----

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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**________________________**

**FORM      10-Q**

| **(Mark                One)** |                                                                                                                           |
|-------------------------------|--------------------------------------------------------------------------------------------------------------------------------|
| þ                        | **QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT                OF 1934** |

| **For                the quarterly period ended March 31, 2006** |
|-----------------------------------------------------------------------|
|                                                                  |
| or                                                                    |

| o | **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.**

| **Delaware**(State                or other jurisdiction of incorporation or organization) | **94-2347624**(I.R.S.                Employer Identification Number) |
|-------------------------------------------------------------------------------------------|----------------------------------------------------------------------|

**1 DNA      Way, South San Francisco, California  94080-4990**

**(650) 225-1000**

| Large                accelerated filer þ | Accelerated                filer o | Non-accelerated                filer o |
|----------------------------------------------------|-----------------------------------------|---------------------------------------------|

| **Class**                                   | **Number                of Shares Outstanding**                     |
|---------------------------------------------|---------------------------------------------------------------------|
| Common                Stock $0.02 par value | 1,053,627,146** **Outstanding                at April 26, 2006 |

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**GENENTECH,      INC.**

**TABLE      OF CONTENTS**

|                    |                                                                                                                                                                                               | Page                No.         |
|-------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|
|                    | PART                I—FINANCIAL                INFORMATION                                                                                                                                   |                            |
|                    |                                                                                                                                                                                               |                            |
| Item                1.  | Financial                Statements                                                                                                                                                                |                            |
|                    |                                                                                                                                                                                               |                            |
|                    | Condensed                Consolidated                Statements of Income—for                the three months ended March 31, 2006 and 2005                                             |  3     |
|                    |                                                                                                                                                                                               |                            |
|                    | Condensed                Consolidated                Statements                of Cash Flows—for                the three months                ended March 31, 2006                and 2005 |  4     |
|                    |                                                                                                                                                                                               |                            |
|                    | Condensed                Consolidated Balance                Sheets—March 31,                2006 and                December 31,                2005                              |  5     |
|                    |                                                                                                                                                                                               |                            |
|                    | Notes                to Condensed Consolidated Financial                Statements                                                                                                       | 6-15        |
|                    |                                                                                                                                                                                               |                            |
|                    | Report                of Independent Registered                Public                Accounting                Firm                                                                           | 16          |
|                    |                                                                                                                                                                                               |                            |
| Item                2.  | Management’s                Discussion                and Analysis of Financial                Condition and Results of Operations                                                           | 17-36       |
|                    |                                                                                                                                                                                               |                            |
| Item                3.  | Quantitative and Qualitative                Disclosures                About Market                Risk                                                                                  | 37          |
|                    |                                                                                                                                                                                               |                            |
| Item                4.  | Controls                and Procedures                                                                                                                                                        | 37          |
|                    |                                                                                                                                                                                               |                            |
|                    | PART                II—OTHER                INFORMATION                                                                                                                                      |                            |
|                    |                                                                                                                                                                                               |                            |
| Item                1.  | Legal                Proceedings                                                                                                                                                                   | 38          |
|                    |                                                                                                                                                                                               |                            |
| Item                1A. | Risk                Factors                                                                                                                                                                        | 38-49       |
|                    |                                                                                                                                                                                               |                            |
| Item                2.  | Unregistered                Sales of Equity Securities                and                Use of Proceeds                                                                                           | 50          |
|                    |                                                                                                                                                                                               |                            |
| Item                6.  | Exhibits                                                                                                                                                                                           | 50          |
|                    |                                                                                                                                                                                               |                            |
| SIGNATURES              | 51                                                                                                                                                                             |

----

**PART      I**
**—FINANCIAL      INFORMATION**

**Item      1.  **
**Financial      Statements**

**GENENTECH,      INC.**

**CONDENSED      CONSOLIDATED STATEMENTS OF INCOME**

*(In      millions, except per share amounts)*

*(Unaudited)*

|                                                                                                                                                                             |   | **Three                Months****Ended                March 31,** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
|                                                                                                                                                                             |   | **2006**                                                          |   | **2005** |   |
| **Revenues**                                                                                                                                                                     |   |                                                              |   |   |   |
| Product                sales (including amounts from related parties:2006-$59;                2005-$54)                                                                          |   | $                                                                 | 1,644  |   | $ | 1,186 |   |
| Royalties                (including amounts from a related party:2006-$167;                2005-$104)                                                                            |   |                                                              | 286    |   |   | 232 |   |
| Contract                revenue (including amounts from related parties:2006-$28;                2005-$26)                                                                       |   |                                                              | 56     |   |   | 44 |   |
| **Total                operating revenues**                                                                                                                                      |   |                                                              | 1,986  |   |   | 1,462 |   |
|                                                                                                                                                                             |   |                                                              |   |   |   |   |   |
| **Costs                and expenses**                                                                                                                                            |   |                                                              |   |   |   |   |   |
| Cost                of sales (including amounts for related parties:2006                and 2005-$50)                                                                            |   |                                                              | 262    |   |   | 256 |   |
| Research                and development(including                amounts for related parties: 2006-$53; 2005-$44)(including                contract related: 2006-$36; 2005-$27) |   |                                                              | 374    |   |   | 243 |   |
| Marketing,                general and administrative                                                                                                                             |   |                                                              | 441    |   |   | 310 |   |
| Collaboration                profit sharing (including amounts for a related party:2006-$43;                2005-$24)                                                            |   |                                                              | 226    |   |   | 176 |   |
| Recurring                charges related to redemption                                                                                                                           |   |                                                              | 26     |   |   | 35 |   |
| Special                items: litigation-related                                                                                                                            |   |                                                              | 13     |   |   | 11 |   |
| **Total                costs and expenses**                                                                                                                                      |   |                                                              | 1,342  |   |   | 1,031 |   |
|                                                                                                                                                                             |   |                                                              |   |   |   |   |   |
| Operating                income                                                                                                                                                  |   |                                                              | 644    |   |   | 431 |   |
| Other                income (expense):                                                                                                                                           |   |                                                              |   |   |   |   |   |
| Interest                and other income, net                                                                                                                                    |   |                                                              | 53     |   |   | 18 |   |
| Interest                expense                                                                                                                                                  |   |                                                              | (19    | ) |   | (3 | ) |
| Total                other income, net                                                                                                                                           |   |                                                              | 34     |   |   | 15 |   |
| Income                before taxes                                                                                                                                               |   |                                                              | 678    |   |   | 446 |   |
| Income                tax provision                                                                                                                                              |   |                                                              | 257    |   |   | 162 |   |
| **Net                income**                                                                                                                                                    |   | $                                                                 | 421    |   | $ | 284 |   |
|                                                                                                                                                                             |   |                                                              |   |   |   |   |   |
| **Earnings                per share**                                                                                                                                            |   |                                                              |   |   |   |   |   |
| Basic                                                                                                                                                                            |   | $                                                                 | 0.40   |   | $ | 0.27 |   |
| Diluted                                                                                                                                                                          |   | $                                                                 | 0.39   |   | $ | 0.27 |   |
|                                                                                                                                                                             |   |                                                              |   |   |   |   |   |
| Shares                used to compute basic earnings per share                                                                                                                   |   |                                                              | 1,054  |   |   | 1,047 |   |
| Shares                used to compute diluted earnings per share                                                                                                                 |   |                                                              | 1,075  |   |   | 1,067 |   |

*See      Notes to Condensed Consolidated Financial Statements*

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**GENENTECH,      INC. **

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

*(In      millions)*

*(Unaudited)*

|                                                                                                            |   | **Three                Months****Ended                March 31,** |   |
|-----------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
|                                                                                                            |   | **2006**                                                          |   | **2005** |   |
| **Cash                flows from operating activities**                                                         |   |                                                              |   |   |   |
| Net                income                                                                                       |   | $                                                                 | 421    |   | $ | 284 |   |
| Adjustments                to reconcile net income to net cash provided by operating                activities: |   |                                                              |   |   |   |   |   |
| Depreciation                and amortization                                                                    |   |                                                              | 96     |   |   | 88 |   |
| Employee                stock-based compensation                                                                |   |                                                              | 74     |   |   | - |   |
| Deferred                income taxes                                                                            |   |                                                              | (50    | ) |   | (21 | ) |
| Deferred                revenue                                                                                 |   |                                                              | 10     |   |   | (9 | ) |
| Litigation-related                liabilities                                                                   |   |                                                              | 13     |   |   | 13 |   |
| Tax                benefit from employee stock options                                                          |   |                                                              | -      |   |   | 51 |   |
| Excess                tax benefit from stock-based compensation arrangements                                    |   |                                                              | (49    | ) |   | - |   |
| Gain                on sales of securities available-for-sale and other                                         |   |                                                              | (3     | ) |   | (1 | ) |
| Write-down                of securities available-for-sale and other                                            |   |                                                              | -      |   |   | 4 |   |
| Changes                in assets and liabilities:                                                               |   |                                                              |   |   |   |   |   |
| Receivables                and other current assets                                                             |   |                                                              | (96    | ) |   | (103 | ) |
| Inventories                                                                                                     |   |                                                              | (86    | ) |   | 25 |   |
| Investments                in trading securities                                                                |   |                                                              | (7     | ) |   | (1 | ) |
| Accounts                payable, other accrued liabilities, and other long-term                liabilities      |   |                                                              | 139    |   |   | 55 |   |
| **Net                cash provided by operating activities**                                                    |   |                                                              | 462    |   |   | 385 |   |
|                                                                                                            |   |                                                              |   |   |   |   |   |
| **Cash                flows from investing activities**                                                         |   |                                                              |   |   |   |   |   |
| Purchases                of securities available-for-sale                                                       |   |                                                              | (454   | ) |   | (72 | ) |
| Proceeds                from sales and maturities of securities available-for-sale                              |   |                                                              | 193    |   |   | 162 |   |
| Capital                expenditures                                                                             |   |                                                              | (253   | ) |   | (144 | ) |
| Change                in other assets                                                                           |   |                                                              | (13    | ) |   | (8 | ) |
| **Net                cash used in investing activities**                                                        |   |                                                              | (527   | ) |   | (62 | ) |
|                                                                                                            |   |                                                              |   |   |   |   |   |
| **Cash                flows from financing activities**                                                         |   |                                                              |   |   |   |   |   |
| Stock                issuances under employee stock plans                                                       |   |                                                              | 89     |   |   | 106 |   |
| Stock                repurchases                                                                                |   |                                                              | (227   | ) |   | (156 | ) |
| Excess                tax benefit from stock-based compensation arrangements                                    |   |                                                              | 49     |   |   | - |   |
| **Net                cash used in financing activities**                                                        |   |                                                              | (89    | ) |   | (50 | ) |
|                                                                                                            |   |                                                              |   |   |   |   |   |
| Net                (decrease) increase in cash and cash equivalents                                             |   |                                                              | (154   | ) |   | 273 |   |
| Cash                and cash equivalents at beginning of period                                                 |   |                                                              | 1,225  |   |   | 270 |   |
| **Cash                and cash equivalents at end of period**                                                   |   | $                                                                 | 1,071  |   | $ | 543 |   |
|                                                                                                            |   |                                                              |   |   |   |   |   |
| **Supplemental                cash flow data**                                                                  |   |                                                              |   |   |   |   |   |
| Non-cash                investing and financing activities                                                      |   |                                                              |   |   |   |   |   |
| Capitalization                of construction in progress related to financing lease                transaction |   | $                                                                 | 27     |   | $ | 44 |   |
| Exchange                of note receivable for a prepaid royalty and other long-term                asset       |   |                                                              | -      |   |   | 29 |   |

*See      Notes to Condensed Consolidated Financial Statements.*

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**GENENTECH,      INC.**

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

*(In      millions)*

*(Unaudited)*

|                                                                                                                                                                                       |   | **March                31,****2006** |   | **December                31,****2005** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|--------|-----------------------------------------|--------|
| **Assets**                                                                                                                                                                                 |   |                                 |   |                                    |   |
| Current                assets                                                                                                                                                              |   |                                 |   |                                    |   |
| Cash                and cash equivalents                                                                                                                                                   |   | $                                    | 1,071  |                                    | $      | 1,225 |   |
| Short-term                investments                                                                                                                                                      |   |                                 | 1,213  |                                    |   | 1,140 |   |
| Accounts                receivable—product sales (net of allowances:2006-$93;                2005-$83; including amounts from related parties:2006-$24;                2005-$4) |   |                                 | 615    |                                    |   | 554 |   |
| Accounts                receivable—royalties (including amounts from related                party:2006-$199;                2005-$173)                                          |   |                                 | 332    |                                    |   | 297 |   |
| Accounts                receivable—other (net of allowances:2006-$1;                2005-$1; including amounts from related parties:2006-$129;                2005-$132)             |   |                                 | 187    |                                    |   | 199 |   |
| Inventories                                                                                                                                                                                |   |                                 | 804    |                                    |   | 703 |   |
| Prepaid                expenses and other current assets                                                                                                                                   |   |                                 | 311    |                                    |   | 268 |   |
| Total                current assets                                                                                                                                                        |   |                                 | 4,533  |                                    |   | 4,386 |   |
| Long-term                marketable debt and equity securities                                                                                                                             |   |                                 | 1,658  |                                    |   | 1,449 |   |
| Property,                plant and equipment, net                                                                                                                                          |   |                                 | 3,565  |                                    |   | 3,349 |   |
| Goodwill                                                                                                                                                                                   |   |                                 | 1,315  |                                    |   | 1,315 |   |
| Other                intangible assets                                                                                                                                                     |   |                                 | 548    |                                    |   | 574 |   |
| Restricted                cash and investments                                                                                                                                             |   |                                 | 735    |                                    |   | 735 |   |
| Other                long-term assets                                                                                                                                                      |   |                                 | 358    |                                    |   | 339 |   |
| **Total                assets**                                                                                                                                                            |   | $                                    | 12,712 |                                    | $      | 12,147 |   |
|                                                                                                                                                                                       |   |                                 |   |                                    |   |   |   |
| **Liabilities                and stockholders’ equity**                                                                                                                              |   |                                 |   |                                    |   |   |   |
| Current                liabilities                                                                                                                                                         |   |                                 |   |                                    |   |   |   |
| Accounts                payable (including amounts to related parties:2006-$3;                2005-$1)                                                                                     |   | $                                    | 328    |                                    | $      | 339 |   |
| Deferred                revenue                                                                                                                                                            |   |                                 | 45     |                                    |   | 44 |   |
| Taxes                payable                                                                                                                                                               |   |                                 | 318    |                                    |   | 62 |   |
| Other                accrued liabilities (including amounts to related                parties:2006-$148;                2005-$132)                                                    |   |                                 | 1,059  |                                    |   | 1,215 |   |
| Total                current liabilities                                                                                                                                                   |   |                                 | 1,750  |                                    |   | 1,660 |   |
| Long-term                debt                                                                                                                                                              |   |                                 | 2,103  |                                    |   | 2,083 |   |
| Deferred                revenue                                                                                                                                                            |   |                                 | 229    |                                    |   | 220 |   |
| Litigation-related                and other long-term liabilities                                                                                                                          |   |                                 | 736    |                                    |   | 714 |   |
| Total                liabilities                                                                                                                                                           |   |                                 | 4,818  |                                    |   | 4,677 |   |
| Commitments                and contingencies                                                                                                                                               |   |                                 |   |                                    |   |   |   |
| Stockholders’                equity                                                                                                                                                  |   |                                 |   |                                    |   |   |   |
| Common                stock                                                                                                                                                                |   |                                 | 21     |                                    |   | 21 |   |
| Additional                paid-in capital                                                                                                                                                  |   |                                 | 9,468  |                                    |   | 9,263 |   |
| Accumulated                other comprehensive income                                                                                                                                      |   |                                 | 255    |                                    |   | 253 |   |
| Accumulated                deficit, since June 30, 1999                                                                                                                                    |   |                                 | (1,850 | )                                       |   | (2,067 | ) |
| Total                stockholders’ equity                                                                                                                                            |   |                                 | 7,894  |                                    |   | 7,470 |   |
| **Total                liabilities and stockholders’ equity**                                                                                                                        |   | $                                    | 12,712 |                                    | $      | 12,147 |   |

*See      Notes to Condensed Consolidated Financial Statements.*

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**GENENTECH,      INC.**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

***(Unaudited)***

| **Note                1.** | **Summary                of Significant Accounting                Policies** |
|----------------------------|------------------------------------------------------------------------------|

***Basis      of Presentation***

***Principles      of Consolidation***

***Use      of Estimates and Reclassifications***

***Earnings      Per Share***

*(in      millions)*

|                                                                                                                  |   | **Three                Months****Ended                March 31,** |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
|                                                                                                                  |   | **2006**                                                          |   | **2005** |   |
| **Numerator:**                                                                                                        |   |                                                              |   |   |   |
| Net                income                                                                                             |   | $                                                                 | 421    |   | $ | 284 |   |
| **Denominator:**                                                                                                      |   |                                                              |   |   |   |   |   |
| Weighted-average                shares outstanding used to compute basic EPS                                          |   |                                                              | 1,054  |   |   | 1,047 |   |
| Effect                of dilutive stock options                                                                       |   |                                                              | 21     |   |   | 20 |   |
| Weighted-average                shares outstanding and dilutive securities used to compute diluted                EPS |   |                                                              | 1,075  |   |   | 1,067 |   |

----

***Comprehensive      Income***

*(in      millions)*

|                                                                 |   | **March                31, 2006** |   | **December                31, 2005** |   |
|----------------------------------------------------------------------|--------|-----------------------------------|--------|--------------------------------------|--------|
| Net                unrealized gains on securities available-for-sale |   | $                                 | 233    |                                 | $      | 230 |   |
| Net                unrealized gains on cash flow hedges              |   |                              | 22     |                                 |   | 23 |   |
| Accumulated                other comprehensive income                |   | $                                 | 255    |                                 | $      | 253 |   |

*(in      millions)*

|                                                                                               |   | **Three                Months****Ended                March 31,** |   |
|----------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
|                                                                                               |   | **2006**                                                          |   | **2005** |   |
| Net                income                                                                          |   | $                                                                 | 421    |   | $ | 284 |   |
| Change                in unrealized gains (losses) on securities                available-for-sale |   |                                                              | 3      |   |   | (77 | ) |
| Change                in unrealized gains (losses) on derivatives                                  |   |                                                              | (1     | ) |   | 13 |   |
| Comprehensive                income                                                                |   | $                                                                 | 423    |   | $ | 220 |   |

***Derivative      Financial Instruments***

| **Note                2.** | **Employee                Stock-Based Compensation** |
|----------------------------|------------------------------------------------------|

----

***Employee      Stock Plans***

***Adoption      of FAS 123R***

*(in      millions, except for per share data):*

|                                                                                                                   |   | **Three                Months****Ended****March                31, 2006** |   |
|------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|
| Research                and development                                                                                |   | $                                                                         | 33     |   |
| Marketing,                general and administrative                                                                   |   |                                                                      | 41     |   |
| Total                employee stock-based compensation expense                                                         |   |                                                                      | 74     |   |
|     Tax                benefit related to employee stock-based compensation                expense |   |                                                                      | (27    | ) |
| Net                effect on net income                                                                                |   | $                                                                         | 47     |   |
| Effect                on earnings per share:                                                                           |   |                                                                      |   |   |
|     Basic                                                                                          |   | $                                                                         | 0.04   |   |
|     Diluted                                                                                        |   | $                                                                         | 0.04   |   |

----

*(In      millions, except for per share data)*

|                                                                                                                                                              |   | **Three                Months****Ended****March                31, 2006** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|
| Net                income as reported                                                                                                                             |   | $                                                                         | 421    |   |
| Deduct: Total                employee stock-based compensation expense includable in cost of sales,                net                of related tax effects |   |                                                                      | (8     | ) |
| Pro                forma net income                                                                                                                               |   | $                                                                         | 413    |   |
| Earnings                per share:                                                                                                                                |   |                                                                      |   |   |
| Basic-as                reported                                                                                                                                  |   | $                                                                         | 0.40   |   |
| Basic-pro                forma                                                                                                                                    |   | $                                                                         | 0.39   |   |
|                                                                                                                                                              |   |                                                                      |   |   |
| Diluted-as                reported                                                                                                                                |   | $                                                                         | 0.39   |   |
| Diluted-pro                forma                                                                                                                                  |   | $                                                                         | 0.38   |   |

***Pro      Forma Information for Period Prior to Adoption of FAS      123R***

*(In      millions, except for per share data)*

|                                                                                                                                                                                              |   | **Three                Months****Ended****March                31, 2005** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|
| Net                income as reported                                                                                                                                                             |   | $                                                                         | 284    |   |
| Deduct: Total                employee stock-based compensation expense determined under the fair                value                based method for all awards, net of related tax effects |   |                                                                      | (40    | ) |
| Pro                forma net income                                                                                                                                                               |   | $                                                                         | 244    |   |
| Earnings                per share:                                                                                                                                                                |   |                                                                      |   |   |
| Basic-as                reported                                                                                                                                                                  |   | $                                                                         | 0.27   |   |
| Basic-pro                forma                                                                                                                                                                    |   | $                                                                         | 0.23   |   |
|                                                                                                                                                                                              |   |                                                                      |   |   |
| Diluted-as                reported                                                                                                                                                                |   | $                                                                         | 0.27   |   |
| Diluted-pro                forma                                                                                                                                                                  |   | $                                                                         | 0.22   |   |

----

***Valuation      Assumptions***

|                                   |   | **Three                Months****Ended                March 31,** |   |
|----------------------------------------|--------|-------------------------------------------------------------------|--------|
|                                   |   | **2006**                                                          |   | **2005** |   |
| Risk-free                interest rate |   |                                                              | 4.6    | % |   | 4.0 | % |
| Dividend                yield          |   |                                                              | 0.0    | % |   | 0.0 | % |
| Expected                volatility     |   |                                                              | 29.0   | % |   | 32.0 | % |
| Expected                term (years)   |   |                                                              | 4.2    |   |   | 4.2 |   |

***Stock      Option Activity***

*(shares      in millions)*

|                                      |   |                                                |   | **Options                Outstanding** |   |
|-------------------------------------------|--------|-----------------------------------------------------|--------|----------------------------------------|--------|
|                                      |   | **Shares****Available****for                Grant** |   | **Number                of****Shares** |   | **Weighted-****Average****Exercise                Price** |   |
| **December 31,                2005** |   |                                                | 84     |                                   |   | 83 |   | $ | 46.64 |   |
| Grants                                    |   |                                                | (1     | )                                      |   | 1 |   |   | 88.10 |   |
| Exercises                                 |   |                                                | -      |                                   |   | (2 | ) |   | 30.38 |   |
| Cancellations                             |   |                                                | 1      |                                   |   | (1 | ) |   | 57.63 |   |
| **March                31, 2006**         |   |                                                | 84     |                                   |   | 81 |   | $ | 47.43 |   |

----

*(in      millions, except exercise price data)*

|                                                          |   | **Options                Outstanding**                |   | **Options                Exercisable**                                                        |   |
|---------------------------------------------------------------|--------|-------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------|--------|
| **Range                of****Exercise                Prices** |   | **Number****of                Shares****Outstanding** |   | **Weighted-Average****Remaining****Contractual                Life**(in                years) |   | **Weighted-Average****Exercise                Price** |   | **Number****of                Shares****Outstanding** |   | **Weighted-Average****Remaining****Contractual                Life**(in                years) |   | **Weighted-Average****Exercise                Price** |   |
| $6.27 - $8.89                                       |   |                                                  | 0.5    |                                                                                          |   | 5.61 |   | $ | 7.71 |   |   | 0.5 |   |   | 5.61 |   | $ | 7.71 |   |
| $10.00 - $14.35                                     |   |                                                  | 13.7   |                                                                                          |   | 5.68 |   | $ | 13.73 |   |   | 11.2 |   |   | 5.51 |   | $ | 13.61 |   |
| $15.04 - $22.39                                     |   |                                                  | 9.0    |                                                                                          |   | 5.09 |   | $ | 20.82 |   |   | 8.7 |   |   | 5.04 |   | $ | 20.91 |   |
| $22.88 - $33.00                                     |   |                                                  | 0.3    |                                                                                          |   | 5.07 |   | $ | 27.53 |   |   | 0.3 |   |   | 5.07 |   | $ | 27.53 |   |
| $35.63 - $53.23                                     |   |                                                  | 36.9   |                                                                                          |   | 7.53 |   | $ | 46.79 |   |   | 18.0 |   |   | 6.93 |   | $ | 44.71 |   |
| $53.95 - $75.90                                     |   |                                                  | 1.5    |                                                                                          |   | 8.53 |   | $ | 59.26 |   |   | 0.5 |   |   | 8.34 |   | $ | 56.09 |   |
| $81.15 - $98.80                                     |   |                                                  | 18.9   |                                                                                          |   | 9.49 |   | $ | 86.12 |   |   | - |   |   | 9.54 |   | $ | 86.04 |   |
|                                                          |   |                                                  | 80.8   |                                                                                          |   |   |   |   |   |   |   | 39.2 |   |   |   |   |   |   |   |

***Stock      Repurchase Program***

| **Note                3.** | **Condensed                Consolidated Financial Statement                Detail** |
|----------------------------|-------------------------------------------------------------------------------------|

***Inventories***

*(in      millions)*

|                                      |   | **March                31, 2006** |   | **December                31, 2005** |   |
|-------------------------------------------|--------|-----------------------------------|--------|--------------------------------------|--------|
| Raw                materials and supplies |   | $                                 | 89     |                                 | $      | 79 |   |
| Work                in process            |   |                              | 463    |                                 |   | 438 |   |
| Finished                goods             |   |                              | 252    |                                 |   | 186 |   |
| Total                                     |   | $                                 | 804    |                                 | $      | 703 |   |

----

| **Note                4.** | **Contingencies** |
|----------------------------|-------------------|

** **

----

| **Note                5.** | **Relationship                with Roche and Related Party                Transactions** |
|----------------------------|------------------------------------------------------------------------------------------|

***Roche’s      Ability to Maintain Its Percentage Ownership Interest in Our      Stock***
** **

**Related      Party Transactions **

----

***Hoffmann-La      Roche***

** **
** **

***Novartis***

** **

| **Note                6.** | **Income                Taxes** |
|----------------------------|---------------------------------|

----

| **Note                7.** | **Subsequent                Event** |
|----------------------------|-------------------------------------|

***Stock      Repurchase Program***

----

**Report      of Independent Registered Public Accounting Firm**

*The      Board of Directors and Stockholders of Genentech, Inc.*

|   | /s/ ERNST                & YOUNG LLP |
|--------|-----------------------------------------------|

----

**Item      2.  **
**Management’s      Discussion and Analysis of Financial Condition and Results of      Operations**

**GENENTECH,      INC.**

**FINANCIAL      REVIEW**

**Overview**

***The      Company***

***Major      Developments in the First Quarter of 2006***

*We      received the following U.S. Food and Drug Administration (or “FDA”)      approvals:*

| ·   | Rituxan                - for use in first-line treatment of patients with diffuse large                B-cell,                CD20-positive, non-Hodgkin’s                lymphoma (or “DLBCL”);                and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Rituxan                - to treat patients with active rheumatoid arthritis (or “RA”) who have                had an inadequate response to tumor necrosis factor antagonist therapy. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*We      submitted the following FDA filings:*

| ·   | a                Supplemental Biologics License Application (or “sBLA”) for use of                Herceptin to treat early-stage, HER2-positive breast                cancer; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | with                Biogen Idec, an sBLA for use of Rituxan to treat indolent front-line                non-Hodgkin’s lymphoma (or “NHL”);                and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | on                April 11, 2006, an sBLA for use of Avastin in first-line treatment                of                advanced, non-squamous, non-small cell lung                cancer. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

***Our      Strategy***

| ·   | To                bring at least 20 new molecules into clinical                development. |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | To                bring at least 15 major new products or indications onto the                market. |
|--------------------|-------------------------------------------------------------------------------------------------------|

| ·   | To                become the number one U.S. oncology company in                sales. |
|--------------------|----------------------------------------------------------------------------------------|

| ·   | To                achieve compound annual non-GAAP earnings per share(1)                growth of 25 percent. |
|--------------------|---------------------------------------------------------------------------------------------------------------|

| ·   | To                achieve cumulative free cash flow(2)                of $12 billion. |
|--------------------|---------------------------------------------------------------------------------------|

|            | Non-GAAP                financial goals are included because our management uses non-GAAP                financial measures to monitor and evaluate Genentech’s operating results                and trends on an ongoing basis and to facilitate internal comparison                to                historical operating results. Excluding the effects of charges related                to                employee stock-based compensation expense, Roche’s redemption of our                special common stock, litigation, and changes in accounting principles                from our operating results provides users of our financial statements                an                important insight into our operating results and related trends that                affect our business. In addition, our management uses non-GAAP financial                information and measures internally for operating, budgeting and                financial                planning purposes, including the establishment of corporate, functional,                departmental and individual performance goals. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)   | The                non-GAAP EPS goal for 2006 through 2010 excludes the after-tax effect                of                the following items: employee stock-based compensation expense associated                with our adoption of FAS 123R, recurring charges related to the redemption                of our special common stock by Roche, litigation-related special                charges                for accrued interest and associated bond costs on the City of Hope                judgment and other potential special charges related to existing                or future                litigation or its resolution, and changes in accounting principles,                all of                which may be significant. GAAP EPS for 2006 through 2010 will include                the                items described above.                                                                                                                                                                                                                                                                                  |
| (2)   | Our                free cash flow measure is defined as cash from ongoing operations                less                gross capital expenditures. Cash from ongoing operations is derived                from                the “net cash provided by operating activities” line in our consolidated                statements of cash flows, but this number may be adjusted for items                that                would allow the measure to better reflect our operational performance.                These adjustments include, for example, cash receipts or payments                related                to litigation settlements, investments in trading securities and                other                potential items, any of which may be                significant.                                                                                                                                                                                                                                                                                                                           |

***Economic      and Industry-wide Factors***

| ·   | Successful                development of biotherapeutics is highly difficult and uncertain.                Our                long-term business growth depends upon our ability to commercialize                important new therapeutics to treat unmet medical needs such as cancer.                Since the underlying biology of these diseases is not completely                understood, it is very challenging to discover and develop safe and                effective treatments, and the majority of potential new therapeutics                fail                to generate the safety and efficacy data required to obtain regulatory                approval. In addition, we face tremendous competition in the diseases                of                interest to us. Our business requires significant investments in                research                and development (or “R&D”)                over many years, often for products that fail during the R&D process.                In addition, after our products receive FDA approval, they remain                subject                to ongoing FDA regulation, including changes to the product label,                new or                revised regulatory requirements for manufacturing practices, written                advisement to physicians, and/or product                recalls. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Intellectual                property protection of our products is crucial to our business. Loss                of                effective intellectual property protection on one or more products                could                result in lost sales to competing products and may negatively affect                our                sales, royalty revenues and operating results. We are often involved                in                disputes over contracts and intellectual property and we work to                resolve                these disputes in confidential negotiations or litigation. We expect                legal                challenges in this area to continue. We plan to continue to build                upon and                defend our intellectual property                position. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Manufacturing                biotherapeutics is difficult and complex, and requires facilities                specifically designed and validated to run biotechnology production                processes. The manufacture of a biotherapeutic requires developing                and                maintaining a process to reliably manufacture and formulate the product                at                an appropriate scale, obtaining regulatory approval to manufacture                the                product, and is subject to changes in regulatory requirements or                standards                that may require modifications to the manufacturing process or FDA                action                (see “Difficulties or delays in product manufacturing or in obtaining                materials from our suppliers could harm our business and/or negatively                affect our financial performance” of “Risk Factors” in Part II, Item 1A of                this Form 10-Q). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                Medicare                Prescription Drug Improvement and Modernization Act                (or “Medicare Act”) was enacted into law in December 2003 and on November                3, 2004, the 2005 Physician Fee Schedule and Hospital Outpatient                Prospective Payment System Final Rules were announced. As                Centers                for Medicare and Medicaid Services (or “CMS”)                is our single largest payer, the new rules continue to represent                an                important area of focus. To                date, we have not seen any detectable effects of the new rules on                our                product sales, and we anticipate minimal effects on our revenues                in 2006.                On November 2, 2005, CMS released its Final Rule with comment on                the                Medicare Part B Competitive Acquisition Program (or “CAP”). The CAP                option, which the CMS expects to begin in July 2006, required under                the                Medicare Act, will be available to physicians providing services                under                Part B of Medicare. Under the CAP, physicians could choose to either                obtain drugs directly from qualified CAP vendors, or continue to                purchase                drugs directly and be reimbursed by CMS at the Average Selling Price                + 6%                rate. Although CMS is still finalizing details of the program, we                anticipate that the impact of the program on our sales will be                minimal. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our                ability to attract and retain highly qualified and talented people                in all                areas of the company, and our ability to maintain our unique culture,                will                be critical to our success over the long-term. In the first quarter                of                2006 we grew to over 10,000 employees. We are working diligently                across                the company to make sure that we successfully hire, train and integrate                new employees into the Genentech culture and                environment. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Marketed      Products **

*Avastin*

*Rituxan      *

*Herceptin      *

----

*Tarceva      *

*Xolair*

*Raptiva*

*Nutropin      *
*Nutropin      AQ *

*Activase      *

*TNKase      *

*Cathflo      Activase *

*Pulmozyme      *

**Licensed      Products**

| ·   | Herceptin,                Pulmozyme, and Avastin outside of the U.S., |
|--------------------|-----------------------------------------------------------------------|

| ·   | Rituxan                outside of the U.S., excluding Japan,                and |
|--------------------|---------------------------------------------------------------------------------|

| ·   | Nutropin                products, Activase and TNKase in Canada. |
|--------------------|------------------------------------------------------------------|

**Available      Information**

| ·   | our                annual report on Form 10-K, quarterly reports on Form 10-Q, current                reports on Form 8-K, and all amendments to those reports as soon                as                reasonably practicable after such material is electronically filed                with                the Securities and Exchange Commission; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | our                policies related to corporate governance, including Genentech’s                Principles                of Corporate Governance, Good                Operating Principles (Genentech’s code of ethics applying to Genentech’s                directors, officers and employees) as well as Genentech’s Code of Ethics                applying to our CEO, CFO and senior financial officials                and; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                charter of the Audit Committee of our Board of Directors. |
|--------------------|------------------------------------------------------------------------------|

**Critical      Accounting Policies and the Use of Estimates **

***Legal      Contingencies***

** **

***Product      Sales Allowances***

----

***Royalties***

***Income      Taxes***

***Inventories***

***Employee      Stock-Based Compensation—Adoption of FAS 123R***

----

----

**Results      of Operations**

*(In      millions)*

|                                                                              |   | **Three                Months****Ended                March 31,** |   |     |   |
|-----------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|----------|--------|
|                                                                              |   | **2006**                                                          |   | **2005** |   | **%                Change** |   |
| Product                sales                                                      |   | $                                                                 | 1,644  |     | $      | 1,186 |   |   | 39 | % |
| Royalties                                                                         |   |                                                              | 286    |     |   | 232 |   |   | 23 |   |
| Contract                revenue                                                   |   |                                                              | 56     |     |   | 44 |   |   | 27 |   |
| Total                operating revenues                                           |   |                                                              | 1,986  |     |   | 1,462 |   |   | 36 |   |
|                                                                              |   |                                                              |   |     |   |   |   |   |   |   |
| Cost                of sales                                                      |   |                                                              | 262    |     |   | 256 |   |   | 2 |   |
| Research                and development                                           |   |                                                              | 374    |     |   | 243 |   |   | 54 |   |
| Marketing,                general and administrative                              |   |                                                              | 441    |     |   | 310 |   |   | 42 |   |
| Collaboration                profit sharing                                       |   |                                                              | 226    |     |   | 176 |   |   | 28 |   |
| Recurring                charges related to redemption                            |   |                                                              | 26     |     |   | 35 |   |   | (26 | ) |
| Special                items: litigation-related                             |   |                                                              | 13     |     |   | 11 |   |   | 18 |   |
| Total                costs and expenses                                           |   |                                                              | 1,342  |     |   | 1,031 |   |   | 30 |   |
|                                                                              |   |                                                              |   |     |   |   |   |   |   |   |
| Operating                income                                                   |   |                                                              | 644    |     |   | 431 |   |   | 49 |   |
|                                                                              |   |                                                              |   |     |   |   |   |   |   |   |
| Other                income (expense):                                            |   |                                                              |   |     |   |   |   |   |   |   |
| Interest                and other income, net                                     |   |                                                              | 53     |     |   | 18 |   |   | 194 |   |
| Interest                expense                                                   |   |                                                              | (19    | )        |   | (3 | ) |   | 533 |   |
| Total                other income, net                                            |   |                                                              | 34     |     |   | 15 |   |   | 127 |   |
|                                                                              |   |                                                              |   |     |   |   |   |   |   |   |
| Income                before taxes                                                |   |                                                              | 678    |     |   | 446 |   |   | 52 |   |
| Income                tax provision                                               |   |                                                              | 257    |     |   | 162 |   |   | 59 |   |
| Net                income                                                         |   | $                                                                 | 421    |     | $      | 284 |   |   | 48 |   |
|                                                                              |   |                                                              |   |     |   |   |   |   |   |   |
| Earnings                per share:                                                |   |                                                              |   |     |   |   |   |   |   |   |
| Basic                                                                             |   | $                                                                 | 0.40   |     | $      | 0.27 |   |   | 48 |   |
| Diluted                                                                           |   | $                                                                 | 0.39   |     | $      | 0.27 |   |   | 44 |   |
|                                                                              |   |                                                              |   |     |   |   |   |   |   |   |
| Pretax                operating margin                                            |   |                                                              | 32     | %        |   | 29 | % |   |   |   |
| Cost                of sales as a % of product sales                              |   |                                                              | 16     |     |   | 22 |   |   |   |   |
| Research                and development as a % of operating revenues              |   |                                                              | 19     |     |   | 17 |   |   |   |   |
| Marketing,                general and administrative as a % of operating revenues |   |                                                              | 22     |     |   | 21 |   |   |   |   |
| Net                income as a % of operating revenues                            |   |                                                              | 21     |     |   | 19 |   |   |   |   |

|   | Percentages                in this table and throughout management’s discussion and analysis of                financial condition and results of operations may reflect rounding                adjustments. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Total      Operating Revenues***

----

***Total      Product Sales***

*(In      millions)*

|                                              |   | **Three                Months****Ended                March 31,** |   |     |   |
|---------------------------------------------------|--------|-------------------------------------------------------------------|--------|----------|--------|
|                                              |   | **2006**                                                          |   | **2005** |   | **%                Change** |   |
| Net                U.S. Product Sales             |   |                                                              |   |     |   |   |   |
| Rituxan                                           |   | $                                                                 | 477    |     | $      | 440 |   |   | 8 | % |
| Avastin                                           |   |                                                              | 398    |     |   | 203 |   |   | 96 |   |
| Herceptin                                         |   |                                                              | 290    |     |   | 130 |   |   | 123 |   |
| Tarceva                                           |   |                                                              | 93     |     |   | 48 |   |   | 94 |   |
| Xolair                                            |   |                                                              | 95     |     |   | 65 |   |   | 46 |   |
| Raptiva                                           |   |                                                              | 21     |     |   | 17 |   |   | 24 |   |
| Nutropin                products                  |   |                                                              | 87     |     |   | 90 |   |   | (3 | ) |
| Thrombolytics                                     |   |                                                              | 59     |     |   | 50 |   |   | 18 |   |
| Pulmozyme                                         |   |                                                              | 49     |     |   | 44 |   |   | 11 |   |
| Total                U.S. product sales           |   | $                                                                 | 1,569  |     | $      | 1,087 |   |   | 44 |   |
|                                              |   |                                                              |   |     |   |   |   |   |   |   |
| Net                product sales to collaborators |   |                                                              | 75     |     |   | 99 |   |   | (24 | ) |
| Total                product sales                |   | $                                                                 | 1,644  |     | $      | 1,186 |   |   | 39 |   |

** **
** **
** **

*Avastin*

----

*Rituxan*

** **

*Herceptin*

** **

*Tarceva*

*Xolair*

*Raptiva*

----

*Nutropin      Products*

*Thrombolytics*

*Pulmozyme*

*Product      Distribution—Changes in Commercial Terms*

*Sales      to Collaborators*

***Royalties***

----

***Contract      Revenues***

***Cost        of Sales***

***Research      and Development***

----

*(in      millions)*

|                                                          |   | **Three                Months****Ended                March 31,** |   |     |   |
|---------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|----------|--------|
| **Research                and Development**                   |   | **2006**                                                          |   | **2005** |   | **%                Change** |   |
| Product                development (including post marketing) |   | $                                                                 | 283    |     | $      | 178 |   |   | 59 | % |
| Research                                                      |   |                                                              | 74     |     |   | 53 |   |   | 40 |   |
| In-licensing                                                  |   |                                                              | 17     |     |   | 12 |   |   | 42 |   |
| Total                R&D                                  |   | $                                                                 | 374    |     | $      | 243 |   |   | 54 |   |

***Marketing,      General and Administrative***

***Collaboration      Profit Sharing***

***Recurring      Charges Related to Redemption***

***Special      Items: Litigation-Related***

***Operating      Income***

----

***Other      Income, Net***

|                                                                          |   | **Three                Months****Ended                March 31,** |   |     |   |
|-------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|----------|--------|
| **Other                Income, Net**                                          |   | **2006**                                                          |   | **2005** |   | **%                Change** |   |
|                                                                          |   | *(In                millions)*                                    |   |     |   |
| Gains                on sales of biotechnology equity securities and other    |   | $                                                                 | 3      |     | $      | 1 |   |   | 200 | % |
| Write-downs                of biotechnology debt, equity securities and other |   |                                                              | -      |     |   | (4 | ) |   | (100 | ) |
| Interest                income                                                |   |                                                              | 49     |     |   | 21 |   |   | 133 |   |
| Interest                expense                                               |   |                                                              | (19    | )        |   | (3 | ) |   | 533 |   |
| Other                miscellaneous income                                     |   |                                                              | 1      |     |   | - |   |   | - |   |
| Total                other income, net                                        |   | $                                                                 | 34     |     | $      | 15 |   |   | 127 |   |

***Income      Tax Provision***

**Liquidity      and Capital Resources**

| **Liquidity                  and Capital Resources**                                                                                                                                                |   | **March 31,****2006**       |   | **December 31,****2005** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|-------------------------------|--------|
|                                                                                                                                                                                                |   | *(In                  millions)* |   |
| Unrestricted                  cash, cash equivalents, short-term investments and long-term marketable                  debt and equity securities                                                   |   | $                                | 3,942  |                          | $      | 3,814 |   |
| Net                  receivable - equity hedge instruments                                                                                                                                          |   |                             | 66     |                          |   | 73 |   |
| Total                  unrestricted cash, cash equivalents, short-term investments, long-term                  marketable debt and equity securities, and equity hedge                  instruments |   | $                                | 4,008  |                          | $      | 3,887 |   |
| Working                  capital                                                                                                                                                                    |   | $                                | 2,783  |                          | $      | 2,726 |   |
| Current                  ratio                                                                                                                                                                      |   |                             | 2.6:1  |                          |   | 2.6:1 |   |

----

***Cash      Provided by Operating Activities***

***Cash      Used in Investing Activities***

***Cash      Used in Financing Activities***

----

*      (shares in millions)*

|                               |   | **Total                Number of****Shares                Purchased****in                2006** |   | **Average                Price Paid****per                Share** |   | **Total                Number of****Shares                Purchased as****Part                of Publicly****Announced                Plans or****Programs** |   | **Maximum                Number****of                Shares that May****Yet                Be Purchased****Under                the Plans or****Programs** |   |
|------------------------------------|--------|-------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| January                1-31, 2006  |   |                                                                                            | 0.9    |                                                              | $      | 88.37                                                                                                                                                        |   |                                                                                                                                                       |   |   |   |   |   |
| February                1-28, 2006 |   |                                                                                            | 0.7    |                                                              |   | 85.31                                                                                                                                                        |   |                                                                                                                                                       |   |   |   |   |   |
| March                1-31, 2006    |   |                                                                                            | 1.0    |                                                              |   | 84.24                                                                                                                                                        |   |                                                                                                                                                       |   |   |   |   |   |
| Total                              |   |                                                                                            | 2.6    |                                                              | $      | 85.95                                                                                                                                                        |   |                                                                                                                                                       | 52     |   |   | 48 |   |

**Off-Balance      Sheet Arrangements**

***Leases***

----

***Contractual      Obligations***

**Contingencies**

**Relationship      with Roche**

***Redemption      of Our Special Common Stock***

***Roche’s      Ability to Maintain Its Percentage Ownership Interest in Our      Stock***

**Related      Party Transactions**

----

***Hoffmann-La      Roche***

***Novartis***

** **

**Stock      Options**

***Option      Program Description***

----

***General      Option Information***

***Summary      of Option Activity***

*(Shares      in millions)*

|                                                  |   |                                                            |   | **Options                Outstanding** |   |
|-------------------------------------------------------|--------|-----------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                  |   | **Shares                Available****for                Grant** |   | **Number                of****Shares** |   | **Weighted-Average****Exercise                Price** |   |
| **December 31,                2004**             |   |                                                            | 102    |                                   |   | 94 |   | $ | 32.32 |   |
| Grants                                                |   |                                                            | (20    | )                                      |   | 20 |   |   | 84.01 |   |
| Exercises                                             |   |                                                            | -      |                                   |   | (29 | ) |   | 25.88 |   |
| Cancellations                                         |   |                                                            | 2      |                                   |   | (2 | ) |   | 42.16 |   |
| **December 31,                2005**             |   |                                                            | 84     |                                   |   | 83 |   | $ | 46.64 |   |
| Grants                                                |   |                                                            | (1     | )                                      |   | 1 |   |   | 88.10 |   |
| Exercises                                             |   |                                                            | -      |                                   |   | (2 | ) |   | 30.38 |   |
| Cancellations                                         |   |                                                            | 1      |                                   |   | (1 | ) |   | 57.63 |   |
| **March 31,                2006 (Year to date)** |   |                                                            | 84     |                                   |   | 81 |   | $ | 47.43 |   |

***In-the-Money      and Out-of-the-Money Option Information***

*(Shares      in millions)*

|                                     |   | **Exercisable** |   | **Unexercisable**                         |   | **Total**  |   |
|------------------------------------------|--------|-----------------|--------|-------------------------------------------|--------|------------|--------|
| **As                of March 31, 2006**  |   | **Shares**      |   | **Weighted-Average****Exercise****Price** |   | **Shares** |   | **Weighted-Average****Exercise****Price** |   | **Shares** |   | **Weighted-Average****Exercise****Price** |   |
| In-the-Money                             |   |            | 39     |                                      | $      | 30.06      |   |   | 24 |   | $ | 46.60 |   |   | 63 |   | $ | 36.28 |   |
| Out-of-the-Money(1)                      |   |            | -      |                                      |   | -          |   |   | 18 |   |   | 86.33 |   |   | 18 |   |   | 86.33 |   |
| Total                Options Outstanding |   |            | 39     |                                      |   |       |   |   | 42 |   |   |   |   |   | 81 |   |   |   |   |

| (1) | Out-of-the-money                options are those options with an exercise price equal to or greater                than                the fair market value of Genentech Common Stock, $84.51, at the close                of                business on March 31, 2006. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Dilutive      Effect of Options***

***Equity      Compensation Plan Information***

----

----

**Item      3.  **
**Quantitative      and Qualitative Disclosures About Market Risk**

**Item      4.  **
**Controls      and Procedures**

*Evaluation      of Disclosure Controls and Procedures*

*Changes      in Internal Controls over Financial Reporting*

----

**PART      II—OTHER INFORMATION**

**Item      1.  **
**Legal      Proceedings**

**Item      1A.  **
**Risk      Factors**

**The      successful development of biotherapeutics is highly uncertain and requires      significant expenditures**

| ·   | Preclinical                tests may show the product to be toxic or lack efficacy in animal                models. |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

| ·   | Clinical                trial results may show the product to be less effective than desired                or to                have harmful or problematic side                effects. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Failure                to receive the necessary regulatory approvals or a delay in receiving                such                approvals. Among other things, such delays may be caused by slow                enrollment in clinical studies, extended length of time to achieve                study                endpoints, additional time requirements for data analysis or Biologic                Licensing Application (or “BLA”) preparation, discussions with the U.S.                Food and Drug Administration (or “FDA”), an FDA request for additional                preclinical or clinical data, or unexpected safety, efficacy or                manufacturing issues. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Difficulties                formulating the product, scaling the manufacturing process or in                getting                approval for manufacturing. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Manufacturing                costs, pricing or reimbursement issues, or other factors that make                the                product uneconomical. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                proprietary rights of others and their competing products and technologies                that may prevent the product from being developed or                commercialized. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | The                number of and the outcome of clinical trials currently being conducted                by                us and/or our collaborators. For example, our R&D expenses may                increase based on the number of late-stage clinical trials being                conducted                by us and/or our collaborators. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                number of products entering into development from late-stage research.                For                example, there is no guarantee that internal research efforts will                succeed                in generating sufficient data for us to make a positive development                decision or that an external candidate will be available on terms                acceptable to us. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Decisions                by F. Hoffmann-La Roche                (or “Hoffmann-La Roche”) 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                reimbursements. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In-licensing                activities, including the timing and amount of related development                funding                or milestone payments. For example, we may enter into agreements                requiring                us to pay a significant upfront fee for the purchase of in-process                R&D, which we may record as an R&D                expense. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Participation                in a number of collaborative research arrangements. On many of these                collaborations, our share of expenses recorded in our financial statements                is subject to volatility based on our collaborators’ spending activities                as well as the mix and timing of activities between the                parties. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Charges                incurred in connection with expanding our product manufacturing                capabilities, as described in “Difficulties or delays in product                manufacturing or in obtaining materials from our suppliers could                harm our                business and/or negatively affect our financial performance”                below. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Future                levels of revenue. |
|--------------------|------------------------------------------|

**We      may be unable to obtain or maintain regulatory approvals for our      products**

| ·   | Significant                delays in obtaining or failing to obtain required approvals as described                in “The successful development of biotherapeutics is highly uncertain                and                requires significant expenditures”above. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Loss                of, or changes to, previously obtained approvals, including those                resulting from post-approval safety or efficacy                issues. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Failure                to comply with existing or future regulatory                requirements. |
|--------------------|--------------------------------------------------------------------------------------------------|

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| ·   | Changes                to manufacturing processes, manufacturing process standards or Good                Manufacturing Practices following approval or changing interpretations                of                these factors. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Difficulties      or delays in product manufacturing or in obtaining materials from our suppliers      could harm our business and/or negatively affect our financial      performance**

| ·   | the                inability of a supplier to provide raw materials used for manufacture                of                our products; equipment obsolescence, malfunctions or                failures; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | product                contamination problems; |
|--------------------|------------------------------------------------|

| ·   | damage                to a facility, including our warehouses and distribution facilities,                due                to natural disasters, including, but not limited to, earthquakes                as our                South San Francisco, Oceanside and Vacaville facilities are located                in                areas where earthquakes could                occur; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | changes                in FDA regulatory requirements or standards that require modifications                to                our manufacturing processes; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | action                by the FDA or by us that results in the halting or slowdown of production                of one or more of our products or products we make for others due                to                regulatory issues; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                contract manufacturer going out of business or failing to produce                product                as contractually required; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | other                similar factors. |
|--------------------|---------------------------------------|

**We      face competition**

*Avastin:*

*Rituxan: *

----

*Herceptin: *

*Tarceva: *

*Xolair: *

*Raptiva: *

*Nutropin:*

*Thrombolytics:*

*Pulmozyme: *

*Lucentis:*

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**Decreases      in third party reimbursement rates may affect our product sales, results of      operations and financial condition**

** **

**Protecting      our proprietary rights is difficult and costly**

**If      there is an adverse outcome in our pending litigation or other legal actions      our      business may be harmed**

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**We      may be unable to manufacture certain of our products if there is BSE      contamination of our bovine source raw material**

**We      may be unable to retain skilled personnel and maintain key      relationships**

**Other      factors could affect our product sales**

| ·   | The                timing of FDA approval, if any, of competitive                products. |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | Our                pricing decisions, including a decision to increase or decrease the                price                of a product, as well as the pricing decisions of our competitors,                any of                which could affect the utilization of our                products. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | Government                  and third-party payer reimbursement and coverage decisions that                  affect the                  utilization of our products and competing                  products. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Negative                  safety or efficacy data from new clinical studies conducted either                  in the                  U.S. or internationally by any party could cause the sales of our                  products                  to decrease or a product to be recalled. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Negative                  safety or efficacy data from post-approval marketing experience                  could                  cause sales of our products to decrease or a product to be                  recalled. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                  degree of patent protection afforded our products by patents granted                  to us                  and by the outcome of litigation involving our                  patents. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                  outcome of litigation involving patents of other companies concerning                  our                  products or processes related to production and formulation of                  those                  products or uses of those products. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                  increasing use and development of alternate                  therapies. |
|--------------------|----------------------------------------------------------------------------------------------|
| ·   | The                  rate of market penetration by competing                  products. |
|--------------------|-----------------------------------------------------------------------------------------|
| ·   | Our                  distribution strategy, including the termination of, or change                  in, an                  existing arrangement with any major wholesalers who supply our                  products. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Our          results of operations are affected by our royalty and contract          revenues**

| ·   | 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                  expiration or termination of existing arrangements with other companies                  and Hoffmann-La Roche, which may include development and marketing                  arrangements for our products in the U.S., Europe and other countries                  outside the U.S. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                  timing of non-U.S. approvals, if any, for products licensed to                  Hoffmann-La                  Roche and to other licensees. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Fluctuations                  in foreign currency exchange rates. |
|--------------------|-------------------------------------------------------------------|
| ·   | The                  initiation of new contractual arrangements with other                  companies. |
|--------------------|--------------------------------------------------------------------------------------------------------|
| ·   | Whether                  and when contract milestones are                  achieved. |
|--------------------|--------------------------------------------------------------------------------------|
| ·   | The                  failure of or refusal of a licensee to pay                  royalties. |
|--------------------|---------------------------------------------------------------------------------------------|

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| ·   | The                  expiration or invalidation of our patents or licensed intellectual                  property. For example, patent litigations, interferences, oppositions,                  and                  other proceedings involving our patents often include claims by                  third-parties that such patents are invalid or unenforceable. If                  a court,                  patent office, or other authority were to determine that a patent                  under                  which we receive royalties and/or other revenues is invalid or                  unenforceable, that determination could cause us to suffer a loss                  of such                  royalties and/or revenues, and could cause us to incur other monetary                  damages. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Decreases                  in licensees’ sales of product due to competition, manufacturing                  difficulties or other factors that affect the sales of                  product. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Our          affiliation agreement with Roche Holdings, Inc. could adversely affect          our cash          position**

**Our          affiliation agreement with Roche could limit our ability to make          acquisitions**

| ·   | Require                  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. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Enable                  Roche to maintain its percentage ownership interest in our Common                  Stock. |
|--------------------|-------------------------------------------------------------------------------------------------------------------|
| ·   | Require                  us to establish a stock repurchase program designed to maintain                  Roche’s                  percentage ownership interest in our Common Stock based on an established                  Minimum Percentage. For information regarding Minimum Percentage,                  see Note                  5, “Relationship with Roche and Related Party Transactions,” in the Notes                  to Condensed Consolidated Financial Statements in Part I, Item                  1 of this                  Form 10-Q. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Future          sales of our Common Stock by Roche could cause the price of our Common          Stock to          decline**

**Roche          Holdings, Inc., our controlling stockholder, may seek to influence our          business          in a manner that is adverse to us or adverse to other stockholders who          may be          unable to prevent actions by Roche**

----

**We          may incur material product liability costs**

**Insurance          coverage is increasingly more difficult and costly to obtain or          maintain**

**We          are subject to environmental and other risks**

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**Fluctuations          in our operating results could affect the price of our Common          Stock**

| ·   | The                  overall competitive environment for our products as described in“We face                  competition” above. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                  amount and timing of sales to customers in the U.S. For example,                  sales of                  a product may increase or decrease due to pricing changes, fluctuations                  in                  distributor buying patterns or sales initiatives that we may undertake                  from time to time. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                  amount and timing of our sales to Hoffmann-La Roche and our other                  collaborators of products for sale outside of the U.S. and the                  amount and                  timing of sales to their respective customers, which directly impacts                  both                  our product sales and royalty revenues. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                  timing and volume of bulk shipments to                  licensees. |
|--------------------|-----------------------------------------------------------------------------------------|
| ·   | The                  availability and extent of government and private third-party                  reimbursements for the cost of therapy. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                  extent of product discounts extended to                  customers. |
|--------------------|------------------------------------------------------------------------------------------|
| ·   | The                  effectiveness and safety of our various products as determined                  both in                  clinical testing and by the accumulation of additional information                  on each                  product after the FDA approves it for                  sale. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                  rate of adoption by physicians and use of our products for approved                  indications and additional indications. Among other things, the                  rate of                  adoption by physicians and use of our products may be affected                  by results                  of clinical studies reporting on the benefits or risks of a                  product. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                  potential introduction of new products and additional indications                  for                  existing products. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                  ability to successfully manufacture sufficient quantities of any                  particular marketed product. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Pricing                  decisions we may adopt. |
|--------------------|--------------------------------------------------|

**Our          integration of new information systems could disrupt our internal operations,          which could harm our revenues and increase our expenses**

**Our          stock price, like that of many biotechnology companies, is          volatile**

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| ·   | Announcements                      of technological innovations or new commercial products by                      us or our                      competitors. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Publicity                      regarding actual or potential medical results relating to products                      under                      development or being commercialized by us or our competitors. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Concerns                      about the pricing of our products and the potential impact                      of such on                      their utilization. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Developments                      or outcome of litigation, including litigation regarding proprietary                      and                      patent rights. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Regulatory                      developments or delays concerning our products in the U.S.                      and foreign                      countries. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Issues                      concerning the safety of our products or of biotechnology products                      generally. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|
| ·   | Economic                      and other external factors or a disaster or                      crisis. |
|--------------------|--------------------------------------------------------------------------------------------------------|
| ·   | Period                      to period fluctuations in our financial                      results. |
|--------------------|---------------------------------------------------------------------------------------------------|

**Our          effective income tax rate may vary significantly**

**To          pay our indebtedness will require a significant amount of cash and may          adversely          affect our operations and financial results**

**Accounting          pronouncements may affect our future financial position and results of          operations**

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**Item          2.  **
**Unregistered          Sales of Equity Securities and Use of Proceeds**

*          (shares in millions)*

|                                   |   | **Total                    Number of****Shares                    Purchased****in                    2006** |   | **Average                    Price Paid****per                    Share** |   | **Total                    Number of****Shares                    Purchased as****Part                    of Publicly****Announced                    Plans or****Programs** |   | **Maximum                    Number****of                    Shares that May****Yet                    Be Purchased****Under                    the Plans or****Programs** |   |
|----------------------------------------|--------|-------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| January                    1-31, 2006  |   |                                                                                                        | 0.9    |                                                                      | $      | 88.37                                                                                                                                                                        |   |                                                                                                                                                                       |   |   |   |   |   |
| February                    1-28, 2006 |   |                                                                                                        | 0.7    |                                                                      |   | 85.31                                                                                                                                                                        |   |                                                                                                                                                                       |   |   |   |   |   |
| March                    1-31, 2006    |   |                                                                                                        | 1.0    |                                                                      |   | 84.24                                                                                                                                                                        |   |                                                                                                                                                                       |   |   |   |   |   |
| Total                                  |   |                                                                                                        | 2.6    |                                                                      | $      | 85.95                                                                                                                                                                        |   |                                                                                                                                                                       | 52     |   |   | 48 |   |

**Item          6.  ****Exhibits**

| **Exhibit                      No.** | **Description**                                                                                                                                                                                                                                                    | **Location    **                                                                                                                                                                                                |
|--------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     10.1    | Genentech,                      Inc. Employee Stock Plan, as                      amended                                                                                                                                                                          | Filed                      on a Current Report on Form 8-K with the U.S. Securities and                      Exchange                      Commission on April 25, 2006, and incorporated herein by                      reference. |
|     15.1    | Letter                      regarding Unaudited Interim Financial                      Information.                                                                                                                                                                | Filed                      herewith                                                                                                                                                                                                 |
|     31.1    | Certification                      of Chief Executive Officer pursuant                      to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities                      Exchange                      Act of 1934, as amended                           | Filed                      herewith                                                                                                                                                                                                 |
|     31.2    | Certification                      of Chief Financial Officer pursuant                      to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities                      Exchange                      Act of 1934, as amended                           | Filed                      herewith                                                                                                                                                                                                 |
|     32.1    | Certifications                      of Chief Executive Officer and                      Chief Financial Officer pursuant to 18 U.S.C. Section 1350,                      as adopted                      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Furnished                      herewith                                                                                                                                                                                             |

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**SIGNATURES**

|   |                           |   | GENENTECH,                    INC.                                                                                        |
|--------|--------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------|
| Date:  | May                    1, 2006 |   | /s/ARTHUR                    D. LEVINSON                                                                                       |
|   |                           |   | Arthur                    D. Levinson, Ph.D.Chairman                    and Chief Executive Officer                            |
|   |                           |   |                                                                                                                           |
|   |                           |   |                                                                                                                           |
| Date:  | May                    1, 2006 |   | /s/DAVID                    A. EBERSMAN                                                                                        |
|   |                           |   | David                    A. EbersmanExecutive                    Vice President andChief                    Financial Officer  |
|   |                           |   |                                                                                                                           |
|   |                           |   |                                                                                                                           |
| Date:  | May                    1, 2006 |   | /s/JOHN                    M. WHITING                                                                                          |
|   |                           |   | John                    M. WhitingVice                    President, Controller andChief                    Accounting Officer |

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