1. Watch List Presentations April 17, 2008 David Light, Phil Rosen, Tim Tyson

3. Company Overview  Leading Biotechnology firm  Discover, develop, and manufacture medicines for patients with unmet medical needs  3 Main Areas of Focus Oncology Immunology Tissue Growth and Repair

4. http://www.gene.com/gene/ir/financials/annual-reports/2007/financials/marketedproducts.html, Accessed 15 Apr 08 2007 Product Sales  3 Blockbuster Drugs  38% Average Growth in Product Sales past 5 years Rituxan 27% Avastin 27% Herceptin 15%

5. Q1 2008 Revenue Rituxan®60553513% Avastin®60053313 Herceptin®3393119 Lucentis®198211-6 Xolair®1171115 Tarceva®1111029 Nutropin® Products8491-8 Thrombolytics6768 Pulmozyme®575210 Raptiva®26248 Total U.S. product sales2,2052,0378 Net product sales to collaborators174292-40 Total product sales2,3792,3292 2008 Q1 2007 Q1 % Change

6. http://www.gene.com/gene/ir/financials/annual-reports/2007/financials/marketedproducts.html, Accessed 15 Apr 08 Avastin  Approved to treat Lung, Colon, and Breast Cancer  Blocks blood vessels from forming in tumors  31% sales growth from ’06 to ‘07

7. Rituxan http://www.gene.com/gene/ir/financials/annual-reports/2007/financials/marketedproducts.html, Accessed 15 Apr 08  Approved to treat non-Hodgkin’s Lymphoma, Leukemia, and some autoimmune diseases  Depletes B cells in diseases characterized by having too many B cells or dysfunctional B cells  10% sales growth from ‘06 to ‘07

8. Herceptin http://www.gene.com/gene/ir/financials/annual-reports/2007/financials/marketedproducts.html, Accessed 15 Apr 08  Approved to treat various forms of breast cancer  Significant sales growth when new uses are discovered, but otherwise steady growth

9. Pipeline Many extended uses of Avastin, Herceptin, and Rituxan Majority already undergoing Phase III clinical trials

10. Management  CEO/Chairman: Arthur Levinson, PH.D. Started in the company as a senior scientist  President Product Development: Susan Desmond-Hellmann, M.D. Joined the company as a clinical scientist  Executive VP/CFO: David Ebersman Started as a business development analyst with the company  Executive VP of Research: Richard Scheller, PH.D. Prior to joining DNA he was a professor of Molecular and Cellular Physiology and of Biological Sciences at Stanford

11. Management’s 2010 Goals  Bring at least 20 new molecules into clinical development  Bring at least 15 major new products or indications onto the market  Achieve a compund annual non-GAAP earnings per share growth rate of 25%  Achieve cumulative free cash flow of $12 billion  Become the number one U.S. oncology company in sales

12. Roche  Majority owner of Genentech  Holding company that helps market Genentech’s products internationally

13. Recent News and Developments  On February 22, 2008, the FDA granted accelerated approval for Avastin in combination with paclitaxel chemotherapy for the first-line treatment of advanced HER2- negative breast cancer.

14. Valuation

15.  Current Price: $74.18  DCF Valuation: $114.83  Intrinsic Value: 103.35 – 126.31  WACC: 8.25%  Beta:.75, L/T Growth: 4%

16. Valuation Growth Rate 114.80 2.0%2.5%3.0%3.5%4.0%4.5%5.0%5.5%6.0% WACC7.0% 111.22 120.87 132.95 148.47 169.17 198.15 241.61 314.05 458.94 7.5% 99.37 106.95 116.21 127.79 142.68 162.52 190.31 231.99 301.45 8.0% 89.55 95.61 102.87 111.76 122.86 137.14 156.17 182.82 222.80 8.25% 85.30 90.76 97.25 105.12 114.83 127.14 143.24 165.20 196.94 9.0% 74.22 78.26 82.98 88.56 95.24 103.42 113.64 126.78 144.30 9.5% 68.14 71.50 75.38 79.91 85.26 91.67 99.52 109.33 121.94 10.0% 62.84 65.67 68.89 72.62 76.96 82.10 88.26 95.79 105.20 11.0% 54.09 56.13 58.43 61.03 64.00 67.44 71.44 76.18 81.85 12.0% 47.16 48.68 50.37 52.25 54.37 56.77 59.51 62.68 66.38

17. Recommendation  Add Genentech to the RCMP Watch List Increasing uses of big 3 drugs Strong Drug Pipeline (Many Phase III Trials) Strong earnings growth Strong balance sheet (minimal debt, surplus cash) Not greatly threatened by generic competition Warrants further review in Fall 2008