<PAGE>

                                                                EXHIBIT 10.2


                             AMENDED AND RESTATED

                              AGREEMENT BETWEEN

                             GENENTECH, INC. AND

                           F. HOFFMANN-LA ROCHE LTD

                          REGARDING COMMERCIALIZATION

                            OF GENENTECH'S PRODUCTS

                           OUTSIDE THE UNITED STATES


<PAGE>

                               TABLE OF CONTENTS

Whereas Clauses

Article I - Definitions
       1.   Affiliate....................................................2
       2.   Agreement....................................................3
       3.   Asia.........................................................3
       4.   Canada Products..............................................3
       5.   Clinical Requirements........................................3
       6.   Collaborative Countries......................................3
       7.   Commercial Requirements......................................3
       8.   DNase........................................................3
       9.   Dossier......................................................4
      10.   Entry into Man...............................................4
      11.   Financial Appendix...........................................4
      12.   First Commercial Introduction................................4
      13.   Effective Date...............................................4
      14.   GENENTECH....................................................4
      15.   Genentech Canada Ltd.........................................4
      16.   Genentech Europe Limited.....................................4
      17.   Roche Territory's Fully Burdened Manufacturing Cost..........4
      18.   Genentech Product............................................4
      19.   Governance Agreement.........................................4
      20.   IDEC Agreement...............................................5
      21.   IDEC Product.................................................5
      22.   IGF-1........................................................5
      23.   In-Licensed Product..........................................5
      24.   Know-How.....................................................5
      25.   Manufacturing Technology.....................................5
      26.   Net Sales....................................................5
      27.   NGF..........................................................5
      28    Party........................................................6
      29.   Patents......................................................6
      30.   Phase II Completion Date.....................................6
      31.   Phase III Trial..............................................6
      32.   Product......................................................6
      33.   Registration.................................................6
      34.   Restated Date................................................6
      35.   ROCHE........................................................7
      36.   Roche Territory..............................................7
      37.   Scios Nova Agreement.........................................7
      38.   Scios Product................................................7
      39.   Small Molecule Product.......................................7
      40.   Trademark....................................................7
      41.   Valid Claim..................................................7

Article II - Licenses, Options, Know-How and Trademarks
       1.   Licenses for Canada Products and DNase.......................7
       2.   Option for License for Other Products........................8
       3.   Exercise of Option for License for Other Products............9
       4.   License to Know-How and Option for License to Know-How......10
       5.   License to Trademark and Option for License to Trademark....11
       6.   Standard of Effort..........................................11
       7.   Reporting on Commercialization Progress.....................12
       8.   License to Genentech........................................12
       9.   Future In-Licenses..........................................13
      10.   IIbIIIa and Ras Farnesyltransferase Collaborations..........13
      11.   IIbIIIa Collaboration.......................................13

<PAGE>

Article III - Commercialization Committees
       1.   Commercialization Committee.................................14
       2.   Management Committee........................................15
       3.   Development Committee.......................................15
       4.   Finance Committee...........................................15

Article IV - Development and Marketing
       1.   Development.................................................16
       2.   Development Costs...........................................16
       3.   Marketing...................................................18

Article V - Production and Supply
       1.   Production of Product.......................................18
       2.   Supply of Clinical Requirements.............................18
       3.   Supply of Commercial Requirements...........................18
       4.   Supply Agreement............................................19
       5.   Amendments to DNase Supply Agreement........................19
       6.   Supply of Scios Product.....................................20
       7.   Supply of IDEC Product......................................21
       8.   Supply of In-Licensed Product...............................21
       9.   Supply of Small Molecule Product............................21
      10.   Manufacturing Process and Facilities........................21
      11.   Additional Capital Requirements.............................22
      12.   Term of Supply Obligation...................................22

Article VI - Payments, Margins and Royalties
       1.   Payment for Product Requirements............................22
       2.   Invoices and Method of Payment of Roche Territory's
              Fully Burdened Manufacturing Cost and Margin..............23
       3.   Royalties on Sales of DNase.................................23
       4.   Royalties and Other Payments on Sale of Canada Products.....23
       5.   Royalties on Sale of Genentech Products.....................23
       6.   Royalties and Other Payments on Sale of Scios Product.......24
       7.   Royalties and Other Payments on Sale of IDEC Product........24
       8.   Royalties and Other Payments on Sale of In-Licensed
              Product...................................................25
       9.   Calculation of Aggregate Net Sales..........................26
      10.   Timing of Royalty Payments..................................26
      11.   Restrictions on Transfer of Funds...........................26
      12.   Records Regarding Royalties.................................27
      13.   Royalty for Use of Trademark................................27
      14.   Generic Competition.........................................27
      15.   Royalty Term if ROCHE Becomes Minority Shareholder..........27

Article VII - Transaction Provisions
       1.   General.....................................................28
       2.   Personnel of Genentech Canada, Inc., Genentech
              Europe Limited and Genentech Ltd. (Japan).................28
       3.   Records and Property Leases.................................28
       4.   Transfer of Dossier and Registration........................29

Article IX - Patents, Inventions and Trademarks
       1.   Sole Inventions.............................................29
       2.   Joint Inventions............................................29
       3.   Patent Infringement.........................................30
       4.   Third Party Patents.........................................31
       5.   Reporting on Patent Status..................................31
       6.   Trademark...................................................32

<PAGE>

Article X - Confidentiality and Publications
       1.   Confidential Information...................................32
       2.   Publications...............................................32
       3.   Restrictions on Transfer of Proprietary Materials..........32

Article XI - Liability
       1.   No Liability...............................................33
       2.   Indemnification by ROCHE...................................33
       3.   Indemnification By GENENTECH...............................33

Article XII - Term and Termination
       1.   Term.......................................................33
       2.   Termination By ROCHE.......................................33
       3.   Termination By GENENTECH...................................34
       4.   Termination of Development/Commercialization...............35
       5.   Termination for Breach.....................................36
       6.   Certain Proceedings........................................36
       7.   Termination For Change in Ownership........................36
       8.   Survival of Terms..........................................36

Article XIII - Miscellaneous
       1.   Disclaimer of Certain Warranties...........................37
       2.   Entire Agreement, Amendment................................37
       3.   Failure to Enforce.........................................37
       4.   Force Majeure..............................................37
       5.   Arbitration................................................37
       6.   Notices....................................................38
       7.   Use of Names...............................................39
       8.   Successors and Assigns.....................................39
       9.   Headings...................................................39
      10.   Counterparts...............................................39
      11.   Severability...............................................39
      12.   Governing Law..............................................39
      13.   Relationship...............................................39

























<PAGE>

      Appendix A - Financial Appendix..................................41
      Appendix B - Article II Countries................................51


<PAGE>

                        AMENDED AND RESTATED AGREEMENT



                      Effective as of the Effective Date

                                      and

                Amended and Restated as of the Restatement Date

                                     Among

 F. Hoffmann-La Roche Ltd, Grenzacherstrasse 124, CH 4070 Basel, Switzerland

                                      and

Genentech, Inc., 1 DNA Way, South San Francisco, California, USA 94080,
Genentech Europe Limited, Reid House, 31 Church Street, Hamilton, Bermuda HM
FXV and Genentech Biopharmaceuticals Limited, Reid House, 31 Church Street,
Hamilton, Bermuda HM FXV.

     WHEREAS, GENENTECH possesses rights outside the United States in and to
certain pharmaceutical products;

     WHEREAS, GENENTECH wishes to have certain pharmaceutical products
developed and marketed outside the United States;

     WHEREAS, ROCHE has considerable knowledge in developing, registering,
manufacturing, formulating and filling, promoting, detailing, distributing
and marketing pharmaceutical products in all of the significant countries
outside the United States that utilize pharmaceutical products, has in place
in those countries a well-experienced staff for performing these activities,
and can perform these activities in a diligent and aggressive manner for
GENENTECH's pharmaceutical products;

     WHEREAS, GENENTECH and ROCHE believe that this Agreement covering the
development, registration, manufacture, supply, formulation and filling,
promotion, detailing, distribution and marketing of certain of GENENTECH's
products outside the United States will be desirable and compatible with both
GENENTECH's and ROCHE's business objectives with respect to such products;

     WHEREAS, GENENTECH believes that this Agreement would provide an
economic benefit to GENENTECH and speed up availability of unmarketed
pharmaceutical products of GENENTECH outside the United States and assist
GENENTECH in defraying the substantial costs associated with the development
of such products in the United States;

     WHEREAS, GENENTECH and ROCHE intend that this Agreement should cover the
development, marketing and supply of certain GENENTECH pharmaceutical
products outside the United States and that this Agreement supersedes the
following agreements: Agreement Between F. Hoffmann-La Roche Ltd, Genentech,
Inc. and Genentech Europe Limited Regarding Commercialization of DNase in
Collaborative Countries; and Agreement Between F. Hoffmann-La Roche Ltd,
Genentech, Inc., and Genentech Europe Limited Regarding Commercialization of
DNase in Rest Of World; Agreement Among F. Hoffmann-La Roche Ltd, Nippon


                                    Page 1
<PAGE>

Roche K.K., Genentech, Inc., and Genentech Biopharmaceuticals Limited
Regarding Commercialization of DNase in Japan;

     WHEREAS, GENENTECH and ROCHE intend that this Agreement should not cover
the development, marketing and supply of certain GENENTECH or jointly
developed pharmaceutical products and that this Agreement does not supersede
the following Agreements: Supply Agreement Between F. Hoffmann-La Roche Ltd,
Genentech, Inc. and Genentech Europe Limited Regarding DNase in Collaborative
Countries, Rest of World and Japan ("DNASE SUPPLY AGREEMENT") except that the
terms of such Agreement shall be expanded to include the supply of DNase in
Canada; Joint Research and Development Agreement between F. Hoffmann-La Roche
Ltd, Hoffmann-La Roche, Inc. and Genentech, Inc. Regarding LFA/ICAM
Antagonists; the TNF-Receptor Fusion Protein Agreement between Genentech,
Inc., F. Hoffmann-La Roche Ltd, and Hoffmann-La Roche, Inc. and the
Development Agreement Between Genentech, Inc. and Hoffmann-La Roche, Inc.,
dated January 6, 1980 concerning interferon alpha and beta; Joint Research
and Development Agreement between F. Hoffmann-La Roche Ltd. and Hoffmann-La
Roche, Inc. and Genentech, Inc. Regarding IL-8 Molecules (expired); Small
Molecule Screening and Collaboration Agreement between F. Hoffmann-La Roche
Ltd. and Genentech, Inc.; Joint Research and Development Agreement among F.
Hoffmann-La Roche Ltd, Hoffmann-La Roche Inc. and Genentech, Inc. regarding
Anti-Coagulants effective February 10, 1995; and Agreement among F. Hoffmann-
La Roche Ltd and Genentech, Inc. regarding Anti-Her2 effective July 6, 1998;

     WHEREAS, Roche Holding Ltd, a corporation organized under the laws of
Switzerland, and Genentech, Inc. concluded, effective September 8, 1990, a
Mutual Confidentiality Agreement (the "MUTUAL CONFIDENTIALITY AGREEMENT")
covering the ongoing disclosure of all confidential scientific, financial,
technical and business information of any nature in any tangible form of
expression among Genentech, Inc. on the one hand and Roche Holding Ltd and
its subsidiaries and affiliates throughout the world, except Genentech, Inc.,
on the other hand.

     WHEREAS, Roche Holding Ltd and Genentech, Inc. concluded effective July
17, 1991 a Mutual Agreement for Supply of Research Material covering the
ongoing transfer of proprietary materials, substances, reagents and the like
among Genentech, Inc. on the one hand and Roche Holding Ltd and its
subsidiaries and affiliates throughout the world, except Genentech, Inc., on
the other hand.

     WHEREAS, GENENTECH and ROCHE amended this Agreement at a meeting in
London on May 1, 1997 and made additional amendments with respect to the
commercialization of the GP-IIbIIIa antagonist, designated Xubix, pursuant to
a letter agreement dated May 29, 1998.

     NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:


ARTICLE I - DEFINITIONS

1.   The term "AFFILIATE" shall mean --

          (a) an organization fifty (50%) percent or more of the voting stock
     of which is owned and/or controlled directly or indirectly by either
     Party;

          (b) an organization which directly or indirectly owns and/or


                                    Page 2
<PAGE>

     controls fifty percent (50%) or more of the voting stock of either
     Party;

          (c) an organization which is directly or indirectly under common
     control of either Party through common share holdings.

     The foregoing notwithstanding, neither Party shall be considered an
     Affiliate of the other Party or of any other Party's Affiliates.

2.   The term "AGREEMENT" shall mean this Agreement, including all Appendices
     hereto, together with any valid amendments or modifications of the
     foregoing, and any agreements or plans entered into in connection with
     this Agreement.

3.   The term "ASIA" shall mean the countries of Japan, Bangladesh, Myanmar,
     Cambodia, Indonesia, People's Republic of China, Hong Kong, Republic of
     Korea, Laos, Malaysia, Papua New Guinea, Philippines, Singapore, Sri
     Lanka, Republic of China (Taiwan) and Thailand and the territories and
     possessions of each.

4.   The term "BULK PRODUCT" shall have the definition set forth in the
     definition of "Product."

5.   The term "CANADA PRODUCTS" shall mean the pharmaceutical products
     Activase, registered trademark, tissue plasminogen activator, Protropin,
     registered trademark, and Nutropin, registered trademark, human growth
     hormone, Actimmune, registered trademark, interferon gamma and
     Pulmozyme, registered trademark, dornase alpha each as sold in Canada.

6.   The term "CLAIMS" shall have the meaning set forth in Article XI,
     Sections 2 and 3 of this Agreement.

7.   The term "CLINICAL REQUIREMENTS" shall mean those quantities of a
     Product reasonably required by a Party for the conduct of preclinical
     and clinical studies of such Product in that Party's Territory.  The
     term Clinical Requirements as used herein with respect to a Party shall
     also include the Clinical Requirements of that Party's licensees, if
     any.

8.   The term "COLLABORATIVE COUNTRIES" shall mean Austria, Belgium, Denmark,
     Finland, France, Germany, Greece, Italy, Ireland, Luxembourg,
     Netherlands, Norway, Portugal, Spain, Switzerland, Sweden, United
     Kingdom and any additional countries that may subsequently become
     members of the EU.

9.   The term "COMMERCIAL REQUIREMENTS" shall mean those quantities of a
     Product reasonably required by a Party for promotion and sale of such
     Product in the its Territory.  The term Commercial Requirements as used
     herein with respect to a Party shall also include the Commercial
     Requirements of that Party's licensees, if any.

10.  The term "DEVELOPMENT COSTS" shall have the meaning set forth in the
     Financial Appendix.

11.  The term "DNASE" shall mean the protein, DNase, as defined in the DNase
     Supply Agreement.



                                    Page 3
<PAGE>

12.  The term "DNASE SUPPLY AGREEMENT" shall have the meaning set forth in
     the preamble of this Agreement.

13.  The term "DOSSIER" shall mean the document or documents filed with and
     approved by the government or health authority in a country in the Roche
     Territory for purposes of registration of a Product for sale in such
     country.

14.  The term "EFFECTIVE DATE" shall mean the date that the Amendment and
     Restatement of Article Third of the Certificate of Incorporation of
     Genentech, Inc. amending the terms of the Redeemable Common Stock, par
     value $0.02, of GENENTECH became effective, i.e., October 25, 1995.

15.  The term "ENTRY INTO MAN" shall mean the occurrence of Genentech's
     official decision to file an Investigational New Drug exemption
     application (an "IND") with the U.S. Food and Drug Administration.

16.  The term "FINANCIAL APPENDIX" shall mean Appendix A to this Agreement.

17.  The term "FINISHED PRODUCT" shall have the meaning set forth in the
     definition of "Product."

18.  The term "FIRST COMMERCIAL INTRODUCTION" shall mean the first date upon
     which a Product is shipped commercially by ROCHE to an independent third
     party in a country in the Roche Territory, after formal marketing
     approval in that country, including any required price approval, has
     been granted from the relevant authority in that country for that
     Product.

19.  The term "GENENTECH" shall mean Genentech, Inc. and, where appropriate,
     its affiliates.

20.  The term "GENENTECH CANADA, INC." shall mean that Affiliate of
     Genentech, Inc. located at 1100 Burloak Drive, Fifth Floor, Burlington,
     Ontario L7L 6B2 and organized as Genentech Canada, Inc. under the laws
     of Canada.

21.  The term "GENENTECH EUROPE LIMITED" shall mean that Affiliate of
     Genentech, Inc. located at 31 Church Street, Hamilton, Bermuda HM FX and
     organized as Genentech Europe Limited under the laws of Bermuda.

22.  The term "GENENTECH'S FULLY BURDENED MANUFACTURING COST" shall have the
     meaning set forth in the Financial Appendix.

23.  The term "GENENTECH PRODUCT" shall mean a Product for which GENENTECH
     (i) has an ownership interest outside the United States as of April 12,
     1995 or (ii) thereafter has or acquires an ownership interest during the
     term of this Agreement but does not include Canada Products, DNase, IDEC
     Product, Scios Product and In-Licensed Products, human growth hormone
     products, tissue plasminogen activator products and interferon gamma
     products.

24.  The term "GLOBAL DEVELOPMENT COSTS" shall have the meaning set forth in
     the Financial Appendix.

25.  The term "GOVERNANCE AGREEMENT" shall mean the Governance Agreement
     entered into between Roche Holdings, Inc., a Delaware corporation, and


                                    Page 4
<PAGE>

     Genentech, Inc. on September 7, 1990 as amended and restated on October
     25, 1995 and as the same may be further amended by the Parties, or any
     agreement which supercedes or replaces that agreement.

26.  The term "IDEC AGREEMENT" shall mean the Collaboration Agreement between
     Genentech, Inc. and IDEC Pharmaceuticals Corporation, effective as of
     March 16, 1995.

27.  The term "IDEC PRODUCT" shall mean all of those products which are the
     subject of the IDEC Agreement.

28.  The term "IND" shall have the meaning set forth in the definition of
     Entry Into Man.

29.  The term "IIbIIIa AGREEMENT" shall mean the Joint Research and
     Development Agreement, dated January 7, 1993, between F. Hoffmann-La
     Roche Ltd, Hoffmann La-Roche Inc. and Genentech, Inc. regarding IIbIIIa
     Antagonists.

30.  The term "IN-LICENSED PRODUCT" shall mean any Product to which,
     subsequent to April 12, 1995, GENENTECH acquires rights in the Roche
     Territory by means of a patent and/or knowhow license from a third
     party.

31.  The term "KNOW-HOW" shall mean proprietary technical information, know-
     how, data, test results, knowledge, techniques, discoveries, inventions,
     specifications, designs, regulatory filings, and other information
     (whether or not patentable) which are now and, unless specified
     otherwise, hereafter during the term of this Agreement are in the
     possession or control of a Party and are specifically related to a
     Product or to the development, manufacture, use or sale of a Product of
     that Party; provided, however, that Know-How shall not include any of
     the foregoing (i) which are now or hereafter in the possession or
     control of a Party as a result of a license taken from a third party and
     which a Party is not free to transfer or license to the other Party or
     which a Party may transfer or license but such transfer or license would
     necessitate the payment of a fee or royalty to the licensor (unless
     provision is made hereunder for the payment of such fee or royalty) or
     (ii) which are generally ascertainable from publicly available
     information.

32.  The term "MUTUAL CONFIDENTIALITY AGREEMENT" shall have the meaning set
     forth in the preamble of this Agreement.

33.  The term "MANUFACTURING TECHNOLOGY" shall mean all Know-How of a Party
     then existing which is necessary to make or have made a Product in the
     manner that such Product is then manufactured by the Party to produce
     Clinical Requirements or to produce Commercial Requirements, as
     applicable.

34.  The term "NET SALES" shall have the meaning set forth in the Financial
     Appendix.

35.  The term "OPTION EXTENSION FEE" shall mean the nonrefundable amount of
     $10,000,000 U.S. which is to be paid to GENENTECH by ROCHE within ten
     (10) days of ROCHE's determination with respect to a Product not to
     exercise its option for a right and license under Article II, Section 2


                                    Page 5
<PAGE>

     (a) after the Phase II Completion Date for that Product.

36.  The term "PARTY" shall mean either GENENTECH or ROCHE, and when used in
     the plural, shall mean both of them.

37.  The term "PATENTS" shall mean any and all patent applications and
     patents (including inventor's certificates), including any
     substitutions, extensions, reissues, renewals, divisions, continuations
     or continuations-in-part thereof or therefor covering a Product, its
     administration, formulation or clinical use, which a Party now or
     hereafter during the term of this Agreement owns or controls or with
     respect to which a Party has the right to grant licenses or sublicenses
     without the payment of a fee or royalty (unless provision is made
     hereunder for the payment of such fee or royalty) to the licensor, but
     only to the extent they specifically cover a Product or the manufacture,
     use or sale of a Product.

38.  The term "PHASE II COMPLETION DATE" shall mean the date by which
     GENENTECH, in its reasonable judgement, has clinical trial data and
     other information sufficient to undertake a Phase III Trial in the USA.

39.  The term "PHASE III COMPLETION DATE" shall mean the date by which a
     Phase III Trial is completed with respect to a Product, and the results
     of that Phase III Trial are known, available and have been analyzed and,
     in GENENTECH'S reasonable judgement, allow filing for a Biologics
     License Application or New Drug Application for that Product in the USA.

40.  The term "PHASE III TRIAL" shall mean a controlled study in humans of
     the efficacy and safety of a Product which is prospectively designed to
     demonstrate statistically whether the Product is effective for use in a
     particular indication in a manner sufficient to obtain regulatory
     approval to market that Product or which is sufficient to permit a
     filing with the competent authorities for a Registration in the USA.

41.  The term "PRODUCT" shall mean any human pharmaceutical formulation of a
     compound for which a Party has an ownership interest as of April 12,
     1995 or thereafter acquires an ownership interest or rights by means of
     a patent or knowhow license during the term of this Agreement.  In the
     case of GENENTECH, the term Product shall include Canada Products,
     Genentech Products, IDEC Product, Scios Product, In-Licensed Products
     and DNase.  The term Product shall also include: (a) all bulk forms of a
     Product ("BULK PRODUCT"); (b) Product which has been vialed but is not
     finished or packaged ("VIALED PRODUCT"); and (c) finished, packaged
     final dosage units of a Product ("FINISHED PRODUCT").  The term Product
     shall include not only the specific molecule involved but molecules
     derived from that molecule whether by addition or deletion of other
     chemical subunits.

42.  The term "REGISTRATION" shall mean the official approval by the
     government or health authority or similar entity in one or more
     countries in the Roche Territory which is required for a Product to be
     offered for sale in that country or those countries, including such
     authorizations as may be required for the production, importation,
     pricing and sale of that Product to the extent they are needed for that
     Product to be offered for sale in that country or those countries.

43.  The term "RESTATEMENT DATE" shall mean July 1, 1999.


                                    Page 6
<PAGE>

44.  The term "ROCHE" shall mean F. Hoffmann-La Roche Ltd and its Affiliates
     unless otherwise specified in this Agreement.

45.  The term "ROCHE TERRITORY" shall mean all countries of the world except
     the United States and its territories and possessions.

46.  The term "SCIOS NOVA AGREEMENT" shall mean the Collaboration Agreement
     between Genentech, Inc. and Scios Nova, Inc. effective as of December
     30, 1994.

47.  The term "SCIOS PRODUCT" shall mean all of those products which are the
     subject of the Scios Nova Agreement.

48.  The term "SMALL MOLECULE PRODUCT" shall mean a synthetic molecule that
     is not a protein or peptide.

49.  The term "TRADEMARK" shall mean the trademarks owned, registered,
     maintained or used by GENENTECH in connection with a Product.

50.  The term "UNITED STATES" shall mean, unless otherwise indicated, the
     United States and its territories and possessions.

51.  The term "VALID CLAIM" shall mean a subsisting claim of an issued and
     unexpired Patent that has not been held invalid, unpatentable or
     unenforceable by a decision of a governmental body or court of
     competent jurisdiction, that is unappealable or unappealed within the
     time allowed for appeal, and that has not been rendered unenforceable
     through disclaimer or otherwise.

52.  The term "VIALED PRODUCT" shall have the meaning set forth in the
     definition of "Product."

53.  The term "XUBIX" shall mean the specific IIaIIIb antagonist currently
     designated by the trademark Xubix, and any formulations thereof.


ARTICLE II - LICENSES, OPTIONS, KNOW-HOW AND TRADEMARKS

1.   License for Canada Products and DNase.

          (a) Subject to the terms and conditions of this Agreement,
     GENENTECH hereby grants to ROCHE a sole and exclusive right and license
     under GENENTECH's Patents, including the right to sublicense others with
     GENENTECH's prior consent, which consent shall not be unreasonably
     withheld, to register, use, sell and market (including the right to
     detail and promote) Canada Products in Canada and DNase in the Roche
     Territory.

          (b) Subject to the terms and conditions of this Agreement,
     GENENTECH hereby grants to ROCHE a sole and exclusive right and license
     under GENENTECH's Patents, including the right to sublicense others with
     GENENTECH's prior consent, which consent shall not be unreasonably
     withheld, for each Canada Product in Canada and DNase in the Roche
     Territory, dependent on the Parties' mutual agreement as to whether
     GENENTECH will supply Vialed Product or Bulk Product (i) to make and/or
     have made Finished Product from Vialed Product or (ii) to make and/or
     have made Vialed Product from Bulk Product.


                                    Page 7
<PAGE>

2.   Option for License for Other Products.

          (a) Subject to the terms and conditions of this Agreement,
     GENENTECH hereby grants to ROCHE an option on a Product-by-Product
     basis, exercisable for any Product at (i) such Product's Entry Into Man;
     (ii) at the first Phase II Completion Date for such Product, or (iii) if
     ROCHE has paid GENENTECH the Option Extension Fee, at the Phase III
     Completion Date for such Product for a sole and exclusive (to the extent
     available) right and license in the Roche Territory under GENENTECH's
     Patents and, to the extent sublicensable by GENENTECH, patents of third
     parties licensed to GENENTECH, including where available the right to
     sublicense others with GENENTECH's prior consent, which consent shall
     not be unreasonably withheld, to register, use, sell and market
     (including the right to detail and promote) each Genentech Product and,
     subject to the terms and conditions of the relevant license agreement,
     In-Licensed Product and IDEC Product or Scios Product and shall include
     the right for all indications.  Such option shall be exercisable only
     once for each Product.  If ROCHE does not pay the Option Extension Fee
     with respect to a Product, there shall be no additional option with
     respect to that Product beyond that associated with the Phase II
     Completion Date.

          (b) Subject to the terms and conditions of this Agreement and
     contingent on ROCHE exercising its option under Section 2(a) of this
     Article II, GENENTECH hereby grants to ROCHE, an option, exercisable
     only once for any Product either at (i) such Product's Entry Into Man;
     (ii) at the first Phase II Completion Date for such Product, or (iii) at
     the Phase III Completion Date, for a sole and exclusive (to the extent
     available) right and license in the Roche Territory, under GENENTECH's
     Patents and, to the extent sublicenseable by GENENTECH, patents of third
     parties licensed to GENENTECH, including where available, the right to
     sublicense others with GENENTECH's prior consent, which consent shall
     not be unreasonably withheld, for Genentech Product and, subject to the
     terms and conditions of the relevant license agreement, In-Licensed
     Product and IDEC Product to the extent GENENTECH is contractually able
     to do so under the IDEC Agreement and to Scios Product to the extent
     GENENTECH is contractually able to do so under the Scios Nova Agreement,
     to make Vialed Product from Bulk Product.  Such option shall be
     exercisable only once for each Product.

          (c) The options described above may be exercised earlier than the
     time periods described if the Parties mutually agree.  The options
     described above shall terminate on October 25, 2015 except as follows:

               (i) if Roche has paid an Option Extension Fee for a Product,
          Roche shall retain an option for that Product exercisable at the
          Phase III Completion Date for that Product;

               (ii) for a Product for which Entry Into Man has occurred but
          which has not yet reached the Phase II Completion Date, Roche shall
          continue to have an option exercisable at the Phase II Completion
          Date; and

               (iii) for any Product for which the 60 day period to exercise
          an option with respect to Entry Into Man or the Phase II Completion
          Date or the Phase III Completion Date has arisen, that option shall
          continue for the remaining portion of that 60 day period that is


                                    Page 8
<PAGE>

          then unexpired.

          (d) The foregoing notwithstanding, if at any time prior to Entry
     Into Man of a Genentech Product or In-Licensed Product, GENENTECH
     decides to discontinue sole development of such a Product and to license
     a third party the rights to that Product, that Product shall be subject
     to the provisions of Section 3.07 of the Governance Agreement and shall
     no longer be subject to the provisions of this Agreement.  If at any
     time upon or after Entry Into Man of a Genentech Product or In-Licensed
     Product, the occurrence of the first Phase II Completion Date for such a
     Product, or thereafter unless ROCHE has paid the Option Extension Fee,
     GENENTECH decides to discontinue sole development of such a Product and
     to license a third party the rights in the Roche Territory to that
     Product, that Product shall be subject to the provisions of Section 3.07
     of the Governance Agreement provided, however, that if the parties do
     not enter into an license agreement regarding such Product on the basis
     of Section 3.07 of the Governance Agreement, the terms of this Agreement
     (including but not limited to ROCHE's option rights) with regard those
     rights to such Product in the Roche Territory shall continue to remain
     in full force and effect.  If ROCHE has paid the Option Extension Fee,
     GENENTECH shall have no rights to grant rights to third parties to that
     Product in the Roche Territory.  Upon receipt of notification with
     respect to a Product as specified in the first sentence of Section 3 (a)
     of Article II, ROCHE shall make a good faith determination as to its
     interest in the Product in the Roche Territory.  If ROCHE determines
     that it has no interest in maintaining its future option rights it will
     so inform GENENTECH so that GENENTECH may pursue other development and
     commercial arrangements with others with respect to that Product in the
     Roche Territory so that GENENTECH may realize the full commercial
     potential of such Product.

3.   Exercise of Option for License for Other Products.

          (a) Upon each of the occurrences of Entry Into Man, the Phase II
     Completion Date and the Phase III Completion Date for a GENENTECH
     Product or an In-Licensed Product for which an option hereunder is still
     in effect, GENENTECH shall so notify ROCHE's primary contact on the
     Commercialization Committee established in Article III.  In connection
     with such notice, GENENTECH shall provide ROCHE with all relevant
     information regarding the Product, including results of preclinical and
     clinical studies, third party rights (patent rights and royalty
     obligations), and manufacturing process and cost information not yet
     communicated to the Development Committee in accordance with this
     Section 3, but such information shall not include marketing or other
     commercial information other than market research information.  At any
     time, ROCHE shall have the right to request reasonable additional non-
     marketing or noncommercial information.  Within thirty (30) days of such
     notification and the receipt by ROCHE of all information specified
     herein, the Commercialization Committee shall meet to review such
     information and the results of such studies and any other relevant non-
     marketing or noncommercial information developed by or possessed by
     GENENTECH regarding that Product which ROCHE may request.  After the
     notice to ROCHE's primary contact on the Commercialization Committee as
     specified above, GENENTECH and ROCHE shall jointly formulate a
     development plan with respect to the United States and Europe for the
     Product, the terms of which shall be negotiated in good faith by the


                                    Page 9
<PAGE>

     Parties.  Such plan shall address issues regarding initially envisioned
     indications and additional indications to be developed and shall be
     agreed upon ten (10) days prior to the expiry of the sixty (60) day
     period mentioned below.  If ROCHE does not exercise its option
     hereunder, that development plan will not have any binding effect.
     Within sixty (60) days of the notice to ROCHE's primary contact on the
     Commercialization Committee as specified above and the receipt by ROCHE
     of all information specified herein, ROCHE shall either exercise in
     writing its option for a license for such Product under Section 2 of
     this Article II or if ROCHE fails to so exercise, ROCHE shall be deemed
     to have irrevocably waived the option with respect to that particular
     option exercise period.

     If ROCHE fails to exercise its option for a license for such Product
     within 60 days of the notice to ROCHE of the Phase III Completion Date,
     GENENTECH thereafter shall be free to develop, make, have made, use,
     sell and market (including the right to promote and detail) such Product
     in the Roche Territory in any manner it chooses, including by means of a
     license to one or more third parties, and free of any restrictions under
     Section 3.07 of the Governance Agreement.

          (b) (1) Within forty-five (45) days of the Effective Date of this
     Agreement, the Commercialization Committee shall meet to review summary
     results of clinical data for any Genentech Product and In-Licensed
     Product for which there has been a Phase II Completion Date of the
     Effective Date and for IDEC Product and Scios Product.  Within ninety
     (90) days of the commencement of such meeting, ROCHE shall either
     exercise in writing its option for a license for each such Product under
     Section 2 of this Article II or if ROCHE fails to so exercise, it shall
     be deemed to have irrevocably waived such option.  If ROCHE waives its
     option for a license for a Product under Section 2 of this Article II,
     GENENTECH shall be free to develop, make, have made, use, sell and
     market (including the right to detail and promote) such Product in the
     Roche Territory in any manner it chooses including by means of a license
     to one or more third parties and free of any restrictions of Section
     3.07 of the Governance Agreement.  If ROCHE waives its option for a
     license for either IDEC Product or Scios Product pursuant to the
     foregoing, ROCHE shall have no further rights to any IDEC Product or
     Scios Product, as the case may be.

              (2) The right of ROCHE to any license hereunder to IDEC Product
     is subject to ROCHE's agreement to comply with all appropriate
     obligations of the IDEC Agreement for IDEC Product and any required
     consent of IDEC.  The right of ROCHE to any license hereunder to Scios
     Product is subject to ROCHE's agreement to comply with all appropriate
     obligations of the Scios Nova Agreement for Scios Product and any
     required consent of Scios Nova.

          (c) Any information provided by GENENTECH to ROCHE for its
     evaluation with respect to exercising an option under this Article shall
     be returned to GENENTECH promptly if ROCHE decides not to exercise such
     option and such information shall be subject to the provisions of
     Article X below.

4.   License to Know-How and Option for License to Know-How.

          (a) Subject to the terms and conditions of this Agreement,


                                    Page 10
<PAGE>

     GENENTECH hereby grants to ROCHE, for the term of this Agreement, a
     right and license, including the right to sublicense others with
     GENENTECH's prior consent, which consent shall not be unreasonably
     withheld, to use in Canada, GENENTECH Know-How specifically related to
     Canada Products and to use in the Roche Territory, GENENTECH Know-How
     specifically related to DNase (i) to register, use, sell and market
     (Including the right to detail and promote) such Products; and dependent
     on the Parties' mutual agreement as to whether GENENTECH will supply
     Vialed Product or Bulk Product (ii) to make and/or have made Finished
     Product from Vialed Product, or (iii) to make and/or have made Vialed
     Product from Bulk Product.

          (b) Subject to the terms and conditions of this Agreement and the
     exercise of the option for such Product under Section 2 of this Article
     II, GENENTECH hereby grants to ROCHE, for the term of this Agreement, a
     right and license, including the right to sublicense others with
     GENENTECH's prior consent, which consent shall not be unreasonably
     withheld, to use in the Roche Territory, GENENTECH Know-How specifically
     related to GENENTECH Products, In-Licensed Products, Scios Product or
     IDEC Product (i) to register, use, sell and market (Including the right
     to detail and promote) such Product; and dependent on the Parties mutual
     agreement as to whether GENENTECH will supply Vialed Product or Bulk
     Product (ii) to make and/or have made such Finished Product from such
     Vialed Product or (iii) to make and/or have made such Vialed Product
     from such Bulk Product.

5.   License to Trademark and Option for License to Trademark.

          (a) Subject to the terms and conditions of this Agreement,
     GENENTECH grants to ROCHE a sole and exclusive right and license to use
     the appropriate Trademarks in Canada for Canada Products and in the
     Roche Territory for DNase including the right to sublicense others with
     GENENTECH's prior consent, which consent shall not be unreasonably
     withheld.  ROCHE and its Affiliates shall use the appropriate Trademarks
     for such Products in Canada in the case of Canada Products or in each
     country in the Roche Territory in the case of DNase unless the Trademark
     is not available in such country.  If the appropriate Trademark for such
     Product is not available in such country, ROCHE shall obtain GENENTECH's
     prior consent before using any other trademark for such Product in such
     country, which consent shall not be unreasonably withheld.

          (b) Subject to the terms and conditions of this Agreement and the
     exercise of the option for a Product under Section 2 of this Article II,
     GENENTECH grants to ROCHE a sole and exclusive right and license to use
     the Trademark for such Product in the Roche Territory including the
     right to sublicense others with GENENTECH's prior consent, which consent
     shall not be unreasonably withheld.  ROCHE and its Affiliates shall use
     the Trademark for such Product in each country in the Roche Territory
     unless the Trademark is not available in such country.  If the Trademark
     for such Product is not available in such country, ROCHE shall obtain
     GENENTECH's prior consent before using any other trademark for the
     Product in such country, which consent shall not be unreasonably
     withheld.

6.   Standard of Effort. ROCHE acknowledges that for those Products licensed
     to ROCHE hereunder, GENENTECH's sole opportunity to receive maximum
     potential revenue from sales of those Products in each country in the


                                    Page 11
<PAGE>

     Roche Territory is solely dependent on ROCHE's efforts and that a
     failure to provide the level of effort specified herein is likely to
     have a significant adverse effect on potential revenues to GENENTECH
     which would be inimical to the purposes of this Agreement.  Therefore,
     the exclusive licenses granted to ROCHE under this Article shall be
     conditioned on ROCHE using its "best efforts" in each country in the
     Roche Territory to take all steps necessary in an expeditious fashion to
     obtain regulatory approval to sell the Product and thereafter to sell
     the Product in a manner so as to maximize its revenue potential. "Best
     efforts" shall mean efforts, including the commitment of all necessary
     personnel and financial resources, in a timeframe equivalent to that
     used by ROCHE to develop, promote and sell ROCHE's major pharmaceutical
     products.

7.   Reporting on Commercialization Progress.  ROCHE shall keep GENENTECH
     informed of the progress of its efforts to develop, register, and market
     the Product licensed by it hereunder in each country in the Roche
     Territory.  Such progress reports shall be made annually by November
     30th of each year.  For each country listed on Appendix B hereto, such
     progress reports shall specifically include information on --

          (a)  the status of, and plans for, clinical trials needed for
          registration of the Product,

          (b)  the status of, and plans for, registering the Product for
          sale, and

          (c)  the budgeted sales of the Product or the Net Sales of the
          Product if it is registered;

          (d)  the Net Sales of the Product included in the business plan for
          the Product; and

          (e)  summaries of promotional plans and market research.

     In addition, GENENTECH may make reasonable requests for, and ROCHE shall
     provide, specific information about efforts to register and sell the
     Products in countries in the Roche Territory other than those set forth
     in Appendix B and about the aggregate Net Sales budgeted or included in
     the business plan for Products for all countries in the Roche Territory.

8.   License to GENENTECH.  Subject to the terms and conditions of this
     Agreement, ROCHE hereby grants, and shall cause Hoffmann-La Roche, Inc.
     to grant, to GENENTECH in the United States, a perpetual royalty-free,
     nonexclusive right and license under ROCHE's Patents and Know-How, to
     register, make, have made, use, sell and market (including the right to
     promote) in the United States

               (a) the Canada Products and DNase; and

               (b) any Genentech Product, In-Licensed Product, IDEC Product
          or Scios Product for which ROCHE exercises its option under Section
          2 of this Article II.

     ROCHE shall not grant to any third party, and ROCHE shall cause
     Hoffmann-La Roche, Inc. not to grant to any third party, any license
     under ROCHE's Patents and Know-How in the United States to register,


                                    Page 12
<PAGE>

     make, have made, use, sell and market (including the right to promote)
     any Product which is described in subsection (a) or (b) of this Section
     8 without GENENTECH's prior written consent.

9.   Future In-Licenses.  With respect to future prospective in-licenses from
     third parties where GENENTECH is the prospective licensee and the
     license involves Products with rights in the Roche Territory, the
     Parties shall discuss in advance the nature of reasonable terms for the
     Roche Territory.  Any final license agreement with respect to the Roche
     Territory shall be on terms mutually acceptable to both Parties, and the
     Parties shall discuss and agree to a worldwide development and
     commercialization strategy with respect to such a Product.

10.  Ras Farnesyltransferase Collaboration.  With respect to the Parties'
     current collaboration on ras farnesyltransferase inhibitors, GENENTECH
     will have the sole right outside of the Roche Territory, and ROCHE shall
     have the sole right in the Roche Territory to register, use, sell and
     market (including the right to detail and promote) all Products
     resulting from such collaboration.  All research efforts and Development
     Costs for these Products shall be shared in an equal manner.  Neither
     Party shall pay the other royalties for sales of any of these Products
     in its Territory.  In the event that any of the existing agreements
     relating to such collaboration conflict with this Section 10 of Article
     II, the terms of this Section shall govern.

11.  IIbIIIa Collaborations Other than Xubix Collaboration.  With respect to
     the Parties' collaborations on IIbIIIa antagonists under the IIbIIIa
     Agreement other than the collaboration on Xubix, GENENTECH will have the
     sole right outside of the Roche Territory, and ROCHE shall have the sole
     right in the Roche Territory to register, use, sell and market
     (including the right to detail and promote) all Products resulting from
     such collaborations.  All research efforts and Global Development Costs
     for these Products shall be shared in an equal manner.  Neither Party
     shall pay the other royalties for sales of any of these Products in its
     Territory.  In the event that any of the existing agreements relating to
     these collaborations conflict with this Section 11 of Article II, the
     terms of this Section shall govern.

12.  GP-IIbIIIa (Xubix) Collaboration.

     (a)  ROCHE hereby grants to GENENTECH the option (the "OPT-IN OPTION")
          to participate and share in the development and commercialization
          of Xubix, exercisable at any time up to and within thirty (30) days
          after NDA approval of the first indication (acute or chronic
          therapy) in the United States.  Such Opt-in Option shall be
          exercisable with respect to Xubix for all indications.  Upon its
          exercise of the Opt-in Option, GENENTECH shall reimburse ROCHE for
          fifty percent (50%) of ROCHE's Development Costs for Xubix
          (including Phase III Development Costs) incurred by ROCHE from and
          after May 1, 1997 through the exercise date and for Phase III
          Development costs incurred prior to May 1, 1997 and shall pay the
          additional sum of $25 million U.S. Upon GENENTECH's exercise of the
          Opt-in Option, the Parties shall negotiate in good faith and enter
          into a more detailed commercialization and development agreement
          with respect to Xubix based on the provisions contained herein it
          being understood that any Development Costs incurred after such
          opt-in date shall be equally shared.


                                    Page 13
<PAGE>

     (b)  If GENENTECH exercises the Opt-in Option, GENENTECH and ROCHE will
          have semi-exclusive rights in the United States, with GENENTECH and
          ROCHE co-promoting Xubix and sharing net profits on a basis of
          sixty percent (60%) to GENENTECH and forty percent (40%) to ROCHE
          if the first indication for which marketing approval is sought is
          for acute therapy or on a basis of fifty percent (50%) to GENENTECH
          and fifty percent (50%) to ROCHE if the first indication for which
          marketing approval is sought is for chronic therapy.  ROCHE shall
          have the sole right in the Roche Territory to register, use, sell
          and market (including the right to detail and promote) all Products
          resulting from such collaboration.

     (c)  Upon ROCHE's filing of a NDA for the first indication (acute or
          chronic therapy) of Xubix in the United States if GENENTECH has not
          yet exercised its Opt-in Option, ROCHE shall provide GENENTECH with
          all relevant information requested by Genentech regarding Xubix
          including results of preclinical and clinical studies.

     (d)  Neither Party shall pay the other royalties for sales of any Xubix
          provided however, that ROCHE shall pay GENENTECH a six percent (6%)
          royalty on Net Sales of Xubix in any country in which Net Sales
          occur, in accordance with Article VI of this Agreement, if
          GENENTECH does not exercise the Opt-in Option.  The royalty shall
          be paid in that country for the longer of (a) a period of ten (10)
          years from First Commercial Introduction of Xubix in that country
          or (b) until the last expiration of a valid claim of a Genentech
          Patent which the sale of Xubix would infringe in that country
          without the license granted in the IIbIIIa Agreement.  If there are
          one or more products generically equivalent to Xubix which directly
          compete with Xubix in a country so that the generically equivalent
          products have a market share in that country of at least twenty-
          five percent (25%) of the market (in units) for Xubix, GENENTECH
          and ROCHE shall negotiate in good faith a modification to the
          royalty term or rate so that the royalty payable by ROCHE in that
          case is more economically viable.

     (e)  In the event that any of the existing agreements relating to this
          collaboration conflict with this Section 12 of Article II, the
          terms of this Section shall govern.


ARTICLE III - COMMERCIALIZATION COMMITTEES

1.   Joint Commercialization Committee.  Within fifteen (15) days of the
     Effective Date, the Parties shall form a Joint Commercialization
     Committee.  The Joint Commercialization Committee shall be the (a) forum
     for communicating to ROCHE information about Products, including the
     results for a Product as of that Product's Entry Into Man, Phase II
     Completion Date and Phase III Completion Date as well as all other
     information about that Product in GENENTECH's possession at the time of
     such communication which is specifically relevant to ROCHE's decision
     whether to exercise its option for that Product (e.g., cost information,
     market research, etc.) and (b) for communicating to GENENTECH
     information about Products for which ROCHE has a license.  The Joint
     Commercialization Committee shall meet initially with respect to a
     Product upon its Entry Into Man or earlier if the Parties mutually
     agree.  The Joint Commercialization Committee shall also be the forum


                                    Page 14
<PAGE>

     for ROCHE's communications, pursuant to Section 7 of Article II, above
     about ROCHE's development and sales and marketing efforts for each
     Product for which it has a license hereunder.  The Joint
     Commercialization Committee shall be comprised of an equal number but
     not more than five nominees of ROCHE and GENENTECH respectively,
     appointed by their respective organizations.  The chairman of the Joint
     Commercialization Committee will be designated by GENENTECH.  The
     chairman will call and chair meetings of the Joint Commercialization
     Committee which will be held at GENENTECH's facilities unless mutually
     agreed otherwise or by video conference where feasible.

2.   Management Committee.  Within ninety (90) days of the Effective Date,
     the Parties shall form a Management Committee comprised of three
     representatives from ROCHE, including its Chief Operating Officer or
     Head of the Pharma Division and three representatives from GENENTECH,
     including its Chief Executive Officer or Chief Operating Officer.  The
     Management Committee shall meet at least once per year to review the
     development and commercialization status of all Products which are then
     subject to this Agreement and any other matters brought to the
     Committee's attention by the Commercialization Committee, the Finance
     Committee or the Development Committee.

3.   Development Committee.  Within sixty (60) days of the Effective Date,
     the Parties shall form a Development Committee comprised of three
     representatives from ROCHE and three representatives from GENENTECH. The
     Development Committee shall meet regularly but at least three (3) times
     a year to discuss the development of Products for which ROCHE has
     exercised its option under Article II.  GENENTECH shall keep ROCHE
     informed through the Development Committee on projects and products for
     which an option of ROCHE is still in effect with an emphasis on those
     projects which are approaching Entry Into Man (i.e. potential Entry Into
     Man foreseen within the next four (4) months).

     The Development Committee shall direct and coordinate development
     efforts on a global basis for a Product for which ROCHE has exercised
     its option, consistent with the development plan required by Section 3
     of Article II.  The Development Committee shall meet initially with
     respect to a Product approaching its Entry Into Man, or earlier if the
     Parties mutually agree, and shall be responsible for formulating a joint
     development plan as required by Section 3 of Article II.  Except as
     otherwise specifically provided in such plan with respect to a Product,
     GENENTECH will lead the planning of world-wide development strategies
     for its Products.  All decisions related to GENENTECH's development
     efforts for a Product and GENENTECH's filings for approval of a
     Registration outside the Roche Territory shall be solely those of
     GENENTECH, except as otherwise specifically provided in such plan.  All
     decisions related to ROCHE's development efforts for a Product for which
     ROCHE has exercised its option right and ROCHE's filing for approval of
     a Registration in the Roche Territory shall be solely those of ROCHE,
     except as otherwise specifically provided in such plan.  The activities
     of a party in its territory shall not negatively impact the activities
     of the other party in its territory.

4.   Joint Finance Committee.  Within sixty (60) days of the Effective Date,
     the Parties shall form a Joint Finance Committee comprised of two
     representatives from ROCHE and two representatives from GENENTECH.  The


                                    Page 15
<PAGE>

     Joint Finance Committee shall meet on an as needed basis to review and
     discuss financial activities and issues relating to this Agreement.

5.   Review of Status.  Within six (6) months of the Restatement Date, the
     Parties shall review the Committee structure and composition described
     above with a view to simplifying the Committee system where feasible.


ARTICLE IV - DEVELOPMENT AND MARKETING

1.   Development.  Subject to the terms and conditions of this Agreement and
     the joint development plan with respect to a Product agreed to pursuant
     to Section 3 of Article II, GENENTECH shall be solely responsible for,
     and have full autonomy with respect to, the development of its Products
     outside of the Roche Territory and in the Roche Territory with respect
     to Products not licensed to ROCHE hereunder, and ROCHE shall be solely
     responsible for the development in the Roche Territory of those Products
     for which it has been granted a license under Section 2 of Article II
     and has exercised its option for a license under Section 3 of Article
     II.  The Parties shall each have the Additional Indication Opt-Out
     Option referred to in the Financial Appendix with respect to each
     Product developed hereunder.

2.   Development Costs Incurred prior to Opt-In.  Except as set forth below,
     GENENTECH shall be reimbursed by ROCHE for fifty percent (50%) of all of
     GENENTECH's Development Costs incurred in connection with a Product
     prior to the date on which ROCHE has exercised its option for such
     license under Sections 2 and 3 of Article II.  GENENTECH shall choose
     the method for reimbursement from among those set forth in the Financial
     Appendix.

     If ROCHE exercises its option for a license for a Product after notice
     of the Phase III Completion Date for that Product, GENENTECH will be
     reimbursed by ROCHE for fifty percent (50%) of all of GENENTECH's
     Development Costs incurred in connection with that Product prior to the
     date of GENENTECH'S notice to ROCHE of the Phase II Completion Date for
     that Product and seventy-five percent (75%) of all of GENENTECH's
     Development Costs incurred in connection with that Product after the
     date of the notice to ROCHE of the Phase II Completion Date and prior to
     the exercise of ROCHE's option for a license to the Product after
     receipt of the notice of the Phase III Completion Date.  If ROCHE has
     paid an Option Extension Fee for a Product, $5,000,000 shall be credited
     against the Development Costs reimbursable by ROCHE at the time of the
     exercise of the option following receipt of notice of the Phase III
     Completion Date.

3.   Development Costs after Opt-In.  Except as noted below, GENENTECH and
     ROCHE shall share the Global Development Costs incurred in connection
     with any development of a Product and incurred on or after the date on
     which ROCHE has been granted a license to such Product under Section 2
     of Article II and has exercised its option for such license under
     Sections 2 and 3 of Article II.  If ROCHE exercises its option for such
     Product during the exercise period after the date of such Product's
     Entry Into Man, ROCHE shall bear fifty percent (50%) of the Global
     Development Costs and GENENTECH shall bear fifty percent (50%) of the
     Global Development Costs for that Product.  If ROCHE exercises its
     option for such Product during the exercise period after the Phase II


                                    Page 16
<PAGE>

     Completion Date for such Product, ROCHE shall bear seventy-five percent
     (75%) of the Global Development Costs and GENENTECH shall bear twenty-
     five percent (25%) of the Global Development Costs for that Product. The
     exceptions to the foregoing are as follows:

          (a)  Canada Products.  With respect to Canada Products, GENENTECH
          shall be reimbursed by ROCHE for ten percent (10%) of all of
          GENENTECH's Development Costs incurred in connection with any
          development of a Canada Product and incurred on or after the date
          on which ROCHE has been granted a license to such Product under
          Section 1 of Article II.

          (b)  IGF-1 Products.  With respect to IGF-1 Products, ROCHE shall
          bear sixty percent (60%) of all Global Development Costs incurred
          in connection with any development of an IGF-1 Product for any
          diabetes indication on or after the date on which ROCHE has
          exercised its option for a license under Section 3 of Article II
          and GENENTECH shall bear forty percent (40%) of such Global
          Development Costs.

          (c)  NGF Products.  With respect to NGF Product, ROCHE shall bear
          sixty percent (60%) of all of Global Development Costs incurred in
          connection with any development of a NGF Product on or after the
          date on which ROCHE has exercised its option for a license under
          Section 3 of Article II and GENENTECH shall bear forty percent
          (40%) of such Global Development Costs, however any costs related
          to AIDS related neuropathies shall be fully borne by GENENTECH.

          (d) Additional Indications, New Formulations and New Dosing
          Schedules.  With respect to any additional indications or new
          formulations or new dosing schedules for a Product other than the
          indication or formulation or dosing schedule for which the Product
          is being developed for initial Registration and where the
          additional indication or new formulation or new dosing schedule
          would require a separate Phase III Trial for Registration,

               (i)  if ROCHE exercises its option associated with the Phase
                    II Completion Date, each Party shall bear 50% of the
                    Global Development Costs incurred with respect to such
                    additional indications and new formulations and new
                    dosing schedules; and

               (ii) if ROCHE exercise its option associated with the Phase
                    III Completion Date, ROCHE shall bear seventy-five
                    percent (75%) and GENENTECH shall bear twenty-five
                    percent (25%) of the Global Development Costs incurred
                    with respect to such additional indications and new
                    formulations and new dosing schedules.

          (e)  Phase III Completion Date Option.  If Roche exercises its
          option for a Product after notice of the Phase III Completion Date
          for that Product, no Global Development Costs will be shared for
          the completion of any clinical development or filing or preparation
          necessary for either Party's Registration for the indication which
          was the subject of the Phase III Trial related to the Phase III
          Completion Date.



                                    Page 17
<PAGE>

     The determination of the amount of the Development Costs and the Global
     Development Costs, and the timing and mechanism for payment thereof, is
     set forth in the Financial Appendix.

4.   Marketing.  GENENTECH shall be solely responsible for and have full
     autonomy with respect to the marketing of its products in the United
     States and in the Roche Territory with respect to Products not licensed
     to ROCHE hereunder.  Subject to the terms and conditions of this
     Agreement, ROCHE shall be solely responsible for the marketing in the
     Roche Territory of those Products for which it has been granted a
     license under Section 2 of Article II and has exercised its option for a
     license under Section 3 of Article II and for Canada Products and DNase.


ARTICLE V - PRODUCTION AND SUPPLY

1.   Production of Product.  Except as provided in Sections 6, 7 and 8 of
     this Article V, GENENTECH, or Genentech Biopharmaceuticals Limited in
     the case of DNase as Vialed Product or Finished Product, or Genentech
     International Limited in the case of Genentech Products (except DNase)
     which are Vialed Product or Finished Product, shall be responsible for
     the manufacture of Clinical Requirements and Commercial Requirements of
     Bulk Product, Vialed Product or Finished Product, as the case may be,
     for which ROCHE has a license, for the Roche Territory.

2.   Supply of Clinical Requirements.  Except as provided in Sections 5, 6, 7
     and 8 of this Article, GENENTECH shall use its best efforts to supply
     ROCHE with ROCHE's Clinical Requirements pursuant to a mutually
     agreeable and reasonable production schedule.  GENENTECH shall not be
     obligated to supply Clinical Requirements to ROCHE other than in
     accordance with the quantities mutually agreed to and at the approximate
     dates of delivery mutually agreed to.  All transportation and packing
     and similar costs shall be borne by ROCHE.  Title and risk of loss shall
     pass to ROCHE upon delivery by GENENTECH FOB origin.  The Parties shall
     agree on specifications for the Clinical Requirements, and the Clinical
     Requirements delivered by GENENTECH shall meet those specifications.
     GENENTECH shall not favor the supply of its own clinical requirements of
     a Product to it or its other licensees over ROCHE's Clinical
     Requirements.

3.   Supply of Commercial Requirements.  Except as provided in Sections 5, 6,
     7 and 8 of this Article, GENENTECH, or Genentech Biopharmaceuticals
     Limited in the case of DNase as Vialed Product or Finished Product, or
     Genentech International Limited in the case of Genentech Products
     (except DNase) which are Vialed Product or Finished Product, shall
     supply ROCHE with ROCHE's Commercial Requirements pursuant to a mutually
     agreeable and reasonable production schedule for ROCHE's Commercial
     Requirements, and ROCHE agrees to purchase its Commercial Requirements
     from those entities.  Those entities shall not be obligated to supply
     Commercial Requirements to ROCHE other than in accordance with the
     quantities mutually agreed to and at the approximate dates of delivery
     mutually agreed to.  All transportation and packing and similar costs
     shall be borne by ROCHE.  Title and risk of loss shall pass to ROCHE
     upon delivery by those entities to ROCHE, FOB origin.  The Parties shall
     agree on specifications and procedures for the Commercial Requirements,
     and the Commercial Requirements delivered by those entities shall meet
     those specifications and procedures.  Those entities shall not favor the


                                    Page 18
<PAGE>

     supply of their own commercial requirements of Product to themselves or
     their other licensees over ROCHE's Commercial Requirements.

4.   Supply Agreement.

          (a)  Except as provided in Sections 5, 6, 7 and 8 of this Article,
     at the time that ROCHE exercises its option for a license for a Product
     under Section 2 of Article II, the Parties agree to negotiate and enter
     into a definitive Supply Agreement for such Product on a basis
     consistent with this Article and the other terms and conditions of this
     Agreement.

          (b) For Canada Products other than DNase, the Parties will
     negotiate and enter into a Supply Agreement consistent with this Article
     V and the other terms and conditions of this Agreement.

5.   Amendments to DNase Supply Agreement.  (a) GENENTECH's and Genentech
     Biopharmaceutical Limited's obligation to supply ROCHE with ROCHE's
     Clinical Requirements and Commercial Requirements of DNase in the Roche
     Territory, and ROCHE's agreement to purchase such Requirements from
     GENENTECH and Genentech Biopharmaceuticals Limited shall be governed by
     the DNase Supply Agreement as amended by this Section 5. The DNase
     Supply Agreement is amended as follows.

          (a)  The definition of Collaborative Countries is amended to
     include Canada by striking Section 4 of Article I in its entirety and
     inserting in lieu thereof:

          "4.  The term "COLLABORATIVE COUNTRIES" shall include those
     countries listed in Appendix D of the Collaborative Agreement and
     Canada.".

          (b)  The definition of Rest of World Countries is amended to
     include Japan by striking Section 19 of Article I and inserting in lieu
     thereof:

          "19. The term "ROW COUNTRIES" shall include all countries except
     the Collaborative Countries and the United States.".

          (c)  The inclusion of Canada and Japan in the DNase Supply Agreement
     and its effect on the provisions allocating DNase in the event of a
     product shortfall shall be addressed by striking Section 9(c)(i) of
     Article II and inserting in lieu thereof:

          "(i) the United States,".

          (d)  In light of the changed marketing arrangement for DNase and to
     provide for an arm's length margin on GENENTECH's manufacture of DNase,
     Section 1 of Article III is stricken in its entirety and a new Section 1
     is inserted in lieu thereof:

          "1.  Payment for Clinical Requirements and Commercial Requirements.

                    (a) All Vialed Product for Clinical Requirements shall be
               supplied by Genentech Biopharmaceutical Limited to ROCHE at
               Genentech Biopharmaceutical Limited's Fully Burdened
               Manufacturing Cost.


                                    Page 19
<PAGE>

                    (b) All Bulk Product for Commercial Requirements shall be
               supplied by Genentech Biopharmaceutical Limited to ROCHE at
               Genentech Biopharmaceutical Limited 's Fully Burdened
               Manufacturing Cost plus a margin of twenty percent (20%) on
               such Cost and all Vialed Product for Commercial Requirements
               shall be supplied by Genentech Biopharmaceutical Limited to
               ROCHE at Genentech Biopharmaceutical Limited's Fully Burdened
               Manufacturing Cost plus a margin of twenty percent (20%) and --

                         (1) in the case of Commercial Requirements for use
                    in a Collaborative Country, such other amounts as
                    specified in Section 3 of Article VI of the Agreement
                    Between Genentech, Inc. and F. Hoffmann-La Roche Ltd
                    Regarding the Commercialization of Genentech's Products
                    in the Roche Territory; or

                         (2) in the case of Commercial Requirements for use
                    in a ROW country, such other amounts as specified in
                    Section 3 of Article VI of the Agreement Between
                    Genentech, Inc. and F. Hoffmann-La Roche Ltd Regarding
                    the Commercialization of Genentech's Products in the
                    Roche Territory."

          (e)  In light of the changed marketing arrangement for DNase and to
     extend Genentech Biopharmaceutical Limited's supply obligation to
     reflect such change, Section 1 of Article IV is stricken in its entirety
     and a new Section 1 is inserted in lieu thereof:

          "1.  Term.  (a)  This Agreement shall enter into force and effect
               as of February 11, 1992.

                      (b)  The term of Genentech Biopharmaceutical Limited's
               obligation to supply ROCHE with Product and ROCHE's obligation
               to purchase Product from Genentech Biopharmaceutical Limited
               for use in each of the Collaborative Countries and ROW
               Countries shall continue only for so long as ROCHE is
               obligated to pay royalties under Section 3 of Article VI of
               the Agreement Between Genentech, Inc and F. Hoffmann-La Roche
               Ltd Regarding the Commercialization of Genentech's Products in
               the Roche Territory; provided, however, that when such term
               ends with respect to a Collaborative or ROW Country, ROCHE and
               Genentech Biopharmaceutical Limited shall discuss in good
               faith terms and conditions for a continuing supply of Product
               from Genentech Biopharmaceutical Limited to ROCHE at a world
               market price for use and sale in the Roche Territory.".

6.   Supply of Scios Product.  If ROCHE exercises its option for Scios
     Product under Section 2 of Article II of this Agreement, Scios Product
     will be supplied by Scios Nova (or a third party contractor of Scios
     Nova) to ROCHE, and ROCHE agrees to purchase such Product from Scios
     Nova (or a third party contractor of Scios Nova), under the terms and
     conditions specified in the Scios Nova Agreement and such other terms
     and conditions as may be agreed to by GENENTECH and Scios Nova in a
     supply agreement yet to be negotiated.  In the event that ROCHE has
     exercised its option for a license for the Scios Product prior to the
     negotiation and execution of such supply agreement, GENENTECH shall keep
     ROCHE fully informed of the negotiations regarding such supply agreement


                                    Page 20
<PAGE>

     and shall invite a representative of ROCHE to participate in such
     discussions.

7.   Supply of IDEC Product.  If ROCHE exercises its option for IDEC Product
     under Section 2 of Article II of this Agreement, IDEC Product will be
     supplied in a manner consistent with the IDEC Agreement.

8.   Supply of In-Licensed Product.  If ROCHE exercises its option for a
     license for an In-Licensed Product under Section 2 of Article II of this
     Agreement and if the terms and conditions of the agreement between
     GENENTECH and the licensor covering the manufacture and supply of such
     In-Licensed Product provide that such licensor (or a third party
     contractor of such licensor) will be responsible for the manufacture and
     supply of such In-Licensed Product, then such In-Licensed Product will
     be supplied by such licensor (or a third party contractor of such
     licensor) to ROCHE, and ROCHE agrees to purchase such In-Licensed
     Product from such licensor (or a third party contractor of such
     licensor) under the terms and conditions specified in the agreement
     between GENENTECH and the licensor.  In the event that ROCHE has
     exercised its option for such In-Licensed Product and a supply agreement
     has yet to be negotiated between GENENTECH and the licensor of such In-
     Licensed Product, GENENTECH shall keep ROCHE fully informed of the
     negotiations regarding such supply agreement and shall invite a
     representative of ROCHE to participate in discussions regarding a supply
     agreement.

9.   Supply of Small Molecule Product.  If ROCHE exercises its option for a
     license for a Product under Section 2 of Article II of this Agreement
     and if such Product is a Small Molecule Product, ROCHE shall be
     responsible for the manufacture and supply of GENENTECH's Clinical
     Requirements and Commercial Requirements of such Small Molecule Product.
     In such case, the terms and conditions herein applicable to GENENTECH
     when it is manufacturing and supplying Product to ROCHE shall be equally
     applicable to ROCHE when it is manufacturing and supplying Small
     Molecule Product to GENENTECH including, without limitation, those terms
     and conditions set forth in Sections 2, 3, 4, 9 and 10 of this Article
     and the Section 1 of Article VI.

10.  Manufacturing Process and Facilities.

          (a) Except as provided in Sections 6, 7, 8 and 9 of this Article,
     GENENTECH shall be solely responsible for the development of a
     manufacturing process and facilities for Products for which ROCHE has a
     license except Small Molecule Products.  The fully burdened costs
     associated with the development of a manufacturing process specifically
     for such Product shall be considered part of the Development Costs and
     shall be shared as set forth in Section 3 of the Financial Appendix.

          (b) ROCHE shall be solely responsible for the development of a
     manufacturing process and facilities for Small Molecule Products for
     which ROCHE has a license.  The fully burdened costs associated with the
     development of a manufacturing process specifically for such Small
     Molecule Product shall be shared by the Parties in proportion to their
     expected share of the worldwide market, in terms of revenues, for the
     Small Molecule Product for their Territory.  For example, if GENENTECH's
     expected proportionate share in terms of revenues of the worldwide
     market is 33%, it shall bear 33% of the expense of developing a


                                    Page 21
<PAGE>

     manufacturing process for that Small Molecule Product.

11.  Additional Capital Requirements.  Except as provided in Sections 6, 7
     and 8 of this Article, if GENENTECH or ROCHE determines that additional
     dedicated manufacturing equipment, expansion or adaption of the then
     existing manufacturing facilities or manufacturing equipment, or
     construction of an additional manufacturing facility is needed to
     manufacture a Product to meet Clinical Requirements or Commercial
     Requirements for the other Party as provided herein, the manufacturing
     Party shall be solely responsible for the capital costs associated with
     such project.

12.  Term of Supply Obligation.  Except as provided in Sections 5, 6, 7 and 8
     of this Article, each Party's obligation to provide the other Party with
     Product for use and sale in that Party's Territory shall continue only
     for so long as that Party is obligated to pay royalties hereunder for
     such Product.  Thereafter ROCHE and GENENTECH shall discuss in good
     faith terms and conditions for a continuing supply of such Product from
     the manufacturing Party to other Party at a mutually agreeable market
     price for use and sale in that Party's Territory.

13.  ROCHE Right to Manufacture.  Notwithstanding anything to the contrary in
     this Agreement, and subject to the provisions relating to Costs of Idle
     Capacity in the Financial Appendix, ROCHE shall have the right to
     manufacture Bulk Product or Vialed Product (i) if ROCHE can demonstrate
     that it is able to manufacture Bulk Product or Vialed Product at a lower
     price than the supply price of GENENTECH, or (ii) if GENENTECH is not
     able to, or it is foreseeable that GENENTECH will not be in a position
     to, supply Roche's Commercial Requirements in the Roche Territory, or
     (iii) if GENENTECH intends to have a third party toll manufacture Bulk
     Product or Vialed Product.  In such case and if ROCHE so requests,
     GENENTECH shall provide ROCHE with all information and, at Roche's
     expense, support needed to enable ROCHE to manufacture Bulk Product or
     Vialed Product for use and sale in the Roche Territory and GENENTECH
     shall grant ROCHE the respective licenses necessary for ROCHE to effect
     its rights hereunder.


ARTICLE VI - PAYMENTS, MARGINS AND ROYALTIES

1.   Payment for Product Requirements.

          (a) Except for IDEC Product and Scios Product, unless the terms and
     conditions applicable to an In-Licensed Product provide otherwise, all
     Clinical Requirements shall be supplied by one Party to the other at the
     manufacturing Party's Fully Burdened Manufacturing Cost.

          (b) Except for IDEC Product and Scios Product, unless the terms and
     conditions applicable to an In-Licensed Product provide otherwise, all
     Commercial Requirements in the form of Vialed Product shall be supplied
     by GENENTECH to ROCHE at GENENTECH's Fully Burdened Manufacturing Cost
     plus a margin of twenty (20%) on such Cost.  Except for IDEC Product and
     Scios Product, unless the terms and conditions applicable to an In-
     Licensed Product provide otherwise, if ROCHE is producing Vialed Product
     pursuant to the licenses granted in Sections 1 and 3 of Article II, then
     Bulk Product, necessary for the manufacture of Vialed Product and
     Finished Product for Commercial Requirements outside the United States,


                                    Page 22
<PAGE>

     shall be supplied by GENENTECH to ROCHE at GENENTECH's Fully Burdened
     Manufacturing Cost plus a margin of twenty (20%) on such Cost.

2.   Invoices and Method of Payment of GENENTECH's Fully Burdened
     Manufacturing Cost and Margin.  GENENTECH shall invoice ROCHE for each
     shipment of Bulk Product or Vialed Product, as the case may be, and
     ROCHE shall pay such invoice on the terms and conditions set forth in
     the Financial Appendix.

3.   Royalties on Sale of DNase.

          (a) ROCHE shall pay GENENTECH a royalty of twenty percent (20%) on
     Net Sales of DNase in each of the Collaborative Countries and Canada.

          (b) ROCHE shall pay GENENTECH a royalty of twelve and one-half
     percent (12.5%) on the first $100 million in aggregate Net Sales of
     DNase in countries other than the Collaborative Countries and Canada
     and thereafter a royalty of fifteen percent (15%) on aggregate Net Sales
     of DNase in such countries in excess of $100 million.

          (c) The payment of royalties on DNase Net Sales in each country of
     the Roche Territory in (a) and (b) above shall continue until the latter
     to occur of (i) the last expiration of a Valid Claim of a GENENTECH
     Patent which the sale of that Product would infringe in that country but
     for the license granted herein or (ii) for a period of 25 years from the
     date of First Commercial Introduction in that country.

4.   Royalties and Other Payments on Sale of Canada Products.

          (a) ROCHE shall pay GENENTECH a royalty of twenty percent (20%) on
     Net Sales of each Canada Product.  The payment of royalties on each
     Canada Product's Net Sales shall continue until the latter to occur of
     (i) the last expiration of a Valid Claim of a GENENTECH Patent which the
     sale of that Product would infringe in that country but for the license
     granted herein or (ii) a period of 25 years from the Effective Date.

          (b) For each annual increase in Net Sales of Activase in Canada in
     excess of 110% of 1994 Net Sales of Activase in Canada, ROCHE agrees to
     make an additional payment to GENENTECH of ten percent (10%) of Net
     Sales of Activase in Canada for that year in excess of 1994 Net Sales.
     In no event shall the total of such annual payments exceed $27 million.

5.   Royalties on Sale of Genentech Products.  Except for Genentech Products
     for which ROCHE exercises its option granted under Section 2(b) of
     Article II after the Phase III Completion Date, ROCHE shall pay
     GENENTECH a royalty of twelve and one-half percent (12.5%) on the first
     $100 million in aggregate Net Sales of each Genentech Product in the
     Roche Territory and a royalty of fifteen percent (15%) on aggregate Net
     Sales of such Genentech Product in excess of $100 million.  For
     Genentech Products for which ROCHE exercises its option granted under
     Section 2(b) of Article II after the Phase III Completion Date, ROCHE
     shall pay GENENTECH a royalty of fifteen percent (15%) on all Net Sales
     of such Genentech Product.  If ROCHE has paid an Option Extension Fee
     for a Product, the amount of $5,000,000 shall be credited against
     royalties payable GENENTECH by ROCHE in the first calendar year of sales
     by ROCHE in which Net Sales of that product exceed $100 million U.S.
     The payment of royalties on each GENENTECH Product's Net Sales in each


                                    Page 23
<PAGE>

     country of the Roche Territory shall continue until the latter to occur
     of (i) the last expiration of a Valid Claim of a GENENTECH Patent which
     the sale of that Product would infringe in that country but for the
     license granted herein or (ii) a period of 25 years from the date of
     First Commercial Introduction in that country.

6.   Royalties and Other Payments on Sale of Scios Product.

          (a) ROCHE shall pay GENENTECH a royalty of twenty percent (20%) on
     annual Net Sales of Scios Product in each country of the Roche Territory
     for so long as GENENTECH is paying a royalty to Scios Nova under the
     Scios Nova Agreement in that country.  Thereafter, ROCHE shall pay
     GENENTECH a royalty on Net Sales in that country of ten percent (10%) or
     aggregate annual Net Sales of up to and including $150 million in all
     countries in that year and of eight percent (8%) for aggregate annual
     Net Sales of over $150 million in all countries in that year, and such
     royalties shall be payable with respect to each country until the latter
     to occur of (i) the last expiration of a Valid Claim of a GENENTECH
     Patent which the sale of that Product would infringe in that country but
     for the license granted herein or (ii) a period of 25 years from the
     date of First Commercial Introduction in that country.

          (b) If ROCHE exercises its option pursuant to Sections 2 and 3 of
     Article II, within thirty (30) days thereafter ROCHE shall pay GENENTECH
     a one time fee of $25,000,000 in lieu of paying one-half-of the
     Development Costs for Scios Product.  Such amount assumes that a second
     Phase III Trial will be required for Registration of Scios Product in
     the United States; if only one Phase III Trial is necessary, the Parties
     will negotiate a higher one time fee.  GENENTECH is obligated to make
     certain one time milestone payments to Scios Nova, as set forth in the
     Scios Nova Agreement, upon Net Sales of $150 million in the Licensed
     Territory in any 12 month period (either $15 million or $7.5 million) or
     upon Regulatory Approval in Japan (either $5 million or $2.5 million) as
     those terms are used in the Scios Nova Agreement.  ROCHE shall promptly
     reimburse GENENTECH for each such milestone GENENTECH pays to Scios
     Nova.

          (c) With respect to Canada, the Scios Nova Agreement provides that
     GENENTECH and Scios Nova will copromote Scios Product as part of a
     copromotion arrangement for the United States and Canada and that
     GENENTECH and Scios Nova will share Operating Profits and Losses on the
     sale of Scios Product as part of an arrangement to share Operating
     Profits and Losses for the United States and Canada.  ROCHE's rights
     with respect to Scios Product are subject to such obligations regarding
     copromotion in Canada and the sharing of Operating Profits and Losses
     with respect to Canada.

7.   Royalties and Other Payments on Sale of IDEC Product.

          (a) ROCHE shall pay GENENTECH a royalty of twenty percent (20%) on
     Net Sales of IDEC Product in each country of the Roche Territory for so
     long as GENENTECH is paying a royalty to IDEC under the IDEC Agreement
     in that country.  Thereafter, ROCHE shall pay GENENTECH a royalty on Net
     Sales in that country of ten percent (10%) for aggregate annual Net
     Sales of up to and including $75 million in all countries in that year
     and eight percent (8%) for aggregate annual Net Sales over $75 million
     in all countries in that year, and such royalties shall be payable with


                                    Page 24
<PAGE>

     respect to each country until the latter to occur of (i) the last
     expiration of a Valid Claim of a GENENTECH Patent which the sale of that
     Product would infringe in that country but for the license granted
     herein or (ii) a period of 25 years from the date of First Commercial
     Introduction in that country.

          (b) If ROCHE exercises its option pursuant to Sections 2 and 3 of
     Article II, within thirty (30) days thereafter ROCHE shall pay GENENTECH
     a one time fee of $10 million in lieu of paying one-half of the
     Development Costs for IDEC Product incurred as of the Effective Date.
     Development Costs incurred after the Effective Date shall be subject to
     Section 2 of Article IV.  In addition, GENENTECH is obligated to make
     certain one time milestone payments to IDEC, as set forth in the IDEC
     Agreement, upon Regulatory Approval in the First Major European Country
     ($10 million) and upon the Patent Milestone Event ($2.5 million) as
     those terms are used in the IDEC Agreement.  ROCHE shall promptly
     reimburse GENENTECH for each such milestone which GENENTECH pays to
     IDEC.

          (c) GENENTECH has an option for a co-exclusive license for rights
     to IDEC Product in Asia for a payment of $2.5 million if such co-
     exclusive license becomes available to GENENTECH.  If ROCHE exercises
     its option for a license for the IDEC Product under Section 2 of Article
     II and if ROCHE wishes GENENTECH to exercise the option for a co-
     exclusive license to IDEC Product in Asia should such license become
     available to GENENTECH, then ROCHE shall provide written notice of such
     to GENENTECH at the time of exercise of its option and pay $2.5 million
     to GENENTECH in conjunction therewith.

          (d) With respect to Canada, the IDEC Agreement provides that
     GENENTECH and IDEC will copromote IDEC Product as part of a copromotion
     arrangement for the United States and Canada and that GENENTECH and IDEC
     will share Operating Profits and Losses on the sale of IDEC Product as
     part of an arrangement to share Operating Profits and Losses for the
     United States and Canada.  ROCHE's rights with respect to IDEC Product
     are subject to such obligations regarding copromotion in Canada and the
     sharing of Operating Profits and Losses with respect to Canada.

8.   Royalties and Other Payments on Sale of In-Licensed Product.

          (a) If ROCHE exercises its option under Article II for an In-
     Licensed Product, the Parties will negotiate mutually agreeable
     financial terms for payments by ROCHE to GENENTECH.

          (b) In general, if ROCHE exercises its option under Article II for
     an In-Licensed Product, ROCHE agrees to pay to GENENTECH a license fee
     or similar acquisition fee for rights in the Roche Territory and any
     milestone or similar payments related to the achievement of progress
     either in development, registration or sales of an In-Licensed Product
     or for other achievements in the Roche Territory.

          (c) The Parties acknowledge that the specific terms and conditions
     related to an In-Licensed Product cannot be anticipated and agree to
     negotiate in good faith the allocation of responsibility for such terms
     and conditions in a fair manner reflecting the benefit to be received by
     each from the In-Licensed Product.



                                    Page 25
<PAGE>

9.   Calculation of Aggregate Net Sales.  The calculation of the aggregate
     Net Sales for determination of the applicable royalty percentage shall
     be that set forth in the Financial Appendix.

10.  Timing of Royalty Payments.  Payment of amounts specified in this
     Article shall be made within ninety (90) days of the end of each
     calendar quarter in which the sale was made except where payments are
     made to GENENTECH in consideration of royalty payments to be made to
     Scios Nova or IDEC in which case those payments shall be made within
     sixty (60) days of the end of each calendar quarter.  For purposes of
     determining when a sale of a Product occurs, the sale shall be deemed to
     occur when an independent third party is invoiced for the Product.  Any
     such payment that is not paid on or before the date such payment is due
     under this Agreement shall bear interest, to the extent permitted by
     applicable law, at the LIBOR rate of interest as reported by Data Stream
     from time to time, calculated on the number of days such payment is
     delinquent.  ROCHE shall make all payments hereunder by bank wire
     transfer in immediately available funds to such account as GENENTECH
     shall designate before such payment is due, free and clear of any taxes,
     duties, levies, fees or charges, except for withholding taxes due on
     behalf of GENENTECH (to the extent applicable).  ROCHE shall make any
     withholding payments due on behalf of GENENTECH and shall promptly
     provide GENENTECH with written documentation of any such payment
     sufficient to satisfy the reasonable requirements of an appropriate tax
     authority with respect to an application by GENENTECH for a foreign tax
     credit for such payment or for similar treatment.  At the time of
     remittance of each payment described in this Article, ROCHE shall
     provide GENENTECH with a statement summarizing the Net Sales of the
     Product in each of country outside the United States in the reporting
     currency of each such country and the rate used to convert from each
     such country's currency to Swiss Francs and, in the case of the Scios
     Agreement and IDEC Agreement, with such other information as those
     Agreements require of GENENTECH.

11.  Restrictions on Transfer of Funds.

          (a) If ROCHE ships Product into a country outside the United States
     for sale in that country and, at the time of shipment, such country has
     legal restrictions on the transfer of funds which prevent the prompt
     remittance of the part or all of the amount described in this Article,
     ROCHE shall be obligated to pay such amounts in immediately available
     funds to such account as GENENTECH shall designate.

          (b) If ROCHE ships Product into a country outside the United States
     for sale in that country and such country subsequently imposes legal
     restrictions on the transfer of funds which prevents the prompt
     remittance of part or all of the amount described in this Article with
     respect to that shipment of the Product in that country, ROCHE shall be
     obligated to --

               (i)  pay such portion of such amount as permitted by the law
          of such country in immediately available funds to such account as
          GENENTECH shall designate, and

               (ii) pay the remainder of such amount to such account as
          GENENTECH shall designate in a bank in such country.



                                    Page 26
<PAGE>

     In such event, the Parties shall discuss in good faith the best means of
     utilizing the funds on deposit in such country.  Shipments of the
     Product into such country after the imposition of legal restrictions on
     the transfer of funds shall be subject to subsection (a) of this
     Section.

12.  Records Regarding Royalties.  ROCHE agrees to keep for at least three
     (3) years, records of all sales of Product on a country-by-country basis
     in sufficient detail to permit GENENTECH to confirm the accuracy of the
     ROCHE's calculations with respect to payment of the amounts described in
     this Article.  Once a year, at the request and the expense of GENENTECH
     and upon at least five (5) days' prior written notice, ROCHE shall
     permit its officially appointed world-wide auditor to examine its
     records in a manner sufficient to report to GENENTECH on the accuracy of
     ROCHE's calculations.  Results of any such examination shall be made
     available to both Parties.  If such examination reveals an underpayment
     of the amounts described in this Article by five percent (5%) or more,
     ROCHE shall pay all costs of such examination.  In the event such
     examination concludes that additional amounts are owed, the additional
     amounts shall be paid within thirty (30) days of the date GENENTECH
     delivers to ROCHE such accountant's written report so concluding.  In
     the event such examination concludes that there has been an overpayment
     with respect to such amounts, the excess shall be credited to ROCHE
     against future payment of the amounts described in this Article.  This
     Section shall survive any termination of royalty payments for a
     particular country for a period of six (6) years.

13.  Royalty for Use of Trademark.  At the end of the term for the payment of
     royalties as defined in this Article, ROCHE shall pay to GENENTECH a
     royalty for the use of each Trademark in each country in the Roche
     Territory at a rate of two percent (2%) of Net Sales by ROCHE in such
     country of the Product represented by the Trademark for so long as the
     Trademark is used.

14.  Generic Competition.  If there is one or more products generically
     equivalent to a Product which compete with that Product in a country so
     that the generically equivalent products have a market share in that
     country of at least twenty-five percent (25%) of the market (in units)
     for the Product, GENENTECH and ROCHE shall negotiate in good faith a
     modification to the royalty term or rate so that the royalty payable by
     ROCHE in that case is significantly more economically viable.

15.  Royalty Term if ROCHE Becomes Minority Shareholder.  Notwithstanding
     anything to the contrary herein, if ROCHE's equity ownership of
     GENENTECH securities is less than fifty percent (50%) of all such
     securities then outstanding, the term for the payment of royalties for a
     Product hereunder in each country shall be reduced to the latter to
     occur of (i) the last expiration of a Valid Claim of a GENENTECH Patent
     which the sale of that Product would infringe in that country but for
     the license granted herein or (ii) a period of ten (10) years from the
     date of First Commercial Introduction in that country.  If at any time
     ROCHE's equity ownership of GENENTECH securities becomes less than fifty
     percent (50%) (the "Divestiture Date"), the term for the payment of
     royalties specified above shall become immediately applicable.  If
     because of the immediate applicability of the shortened term for the
     payment of royalties for a Product, royalties would no longer be payable
     in a country, ROCHE shall continue to pay royalties on that Product in


                                    Page 27
<PAGE>

     that country over the following period in a decreasing manner as
     follows:

                         Period                       % of applicable royalty

               From Divestiture Date until                  100
               end of that calendar year

               First full calendar year following            80
               Divestiture Date

               Second full calendar year following           60
               Divestiture Date

               Third full calendar year following            40
               Divestiture Date

               Fourth full calendar year following           20
               Divestiture Date

               Fifth full calendar year following             0
               Divestiture Date and thereafter

     Thereafter, ROCHE shall have a fully paid-up license for such Product.


ARTICLE VII - TRANSITION PROVISIONS

1.   General.  The Parties intend to effect a transfer of the operations of
     Genentech Canada Ltd, Genentech Europe Limited and Genentech Ltd.
     (Japan) to ROCHE in the manner described above and in the subsequent
     provisions of this Article VII.  The Parties acknowledge that a number
     of actions must be taken to effect such transfers in an orderly manner
     so as to minimize disruption to those operations and attendant costs and
     maximize revenue receipt where such operations are generating or
     involved in generating revenue.  The Parties acknowledge that while they
     will act expeditiously to take all such appropriate actions, a
     substantial period is likely to be required to complete all of such
     actions.  Therefore, the Parties agree to effect such a transfer as
     quickly as possible but no later than January 1, 1996 and the provisions
     relating to such a transfer, including license grants, supply
     obligation, like relating to Canada, shall be effective when such
     transfer is completed and at a date to be mutually agreed to.

2.   Personnel of Genentech Canada, Inc., Genentech Europe Limited and
     Genentech Ltd. (Japan).  The Parties shall discuss and mutually agree
     with respect to the continuing status of the employees of Genentech
     Canada, Inc., Genentech Europe Limited and Genentech Ltd. (Japan).

3.   Records and Property Leases.

          (a) Within ninety (90) days of the Effective Date of this
     Agreement, copies of the records of Genentech Canada, Inc., Genentech
     Europe Limited and Genentech Ltd. (Japan) relating to their operations
     and needed by ROCHE to assume those operations shall be made available
     to ROCHE.



                                    Page 28
<PAGE>

          (b) Within ninety (90) days of the Effective Date of this
     Agreement, information regarding the real estate property leases of
     Genentech Canada, Inc., Genentech Europe Limited and Genentech Ltd.
     (Japan) shall be made available to ROCHE and such leases shall promptly
     be assumed by ROCHE as well as any other liabilities of these entities
     which have arisen in the ordinary course of business except for a line
     of credit to Genentech Canada, Inc. used to purchase Activase rights.

          (c) Within ninety (90) days of the Effective Date of this
     Agreement, information regarding office equipment and the like to ROCHE.
     Within thirty (30) days after such information is made available ROCHE,
     ROCHE shall advise GENENTECH whether it wishes to purchase any or all of
     such equipment or the like.

4.   Transfer of Dossier and Registration.  The Dossiers for Canada Product,
     including all data, information, results, and documents with respect to
     pertinent Registrations in Canada, shall be transferred by GENENTECH to
     ROCHE, and ROCHE shall be entitled to use the Dossiers and all such
     data, information, results, and documents for its own purposes
     consistent with the terms of this Agreement.  GENENTECH shall cooperate
     with ROCHE in a timely manner and in every proper way to effect the
     transfer of the pertinent Registration or Registrations exclusively to
     ROCHE and GENENTECH shall seek, and use its best efforts to obtain, the
     necessary authorization from the pertinent governmental authorities
     applicable to such transfer.


ARTICLE IX - PATENTS, INVENTIONS AND TRADEMARKS

1.   Sole Inventions.  The Parties recognize that either Party may
     independently and separately make inventions in the course of this
     Agreement relating to a Product, its administration, formulation or
     clinical use.  In such event, the Party making the invention shall be
     the sole owner of that invention and of any patent applications and
     patents thereon (including inventor's certificates) and shall be solely
     responsible for the filing, prosecution and maintenance of all such
     patent applications and patents and shall have sole authority to decide
     what actions in that regard it shall take.  If the other Party wishes to
     have the Party owning the invention undertake actions which the Party
     owning the invention does not routinely undertake or which it has
     decided not to undertake, the other Party may request such Party to
     undertake such actions and if the other Party does undertake such
     actions, it shall be reimbursed for all internal and external costs it
     incurs relating to such actions.

2.   Joint Inventions.  Any inventions relating to a Product, its
     administration, formulation or clinical use arising from the Parties'
     efforts under this Agreement that are jointly made by both Parties
     (i.e., an invention in which one or more inventors from each Party,
     including individuals normally obliged to assign an invention to a
     Party, have made an inventive contribution as determined by United
     States Patent Law), and any patent applications and patents thereon,
     shall be jointly owned by the Parties.  With respect to any such joint
     invention, the Parties intend that after consultation with each other,
     the filing, prosecution and maintenance of any patent applications
     thereon will be under the control of the Party from whom the majority of
     the data underlying such patent application arises (the "Controlling


                                    Page 29
<PAGE>

     Party"), and the Controlling Party shall have the right (but not the
     obligation) to undertake such filings, prosecutions and maintenance at
     its sole expense, provided that: (a) the Controlling Party notifies the
     non-Controlling Party within one (1) month after the filing of any
     priority patent application by the Controlling Party; (b) the
     Controlling Party informs the non-Controlling Party within eight (8)
     months from the filing of the priority application whether and in which
     countries it intends to file convention applications; (c) the
     Controlling Party provides the non-Controlling Party promptly with
     copies of all communications received from or filed in patent offices
     with respect to such filings; and (d) the Controlling Party provides the
     non-Controlling Party a reasonable time prior to taking or failing to
     take action that would affect the scope or validity of rights under any
     patent applications or patents (including but not limited to
     substantially narrowing or canceling any claim, abandoning any patent or
     not filing or perfecting the filing of any patent application in any
     country), with notice of such proposed action or inaction so that the
     non-Controlling Party has a reasonable opportunity to review and make
     comments.  In the event that the Controlling Party breaches the
     foregoing obligations regarding updating and consultation, and such
     breach is not cured with thirty (30) days of a written notice from the
     non-Controlling Party to the Controlling Party describing such breach,
     or in the event that the Controlling Party fails to undertake the filing
     of a patent application within ninety (90) days of a written notice by
     the non-Controlling Party to the Controlling Party that the non-
     Controlling Party believes filing of such an application is appropriate,
     the non-Controlling Party may undertake such filing, prosecution and
     maintenance at its sole expense, in which case the Controlling Party
     shall assign all its rights to such invention to the non-Controlling
     Party, and any patent application and subsequently issued patent thereon
     shall be owned solely by the non-Controlling Party.

3.   Patent Infringement.

          (a) In the event that GENENTECH or ROCHE become aware of any
     infringement by a third party of any GENENTECH Patents in the Roche
     Territory, whether solely or jointly held, each Party shall inform the
     other in writing of all available evidence and details available
     concerning such infringement.  Before taking any action, the Parties
     shall consult with each other as to the best manner in which to proceed.
     Either Party which is the sole owner of a Patent shall have the sole
     right but not the obligation to bring, defend, and maintain any
     appropriate suit or action or to control the conduct thereof against the
     infringer.  However, if the Parties agree to equally share all expenses,
     they shall also share the recoveries due to any such action.  If the
     Parties do not agree to share all expenses, the paying Party will
     receive all recoveries due to any such action.  If one Party requests
     the other Party to join in such suit or action, the other Party shall
     cooperate and execute all papers and perform such other acts as may be
     reasonably required.

          (b) In the event that GENENTECH and/or ROCHE are sued or threatened
     with suit in the Roche Territory, by a third party who claims that the
     manufacture, use or sale of a Product is an infringement of one or more
     claims of a patent owned or controlled by the third party, GENENTECH and
     ROCHE shall each pay its own costs in defending such suit or threatened
     suit.  If the settlement of a lawsuit or threatened lawsuit or other


                                    Page 30
<PAGE>

     action or a judgment arising out of a lawsuit requires any payments to a
     third party or license from a third party in order to manufacture, use
     or sell Product in a country as a result of a dominating third party
     patent right, GENENTECH agrees to reduce the royalty for that Product in
     that country specified in this Agreement by one-half of the amount of
     any such payments, up to a maximum reduction of two percent (2%) of the
     royalty due on Net Sales of that Product in that country.  In such case,
     there shall be no additional reduction in royalties on Net Sales of that
     Product for that country because of dominating third party patent rights.

4.   Third Party Patents.

          (a) If either Party becomes aware of any patent or other
     appropriate intellectual property belonging to a third party which the
     Party reasonably believes that without a license thereto GENENTECH would
     infringe by virtue of its obligations under Article IV to manufacture
     and supply both clinical and commercial needs for Bulk Product or Vialed
     Product in the Roche Territory, the Party shall notify the other Party
     of such.  The Parties shall thereafter discuss a means of resolving such
     potential infringement including taking a license to such patent or
     other intellectual property.  If as a result of an agreement between the
     parties, GENENTECH acquires a license to such patent or other
     intellectual property, the associated intellectual property acquisition
     and licensing costs shall be deemed to be part of the GENENTECH's Fully
     Burdened Manufacturing Cost.

          (b) If GENENTECH insists that such a license is necessary but ROCHE
     does not agree, or if ROCHE is not willing to agree to terms for such a
     license that are acceptable to the third party patent or intellectual
     property owner, then ROCHE shall defend, indemnify and hold harmless
     GENENTECH from and against all third party costs, claims, suits,
     expenses (including reasonable attorney's fees) and damages arising out
     of or resulting from any infringement by GENENTECH of such patent or
     intellectual property which covers the manufacture of the Product.

          (c) If ROCHE insists that such a license is necessary but GENENTECH
     does not agree, or if GENENTECH is not willing to agree to terms for
     such a license that are acceptable to the third party patent or
     intellectual property owner, then GENENTECH shall defend, indemnify and
     hold harmless ROCHE from and against all third party costs, claims,
     suits, expenses (including reasonable attorney's fees) and damages
     arising out of or resulting from any infringement by ROCHE of such
     patent or intellectual property which covers the manufacture of the
     Product.

5.   Reporting on Patent Status.  GENENTECH shall keep ROCHE informed of its
     efforts to secure one or more Patents its owns in the Roche Territory
     with one or more valid claims covering as compositions

          (a) Canada Products and DNase, and

          (b) Genentech Products, IDEC Product, Scios Product and In-Licensed
          Product for which ROCHE has exercised its option under Section 2 of
          Article II,

     or its use or sale in the Roche Territory.  Such reports shall be made
     at the end of each year beginning in the year of execution of this


                                    Page 31
<PAGE>

     Agreement and shall include the expiration date of any such patent
     which.

6.   Trademark.  GENENTECH will register in each major country in the Roche
     Territory, at its own expense, at least one Trademark for each Product
     for which ROCHE has exercised its option under Section 2 of Article II
     and will maintain it in force.  GENENTECH shall monitor for trademarks
     that may infringe such Trademark at its sole expense.  ROCHE shall
     inform GENENTECH of any infringing trademarks in major countries in the
     Roche Territory of which ROCHE becomes aware.  GENENTECH shall hold
     ROCHE harmless from all loss, expense or damage such as interruption and
     loss of sales, destruction and reprinting of packaging and promotional
     material, damages to the adverse party and other similar consequences if
     a third party succeeds in enjoining ROCHE from distributing and
     marketing a Product outside the United States to the extent that such
     loss, expense or damage results from the use of GENENTECH's Trademark.
     In such event, ROCHE shall make best efforts to mitigate any losses both
     prospectively and subsequently.


ARTICLE X - CONFIDENTIALITY AND PUBLICATIONS

1.   Confidential Information.  The Parties acknowledge that during the
     course of this Agreement they may receive from each other information
     which is proprietary and confidential and of significant commercial
     value to the disclosing Party.  Such information shall specifically
     include all data provided to ROCHE for its evaluation in connection the
     exercise of any option under Section 2 of Article II.  Such information
     as well as any Know-How, so long as such Know-How is not generally
     ascertainable from publicly available information, to the extent
     provided by the other Party, shall be deemed "Information" as that term
     is used in the Mutual Confidentiality Agreement entered into as of
     September 8, 1990 between Roche Holding Ltd and GENENTECH, Inc. (the
     "Mutual Confidentiality Agreement"), and the Parties agree that such
     Information shall be subject to the terms and provisions of the Mutual
     Confidentiality Agreement.

2.   Publications.  Notwithstanding Section 1 of this Article, ROCHE shall be
     free to publish the results of the development activities hereunder to
     the extent that such publication will not result in the disclosure of
     Information of GENENTECH.  ROCHE shall submit to GENENTECH any such
     proposed publication at least thirty (30) days in advance to allow
     GENENTECH to review such planned publication.  GENENTECH will promptly
     report any decisions regarding the existence of patentable inventions,
     and should any patentable inventions be identified, ROCHE agrees to
     delay disclosure for a reasonable time period to allow filing of such
     patent applications.  In addition, GENENTECH shall have the authority to
     require deletion from any such planned publication of any Information of
     GENENTECH.

3.   Restrictions on Transfer of Proprietary Materials.  Each Party agrees,
     with respect to any proprietary materials, substances, reagents or the
     like (except Product) received from the other Party ("Materials") that
     such materials shall be subject to the provisions of Mutual Agreement
     for Supply of Research Material entered into between GENENTECH Inc. and
     Roche Holding Ltd as of July 17, 1991.



                                    Page 32
<PAGE>

ARTICLE XI - LIABILITY

1.   No Liability.  Neither Party shall be liable to the other Party for
     indirect, incidental or consequential damages arising out of the terms
     and conditions of this Agreement or with respect to that Party's
     performance hereunder or lack thereof.

2.   Indemnification by ROCHE.  ROCHE shall defend, indemnify and hold
     harmless GENENTECH from and against all third party costs, claims,
     suits, expenses (including reasonable attorneys' fees), assessments,
     fines and damages (collectively "CLAIMS") arising out of or resulting
     from ROCHE's manufacturing (if any), formulating (if any), filling (if
     any), finishing, packaging, labeling, distributing, selling or using
     after title to a Product has passed to ROCHE from GENENTECH.  The
     foregoing indemnification shall not extend to any claims which arise or
     result from any defect in GENENTECH's manufacture, formulation or fill
     of the Product.  The foregoing indemnification shall be conditioned upon
     GENENTECH: (a) providing written notice to ROCHE within twenty (20) days
     after GENENTECH has been given written notice of such Claim; (b)
     permitting ROCHE the opportunity to assume full responsibility (at
     ROCHE's expenses) for the investigation and defense of any such Claim;
     and (c) not settling or compromising any such Claim without ROCHE's
     prior written consent.

3.   Indemnification by GENENTECH.  GENENTECH shall defend and indemnify and
     hold harmless ROCHE from and against all third party costs, claims,
     suits, expenses (including reasonable attorney's fees) assessments,
     fines and damages (collectively "Claims") arising out of or resulting
     from its manufacture, formulating, filling and testing prior to passage
     of title to the Product to ROCHE from GENENTECH and which gives rise to
     a defect which could not normally be detected by adequate quality
     control testing on the part of ROCHE.  The foregoing indemnification
     shall not extend to any claims which arise or result from any defect in
     ROCHE's manufacture of the Product (if such manufacture occurs).  The
     foregoing indemnification shall be conditioned upon ROCHE: (a) providing
     written notice to GENENTECH within twenty (20) days after ROCHE has been
     given written notice of such Claim, (b) permitting GENENTECH the
     opportunity to assume full responsibility (at GENENTECH's expenses) for
     the investigation and defense of any such Claim; and (c) not settling or
     compromising any such Claim without GENENTECH's prior written consent.


ARTICLE XII - TERM AND TERMINATION

1.   Term.  This Agreement shall enter into force and effect as of the
     Effective Date.  This Agreement shall expire as to a Product when
     royalties are no longer payable by ROCHE to GENENTECH with respect to
     such Product unless the Parties mutually agree to extend this Agreement
     with respect to such Product.  Thereafter, ROCHE shall have a fully
     paid-up license for such Product.

2.   Termination by ROCHE.

          (a) ROCHE shall have the right to terminate its license for a
     Product in the Roche Territory hereunder at any time upon thirty (30)
     days prior written notice to GENENTECH.  If ROCHE terminates its license
     for a Product in the Roche Territory for other than safety reasons,


                                    Page 33
<PAGE>

     ROCHE shall continue to remain liable for all of its obligations with
     respect to said Product, including its obligations with respect to
     payment of its portion of Global Development Costs, for a period of
     twelve (12) months from the date of the termination notice or six (6)
     months from the date of termination notice in the specific circumstance
     where GENENTECH or ROCHE has completed at least one Phase III Trial for
     that Product and the results of that Trial, either alone or in
     conjunction with any other Phase III Trial involving the Product, are
     insufficient to support a Registration of the Product in a country set
     forth on Appendix B, or if results of other preclinical or clinical
     trials establish that further development would not provide data
     sufficient to support Registration of the Product in a country set forth
     on Appendix B.  If GENENTECH enters in a license agreement with a third
     party with respect to such Product in the Roche Territory within twelve
     (12) months from the date of termination notice, ROCHE shall be relieved
     of its obligations to pay its share of Global Development Costs during
     that twelve month period to the extent the third party licensee is
     obligated to pay those same costs.  GENENTECH shall use diligent efforts
     to have such costs borne by the third party licensee where it is
     reasonable to do so.

          (b) If ROCHE terminates its license for a Product in the Roche
     Territory based on a good faith determination, after consultation with
     appropriate regulatory authorities in the relevant country, that the
     Product cannot be approved for sale in one or more major countries in
     the Collaborative Countries because of issues related to the safety of
     the Product.  ROCHE shall continue to remain liable for all obligations
     with respect to that Product to the extent they are incurred primarily
     to support Registration of that Product, for a period not to exceed six
     (6) months from the date of termination, in the Roche Territory.  The
     Parties agree to attempt to wind down such obligations and the
     activities associated therewith as soon as possible after ROCHE has
     terminated its license because of safety issues.

          (c) If ROCHE terminates its license,

               (i) all rights and licenses granted to ROCHE herein with
          respect to such Product and supply obligations of GENENTECH
          hereunder shall automatically terminate as of the date of
          termination;

               (ii) the transfer and assignment to GENENTECH or GENENTECH's
          designee of the Dossier and the Registration and all associated
          data, information, results and documents for such Product in the
          Roche Territory shall be done promptly and GENENTECH shall
          thereafter have an nonexclusive license thereto as well as to all
          ROCHE Patents and Know-How related to such Product and generated by
          ROCHE under this Agreement; and

               (iii) the Parties shall discuss and agree on a transfer of
          stocks of such Product held by ROCHE.

3.   Termination by GENENTECH

          (a) If ROCHE fails to exercise its "best efforts" to commercialize
     a Product in a country in the Roche Territory, GENENTECH shall have the
     right to request ROCHE to take remedial measures.  If GENENTECH makes


                                    Page 34
<PAGE>

     such a request and ROCHE thereafter does not exercise such "best
     efforts" within a period of six (6) months after GENENTECH has requested
     ROCHE to take remedial measures or if ROCHE fails to meet the
     requirements of Article III, Section 6, then GENENTECH shall have the
     right (x) to terminate ROCHE's license hereunder with respect to such
     country if Registration for the Product has not been initiated or (y) to
     convert the license to a nonexclusive one if Registration has been
     initiated and

               (i) all rights and licenses granted to ROCHE herein and
          Product supply obligations of GENENTECH with respect to such
          Product in such country shall automatically terminate as of the
          date of termination;

               (ii) the transfer and assignment to GENENTECH or GENENTECH's
          designee of the Dossier and the Registration and all associated
          data, information, results and documents for such Product in such
          country shall be done promptly and GENENTECH shall thereafter have
          an nonexclusive license thereto in such country as well as to all
          ROCHE Patents and Know-how related to such Product and developed by
          ROCHE under this Agreement; and

               (iii) the Parties shall discuss and agree on a transfer of
          stocks of such Product held by ROCHE with respect to such country.

4.   Termination of Development/Commercialization.

          (a) GENENTECH may terminate at any time its development and/or
     commercialization of Product for which ROCHE has exercised its option
     under Article II.  If GENENTECH so terminates its development and/or
     commercialization of a Product and if GENENTECH decides to enter into an
     agreement with a third party with respect to rights to such Product in
     the United States, the provisions of Section 3.07 of the Governance
     Agreement shall apply.  In such event, GENENTECH's obligation to
     manufacture and supply Clinical Requirements or Commercial Requirements
     of that Product to ROCHE shall terminate in the following manner:

               (1) If GENENTECH terminates for reasons related to the safety
          of the Product, such obligation shall terminate immediately.

               (2) If GENENTECH terminates for reasons other than safety,
          e.g., efficacy or cost effectiveness or the like, such obligation
          shall continue until the earlier to occur of two (2) years from the
          date of GENENTECH's notice to ROCHE of such termination or on the
          date ROCHE advises GENENTECH that no such further supply is
          required.

     ROCHE thereafter shall have the royalty-free right and license to
     produce and supply all of ROCHE's Clinical Requirements and Commercial
     Requirements for use and sale in the Roche Territory.  Upon such
     termination by GENENTECH, it shall promptly transfer all of the
     Manufacturing Technology for that Product to ROCHE.

          (b) ROCHE may terminate at any time its development and/or
     commercialization of a Small Molecule Product.  In such event, ROCHE's
     obligation to manufacture and supply Clinical Requirements or Commercial
     Requirements of that Product to GENENTECH shall terminate in the


                                    Page 35
<PAGE>

     following manner:

               (1) If ROCHE terminates for reasons related to the safety of
          the Product, such obligation shall terminate immediately.

               (2) If ROCHE terminates for reasons other than safety, e.g.,
          efficacy or cost effectiveness or the like, such obligation shall
          continue until the earlier to occur of two (2) years from the date
          of ROCHE's notice to GENENTECH of such termination or on the date
          GENENTECH advises ROCHE that no such further supply is required.

     GENENTECH shall thereafter have the royalty-free right and license to
     produce and supply all of its Clinical Requirements and Commercial
     Requirements for sale in the United States.  Upon such termination by
     ROCHE, it shall promptly transfer all of the Manufacturing Technology
     for that Product to GENENTECH.

5.   Termination for Breach.  Except as provided in Section 3 of this
     Article, either Party may terminate this Agreement upon the failure of
     the other Party to comply with any of its material obligations contained
     in this Agreement or in the Governance Agreement.  Such termination
     shall become effective at any time after providing sixty (60) days'
     written notice by the non-breaching Party specifying the breach and its
     intent to terminate the Agreement; provided that the breaching Party
     shall have an opportunity to cure any defect or omission during such
     sixty (60) day period.  Should such cure be effected, such notice shall
     be null and void.  Any other provision of this Agreement notwithstanding,
     termination of this Agreement for failure to comply with a material
     obligation shall be without prejudice to --

          (a) any remedies which either Party may then or thereafter have
     hereunder or at law; and

          (b) either Party's right to obtain performance of any obligations
     provided for in this Agreement which survive termination by their terms
     or by a fair interpretation of this Agreement.

6.   Certain Proceedings.  In the event any action or proceeding before any
     court or governmental agency or other regulatory or administrative
     agency or commission, by any governmental or other regulatory or
     administrative agency or commission or by any other person, successfully
     challenging this Agreement or the relations or actions of the Parties
     contemplated hereby or otherwise materially and adversely affecting the
     business or property (including the goodwill and business reputation and
     character) of a Party hereto, the Parties shall discuss an appropriate
     termination of this Agreement and the terms and conditions associated
     with such termination.

7.   Termination For Change in Ownership.  If at any time during the term of
     this Agreement, ROCHE's equity ownership of GENENTECH securities is less
     than fifty percent (50%) of all such securities then outstanding,
     ROCHE's right to exercise any unexercised options set forth in Article
     II above shall terminate immediately.

8.   Survival of Terms.  The foregoing notwithstanding, the provisions of
     Articles IX, X, XI, XII and XIII as well as any provisions which by
     their specific language or context are intended to or can be fairly read


                                    Page 36
<PAGE>

     to survive termination of this Agreement, shall survive any termination
     of this Agreement for any reason.


ARTICLE XIII - MISCELLANEOUS

1.   Disclaimer of Certain Warranties.  Information, reagents and materials
     (except Product) transferred from one Party to another in the course of
     this Agreement are supplied "as is" without warranties, express or
     implied, including any warranty of merchantability, title, freedom from
     infringement or fitness for a particular use.

2.   Entire Agreement, Amendment.

          (a) Except as provided in subsection (b), this Agreement, as
     amended, constitutes the entire agreement between the Parties with
     respect to the subject matter hereof, supersedes all prior agreements,
     understandings and communications, oral or written, relating to the
     subject matter hereof (including but not limited to the minutes of the
     meeting between ROCHE and GENENTECH in London of May 1, 1997 and the
     letter agreement dated May 29, 1998, between ROCHE and GENENTECH with
     respect to Xubix), and shall not be modified, altered or amended except
     by mutual written agreement of the Parties.

          (b) This Agreement shall not supersede the DNase Supply Agreement
     except that the terms of such Agreement shall be expanded to include the
     supply of DNase in Canada.

          (c) This Agreement shall not supersede any terms of the IIbIIIa
     Agreement unless specifically mentioned in Section 11 and 12 of Article
     II.

3.   Failure to Enforce.  The failure by either Party at any time or for any
     period of time to enforce any term or provision of this Agreement shall
     not be construed as a waiver of such term or provision or of the right
     of either Party to enforce each and every such term and provision.

4.   Force Majeure.  If either Party shall be delayed, interrupted in or
     prevented from the performance of any obligation hereunder by reason of
     Force Majeure including an act of God, fire, flood, war (declared or
     undeclared), public disaster, strike or labor differences, governmental
     enactment, rule or regulation, or any other cause beyond such Party's
     control, such Party shall not be liable to the other therefor and the
     time for performance of such obligation shall be extended for a period
     equal to the duration of the contingency which occasioned the delay,
     interruption or prevention.  The Party invoking such Force Majeure
     rights must notify the other Party within a period of fifteen (15) days,
     from the first and the last day of the Force Majeure unless the Force
     Majeure renders such notification impossible in which case notification
     will be made as soon as possible.  If the delay resulting from the Force
     Majeure exceeds six (6) months, both Parties shall consult each other to
     find an appropriate solution.

5.   Arbitration.  In the event of any dispute, controversy or claim arising
     out of or relating to this Agreement, the Parties shall try to settle
     such disputes, controversies or claims amicably between themselves
     including referring such dispute, controversy or claim to the Chief


                                    Page 37
<PAGE>

     Executive Officer of GENENTECH and a member of ROCHE's Executive
     Committee.  If the Parties are unable to so settle such dispute,
     controversy or claim, then any such dispute, controversy or claim
     arising out of or relating to any provision of this Agreement or the
     interpretation, enforceability, performance, breach, termination or
     validity hereof, including, without limitation, this arbitration clause
     shall be solely and finally settled by arbitration in the manner
     specified in this Section.

     All arbitration proceedings shall be conducted in New York City.  If
     ROCHE requests the commencement of such proceedings, the arbitration
     proceedings shall be conducted under the procedural rules of the
     American Arbitration Association.  If GENENTECH requests the
     commencement of proceedings, arbitration proceedings shall be conducted
     under the procedural rules of the International Arbitration Rules of the
     Zurich Chamber of Commerce.  In either case, proceedings in the
     arbitration shall conducted in the English language, and all documents
     not in English submitted by either party must be accompanied by a
     translation into English.  The Party requesting arbitration shall serve
     upon the other Party a written demand for arbitration stating the
     substance of the controversy, dispute or claim, and the contention of
     the Party requesting arbitration.  Within sixty (60) days after the
     demand, the Parties shall select three (3) mutually acceptable
     arbitrators.  The arbitrators are to act as neutral arbitrators and
     shall have no past, present or anticipated future affiliation with the
     Parties or any relationship with the Parties which would unduly
     influence the independence of an arbitrator.  If the Parties are unable
     to agree upon three (3) mutually acceptable arbitrators, the arbitration
     agent under whose rules the arbitration is proceeding shall appoint
     three (3) arbitrators.  No more than two arbitrators shall be citizens
     and/or residents of the United States or citizens and/or residents of
     Switzerland.  The decision of the arbitrators shall be in writing
     setting forth the basis therefore.  The arbitrators shall have the
     authority to award such remedies as they believe are appropriate in the
     circumstances, including, but not limited to, compensatory damages,
     consequential and incidental damages, interest, tort damages (but not
     punitive or similar damages) and specific performance and other
     equitable relief.  The Parties shall abide by the award rendered in such
     arbitration proceeding, and such award may be enforced and executed upon
     in any court having jurisdiction over the Party against whom enforcement
     of such award is sought.  The Parties shall divide equally the
     administrative charges, arbitrators's fees and related expenses of
     arbitration, but each Party shall pay its own attorney's fees incurred
     in connection with such arbitration; provided, however, if the
     arbitrators determine that one Party prevailed clearly and substantially
     over the other Party, then the non-prevailing party shall also pay the
     prevailing Party's reasonable attorney's fees and expert witness costs
     and arbitration costs.

6.   Notices.  Requests, notices and reports required or permitted under this
     Agreement shall be in writing and shall be sent by telefax or telecopier
     (with written confirmation) or express mail to the address set forth
     below or such other address as a Party may designate from time to time
     in accordance with this Section:





                                    Page 38
<PAGE>

     to ROCHE:           F. Hoffmann-La Roche Ltd
                         Corporate Law
                         Grenzacherstrasse 124
                         CH-4070 Basel, Switzerland

     to GENENTECH:       Genentech, Inc.
                         Corporate Secretary
                         1 DNA Way
                         South San Francisco, California  94080
                         U.S.A.

7.   Use of Names.  Neither Party will use or refer to this Agreement in any
     promotional activity, or use the marks of the other Party, without
     express prior written permission of the other Party.  Either Party shall
     refrain from making any public announcement or disclosure of this
     Agreement and its terms without the prior written consent of the other
     Party except as required by law.

8.   Successors and Assigns.  Neither Party may assign this Agreement or any
     rights hereunder in any manner, whether by virtue of law or otherwise,
     without the prior written consent of the other Party, except that
     GENENTECH may assign part or all of its responsibilities and obligations
     under this Agreement to one or more wholly-owned subsidiaries of
     GENENTECH.

9.   Headings.  The section headings of this Agreement are for convenience
     only and are not a part of this Agreement.

10.  Counterparts.  This Agreement may be executed in two or more counterparts,
     each of which shall be deemed an original but all of which together shall
     constitute one and the same instrument.

11.  Severability.  The Parties hereby expressly state that it is not their
     intention to violate any applicable rule, law or regulation.  If any of
     the provisions of this Agreement are held to be void or unenforceable
     with regard to any particular country by a court of competent
     jurisdiction, then, to the extent possible, such void or unenforceable
     provision shall be replaced by a valid and enforceable provision which
     will achieve as far as possible the economic business intentions of the
     Parties.  The provisions held to be void or unenforceable shall remain,
     however, in full force and effect with regard to all other countries.

12.  Governing Law.  This Agreement shall be governed by and construed for
     all purposes in accordance with the laws of the State of New York.

13.  Relationship.  Neither ROCHE or GENENTECH is in any way the legal
     representative or agent of the other, nor authorized or empowered to
     assume any obligation of any kind, implied or expressed, on behalf of
     the other, without the express written consent of the other.


IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives as of the Effective Date.






                                    Page 39
<PAGE>

GENENTECH, INC.                        F. HOFFMANN-LA ROCHE LTD


By:    /S/ARTHUR D. LEVINSON           By:    /S/STEPHAN ARNOLD
       -------------------------              ----------------------------
Name:  Arthur D. Levinson              Name:  Stephan Arnold
Title: President and Chief             Title: Vice Director Law Department
       Executive Officer
                                       By:    /S/RUDOLF SCHAFFNER
                                              ----------------------------
                                       Name:  Rudolf Schaffner
                                       Title: Head of Licensing



GENENTECH EUROPE LIMITED

By:    /S/ARTHUR D. LEVINSON
       -------------------------
Name:  Arthur D. Levinson
Title: President



GENENTECH BIOPHARMACEUTICALS LIMITED

By:    /S/ARTHUR D. LEVINSON
       -------------------------
Name:  Arthur D. Levinson
Title: President



GENENTECH INTERNATIONAL LIMITED

By:    /S/ARTHUR D. LEVINSON
       -------------------------
Name:  Arthur D. Levinson
Title: President




















                                    Page 40
<PAGE>


                                  APPENDIX A

           FINANCIAL APPENDIX TO THE AMENDED AND RESTATED AGREEMENT

This document is the Financial Appendix to the Amended and Restated Agreement
(the "License Agreement") effective as of the Effective Date, and amended and
restated as of the Restatement Date, between F. Hoffmann-La Roche Ltd.
(ROCHE) and Genentech, Inc., Genentech Europe Limited, Genentech
Biopharmaceuticals Limited and Genentech International Limited (GENENTECH)
and contains the financial definitions and descriptions applicable to the
License Agreement.

When inconsistent with the License Agreement, terms and conditions of the
License Agreement shall prevail upon those as defined herein.  Terms not
defined in this Financial Appendix shall have the meanings set forth in the
License Agreement.

1.   DEFINITIONS

     ADJUSTED GROSS SALES - Shall mean the gross sales amount invoiced by
     either Party, their Affiliates, or sublicensees for a Product to non-
     Affiliated third party purchasers in the Territory less, to the extent
     such amounts are included in the amount of gross sales invoiced,
     deductions of returns (including withdrawals and recalls), rebates
     (price reductions including Medicaid and similar types of rebates, e.g.,
     chargebacks or retroactive price reductions), volume (quantity)
     discounts, discounts granted at the time of invoicing, sales taxes and
     other taxes directly linked to the gross sales amount as computed on a
     product-by-product basis and reported in the central ROCHE sales
     statistics for the countries concerned.

     NET SALES - Shall mean the amount calculated by subtracting from the
     amount of Adjusted Gross Sales a lump sum deduction of three percent
     (3%) for those sales related deductions which are not accounted for on a
     product-by-product basis, to the extent not already included in the
     determination of the Adjusted Gross Sales (such costs shall include but
     are not limited to costs of outward freights, postage charges,
     transportation insurance, packaging materials for dispatch of goods,
     custom duties, discounts granted later than at the time of invoicing,
     cash discounts and other direct sales expenses).

     COSTS OF GOODS - For Bulk Product, semi-finished (e.g. Vialed Product),
     or Finished Product, as the case may be, shall be the sum of:
          i)   Fully Burdened Manufacturing Cost (FBMC);
         ii)   Outbound Costs

     In the event Product is supplied for clinical or commercial purposes,
     such Cost of Goods shall not include item i) above to the extent it has
     already been considered or charged within Genentech's Development Costs
     or Global Development Costs.

     FULLY BURDENED MANUFACTURING COST - (FBMC) - Shall mean GENENTECH's
     fully burdened manufacturing costs of Bulk Product, semi-finished, or
     Finished Product, as the case may be, shipped for clinical or commercial
     use and determined in accordance with generally accepted accounting
     principles as applied by GENENTECH.


                                    Page 41
<PAGE>

     Such FBMC shall include direct labor, materials, product testing costs
     (including QC and QA bulk testing and in-process testing e.g.
     adventitious virus and mycoplasma testing), and Allocable Overhead for
     manufacturing or contracting for each stage of the manufacturing process
     of the product shipped.  GENENTECH will discuss annually with ROCHE the
     main drivers of estimated and actual FBMC such as yields and Failures.
     Four years after the launch of the Product the Parties will agree on an
     annual standard cost for the bulk material manufactured to be charged.
     Such standard cost will consider yields, success factors (Failures) and
     other pertinent data.  In any case, yield losses and Failures which go
     beyond what could be reasonably expected and/or justified in this area
     of technology shall remain the sole costs of GENENTECH.

     Such FMBC shall not include any costs associated with expired products
     to the extent that the actual quantity of material purchased is at least
     equal to the amount of the firm orders.  (Firm orders shall be ROCHE's
     latest production quantity request prior to each manufacturing campaign
     of GENENTECH.) GENENTECH agrees to consider the worldwide sales and
     production needs when establishing its manufacturing campaign plans.  A
     supply agreement to be entered between the Parties shall determine which
     and when forecasts shall become firm orders.

     Such FBMC shall not include any costs associated with all of GENENTECH's
     allocable intellectual property acquisition, licensing and royalty costs
     payable by GENENTECH to third parties in relation with the manufacturing
     formulation, filling, use or sale of a Product.

     Such FBMC shall not include any costs associated with process
     development, scale up costs, qualification lots and any other costs if
     they are included in Genentech's Development Costs or Global Development
     Cost.

     OUTBOUND COSTS - Shall mean any outbound costs borne by GENENTECH at the
     request of ROCHE including but not limited to transport, customs
     clearance and storage of Product (i.e., freight, duty, insurance and
     warehousing).

     ALLOCABLE OVERHEAD - Shall mean costs incurred by a Party or for its
     account which are attributable to a Party's supervisory services,
     occupancy costs, corporate bonus (to the extent not charged directly),
     and its payroll, information systems, human resources or purchasing
     functions and which are allocated to company departments based on a
     space occupied or headcount or other activity-based method.  Allocable
     Overhead shall not include any costs attributable to general corporate
     activities including, by way of example, executive management, investor
     relations, business development, legal affairs and finance.

     TRANSFER OF MANUFACTURING - In the case where ROCHE assumes
     manufacturing for its supply requirements pursuant to Article V, Section
     13 (i) of the License Agreement, ROCHE will reimburse GENENTECH for 100%
     of the costs incurred by GENENTECH in making the transfer including
     overhead and for the cost of Idle Capacity as describe in the next
     section.

     COST OF IDLE CAPACITY -  The principle of cost of Idle Capacity shall
     only apply in the case of Article V, Section 13 (i) of the License
     Agreement and for a period of four (4) years from notification by ROCHE


                                    Page 42
<PAGE>

     that it will assume manufacturing.  The Cost of Idle Capacity (CIC)
     shall be determined and charged to ROCHE as follows:

          (i) ROCHE will be charged other operating costs calculated as
              follows:

              (capacity utilized by ROCHE prior to ROCHE's notification minus
              capacity actually used for the supply for the ROCHE Territory)

                         divided by

              (total capacity utilized by the Parties for the Product(s)
              prior to ROCHE's notification minus capacity actually used for
              the supply of Product(s) for GENENTECH's and ROCHE's Territory)

                         multiplied by

              depreciation, plant maintenance cost and other fixed
              manufacturing cost related to the total capacity utilized for
              Product(s) prior to ROCHE's notification.

     The result of this method of accounting for idle capacity is to ensure
     that GENENTECH charges ROCHE the share of depreciation, plant
     maintenance cost and other fixed manufacturing cost related to the
     capacity for the supply of the Product(s) for the ROCHE Territory
     utilized prior to ROCHE's notification but actually not utilized after
     ROCHE assumes manufacturing.

         (ii) GENENTECH shall notify the Joint Finance Committee (JFC)
              prospectively of any such charge hereunder, including the
              calculation thereof, in writing.  The JFC shall review any such
              calculated charge hereunder and shall be entitled to receive
              from GENENTECH such financial and other information as the JFC
              shall reasonably deem necessary in order to confirm (or
              correct) the calculated charge.

        (iii) To the extent feasible and reasonable, GENENTECH will make best
              efforts to use idle capacity for its own products that are not
              Products under the Agreement, with the effect that the idle
              plant cost charge to ROCHE set forth herein is reduced dollar
              for dollar for the portion of capacity actually used by
              GENENTECH in such fashion.

     FAILURES - Shall mean Bulk Product, semi-finished, or Finished Product,
     as the case may be, that:
          1.  does not meet the specifications, or
          2.  was not manufactured or tested in accordance with the
              procedures, or
          3.  was not manufactured in accordance with cGMPs.

     Only those tests listed in the specifications may be used to determine
     conformity.

     THIRD PARTY ROYALTIES - Shall mean all of GENENTECH's allocable
     intellectual property acquisition, licensing and royalty costs paid to
     third parties upon the sale of Product by ROCHE to third parties (unless
     any such cost is specifically identified as the sole cost of GENENTECH


                                    Page 43
<PAGE>

     in the License Agreement) , such royalties being payable to third
     parties as a result of licenses from third parties for the manufacture,
     formulation, filling, use or sale of a Product.

     Each Party shall bear the full cost related to Third Party Royalties for
     the units of Product sold in its Territory.  Procedures for converting
     from foreign currencies and paying such royalty to the other Party shall
     be as described below in section 6.

     GENENTECH shall provide ROCHE the details of such Third Party Royalties
     obligations including but not limited to the name of the third party,
     the rate, the duration and the "Net Sales" basis for calculation of such
     payment.  Such information shall be periodically updated for changes (as
     need be) by GENENTECH or at ROCHE's request.

     DEVELOPMENT COSTS - With respect to GENENTECH whether as part of
     Genentech's Development Costs or as part of Global Development Costs,
     shall mean the development costs actually incurred by GENENTECH after
     the date of GENENTECH's decision to bring a Product into development
     (for illustration purposes Development Costs for Product shall include
     IND enabling toxicology costs but shall not include optimization of lead
     candidates ) through the date of marketing approval or termination of
     development efforts of the final indication for which marketing approval
     in any country is sought.  Such costs shall comprise those costs, both
     direct and indirect (i.e. fully burdened costs), required to obtain the
     authorization and/or ability to manufacture, formulate, fill, ship
     and/or sell the Product in commercial quantities to the third parties.
     Such Development Costs shall include but are not limited to costs of
     development including cost of studies on the toxicological,
     pharmacokinetical, metabolical or clinical aspects of the Product
     conducted internally or by individual investigators, or consultants
     necessary for the purpose of obtaining and/or maintaining approval in
     any country of the Product, process development and scale up costs,
     qualification lots, costs for preparing, submitting, reviewing or
     developing data or information for the purpose of submission to the U.S.
     Food and Drug Administration or other governmental authority to obtain
     and/or maintain approval in any country.  These costs shall include
     expenses for data management, statistical designs and studies, document
     preparation, and other administration expenses associated with the
     clinical testing program.

     These costs shall not include Patent costs, pre-Registration marketing
     costs (e.g. trademark costs, advertising agency selection costs, pre-
     marketing studies), post-Registration clinical studies which are not
     enabling for Registration of the Product and post-Registration marketing
     studies.

     GENENTECH'S DEVELOPMENT COSTS -  shall include all such Costs incurred
     by GENENTECH up to ROCHE's exercise of its option for a Product at Entry
     Into Man or Phase II or Phase III Completion Date, as applicable. In
     determining Development Costs, GENENTECH will use its Project Cost
     System with the purpose of tracking costs as much as possible on a
     product indication-by-product indication basis.

     GLOBAL DEVELOPMENT COSTS - Shall mean the costs specifically
     attributable to the development of a Product and actually incurred after
     the date of ROCHE's decision to exercise its option for a GENENTECH or


                                    Page 44
<PAGE>

     an In-Licensed Product through the date of marketing approval or
     termination of development efforts of the final indication or
     formulation or dosing for which marketing approval is sought in the USA
     and/or the Collaborative Countries.

     Such costs shall comprise those costs, both direct and indirect
     including Allocable Overhead (i.e. fully burdened costs), required to
     obtain the authorization to manufacture, formulate, fill, ship and/or
     sell a Product in commercial quantities in the USA and/or the
     Collaborative Countries to third parties.

     Such Global Development Costs shall include but are not limited to costs
     of development including cost of studies on the toxicological,
     pharmacokinetical, metabolical or clinical aspects of a Product
     conducted internally or by individual investigators or consultants,
     manufacturing process development and scale up costs, qualification
     lots, costs for preparing, submitting, reviewing or developing data or
     information necessary for the purpose of submission to the FDA, EMEA or
     other governmental authority in order to obtain and/or maintain approval
     of a Product in the USA and/or the Collaborative Countries.

     These costs shall include expenses for data management, statistical
     designs and studies, document preparation, and other administration
     expenses associated with the clinical testing program.

     These costs shall include costs incurred in geographical areas other
     than USA and/or the Collaborative Countries (e.g.: Canada, South Africa
     and Brazil) only to the extent that the activities related with such
     costs are specifically planned (and specifically included in the
     mutually approved global development plan and budget) to be incurred in
     such geographical areas for the purpose of generating data or
     information required to obtain the above mentioned authorization in the
     USA and/or the Collaborative Countries.

     These costs shall not include Patent costs, pre-registration marketing
     costs (e.g. trademark costs, advertising agency selection costs, pre-
     marketing studies), post-registration clinical and marketing studies
     which are not conducted as part of the global development plan.

     In determining Global Development Costs, each Party will use its
     applicable project cost system with the purpose of tracking costs as
     much as possible on a product indication-by-product indication basis.

     As the case may be, Global Development Costs shall exclude for a Product
     development costs attributable to specific indications for which one
     Party has opted out as described in the next section for such Product as
     updated from time to time.

     ADDITIONAL INDICATION OPT OUT I OPT BACK IN - When ROCHE opts in for a
     Product, it will opt in for all indications for such Product.

     Each Party has the right to opt out of the development of an additional
     indication for a Product beyond the initial indication for that Product
     at one of the following three decision points:

          a)  Executive Committee decision of GENENTECH to develop an
              indication or the equivalent ROCHE decision as defined above


                                    Page 45
<PAGE>

          b)  End of Phase II

          c)  A formal decision point in phase III defined in the clinical
              study protocol and agreed upon by the parties

     Prior to such opt out decision, the Parties shall have a good faith
     discussion about the reasons and consequences of the opt out.

     The Party electing to opt out will provide the other Party with sixty
     days notice prior to its election and will be obligated to pay its share
     of the cost of all ongoing clinical and preclinical studies and its
     share of other development costs already committed to third parties as
     of the date of such notice.  Thereafter the Party electing to opt out
     will not share any costs or benefits of such indication.

     In the event that a Party which previously opted out of an indication
     wishes to regain its rights to such indication then it may regain such
     rights by electing to do so at the latest within thirty days of a formal
     decision to file for approval for that indication and by paying within
     thirty days, two hundred percent of the Global Development Costs it
     would have otherwise incurred if it had not opted out for such
     indication during the period of opt out and by thereafter assuming from
     the opt back in date its ongoing obligations as if no opt out had
     occurred.

2.   PLANNING AND BUDGETING OF GLOBAL DEVELOPMENT COSTS

     For a Product for which ROCHE has exercised its option, the Parties
     shall agree on a global development plan and budget on an indication-by-
     indication basis.

     Such plan and budget shall i) identify activities and costs to be
     incurred, by calendar quarter, ii) provide details of activities in a
     manner to be specified by the Joint Development Committee and in a
     manner consistent with the cost systems of each Party, iii) be updated
     whenever needed, at least on a quarterly basis and when development of
     indications additional to the initial indication shall be envisaged.

3.   REIMBURSEMENT OF DEVELOPMENT COSTS

     SHARING AND REIMBURSEMENT OF GENENTECH'S DEVELOPMENT COSTS  -  Thirty
     days prior to the date by which ROCHE must exercise its option for a
     Product, GENENTECH shall choose one of the following methods for
     reimbursement of Development Costs incurred prior to exercise of such
     option, the choice being subject to ROCHE's consent which shall not be
     unreasonably withheld:

     A.) Lump sum payment for the appropriate percentage of the cumulative
     Genentech's Development Costs incurred prior to ROCHE's exercise of such
     option, due thirty days after ROCHE's exercise of such option, or

     B.) Quarterly payments, due 30 days after invoicing from GENENTECH,
     equal to one hundred and fifty percent (150%) of the Global Development
     Costs GENENTECH incurred after ROCHE's exercise of a Product option
     until such the cumulative amount paid thereunder equals the appropriate
     percentage of the cumulative Genentech's Development Costs incurred
     prior to ROCHE's exercise of such option plus interest at LIBOR from the


                                    Page 46
<PAGE>

     date of such option exercise.  GENENTECH shall invoice ROCHE for the
     amount due hereunder within 30 days of the end of each quarter.

     For products which GENENTECH can only license Canadian rights to ROCHE,
     the appropriate percentage reimbursement of Genentech's Development
     Costs provided in this Section 3 of this Appendix shall be reduced to
     ten percent (10%).

     SHARING AND REIMBURSEMENT OF GLOBAL DEVELOPMENT COSTS -  The global
     development plan and budget as agreed by the JCC for such Product shall
     be the reference for sharing Global Development Costs.  The Parties
     shall share development costs provided that they relate to activities
     which have been planned for and budgeted either in a global development
     plan and budget agreed between the Parties before the Option Exercise or
     in one of the subsequently jointly agreed updates of such global
     development plan and budget after the Option Exercise.

     In the case of i) activities or costs which have not been planned and
     budgeted but have actually been incurred by a Party or ii) actual costs
     of planned activities which have significantly exceeded (more than 10%)
     the amount budgeted, the JCC shall decide whether and/or how such
     additional costs shall be shared between the Parties.

     On a quarterly calendar basis, within 30 days after the end of each
     calendar quarter, each Party shall provide the other with an invoice for
     the amount of Global Development Costs it has incurred and which is due
     for reimbursement by such other Party for such quarter.  The cost
     sharing shall be that provided for in the License Agreement or in this
     Financial Appendix.  Such amount shall be expressed in US Dollars and
     payable within 30 days from receipt of such invoice.  Such invoice shall
     be accompanied by a report specifying such Global Development Costs on a
     product indication-by-product indication basis and providing details per
     activity as specified by the JCC and show in local currency and US
     Dollars in a manner consistent with the amounts budgeted for such
     activities.

     As the case may be, development costs attributable to specific
     indications for which one Party has opted out pursuant to an Additional
     Indication Opt Out shall not be included in the global development plan
     and budget for such Product.

     Whenever for the purpose of calculating conversation of Global
     Development Costs from any foreign currency into US Dollars shall be
     required, such conversion shall be made using the average quarterly rate
     of exchange at the time for such currencies as retrieved from the
     Reuters System for the countries concerned.

4.   SALES BUSINESS PLAN AND BUDGET

     ROCHE shall provide GENENTECH within 30 days of availability in final
     form its sales budget (prepared annually and covering a one year period,
     month by month) and sales business plan (prepared annually and covering
     at least a three year period) for each Product for which it has
     exercised its option for commercialization in the Roche Territory under
     the License Agreement.

5.   SUPPLY PRICE OF PRODUCT


                                    Page 47
<PAGE>

     The total amount due for the supply of Product between the Parties shall
     be the amount defined below:

     SUPPLY OF CLINICAL REQUIREMENTS - The sales price of Product for
     clinical purposes shall be the FBMC for such Clinical Requirements.
     Product manufactured as qualification lots and supplied for clinical
     purposes shall only be charged to the extent not included in Genentech's
     Development Costs or Global Development Costs.

     SUPPLY OF COMMERCIAL REQUIREMENTS - The sales price of Product for
     commercial purposes shall be GENENTECH's Cost of Goods plus a mark-up of
     twenty percent (20%) on FBMC.

     For the ROCHE Territory, such sales price will be billed to ROCHE and
     paid as follows:

          (a) The amount corresponding to FBMC + 20% mark-up will be invoiced
          in US Dollars and paid by ROCHE in such currency within 30 days
          after shipment.

          (b) Unless otherwise agreed upon in writing between the Parties,
          the amount corresponding to Outbound Costs will be billed in US
          Dollars on a quarterly basis and paid by ROCHE in such currency
          within 30 days of receipt of the invoice.

     Product manufactured as qualification lots and supplied for commercial
     purposes shall only be charged to the extent not included in Genentech's
     Development Costs or Global Development Costs.

6.   TIMING AND PAYMENT OF ROYALTIES BETWEEN THE PARTIES

     TIMING - Payment of Royalties due GENENTECH shall be made within ninety
     (90) days of the end of each calendar quarter in which the sale was
     made.  For purposes of determining when a sale of a Product occurs, the
     sale shall be deemed to occur when a non-Affiliated third party is
     invoiced for the Product.  Payment of Royalties due to third parties
     will be made ten days prior to the date the royalties are due to the
     third party under their respective licenses.  Any royalty payment that
     is not paid on or before the date such payment is due under the License
     Agreement shall bear interest, to the extent permitted by applicable
     law, at the LIBOR rate of interest as reported from time to time by a
     qualified source that is mutually acceptable to the Parties, calculated
     on the number of days such payment is delinquent.

     PAYMENT - WITHOLDING TAXES - Unless otherwise agreed in writing between
     the Parties, payments of royalties shall be made in US Dollars, by wire
     transfer in immediately available funds to such account GENENTECH shall
     designate before such payment is due, free and clear of any taxes,
     duties, levies, fees or charges, except for withholding taxes due on
     behalf of GENENTECH (to the extent applicable).  ROCHE shall make any
     withholding payments due on behalf of GENENTECH and shall promptly
     provide GENENTECH with written documentation of any such payment
     sufficient to satisfy the reasonable requirements of an appropriate tax
     authority with respect to an application by GENENTECH for a foreign tax
     credit for such payment or for similar treatment.

     ROYALTY REPORTING AND ROYALTY CALCULATION -  Within thirty days after


                                    Page 48
<PAGE>

     the end of each calendar quarter, ROCHE shall provide GENENTECH with a
     statement summarizing the Net Sales of the Product in each country in
     the reporting currency of each such country as well as the rate used to
     convert from each such country's currency to Swiss Francs.

     Whenever for the purpose of calculating royalties conversion from any
     foreign currency shall be required, the amount of such Net Sales in
     foreign currencies shall be converted into Swiss Francs using the
     average monthly rate of exchange at the time for such currencies as
     retrieved from the Reuters System, or another qualified source that is
     mutually acceptable to the Parties.

     The amount of royalties due for payment to GENENTECH and calculated in
     Swiss Francs shall be translated into US Dollar at the rate retrieved
     from the Reuters System during the morning of the "day two" before the
     value date of such payment.  The corresponding amount in US Dollars will
     then be communicated to the bank for payment on the value date.

7.  AUDIT AND INTERIM REVIEWS

     Audit work will be performed in the following manner and according to
     the specifications of the Article "Records Regarding Royalties" of the
     1995 Agreement:

     If deemed necessary by either ROCHE or GENENTECH , an audit by
     independent certified public accountants may be requested.  Such audit
     will be at the sole expense of the requesting Party and will be
     performed by the officially appointed auditor of the Party audited.  If
     GENENTECH requests audit work of the ROCHE accounts, the audit will be
     performed by ROCHE's appointed worldwide auditor which is currently
     Price Waterhouse, LLP.  If ROCHE requests audit work of the GENENTECH
     accounts, the audit will be performed by the independent auditor
     appointed by GENENTECH which is currently Ernst & Young LLP.


























                                    Page 49
<PAGE>

                              FINANCIAL APPENDIX
                                    PART 2

          When inconsistent with Part 1, terms and conditions of Part 2 shall
     supersede those as defined in Part 1.

     1)   Sharing of Global Development Costs after Option

          Global Development Costs shall be shared fifty percent by ROCHE and
     fifty percent by GENENTECH.
















































                                    Page 50
<PAGE>

                                   APPENDIX B

                              ARTICLE II COUNTRIES

          Germany
          Italy
          France
          United Kingdom
          Spain
          Japan
          Canada
          Mexico
          Brazil
          Argentina
          People's Republic of China
          Turkey
          South Korea
          Australia








































                                    Page 51