of probable 
revenues so the 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.  The Company also enters 
into foreign currency forward contracts to lock in the dollar value of a 
portion of these anticipated revenues.



                                    Page 18

Interest Rates:  The Company's interest income is sensitive to changes in 
the general level of U.S. interest rates.  In this regard, changes in U.S. 
interest rates affect the interest earned on the Company's cash equivalents, 
short-term investments and long-term investments.  To mitigate the short-
term impact of fluctuations in U.S. interest rates, the Company invests in 
securities with durations ranging from overnight to ten years.  The purchase 
of a combination of both long- and short-term securities minimizes the 
quarterly fluctuation in the average yield of the portfolio by locking in 
some rates for longer periods of time than can be accomplished with only 
short-term investments.

Equity Securities:  As part of its strategic alliance efforts, the Company 
invests in equity instruments that 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 the Company from a decline 
in the market value of the security below a certain minimum level (the put 
"strike" level); while the call effectively limits the Company's potential 
to benefit from an increase in the market value of the security above a 
certain maximum level (the call "strike" level).

Credit Risk of Counterparties:  The Company could be exposed to losses 
related to the above financial instruments should one of its counterparties 
default.  This risk is mitigated through credit quality standards and credit 
monitoring procedures.

Legal Proceedings:  The Company is a party to various legal proceedings 
including patent infringement cases and various cases involving product 
liability and other matters. 






























                                   Page 19




                   INDEPENDENT ACCOUNTANTS' REVIEW REPORT



The Board of Directors and Stockholders
Genentech, Inc.


We have reviewed the accompanying condensed consolidated balance sheet of 
Genentech, Inc. as of September 30, 1997, and the related condensed 
consolidated statements of income for the three-month and nine-month periods 
ended September 30, 1997 and 1996, and the condensed consolidated statements 
of cash flows for the nine-month periods ended September 30, 1997 and 1996.  
These financial statements are the responsibility of the Company's 
management.

We conducted our reviews in accordance with standards established by the 
American Institute of Certified Public Accountants.  A review of interim 
financial information consists principally of applying analytical procedures 
to financial data, and making inquiries of persons responsible for financial 
and accounting matters.  It is substantially less in scope than an audit 
conducted in accordance with generally accepted auditing standards, which 
will be performed for the full year with the objective of expressing an 
opinion regarding the financial statements taken as a whole.  Accordingly, 
we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that 
should be made to the accompanying condensed consolidated financial 
statements referred to above for them to be in conformity with generally 
accepted accounting principles.

We have previously audited, in accordance with generally accepted auditing 
standards, the consolidated balance sheet of Genentech, Inc. as of December 
31, 1996, and the related consolidated statements of income, stockholders' 
equity, and cash flows for the year then ended (not presented herein) and in 
our report dated January 17, 1997, we expressed an unqualified opinion on 
those consolidated financial statements.  In our opinion, the information 
set forth in the accompanying condensed consolidated balance sheet as of 
December 31, 1996, is fairly stated, in all material respects, in relation 
to the consolidated balance sheet from which it has been derived.





                                             ERNST & YOUNG LLP

San Jose, California 
October 8, 1997









                                    Page 20



GENENTECH, INC.
                           PART II.  OTHER INFORMATION


ITEM 1.     LEGAL PROCEEDINGS  


In February 1997, Genentech, Inc. (the Company), received another grand jury 
document subpoena from the United States District Court for the Northern 
District of California for documents relating to the Company's clinical, 
sales and marketing activities associated with human growth hormone.  The 
Company believes that the government is actively investigating this matter.

See also the Legal Proceedings and Subsequent Event notes in the Notes to 
Condensed Consolidated Financial Statements of Part I.

See also Item 1 of the Company's reports on Form 10-Q for the periods ended 
June 30, 1997 and March 31, 1997.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            (a)  Exhibits

                 15.1   Letter re:   Unaudited Interim Financial Information

                 27.1   Financial Data Schedule


            (b)  Reports on Form 8-K

                 There were no reports on Form 8-K filed during the quarter 
                 ended September 30, 1997.




























                                     Page 21




                                GENENTECH, INC.
                                  SIGNATURES


Pursuant to the requirements 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.


   Date:  November 12, 1997                    GENENTECH, INC.


   /S/ARTHUR D. LEVINSON                       /S/LOUIS J. LAVIGNE, JR.
   -------------------------------------       ----------------------------
   Arthur D. Levinson, Ph.D.                   Louis J. Lavigne, Jr.
   President and Chief Executive Officer       Executive Vice President and
                                               Chief Financial Officer



                                               /S/JOHN M. WHITING
                                               ----------------------------
                                               John M. Whiting
                                               Controller and 
                                               Chief Accounting Officer 



































                                      Page 22