SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                           FORM 10-KSB
(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, 2000

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934.

       For the transition period from ________ to ________

                 Commission file number 0-15888


                    IGENE Biotechnology, Inc.
         ______________________________________________
         (Name of Small Business Issuer in Its Charter)

           Maryland                          52-1230461
_______________________________  _______________________________
(State of other jurisdiction of       (IRS Employer
 incorporation or organization)        Identification No.)

9110 Red Branch Road, Columbia, Maryland          21045
________________________________________  ______________________
(Address of principal executive offices)        (Zip Code)

                         (410) 997-2599
        ________________________________________________
        (Issuer's telephone number, including area code)

     Securities registered pursuant to Section 12(b) of the
     Exchange Act:

Title of Each Class    Name of Each Exchange on Which Registered
___________________    _________________________________________
      None                                None
___________________    _________________________________________

     Securities registered pursuant to Section 12(g) of the
     Exchange Act:

            Common Stock (par value $.01 per share
     _______________________________________________________
                      (Title of class)

     Check  whether the issuer (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the
past  12  months (or for such shorter period that the  registrant
was  required to file such reports), and (2) has been subject  to
such filing requirements for the past 90 days.

YES    X            NO
      ---                ---

     Check  if  there  is no disclosure of delinquent  filers  in
response  to Item 405 of Regulation S-B contained in  this  form,
and  no disclosure will be contained, to the best of registrant's
knowledge,   in   definitive  proxy  or  information   statements
incorporated by reference in Part III of this Form 10-KSB or  any
amendment to this Form 10-KSB.  [  ]

     State  issuer's  revenues for its most  recent  fiscal year.
$702,533

     State  the  aggregate market value of the  voting  and  non-
voting common equity held by non-affiliates computed by reference
to  the price at which the common equity was sold, or the average
bid and asked price of such common equity, as of a specified date
within the past 60 days.           $1,446,777 as of March 1, 2001
(Note:   The  officers and directors of the issuer are considered
affiliates for purposes of this calculation.)

     State  the  number  of  shares  outstanding  of  each of the
issuer's classes of common equity,  as  of the latest practicable
date.  As of March 1, 2001 there were 62,249,005  shares  of  the
issuer's common stock outstanding.

<PAGE>

CAUTIONARY STATEMENT FOR PURPOSES OF "SAFE HARBOR PROVISIONS"  OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:

EXCEPT  FOR  HISTORICAL  FACTS, ALL  MATTERS  DISCUSSED  IN  THIS
REPORT, WHICH ARE FORWARD LOOKING, INVOLVE A HIGH DEGREE OF RISKS
AND  UNCERTAINTIES.   POTENTIAL RISKS AND UNCERTAINTIES  INCLUDE,
BUT   ARE  NOT  LIMITED  TO,  COMPETITIVE  PRESSURES  FROM  OTHER
COMPANIES AND WITHIN THE BIOTECH INDUSTRY, ECONOMIC CONDITIONS IN
THE  COMPANY'S  PRIMARY MARKETS AND OTHER UNCERTAINTIES  DETAILED
FROM  TIME-TO-TIME  IN  THE  COMPANY'S  SECURITIES  AND  EXCHANGE
COMMISSION FILINGS.

                             PART I

ITEM 1.   DESCRIPTION OF BUSINESS

General

     IGENE  Biotechnology,  Inc.  ("Igene")  is  engaged  in  the
business  of developing, marketing, and manufacturing  industrial
microbiology  and  related  biotechnology  products.   Igene  was
formed  on October 27, 1981 to develop, produce and market value-
added  specialty  biochemical  products  derived  from  abundant,
inexpensive  and  renewable  agricultural  residues  and   wastes
through  the  use  of  state-of-the-art fermentation  technology,
physical and chemical separation technology, and related chemical
and biochemical engineering technologies.

     Igene  has  devoted  its  resources to  the  development  of
proprietary  processes  to  convert  selected  agricultural   raw
materials  or  feedstocks  into  commercially  useful  and   cost
effective  products for the food, feed, flavor  and  agrochemical
industries.   In  developing these processes and products,  Igene
has relied on the expertise and skills of its in-house scientific
staff and, for special projects, various consultants.

     Igene  leases manufacturing capacity in Mexico City, Mexico,
and  also has administrative, research and pilot plant facilities
in  Columbia, Maryland.  Igene is manufacturing its own  products
through  a  contract manufacturer.  During the year  2000,  Igene
formed  a wholly-owned subsidiary, Igene Chile Comercial,  Ltda.,
in Chile.  The subsidiary has a sales and customer service office
and a product warehouse in Puerto Montt, Chile.

Government Regulation

     The  manufacturing  and marketing of most  of  the  products
Igene has developed are and will likely continue to be subject to
regulation by various governmental agencies in the United States,
including   the  Food  and  Drug  Administration   ("FDA"),   the
Department   of   Agriculture  ("USDA"),  and  the  Environmental
Protection  Agency  ("EPA"),  and comparable  agencies  in  other
countries.    Igene,  as a matter of policy,  requires  that  its
products  conform  to current Good Manufacturing  Practices   (as
defined  under the Federal Food, Drug and Cosmetic  Act  and  the
rules  and regulations thereunder) and Igene believes all of  its
products  so  conform.   The extent of any  adverse  governmental
regulation  that  might  arise  from  future  administrative   or
legislative  action,  including  current  rules  and  regulations
pertaining to the process of GRAS (Generally Recognized as  Safe)
affirmations, cannot be predicted.

     In  a notice published in the Federal Register July 6, 2000,
the FDA announced the amendment of its color additive regulations
to provide for the safe use of Phaffia yeast, such as that in the
Company's product, AstaXin(R), as a color additive in aquaculture
feeds.   This  ruling, which is effective August 8, 2000,  allows
Igene to  market  its  product, AstaXin(R), for aquaculture feeds
and  fish  produced  in or imported into the United States.  This
ruling is available to the public in the Federal Register.  Igene
has  also  previously  obtained  approval for AstaXin(R) from the
Canadian  Food  Inspection  Agency  (CFIA).   Additional  foreign
approval applications  for  AstaXin(R), including  those  for the
European Union, are in progress.

<PAGE>

Government Regulation (continued)

     In  July 2000, Igene also obtained clearance from the FDA to
market   its  product,   AstaBioCare(TM),   as  a  human  dietary
supplement in the United States.  Scientific literature indicates
that natural astaxanthin, such as that in the Company's  product,
AstaBioCare(TM), may offer health benefits for humans  due to its
antioxidant  properties.  The FDA notification and the  Company's
submissions   are  available  to  the  public   from   the   FDA.
Comparable  agencies  in  the European Union  and  other  foreign
countries  may have their own additional registration procedures.
No additional applications for approval of  AstaBioCare(TM) as  a
human nutritional supplement have yet been submitted.

     Igene  has not incurred and does not anticipate any material
environmental compliance costs due to the fact that its  contract
manufacturer   has   primary  responsibility  for   environmental
compliance  and  that  its  current  products  and  manufacturing
processes are not associated with, and are not expected to result
in, any material environmental compliance issues.

Research and Development

     As  of  December 31, 2000, Igene had expended  approximately
$11,882,000  on research and development since its  inception  on
October  27,  1981  and has, as of December  31,  2000,  received
revenues  from  product  sales  and  royalties  of  approximately
$2,743,000  from  the proprietary processes resulting  from  such
research  and development.  Igene will continue to incur research
and  development  costs in connection with  improvements  in  its
existing  processes  and  products, but it  does  not  anticipate
development of new processes and products in 2001.

      Research and development expenditures for each of the  last
two years are as follows:

     1999      $ 350,659
     2000      $ 355,659

     Igene's research and development activities have resulted in
the  development of processes to produce the products hereinafter
discussed.

Commercial Products

AstaXin(R)

     AstaXin(R) is Igene's tradename for its dried yeast  product
made  from  a  proprietary strain of yeast  developed  by  Igene.
AstaXin(R) is a  natural source of astaxanthin, a  pigment  which
imparts  the  characteristic red color to the  flesh  of  salmon,
trout, prawns and certain other types of fish and shellfish.   In
the  ocean,  salmon and trout obtain astaxanthin from  krill  and
other  planktonic  crustaceans  in  their  diet.   A  krill   and
crustacean diet would be prohibitively expensive for farm  raised
salmonids.   Without the addition of astaxanthin,  the  flesh  of
such fish is a pale, off-white color, which is less appealing  to
consumers  expecting "salmon-colored" fish.  Fish feeding  trials
in  Europe,  Asia, and North and South America have  demonstrated
the  efficacy of AstaXin(R). An estimated 700,000 metric  tons of
farm raised salmon are produced annually worldwide.

      On  May 20, 2000, Igene renewed its manufacturing agreement
with Fermic, S.A. de C.V., of Mexico City, Mexico (Fermic"),  for
the production of its natural astaxanthin pigment, AstaXin(R), in
Fermic's  manufacturing facility in Mexico. Commercial production
began in January of 1998, and Igene continues to manufacture  and
sell  AstaXin(R) worldwide,  directly  or through distributors to
meet an anticipated increasing demand for the product.

<PAGE>

AstaXin(R) (continued)

     The  new Fermic contract provides that the manufacturer  has
the right and license to produce AstaXin(R) for Igene, is paid  a
cash  fee based on manufacturing capacity, and may receive up  to
20,000,000  shares  of Igene common stock in lieu  of  additional
cash  based on quantity of product manufactured over the six year
term.   Fermic  provides  equipment and facilities  necessary  to
manufacture  and  store  the  product  and  is  responsible   for
purchasing raw materials.  Igene is responsible for sales efforts
and  for ensuring the quality of the pigment.  Igene also  has  a
role   in   ensuring   that  the  manufacturing   process   works
effectively.    The  contract  expires  May  20,   2006,   unless
terminated   earlier  by  either  party.   (See  also   item   2.
Description of Property).

     Based  on  estimates of worldwide production of farm  raised
salmon,  Igene  believes the market for astaxanthin  as  a  color
additive  in salmon feed exceeds $200,000,000 per year worldwide,
which would be equivalent to approximately 10,000 metric tons  of
AstaXin(R). A single  competitor,  which  produces  a  chemically
synthesized  product, presently controls more  than  95%  of  the
world  market  for  astaxanthin as  a  pigment  for  aquaculture.
Igene's production for the year 2001 will depend on market demand
for  the  product, but is projected to exceed 300 metric tons  of
AstaXin(R),  which  would  be  less  than  4%  of  the  potential
worldwide  market  for  astaxanthin as a color additive in salmon
feed.  Igene  has  significant  unused production capacity at its
manufacturing  plant in  Mexico  City which it intends to utilize
during  the  year  2001  to  meet  additional  demand  as  deemed
necessary.

     Igene  has  completed  commercial  trials of AstaXin(R) with
fish  farming  companies in Chile, which have been successful and
have resulted in total sales in 1999 and 2000,  of  approximately
$721,000.

     Effective  January  1,  2001,  Igene  has  appointed  ProBio
Nutraceuticals  A.S.  ("ProBio"), of  Norway,  as  its  exclusive
worldwide agent for the marketing, promotion and sales of all  of
its natural astaxanthin products.

     Sales of AstaXin(R) amounted to 100% and 66% of revenue  for
2000 and 1999,  respectively.  Sales of  AstaXin(R)  in  2000  of
approximately  $703,000 and subsequent sales during  the  quarter
ended March 31, 2001 of approximately $445,000 have resulted from
Igene's  marketing efforts on its own behalf, primarily based  on
the  completion  of successful commercial sized  fish  production
trials with Chilean salmon farmers.

     During  1997  Archer-Daniels Midland, Inc. (ADM) filed  suit
against Igene alleging patent infringement regarding  AstaXin(R).
Igene  filed a counter-suit against ADM alleging theft  of  trade
secrets.   This  litigation is on-going (See also Item  3.  Legal
Proceedings).

AstaBioCare(TM)

     During   2000  Igene  began  investigating  other   possible
commercial  uses of astaxanthin, including its application  as  a
human  nutritional  supplement.   Igene  has  formulated  natural
astaxanthin  as  a  super-antioxidant, AstaBioCare(TM),  for  the
North American dietary supplement market. Antioxidants are one of
the  largest  product  categories  in  the  health  and nutrition
industry.

Patents and Trademarks

     It  is  Igene's policy to protect its intellectual  property
rights by a variety of means, including applying for patents  and
trademarks  in  the United States and in other countries.   Igene
also  relies  upon  trade  secrets and improvements,  un-patented
proprietary  know-how and continuing technological innovation  to
develop  and  maintain its competitive position. In this  regard,
Igene  places  restrictions in its agreements with third  parties
with  respect to the use and disclosure of any of its proprietary
technology.   Igene  also has internal nondisclosure  safeguards,
including   confidentiality   agreements   with   employees   and
consultants.

<PAGE>

Patents and Trademarks (continued)

     All  patents and trademarks are carefully reviewed and those
with  no  foreseeable commercial value are abandoned to eliminate
costly  maintenance fees.  Patents, trademarks on technology  and
products  with  recognized commercial value, and which  Igene  is
currently maintaining, include those  for  AstaXin(R), which have
remaining lives ranging from 6 to 10 years.


Competition

     Competitors in the biotechnology field in the United  States
and   elsewhere   are  numerous  and  include   major   chemical,
pharmaceutical  and  food  companies,  as  well  as   specialized
biotechnology companies.  Competition can be expected to increase
as  small  biotechnology companies continue to  be  purchased  by
major   multinational   corporations   with   their   substantial
resources.   Competition is also expected to  increase  with  the
introduction  of more diverse products developed by biotechnology
firms,    increasing   research   cooperation   among    academic
institutions  and  large corporations, and  continued  government
funding   of   research  and  development   activities   in   the
biotechnology  field,  both in the United  States  and  overseas.
Unlike  the  majority  of  biotechnology  companies,  which   are
developing products principally for the pharmaceutical  industry,
Igene  has  focused  its  own activities on  the  development  of
proprietary  products  for  use in  aquaculture  and  nutritional
supplement  industries.  In the future, however, competitors  may
offer  products, that, by reason of price, or efficacy,  or  more
adequate  resources for technology advances, may be  superior  to
Igene's existing or future products.

     A  single  large pharmaceutical company presently  dominates
the  market  for  astaxanthin pigment for  aquaculture  in  which
Igene's  product,  AstaXin(R),  is  presently  marketed and sold.
Igene  believes  that  AstaXin(R)  will be able to be competitive
with this dominant producer, and other producers  whose  products
are chemically  synthesized, since AstaXin(R) is made from yeast,
which is a natural ingredient. As consumers and producers of fish
become more aware of other alternatives, Igene believes that they
will desire natural ingredients, such as those in AstaXin(R).

     Several  companies  are  also known  to  be  developing  and
marketing  other  natural astaxanthin products.   Some  of  these
companies'  products are made from algae, while others  are  made
from  yeast.   Igene believes that AstaXin(R) will be competitive
with  other  companies'  astaxanthin products which are made from
algae,  due  to  higher  production  capacity,  ease of obtaining
additional capacity as needed, and lower production  costs. Igene
also  believes  that  AstaXin(R)  will  be competitive with other
companies'  astaxanthin  products  which are also made from yeast
due  to  our  proprietary  process  to  disrupt yeast cell walls,
which, as  studies  have  shown,  makes  AstaXin(R)  more readily
absorbed  by  the fish.

     Igene  is  also  beginning to explore the  possible  use  of
AstaBioCare(TM) as a human nutritional supplement. This market is
attractive  because of potentially higher profit  margins.  Other
companies   are  known  to  also  be  developing  and   marketing
astaxanthin products for the human nutritional supplement market.
Igene  can  not yet predict how competitive it would be  in  this
market.

Sources and Availability of Raw Materials

     Raw materials used in the manufacture of AstaXin(R)  consist
principally of agricultural commodities widely available in world
markets  from  many suppliers, which may be used interchangeably.
We  do  not anticipate material price fluctuations or changes  in
availability in these raw materials in the near future.

Employees

     At  December 31, 2000, Igene had 11 employees,  10  of  whom
were full-time employees.  Six of the full time employees are  in
administration and/or marketing, while the remainder are  engaged
in  research,  process development and support  of  manufacturing
activities.  The full time marketing employees include Igene's  3
sales  and technical representatives in Chile.  The remainder  of
the  employees are based in the U.S.  Igene also utilizes various
consultants on an as-needed or short-term basis.

     None  of  Igene's employees is represented by a labor  union
and  Igene has experienced no work stoppages.  Igene believes its
relations with its employees are satisfactory.

<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTY

     Igene leases approximately 8,500 square feet of space in the
Oakland  Ridge Industrial Park located at 9110 Red  Branch  Road,
Columbia,  Maryland.   Igene occupies the  space  under  a  lease
extension  expiring  on  January  31,  2004.  Approximate  rental
expense  ranges from $86,500 - $93,600 per year for the remaining
term of the lease.  Approximately 2,000 square feet of this space
is   used   for   executive   and  administrative   offices   and
approximately  2,500  feet is used for research  and  development
activities.    The remaining 4,000 square feet of space  is  used
for Igene's intermediate-stage or scale-up pilot plant facility.

     Igene  also  leases,  under a contract  expiring  May  2006,
manufacturing capacity at Fermic S.A. de C.V. (Fermic) in  Mexico
City,  Mexico and leases warehouse space for product  storage  in
Mexico City.

     During  the  fourth  quarter of 1999,  Igene  began  leasing
approximately 2,000 square feet of office space, on  a  month-to-
month basis, in Chile, for the conduct of marketing and technical
support  activities  by its full-time technical  representatives.
Igene  also leases warehouse space as needed for product  storage
in Chile.

     Igene  currently  owns  or leases sufficient  equipment  and
facilities  for  its operations and all of this equipment  is  in
satisfactory condition and is adequately insured.  There  are  no
current  plans for improvement of this property.   If demand  for
Igene's  products  increases, Igene plans  to  lease  additional,
available  manufacturing capacity at Fermic in  Mexico  City  and
additional  warehouse  space as needed in both  Mexico  City  and
Chile.

ITEM 3.  LEGAL PROCEEDINGS

     Archer  Daniels  Midland, Inc. ("ADM") sued Igene,  alleging
patent  infringement and requesting injunctive relief as well  as
an  unspecified amount of damages (suit filed July 21, 1997, U.S.
District  Court, Baltimore, MD).  Igene has filed a  $300,450,000
counterclaim concerning the theft of trade secrets (counter claim
filed  August  4,  1997).   The court denied  ADM's  request  for
preliminary  injunctive relief.   Mediation efforts  during  1999
did  not  resolve  this dispute, which has been returned  to  the
court  for  a  judicial disposition. Presently,  a  stay  on  all
discovery  remains  in  effect  while  a  court-appointed  expert
analyzes the yeast products of both parties.  Igene believes that
it   is  not  probable  that  this  dispute  will  result  in  an
unfavorable outcome to Igene.  Accordingly, no liability has been
reflected  in  the December 31, 2000 balance sheet.  Nonetheless,
should ADM prevail, Igene could be liable for damages, and  Igene
could  also lose the right to use a particular strain  of  yeast.
However, Igene expects that this will not affect Igene's  ability
to make and sell its product, AstaXin(R).  Igene had expenses  of
$13,249  and  $530,882, respectively in 2000 and 1999  associated
with this on-going litigation.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

<PAGE>
                             PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Common Stock

     Commencing  on or about June 12, 1989, Igene's common  stock
began  trading on the over-the-counter market on a limited  basis
and  is  quoted on the National Quotation Bureau's OTC  "bulletin
board".   The  following  table shows, by calendar  quarter,  the
range  of representative bid prices for Igene's common stock  for
2000 and 1999.

<TABLE>
<CAPTION>
          Calendar Quarter                  High          Low
          ________________                ________     _________
  <S>     <C>                             <C>          <C>
  2000:   First Quarter                   $  .6400     $  .0450
          Second Quarter                  $  .2700     $  .0800
          Third Quarter                   $  .1390     $  .0700
          Fourth Quarter                  $  .1150     $  .0410

  1999:   First Quarter                   $  .1150     $  .0450
          Second Quarter                  $  .1100     $  .0750
          Third Quarter                   $  .0900     $  .0625
          Fourth Quarter                  $  .0850     $  .0400
</TABLE>

     Igene  obtained  the  above information  from  the  National
Quotation  Bureau.   Such quotations are inter-dealer  quotations
without  retail mark-up, mark-downs, or commissions, and may  not
represent  actual  transactions.  The  above  quotations  do  not
reflect the "asking price" quotations of the stock.

     The  approximate number of record holders of Igene's  common
stock as of March 1, 2001 was 250.  As of March 1, 2001, the high
bid  and low offer prices for the common stock, as shown  on  the
"bulletin board" were $0.062 and $0.07, respectively.

Preferred Stock

     There  was  no  public  market for Igene's  preferred  stock
during  2000  and 1999 and since January 25, 1988, no  quotations
for  the  preferred  stock  have been  reported  on  NASDAQ.  The
approximate  number of record holders of preferred  stock  as  of
March 1, 2001 was 12.

Dividend Policy

     When  and  if  funds are legally available for such  payment
under  statutory  restrictions, Igene may pay  annual  cumulative
dividends on the preferred stock of $.64 per share on a quarterly
basis.   During 1988 Igene declared and paid a cash  dividend  of
$.16  per share of its preferred stock.  In December 1988,  Igene
suspended payment of the quarterly dividend of $.16 per share  of
preferred  stock.  No dividends have been declared or paid  since
1988.   Any  resumption of dividend payments on  preferred  stock
would  require  significant improvement in cash flow.   Preferred
stock  dividends  are  payable when and if  declared  by  Igene's
board.   Unpaid  dividends  accumulate  for  future  payment   or
addition  to the liquidation preference and redemption  price  of
the preferred stock.  As of December 31, 2000 the total amount of
dividends in arrears with respect to Igene's preferred stock  was
$207,015.

     Dividends  on common stock are currently prohibited  because
of  the preferential rights of holders of preferred stock.  Igene
has  paid  no cash dividends on its common stock in the past  and
does  not  intend to declare or pay any dividends on  its  common
stock in the foreseeable future.

<PAGE>

Sales of Unregistered Securities

      During  2000, Igene issued to certain directors  and  other
accredited  investors 10,000,000 new shares of  common  stock  at
$.10  per  share,  based on the current market price  of  Igene's
stock at the time of commitment.  The total proceeds received  in
these  issues was $1,000,000.  In return for committing to  these
investments, these investors also received 10,000,000 warrants to
purchase  shares of common stock at the price of $.10 per  share,
based on the current market price of Igene's stock at the time of
commitment, expiring 10 years from the dates of issue.  The funds
received  in  these  transactions  have  been  used  to  continue
operations  of  Igene.   Igene relied  on  Section  4(2)  of  the
Securities Act of 1933, as amended, and Rule 506 of Regulation  D
promulgated under the Securities Act to claim exemption from  the
registration requirements of the Securities Act.

     During  2000, Igene issued 80,000 shares of common stock  to
The  Dow  Chemical Co. in payment of interest on a variable  rate
subordinated  debenture .  If paid in cash,  the  interest  would
have  been  payable at 12%, or $180,000 per year. Shares  may  be
issued  in  lieu  of cash under the debenture  agreement  at  the
higher  of $2.25 per share or market price per share.  The  stock
was  issued  and related interest was paid in 2000 at  $2.25  per
share, or $180,000, in each year. Igene relied on Section 4(2) of
the   Securities  Act  of  1933  to  claim  exemption  from   the
registration requirements of the Securities Act.

<PAGE>

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     Certain  statements  in this report set  forth  management's
intentions,  plans, beliefs, expectations or predictions  of  the
future  based on current facts and analyses.  Actual results  may
differ materially from those indicated in such statements, due to
a  variety  of  factors  including reduced or  increased  product
demand,   increased  competition,  government   action,   weather
conditions, and other factors.

Results of Operations

    Sales and other revenue
    During  1999,  Igene conducted large-scale commercial  trials
of AstaXin(R) with several of the major salmon farmers  in Chile.
These  trials, which took between nine and twelve months each  to
complete, resulted in sales of AstaXin(R) of $18,131 in 1999, and
have resulted in sales of $702,533 in 2000, 97% of which were  to
customers  in  Chile,  during 2000.    Most  customers  have  now
completed their trials with excellent results, and have indicated
their desire to expand their usage of AstaXin(R),  beginning  the
first  quarter of 2001.  Sales for the first quarter of 2001  are
approximately $445,000.  Igene earned no licensing  revenue  from
ClandoSan(R) during  2000,  compared  with  gross  revenue   from
licensing  of ClandoSan(R) of $9,310 in 1999, which  represents a
decrease  of 100%. Igene continues to focus its efforts primarily
on AstaXin(R) and no longer considers ClandoSan(R)  an  important
product.  The foregoing resulted in sales and other revenues  for
the  year  ended  December 31, 2000 of  $702,533, increased  from
$27,441  in  1999.   This is an increase in  overall  revenue  of
$675,092 or 2,460%.  During 2000, 3 customers, who are located in
Chile, represented over 10% of sales each, for a total of 81%  in
the aggregate.

    Cost of sales
    During   a   successful  implementation   test   of   certain
improvements in its production process, which had been  developed
in  Igene's  pilot  plant,  commercial production  was  suspended
during  the  first  quarter of 1999.  A temporary  resumption  of
production during the second quarter of 1999 confirmed  that  the
improvements resulted in increased efficiency and yields  in  the
manufacturing  process.  In June 1999, and continuing  until  May
2000,  production continued to be suspended, until  sales  volume
warranted additional production.  While production was suspended,
Igene   provided  product  for  the  market  from  its   existing
inventory.   Igene resumed commercial production  in  the  second
quarter  of 2000, since the successful trials resulted,  and  are
expected to continue to result in, increased sales of AstaXin(R).
However,  there can be no assurance that such sales will continue
to  occur  or that they will be material.  During 2000,  cost  of
sales   also   included  $45,324  in  amortization  of   deferred
manufacturing costs.  The deferred manufacturing costs  represent
equipment  and  a  note,  which were  sold  to  Igene's  contract
manufacturer  in  consideration for a reduction in  manufacturing
fees  over  the six year term of Igene's manufacturing  contract.
The  preceding  resulted in cost of sales for 2000  and  1999  of
$793,380 and $157,966, respectively, an increase of  $635,414  or
402%.  During  2000 and 1999, gross losses on sales of AstaXin(R)
of $90,847 and $139,835, respectively, were recorded. These gross
losses  were  caused by inefficiencies in the initial  commercial
production runs, the costs of which exceeded the market value  of
the  product  and  also  were  caused  by  discounts  offered  to
customers   during  the  trial  stages.   Production   efficiency
continued  to improve during 2000 and 1999, and Igene expects  to
achieve gross profits on sales of AstaXin(R)  produced  in  2001,
provided that sufficient sales are achieved.  However, there  can
be  no assurance that such gross profits will be realized or that
they  will be material.  Igene expects to incur future production
costs  for  AstaXin(R) of at least $500,000 per  month  beginning
during the first quarter of 2001, which are expected to be funded
by  increasing product sales.  However, there can be no assurance
that  such  sales  will  occur, or that they  will  be  material.
Management plans to expand production capacity in 2001 to meet an
expected increase  in  demand  for  AstaXin(R).  There   were  no
production  costs  for  ClandoSan(R) during 2000 and 1999.  Igene
discontinued  direct  production and sales of  this  product  and
earned  revenue only through royalties on sales by  its  licensed
manufacturer in 1999, incurring no costs of sales.

<PAGE>

    Marketing and selling expenses
    Igene  substantially increased its marketing  efforts  during
2000 and 1999 as it escalated the promotion of AstaXin(R). During
the  commercial trials as described above, Igene delivered  large
quantities of AstaXin(R) either free to customers or  at  reduced
prices  in exchange for agreements to purchase additional product
during  the  trial period.  Igene's administrative and  marketing
employees   have   traveled   extensively  to  Chile  to  promote
AstaXin(R). Igene also hired 3 technical representatives in Chile
during 1999 and 2000, and during the first quarter of 2000 formed
a  foreign subsidiary  entity  in Chile.  Igene has also engaged,
during  the  first  quarter  of  2000,  a full-time consultant to
market AstaXin(R) in Europe and to explore the market for the use
of AstaXin(R) as a human nutritional supplement.  This consultant
has considerable experience in  both  the salmon farming industry
and in the human nutritional supplement market. Effective January
1, 2001 the consultant has  been  appointed as Igene's  worldwide
marketing agent on a commissioned basis.  The  forgoing  resulted
in  marketing  and selling expenses for 2000 and 1999 of $639,015
and $493,535, respectively, an increase  of  $145,480,   or  29%.
Marketing expenses  for AstaXin(R) are expected  to  continue  to
increase, since to achieve continuing and increasing sales  Igene
will  need to make additional marketing efforts with the help  of
its  worldwide marketer.  These additional expenses are  expected
to  be  funded by revenues from product sales, if future  product
sales occur.

    Research, development and pilot plant expenses
    Research, development and pilot plant expenses for  2000  and
1999  were  $355,659 and $350,659, respectively, an  increase  of
$5,000,  or  1%.  These  expenses are  expected  to  continue  at
approximately  $30,000 per month in the near term in  support  of
increasing  the  efficiency of the manufacturing process  through
experimentation  in  Igene's pilot plant, development  of  higher
yielding  strains  of  yeast and other  improvements  in  Igene's
AstaXin(R) technology.  However, there can be  no  assurance that
such  improvements in efficiency and yield will  occur,  or  that
they  will be material.  These expenses are expected to be funded
by available cash and additional funding from stockholders.

    General and administrative expenses
    General  and administrative expenses for 2000 and  1999  were
$424,120  and $324,239, respectively, an increase of $99,881,  or
31%.   This  increase  resulted  primarily  from  legal  expenses
relating to warrants registered during 2000, preparations of  new
contracts,  and  patent and approval applications.   General  and
administrative  expenses are expected to  continue  in  the  near
future  at  approximately $36,000 per month.  These expenses  are
expected  to  be funded by available cash and additional  funding
from stockholders.

    Litigation expenses
    Management   expects   to   ultimately   recover   litigation
expenses, which are associated with the suit filed against  Igene
by  ADM  and  Igene's  counterclaim, through  damage  awards  and
through  preservation of the commercial product rights associated
with AstaXin(R).  However, there can be no assurance  that  Igene
will  receive damage awards or that its rights will be preserved.
Litigation expenses for 2000 and 1999 were $13,249 and  $530,882,
respectively, a decrease of $517,633 or 98%. Igene estimates that
the  costs  of  litigation will continue in the  near  future  at
levels  based on management's continuing assessments of potential
costs   and   benefits  of  various  litigation  strategies   and
alternatives.  These  expenses  are  expected  to  be  funded  by
available  cash  and  additional funding from  stockholders.    A
range of reasonably possible losses from the litigation cannot be
estimated at this time.

    Interest expense (net of interest income)
    Net  interest  expense  for 2000 and 1999  was  $709,828  and
$695,500,  respectively, an increase of  $14,328,  or  2%.   This
increase resulted from additional debt of $600,000 issued in  the
fourth  quarter  of  2000 and a reduction in interest  income  of
$10,190 due to decreased levels of available cash.

<PAGE>

    Net loss and net loss per common share
    As  a  result of the foregoing, Igene reported net losses  of
$(2,255,315) and $(2,525,340), respectively, for 2000 and 1999; a
decreased  loss of $(270,025) or 11%.  This is a loss  of  $(.04)
and  $(.08)  per  share, respectively, for 2000  and  1999.   The
weighted average number of shares of common stock outstanding  of
56,042,471 and 33,979,575, respectively, for 2000 and  1999  have
increased by 22,062,896 shares.  This resulted primarily from the
issuance of 80,000 shares during 2000 in lieu of interest payment
on  a  subordinated debenture, the issue of 10,000,000 shares  of
stock  to directors and other investors in direct purchases,  the
exercise  of  1,500,000  employee  stock  options  and  3,994,500
warrants.

Financial Position
During  2000 and 1999, the following materially affected  Igene's
financial position:

  o  Igene maintained inventory from manufacture of AstaXin(R) of
     $762,432 and $707,595, respectively, as of December 31, 2000
     and 1999.  Inventory increased by $54,837 during 2000.

  o  Igene  issued  80,000  shares  in  each  of 2000 and 1999 of
     common  stock  in  payment of interest on  a  variable  rate
     subordinated   debenture   with  a   principal   balance  of
     $1,500,000, recording interest expense and increasing common
     stock and paid-in  capital  for $180,000 in each of 2000 and
     1999.

  o  The   carrying   value  of  redeemable preferred  stock  was
     increased   and   paid-in   capital  available   to   common
     shareholders  was   decreased   by   $16,929  and   $18,438,
     respectively, in 2000 and 1999, reflecting cumulative unpaid
     dividends on redeemable preferred stock.

  o  Holders of redeemable preferred stock and limited redemption
     preferred stock converted 62 and 3,125 shares, respectively,
     in  2000  and  1999  of  preferred  stock into 124 and 6,250
     shares, respectively,  of common stock, providing additional
     capital  and  reducing  the  liquidation value of redeemable
     preferred  stock  by $972 and $47,000, respectively, in each
     year.

  o  Igene  issued  866,667  of  common stock in payment of legal
     fees  in  1999,  recording  additional  capital  and   legal
     expenses of $49,750,  based on the market value of the stock
     at date of issue.

  o  Igene  received  $1,000,000 and $1,500,000, respectively, in
     proceeds  during  2000  and 1999 in issuance's of 10,000,000
     and  24,791,668  shares,  respectively,  in each year of new
     common stock through direct purchases by directors and other
     accredited investors.

  o  Due  to  increased  sales,  accounts receivable increased by
     $298,531 during 2000.

  o  Igene  capitalized  $444,995 in deferred manufacturing costs
     during  2000  as  a  result  of  a transfer of manufacturing
     equipment  and  a  note  in consideration for a reduction of
     fees over the term of its new manufacturing contract,  which
     are being amortized over the six year term of this contract.
     Igene  disposed  of  a  loan  receivable  and  manufacturing
     equipment of equivalent book value in this transaction.

  o  Interest  of  $490,013  accrued on notes payable during 2000
     remains unpaid.

  o  1,500,000  employee  stock  options  were   exercised   with
     proceeds of $150,000 during 2000.

  o  3,994,500  warrants were exercised during 2000, in cash-less
     exercises,  resulting  in  the  issue of 3,070,123 shares of
     stock, and the cancellation of $5,200 of notes payable.

  o  $600,000  in  demand  notes  were issued to directors during
      2000.

<PAGE>

     In  December 1988, as part of an overall effort  to  contain
costs  and  conserve working capital, Igene suspended payment  of
the quarterly dividend on its preferred stock.  Resumption of the
dividend  will  require significant improvements  in  cash  flow.
Unpaid  dividends cumulate for future payment or addition to  the
liquidation  preference  or redemption  value  of  the  preferred
stock.   As  of December 31, 2000, total dividends in arrears  on
Igene's preferred stock total $207,015 ($7.84 per share) and  are
included in the carrying value of the redeemable preferred stock.

Liquidity and Capital Resources

    Historically,  Igene  has  been funded  primarily  by  equity
contributions  and loans from stockholders. As  of  December  31,
2000  Igene  had working capital of $578,397, and cash  and  cash
equivalents of $143,572.

    Cash  used by operating activities in 2000 and 1999  amounted
to  $1,813,746 and $1,670,094, respectively, an increase in  cash
used of $143,652.

    Cash  provided  (used) by investing activities  decreased  by
$30,574, from $21,595 in 1999 to $(8,979) in 2000.

    Cash  provided by financing activities increased by  $250,000
from  $1,500,000 in 1999 to $1,750,000 in 2000. Cash provided  by
financing  activities  during  2000  included  net  proceeds   of
$600,000  from  issuance of notes to directors,  $1,000,000  from
issuance of new stock to directors, and $150,000 from exercise of
employee stock options in 2000.

    Over  the  next twelve months, Igene believes  it  will  need
additional  working capital. Igene hopes to achieve profits  from
sales of  AstaXin(R),  but  additional  funding  through   direct
purchases  of stock exceeding approximately $1,800,000 will  also
be   required  to  finance  increased  customer  receivables  and
inventory  levels caused by expansion of sales and manufacturing.
During  the  first  quarter  2001,  certain  directors  of  Igene
provided  $400,000 in additional funding to Igene through  demand
notes  payable  which were cancelled in exchange  for  debentures
convertible  into  common stock in March 2001.   These  directors
also  provided an additional $400,000 in March 2001 as part of  a
commitment to provide total funding of $1,500,000 over  the  next
six  months  in  the form of debentures convertible  into  common
stock.   However,  there  can  be  no  assurance  that  projected
profits, if any, from sales, or projected additional funding from
directors  will  be  available to Igene  to  fund  its  continued
operations.   Igene  expects to spend approximately  $360,000  on
technology  research  over  the next  twelve  months  to  improve
manufacturing  processes and research new strains for  production
of pigments.

    Igene  does  not  believe that inflation  had  a  significant
impact on its operations during 2000 and 1999.


ITEM 7. CONSOLIDATED FINANCIAL STATEMENTS

    The  consolidated financial statements appear after Part  III
of this Report and are incorporated herein by reference.

ITEM 8. CHANGES   IN   AND  DISAGREEMENTS  WITH  ACCOUNTANTS   ON
        ACCOUNTING AND FINANCIAL DISCLOSURE

    None.

<PAGE>
                            PART III


ITEM 9. DIRECTORS,   EXECUTIVE   OFFICERS,   PROMOTERS,   CONTROL
        PERSONS, AND KEY EMPLOYEES


Igene's  directors  are elected annually by the  shareholders  of
Igene.   The  directors, executive officers and key employees  of
Igene are as follows:

<TABLE>
<CAPTION>
Name                  Age  Position with IGENE
___________________   ___  ______________________________________
<S>                   <C>  <C>
Michael G. Kimelman   62   Chairman of the Board of Directors,
                           member of audit committee

Thomas L. Kempner     73   Vice Chairman of the Board of
                           Directors, member of finance committee

Stephen F. Hiu        44   Director, President, Treasurer,
                           and Director of Research and
                           Development

Patrick F. Monahan    50   Director, Secretary, and
                           Director of Manufacturing

Joseph C. Abeles      86   Director, member of audit committee

John A. Cenerazzo     77   Director, member of audit committee

Sidney R. Knafel      70   Director, member of finance committee

</TABLE>

MICHAEL  G. KIMELMAN was elected a Director of Igene in  February
1991 and Chairman of the Board of Directors in March 1991.  He is
the Managing Partner of Kimelman & Baird, LLC.   Mr. Kimelman  is
currently  a Director of the Harness Horse Breeders of  New  York
State and serves on the Board of the Hambletonian Society.

THOMAS L. KEMPNER is Vice Chairman of the Board of Directors  and
has been a Director of Igene since its inception in October 1981.
He  is and has been Chairman and Chief Executive Officer of  Loeb
Partners  Corporation,  investment bankers,  New  York,  and  its
predecessors since February 1978.  He is currently a Director  of
Alcide  Corporation, CCC Information Services Group, Inc.,  Dyax,
Evercel,  Inc.,  Fuel  Cell Energy, Inc., Insight  Communications
Co.,   Inc.,  Intermagnetics  General  Corp.  and  Roper   Starch
Worldwide, Inc.  He is a Director Emeritus of Northwest Airlines,
Inc.

STEPHEN  F.  HIU was appointed President and Treasurer  in  March
1991,  and  elected  a  Director in August  1990.   He  has  been
Director  of  Research and Development since  January  1989  and,
prior thereto, was Senior Scientist since December 1985, when  he
joined  Igene.  He was a post-doctoral Research Associate at  the
Virginia  Polytechnic Institute and State University, Blacksburg,
Virginia, from January 1984 until December 1985.  Dr. Hiu holds a
Ph.D.  degree in microbiology from Oregon State University and  a
B.S.  degree  in  biological  sciences  from  the  University  of
California, Irvine.

<PAGE>

PATRICK  F.  MONAHAN was appointed Director of Manufacturing  and
elected  a  Director  of  Igene in April  1991  and  was  elected
Secretary in September 1998.  He has managed Igene's fermentation
pilot  plant  since  1982.  Prior thereto,  he  was  a  technical
specialist in the fermentation pilot plant of W.R. Grace and  Co.
from  1975  to 1982. He received an Associate of Arts  degree  in
biology  from  Allegheny Community College and a B.S.  degree  in
biology  with a minor in Chemistry from Frostburg State  College,
Frostburg, Maryland.

JOSEPH C. ABELES, private investor, was elected Director of Igene
on  February  28,  1991.  Mr. Abeles is a  Director  Emeritus  of
Intermagnetics   General  Corporation,   Director   Emeritus   of
Bluegreen  Corporation and also serves as a Director of Ultralife
Batteries, Inc.

JOHN A. CENERAZZO was Chairman of the Board from November 1989 to
April  1991.   He served as President of Igene from  August  1988
through  September 1989 and has been a Director  since  September
1987.    He  is  a  Director  of  U.S.  Axle  Corporation,   Penn
Securities, Inc., and Investors Trust, Inc.

SIDNEY  R.  KNAFEL,  a  Director of Igene since  1982,  has  been
Managing  Partner of SRK Management Company, a private investment
concern,   New   York,   since   1981,   Chairman   of    Insight
Communications,  Inc. since 1985, and of BioReliance  Corporation
since  1982.  Mr. Knafel is also currently a Director of Cellular
Communications   International,  Inc.,   CoreComm   Incorporated,
General American Investors Company, Inc., and NTL Incorporated.

Section 16(a) Beneficial Ownership Reporting Requirements
---------------------------------------------------------
     Igene  believes  that, during 2000,  all  of  its  officers,
directors  and  holders  of more than 10%  of  its  common  stock
complied with all filing requirements under Section 16(a) of  the
Securities  Exchange Act of 1934, as amended, except as  follows:
In  1997 certain directors of Igene made various loans to  Igene.
The  loans are evidenced by notes convertible into common  stock.
Certain  directors also received warrants to purchase  shares  of
common stock in 1997 and 1998 in conjunction with the 1997  notes
and  with  a 1998 rights offering. During 1999 and 2000,  certain
directors  and  other accredited investors also  purchased  stock
through  direct purchases of new stock and received  warrants  in
conjunction  with these purchases.  Igene believes that  none  of
the  foregoing securities have been reported by Messrs. Kimelman,
Abeles, Cenerazzo or Knafel in Forms 3, 4 or Forms 5 pursuant  to
Section  16(a)  of the Exchange Act.  In making this  disclosure,
Igene  has  relied  solely  on  written  representations  of  its
directors,  officers  and more than 10%  holders  and  on  copies
furnished  to  Igene  of reports that have been  filed  with  the
Securities and Exchange Commission.

ITEM 10.    EXECUTIVE COMPENSATION

    During  2000, no executive officer's annual cash compensation
exceeded  $100,000.    The functions of chief  executive  officer
have  been performed by Igene's Board of Directors (see Item  9),
acting  as  a  group.  During 2000, no Directors were compensated
for their Board or Committee activities.

     Other  than  the 1986 and 1997 stock option  plans  and  the
Simple  Retirement  Plan described below,  Igene  has  no  profit
sharing or incentive compensation plans.

Simple Retirement Plan
----------------------
     Effective February 1, 1997 Igene adopted a Simple Retirement
Plan  under Internal Revenue Code Section 408(p).  The plan is  a
defined  contribution  plan, which covers  all  of  Igene's  U.S.
employees  who  receive at least $5,000 of compensation  for  the
preceding    year.    The   plan   permits   elective    employee
contributions.  Igene makes a nonelective contribution of  2%  of
each  eligible  employee's compensation for each  year.   Igene's
contributions to the plan for 2000 were $7,275, which is expensed
in  the  2000 statement of operations.  Igene's contributions  to
the  plan  for 1999 were $6,569, which is expensed  in  the  1999
statement of operations.

<PAGE>

Stock Option Plans
------------------
    The  1997  Stock Option Plan (the "Plan"), which was approved
by  the stockholders on November 17, 1997, and which succeeds the
1986  Stock Option Plan, provides for the issuance of options  to
acquire  up  to 20,000,000 shares of common stock of Igene.   The
1986  Stock  Option Plan provided for the issuance of options  to
acquire  up  to  2,000,000 shares of common stock  of  Igene.   A
committee of the Board of Directors administers the Plans.

    The  purpose  of  the Plans is to advance  the  interests  of
Igene  by  encouraging and enabling the acquisition of  a  larger
personal   proprietary  interest  in  Igene  by  directors,   key
employees,  consultants  and  independent  contractors  who   are
employed  by, or perform services for, Igene and its subsidiaries
and  upon  whose  judgment  and keen interest  Igene  is  largely
dependent  for the successful conduct of its operations.   It  is
also  expected that the opportunity to acquire such a proprietary
interest  will enable Igene and its subsidiaries to  attract  and
retain   desirable   personnel,  directors  and   other   service
providers.

    Options  are exercisable at such rates and times  as  may  be
fixed by the committee.  Options also become exercisable in  full
upon  (i)  the holder's retirement on or after his 65th birthday,
(ii)  the disability or death of the holder, or (iii) under other
circumstances as determined by the Committee.  Options  generally
terminate  on  the  tenth  business day  following  cessation  of
service  as  an  employee,  director, consultant  or  independent
contractor.

    Options  may  be exercised by payment in full of  the  option
price in cash or check, or by delivery of previously-owned shares
of  common stock having a total fair market value on the date  of
exercise  equal to the option price, or by such other methods  as
permitted by the Committee.

    The  Plans contain anti-dilution provisions in the  event  of
certain corporate transactions.

    The  Board  of  Directors may at any time withdraw  from,  or
amend,   the  Plans  and  any  options  not  heretofore  granted.
Stockholder  approval is required to (i) increase the  number  of
shares  issuable  under the Plans, (ii) increase  the  number  of
options  which  may be granted to any individual during  a  year,
(iii)  or  change  the class of persons to whom  options  may  be
granted.   No options shall be granted under the 1997 Plan  after
September 19, 2007 and no additional options may be granted under
the 1986 Plan.

    Options  to  acquire 13,433,084 shares of common  stock  have
been  granted  under  the 1986 and 1997 Stock  Option  Plans  and
11,298,250 options are outstanding under the Plans as of December
31,   2000.     4,727,500  options  were  granted  during   2000.
Subsequent  to  December 31, 2000, an additional  45,000  options
were granted to employees effective January 22, 2001.

Compensation of Directors

    During  2000, Directors were not compensated for their  Board
or Committee activities.

<PAGE>

ITEM 11.  SECURITY  OWNERSHIP  OF  CERTAIN BENEFICIAL OWNERS  AND
          MANAGEMENT

    The  following table sets forth information as  of  March  1,
2001  with  respect to beneficial ownership of shares of  Igene's
outstanding  common stock and preferred stock by (i) each  person
known  to Igene to own or beneficially own more than five percent
of  its common stock or preferred stock, (ii) each Director,  and
(iii) all Directors and Officers as a group.

<TABLE>
<CAPTION>
                                      Common Stock              Preferred Stock
                               ------------------------   -------------------------
                                 Number of                  Number of
Name and Address                 Shares        Percent*     Shares          Percent
----------------------         -------------   --------   ---------------   -------

Directors and officers
----------------------
<S>                            <C>             <C>        <C>               <C>
Joseph C. Abeles               15,012,789(1)     19.98         7,375         27.93
  220 E. 42nd Street
  New York, NY  10017

John A. Cenerazzo               1,912,456(2)      2.99           ---           ---
  PO Box 4067
  Reading, PA  19606

Stephen F. Hiu                  5,065,300(3)      7.53           ---           ---
  9110 Red Branch Road
  Columbia, MD  21045

Thomas L. Kempner              86,360,974(4)     66.30           ---           ---
  61 Broadway
  New York, NY  10006

Michael G. Kimelman            15,321,950(5)     20.08           ---           ---
  100 Park Avenue
  New York, NY  10017

Sidney R. Knafel               83,802,046(6)     65.54           ---           ---
  126 East 56th Street
  New York, NY  10022

Patrick F. Monahan              3,064,400(7)      4.70           ---           ---
  9110 Red Branch Road
  Columbia, MD  21045

All Directors and Officers    210,539,715(8)     90.57         7,375         27.93
as a Group (7 persons)

Others
------
Thomas R. Grossman              4,192,149(9)      6.58           ---           ---
  461 Grant Road
  North Salem, NY  10560

Fraydun Manocherian             7,905,135(10)    11.85           ---           ---
  3 New York Plaza
  New York, NY  10004

</TABLE>

*  Under the rules of the Securities and Exchange Commission, the
calculation of the percentage assumes for each person  that  only
that  person's rights, warrants, options or convertible notes  or
preferred  stock are exercised or converted, and  that  no  other
person   exercises  or  converts  outstanding  rights,  warrants,
options or convertible notes or preferred stock.

<PAGE>

1. Includes   the  following:  2,109,404  shares;   2,250  shares
   issuable  upon  the  conversion  of 1,125 shares  of preferred
   stock;  3,782,083  shares  issuable  upon  the  conversion  of
   $311,663 of long-term  notes  issued  by Igene; and  9,093,427
   warrants held by  Mr. Abeles. Also includes 4,140  shares, and
   12,500  shares  issuable  upon  conversion  of 6,250 shares of
   preferred stock and 8,985 warrants held by Mr. Abeles' wife.

2. Includes   the  following:  283,458   shares;  32,750  options
   currently  exercisable;  492,321  shares  issuable   upon  the
   conversion  of $40,622 of long-term notes issued by Igene; and
   1,103,513 warrants held by Mr. Cenerazzo.  Also  includes  414
   shares held by Mr. Cenerazzo's wife.

3. Includes the following:  65,300 shares;  and 5,000,000 options
   currently exercisable held by Dr. Hiu.

4. Includes  386,972  shares  and  536,920 warrants held  by  Mr.
   Kempner.  Also  includes  8,166,916 shares,  4,151,594  shares
   subject  to  the  conversion  of  $394,425  of notes issued by
   Igene; and 26,663,535 warrants held by a trust under which Mr.
   Kempner is one of two trustees and the sole beneficiary.  Also
   includes  8,126,918  shares;  4,151,594  shares subject to the
   conversion   of   $394,425  of  notes  issued  by  Igene;  and
   26,641,933  warrants  held  a  trust  under  which Mr. Kempner
   is  one  of  two  trustees and one of his brothers is the sole
   beneficiary.  Also includes 1,482,987 shares; 1,147,667 shares
   subject to the conversion of $79,200 of notes issued by Igene;
   and 4,622,846 warrants held  by trusts under which Mr. Kempner
   is  one  of  two  trustees  and  is  a  one-third beneficiary.
   Also  includes 182,526 shares and 98,565 warrants  held by Mr.
   Kempner's wife.

5. Includes  1,264,360   shares;  1,500,000   options   currently
   exercisable,  804,568  shares  subject  to  the conversion  of
   $63,070  of  notes  issued  by Igene; and 11,753,022  warrants
   held directly or indirectly by Mr. Kimelman.

6. Includes  18,190,551  shares; 8,786,762 shares subject  to the
   conversion   of  $813,306  of  notes  issued  by  Igene;   and
   56,824,733 warrants owned or beneficially owned by Mr. Knafel.

7. Includes  64,200  shares;  and  3,000,000,  options  currently
   exercisable held by Mr. Monahan.

8. Includes  40,328,146  shares  of  common stock; 14,750  shares
   issuable  upon  the  conversion  of  7,375 shares of preferred
   stock; 9,532,750  options  currently  exercisable;  23,316,590
   shares  issuable  upon  the  conversion of $2,096,711 of notes
   issued by Igene; and 137,347,479 warrants.

9. Includes   2,753,399    shares    of   common    stock     and
   1,438,750 warrants.

10.Includes  3,455,025  shares   of   common   stock   owned   or
   beneficially  owned  by Mr. Manocherian and 4,450,110 warrants
   held or beneficially owned by Mr. Manocherian.

<PAGE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     During  1999,  Igene  issued 1,500,000 options  to  purchase
common  shares, at $.05 per share (which was the market value  of
the  stock as of the date issued), to its Chairman of the  Board,
Mr. Kimelman, under its 1997 Stock Option Plan.

     During  1999,  Igene issued to certain directors  and  other
accredited  investors 24,791,668 new shares of  common  stock  at
prices  ranging  from $.05 to $.08, based on the  current  market
price  of Igene's stock at the time of issue.  The total proceeds
received   in  these  issues  was  $1,500,000.   In  return   for
committing  to  these investments, these investors also  received
24,791,668  warrants  to  purchase  shares  of  common  stock  at
equivalent prices (ranging from $.05 to $.08 per share, based  on
the  current market price of Igene's stock at the time of issue),
expiring 10 years from the dates of issue.  The funds received in
these transactions were used to continue operations of Igene  and
to  fund legal expenses associated with on going litigation  (See
item  3.  Legal Proceedings).  In these transactions:  11,145,834
of  these shares and an equivalent number of warrants were issued
to  Mr.  Kempner, a director of Igene, or entities controlled  by
him;  11,145,834  of  these shares and an  equivalent  number  of
warrants  were  issued  to Mr. Knafel, a director  of  Igene,  or
entities  controlled  by him; 1,000,000 of these  shares  and  an
equivalent  number of warrants were issued to  Mr.  Grossman,  an
accredited  investor; 750,000 of these shares and  an  equivalent
number  of  warrants were issued to a Company controlled  by  Mr.
Kimelman, Chairman of Igene's board of directors.

     During  2000,  Igene issued to certain directors  and  other
accredited  investors 10,000,000 new shares of  common  stock  at
$.10  per  share,  based on the current market price  of  Igene's
stock at the time of commitment.  The total proceeds received  in
these  issues was $1,000,000.  In return for committing to  these
investments, these investors also received 10,000,000 warrants to
purchase  shares of common stock at the price of $.10 per  share,
based on the current market price of Igene's stock at the time of
commitment, expiring 10 years from the dates of issue.  The funds
received  in  these  transactions  have  been  used  to  continue
operations of Igene.   In these transactions: 5,000,000 of  these
shares  and an equivalent number of warrants were issued  to  Mr.
Kempner, a director of Igene, or entities controlled by him;  and
5,000,000  of these shares and an equivalent number  of  warrants
were  issued  to  Mr.  Knafel, a director of Igene,  or  entities
controlled by him.

     In  March  2001, Igene issued $1,014,211 of  8%  convertible
debentures  to  certain directors of Igene in  exchange  for  the
cancellation  of  $800,000  of demand  notes  payable  (including
accrued  interest of $14,211) and $200,000 in cash.  $600,000  of
these  demand  notes were issued during 2000  and  $200,000  were
issued subsequently.  These debentures will convert automatically
into  10,142,110 shares of Igene's common stock at $.10 per share
upon the effective date of a sufficient increase in the number of
authorized shares of common stock.  These directors also received
10,142,110  warrants to purchase common stock at $.10 per  share,
which  are  exercisable upon the effective date of  a  sufficient
increase in the number of authorized shares of common stock.   In
these transactions: $507,105 of these convertible debentures  and
5,071,055  warrants  were issued to Mr. Kempner,  a  director  of
Igene,  or  entities  controlled by him; and  $507,105  of  these
convertible debentures and 5,071,055 warrants were issued to  Mr.
Knafel, a director of Igene, or entities controlled by him.

     In  March 2001, Igene issued 5,500,000 warrants to  purchase
Igene  common  stock  at $.08 per share to its  Chairman  of  the
Board, Mr. Kimelman.  These warrants become exercisable upon  the
effective  date  of  a  sufficient  increase  in  the  number  of
authorized shares.

     In March 2001, certain directors of Igene also committed  to
provide   additional  funding  in  the  form  of  8%  convertible
debentures in the amount of $1,500,000 over the next six  months.
The  initial installment of $400,000 was received in March  2001.
In   consideration  of  this  commitment,  these  directors  also
received 18,750,000 warrants to purchase common stock at $.08 per
share, exercisable upon the effective date of an increase in  the
number  of  authorized shares of common stock.  These  debentures
will  convert  automatically into 18,750,000  shares  of  Igene's
common  stock  at $.08 per share upon the effective  date  of  an
increase in the number of authorized shares of common stock.   In
these  transactions:  $750,000 of the convertible debentures  and
9,375,000  of warrants were issued to Mr. Kempner, a director  of
Igene,   or  entities  controlled  by  him;  $750,000  of   these
convertible debentures and 9,375,000 warrants were issued to  Mr.
Knafel, a director of Igene, or entities controlled by him.

<PAGE>

ITEM 13.  EXHIBITS,  FINANCIAL  STATEMENTS SCHEDULES, AND REPORTS
          ON FORM 8-K

(a)1. The following financial statements relating to 2000  and
      1999 are filed as a part of this Report:

      Independent Auditors' Report.
      Consolidated Balance Sheet as of December 31, 2000.
      Consolidated  Statements of Operations for the years  ended
           December 31, 2000 and December 31, 1999.
      Consolidated  Statements  of Stockholders' Deficit for  the
           years ended December 31, 2000 and December 31, 1999.
      Consolidated  Statements of Cash Flows for the years  ended
           December 31, 2000 and December 31, 1999.
      Notes to Consolidated Financial Statements.

(a)2. Exhibits   filed  herewith  or  incorporated  by  reference
      herein are set  forth in the following  table  prepared  in
      accordance with Item 601 of Regulations S-K.

      3.1   Articles   of  Incorporation  of  the  Registrant  as
            amended   to   date,   constituting  Exhibit  3.1  to
            Registration   Statement No. 333-41581 on  Form  SB-1
            are hereby incorporated herein by reference.

      3.2   By-Laws, constituting Exhibit 3.2 to the Registrant's
            Registration  Statement  No. 33-5441 on Form S-1, are
            hereby incorporated herein by reference.

      4.1   Form  of   Variable  Rate  Convertible   Subordinated
            Debenture  Due  2002  (Class  A), constituting Exhibit
            4.4 to Registration Statement No. 33-5441 on Form S-1,
            is hereby incorporated herein by reference.

     10.1   Form of Conversion and Exchange Agreement used in  May
            1988 in connection with the conversion and exchange by
            certain  holders  of  shares  of  preferred  stock for
            common stock and Warrants, constituting  Exhibit 10.19
            to Registration Statement  No. 33-5441  on  Form  S-1,
            is hereby incorporated herein by reference.

     10.2   Exchange Agreement made as of July 1, 1988 between the
            Registrant and now Dow Chemical Company,  Inc. (f.k.a.
            Essex Industrial Chemicals, Inc.), with respect to the
            exchange  of  187,500  shares of preferred  stock  for
            a   Debenture,   constituting   Exhibit   10.21     to
            Registration Statement  No.  33-5441  on   Form   S-1,
            is hereby incorporated herein by reference.

     10.3   Preferred Stockholders' Waiver Agreement  dated May 5,
            1988, incorporated by  reference  to  the  identically
            numbered  exhibit  in  Form S-1 Registration Statement
            No. 33-23266.

     10.4   Form of Agreement between the Registrant  and  Certain
            Investors in Preferred Stock dated September 30, 1987,
            incorporated by reference to the identically  numbered
            exhibit in Amendment No. 1 to  Form  S-1  Registration
            Statement No. 33-23266.

     10.5   Letter Agreement executed May 11, 1995 between  Archer
            Daniels  Midland,  Inc. and IGENE Biotechnology, Inc.,
            along  with  November 11, 1995 Amendment, constituting
            Exhibit  10.11  to  the  Registrant's  Report  on Form
            10-KSB  for  the  year  ended  December  31,  1995  is
            incorporated herein by reference.

     10.6   Agreement of Lease effected December 15, 1995  between
            Columbia   Warehouse  Limited  Partnership  and  IGENE
            Biotechnology, Inc. constituting  Exhibit 10.13 to the
            registrant's report on Form 10-KSB  for the year ended
            December 31, 1995 is incorporated herein by reference.

     10.7   Toll  manufacturing  agreement effective as of May 20,
            2000 between Igene Biotechnology, Inc. and Fermic S.A.
            de  C.V. (Portions  of  this exhibit have been omitted
            pursuant to a request for confidential treatment.)

<PAGE>

     10.8   First  amendment  to  lease  made  September  13, 2000
            between  Igene  Biotechnology,  Inc.  and  Red  Branch
            Center, LLC.

     10.9   Marketing  agency  agreement effective as of January 1,
            2001  between  Igene  Biotechnology,  Inc.  and  ProBio
            Nutraceuticals A.S. (Portions of this exhibit have been
            omitted   pursuant   to   a  request  for  confidential
            treatment.)

     21.    Subsidiaries

            Igene Chile Comercial, Ltda.

     23.    Consents of Berenson & Company



 (b) No reports on Form 8-K were filed during the Fourth Quarter of
     2000.

<PAGE>

                  INDEPENDENT AUDITORS' REPORT









Board of Directors
IGENE Biotechnology, Inc. and Subsidiary
Columbia, MD


We  have  audited the consolidated financial statements of  IGENE
Biotechnology, Inc. and Subsidiary as listed in response to (a)1.
of  Item  13.   These consolidated financial statements  are  the
responsibility of Igene's management.  Our responsibility  is  to
express  an  opinion  on these consolidated financial  statements
based on our audits.

We  conducted  our  audits in accordance with auditing  standards
generally accepted in the United States.  Those standards require
that we plan and perform the audit to obtain reasonable assurance
about  whether the consolidated financial statements are free  of
material  misstatement. An audit includes examining,  on  a  test
basis,  evidence  supporting the amounts and disclosures  in  the
consolidated   financial  statements.  An  audit  also   includes
assessing   the   accounting  principles  used  and   significant
estimates  made by management, as well as evaluating the  overall
financial  statement presentation.  We believe  that  our  audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above  present  fairly, in all material respects,  the  financial
position  of  IGENE  Biotechnology, Inc.  and  Subsidiary  as  of
December 31, 2000 and the results of its operations and its  cash
flows  for  the  years  ended  December  31,  2000  and  1999  in
conformity with accounting principles generally accepted  in  the
United States.

The  accompanying  consolidated financial  statements  have  been
prepared  assuming that IGENE Biotechnology, Inc. and  Subsidiary
will continue as a going concern.  As discussed in note 17 to the
consolidated financial statements, Igene's recurring  losses  and
limited  capitalization  raise substantial  doubt  about  Igene's
ability  to  continue as a going concern. Management's  plans  in
regard   to  these  matters  are  described  in  note  17.    The
consolidated financial statements do not include any  adjustments
that might result from the outcome of this uncertainty.




                         BERENSON & COMPANY LLP



New York, NY
February 23, 2001,  except for Note 20,  as  to which the date is
March 27, 2001

<PAGE>
<TABLE>
            IGENE Biotechnology, Inc. and Subsidiary
                   Consolidated Balance Sheet
                        December 31, 2000
<CAPTION>

ASSETS
------
<S>                                                               <C>
CURRENT ASSETS
  Cash and cash equivalents                                       $    143,572
  Accounts receivable, net of allowances of $13,200                    316,663
  Inventory                                                            762,432
  Prepaid expenses and other current assets                            186,002
  Deferred costs, current portion                                       74,160
                                                                  -------------
     TOTAL CURRENT ASSETS                                            1,482,829

OTHER ASSETS
  Property and equipment, net                                          104,150
  Deferred costs, net of current portion                               420,781
  Other assets                                                           5,861
                                                                  -------------
     TOTAL ASSETS                                                  $ 2,013,621
                                                                  =============

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
-----------------------------------------------------------------
CURRENT LIABILITIES
  Accounts payable and accrued expenses                           $    304,432
  Notes payable                                                        600,000
                                                                  -------------
     TOTAL CURRENT LIABILITIES                                         904,432

LONG-TERM DEBT
  Notes payable                                                      6,077,300
  Variable rate subordinated debenture                               1,500,000
  Accrued interest                                                   1,337,063
                                                                  -------------
     TOTAL LIABILITIES                                               9,818,795
                                                                  -------------

COMMITMENTS AND CONTINGENCIES

REDEEMABLE PREFERRED STOCK
  Carrying amount of redeemable preferred stock, 8% cumulative,
  convertible, voting, series A, $.01 par value per share.
  Stated value $15.84 per share.   Authorized 1,312,500 shares;
  issued and outstanding 26,405 shares. Redemption amount
  $418,255                                                             418,255
                                                                  -------------

STOCKHOLDERS' DEFICIT
  Common stock -- $.01 par value per share.  Authorized
    250,000,000 shares; issued and outstanding 62,249,005 shares       622,490
  Additional paid-in capital                                        21,411,645
  Deficit                                                          (30,257,564)
                                                                  -------------
     TOTAL STOCKHOLDERS' DEFICIT                                    (8,223,429)
                                                                  -------------
     TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                   $ 2,013,621
                                                                  =============

</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.

<PAGE>
<TABLE>
            IGENE Biotechnology, Inc. and Subsidiary
              Consolidated Statements of Operations



<CAPTION>                                     Years ended December 31,
                                                 2000           1999
                                             ------------   ------------
<S>                                          <C>            <C>
REVENUE
-------
  Sales                                      $   702,533    $    18,131
  Cost of sales                                  793,380        157,966
                                             ------------   ------------
  GROSS PROFIT (LOSS)                            (90,847)      (139,835)

  Technology Licensing Income                        ---          9,310
                                             ------------   ------------
                                                 (90,847)      (130,525)
                                             ------------   ------------
OPERATING EXPENSES
------------------
  Marketing and selling                          639,015        493,535
  Research, development and pilot plant          355,659        350,659
  General and administrative                     424,120        324,239
  Litigation expenses                             13,249        530,882
                                             ------------   ------------
    TOTAL OPERATING EXPENSES                   1,432,043      1,699,315
                                             ------------   ------------
    OPERATING LOSS                            (1,522,890)    (1,829,840)

OTHER INCOME (EXPENSES)
-----------------------
  Miscellaneous                                    8,150            ---
  Loss on disposal of equipment                  (30,747)           ---
  Interest expense (net of interest
    income of $3,810 and $14,000,
    respectively, in 2000 and 1999)             (709,828)      (695,500)
                                             ------------   ------------
    TOTAL OTHER INCOME (EXPENSE)                (732,425)      (695,500)
                                             ------------   ------------
  NET LOSS                                   $(2,255,315)   $(2,525,340)
                                             ============   ============
  NET LOSS PER COMMON SHARE                  $     (0.04)   $     (0.08)
                                             ============   ============

 </TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.

<PAGE>
<TABLE>

                                     IGENE Biotechnology, Inc. and Subsidiary
                                 Consolidated Statements of Stockholders' Deficit
<CAPTION>
                                                                         Additional                           Total
                                               Common Stock               Paid-in                         Stockholders'
                                          # Shares        Amount          Capital          Deficit           Deficit
                                         ----------     ----------      ------------    -------------     -------------
<S>                                      <C>            <C>             <C>             <C>               <C>
BALANCE AT DECEMBER 31, 1998             21,854,173     $  218,542      $18,738,038     $(25,476,909)     $ (6,520,329)

Issuance of common stock in lieu
  of cash in payment of interest on
  subordinated debenture                     80,000            800          179,200              ---           180,000

Cumulative undeclared dividends
  on redeemable preferred stock                 ---            ---          (18,438)             ---           (18,438)

Conversion of redeemable preferred
  stock into common stock                     6,250             62           46,938              ---            47,000

Issuance of common stock in lieu of
  cash in payment of legal fees             866,667          8,667           41,083              ---            49,750

Issuance of shares of common stock
  pursuant to direct purchase of shares
  by certain directors and other
  accredited investors                   24,791,668        247,917        1,252,083              ---         1,500,000

Net loss for 1999                               ---            ---              ---       (2,525,340)       (2,525,340)
                                         ----------     ----------      ------------    -------------     -------------
BALANCE AT DECEMBER 31, 1999             47,598,758        475,988       20,238,904      (28,002,249)       (7,287,357)

Issuance of common stock in lieu
  of cash in payment of interest on
  subordinated debenture                     80,000            800          179,200              ---           180,000

Cumulative undeclared dividends
  on redeemable preferred stock                 ---            ---          (16,929)             ---           (16,929)

Conversion of redeemable
  preferred stock into common stock             124              1              971              ---               972

Exercise of employee stock options        1,500,000         15,000          135,000              ---           150,000

Exercise of warrants                      3,070,123         30,701          (25,501)             ---             5,200

Issuance of shares of common stock
  pursuant to direct purchase of shares
  by certain directors and other
  accredited investors                   10,000,000        100,000          900,000              ---         1,000,000

Net loss for 2000                               ---            ---              ---       (2,255,315)       (2,255,315)
                                         ----------     ----------      ------------    -------------     -------------
BALANCE AT DECEMBER 31, 2000             62,249,005     $  622,490      $21,411,645     $(30,257,564)     $ (8,223,429)
                                         ==========     ==========      ============    =============     =============
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.

<PAGE>
<TABLE>

                        IGENE Biotechnology, Inc. and Subsidiary
                         Consolidated Statements of Cash Flows
<CAPTION>
                                                                 Years ended December 31,
                                                                  2000             1999
                                                             --------------   --------------
<S>                                                          <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------
  Net loss                                                   $  (2,255,315)   $  (2,525,340)
  Adjustments to reconcile net loss to net
      Cash used by operating activities:
      Depreciation                                                  14,558           31,706
      Amortization of deferred costs                                87,666           42,342
      Loss on disposal of assets                                    30,747              ---
      Interest on debenture paid in shares of common stock         180,000          180,000
      Legal fees paid in shares of common stock                        ---           49,750
      Decrease (increase) in:
          Accounts receivable                                     (298,531)         (24,267)
          Inventory                                                (54,837)         162,665
          Prepaid expenses and other assets                        (39,897)         (58,082)
      Increase (decrease) in:
          Accounts payable and other accrued expenses              521,863          471,132
                                                             --------------   --------------
              NET CASH USED IN OPERATING ACTIVITIES             (1,813,746)      (1,670,094)
                                                             --------------   --------------
CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
      Proceeds from disposal of equipment                              ---              460
      Return of security deposit                                       ---            5,725
      Capital expenditures                                          (8,979)         (28,593)
      Repayments of loan receivable                                    ---           44,003
                                                             --------------   --------------
              NET CASH PROVIDED BY (USED IN)
              INVESTING ACTIVITIES                                  (8,979)          21,595
                                                             --------------   --------------
CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
  Proceeds from issuance of common stock                         1,150,000        1,500,000
  Proceeds from issuance of debt                                   600,000              ---
                                                             --------------   --------------
              NET CASH PROVIDED BY FINANCING ACTIVITIES          1,750,000        1,500,000
                                                             --------------   --------------
NET DECREASE IN CASH AND CASH EQUIVALENTS                          (72,725)        (148,499)

CASH AND CASH EQUIVALENTS - BEGINNING OF THE YEAR                  216,297          364,796
                                                             --------------   --------------
CASH AND CASH EQUIVALENTS - END OF THE YEAR                  $     143,572    $     216,297
                                                             ==============   ==============

SUPPLEMENTARY DISCLOSURE AND CASH FLOW INFORMATION
--------------------------------------------------
  Cash paid during the year for interest                     $       1,283    $         558
  Cash paid during the year for income taxes                           ---              ---

</TABLE>

See Note 3 for non-cash investing and financing activities.


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

<PAGE>
            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements


(1) Nature of Business
    ------------------
    IGENE  Biotechnology, Inc. ("Igene") was  incorporated  under
    the  laws  of  the State of Maryland on October 27,  1981  as
    "Industrial Genetics, Inc."  Igene changed its name  to  "IGI
    Biotechnology,  Inc."  on  August  17,  1983  and  to  "IGENE
    Biotechnology, Inc." on April 14, 1986.  Igene is located  in
    Columbia,  Maryland  and  is  engaged  in  the  business   of
    industrial microbiology and related biotechnologies.

(2) Summary of Significant Accounting Policies
    ------------------------------------------

    Principles of Consolidation
    ---------------------------
    During  2000  Igene formed a wholly-owned foreign  subsidiary
    in  Chile,  Igene  Chile Comercial Ltda.  These  consolidated
    financial  statements include the accounts of  Igene  and  of
    its  wholly-owned  subsidiary.  All significant  intercompany
    accounts   and   transactions   have   been   eliminated   in
    consolidation.

    Cash and cash equivalents
    -------------------------
    Igene  considers  cash equivalents to be  short-term,  highly
    liquid  investments  that have maturities  of  less  than  90
    days.  These include interest bearing money market accounts.

    Inventories
    -----------
    Inventory,  stated at lower of cost, on a first-in  first-out
    basis, or market value, represents AstaXin(R) manufactured  and
    held for sale, is as follows:

      Raw materials               $         ---
      Work-in-process                     4,080
      Finished goods                    758,352
                                  --------------
      Total inventory             $     762,432
                                  ==============

    Inventory  has been reduced by approximately $255,000  as  of
    December  31,  2000 to reflect the excess of  inventory  cost
    over market value.

    Research and development costs
    ------------------------------
    For  financial reporting purposes, research, development  and
    pilot  plant  scale-up  costs are  charged  to  expense  when
    incurred.

    Depreciation
    ------------
    Depreciation of property and equipment is provided under  the
    straight-line method over the useful lives of the  respective
    assets which average 7 years for all equipment.

<PAGE>

            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

(2) Summary of Significant Accounting Policies (continued)
    ------------------------------------------------------
    Estimates
    ---------
    The  preparation  of financial statements in conformity  with
    generally  accepted accounting principles requires management
    to  make  estimates and assumptions that affect the  reported
    amounts   of   assets  and  liabilities  and  disclosure   of
    contingent  assets  and  liabilities  at  the  date  of   the
    financial  statements and the reported  amounts  of  revenues
    and  expenses  during the reporting period.   Actual  results
    could differ from those estimates.

    Deferred Costs
    --------------
    Deferred  manufacturing  costs are  being  amortized  on  the
    straight  line method over their estimated lives,  which  are
    between 5 and 6 years.

    Foreign Currency Translation and Transactions
    ---------------------------------------------
    Since   the   day-to-day  operations   of   Igene's   foreign
    subsidiary   in   Chile  are  dependent   on   the   economic
    environment of the parent's currency, the financial  position
    and  results of operations of Igene's foreign subsidiary  are
    determined  using Igene's reporting currency (US dollars)  as
    the  functional currency.  All exchange gains and losses from
    remeasurement  of  monetary assets and liabilities  that  are
    not  denominated  in US dollars are recognized  currently  in
    income.   These  gains and losses were immaterial  in  amount
    during  the  year  ended December 31, 2000.   The  effect  of
    exchange  rate changes occurring subsequent to  December  31,
    2000 is immaterial.

    Statements of Cash Flows
    ------------------------
    Igene  has  determined that the effect  of  foreign  exchange
    rate changes on cash flows is not material.

    Fair value of financial instruments
    -----------------------------------
    The  carrying amounts of cash and cash equivalents,  accounts
    receivable,    accounts   payable,   and   short-term    debt
    approximate  fair  value  because  of  the  relatively  short
    maturity of these instruments.  The carrying amount of  long-
    term  debt approximates fair value because of similar current
    rates  at  which  Igene  could borrow funds  with  consistent
    remaining maturities.

    Sales Returns
    -------------
    Igene  records  sales  returns in the  period  in  which  the
    product  is  returned, rather than estimating future  returns
    of  current  sales, since they are expected to be  immaterial
    in amount.

    Interest on Variable Rate Subordinated Debenture
    ------------------------------------------------
    Igene  recorded  interest on its variable  rate  subordinated
    debenture  (see also note 6) at a level rate  of  8%  through
    October  1,  1996 and at 12% thereafter; rather than  at  the
    fair-market  value of shares which have been issued  in  lieu
    of  cash  payments of interest.  This is an estimated average
    rate  based  on  Igene's plan to continue (as  it  has  since
    October  1, 1989) to pay interest on the debenture by issuing
    shares  of common stock at the higher of $2.25 per  share  or
    the  current market value of Igene's shares, as allowed under
    the  terms of the debenture.  If the market value of  Igene's
    stock  remains below $2.25 per share (during the period  from
    October  1989  through December 1999 its  highest  price  was
    $1.25)  Igene  can continue to issue stock in  lieu  of  cash
    payments at $2.25 per share.

<PAGE>

            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

(2) Summary of Significant Accounting Policies (continued)
    ------------------------------------------------------
    Accounting for stock based compensation
    ---------------------------------------
    Igene  applies  APB  Opinion 25 in  accounting  for  employee
    stock  option  plans (note 12).  Accordingly, no compensation
    cost  has  been recognized in 2000 or 1999.  Had compensation
    cost been determined on the basis of FASB Statement 123,  the
    following changes would have resulted:

<TABLE>
<CAPTION>
                                       2000             1999
                                  -------------    -------------
    <S>                           <C>              <C>
    Net loss:
      As reported                 $ (2,255,315)    $ (2,525,340)
      Pro forma                   $ (2,403,540)      (2,567,336)

    Net loss per common share:
      As reported                 $       (.04)    $       (.08)
      Pro forma                           (.04)            (.08)

</TABLE>

    The  fair value of compensation was computed using an option-
    pricing  model, which took into account the following factors
    as of the grant date:

    - The exercise price and expected life of the option.
    - The current price of the stock and its expected volatility.
    - Expected dividends, if any.
    - The  risk-free  interest  rate for the expected term of the
      option  using  Treasury  Note  rates  with a remaining term
      equal to the expected life of the options.

    Long-lived Assets:
    -----------------
    Long-lived  assets  to  be held and  used  are  reviewed  for
    impairment   whenever  events  or  changes  in  circumstances
    indicate  that  the  related  carrying  amount  may  not   be
    recoverable.  When required, impairment losses on  assets  to
    be  held  and used are recognized based on the fair value  of
    the  asset.  Long-lived assets to be disposed of are reported
    at  the  lower of carrying amount of fair value less cost  to
    sell.

(3) Non-cash investing and financing activities:
    --------------------------------------------
    During  2000 and 1999, Igene issued 80,000 shares  of  common
    stock,  in  each year, in payment of interest on  a  variable
    rate  subordinated debenture.  If paid in cash, the  interest
    would  have been payable at 12%, or $180,000 per year. Shares
    may  be  issued in lieu of cash under the debenture agreement
    at  the  higher of $2.25 per share or market price per share.
    The  stock was issued and related interest was paid  in  2000
    and  1999  at  $2.25 per share, or $180,000,  in  each  year.
    (see also note 8)

    During 2000 and 1999, Igene recorded dividends in arrears  on
    8%  redeemable preferred stock at $.64 per share  aggregating
    $16,929  and  $18,438, respectively, which has  been  removed
    from  paid-in capital and included in the carrying  value  of
    the redeemable preferred stock. (see also note 11)

    During  2000, Igene agreed to the re-payment of  $218,984  in
    loans  receivable  and  accrued  interest  and  the  sale  of
    equipment  having a net book value of $226,011 as part  of  a
    reduction  in  manufacturing fees under a new  contract  with
    Igene's  contract manufacturer of AstaXin(R).  The  book  value
    of  the loan receivable and equipment, totaling $444,995, has
    been recorded as a deferred cost which is being amortized  as
    manufacturing  occurs  over  the  six  year  term   of   this
    contract, which will expire May 2006. (see also note 2)

<PAGE>

            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

(3) Non-cash investing and financing activities (continued):
    --------------------------------------------------------
    During  2000,  holders of 3,994,500 warrants  issued  in  the
    March  1998  Rights Offering exercised those  warrants  using
    $5,200  of  notes payable and also using 924,377 warrants  in
    cashless  exercises.  3,070,123 new shares  were  issued  and
    $5,200   of   notes   payable   were   cancelled   in   these
    transactions.

    During 1999, Igene satisfied accounts payable of $20,000  and
    advanced  $29,750  for  legal retainers  by  issuing  866,667
    shares of common stock to counsel in on-going litigation.

(4) Concentration of Credit Risk
    ----------------------------
    Igene   is   potentially  subject  to  the   effects   of   a
    concentration   of   credit  risk  in  accounts   receivable.
    Accounts  receivable is substantially composed of receivables
    from  customers  in Chile, which is an important  market  for
    Igene's  product, AstaXin(R).  Chile has  from  time  to time
    experienced   political  unrest  and  currency   instability.
    Because  of  the volume of business transacted  by  Igene  in
    Chile,  recurrence  of  such  unrest  or  instability   could
    adversely affect the businesses of its customers in Chile  or
    Igene's  ability  to  collect  its  receivables  from   these
    customers.   In  order  to  minimize  risk,  Igene   strictly
    evaluates  the companies to which it extends credit  and  all
    prices  are denominated in US dollars as to minimize currency
    fluctuation  risk.   Losses due to credit risks  in  accounts
    receivable are expected to be immaterial.

(5) Property and Equipment
    ----------------------
    Property  and equipment are stated at cost and are summarized
    as follows:

    Laboratory equipment and fixtures             $  111,461
    Pilot plant equipment and fixtures                61,549
    Idle equipment                                    56,150
    Office  furniture and fixtures                    30,326
                                                  -----------
                                                     259,486
    Less accumulated depreciation                   (155,336)
                                                  -----------
                                                  $  104,150
                                                  ===========

    Idle  equipment represents manufacturing equipment, which  is
    not  presently  needed  for  production of AstaXin(R).  Igene
    plans  to  retain  the  equipment  for use when needed due to
    increased  production  volume  or  failure of presently  used
    equipment. This equipment  is not currently being depreciated
    and its cost approximates its fair value.

(6) Deferred Costs
    --------------
    Deferred  costs  include  deferred  manufacturing  costs   of
    $399,671,   which   represents   the   value,   reduced    by
    amortization,  of a note receivable and accrued  interest  of
    $218,984  and manufacturing equipment with a net  book  value
    of  $226,011.   These  assets have been cancelled  and  sold,
    respectively,   in   consideration   for   a   reduction   in
    manufacturing  fees  over  the  six  year  term  of   a   new
    manufacturing contract which became effective  in  May  2000.
    These  deferred manufacturing costs are being amortized  over
    the  term of the contract, and such accumulated amortization,
    in  the  amount  of $45,324 for the year ended  December  31,
    2000, is included in cost of sales and inventory.

<PAGE>

            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

(6) Deferred Costs (continued)
    --------------------------
    Deferred  costs  also includes debt issue costs  relating  to
    long-term  notes payable.  Costs amounting to  $211,713  were
    capitalized  and  are being amortized over the  term  of  the
    debt, which is 5 years, on the straight-line method.

    Deferred  costs  as  of  December 31, 2000  are  detailed  as
    follows:

<TABLE>
<CAPTION>
                                  Manufacturing    Debt Issue
                                      Costs          Costs          Total
                                  -------------   ------------   ------------
    <S>                           <C>             <C>            <C>
    Original amount               $    444,995    $   211,713    $   656,708
    Accumulated amortization           (45,324)      (116,443)      (161,767)

    Deferred costs, net                399,671         95,270        494,941
    Less: current portion              (74,160)           ---        (74,160)
                                  -------------   ------------   ------------
    Non-current portion           $    325,511    $    95,270    $   420,781
                                  =============   ============   ============

</TABLE>

(7) Accounts Payable and Accrued Expenses
    -------------------------------------
    Accounts  payable  and  accrued  expenses  consist   of   the
    following:

    Accounts payable, trade                          $  169,289
    Accrued manufacturing fees payable
      in common stock (see  note14)                      83,843
    Accrued interest on variable rate
      subordinated debenture (see note 8)                45,000
    Accrued interest on demand notes (see note 9)         4,500
    Audit fees                                           18,000
                                                     -----------
                                                     $  304,432
                                                     ===========
(8) Variable Rate Subordinated Debenture
    ------------------------------------
    In  July  1988,  Igene  and  a principal  holder  of  Igene's
    redeemable preferred stock agreed to exchange 187,500  shares
    of  Igene's 8% cumulative convertible preferred stock, Series
    A  for  a  $1,500,000 variable rate convertible  subordinated
    debenture due 2002, Class A.

    The  debenture  bears  interest at a rate  of  8%  per  annum
    through  September 30, 1996 and thereafter at a rate  of  12%
    per  annum.  Interest was payable in cash through October  1,
    1989.   Thereafter, the debenture agreement provides that  at
    the  option and at the discretion of Igene, interest  may  be
    paid  in  shares  of Igene's common stock at the  greater  of
    $2.25  per  share  or  the average market  value  per  share.
    During  2000  and  1999 Igene issued 80,000 shares,  in  each
    year,  of  its  common stock as payment of  interest  on  the
    debenture. The debenture is convertible into common stock  of
    Igene  at any time at the option of the holder at an  initial
    rate  of  $4  per  share of common stock.  The  debenture  is
    redeemable  at  the option of Igene at any  interest  payment
    date  at  par value plus accrued interest.  Upon maturity  of
    the  debenture, Igene, at its option, may repay the remaining
    principal  in  shares of 8% cumulative convertible  preferred
    stock,  at  a  rate  of  $8  per  preferred  share.   Accrued
    interest of $45,000 through December 31, 2000 is recorded  in
    these financial statements.

<PAGE>

            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

(9) Demand Notes Payable
    --------------------
    During  2000,  Igene issued $600,000 in 8%  demand  notes  to
    certain  directors of Igene.  As of December 31, 2000,  Igene
    has  accrued $4,500 of interest payable on these notes, which
    are payable on demand.

(10)Notes Payable
    -------------
    Beginning  November 16, 1995 and continuing  through  May  8,
    1997, Igene issued promissory notes to certain directors  for
    aggregate  consideration of $1,082,500.  These notes  specify
    that  at any time prior to repayment the holder has the right
    to  convert  the  notes to common stock of  Igene  at  prices
    ranging  from $0.05 per share to $0.135 per share,  based  on
    the  market  price  of common shares at the respective  issue
    dates.   The  notes  are convertible in total  to  13,174,478
    shares  of  common stock.  Concurrently with  such  issuance,
    the   holders  also  received  13,174,478  warrants  for   an
    equivalent  number  of  shares at the  equivalent  price  per
    share.  The warrants expire ten years from the issue  of  the
    notes.   These  notes were modified in conjunction  with  the
    1998 rights offering and are now due on March 31, 2003.   The
    notes bear interest at the prime rate.

    In  conjunction  with  rights offering in  March  1998  Igene
    issued  5,000,000  of  8%  Notes  due  March  31,  2003   and
    50,000,000 warrants to purchase one share of common stock  at
    an exercise price of $0.10 per share.

    Notes Payable are summarized as follows as of December 31,
    2000:

<TABLE>
<CAPTION>
                                                        Accrued
                                          Principal     Interest
                                         -----------  -----------
    <S>                                  <C>          <C>
    Long-term notes payable,
        bearing interest at prime,
        maturing March 31, 2003,
        convertible into common stock    $ 1,082,500  $   238,150
    Long-term notes payable,
        bearing interest at 8%,
        maturing March 31, 2003            4,994,800    1,098,913
                                         -----------  -----------
                                         $ 6,077,300  $ 1,337,063
                                         ===========  ===========
</TABLE>

    Combined  aggregate amounts of maturities for  all  long-term
    borrowings are as follows:

                 Year                   Amount
                ------                 ---------
                 2000                        ---
                 2001                        ---
                 2002                  1,500,000
                 2003                  7,414,363

(11)Redeemable Preferred Stock
    --------------------------
    Each  share of redeemable preferred stock is entitled to vote
    on  all  matters requiring shareholder approval as one  class
    with  holders  of  common stock, except that  each  share  of
    redeemable preferred stock is entitled to two votes and  each
    share of common stock is entitled to one vote.

    Redeemable  preferred stock is convertible at the  option  of
    the  holder  at  any time, unless previously  redeemed,  into
    shares  of Igene's common stock at the rate of two shares  of
    common  stock  for each share of preferred stock  (equivalent
    to  a conversion price of $4.00 per common share), subject to
    adjustment under certain conditions.

<PAGE>

            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

(11)Redeemable Preferred Stock (continued)
    --------------------------------------
    Shares of redeemable preferred stock are redeemable for  cash
    in  whole  or in part at the option of Igene at any  time  at
    the  stated  value plus accrued and unpaid dividends  to  the
    redemption  date.   Dividends  are  cumulative  and   payable
    quarterly on January 1, April 1, July 1 and October 1,  since
    January  1,  1988   (See  note 8  relating  the  exchange  of
    certain   redeemable  preferred  stock  for   a   debenture).
    Mandatory  redemption by Igene is required by  October  2002.
    As  of  December  31, 2000, cumulative dividends  in  arrears
    total  $207,015  ($7.84 per share) and are  included  in  the
    carrying value of redeemable preferred stock.

(12)Stockholders' Equity
    --------------------
    Options

    In  November of 1997 the stockholders approved the 1997 Stock
    Option  Plan  which succeeds Igene's 1986 Stock Option  Plan,
    as  amended.   All  outstanding, unexercised options  granted
    under  the 1986 Plan remain outstanding with unchanged terms.
    The  number  of  shares  issuable  under  the  1997  Plan  is
    20,000,000, and the number issuable under the 1986  Plan  was
    2,000,000.

    The   following   is  a  summary  of  options   granted   and
    outstanding  under  the  plans as of December  31,  2000  and
    1999:

<TABLE>
<CAPTION>
                                                2000                         1999
                                       -----------------------     -----------------------
                                                      Weighted                    Weighted
                                                      Average                     Average
                                                      Exercise                    Exercise
                                         Number       Price          Number       Price
                                       ----------   ----------     ----------   ----------
    <S>                                <C>          <C>            <C>          <C>
    Options outstanding
    and exercisable,
    beginning of year                   8,070,750        $.072      6,327,885        $.077

    Options granted                     4,727,500        $.050      1,742,865        $.055

    Options exercised                  (1,500,000)       $.100            ---          ---

    Options forfeited,
    or withdrawn with
    consent of holders                        ---          ---            ---          ---

    Options expired                           ---          ---            ---          ---
                                       ----------   ----------     ----------   ----------
    Options outstanding
    and exercisable,
    end of year                        11,298,250        $.059      8,070,750        $.072
                                       ==========   ==========     ==========   ==========
</TABLE>
<PAGE>

            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

(12)Stockholders' Equity (continued)
    --------------------------------
    Warrants
    --------
    During  1999, Igene issued 24,791,668 warrants,  expiring  in
    ten  years,  to certain directors and investors who purchased
    24,791,668   new  shares  of  common  stock  through   direct
    purchases  for  a total price of $1,500,000.  The  shares  of
    stock  and the warrants were issued at various prices ranging
    from  $.05  to $.08 per share, based on the market  value  of
    Igene's  stock at the time of the commitment to purchase  the
    stock.

    During  2000, Igene issued 10,000,000 warrants,  expiring  in
    ten  years, to certain directors who purchased 10,000,000 new
    shares  of common stock through direct purchases for a  total
    price  of $1,000,000.  The shares of stock and warrants  were
    issued  at  $.10  per  share, based on the  market  value  of
    Igene's  stock at the time of the commitment to purchase  the
    stock.

    The  following table summarizes warrants issued,  outstanding
    and exercisable:

<TABLE>
<CAPTION>
                              As of December 31,
                      --------------------------------
                          2000                1999
                      -----------          -----------
    <S>               <C>                  <C>
    Issued            131,759,345          125,756,545
    Outstanding       131,759,345          125,753,845
    Exercisable       131,759,345          125,753,845

</TABLE>

    Common Stock
    ------------
    At  December  31, 2000, 131,759,345 shares of authorized  but
    unissued   common  stock  were  reserved  for   exercise   of
    outstanding  warrants, 19,910,166 shares  of  authorized  but
    unissued common stock were reserved for exercise pursuant  to
    the  1986  and  1997  Stock Option Plans,  52,810  shares  of
    authorized  but  unissued  common  stock  were  reserved  for
    issuance  upon  conversion of Igene's  outstanding  preferred
    stock,  160,000  shares  of authorized  but  unissued  common
    stock  were  reserved  for issuance in  lieu  of  payment  of
    interest   on  the  variable  rate  subordinated   debenture,
    375,000  shares of authorized but unissued common stock  were
    reserved  for  issuance upon conversion of the variable  rate
    subordinated  debenture, 20,000,000 shares were reserved  for
    issue  in  accordance  with Igene's  manufacturing  agreement
    with   Fermic  (see  note  14)  and  13,174,478   shares   of
    authorized  but  unissued stock were  reserved  for  issuance
    upon conversion of outstanding convertible notes.

    Preferred Stock
    ---------------
    During  1999  and 2000 holders of redeemable preferred  stock
    converted  62  and 3,125 shares, respectively,  of  preferred
    stock  into  124  and 6,250 shares, respectively,  of  common
    stock of Igene.

    At   December  31,  2000,  cumulative  dividends  in  arrears
    totaled $207,015 ($7.84 per share) and were included  in  the
    aggregate  involuntary  liquidation value  of  the  preferred
    stock.

    At  December  31,  2000,  187,500 shares  of  authorized  but
    unissued  preferred  stock were reserved  for  issuance  upon
    maturity of the variable rate subordinated debenture.

<PAGE>

            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)


(13)Net Loss Per Common Share
    -------------------------
    Net  loss  per  common share for 2000 and 1999  is  based  on
    56,042,471   and   33,979,575   weighted   average    shares,
    respectively.  For purposes of computing net loss per  common
    share,  the  amount  of  net  loss  has  been  increased   by
    dividends  declared  and cumulative undeclared  dividends  in
    arrears on preferred stock.

    Common   stock  equivalents,  including:  options,  warrants,
    convertible   debt,   convertible   preferred   stock,    and
    exercisable  rights have not been included in the computation
    of  earnings  per  share in 2000 and 1999 because  to  do  so
    would  have been anti-dilutive.  However, these common  stock
    equivalents  could have potentially dilutive effects  in  the
    future (see also notes 8, 10, 11 and 12).

(14)Commitments
    -----------
    Igene  is obligated for office and laboratory facilities  and
    other  rentals under operating lease agreements, which expire
    in  2004.  The  basic  annual  rentals  are  expected  to  be
    approximately $86,500 under such leases. Annual rent  expense
    relating to the leases for the years ended December 31,  2000
    and 1999 approximated $81,000 and $78,000, respectively.

    Future  minimum  rental payments, in the  aggregate  and  for
    each of the next five years are as follows:

<TABLE>
<CAPTION>
                 Year                     Amount
                ------                  ----------
                <S>                     <C>
                 2001                      86,500
                 2002                      90,000
                 2003                      93,600
                 2004                         ---
                 2005                         ---
                                        ----------
                                        $ 270,100
                                        ==========
</TABLE>

     Effective   May   20,  2000,  Igene  signed   an   exclusive
     manufacturing   agreement  with   Fermic,   S.A.   de   C.V.
     ("Fermic"),  of Mexico City, Mexico, for the  production  of
     AstaXin(R).   The  Fermic   contract   provides   that   the
     manufacturer  has  an  exclusive right to produce AstaXin(R)
     and is paid a monthly  fee  in  cash,  which  is  based   on
     manufacturing  capacity, plus shares of Igene  common  stock
     based  on  production quantities.  Fermic provides equipment
     and  facilities  necessary  to  manufacture  and  store  the
     product  and  is  responsible for purchasing raw  materials.
     Igene is responsible for sales efforts and for ensuring  the
     quality  of the pigment.  Igene also has a role in  ensuring
     that  the manufacturing process works effectively.  The term
     of the contract is 6 years.

     Based on production of AstaXin(R), Igene  has  committed  to
     issue  to  Fermic  up to a maximum of 20,000,000  shares  of
     Igene common stock during a six year period expiring May 20,
     2006  in  accordance  with the new manufacturing  agreement.
     Based on quantities  of  AstaXin(R)  produced  during  2000,
     762,188  shares  of  Igene common stock will  be  issued  to
     Fermic.   This stock has been recorded as an accrued expense
     and also as an increase in either cost of sales or inventory
     in  the  amount  of $83,843.  This amount has been  computed
     based on the fair value of the stock as of May 20, 2000, the
     measurement  date,  which  is  the  effective  date  of  the
     contract  agreement.  This stock has not yet been issued  to
     Fermic.

<PAGE>

            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

(15)Contingencies
    -------------
    Archer   Daniels  Midland,  Inc.  ("ADM")  has  sued  Igene,
    alleging   patent  infringement  and  requesting  injunctive
    relief  as  well as an unspecified amount of damages  (filed
    July  21,  1997, U.S. District Court, Baltimore, MD).  Igene
    has  filed a $300,450,000 counterclaim concerning the  theft
    of  trade secrets (filed August 4, 1997).  The court  denied
    ADM's request for preliminary injunctive relief.   Mediation
    efforts during 1999 did not resolve this dispute, which  has
    been  returned  to  the  court for a  judicial  disposition.
    Presently, a stay on all discovery remains in effect while a
    court-appointed expert analyzes the yeast products  of  both
    parties.   Management believes that it is not probable  that
    this dispute will result in an unfavorable outcome to Igene.
    Accordingly, no liability has been reflected in the December
    31,  2000  balance sheet. Nonetheless, should  ADM  prevail,
    Igene could be liable for damages, and Igene could also lose
    the  right  to  use a particular strain of yeast.   However,
    Management expects that this will not affect Igene's ability
    to make and sell its product, AstaXin(R). Igene had expenses
    of  $13,249  and  $530,882, respectively in  2000  and  1999
    associated with this on-going litigation.

(16)Income Taxes
    ------------
    At  December  31,  2000,  Igene has  federal  and  state  net
    operating  loss  carry-forwards of approximately  $23,931,000
    that  expire  at various dates from 2000 through  2020.   The
    recorded   deferred  tax  asset,  representing  the  expected
    benefit  from  the  future realization of the  net  operating
    losses,  net  of the valuation allowance, was $-0-  for  2000
    and 1999.

    The  sources  of the deferred tax asset are approximately  as
    follows:

       Net operating loss carry-forward benefit    $  9,503,600
       Valuation allowance                          ( 9,503,600)
                                                   -------------
       Deferred tax asset, net                     $        ---
                                                   =============

(17)Uncertainty
    -----------
    Igene  has incurred net losses in each year of its existence,
    aggregating  approximately  $30,000,000  from  inception   to
    December   31,  2000  and  its  liabilities  and   redeemable
    preferred   stock   exceeded  its  assets  by   approximately
    $8,224,000  at that date.  These factors indicate that  Igene
    will  not be able to continue in existence unless it is  able
    to   raise   additional   capital   and   attain   profitable
    operations.

    The  continuing  successful  marketing  of  Igene's  product,
    AstaXin(R),  may  permit  Igene to attract additional capital
    and enable it to continue.

    Igene began manufacturing and selling AstaXin(R) during  1998
    and  has  continued  to  do so in 1999 and  2000,  increasing
    sales and manufacturing levels in 2000.  Igene believes  this
    technology to be highly marketable.  Igene hopes to  continue
    increasing sales of  AstaXin(R), eventually  achieving  gross
    profits and, subsequently, profitable operations.

    During  2000 and 1999, Igene continued to fund its operations
    through  the  issuance of stock through direct purchases  and
    loans  by  directors  and other accredited  investors.   This
    provided  additional  capital of $1,600,000  and  $1,500,000,
    respectively.

<PAGE>

            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

(18)Nature of Risks and Concentrations
    ----------------------------------
    Igene  derived  approximately 100% and 66%, respectively,  of
    its  revenue during 2000 and 1999 from sales of the  product,
    AstaXin(R). Substantially all of Igene's 2000 and 1999  sales
    were  to fish producers in the aquaculture industry in Chile.
    During   2000,  3  customers,  who  are  located  in   Chile,
    represented  over 10% of sales each, for a total  of  81%  in
    the  aggregate.   All of Igene's manufacturing operations for
    AstaXin(R)  are  conducted in a single manufacturing facility
    in Mexico City, Mexico.

    All  of the preceding concentrations subject Igene to certain
    risks.  For  example,  it is considered at  least  reasonably
    possible  that any particular customer, distributor,  product
    line,  or provider of services or facilities may be  lost  in
    the  near  term.   It is also considered at least  reasonably
    possible  that  operations located outside the United  States
    may  be  disrupted in the near term.  However, Igene  has  at
    present no information that would lead it to believe that  it
    will lose its principal product, principal customers, or  its
    contracted  manufacturer; or that its  operations  in  Mexico
    City or Chile will be disrupted.

    Following is a schedule of the approximate carrying value  of
    net assets located in foreign countries by geographic area:

        Chile                              $   750,000
        Mexico                                 600,000
        Others                                   4,000
                                           ___________
        Total net assets located in
            foreign countries              $ 1,515,604
                                           ===========

(19)Simple Retirement Plan
    ----------------------
    Effective  January 1, 1997, Igene adopted a Simple Retirement
    Plan under Internal Revenue Code Section 408(p). The Plan  is
    a defined contribution plan, which covers all of Igene's U.S.
    employees who receive at least $5,000 of compensation for the
    preceding  year.   The   Plan   permits   elective   employee
    contributions.  Igene makes a nonelective contribution  of 2%
    of each  eligible  employee's  compensation  for  each  year.
    Igene's contributions  to the Plan for  2000  and  1999  were
    $7,275 and  $6,569, respectively, which are expensed  in  the
    2000 and 1999 statements of operations.

(20)Subsequent Events
    -----------------
    Effective  January  1,  2001,  Igene  signed   an   agreement
    appointing  ProBio  Nutraceuticals  A.S.  ("ProBio")  as  its
    exclusive   worldwide  marketing  agent.    ProBio   will  be
    compensated in  the  form of a commission  based  on  Igene's
    sales of AstaXin(R), its feed additive  for  aquaculture  and
    AstaBioCare(TM),   its   new   dietary   supplement  product.
    Igene has had no sales of AstaBioCare(TM) to date.

    In March  2001,  Igene issued $1,014,211  of  8%  convertible
    debenture  to certain directors of Igene in exchange  for the
    cancellation of $1,014,211 of demand notes payable (including
    accrued  interest of $14,211).  $600,000 of these  notes were
    issued during  2000  and $400,000 were  issued  subsequently.
    These debentures will convert automatically  into  10,142,011
    shares of  Igene's common stock at $.10 per  share  upon  the
    effective  date  of a sufficient increase  in  the  number of
    authorized  shares  of  common stock.   These  directors also
    received 10,142,011 warrants to purchase common stock at $.10
    per share,  which  are exercisable upon  the  effective  date
    approval of a sufficient increase in the number of authorized
    shares of  common stock.  The directors resolved to  increase
    the  number   of  authorized  shares  of  common   stock   to
    750,000,000  at  the  February  2001  board   meeting.    The
    shareholders are  expected to ratify  this  increase  at  the
    shareholders meeting scheduled in June 2001,  at  which  time
    shares may be issued upon conversion of these debentures  and
    these warrants would become exercisable.

<PAGE>
            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

(20)Subsequent Events (continued)
    -----------------------------
    In  March  2001, Igene issued 5,500,000 warrants to  purchase
    Igene  common stock at $.08 per share to its Chairman of  the
    Board,  Mr. Kimelman.  These warrants will become exercisable
    upon  the  effective  date of a sufficient  increase  in  the
    number of authorized shares (see above).

    In  March 2001, certain directors of Igene also committed  to
    provide   additional  funding  in  the  form  of  convertible
    debentures  in  the amount of $1,500,000 over  the  next  six
    months.  The initial installment of $400,000 was received  in
    March  2001.   In  consideration of  this  commitment,  these
    directors  also  received  18,750,000  warrants  to  purchase
    common  stock  at  $.08  per  share,  exercisable  upon   the
    effective  date  of an increase in the number  of  authorized
    shares  of  common stock (see above).  These debentures  will
    convert  automatically  into  18,750,000  shares  of  Igene's
    common stock at $.08 per share upon the effective date of  an
    increase  in the number of authorized shares of common  stock
    (see above).

<PAGE>
                           SIGNATURES


In accordance with Section 13 or 15(d) of the Securities Exchange
Act, the registrant caused this report to be signed on its behalf
by  the  undersigned,  thereunto duly  authorized,  in  Columbia,
Howard County, State of Maryland on April 2, 2001.


                                 IGENE Biotechnology, Inc.
                                --------------------------------
                                        (Registrant)

                         By     /s/ Stephen F. Hiu, President
                                --------------------------------
                         Date        April 2, 2001
                                --------------------------------
                         By:    /s/ Melissa M. Stump, Controller
                                --------------------------------
                         Date        April 2, 2001
                                --------------------------------



In  accordance with the Exchange Act, this report is to be signed
below by the following persons on behalf of the registrant and in
the capacities indicated.


Signature                   Title                   Date
------------------------    ---------------------   -------------

/s/  Joseph C. Abeles       Director                April 2, 2001
------------------------

/s/  John A. Cenerazzo      Director                April 2, 2001
------------------------

/s/  Stephen F. Hiu         Director, President,    April 2, 2001
------------------------    Treasurer, Chief
                            Financial Officer,
                            and Chief Accounting
                            Officer

/s/  Thomas L. Kempner      Vice Chairman of Board  April 2, 2001
------------------------    of Directors

/s/  Michael G. Kimelman    Chairman of the Board   April 2, 2001
------------------------    of Directors

/s/  Sidney R. Knafel       Director                April 2, 2001
------------------------

/s/  Patrick F. Monahan     Director and Secretary  April 2, 2001
------------------------