----

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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**___________**

**FORM      10-K**

**(Mark      One)**

| x      | **ANNUAL                REPORT PURSUANT TO SECTION  13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF 1934**              |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------|
|   | **For                the fiscal year ended December 31, 2006**                                                                            |
|   | **or**                                                                                                                                    |
| ¨ | **TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** |
|   | **For                the transition period                from  ___________  to  ___________**              |

**Commission      File No. 000-23143**

**___________**

**PROGENICS      PHARMACEUTICALS, INC.**

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

| **Delaware**                                                                                        | **13-3379479**                                                            |
|-----------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------|
| **(State                or other jurisdiction of****incorporation                or organization)** | **(I.R.S.                Employer Identification                Number)** |

**___________**

**777      Old Saw Mill River Road**

**Tarrytown,      NY 10591**

**(Address      of principal executive offices, including zip code)**

**Registrant’s      telephone number, including area code: (914) 789-2800**

**                                  Securities      Registered pursuant to Section 12(b) of the Act: **

| **Securities                Registered pursuant to Section  12(g) of the                Act:** | None   |
|-----------------------------------------------------------------------------------------------------|--------|
|                                                                                                |   |

**___________**

| (1)   | Calculated                by excluding all shares that may be deemed to be beneficially owned                by                executive officers, directors and five percent stockholders of the                Registrant, without conceding that any such person is an “affiliate” of                the Registrant for purposes of the Federal securities                laws. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**DOCUMENTS      INCORPORATED BY REFERENCE**

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**TABLE      OF CONTENTS**

| PART                I                        |                                                                                                                                |   |
|----------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------|--------|
| Item                1.                       | Business                                                                                                                            | 1      |
| Item                1A.                      | Risk                Factors                                                                                                         | 19     |
| Item                1B.                      | Unresolved                Staff Comments                                                                                            | 29     |
| Item                2.                       | Properties                                                                                                                          | 29     |
| Item                3.                       | Legal                Proceedings                                                                                                    | 29     |
| Item                4.                       | Submission                of Matters to a Vote of Security                Holders                                                   | 29     |
| PART                II                       |                                                                                                                                |   |
| Item                5.                       | Market                Price of and Dividends on the Registrant’s Common                Equity and Related Stockholder Matters | 30     |
| Item                6.                       | Selected                Financial Data                                                                                              | 31     |
| Item                7.                       | Management’s                Discussion and Analysis of Financial Condition                and Results of Operations           | 32     |
| Item                7A.                      | Quantitative                and Qualitative Disclosures about Market                Risk                                            | 52     |
| Item                8.                       | Financial                Statements and Supplementary                Data                                                           | 52     |
| Item                9.                       | Changes                in and Disagreements with Accountants on Accounting                and Financial Disclosure                  | 52     |
| Item                9A.                      | Controls                and Procedures                                                                                              | 52     |
| Item                9B.                      | Other                Information                                                                                                    | 53     |
| PART                III                      |                                                                                                                                |   |
| Item                10.                      | Directors,                Executive Officers and Corporate                Governance                                                | 54     |
| Item                11.                      | Executive                Compensation                                                                                               | 54     |
| Item                12.                      | Security                Ownership of Certain Beneficial Owners and                Management and Related Stockholder Matters        | 54     |
| Item                13.                      | Certain                Relationships and Related Transactions, and                Director Independence                             | 54     |
| Item                14.                      | Principal                Accounting Fees and Services                                                                               | 54     |
| PART                IV                       |                                                                                                                                |   |
| Item                15.                      | Exhibits                and Financial Statement                Schedules                                                            | 55     |
| INDEX                TO FINANCIAL STATEMENTS | F-1                                                                                                                                 |
| SIGNATURES                                   | S-1                                                                                                                                 |
| EXHIBIT                INDEX                 | E-1                                                                                                                                 |

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Table          of Contents

**PART      I**

**Available      Information**

**Item      1. Business**

**Overview**

**Gastroenterology**

*Gastroenterology*

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**Virology**

*HIV*

** **
*Virology-      Hepatitis C Viral Entry Inhibitor*

**Oncology**

*Prostate      Cancer*

*Melanoma-      GMK Vaccine*

**Product      In-Licensing**

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| **Program/Product                Candidates**     |   | **Indication/Use**                                      |   | **Status                (1)**                                          |
|---------------------------------------------------|--------|---------------------------------------------------------|--------|------------------------------------------------------------------------|
| **Gastroenterology**                              |   |                                                    |   |                                                                   |
| Methylnaltrexone-Subcutaneous                     |   | Treatment                of opioid-induced constipation |   | Phase                3 completed in patients receiving palliative care |
| Methylnaltrexone-Intravenous                      |   | Management                of post-operative ileus       |   | Phase                3                                                 |
| Methylnaltrexone-Oral                             |   | Treatment                of opioid-induced constipation |   | Clinical                testing of new formulation                     |
| **Virology**                                      |   |                                                    |   |                                                                   |
| **HIV**                                           |   |                                                    |   |                                                                   |
| PRO                140                            |   | Treatment                of HIV infection               |   | Phase                1b, completed enrollment and dosing               |
| ProVax                                            |   | Treatment                of HIV infection               |   | Research                                                               |
| **Other**                                         |   |                                                    |   |                                                                   |
| Hepatitis                C virus (HCV)            |   | Treatment                of HCV infection               |   | Research                                                               |
| **Oncology**                                      |   |                                                    |   |                                                                   |
| **Prostate                Cancer**                |   |                                                    |   |                                                                   |
| PSMA:                                             |   |                                                    |   |                                                                   |
| Recombinant                protein vaccine        |   | Immunotherapy                for prostate cancer        |   | Phase                1                                                 |
| Viral-vector                vaccine               |   | Immunotherapy                for prostate cancer        |   | Preclinical                                                            |
| Monoclonal                antibody-drug conjugate |   | Treatment                of prostate cancer             |   | Preclinical                                                            |
| **Melanoma**                                      |   |                                                    |   |                                                                   |
| GMK                vaccine                        |   | Immunotherapy                for melanoma               |   | Phase                3                                                 |

**___________**

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**Gastroenterology**

***Methylnaltrexone***

*Progenics’      Licenses—UR Labs/ University of Chicago*

***Subcutaneous      methylnaltrexone.***

***Intravenous      methylnaltrexone.***

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***Oral      methylnaltrexone.***

**Virology**

**HIV**

*Nature      *

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*PRO      140*

*in      vitro*

*Progenics’      Licenses—PDL Biopharma, Inc*

*ProVax*

*Hepatitis      C Viral Entry Inhibitor*

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**Oncology      **

**Prostate      Cancer**

*PSMA*

** **

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*PSMA      Licenses -Seattle Genetics, *

**Melanoma**

*GMK      Vaccine*

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**Licenses**

***Progenics’      Licenses***

***Wyeth.***

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***UR      Labs/University of Chicago.***

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***PDL      BioPharma, Inc. (formerly, Protein Design Labs).***

***Sloan-Kettering.***

***Columbia      University.***

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***Aquila      Biopharmaceuticals.***

***KMT      Hepatech, Inc***

***PSMA      LLC Licenses***

***Amgen      Fremont, Inc. (formerly Abgenix).***

***AlphaVax      Human Vaccines.***

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***Seattle      Genetics.***

***ADARC.***

***Rights      and Obligations.***

**Patents      and Proprietary Technology**

| ·   | the                longer of 17 years from the date of issue or 20 years from the earliest                asserted filing date of the corresponding patent application, if                the                patent application was filed prior to June 8, 1995;                and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 20                years from the earliest asserted filing date of the corresponding                patent                application, if the application was filed on or after June 8,                1995. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Government      Regulation**

| ·   | preclinical                laboratory and animal tests; |
|--------------------|---------------------------------------------------------|

| ·   | submission                to the FDA of an investigational new drug application, or IND, which                must                become effective before clinical trials may                begin; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | adequate                and well-controlled human clinical trials to establish the safety                and                efficacy of the product for its intended                indication; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | submission                to the FDA of a marketing application;                and |
|--------------------|-------------------------------------------------------------------------------------|

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| ·   | a                description of the sponsor’s investigational                plan; |
|--------------------|------------------------------------------------------------------------------------------|

| ·   | protocols                for each planned study; |
|--------------------|--------------------------------------------------|

| ·   | chemistry,                manufacturing, and control                information; |
|--------------------|----------------------------------------------------------------------------------|

| ·   | pharmacology                and toxicology information; and |
|--------------------|-------------------------------------------------------------|

| ·   | a                summary of previous human experience with the investigational                drug. |
|--------------------|-----------------------------------------------------------------------------------------------------|

| ·   | chemistry,                manufacturing, and controls; |
|--------------------|--------------------------------------------------------|

| ·   | non-clinical                pharmacology and toxicology; |
|--------------------|----------------------------------------------------------|

| ·   | human                pharmacokinetics and bioavailability;                and |
|--------------------|-------------------------------------------------------------------------------|

| ·   | clinical                data. |
|--------------------|-------------------------------|

| ·   | evaluate                preliminarily the efficacy of the product for specific, targeted                indications; |
|--------------------|----------------------------------------------------------------------------------------------------------------------|

| ·   | determine                dosage tolerance and optimal dosage;                and |
|--------------------|----------------------------------------------------------------------------------|

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| ·   | identify                possible adverse effects and safety                risks. |
|--------------------|-----------------------------------------------------------------------------------|

**Manufacturing**

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**Sales      and Marketing**

**Competition**

**.**

*in      vivo*
*ex      vivo*

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| ·   | efficacy                and safety of our products; |
|--------------------|-----------------------------------------------------|

| ·   | timing                and scope of regulatory approval; |
|--------------------|---------------------------------------------------------|

| ·   | product                reliability and availability; |
|--------------------|------------------------------------------------------|

| ·   | sales,                marketing and manufacturing                capabilities; |
|--------------------|--------------------------------------------------------------------------------|

| ·   | capabilities                of our collaborators; |
|--------------------|---------------------------------------------------|

| ·   | reimbursement                coverage from insurance companies and                others; |
|--------------------|-------------------------------------------------------------------------------------------|

| ·   | degree                of clinical benefits of our product candidates relative to their                costs; |
|--------------------|--------------------------------------------------------------------------------------------------------------|

| ·   | method                of administering a product; |
|--------------------|---------------------------------------------------|

| ·   | price;                and |
|--------------------|---------------------------|

| ·   | patent                protection. |
|--------------------|-----------------------------------|

**Product      Liability**

**Human      Resources**

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**Item      1A. RISK FACTORS**

**Our      product development programs are inherently risky.**

**We      have granted to Wyeth the exclusive rights to develop and commercialize      methylnaltrexone, our lead product candidate, and our resulting dependence      upon      Wyeth exposes us to significant risks.**

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**If      testing does not yield successful results, our products will not be      approved.**

| · | the                results of preclinical studies may be inconclusive, or they may not                be                indicative of results that will be obtained in human clinical                trials; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | potential                products may not have the desired efficacy or may have undesirable                side                effects or other characteristics that preclude marketing approval                or limit                their commercial use if approved; |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | after                reviewing test results, we or our collaborators may abandon projects,                which we previously believed to be promising;                and |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | we,                our collaborators or regulators may suspend or terminate clinical                trials                if we or they believe that the participating subjects or patients                are                being exposed to unacceptable health                risks. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**A      setback in our clinical development programs could adversely affect      us.**

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** **

**We      have a history of operating losses, and we may never be      profitable.**

**We      are likely to need additional financing, but our access to capital funding      is      uncertain.**

**Our      clinical trials could take longer than we expect.**

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| · | deaths                or other adverse medical events involving patients or subjects in                our                clinical trials; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

| · | regulatory                or patent issues; |
|--------|---------------------------------------------|

| · | interim                or final results of ongoing clinical                trials; |
|--------|------------------------------------------------------------------------------------|

| · | failure                to enroll clinical sites as                expected; |
|--------|-----------------------------------------------------------------------------|

| · | competition                for enrollment from clinical trials conducted by others in similar                indications; |
|--------|---------------------------------------------------------------------------------------------------------------------------|

| · | scheduling                conflicts with participating clinicians and clinical institutions;                and |
|--------|-----------------------------------------------------------------------------------------------------------------|

| · | manufacturing                problems. |
|--------|----------------------------------------|

**We      are subject to extensive regulation, which can be costly and time consuming      and      can subject us to unanticipated fines and delays.**

**Our      products do not yet have, and may never obtain, the regulatory approvals needed      for marketing.**

| · | they                might not obtain labeling claims necessary to make the product                commercially viable (in general, labeling claims define the medical                conditions for which a drug product may be marketed, and are therefore                very important to the commercial success of a                product); |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | we                or our collaborators might be required to undertake post-marketing                trials                to verify the product’s efficacy or                safety; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | we,                our collaborators or others might identify side effects after the                product                is on the market, or we or our collaborators might experience                manufacturing problems, either of which could result in subsequent                withdrawal of marketing approval, reformulation of the product, additional                preclinical testing or clinical trials, changes in labeling of the                product                or the need for additional marketing applications;                and |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | we                and our collaborators will be subject to ongoing FDA obligations                and                continuous regulatory review. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

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**Even      if our products obtain marketing approval, they might not be accepted in the      marketplace.**

**Marketplace      acceptance will depend in part on competition in our industry, which is      intense.**

**One      or more competitors developing an opioid antagonist may reach the market ahead      of us and adversely affect the market potential for      methylnaltrexone.**

**If      we are unable to negotiate collaborative agreements, our cash burn rate could      increase and our rate of product development could      decrease.**

**If      we do not remedy our failure to achieve milestones or satisfy conditions      regarding some of our product candidates, we may not maintain our rights under      our licenses relating to these product candidates.**

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**We      have limited manufacturing capabilities, which could adversely impact our      ability to commercialize products.**

**We      are dependent on our patents and other intellectual property rights. The      validity, enforceability and commercial value of these rights are highly      uncertain.**

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**.      **

**If      we infringe third-party patent or other intellectual property rights, we may      need to alter or terminate a product development program.**

**We      are dependent upon third parties for a variety of functions. These arrangements      may not provide us with the benefits we expect.**

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**We      lack sales and marketing infrastructure and related staff, which will require      significant investment to establish and in the meantime may make us dependent      on      third parties for their expertise in this area.**

**If      we lose key management and scientific personnel on whom we depend, our business      could suffer.**

*Executive      Compensation - Employment Agreements *

**If      we are unable to obtain sufficient quantities of the raw and bulk materials      needed to make our products, our product development and commercialization      could      be slowed or stopped.**

**A      substantial portion of our funding comes from federal government grants and      research contracts. We cannot rely on these grants or contracts as a continuing      source of funds.**

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**If      health care reform measures are enacted, our operating results and our ability      to commercialize products could be adversely affected.**

**We      are exposed to product liability claims, and in the future we may not be able      to      obtain insurance against these claims at a reasonable cost or at      all.**

**We      handle hazardous materials and must comply with environmental laws and      regulations, which can be expensive and restrict how we do business. If we      are      involved in a hazardous waste spill or other accident, we could be liable for      damages, penalties or other forms of censure.**

**Our      stock price has a history of volatility. You should consider an investment      in      our stock as risky and invest only if you can withstand a significant      loss.**

| · | the                results of clinical trials and preclinical studies involving our                products                or those of our competitors; |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | changes                in the status of any of our drug development programs, including                delays in                clinical trials or program                terminations; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | developments                regarding our efforts to achieve marketing approval for our                products; |
|--------|------------------------------------------------------------------------------------------------------------------|

| · | developments                in our relationship with Wyeth regarding the development and                commercialization of                methylnaltrexone; |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | announcements                of technological innovations or new commercial products by us, our                collaborators or our competitors; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| · | developments                in our relationships with other collaborative                partners; |
|--------|----------------------------------------------------------------------------------------------------|

| · | developments                in patent or other proprietary                rights; |
|--------|-----------------------------------------------------------------------------------|

| · | governmental                regulation; |
|--------|-----------------------------------------|

| · | changes                in reimbursement policies or health care                legislation; |
|--------|---------------------------------------------------------------------------------------------|

| · | public                concern as to the safety and efficacy of products developed by us,                our                collaborators or our competitors; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | our                ability to fund on-going                operations; |
|--------|------------------------------------------------------------------------|

| · | fluctuations                in our operating results; and |
|--------|-----------------------------------------------------------|

| · | general                market conditions. |
|--------|-------------------------------------------|

**Our      principal stockholders are able to exert significant influence over matters      submitted to stockholders for approval.**

**Anti-takeover      provisions may make the removal of our Board of Directors or management more      difficult and discourage hostile bids for control of our company that may be      beneficial to our stockholders.**

| · | make                the takeover of Progenics or the removal of our Board of Directors                or                management more difficult; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| · | discourage                hostile bids for control of Progenics in which stockholders may receive                a                premium for their shares of common stock;                and |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | otherwise                dilute the rights of holders of our common stock and depress the                market                price of our common stock. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

**If      there are substantial sales of our common stock, the market price of our common      stock could decline.**

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**Item      1B. Unresolved Staff Comments**

**Item      2. Properties**

**Item      3. Legal Proceedings**

**Item      4. Submission of Matters to a Vote of Security      Holders**

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**PART      II**

**Item      5. Market Price of and Dividends on the Registrant’s Common      Equity and Related Stockholder Matters**

**Price      Range of Common Stock**

|                                            |   | **High** |   | **Low** |   |
|-------------------------------------------------|--------|----------|--------|---------|--------|
|                                            |   |     |   |    |   |
| **Year                ended December 31, 2005** |   |     |   |    |   |
| First                quarter                    |   | $        | 24.40  |    | $      | 14.09 |   |
| Second                quarter                   |   |     | 21.35  |    |   | 15.76 |   |
| Third                quarter                    |   |     | 25.07  |    |   | 20.60 |   |
| Fourth                quarter                   |   |     | 27.00  |    |   | 20.73 |   |
| **Year                ended December 31, 2006** |   |     |   |    |   |   |   |
| First                quarter                    |   |     | 30.83  |    |   | 24.92 |   |
| Second                quarter                   |   |     | 26.72  |    |   | 19.95 |   |
| Third                quarter                    |   |     | 26.07  |    |   | 19.80 |   |
| Fourth                quarter                   |   |     | 29.55  |    |   | 22.51 |   |

** **

**Comparative      Stock Performance Graph**

**Dividends**

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**Item      6. Selected Financial Data**

|                                                                   |   | **Years                    Ended December 31,** |    |
|------------------------------------------------------------------------|--------|-------------------------------------------------|---------|
|                                                                   |   | **2002**                                        |    | **2003** |   | **2004** |   | **2005** |   | **2006** |   |
|                                                                   |   |                                            |    | **(in                    thousands, except per share data)** |   |   |   |
| **Statement                    of Operations Data:**                   |   |                                            |    |   |   |   |   |   |   |   |   |
| Revenues:                                                              |   |                                            |    |   |   |   |   |   |   |   |   |
| Contract                    research and development from collaborator |   | $                                               | 194     |   |   |   |   |   |   |   |   |   |   | $ | 58,415 |   |
| Contract                    research and development, joint venture    |   |                                            | 5,298   |   | $ | 2,486 |   | $ | 2,008 |   | $ | 988 |   |   |  |   |
| Research                    grants and contracts                       |   |                                            | 4,544   |   |   | 4,826 |   |   | 7,483 |   |   | 8,432 |   |   | 11,418 |   |
| Product                    sales                                       |   |                                            | 49      |   |   | 149 |   |   | 85 |   |   | 66 |   |   | 73 |   |
| Total                    revenues                                      |   |                                            | 10,085  |   |   | 7,461 |   |   | 9,576 |   |   | 9,486 |   |   | 69,906 |   |
| Expenses:                                                              |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Research                    and development                            |   |                                            | 22,797  |   |   | 26,374 |   |   | 35,673 |   |   | 43,419 |   |   | 61,711 |   |
| In-process                    research and development                 |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   | 13,209 |   |
| License                    fees - research and development             |   |                                            | 964     |   |   | 867 |   |   | 390 |   |   | 20,418 |   |   | 390 |   |
| General                    and administrative                          |   |                                            | 6,484   |   |   | 8,029 |   |   | 12,580 |   |   | 13,565 |   |   | 22,259 |   |
| Loss                    in Joint Venture                               |   |                                            | 2,886   |   |   | 2,525 |   |   | 2,134 |   |   | 1,863 |   |   | 121 |   |
| Depreciation                    and amortization                       |   |                                            | 1,049   |   |   | 1,273 |   |   | 1,566 |   |   | 1,748 |   |   | 1,535 |   |
| Total                    expenses                                      |   |                                            | 34,180  |   |   | 39,068 |   |   | 52,343 |   |   | 81,013 |   |   | 99,225 |   |
| Operating                    loss                                      |   |                                            | (24,095 | ) |   | (31,607 | ) |   | (42,767 | ) |   | (71,527 | ) |   | (29,319 | ) |
| Other                    income (expense):                             |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                    income                                     |   |                                            | 1,708   |   |   | 625 |   |   | 780 |   |   | 2,299 |   |   | 7,701 |   |
| Interest                    expense                                    |   |                                            | (2      | ) |   | (4 | ) |   |   |   |   |   |   |   |   |   |
| Loss                    on sale of marketable securities               |   |                                            |    |   |   |   |   |   | (31 | ) |   |   |   |   |   |   |
| Payment                    from insurance settlement                   |   |                                            | 1,600   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                    other income                                  |   |                                            | 3,306   |   |   | 621 |   |   | 749 |   |   | 2,299 |   |   | 7,701 |   |
| Net                    loss before income taxes                        |   |                                            | (20,789 | ) |   | (30,986 | ) |   | (42,018 | ) |   | (69,228 | ) |   | (21,618 | ) |
| Income                    taxes                                        |   |                                            |    |   |   |   |   |   |   |   |   | (201 | ) |   |   |   |
| Net                    loss                                            |   | $                                               | (20,789 | ) | $ | (30,986 | ) | $ | (42,018 | ) | $ | (69,429 | ) | $ | (21,618 | ) |
| Per                    share amounts on net loss:                      |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                    and diluted                                   |   | $                                               | (1.66   | ) | $ | (2.32 | ) | $ | (2.48 | ) | $ | (3.33 | ) | $ | (0.84 | ) |

|                                                                              |   | **December                   31,** |   |
|-----------------------------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                                              |   | **2002**                                |   | **2003** |   | **2004** |   | **2005** |   | **2006** |   |
|                                                                              |   | **(in                  thousands)**     |   |
| **Balance                  Sheet Data:**                                          |   |                                    |   |   |   |   |   |   |   |   |   |
| Cash,                  cash equivalents andmarketable                  securities |   | $                                       | 42,374 |   | $ | 65,663 |   | $ | 31,207 |   | $ | 173,090 |   | $ | 149,100 |   |
| Working                  capital                                                  |   |                                    | 36,209 |   |   | 56,228 |   |   | 25,667 |   |   | 137,101 |   |   | 91,827 |   |
| Total                  assets                                                     |   |                                    | 48,118 |   |   | 72,886 |   |   | 39,545 |   |   | 184,003 |   |   | 165,911 |   |
| Deferred                  revenue, long-term                                      |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   | 16,101 |   |
| Deferred                  lease liability                                         |   |                                    | 71     |   |   | 50 |   |   | 42 |   |   | 49 |   |   | 123 |   |
| Total                  stockholders’ equity                                 |   |                                    | 45,147 |   |   | 67,683 |   |   | 31,838 |   |   | 112,732 |   |   | 110,846 |   |

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**Item      7. Management’s Discussion and Analysis of Financial Condition      and Results of Operations**

**Overview**

***General***

*“Collaboration      with Wyeth Pharmaceuticals”,*

** **

*“PSMA      Development Company LLC”*

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** **

***Collaboration      with Wyeth Pharmaceuticals***

*Critical      Accounting Policies - Revenue Recognition*

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***Purchase      of Rights from Methylnaltrexone Licensors***

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***PSMA      Development Company LLC***

** **

** **

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**Results      of Operations    **
**(amounts      in      thousands)**

**Revenues:**

| **Sources                of Revenue**              |   | **2006**                |   | **2005**                               |   | **2004**               |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|----------------------------------------------------|--------|-------------------------|--------|----------------------------------------|--------|------------------------|--------|-----------------------------------|----------------------------------|
|                                               |   |                    |   |                                   |   |                   |   | **Percent                Change** |
| Contract                research from collaborator |   | $                58,415 |   |                                   |   |                   |   | N/A                               |                             |
| Contract                research from PSMA LLC     |   |                    |   | $                   988 |   | $                2,008 |   | (100%)                            | (51%)                            |
| Research                grants and contract        |   | 11,418                  |   | 8,432                                  |   | 7,483                  |   | 35%                               | 13%                              |
| Product                sales                       |   | 73                      |   | 66                                     |   | 85                     |   | 11%                               | (22%)                            |
|                                               |   | $                69,906 |   | $ 9,486                           |   | $                9,576 |   | 637%                              | (1%)                             |

***2006      vs. 2005***
** **

**Contract      research from collaborator**

*Critical      Accounting Policies -Revenue Recognition*

**Contract      research from PSMA LLC**

**Research      grants and contract**

**Product      sales**

----

Table            of Contents

***2005      vs. 2004***

**Contract      research from PSMA LLC**

**Research      grants and contract**

**Product      sales**

**Expenses:**

**Research      and Development Expenses:**

|                                     | **2006**    | **2005**    | **2004**    |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|------------------------------------------|-------------|-------------|-------------|--------|-----------------------------------|----------------------------------|
|                                     |        |        |        |   | **Percent                change** |
| **Salaries                and benefits** | **$17,013** | **$13,412** | **$11,983** |   | **27%**                           | **12%**                          |

*2006      vs. 2005 *

*2005      vs. 2004 *

----

Table            of Contents

|                                                   |       |       |     |   |                              |                             |
|--------------------------------------------------------|------------|------------|----------|--------|-----------------------------------|----------------------------------|
|                                                   | **2006**   | **2005**   | **2004** |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|                                                   |       |       |     |   | **Percent                change** |
| **Share-based                compensation (non-cash)** | **$5,814** | **$1,237** | **$595** |   | **370%**                          | **108%**                         |

*2006      vs. 2005 *
*Critical      Accounting Policies − Share-Based Payment Arrangements*

*2005      vs. 2004 *

|                                    | **2006**   | **2005**    | **2004**   |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|-----------------------------------------|------------|-------------|------------|--------|-----------------------------------|----------------------------------|
|                                    |       |        |       |   | **Percent                change** |
| **Clinical                trial costs** | **$9,485** | **$10,493** | **$8,675** |   | **(10%)**                         | **21                %**          |

*2006      vs. 2005 *

*2005      vs. 2004 *

|                                   | **2006**   | **2005**   | **2004**   |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|----------------------------------------|------------|------------|------------|--------|-----------------------------------|----------------------------------|
|                                   |       |       |       |   | **Percent                change** |
| **Laboratory                supplies** | **$6,337** | **$5,292** | **$3,762** |   | **20%**                           | **41%**                          |

*2006      vs. 2005 *

*2005      vs. 2004 *

|                                                         | **2006**    | **2005**   | **2004**   |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|--------------------------------------------------------------|-------------|------------|------------|--------|-----------------------------------|----------------------------------|
|                                                         |        |       |       |   | **Percent                change** |
| **Contract                manufacturing and subcontractors** | **$12,448** | **$5,836** | **$5,371** |   | **113%**                          | **9%**                           |

*2006      vs. 2005 *

*2005      vs. 2004 *

----

Table            of Contents

|            | **2006**   | **2005**   | **2004**   |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|-----------------|------------|------------|------------|--------|-----------------------------------|----------------------------------|
|            |       |       |       |   | **Percent                change** |
| **Consultants** | **$5,286** | **$2,969** | **$1,261** |   | **78%**                           | **135%**                         |

*2006      vs. 2005 *

*2005      vs. 2004 *

|                            | **2006** | **2005**    | **2004** |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|---------------------------------|----------|-------------|----------|--------|-----------------------------------|----------------------------------|
|                            |     |        |     |   | **Percent                change** |
| **License                fees** | **$390** | **$20,418** | **$390** |   | **(98%)**                         | **5,135%**                       |

*2006      vs. 2005 *
*Overview      *
*¾*
*      Purchase of Rights from Methylnaltrexone Licensors*

*2005      vs. 2004 *

|                                  | **2006**    | **2005**   | **2004**   |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|---------------------------------------|-------------|------------|------------|--------|-----------------------------------|----------------------------------|
|                                  |        |       |       |   | **Percent                change** |
| **Operating                expenses** | **$18,537** | **$4,180** | **$4,026** |   | **343%**                          | **4%**                           |

*2006      vs. 2005 *
*PSMA      Development Company LLC *

*2005      vs. 2004 *

**General      and Administrative Expenses:**

|                                            | **2006**   | **2005**   | **2004**   |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|-------------------------------------------------|------------|------------|------------|--------|-----------------------------------|----------------------------------|
|                                            |       |       |       |   | **Percent                change** |
| **Salaries                and benefits (cash)** | **$5,942** | **$4,614** | **$3,815** |   | **29%**                           | **21%**                          |

*2006      vs. 2005 *

*2005      vs.*
*      2004*

----

Table            of Contents

|                                                   | **2006**   | **2005**   | **2004** |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|--------------------------------------------------------|------------|------------|----------|--------|-----------------------------------|----------------------------------|
|                                                   |       |       |     |   | **Percent                change** |
| **Share-based                compensation (non-cash)** | **$6,840** | **$1,281** | **$242** |   | **434%**                          | **429%**                         |

*2006      vs. 2005 *
*Critical      Accounting Policies − Share-Based Payment Arrangements *

*2005      vs. 2004 *

|                                                | **2006**   | **2005**   | **2004**   |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|-----------------------------------------------------|------------|------------|------------|--------|-----------------------------------|----------------------------------|
|                                                |       |       |       |   | **Percent                change** |
| **Consulting                and professional fees** | **$5,547** | **$4,488** | **$5,336** |   | **24%**                           | **($16%)**                       |

*2006      vs. 2005 *

*2005      vs. 2004 *

|                                  | **2006**   | **2005**   | **2004**   |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|---------------------------------------|------------|------------|------------|--------|-----------------------------------|----------------------------------|
|                                  |       |       |       |   | **Percent                change** |
| **Operating                expenses** | **$3,485** | **$2,789** | **$2,860** |   | **25%**                           | **(2%)**                         |

*2006      vs. 2005 *

*2005      vs. 2004 *

|      | **2006** | **2005** | **2004** |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|-----------|----------|----------|----------|--------|-----------------------------------|----------------------------------|
|      |     |     |     |   | **Percent                change** |
| **Other** | **$445** | **$393** | **$327** |   | **13%**                           | **20%**                          |

*2006      vs. 2005 *

*2005      vs. 2004 *

----

Table            of Contents

**Loss      in Joint Venture:**

|   | **2006** | **2005**   | **2004**   |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|--------|----------|------------|------------|--------|-----------------------------------|----------------------------------|
|   |     |       |       |   | **Percent                change** |
|   | **$121** | **$1,863** | **$2,134** |   | **(94%)**                         | **(13%)**                        |

*2006      vs. 2005 *

*2005      vs. 2004 *
** **

**Depreciation      and Amortization:**

|   | **2006**   | **2005**   | **2004**   |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|--------|------------|------------|------------|--------|-----------------------------------|----------------------------------|
|   |       |       |       |   | **Percent                change** |
|   | **$1,535** | **$1,748** | **$1,566** |   | **(12%)**                         | **12%**                          |

*2006      vs. 2005 *
** **

*2005      vs. 2004 *

**Other      Income:**

|   | **2006**   | **2005**   | **2004** |   | **2006                vs. 2005**  | **2005                vs. 2004** |
|--------|------------|------------|----------|--------|-----------------------------------|----------------------------------|
|   |       |       |     |   | **Percent                change** |
|   | **$7,701** | **$2,299** | **$780** |   | **235%**                          | **195%**                         |

*2006      vs. 2005 *

*2005      vs. 2004 *

----

Table            of Contents

**Income      Taxes:**

**Net      Loss:**

**Liquidity      and Capital Resources**

**Overview**

|                                          |   | **Years                Ended December 31,** |    |
|-----------------------------------------------|--------|---------------------------------------------|---------|
|                                          |   | **2006**                                    |    | **2005** |   | **2004** |   |
|                                          |   | **in                thousands**             |    |
| Net                cash (used in):provided by |   |                                        |    |   |   |   |   |
| Operating                activities           |   | $                                           | (9,157  | ) | $ | 11,402 |   | $ | (36,708 | ) |
| Investing                activities           |   |                                        | (53,043 | ) |   | (81,580 | ) |   | 24,657 |   |
| Financing                activities           |   |                                        | 7,075   |   |   | 132,023 |   |   | 5,441 |   |

| ·   | Cash                used in operating activities for 2006 resulted primarily from a net                loss                of $21.6 million, which was offset by $12.7                million of                non-cash compensation expense from the issuance of restricted stock                and                stock options to employees and non-employees, $13.2 million of expense                of                purchased technology in connection with our purchase of Cytogen’s equity                interest in PSMA LLC and $1.5 million of depreciation expense on                our fixed                assets. Although we purchased $8.8 million of capital equipment during                2006, $5.4 million of that amount was in construction in progress                related                to the expansion of our laboratory and manufacturing facilities and                was                not subject to depreciation. In addition, the significant changes                in                operating assets and liabilities between 2006 and 2005 were: a decrease                of                $16.9 million in deferred revenue in 2006 resulting from the amortization                of the $60 million upfront payment received from Wyeth in 2005 and                deferred revenue related to payments by Wyeth for development expenses;                a                decrease of $1.6 million in trade accounts receivable, mostly related                to                reimbursement of our fourth quarter 2006 expenses under grants and                contract with the NIH; and an increase of $1.5 million in accounts                payable                and accrued expenses, due to timing of                payments. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table            of Contents

*Overview      - Purchase of Rights from Licensors of methylnaltrexone*

| ·   | Net                cash used in investing activities was $53.0 million for the year                ended                December 31, 2006 compared with net cash used in investing activities                of                $81.6 million and net cash provided by investing activities of $24.7                million for the years ended December 31, 2005 and 2004, respectively.                Net                cash used in investing activities for the year ended December 31,                2006                resulted primarily from the purchase of Cytogen’s 50% interest in PSMA LLC                for $13.1 million, net of $0.3 million of cash acquired and the sale                of                $267.9 million of marketable securities offset by the purchase of                $299.1                million of marketable securities. During 2005, we raised approximately                $121.6 million in three public offerings of our common stock and                invested                most of those funds in marketable securities. As a result, in 2006                and                2005, we used net cash in investing activities rather than having                net cash                provided by investing activities as in 2004. We purchase and sell                marketable securities in order to provide funding for our operations                and                to achieve appreciation of our unused cash in a low risk environment.                We                also purchased $8.8 million, $1.2 million and $2.4 million of fixed                assets, during the years ended December 31, 2006, 2005 and 2004,                respectively, including capital equipment and leasehold improvements                as we                acquired and built out additional manufacturing space and purchased                more                laboratory equipment for our expanding research and development                projects. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net                cash provided by financing activities was $7.1 million, $132.0 million                and                $5.4 million for the years ended December 31, 2006, 2005 and 2004,                respectively. The net cash provided by financing activities for 2005                includes $121.6 million in net proceeds that we received from the                sale of                approximately 6.3 million shares of our common stock during 2005.                In                addition, all periods reflect the exercise of stock options under                our                Stock Incentive Plans and the sale of common stock under our Employee                Stock Purchase Plans. Cash received from exercises under such plans                during                2006 and 2004 was less than that in 2005 since a major portion of                exercises during 2005 were of options from a former                executive. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Sources      of Cash**

----

Table            of Contents

**Uses      of Cash**

----

Table            of Contents

*Overview      *
*¾*
*      Purchase of Rights from Methylnaltrexone Licensors, Overview *
*¾*
*      PSMA      Development Company LLC and Results of Operations—Expenses,*

|                          |   |  **For                the Year Ended December 31,** |   |
|-------------------------------|--------|----------------------------------------------------------|--------|
|                          |   |  **2006**                                           |   |  **2005** |   |  **2004** |   |
|                          |   | **(in                millions)**                         |   |
| Methylnaltrexone              |   | $                                                        | 32.1   |   | $ | 43.8 |   | $ | 19.7 |   |
| HIV                           |   |                                                     | 15.8   |   |   | 11.7 |   |   | 8.3 |   |
| Cancer                        |   |                                                     | 23.2   |   |   | 6.6 |   |   | 5.9 |   |
| Other                programs |   |                                                     | 4.2    |   |   | 1.7 |   |   | 2.2 |   |
| Total                         |   | $                                                        | 75.3   |   | $ | 63.8 |   | $ | 36.1 |   |

*Overview      *
*¾*
*      Purchase of Rights from Methylnaltrexone Licensors*

**Contractual      Obligations**

----

Table            of Contents

|                                                    |   |       |   |  **Payments                due by December 31,** |   |
|---------------------------------------------------------|--------|-----------------|--------|-------------------------------------------------------|--------|
|                                                    |   |  **Total** |   |  **2007**                                        |   |  **2008-2009** |   |  **2010-2011** |   |  **Thereafter** |   |
|                                                    |   |       |   |  **(                in millions)**               |   |
| Operating                leases                         |   | $               | 8.0    |                                                  | $      | 2.3 |   | $ | 4.8 |   | $ | 0.3 |   | $ | 0.6 |   |
| License                and collaboration agreements (1) |   |            | 99.8   |                                                  |   | 3.4 |   |   | 4.3 |   |   | 3.3 |   |  | 88.8 |   |
| Total                                                   |   | $               | 107.8  |                                                  | $      | 5.7 |   | $ | 9.1 |   | $ | 3.6 |   | $ | 89.4 |   |

| (1)   | Assumes                attainment of milestones covered under each agreement, including                those by                PSMA LLC. The timing of the achievement of the related milestones                is                highly uncertain, and accordingly the actual timing of payments,                if any,                is likely to vary, perhaps significantly, relative to the timing                contemplated by this table. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Off-Balance      Sheet Arrangements and Guarantees**

**Critical      Accounting Policies**

----

Table            of Contents

*Revenue      Recognition*

----

Table            of Contents

*Share-Based      Payment Arrangements*

----

Table            of Contents

| ·   | We                use the closing price of our common stock on the date of grant, as                quoted                on The NASDAQ Stock Market LLC, as the exercise price. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Historical                volatilities are based upon daily quoted market prices of our common                stock                on The NASDAQ Stock Market LLC over a period equal to the expected                term of                the related equity instruments. We rely only on historical volatility                since future volatility is expected to be consistent with historical;                historical volatility is calculated using a simple average calculation;                historical data is available for the length of the option’s expected term                and a sufficient number of price observations are used consistently.                Since                our stock options are not traded on a public market, we do not use                implied                volatility. For the years ended December 31, 2006 , 2005 and 2004,                the                volatility of our common stock has been high, 69%-94%, 92%-97% and                92%,                respectively, which is common for entities in the biotechnology industry                that do not have commercial products. A higher volatility input to                the                Black-Scholes model increases the resulting compensation expense. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                expected term of options granted represents the period of time that                options granted are expected to be outstanding. For the year ended                December 31, 2006, our expected term has been calculated based upon                the                simplified method as detailed in Staff Accounting Bulletin No. 107                (“SAB                107”). Accordingly, we are using an expected term of 6.5 years based                upon                the vesting period of the outstanding options of four or five years                and a                contractual term of ten years. For the year ended December 31, 2005,                our                expected term of 6.5 years is based upon the average of the vesting                term                and the original contractual term. For the year ended December 31,                2004,                our expected term of 5.0 years represents the average of the maximum                contractual term of our stock option awards of 10 years. We plan                to refine                our estimate of expected term in the future as we obtain more historical                data. A shorter expected term would result in a lower compensation                expense. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table            of Contents

| ·   | We                have never paid dividends and do not expect to pay dividends in the                future. Therefore, our dividend rate is                zero. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                risk-free rate for periods within the expected term of the options                is                based on the U.S. Treasury yield curve in effect at the time of                grant. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Clinical      Trial Expenses*

----

Table            of Contents

**Impact      of Recently Issued Accounting Standards**

*Accounting      for Uncertainty in Income Taxes—an Interpretation of FASB Statement      109*

----

Table          of Contents

**Item      7A. Quantitative and Qualitative Disclosures about Market      Risk**

**Item      8. Financial Statements and Supplementary      Data**

**Item      9. Changes in and Disagreements with Accountants on Accounting      and Financial Disclosure**

**Item      9A. Controls and Procedures**

**Evaluation      of Disclosure Controls and Procedures**

**Changes      in Internal Control over Financial Reporting**

**Management’s      Report on Internal Control Over Financial Reporting**

----

Table            of Contents

*Internal      Control—Integrated Framework*

**Item      9B. Other Information**

----

Table            of Contents

**PART      III**

**Item      10. Directors, Executive Officers and Corporate      Governance**

**Item      11. Executive Compensation**

**Item      12.**
**Security      Ownership of Certain Beneficial Owners and Management      and Related Stockholder Matters**

**Item 13. Certain      Relationships and Related Transactions, and Director      Independence**

**Item      14. Principal Accounting Fees and      Services**

----

Table            of Contents

**PART      IV**

**Item      15. Exhibits and Financial Statement      Schedules**

*a)*
*Documents      filed as part of this Report:*

|   | 1. | Consolidated                Financial Statements of Progenics Pharmaceuticals,                Inc. |
|--------|----|----------------------------------------------------------------------------------------------------|

*b)*
*Item      601 Exhibits*

----

Table          of Contents

**PROGENICS      PHARMACEUTICALS, INC.**

**INDEX      TO CONSOLIDATED FINANCIAL STATEMENTS**

|                                                                                                                                                                | **Page** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| Report                of Independent Registered Public Accounting Firm                                                                                              | F-2      |
| Financial                Statements:                                                                                                                                |     |
| Consolidated                Balance Sheets at December 31, 2005 and 2006                                                                                       | F-3      |
| Consolidated                Statements of Operations for the years ended December 31, 2004, 2005                and 2006                                       | F-4      |
| Consolidated                Statements of Stockholders’ Equity and Comprehensive Lossfor                the years ended December 31, 2004, 2005 and 2006 | F-5      |
| Consolidated                Statements of Cash Flows for the years ended December 31, 2004, 2005                and 2006                                       | F-6      |
| Notes                to Consolidated Financial Statements                                                                                                           | F-7      |

----

Table            of Contents

**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

**Consolidated      financial statements**

**Internal      control over financial reporting**

*Internal      Control—Integrated Framework *
*Internal      Control—Integrated Framework *

| /s/                PricewaterhouseCoopers LLP |   |
|-----------------------------------------------|--------|
| Hartford,                Connecticut          |   |
| March 15,                2007            |   |

----

Table          of Contents

**PROGENICS        PHARMACEUTICALS, INC.**

**CONSOLIDATED      BALANCE SHEETS**

**(in      thousands, except for par value and share amounts)**

|                                                                                                                                                                |   | **December 31,** |     |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|----------|
|                                                                                                                                                                |   | **2005**              |     | **2006** |   |
| **A****ssets**                                                                                                                                                      |   |                  |     |   |   |
| Current                assets:                                                                                                                                      |   |                  |     |   |   |
| Cash                and cash equivalents                                                                                                                            |   | $                     | 67,072   |   | $ | 11,947 |   |
| Marketable                securities                                                                                                                                |   |                  | 98,983   |   |   | 113,841 |   |
| Accounts                and unbilled receivables                                                                                                                    |   |                  | 3,287    |   |   | 1,699 |   |
| Other                current assets                                                                                                                                 |   |                  | 2,561    |   |   | 3,181 |   |
| Total                current assets                                                                                                                                 |   |                  | 171,903  |   |   | 130,668 |   |
| Marketable                securities                                                                                                                                |   |                  | 7,035    |   |   | 23,312 |   |
| Fixed                assets, at cost, net of accumulated depreciation and                amortization                                                               |   |                  | 4,156    |   |   | 11,387 |   |
| Investment                in joint venture                                                                                                                          |   |                  | 371      |   |   |   |   |
| Restricted                cash                                                                                                                                      |   |                  | 538      |   |   | 544 |   |
| Total                assets                                                                                                                                         |   | $                     | 184,003  |   | $ | 165,911 |   |
|                                                                                                                                                                |   |                  |     |   |   |   |   |
| **L****iabilities                and****S****tockholders****’                E****quity**                                                                     |   |                  |     |   |   |   |   |
| Current                liabilities:                                                                                                                                 |   |                  |     |   |   |   |   |
| Accounts                payable and accrued expenses                                                                                                                |   | $                     | 10,238   |   | $ | 11,852 |   |
|                       Deferred revenue ¾                current                                                                  |   |                  | 23,580   |   |   | 26,989 |   |
| Due                to joint venture                                                                                                                                 |   |                  | 194      |   |   |   |   |
| Other                current liabilities                                                                                                                            |   |                  | 790      |   |   |   |   |
| Total                current liabilities                                                                                                                            |   |                  | 34,802   |   |   | 38,841 |   |
| Deferred                revenue —long term                                                                                                                    |   |                  | 36,420   |   |   | 16,101 |   |
| Deferred                lease liability                                                                                                                             |   |                  | 49       |   |   | 123 |   |
| Total                liabilities                                                                                                                                    |   |                  | 71,271   |   |   | 55,065 |   |
| Commitments                and contingencies (Note  11)                                                                                                        |   |                  |     |   |   |   |   |
| Stockholders’                equity:                                                                                                                          |   |                  |     |   |   |   |   |
| Preferred                stock, $.001 par value; 20,000,000 shares authorized; issued, and                outstanding—none                                    |   |                  |     |   |   |   |   |
| Common                stock, $.0013 par value; 40,000,000 shares authorized; issued and                outstanding— 25,229,240 in 2005 and 26,199,016 in 2006 |   |                  | 33       |   |   | 34 |   |
| Additional                paid-in capital                                                                                                                           |   |                  | 306,085  |   |   | 321,315 |   |
| Unearned                compensation                                                                                                                                |   |                  | (4,498   | ) |   |   |   |
| Accumulated                deficit                                                                                                                                  |   |                  | (188,740 | ) |   | (210,358 | ) |
| Accumulated                other comprehensive (loss)                                                                                                               |   |                  | (148     | ) |   | (145 | ) |
| Total                stockholders’ equity                                                                                                                     |   |                  | 112,732  |   |   | 110,846 |   |
| Total                liabilities and stockholders’ equity                                                                                                     |   | $                     | 184,003  |   | $ | 165,911 |   |

**The      accompanying notes are an integral part of the financial      statements.**

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Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC.**

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

**(in      thousands, except for loss per share data)**

|                                                                |   | **Years                Ended December  31,** |    |
|---------------------------------------------------------------------|--------|---------------------------------------------------|---------|
|                                                                |   | **2004**                                          |    | **2005** |   | **2006** |   |
| Revenues:                                                           |   |                                              |    |   |   |   |   |
| Contract                research and development from collaborator  |   |                                              |    |   |   | $                58,415 |   |
| Contract                research and development from joint venture |   | $                                                 | 2,008   |   | $ | 988 |   |   |   |   |
| Research                grants and contracts                        |   |                                              | 7,483   |   |   | 8,432 |   |   | 11,418 |   |
| Product                sales                                        |   |                                              | 85      |   |   | 66 |   |   | 73 |   |
| Total                revenues                                       |   |                                              | 9,576   |   |   | 9,486 |   |   | 69,906 |   |
| Expenses:                                                           |   |                                              |    |   |   |   |   |   |   |   |
| Research                and development                             |   |                                              | 35,673  |   |   | 43,419 |   |   | 61,711 |   |
| In-process                research and development                  |   |                                              |    |   |   |   |   |   | 13,209 |   |
| License                fees — research and development        |   |                                              | 390     |   |   | 20,418 |   |   | 390 |   |
| General                and administrative                           |   |                                              | 12,580  |   |   | 13,565 |   |   | 22,259 |   |
| Loss                in joint venture                                |   |                                              | 2,134   |   |   | 1,863 |   |   | 121 |   |
| Depreciation                and amortization                        |   |                                              | 1,566   |   |   | 1,748 |   |   | 1,535 |   |
| Total                expenses                                       |   |                                              | 52,343  |   |   | 81,013 |   |   | 99,225 |   |
| Operating                loss                                       |   |                                              | (42,767 | ) |   | (71,527 | ) |   | (29,319 | ) |
| Other                income (expense):                              |   |                                              |    |   |   |   |   |   |   |   |
| Interest                income                                      |   |                                              | 780     |   |   | 2,299 |   |   | 7,701 |   |
| Loss                on sale of marketable securities                |   |                                              | (31     | ) |   |   |   |   |   |   |
| Total                other income                                   |   |                                              | 749     |   |   | 2,299 |   |   | 7,701 |   |
| Net                loss before income taxes                         |   |                                              | (42,018 | ) |   | (69,228 | ) |   | (21,618 | ) |
| Income                taxes                                         |   |                                              |    |   |   | (201 | ) |   |   |   |
| Net                loss                                             |   | $                                                 | (42,018 | ) | $ | (69,429 | ) | $ | (21,618 | ) |
| Net                loss per share—basic and diluted           |   | $                                                 | (2.48   | ) | $ | (3.33 | ) | $ | (0.84 | ) |
| Weighted-average                shares—basic and diluted      |   |                                              | 16,911  |   |   | 20,864 |   |   | 25,669 |   |

**The      accompanying notes are an integral part of the financial      statements.**

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Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC.**

**CONSOLIDATED      STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE LOSS**

**For      the Years Ended December 31, 2004, 2005 and 2006**

**(in      thousands)**

|                                                                                                                                                                          |   | **Common                          Stock** |   | **Additional                          Paid-in** |   | **Unearned** |   | **Accumulated**  |    | **Accumulated                          Other Comprehensive** |   |                                       |   | **Comprehensive** |     |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|-------------------------------------------------|--------|--------------|--------|------------------|---------|--------------------------------------------------------------|--------|--------------------------------------------|--------|-------------------|----------|
|                                                                                                                                                                          |   | **Shares**                                |   | **Amount**                                      |   | **Capital**  |   | **Compensation** |    | **Deficit**                                                  |   | **Income                          (Loss)** |   | **Total**         |     | **(Loss)** |   |
| Balance                          at December 31, 2003                                                                                                                         |   |                                      | 16,641 |                                            | $      | 22           |   | $                | 144,940 |                                                         |   |                                       |   | $                 | (77,293  | ) | $ | 14 |   | $ | 67,683 |   |   |   |   |
| Issuance                          of restricted stock, net of forfeited shares                                                                                                |   |                                      | 161    |                                            |   |         |   |             | 2,703   |                                                         | $      | (2,703                                     | )      |              |     |   |   |   |   |   |   |   |   |   |   |
| Amortization                          of unearned compensation - employees                                                                                                    |   |                                      |   |                                            |   |         |   |             |    |                                                         |   | 452                                        |   |              |     |   |   |   |   |   | 452 |   |   |   |   |
| Issuance                          of compensatory stock options - non-employees                                                                                               |   |                                      |   |                                            |   |         |   |             | 385     |                                                         |   |                                       |   |              |     |   |   |   |   |   | 385 |   |   |   |   |
| Sale                          of common stock under employee stock purchase plans and                          exercise of stock                          options             |   |                                      | 479    |                                            |   |         |   |             | 5,441   |                                                         |   |                                       |   |              |     |   |   |   |   |   | 5,441 |   |   |   |   |
| Net                          loss for the year ended December 31, 2004                                                                                                        |   |                                      |   |                                            |   |         |   |             |    |                                                         |   |                                       |   |              | (42,018  | ) |   |   |   |   | (42,018 | ) | $ | (42,018 | ) |
| Change                          in unrealized gain on marketable securities                                                                                                   |   |                                      |   |                                            |   |         |   |             |    |                                                         |   |                                       |   |              |     |   |   | (105 | ) |   | (105 | ) |   | (105 | ) |
| Balance                          at December 31, 2004                                                                                                                         |   |                                      | 17,281 |                                            |   | 22           |   |             | 153,469 |                                                         |   | (2,251                                     | )      |              | (119,311 | ) |   | (91 | ) |   | 31,838 |   |   | (42,123 | ) |
|                                                                                                                                                                          |   |                                      |   |                                            |   |         |   |             |    |                                                         |   |                                       |   |              |     |   |   |   |   |   |   |   |   |   |   |
| Issuance                          of restricted stock, net of forfeited shares, and compensatory                          stock                          options to employees |   |                                      | 134    |                                            |   |         |   |             | 4,125   |                                                         |   | (4,125                                     | )      |              |     |   |   |   |   |   |   |   |   |   |   |
| Amortization                          of unearned compensation - employees                                                                                                    |   |                                      |   |                                            |   |         |   |             |    |                                                         |   | 1,878                                      |   |              |     |   |   |   |   |   | 1,878 |   |   |   |   |
| Issuance                          of compensatory stock options to non-employees                                                                                              |   |                                      |   |                                            |   |         |   |             | 640     |                                                         |   |                                       |   |              |     |   |   |   |   |   | 640 |   |   |   |   |
| Sale                          of common stock under employee stock purchase plans and                          exercise of stock                          options             |   |                                      | 821    |                                            |   | 1            |   |             | 10,467  |                                                         |   |                                       |   |              |     |   |   |   |   |   | 10,468 |   |   |   |   |
| Sale                          of common stock in public offerings, net of offering expenses                          of                          $4,768                       |   |                                      | 6,307  |                                            |   | 9            |   |             | 121,546 |                                                         |   |                                       |   |              |     |   |   |   |   |   | 121,555 |   |   |   |   |
| Issuance                          of common stock for license rights (see Note 10)                                                                                            |   |                                      | 686    |                                            |   | 1            |   |             | 15,838  |                                                         |   |                                       |   |              |     |   |   |   |   |   | 15,839 |   |   |   |   |
| Net                          loss for the year ended December 31, 2005                                                                                                        |   |                                      |   |                                            |   |         |   |             |    |                                                         |   |                                       |   |              | (69,429  | ) |   |   |   |   | (69,429 | ) |   | (69,429 | ) |
| Change                          in unrealized gain on marketable securities                                                                                                   |   |                                      |   |                                            |   |         |   |             |    |                                                         |   |                                       |   |              |     |   |   | (57 | ) |   | (57 | ) |   | (57 | ) |
| Balance                          at December 31, 2005                                                                                                                         |   |                                      | 25,229 |                                            |   | 33           |   |             | 306,085 |                                                         |   | (4,498                                     | )      |              | (188,740 | ) |   | (148 | ) |   | 112,732 |   |   | (69,486 | ) |
|                                                                                                                                                                          |   |                                      |   |                                            |   |         |   |             |    |                                                         |   |                                       |   |              |     |   |   |   |   |   |   |   |   |   |   |
| Compensation                          expense for vesting of share-based payment arrangements                                                                                 |   |                                      |   |                                            |   |         |   |             | 12,034  |                                                         |   |                                       |   |              |     |   |   |   |   |   | 12,034 |   |   |   |   |
| Issuance                          of restricted stock, net of forfeitures                                                                                                     |   |                                      | 228    |                                            |   |         |   |             |    |                                                         |   |                                       |   |              |     |   |   |   |   |   |   |   |   |   |   |
| Sale                          of common stock under employee stock purchase plans and                          exercise of stock                          options             |   |                                      | 742    |                                            |   | 1            |   |             | 7,074   |                                                         |   |                                       |   |              |     |   |   |   |   |   | 7,075 |   |   |   |   |
| Issuance                          of compensatory stock options to non-employees                                                                                              |   |                                      |   |                                            |   |         |   |             | 620     |                                                         |   |                                       |   |              |     |   |   |   |   |   | 620 |   |   |   |   |
| Elimination                          of unearned compensation upon adoption of SFAS No. 123(R)                                                                                |   |                                      |   |                                            |   |         |   |             | (4,498  | )                                                            |   | 4,498                                      |   |              |     |   |   |   |   |   |   |   |   |   |   |
| Net                          loss for the year ended December 31, 2006                                                                                                        |   |                                      |   |                                            |   |         |   |             |    |                                                         |   |                                       |   |              | (21,618  | ) |   |   |   |   | (21,618 | ) |   | (21,618 | ) |
| Change                          in unrealized loss on marketable securities                                                                                                   |   |                                      |   |                                            |   |         |   |             |    |                                                         |   |                                       |   |              |     |   |   | 3 |   |   | 3 |   |   | 3 |   |
| Balance                          at December 31, 2006                                                                                                                         |   |                                      | 26,199 |                                            | $      | 34           |   | $                | 321,315 |                                                         | $      | 0                                          |   | $                 | (210,358 | ) | $ | (145 | ) | $ | 110,846 |   | $ | (21,615 | ) |

**The      accompanying notes are an integral part of the financial      statements.**

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Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**(in      thousands)**

|                                                                                                                                                      |   | **Years                Ended December  31,** |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|---------|
|                                                                                                                                                      |   | **2004**                                          |    | **2005** |   | **2006** |   |
| Cash                flows from operating activities:                                                                                                      |   |                                              |    |   |   |   |   |
| Net                loss                                                                                                                                   |   | $                                                 | (42,018 | ) | $ | (69,429 | ) | $ | (21,618 | ) |
| Adjustments                to reconcile net loss to net cash (used in) provided by operating                activities:                                   |   |                                              |    |   |   |   |   |   |   |   |
| Depreciation                and amortization                                                                                                              |   |                                              | 1,566   |   |   | 1,748 |   |   | 1,535 |   |
| Write-off                of fixed assets                                                                                                                  |   |                                              | 42      |   |   |   |   |   | 2 |   |
| Loss                on sale of marketable securities                                                                                                      |   |                                              | 31      |   |   |   |   |   |   |   |
| Amortization                of discounts, net of premiums, on marketable securities                                                                       |   |                                              | 640     |   |   | 270 |   |   | 9 |   |
| Amortization                of unearned compensation                                                                                                      |   |                                              | 452     |   |   | 1,878 |   |   |   |   |
| Noncash                expenses incurred in connection with vesting of share-based payment                arrangements                                    |   |                                              |    |   |   |   |   |   | 12,034 |   |
| Noncash                expenses incurred in connection with issuance of compensatory stock                options to non-employees                        |   |                                              | 385     |   |   | 640 |   |   | 620 |   |
| Expense                of purchased technology (see Note 12c)                                                                                             |   |                                              |    |   |   |   |   |   | 13,209 |   |
| Loss                in joint venture                                                                                                                      |   |                                              | 2,134   |   |   | 1,863 |   |   | 121 |   |
| Adjustment                to loss in joint venture (See Note 12b)                                                                                         |   |                                              | 762     |   |   | 1,311 |   |   |   |   |
| Purchase                of license rights for common stock (see Note 10)                                                                                  |   |                                              |    |   |   | 15,839 |   |   |   |   |
| Changes                in assets and liabilities, net of effects of purchase of PSMA                LLC:                                                  |   |                                              |    |   |   |   |   |   |   |   |
| (Increase)                decrease in accounts receivable                                                                                                 |   |                                              | (321    | ) |   | (2,175 | ) |   | 1,588 |   |
| (Increase)                decrease in amount due from joint venture                                                                                       |   |                                              | (189    | ) |   | 189 |   |   |   |   |
| (Increase)                in other current assets and other assets                                                                                        |   |                                              | (341    | ) |   | (751 | ) |   | (620 | ) |
| Increase                in accounts payable and accrued expenses                                                                                          |   |                                              | 2,107   |   |   | 2,978 |   |   | 1,533 |   |
| Increase                (decrease) in due to joint venture                                                                                                |   |                                              |    |   |   | 194 |   |   | (194 | ) |
| (Increase)                decrease in investment in joint venture                                                                                         |   |                                              | (1,950  | ) |   | (3,950 | ) |   | 250 |   |
| Increase                (decrease)in other current liabilities                                                                                            |   |                                              |    |   |   | 790 |   |   | (790 | ) |
| Increase                (decrease) in deferred revenue                                                                                                    |   |                                              |    |   |   | 60,000 |   |   | (16,910 | ) |
| (Decrease)                increase in deferred lease liability                                                                                            |   |                                              | (8      | ) |   | 7 |   |   | 74 |   |
| Net                cash (used in) provided by operating activities                                                                                        |   |                                              | (36,708 | ) |   | 11,402 |   |   | (9,157 | ) |
| Cash                flows from investing activities:                                                                                                      |   |                                              |    |   |   |   |   |   |   |   |
| Capital                expenditures                                                                                                                       |   |                                              | (2,409  | ) |   | (1,212 | ) |   | (8,768 | ) |
| Purchases                of marketable securities                                                                                                         |   |                                              | (39,601 | ) |   | (205,301 | ) |   | (299,075 | ) |
| Sales                of marketable securities                                                                                                             |   |                                              | 66,670  |   |   | 124,936 |   |   | 267,934 |   |
| Acquisition                of PSMA LLC, net of cash acquired (see Note 12c)                                                                               |   |                                              |    |   |   |   |   |   | (13,128 | ) |
| Increase                in restricted cash                                                                                                                |   |                                              | (3      | ) |   | (3 | ) |   | (6 | ) |
| Net                cash provided by (used in) investing activities                                                                                        |   |                                              | 24,657  |   |   | (81,580 | ) |   | (53,043 | ) |
| Cash                flows from financing activities:                                                                                                      |   |                                              |    |   |   |   |   |   |   |   |
| Proceeds                from public offerings of Common Stock                                                                                             |   |                                              |    |   |   | 126,323 |   |   |   |   |
| Expenses                associated with public offerings of Common Stock                                                                                  |   |                                              |    |   |   | (4,768 | ) |   |   |   |
| Proceeds                from the exercise of stock options and sale of Common Stock under                the                Employee Stock Purchase Plans |   |                                              | 5,441   |   |   | 10,468 |   |   | 7,075 |   |
| Net                cash provided by financing activities                                                                                                  |   |                                              | 5,441   |   |   | 132,023 |   |   | 7,075 |   |
| Net                (decrease) increase in cash and cash equivalents                                                                                       |   |                                              | (6,610  | ) |   | 61,845 |   |   | (55,125 | ) |
| Cash                and cash equivalents at beginning of period                                                                                           |   |                                              | 11,837  |   |   | 5,227 |   |   | 67,072 |   |
| Cash                and cash equivalents at end of period                                                                                                 |   | $                                                 | 5,227   |   | $ | 67,072 |   | $ | 11,947 |   |
| Supplemental                disclosure of noncash investing activity:                                                                                     |   |                                              |    |   |   |   |   |   |   |   |
| Fair                value of assets, including purchased technology, acquired from PSMA                LLC                (see Note 12c)                  |   |                                              |    |   |   |   |   | $ | 13,674 |   |
| Cash                paid for acquisition of PSMA LLC                                                                                                      |   |                                              |    |   |   |   |   |   | (13,459 | ) |
| Liabilities                assumed from PSMA LLC                                                                                                          |   |                                              |    |   |   |   |   | $ | 215 |   |

**The      accompanying notes are an integral part of the financial      statements.**

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Table          of Contents

**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **

**1.      Organization and Business**

**2.      Summary of Significant Accounting Policies**

**Basis      of Consolidation**

**Revenue      Recognition**

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Table          of Contents

**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

----

Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

**Research      and Development Expenses**

**Use      of Estimates**

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Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

**Patents**

**Net      Loss Per Share**

**Concentrations      of Credit Risk**

**Cash      and Cash Equivalents**

**Marketable      Securities**

**Fixed      Assets**

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Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

| Computer                equipment      | 3                years                                 |
|----------------------------------------|--------------------------------------------------------|
| Machinery                and equipment | 5-7                years                               |
| Furniture                and fixtures  | 5                years                                 |
| Leasehold                improvements  | Earlier                of life of improvement or lease |

**Impairment      of Long-Lived Assets**

**Income      Taxes**

**Risks      and Uncertainties**

**Comprehensive      Loss**

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Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

**Impact      of Recently Issued Accounting Standards**

*Accounting        for Uncertainty in Income Taxes—an Interpretation of FASB Statement        109*
** **

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Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

**3.      Share-Based Payment Arrangements**

|                                                                                                                                                         |   | **Years                Ended December 31,** |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|---------|
|                                                                                                                                                         |   | **2004**                                    |    | **2005** |   |
| Net                loss, as reported                                                                                                                         |   | $                                           | (42,018 | ) | $ | (69,429 | ) |
| Add:                Stock-based employee compensation expense included in reported net                loss                                                   |   |                                        | 452     |   |   | 1,878 |   |
| Deduct:                Total share-based employee compensation expense determined under                fair                value based method for all awards |   |                                        | (8,479  | ) |   | (10,148 | ) |
| Pro                forma net loss                                                                                                                            |   | $                                           | (50,045 | ) | $ | (77,699 | ) |
|                                                                                                                                                         |   |                                        |    |   |   |   |   |
| Net                loss per share amounts, basic and diluted:                                                                                                |   |                                        |    |   |   |   |   |
| As                reported                                                                                                                                   |   | $                                           | (2.48   | ) | $ | (3.33 | ) |
| Pro                forma                                                                                                                                     |   | $                                           | (2.96   | ) | $ | (3.72 | ) |

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Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

|                                    |   | **For                the Years Ended** |
|-----------------------------------------|--------|----------------------------------------|
|                                    |   | **2004**                               |   | **2005** |   | **2006** |
|                                    |   |                                   |   |   |   |   |
| Expected                volatility      |   | 92%                                    |   | 92%                - 97% |   | 69%                - 94% |
| Expected                dividends       |   | zero                                   |   | zero |   | zero |
| Expected                term (in years) |   | 5.0                                    |   | 6.5 |   | 6.5 |
| Risk-free                rate           |   | 3.10%                - 3.92%           |   | 3.29%                - 3.98% |   | 4.56%                - 5.06% |

| **Options**                                     |   | **Shares** |   | **Weighted                Average Exercise Price** |   | **Weighted****Average                Remaining Contractual Term (Yr.)** |   | **Aggregate                Intrinsic Value** |   |
|-------------------------------------------------|--------|------------|--------|----------------------------------------------------|--------|-------------------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                            |   |       |   |                                               |   |                                                                    |   |                                         |   |
| Outstanding                at January 1, 2006   |   |       | 4,099  |                                               | $      | 14.60                                                                   |   |                                         |   |   |   |   |   |
| Granted                                         |   |       | 844    |                                               |   | 24.59                                                                   |   |                                         |   |   |   |   |   |
| Exercised                                       |   |       | (345   | )                                                  |   | 7.81                                                                    |   |                                         |   |   |   |   |   |
| Forfeited                or expired             |   |       | (103   | )                                                  |   | 19.25                                                                   |   |                                         |   |   |   |   |   |
| Outstanding                at December 31, 2006 |   |       | 4,495  |                                               | $      | 16.89                                                                   |   |                                         | 5.89   |   | $ | 41,619 |   |
| Exercisable                at December 31, 2006 |   |       | 3,055  |                                               | $      | 14.82                                                                   |   |                                         | 4.77   |   | $ | 34,823 |   |

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Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

| **Nonvested                Shares**           |   | **Shares** |   | **Weighted                Average Grant-Date****Fair                Value** |   |
|-----------------------------------------------|--------|------------|--------|-----------------------------------------------------------------------------|--------|
|                                          |   |       |   |                                                                        |   |
| Nonvested                at January 1, 2006   |   |       | 242    |                                                                        | $      | 19.47 |   |
| Granted                                       |   |       | 241    |                                                                        |   | 24.69 |   |
| Vested                                        |   |       | (82    | )                                                                           |   | 20.80 |   |
| Forfeited                                     |   |       | (13    | )                                                                           |   | 21.26 |   |
| Nonvested                at December 31, 2006 |   |       | 388    |                                                                        |   | 22.37 |   |

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Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

|                                 |   | **For                  the Years Ended****December                  31,** |
|--------------------------------------|--------|---------------------------------------------------------------------------|
|                                 |   | **2004**                                                                  |   | **2005** |   | **2006** |
|                                 |   |                                                                      |   |   |   |   |
| Expected                  volatility |   | 25%                  - 39%                                                |   | 29%-                  47% |   | 37%                  - 43% |
| Expected                  dividends  |   | zero                                                                      |   | zero |   | zero |
| Expected                  term       |   | 6                  months                                                 |   | 6                  months |   | 6                  months |
| Risk-free                  rate      |   | 0.93%                  - 2.34%                                            |   | 2.53%                  - 3.29% |   | 3.25%                  - 4.75% |

|   |   | **Qualified                Plan**   |   | **Non-Qualified                Plan** |   |
|--------|--------|-------------------------------------|--------|---------------------------------------|--------|
|   |   | **Shares                Purchased** |   | **Price                Range**        |   | **Weighted****Average                Grant-Date Fair Value** |   | **Shares                Purchased** |   | **Price                Range** |   | **Weighted****Average                Grant-Date Fair Value** |   |
|   |   |                                |   |                                  |   |   |   |   |   |   |   |   |   |
| 2004   |   |                                | 144    |                                  | $      | 7.47                - $17.13 |   | $ | 5.36 |   |   | 17 |   | $ | 7.47                - $17.13 |   | $ | 5.43 |   |
| 2005   |   |                                | 130    |                                  |   | 13.60                - 24.67 |   |   | 7.07 |   |   | 27 |   |   | 13.60                - 24.67 |   |   | 7.08 |   |
| 2006   |   |                                | 126    |                                  |   | 17.80                - 25.84 |   |   | 3.30 |   |   | 27 |   |   | 18.61                - 25.84 |   |   | 3.25 |   |

|                                      |   | **Years                Ended December 31,** |   |
|-------------------------------------------|--------|---------------------------------------------|--------|
|                                      |   | **2004**                                    |   | **2005** |   | **2006** |   |
| Recognized                as:             |   |                                        |   |   |   |   |   |   |   |   |
| Research                and Development   |   | $                                           | 595    |   | $ | 1,237 |   | $ | 5,814 |   |
| General                and Administrative |   |                                        | 242    |   |   | 1,281 |   |   | 6,840 |   |
| Total                                     |   | $                                           | 837    |   | $ | 2,518 |   | $ | 12,654 |   |

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Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

**4.      Marketable Securities**

|                                                                                    |   | **Amortized**                 |    | **Fair**  |   | **Unrealized                Holding** |   |
|-----------------------------------------------------------------------------------------|--------|-------------------------------|---------|-----------|--------|---------------------------------------|--------|
|                                                                                    |   | **Cost                Basis** |    | **Value** |   | **Gains**                             |   | **(Losses)** |   | **Net** |   |
| **2005:**                                                                               |   |                          |    |      |   |                                  |   |   |   |   |   |
| Maturities                less than one year:                                           |   |                          |    |      |   |                                  |   |   |   |   |   |
| Corporate                debt securities                                                |   | $                             | 51,458  |      | $      | 51,333                                |   |   |   |   | $ | (125 | ) | $ | (125 | ) |
| Government-sponsored                entities                                            |   |                          | 2,500   |      |   | 2,484                                 |   |   |   |   |   | (16 | ) |   | (16 | ) |
| Maturities                between one and five years:                                   |   |                          |    |      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Corporate                debt securities                                                |   |                          | 7,059   |      |   | 7,035                                 |   |   |   |   |   | (24 | ) |   | (24 | ) |
| Maturities                greater than five years:                                      |   |                          |    |      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Municipal                Bonds (ARS) see *Note                2 -Marketable Securities* |   |                          | 45,149  |      |   | 45,166                                |   | $ | 17 |   |   |   |   |   | 17 |   |
|                                                                                    |   | $                             | 106,166 |      | $      | 106,018                               |   | $ | 17 |   | $ | (165 | ) | $ | (148 | ) |

|                                                                                    |   | **Amortized**                 |    | **Fair**  |   | **Unrealized                Holding** |   |
|-----------------------------------------------------------------------------------------|--------|-------------------------------|---------|-----------|--------|---------------------------------------|--------|
|                                                                                    |   | **Cost                Basis** |    | **Value** |   | **Gains**                             |   | **(Losses)** |   | **Net** |   |
| **2006:**                                                                               |   |                          |    |      |   |                                  |   |   |   |   |   |
| Maturities                less than one year:                                           |   |                          |    |      |   |                                  |   |   |   |   |   |
| Corporate                debt securities                                                |   | $                             | 75,907  |      | $      | 75,833                                |   | $ | 6 |   | $ | (80 | ) | $ | (74 | ) |
| Government-sponsored                entities                                            |   |                          | 9,000   |      |   | 8,979                                 |   |   |   |   |   | (21 | ) |   | (21 | ) |
| Maturities                between one and five years:                                   |   |                          |    |      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Corporate                debt securities                                                |   |                          | 20,366  |      |   | 20,319                                |   |   |   |   |   | (47 | ) |   | (47 | ) |
| Government-sponsored                entities                                            |   |                          | 3,000   |      |   | 2,993                                 |   |   |   |   |   | (7 | ) |   | (7 | ) |
| Maturities                greater than five years:                                      |   |                          |    |      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Municipal                Bonds (ARS) see *Note                2 -Marketable Securities* |   |                          | 29,025  |      |   | 29,029                                |   |   | 4 |   |   |   |   |   | 4 |   |
|                                                                                    |   | $                             | 137,298 |      | $      | 137,153                               |   | $ | 10 |   | $ | (155 | ) | $ | (145 | ) |

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Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

**At      December 31, 2005:**

|                                         |   | **Less                than 12 Months** |   | **12                Months or Greater** |   | **Total**                     |   |
|----------------------------------------------|--------|----------------------------------------|--------|-----------------------------------------|--------|-------------------------------|--------|
| **Description                of Securities** |   | **Fair                Value**          |   | **Unrealized                Losses**    |   | **Fair                Value** |   | **Unrealized                Losses** |   | **Fair                Value** |   | **Unrealized                Losses** |   |
|                                         |   |                                   |   |                                    |   |                          |   |   |   |   |   |   |   |
| Corporate                debt securities     |   | $                                      | 57,377 |                                    | $      | (142                          | )      | $ | 991 |   | $ | (7 | ) | $ | 58,368 |   | $ | (149 | ) |
| Government-sponsored                entities |   |                                   | 2,484  |                                    |   | (16                           | )      |   |   |   |   |   |   |   | 2,484 |   |   | (16 | ) |
| Total                                        |   | $                                      | 59,861 |                                    | $      | (158                          | )      | $ | 991 |   | $ | (7 | ) | $ | 60,852 |   | $ | (165 | ) |

**At December      31, 2006:**

|                                         |   | **Less                than 12 Months** |   | **12                Months or Greater** |   | **Total**                     |   |
|----------------------------------------------|--------|----------------------------------------|--------|-----------------------------------------|--------|-------------------------------|--------|
| **Description                of Securities** |   | **Fair                Value**          |   | **Unrealized                Losses**    |   | **Fair                Value** |   | **Unrealized                Losses** |   | **Fair                Value** |   | **Unrealized                Losses** |   |
|                                         |   |                                   |   |                                    |   |                          |   |   |   |   |   |   |   |
| Corporate                debt securities     |   | $                                      | 78,944 |                                    | $      | (123                          | )      | $ | 6,095 |   | $ | (4 | ) | $ | 85,039 |   | $ | (127 | ) |
| Government-sponsored                entities |   |                                   | 11,972 |                                    |   | (28                           | )      |   |   |   |   |   |   |   | 11,972 |   |   | (28 | ) |
| Total                                        |   | $                                      | 90,916 |                                    | $      | (151                          | )      | $ | 6,095 |   | $ | (4 | ) | $ | 97,011 |   | $ | (155 | ) |

**Corporate      debt securities. **

**Government-sponsored      entities. **

**5.      Accounts Receivable**

|                                         |   | **December                31,** |   |
|----------------------------------------------|--------|---------------------------------|--------|
|                                         |   | **2005**                        |   | **2006** |   |
| National                Institutes of Health |   | $                               | 3,265  |   | $ | 1,697 |   |
| Other                                        |   |                            | 22     |   |   | 2 |   |
| Total                                        |   | $                               | 3,287  |   | $ | 1,699 |   |

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Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

**6.      Fixed Assets**

|                                                           |   | **December                 31,** |   |
|----------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                           |   | **2005**                              |   | **2006** |   |
| Computer                equipment                              |   | $                                     | 841    |   | $ | 1,690 |   |
| Machinery                and equipment                         |   |                                  | 5,263  |   |   | 6,890 |   |
| Furniture                and fixtures                          |   |                                  | 671    |   |   | 726 |   |
| Leasehold                improvements                          |   |                                  | 4,241  |   |   | 4,950 |   |
| Construction                in progress                        |   |                                  | 946    |   |   | 6,361 |   |
|                                                           |   |                                  | 11,962 |   |   | 20,617 |   |
| Less,                accumulated depreciation and amortization |   |                                  | (7,806 | ) |   | (9,230 | ) |
| Total                                                          |   | $                                     | 4,156  |   | $ | 11,387 |   |

**7.      Accounts Payable and Accrued Expenses**

|                                                       |   | **December                 31,** |   |
|------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                       |   | **2005**                              |   | **2006** |   |
| Accounts                payable                            |   | $                                     | 880    |   | $ | 1,559 |   |
| Accrued                consulting and clinical trial costs |   |                                  | 6,721  |   |   | 7,404 |   |
| Accrued                payroll and related costs           |   |                                  | 1,144  |   |   | 990 |   |
| Legal                and professional fees                 |   |                                  | 1,255  |   |   | 1,301 |   |
| Other                                                      |   |                                  | 238    |   |   | 598 |   |
| Total                                                      |   | $                                     | 10,238 |   | $ | 11,852 |   |

**8.      Stockholders’ Equity**

**9.      **
**License      and Co-Development Agreement with Wyeth Pharmaceuticals**

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**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

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**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

**10.      Acquisition of Contractual Rights from Methylnaltrexone      Licensors**

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Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

**11.      Commitments and Contingencies**

**a.      Operating Leases**

| **Years                  ending December 31,**                                                                                                                                                                                                                                             |   | **Minimum****Annual                  Payments**                                                                               |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------|
| 2007                                                                                                                                                                                                                                                                                            |   | $                   2,353                                                                                                |
| 2008                                                                                                                                                                                                                                                                                            |   |                     2,393                                                                                           |
| 2009                                                                                                                                                                                                                                                                                            |   |                                    2,362 |
| 2010                                                                                                                                                                                                                                                                                            |   |                        170                                                                                |
|                          2011                                                                                                                                                                                                                                |   |                         187                                                                          |
|                 Thereafter                                                                                                                                                                                      |   |                         583                                                                          |
|                                                               Total |   | $                   8,048                                                                                                |

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**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

**b.      Licensing, Service and Supply Agreements of Progenics Pharmaceuticals,      Inc.**

***i.      Columbia University***

***ii.      Sloan-Kettering Institute for Cancer Research***

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Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

***iii.      Aquila Biopharmaceuticals, Inc.***

***iv.      Development and License Agreement with PDL BioPharma, Inc. (formerly, Protein      Design Labs, Inc.)***

***v.      UR Labs, Inc./ University of Chicago***

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Table            of Contents

**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

***vi.      Hoffmann-LaRoche***

 

***vii.      Cornell Research Foundation***

***viii.      Mallinckrodt Inc.***

***ix.      KMT Hepatech, Inc.***

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**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

**c.      Licensing and Collaboration Agreements of PSMA Development Company      LLC**

***i.      Amgen Fremont, Inc. (formerly Abgenix)***

***ii.      AlphaVax Human Vaccines***

***iii.      Seattle Genetics, Inc.***

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**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

**d.      Consulting Agreements**

**12.      PSMA Development Company LLC**

**a**
**Introduction**

**b.      Contract Research and Development Revenue from PSMA LLC**

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**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

**c.      Acquisition of Cytogen’s Membership Interest**

** **

**13.      Employee Savings Plan**

**14.      Income Taxes**

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**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

**.      **

|                                             |   | **December                31,** |          |
|--------------------------------------------------|--------|---------------------------------|---------------|
|                                             |   | **2005**                        |          | **2006** |   |
| Depreciation                and amortization     |   | $                               | 1,033         |   | $ | 6,030 |   |
| R&D                tax credit carry-forwards |   |                            | 5,692         |   |   | 5,417 |   |
| AMT                credit carry-forwards         |   |                            | 412           |   |   | 306 |   |
| Net                operating loss carry-forwards |   |                            | 49,134        |   |   | 55,882 |   |
| Deferred                revenue                  |   |                            | 23,909        |   |   | 17,171 |   |
| Stock                compensation                |   |                            |          |   |   | 4,162 |   |
| Other                items                       |   |                            | 3,433         |   |   | 2,930 |   |
|                                             |   |                            | 83,613        |   |   | 91,898 |   |
| Valuation                allowance               |   |                            | (83,613       | ) |   | (91,898 | ) |
|                                             |   |  $                         | —  |   | $ | — |   |

|                                                      |   | **Year                Ended December 31,** |
|-----------------------------------------------------------|--------|--------------------------------------------|
|                                                      |   | **2004**                                   |   | **2005** |   | **2006** |
|                                                      |   |                                       |   |   |   |   |
| U.S.                Federal statutory rate                |   | (34)%                                      |   | (34)% |   | (34)% |
| State                income taxes, net of Federal benefit |   | (5.8)                                      |   | (4.9) |   | (5.8) |
| Research                and experimental tax credit       |   | (2.4)                                      |   | (1.0) |   | (6.4) |
| UR                Labs license purchase                   |   |                                       |   | 5.7 |   |   |
| Change                in valuation allowance              |   | 42.1                                       |   | 34.4 |   | 43.1 |
| Other                                                     |   | 0.1                                        |   | 0 |   | 3.1 |
| Income                tax provision                       |   | 0%                                         |   | 0.2% |   | 0% |

*Accounting      for Uncertainty in Income Taxes*
*Note      2 - Impact of Adoption of Recently Issued Accounting      Pronouncements*

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**PROGENICS        PHARMACEUTICALS, INC**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS **
**¾**
**continued**

**15.      Net Loss Per Share**

|                             |   | **Net                Loss****(Numerator)** |    | **Weighted                Average****Common                Shares****(Denominator)** |   | **Per                Share****Amount** |   |
|----------------------------------|--------|--------------------------------------------|---------|--------------------------------------------------------------------------------------|--------|----------------------------------------|--------|
| **2004:**                        |   |                                       |    |                                                                                 |   |                                   |   |
| Basic                and diluted |   | $                                          | (42,018 | )                                                                                    |   | 16,911                                 |   | $ | (2.48 | ) |
| **2005:**                        |   |                                       |    |                                                                                 |   |                                   |   |   |   |   |
| Basic                and diluted |   | $                                          | (69,429 | )                                                                                    |   | 20,864                                 |   | $ | (3.33 | ) |
| **2006:**                        |   |                                       |    |                                                                                 |   |                                   |   |   |   |   |
| Basic                and diluted |   | $                                          | (21,618 | )                                                                                    |   | 25,669                                 |   | $ | (0.84 | ) |

|                                |   | **Years****Ended December 31,**   |   |
|-------------------------------------|--------|-----------------------------------|--------|
|                                |   | **2004**                          |   | **2005** |   | **2006** |   |
|                                |   | **Weighted****Average****Number** |   | **Weighted****Average****Exercise                Price** |   | **Weighted****Average****Number** |   | **Weighted****Average****Exercise                Price** |   | **Weighted****Average****Number** |   | **Weighted****Average****Exercise                Price** |   |
| Options                and warrants |   |                              | 4,378  |   | $ | 10.15 |   |   | 4,640 |   | $ | 13.08 |   |   | 4,663 |   | $ | 15.13 |   |
| Restricted                stock     |   |                              | 83     |   |   |   |   |   | 204 |   |   |   |   |   | 312 |   |   |   |   |
| Total                               |   |                              | 4,461  |   |   |   |   |   | 4,844 |   |   |   |   |   | 4,975 |   |   |   |   |

**16.      Unaudited Quarterly Results**

|                               |   | **Quarter                Ended****March                 31,****2005****(unaudited)** |    | **Quarter                Ended****June                 30,****2005****(unaudited)** |   | **Quarter                Ended September  30,****2005****(unaudited)** |   | **Quarter                Ended****December                 31,****2005****(unaudited)** |    |
|------------------------------------|--------|-------------------------------------------------------------------------------------------|---------|------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------|---------|
| Revenue                            |   | $                                                                                         | 2,589   |                                                                                     | $      | 2,075                                                                       |   | $                                                                                            | 2,774   |   | $ | 2,048 |   |
| Net                loss            |   |                                                                                      | (13,194 | )                                                                                        |   | (12,795                                                                     | )      |                                                                                         | (10,743 | ) |   | (32,697 | ) |
| Net                loss per share: |   |                                                                                      |    |                                                                                     |   |                                                                        |   |                                                                                         |    |   |   |   |   |
| Basic                and diluted   |   |                                                                                      | (0.76   | )                                                                                        |   | (0.65                                                                       | )      |                                                                                         | (0.49   | ) |   | (1.34 | ) |
|                               |   |                                                                                      |    |                                                                                     |   |                                                                        |   |                                                                                         |    |   |   |   |   |

|                               |   | **Quarter                Ended****March                 31,****2006****(unaudited)** |   | **Quarter                Ended****June                 30,****2006****(unaudited)** |   | **Quarter                Ended****September                 30,****2006****(unaudited)** |   | **Quarter                Ended****December                 31,****2006****(unaudited)** |   |
|------------------------------------|--------|-------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------|--------|
| Revenue                            |   | $                                                                                         | 11,001 |                                                                                     | $      | 19,122                                                                                        |   | $                                                                                            | 17,848 |   | $ | 21,935 |   |
| Net                loss            |   |                                                                                      | (2,643 | )                                                                                        |   | (14,328                                                                                       | )      |                                                                                         | (2,935 | ) |   | (1,712 | ) |
| Net                loss per share: |   |                                                                                      |   |                                                                                     |   |                                                                                          |   |                                                                                         |   |   |   |   |   |
| Basic                and diluted   |   |                                                                                      | (0.10  | )                                                                                        |   | (0.56                                                                                         | )      |                                                                                         | (0.11  | ) |   | (0.07 | ) |

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Table          of Contents

**SIGNATURES**

|   | PROGENICS                PHARMACEUTICALS, INC. |
|--------|------------------------------------------------|
|   | By:                                            | PAUL                J. MADDON, M.D., PH.D. |
|   |                                           | Paul                J. Maddon, M.D., Ph.D.(Duly                authorized officer of theRegistrant                and Chief Executive Officer, Chief Science Officer and                Director) |

| **Signature**                                         |   | **Capacity**                                                      | **Date**                           |
|-------------------------------------------------------|--------|-------------------------------------------------------------------|------------------------------------|
|  /s/                KURT W. BRINER               |   | Co-Chairman                                                       | March 15,                2007 |
| Kurt                W. Briner                    |   |                                                              |                               |
| /s/                PAUL F. JACOBSON                   |   | Co-Chairman                                                       | March 15,                2007 |
| Paul                F. Jacobson                  |   |                                                              |                               |
| /s/                PAUL J. MADDON, M.D., PH.D.        |   | Chief                Executive Officer, Chief Science             | March 15,                2007 |
| Paul                J. Maddon, M.D., Ph.D.       |   | Officer                and Director (Principal Executive Officer) |                               |
| /s/                CHARLES A. BAKER                   |   | Director                                                          | March 15,                2007 |
| Charles                A. Baker                  |   |                                                              |                               |
| /s/                MARK F. DALTON                     |   | Director                                                          | March 15,                2007 |
| Mark                F. Dalton                    |   |                                                              |                               |
| /s/                STEPHEN P. GOFF, PH.D.             |   | Director                                                          | March 15,                2007 |
| Stephen                P. Goff, Ph.D.            |   |                                                              |                               |
| /s/                DAVID A. SCHEINBERG, M.D., PH.D.   |   | Director                                                          | March 15,                2007 |
| David                A. Scheinberg, M.D., Ph.D.  |   |                                                              |                               |
| /s/                NICOLE S. WILLIAMS                 |   | Director                                                          | March                15, 2007      |
| Nicole                S. Williams                |   |                                                              |                               |
| /s/                ROBERT A. MCKINNEY, CPA            |   | Chief                Financial Officer, Senior Vice President,    | March 15,                2007 |
| Robert                A. McKinney, CPA                |   | Finance                & Operations and Treasurer             |                               |
|                                                  |   | (Principal                Financial and Accounting Officer)       |                               |

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Table          of Contents

**EXHIBIT      INDEX**

| **Exhibit****Number**             | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-----------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1(1)                            | Certificate                of Incorporation of the Registrant, as amended.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 3.2(1)                            | By-laws                of the Registrant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.1(1)                            | Specimen                Certificate for Common Stock, $.0013 par value per share, of the                Registrant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1(1)                           | Form                of Registration Rights Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.2(1)                           | 1989                Non-Qualified Stock Option Plan‡                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.3(1)                           | 1993                Stock Option Plan, as amended‡                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.4(1)                           | 1993                Executive Stock Option Plan‡                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.5(4)                           | Amended                and Restated 1996 Stock Incentive Plan‡                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.5.1(12)                        | Form                of Non-Qualified Stock Option Agreement‡                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.5.2(12)                        | Form                of Restricted Stock Award‡                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.6(1)                           | Form                of Indemnification Agreement‡                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.7(2)                           | Employment                Agreement dated December 31, 2003 between the Registrant and Dr.                Paul J.                Maddon‡                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.8(1)                           | Letter                dated August 25, 1994 between the Registrant and Dr. Robert J.                Israel‡                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.9(10)                          | 1998                Employee Stock Purchase Plan‡                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.10(10)                         | 1998                Non-qualified Employee Stock Purchase Plan‡                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.11(1)†                   | License                Agreement dated November 17, 1994 between the Registrant and                Sloan-Kettering Institute for Cancer Research                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.12(1)†                   | QS-21                License and Supply Agreement dated August 31, 1995 between the Registrant                and Cambridge Biotech Corporation, a wholly owned subsidiary of                bioMerieux, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.13(1)†                   | License                Agreement dated March 1, 1989, as amended by a Letter Agreement dated                March 1, 1989 and as amended by a Letter Agreement dated October                22, 1996                between the Registrant and the Trustees of Columbia                University                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.14(6)                          | Amended                and Restated Sublease dated June 6, 2000 between the Registrant and                Crompton Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.15(3)†                   | Development                and License Agreements, effective as of April 30, 1999, between Protein                Design Labs, Inc. and the Registrant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.15.1                           | Letter                Agreement dated November 24, 2003 relating to the Development and                License                Agreement between Protein Design Labs, Inc. and the                Registrant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.16(3)†                   | PSMA/PSMP                License Agreement dated June 15, 1999, by and among the Registrant,                Cytogen Corporation and PSMA Development Company LLC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.17(3)†                   | Limited                Liability Company Agreement of PSMA Development Company LLC, dated                June                15, 1999, by and among the Registrant, Cytogen Corporation and PSMA                Development Company LLC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.18(8)                          | Amendment                Number 1 to Limited Liability Company Agreement of PSMA Development                Company LLC dated March 22, 2002 by and among the Registrant, Cytogen                Corporation and PSMA Development Company LLC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.19(5)                          | Director                Stock Option Plan‡                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.20(7)†                   | Exclusive                Sublicense Agreement, dated September 21, 2001, between the Registrant                and                UR Labs, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.20.1(11)                       | Amendment                to Exclusive Sublicense Agreement between the Registrant and UR Labs,                Inc., dated September 21, 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.21(9)                          | Research                and Development Contract between the National Institutes of Health                and the                Registrant, dated September 26, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.22(9)                          | Agreement                of Lease between Eastview Holdings LLC and the Registrant, dated                September                30, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.23(9)                          | Letter                Agreement amending Agreement of Lease between Eastview Holdings LLC                and                the Registrant, dated October 23, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.24(13)                         | Summary                of Non-Employee Director Compensation‡                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.26(15)                †  | License                and Co-Development Agreement dated December 23, 2005 by and among                Wyeth,                acting through Wyeth Pharmaceuticals Division, Wyeth-Whitehall                Pharmaceuticals, Inc. and Wyeth-Ayerst Lederle, Inc. and Progenics                Pharmaceuticals, Inc. and Progenics Pharmaceuticals Nevada, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.27(15)                †  | Option                and License Agreement dated May 8, 1985 by and between the University                of                Chicago and UR Labs, Inc., as amended by the Amendment to Option                and                License Agreement dated September 17, 2005 by and between theUniversity                of Chicago and UR Labs, Inc., by the Second Amendment to Option and                License Agreement dated March 3, 1989 by and among the University                of                Chicago, ARCH Development Corporation and UR Labs, Inc. andby                the Letter Agreement Related to Progenics' Methylnaltrexone In-License                dated December 22, 2005 by and among the University of Chicago, acting                on                behalf of itself and ARCH Development Corporation, Progenics                Pharmaceuticals,Inc.,                Progenics Pharmaceuticals Nevada, Inc. and Wyeth, acting through                its Wyeth                Pharmaceuticals Division |
| 10.28                (16)         | Membership                Interest Purchase Agreement dated April 20, 2006 by and between Progenics                Pharmaceuticals, Inc. and Cytogen Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.29                (16) † | Amended                and Restated PSMA/PSMP License Agreement dated April 20, 2006 by                and among                Progenics Pharmaceuticals, Inc., Cytogen Corporation and PSMA Development                Company LLC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 23.1                              | Consent                of PricewaterhouseCoopers LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 31.1                              | Certification                of Paul J. Maddon, M.D., Ph.D., Chief Executive Officer of the Registrant                pursuant to 13a-14(a) and Rule 15d-14(a) under the Securities Exchange                Act                of 1934, as amended.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 31.2                              | Certification                of Robert A. McKinney, Chief Financial Officer, Senior Vice President,                Finance and Operations and Treasurer of the Registrant pursuant to                13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of                1934, as                amended.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 32.1                              | Certification                of Paul J. Maddon, M.D., Ph.D., Chief Executive Officer of the Registrant                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                906 of                the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 32.2                              | Certification                of Robert A. McKinney, Chief Financial Officer, Senior Vice President,                Finance and Operations and Treasurer of the Registrant pursuant to                18                U.S.C. Section 1350, as adopted pursuant to Section 906 of the                Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

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