Deep learning methods applied to drug discovery have been used to generate novel structures. In this study, we propose a new deep learning architecture, LatentGAN, which combines an autoencoder and a generative adversarial neural network for de novo molecular design. We applied the method in two scenarios: one to generate random drug-like compounds and another to generate target-biased compounds. Our results show that the method works well in both cases: sampled compounds from the trained model can largely occupy the same chemical space as the training set and also generate a substantial fraction of novel compounds. Moreover, the drug-likeness score of compounds sampled from LatentGAN is also similar to that of the training set. Lastly, generated compounds differ from those obtained with a Recurrent Neural Network-based generative model approach, indicating that both methods can be used complementarily.