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, 2001

[ ]  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 Identification No.)
incorporation or organization)

   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            NO   X
    ___            ___

     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
$4,181,037

     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.    $966,785 as of March 1, 2002
                            ____________________________

(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, 2002 there were 75,848,600 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, EXCHANGE RATE FLUCTUATIONS,  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 specialty
ingredients for  human  and  animal nutrition.  Igene  was formed
on  October  27,  1981 to develop, produce and market value-added
specialty  biochemical  products.  Igene is a supplier of natural
axtaxanthin,   an   essential   nutrient   in    different   feed
applications  and  as  a  source  of pigment for coloring  farmed
salmon  species.   Igene also supplies nutraceutical ingredients,
as  well  as  consumer  ready  health food supplements, including
astaxanthin  and  Omega-3  fatty  acids.    Igene  is  focused on
competence  in  fermentation technology,  pharmacology, nutrition
and  health  in  its marketing of products and applications world
wide.

     During  the  year  2001, Igene purchased their  sales  agent
ProBio  Nutraceuticals  AS  ("ProBio").   ProBio  was  a  company
specializing   in  sales  and  marketing  to  the  pharmaceutical
industry  and feed ingredients markets.  In addition to  ProBio's
nutraceuticals  business, it is hoped the purchase  will  add  to
Igene's  management  structure  and  enhance  sales  development.
Following  the  acquisition, Stein Ulve and Per Benjaminsen,  the
managing   director   and  director  of  marketing   and   sales,
respectively,  of ProBio became our chief executive  officer  and
chief   marketing  officer,  respectively,  pursuant  to  written
employment agreements.  This division is now referred to as Igene
Norway AS.

     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
in  Puerto Varas, Chile, 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"), 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 ("GMPs")  (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 became 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

<PAGE>
the Canadian Food Inspection Agency (CFIA).   Additional  foreign
approval  applications  for AstaXin(R), including those  for  the
European Union, are in progress.

     In  July 2000, Igene also obtained clearance from the FDA to
market its product, AstaXin(TM), as a human dietary supplement in
the  United States.  Scientific literature indicates that natural
astaxanthin, such as that in the Company's product,  AstaXin(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 AstaXin(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, 2001, Igene had expended  approximately
$12,419,000  on research and development since its  inception  on
October  27,  1981  and has, as of December  31,  2001,  received
revenues  from  product  sales  and  royalties  of  approximately
$6,924,000  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 2002.

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

     2000        $ 355,659
     2001        $ 536,638

     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  registered  trademark 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) in pigmenting  fish.  An
estimated  1,000,000  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.  Of the 20,000,000 shares available to be earned, 5,043,019
have  already  been earned and issued to date.   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,  who  produces  a   chemically
synthesized  product, presently controls more  than  80%  of  the
world  market  for  astaxanthin as  a  pigment  for  aquaculture.
Igene's  production  for  the  year  2002  will  depend  on   the
successful  completion of production increases by  their  current
manufacturing  partner in Mexico City, in addition to  management
locating additional satisfactory production providers.  Demand is
currently  projected  to exceed the current contracted production
capacity of Igene's current producer.  However, there can  be  no
assurance  that the Company will be able to find and subsequently
be  able  to  utilize  other  additional  sources  of  production
capacity,  or that, if it is able to obtain additional production
capacity, that any level of demand will continue.

     Igene,  after  successfully completing commercial trials  of
AstaXin(R)  with  fish  farming  companies in Chile, has achieved
total sales in 1999, 2000 and 2001, of approximately $4,902,000.

      Effective January 1, 2001, Igene had appointed Igene Norway
(fka  ProBio) as its exclusive worldwide agent for the marketing,
promotion  and sales of all of its natural astaxanthin  products.
By  December of 2001, Igene had purchased ProBio to further  this
development  as  well  as  the  development  of  it's  management
structure.   As  a result of this purchase Igene  terminated  its
exclusive agreement with ProBio.

      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).

AstaXin(TM)

     During  2000  and  2001  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,
AstaXin(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.

     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.

<PAGE>

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
substantial 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,  because  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  and  lower production
costs, but can provide  no assurances in that regard.  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
AstaXin(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, 2001, Igene had 27 employees, all  of  whom
are full-time employees.  Nineteen 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  three  sales and technical  representatives  in
Chile and four representatives in Norway.  Additionally, three of
the   employees  located  in  Norway  are  administrative.    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 are 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  December of 2001, Igene began a one  year  lease  of
approximately 220 square feet of office space, in Chile, for  the
conduct of marketing and technical support activities by its full-
time  technical  representatives.  Igene  also  leases  warehouse
space on a month to month basis as needed for product storage  in
Chile.

     In  addition,  during  the fourth  quarter  of  2001,  Igene
executed  a  six  month  lease on a three  bedroom  residence  in
Annapolis,  Maryland to be used by the representatives  traveling
from  Norway,  in  order  to  reduce  travel  costs  while  those
relocating are able to get situated.

     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  product  continues to increase,  Igene  plans  to  lease
additional manufacturing capacity 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, 2001 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
$65,258  and  $13,249  in 2001 and 2000 respectively,  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
2001 and 2000.
<TABLE>
<CAPTION>

          Calendar Quarter                High          Low
          ________________             _________     _________
          <S>                          <C>           <C>
   2001:  First Quarter                $  .1700      $  .0620
          Second Quarter               $  .1000      $  .0575
          Third Quarter                $  .0795      $  .0480
          Fourth Quarter               $  .0575      $  .0341

   2000:  First Quarter                $  .6400      $  .0450
          Second Quarter               $  .2700      $  .0800
          Third Quarter                $  .1390      $  .0700
          Fourth Quarter               $  .1150      $  .0410

</TABLE>

     Igene   obtained  the  above  information  from  a  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, 2002 was 250.  As of March 1, 2002, the high
bid  and low offer prices for the common stock, as shown  on  the
"bulletin board" were $0.07 and $0.065, respectively.

Preferred Stock

     There  was  no  public  market for Igene's  preferred  stock
during  2001  and 2000 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, 2002 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, 2001 the total amount of
dividends in arrears with respect to Igene's preferred stock  was
$223,914.

     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

     In December of 2001, Igene issued 8,000,000 shares of common
stock  in  addition to $1,000,000 of convertible  debentures,  in
addition  to $400,000 in cash, as consideration for the  purchase
of  it's  sales  agent  ProBio  pursuant to  a  written  purchase
agreement.   Based on the current market price of the  shares  in
December, 2001,at the completion of the purchase, the transaction
was recorded at $.05 per share.  In consideration for the payment
of  stock,  convertible debentures and cash as  described  above,
Igene  received all of the issued and outstanding stock of ProBio
for  assets  of ProBio valued on the books of Igene at  $577,462.
These assets included all tangible an intangible fixed assets  as
well  as accounts payable, accounts receivable, and cash.   Igene
relied on Section 4(2) of the Securities Act of 1933, as amended,
to  issue the shares to the former stockholders of ProBio without
registration under that act.  Igene relied on the representations
and  warranties  of  the  selling stockholders  in  claiming  the
aforementioned exemption.

     During   the  course  of  2000  and  2001,  Fermic,  Igene's
manufacturing agent, earned 5,043,019 shares of common  stock  as
part of the manufacturing agreement.  They are able to earn up to
20,000,000  shares  throughout the course of the  contract.   The
5,043,019  shares  were earned at an average price  of  $.06  per
share  over the period and issued at the end of 2001.  Any future
shares  earned  by  Fermic will be issued on a  quarterly  basis.
Igene  relied on Section 4(2) of the Securities Act of  1933,  as
amended, to issue the shares to the former stockholders of ProBio
without  registration  under  that  act.   Igene  relied  on  the
representations   and   warranties  of   Fermic   made   in   the
manufacturing agreement in claiming the aforementioned exemption.

<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, general economic conditions in the
United  States and in the foreign markets in which Igene  markets
its   products,   including  exchange  rate   fluctuations,   and
government action, weather conditions, and other factors.

Results of Operations

Sales and other revenue
     Sales of AstaXin(R) for 2001 and 2000, were  $4,181,037  and
$702,533,  respectively an increase of $3,478,504 or 495%.  Sales
for subsequent quarters are expected to continue to increase into
2002,  but  will  be  limited by presently  available  production
capacity,  as  was the case during the fourth quarter.   However,
there  can be no assurance that these, or any increases in  sales
will  occur,  or that they will be material.  In June  2001,  the
Company  signed  an  agreement with a leading  feed  producer  of
aquaculture  in  Chile to sell  $2 million of AstaXin(R) over the
next  twelve  months.  As of  December 31,2001, $283,000 of sales
have been recorded related to this contract.

    To  better  illustrate  recent trends  in  sales  growth  for
AstaXin(R), the following table shows Sales for each of  the past
six quarters:

<TABLE>
<CAPTION>
       Period                                Sales
       ________________________________      ____________
      <S>                                    <C>
       Quarter ended December 31, 2001       $ 1,166,426
       Quarter ended September 30, 2001        1,473,068
       Quarter ended June 30, 2001             1,096,525
       Quarter ended March 31, 2001              445,018
       Quarter ended December 31, 2000           313,791
       Quarter ended September 30, 2000          129,575

</TABLE>

Cost of sales and gross profit (loss)
     Gross Profit on sales of AstaXin(R) was $663,609  for  2001.
This  is  an increase of $754,456 over the loss of $(90,847)  for
2000.   Gross  profit  (loss) was 15.9% of  sales  for  2001  and
(12.9%)  for 2000.  The Company expects that the level  of  gross
profit  as  a  percentage  of sales will increase  as  production
efficiency  increases,  but can provide  no  assurances  in  that
regard.  The Company plans to continue to increase production  of
AstaXin(R),  as  needed, to  meet  expected  increased  sales  of
AstaXin(R).   Demand is increasing both due to seasonal increases
in  customer  usage and increases in our market share.  If demand
for AstaXin(R) continues to increase, as the Company expects that
it will, sales and gross profits may be limited by the quantities
of AstaXin(R) the  Company  is able to produce with its presently
available  capacity  with  its  contract manufacturer, as was the
case during the fourth quarter.   To  avoid  this limitation, the
Company  is presently investigating  other  additional sources of
available production capacity. However, there can be no assurance
that the  Company will  be  able to find and subsequently be able
to utilize  other  additional  sources  of production capacity as
quickly as they are needed, and sales and gross profit growth may
be limited unless augmented by increases in production efficiency
resulting  from  process  research  and  development.   Presently
available   capacity   with   the   Company's   current  contract
manufacturer is expected  to allow  for  an  approximate increase
of 80% over  capacity  being used as of December 31, 2001.

     The preceding resulted in cost of sales for the  year  ended
December   31,   2001  and  2000  of  $3,517,428  and   $793,380,
respectively, an increase of $2,724,048 or 343%.
<PAGE>
Marketing and selling expenses
    Marketing expenses for AstaXin(R) are expected to continue to
increase,  since to achieve continuing and increasing sales,  and
to enter other markets for AstaXin(R), the Company will  need  to
make  additional  marketing efforts both on its  own  behalf  and
through its newly-acquired worldwide marketing agent, ProBio.  In
addition,  the  marketing and selling expense for  2001  includes
$164,882  currency exchange loss resulting from sales  in  Chile.
These  additional  expenses are expected to be  funded  by  gross
profits  from  product sales, however, there can be no  assurance
that  these sales will occur, that they will be material or  that
gross  profits will result.  Marketing and selling  expenses  for
2001  were $1,088,173, an increase of $449,158, or 70%  over  the
marketing and selling expenses of $639,015 for 2000.

Research, development and pilot plant expenses
    Research,  development and pilot plant expenses are  expected
to  continue to increase at a moderate rate in the near  term  in
support of increasing the efficiency of the manufacturing process
through  experimentation in the Company's pilot plant, developing
higher  yielding strains of yeast and other improvements  in  the
Company's  AstaXin(R)  technology.    For  2001  and  2000, these
expenses were $536,638 and $355,659, respectively, an increase of
$180,979 or  51%.   These  expenses  are expected  to  be  funded
through   additional  funding  from  stockholders, if any, and by
profitable operations, if profitable operations occur.

General and administrative expenses
    General  and administrative expenses for 2001 and  2000  were
$611,620 and $424,120, respectively, an increase of $187,500,  or
44%.    This  increase  ,  and  expectation  of  moderate  future
increases  in the near term, resulted from increases in  cost  of
insurance  coverage,  increased  legal  fees  and  administrative
expenses due to the expansion of the Company.  These expenses are
expected to be funded by additional funding from stockholders, if
any,  and  by  profitable  operations, if  profitable  operations
occur.

Litigation expenses
    Management  expects  to  ultimately recover,  through  damage
awards,  some portion of litigation expenses previously incurred,
in  connection with the suit filed against the Company by ADM and
the   Company's  counterclaim,  and  expects  to   preserve   its
commercial product  rights associated with  AstaXin(R).  However,
there can be no assurance that the Company will receive damage or
expense  awards or that its rights will be preserved.  Litigation
expenses   for   2001   and  2000  were  $65,258   and   $13,248,
respectively.  Expenses associated with this on-going  litigation
continued  despite the fact a stay on all discovery has  remained
in  effect  while  a  court appointed expert analyzes  the  yeast
product of both parties to the suit.  Costs of litigation may  be
incurred in the future at levels based on management's continuing
assessments  of  the  potential costs  and  benefits  of  various
litigation  strategies  and  alternatives.   These  expenses  are
expected  to  be  funded  by additional  funding,  if  any,  from
stockholders  and  from expected cash flow  from  operations.   A
range of reasonably possible losses from the litigation cannot be
estimated  at this time, and accordingly, no liability  has  been
reflected in the financial statements.

Interest expense (net of interest income)
    Interest  expense (net of interest income) for 2001 and  2000
was  $813,423 and $709,828 respectively, an increase of  $103,595
or  15%.   This  interest expense (net of  interest  income)  was
almost  entirely composed of interest on the Company's long  term
financing from its directors and other stockholders and  interest
on the Company's subordinated and convertible debentures, and has
increased   due  to  increased  financing  from  directors.    In
addition,  interest  expense will increase in  2002  due  to  the
issuance of $1,000,000 of convertible debentures related  to  the
purchase of ProBio.

Expense of contract termination
     Igene  acquired all of the issued and outstanding shares  of
capital   stock  of  ProBio  Nutraceuticals,  AS,   a   Norwegian
corporation ("ProBio"), as of December 21, 2001.  As a result  of
the  stock  purchase, ProBio became our wholly-owned  subsidiary,
and we currently intend to continue its historical business as  a
specialty  marketing and sales company within the  nutraceuticals
and  feed  ingredients markets.  As previously  reported  in  our
annual  report on Form 10-KSB for the fiscal year ended  December
31,  2000, we entered into an exclusive marketing agreement  with
ProBio  as of January 1, 2001, and ProBio has been acting as  our
exclusive marketing agent since that time.  While ProBio  expects
to  continue to serve as our sales agent, we have terminated  the
exclusive marketing agreement.
<PAGE>
      In  connection with the acquisition, we acquired all 10,000
issued  and outstanding shares of capital stock of  from thirteen
individual and corporate sellers in exchange for $1.8 million  in
aggregate  consideration, consisting of $1 million in  debentures
convertible  into our common stock at $.10 per share  (reflecting
the  price at which our common stock was trading on the over-the-
counter  bulletin  board when we agreed as to  price),  8,000,000
shares  of  our  common stock, valued for  the  purposes  of  the
acquisition  at $.05 per share, and $400,000 in cash.   The  cash
used to acquire ProBio constituted proceeds of private placements
of  our  common  stock  received during 2001  and  revenues  from
operations.   Following  the  acquisition,  Stein  Ulve  and  Per
Benjaminsen, the managing director and director of marketing  and
sales, respectively, of ProBio became our chief executive officer
and  chief  marketing officer, respectively, pursuant to  written
employment agreements.

      Igene's  acquisition of ProBio will be accounted for  using
the purchase method of accounting, as prescribed by SFAS No. 141,
"Business Combinations." Accordingly, the purchase price will  be
allocated to the estimated fair value of identifiable net  assets
acquired.   The  excess  purchase  price  remaining  after   this
allocation  is  accounted  for  as  an  expense  to  account  for
termination of the prior sales agency agreement between Igene and
ProBio.

      Igene has accounted for the purchase under the requirements
of  SFAS No. 141, "Business Combinations." It was determined that
the  excess purchase price paid over the identifiable  assets  of
ProBio  would not meet the criteria under SFAS No. 142  "Goodwill
and  Other Intangible Assets" to be classified as goodwill. As  a
result,  the  excess  purchase price paid over  the  identifiable
assets  was  classified as the cost to terminate a-then  existing
exclusive sales agreement contract between Igene and ProBio.   As
a  result of the purchase and the elimination of the sales agency
agreement,  the Company recorded a one time contract  termination
charge  of $1,222,538.  The Company feels the purchase is in  its
best  interest  for marketing and future company  and  management
growth

Net loss and net loss per common share
    As  a  result  of  the  foregoing, the Company  reported  net
losses  of $3,672,959 and $2,255,315, respectively, for 2001  and
2000, an increased loss of $1,417,644 or 63%.  This represents  a
loss  of $(.06) per basic and diluted common share in 2000.   The
weighted average number of shares of common stock outstanding  of
62,657,780 and 56,043,470,  respectively, for 2001 and 2000  have
increased  by 6,615,310 shares.  This resulted from the  issuance
of  80,000  shares in lieu of interest payment on a  subordinated
debenture,  the  issuance  of  305,666  shares  of  common  stock
pursuant  to the exercise of employee stock options, the issuance
of  170,910  shares of common stock pursuant to the  exercise  of
warrants,  the issuance of 8,000,000 shares of stock  related  to
the  purchase of ProBio, and the issuance of 5,043,019 shares  to
its  manufacturer  as regards the manufacturing  agreement.   The
weighting  of  the last two issuances will have  only  a  minimal
effect  of  the  outstanding as they were not  issued  until  the
latter portion of December.

Financial Position
During  2001 and 2000, the following materially affected  Igene's
financial position:

  -  Igene maintained inventory from manufacture of AstaXin(R) of
     $812,145 and $762,432, respectively, as of December 31, 2001
     and  2000.   Inventory  of  AstaXin(R) increased  by $49,713
     during 2001.

  -  Igene  issued  80,000  shares  in  each  of 2001 and 2000 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 2001 and
     2000.

  -  The   carrying   value  of  redeemable preferred  stock  was
     increased   and  paid-in   capital   available   to   common
     shareholders   was  decreased  by   $16,900   and   $16,929,
     respectively, in 2001 and 2000, reflecting cumulative unpaid
     dividends on redeemable preferred stock.

  -  Holders of redeemable preferred stock and limited redemption
     preferred   stock  converted 62 shares of preferred stock in
     2000  into 124  shares of common stock, providing additional
     capital and  reducing  the  liquidation  value of redeemable
     preferred stock by $972.

    <PAGE>
  -  Igene  received   $1,000,000  in  proceeds  during  2000  in
     issuances  of  10,000,000 shares of new common stock through
     direct  purchases   by   directors   and   other  accredited
     investors.

  -  Due   to  increased  activity  in  preparation for increased
     production,   prepaid  expenses   and  other  current assets
     increased by $493,022 during 2001.

  -  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.

  -  Accounts  payable,  accrued  expenses  and accrued  interest
     increased  in  2001  by  $1,371,653.  Of this, approximately
     $590,000 related to accrued and unpaid interest.

  -  During  the year ended December 31,2001, employees exercised
     stock  options  using 8% notes payable plus accrued interest
     in  a  cashless  exercise.   New shares of common stock were
     issued  pursuant to these exercises of options and $2,250 of
     8% notes were cancelled.

  -  During  2001,  Igene  purchased  equipment in the amount  of
     $211,380 to be used by the manufacturing agent related to an
     investment  agreement of up to $500,000 to be spent  by  the
     manufacturing agent for improvements.   These funds will  be
     credited  to  Igene production costs over the remaining term
     of the manufacturing agreement.

  -  During  the  year ended December 31, 2001,  170,910 warrants
     were  exercised  using  $17,091  of  8%  notes  payable in a
     cashless exercise.   170,910 new shares of common stock were
     issued pursuant to these exercises of options and $17,091 of
     8% notes were cancelled.

  -  During   the  year  ended  December  31, 2000,   holders  of
     3,994,500  warrants issued in the March 1998 Rights Offering
     exercised  those  warrants using  $5,200 of 8% notes payable
     and  utilizing   924,377   warrants  in  cashless exercises.
     3,070,123 new shares of common stock were issued pursuant to
     these  exercises  of  warrants  and  $5,200 of 8% notes were
     cancelled.

     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, 2001, total dividends in arrears  on
Igene's preferred stock total $223,914 ($8.48 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,
2001, Igene had working capital of $1,854,428, and cash and  cash
equivalents of $394,487.

    Cash  used by operating activities in 2001 and 2000  amounted
to  $2,354,617 and $1,813,746, respectively, an increase in  cash
used of $540,871.

    Cash  used  by  investing activities increased  by  $314,468,
from $8,979 in 2000 to $323,447 in 2001.

    Cash   provided   by   financing  activities   increased   by
$1,178,979  from $1,750,000 in 2000 to $2,928,979 in  2001.  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.  Cash  provided
by  financing  activities  during 2001 included  $1,900,000  from
issuances  of debentures to directors, $1,000,000 from  issuances
of  debentures as part of the ProBio purchase, and the  remainder
was from the exercise of options, warrants, and long term debt.
<PAGE>

    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 will also be required
to  finance  increased customer receivables and inventory  levels
caused by expansion of sales and manufacturing.  During the first
quarter  2002,  certain directors of Igene provided  $750,000  in
additional  funding  to  Igene  through  demand  notes   payable.
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  does  not  believe that inflation  had  a  significant
impact on its operations during 2001 and 2000.


ITEM 7. CONSOLIDATED FINANCIAL STATEMENTS

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

<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        63     Chairman of the Board of
                                  Directors,
                                  member of audit committee

Thomas L. Kempner          74     Vice Chairman of the
                                  Board of Directors,
                                  member of finance committee

Stephen F. Hiu             45     Director, President, Treasurer,
                                  Chief Technical Officer,
                                  and Director of Research and
                                  Development

Patrick F. Monahan         51     Director, Vice-President,
                                  Secretary, and
                                  Director of Manufacturing

Joseph C. Abeles           87     Director,
                                  member of audit committee

John A. Cenerazzo          78     Director,
                                  member of audit committee

Sidney R. Knafel           71     Director,
                                  member of finance committee

Stein G. Ulve              36     Chief Executive Officer

Edward J. Weisberger       37     Chief Financial Officer

Per A. Benjaminsen         33     Chief Marketing Officer

</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,
Fuel  Cell  Energy, Inc., Insight Communications Co.,  Inc.,  and
Intermagnetics  General  Corp.  He  is  a  Director  Emeritus  of
Northwest Airlines, Inc.

STEPHEN F. HIU was appointed Chief Technical Officer in 2002,  as
well  as  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 Vice-President in 2002, as  well
as  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.  He is also currently a Director of General American
Investors  Company,  Inc.,  NTL Incorporated,  and  some  private
companies.

STEIN  G. ULVE was appointed Chief Executive Officer of Igene  in
December 2001.  He has a master's degree in international finance
from  the London School of Economics.  He also maintains  a  long
list   of  experiences  in  managing  companies  in  the  seafood
processing and aquaculture industry, as well as within  the  feed
and food ingredients area.

EDWARD  J.  WEISBERGER was appointed Chief Financial  Officer  of
Igene  in  December  2001.  He is a CPA with  multiple  years  of
financial experience in the public and private sectors with  both
smaller and fortune 100 companies.

PER A. BENJAMINSEN was appointed Chief Marketing Officer of Igene
in December 2001.  He received his degree in fisheries science at
the  University  of  Tromso,  Norway.  He  was  the  founder  and
entrepreneur  of a specialty refining company of essential  fatty
acids in Norway.


Section 16(a) Beneficial Ownership Reporting Requirements

     Igene  believes  that, during 2001,  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 and 2001 certain directors of Igene made various loans to
Igene.   The loans are evidenced by notes convertible into common
stock, and in 2001 received warrants in conjunction with the loan
agreement.  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.

<PAGE>
ITEM 10.    EXECUTIVE COMPENSATION

    During  2001, 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.  As of December 31, 2001, with the purchase of
ProBio and the hiring of Mr. Stein Ulve, Mr. Per Benjaminsen, and
Mr. Edward Weisberger, each of them will receive an annual salary
of  $100,000,  as well as Messrs. Ulve and Benjaminsen  receiving
expense  reimbursements of up to $30,000 annually.  During  2000,
no  Directors  were  compensated for  their  Board  or  Committee
activities.

     Other than the 1986 and 1997, and 2001 Stock Incentive 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 2001 were $7,997, which is expensed
in  the  2001 statement of operations.  Igene's contributions  to
the  plan  for  2000 were $7,275 which is expensed  in  the  2000
statement of operations.

Stock Option Plans
__________________

    The  2001  Stock Incentive Plan (the "2001 Plan"), which  was
approved  on June 12, 2001, which succeeds the 1997 Stock  Option
Plan (the "1997 Plan"), which was approved by the stockholders on
November 17, 1997, and which succeeds the 1986 Stock Option Plan,
combined to provide for the issuance of options to acquire up  to
75,000,000  shares of common stock of Igene.  The 1997  and  1986
Stock Option Plan provided for the issuance of options to acquire
up  to  20,000,000 and 2,000,000 shares, respectively, 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.


<PAGE>
Stock Option Plans (continued)
______________________________

    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 2001 Plan  after
April  30, 2011 and under the 1997 Plan after September 19,  2007
and no additional options may be granted under the 1986 Plan.

    Options  to  acquire 19,463,084 shares of common  stock  have
been  granted  under the three Stock Option Plans and  19,037,584
options are outstanding under the Plans as of December 31,  2001.
4,727,500 options were granted during 2000, and 8,045,000 options
were granted during 2001.

Compensation of Directors

    During  2000, Directors were not compensated for their  Board
or  Committee  activities.  During 2001 Michael G.  Kimelman  was
granted 5,500,000 options as compensation for Board and Committee
activities.


<PAGE>
ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The  following table sets forth information as of March 1, 2002 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
__________________________    _____________    ________    __________  _________
<S>                           <C>              <C>         <C>         <C>
Directors and officers
__________________________

Joseph C. Abeles               15,012,789<F1>  16.92       7,375       27.93
  220 E. 42nd Street
  New York, NY 10017

John A. Cenerazzo               1,912,456<F2>   2.47         ---         ---
  P.O. Box 4067
  Reading, PA 19606

Stephen F. Hiu                  5,065,300<F3>   6.27         ---         ---
  9110 Red Branch Road
  Columbia, MD 21045

Thomas L. Kempner             103,804,365<F4>  64.16         ---         ---
  61 Broadway
  New York, NY 10006

Michael G. Kimelman            15,321,950<F5>  17.04         ---         ---
  100 Park Avenue
  New York, NY 10017

Sidney R. Knafel              102,587,578<F6>  64.02         ---         ---
  810 Seventh Avenue
  New York, NY 10019

Patrick F. Monahan              3,064,400<F7>   3.89         ---         ---
  9110 Red Branch Road
  Columbia, MD 21045

Stein G. Ulve                   4,000,000<F11>  5.27         ---         ---
  9110 Red Branch Road
  Columbia, MD 21045

Per A. Benjaminsen              4,000,000<F12>  5.27         ---         ---
  9110 Red Branch Road
  Columbia, MD 21045

Edward J. Weisberger            2,500,000<F13>  3.19         ---         ---
  9110 Red Branch Road
  Columbia, MD 21045

All Directors and Officers    257,268,638<F8>  90.18       7,375       27.93
  as a Group (10 persons)

Others
Thomas R. Grossman              4,192,149<F9>   5.42         ---         ---
  461 Grant Road
  North Salem, NY 10560

<PAGE>

Fraydun Manocherian             7,905,135<F10>  9.87         ---         ---
  3 New York Plaza
  New York, NY 10004

Fermic                          5,043,019<F14>  6.65         ---         ---

*  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.

<FN>
<F1>  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.

<F2>  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.

<F3>  Includes  the  following: 65,300 shares; and 5,000,000  options currently
  exercisable held by Dr. Hiu.

<F4>  Includes 386,972 shares and 536,920 warrants held by Mr.  Kempner.    Also
  includes 8,661,245 shares, 8,222,978 shares subject to the conversion of notes
  issued  by  Igene;  and  32,832,728  warrants  held  by  a  trust  under which
  Mr. Kempner is one  of  two  trustees and the sole beneficiary.  Also includes
  8,621,247  shares;  8,222,978 shares subject to the conversion of notes issued
  by Igene; and  32,811,126 warrants held a trust under which Mr. Kempner is one
  of two trustees and one of his brothers is the sole beneficiary. Also includes
  1,147,667  shares  subject  to  the  conversion  of $79,200 of notes issued by
  Igene; and 2,079,411 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.

<F5>  Includes  1,264,360  shares;  7,000,000  options  currently   exercisable,
  804,568 shares subject to the conversion of $63,070 of notes issued by  Igene;
  and 6,253,022 warrants held directly or indirectly by Mr. Kimelman.

<F6>  Includes 18,190,551 shares; 16,929,532 shares subject to the conversion of
  notes issued by Igene; and 67,467,495 warrants owned or beneficially owned  by
  Mr. Knafel.

<F7>  Includes 64,200 shares; and 3,000,000, options currently exercisable  held
  by Mr. Monahan.

<F8>  Includes  47,833,817  shares  of common stock; 14,750 shares issuable upon
  the  conversion  of  7,375  shares  of  preferred  stock;  17,532,750  options
  currently exercisable; 39,602,129 shares issuable upon the conversion of notes
  issued by Igene; and 152,285,192 warrants.

<F9>  Includes 2,753,399 shares of common stock and  1,438,750 warrants.

<F10> 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.

<F11> Includes 4,000,000 shares of common stock.

<F12> Includes 4,000,000 shares of common stock.

<PAGE>

<F13> Includes 2,500,000 options currently exercisable.

<F14> Includes 5,043,019 shares of common stock.

</FN>

</TABLE>
<PAGE>
ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     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  are  convertible  into
10,142,110  shares  of Igene's common stock at  $.10  per  share.
These  directors  also received 10,142,110 warrants  to  purchase
common  stock at $.10 per share, which were 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 became 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 nine months.
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
are convertible into 18,750,000 shares of Igene's common stock at
$.08  per  share.   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.

     In connection with the acquisition of ProBio, Igene acquired
all  10,000  issued and outstanding shares of  capital  stock  of
ProBio from thirteen individual and corporate sellers in exchange
for  $1.8  million in aggregate consideration, consisting  of  $1
million  in debentures convertible into our common stock at  $.10
per  share  (reflecting the price at which our common  stock  was
trading on the over-the-counter bulletin board when we agreed  as
to  price in June of 2001), 8,000,000 shares of our common stock,
valued  for the purposes of the acquisition in December  2001  at
$.05  per  share, and $400,000 in cash. The cash used to  acquire
ProBio  constituted proceeds of private placements of our  common
stock   received  during  2001  and  revenues  from   operations.
Following  the  acquisition, Stein Ulve and Per Benjaminsen,  the
managing   director   and  director  of  marketing   and   sales,
respectively,  of ProBio became our chief executive  officer  and
chief   marketing  officer,  respectively,  pursuant  to  written
employment  agreements.   Prior to the sale of  ProBio  to  Igene
both Stein Ulve and Per Benjaminsen were both owners in excess of
10% of ProBio.
<PAGE>
ITEM 13. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON
         FORM 8-K

(a)1.    The following financial statements relating to 2001  and
    2000 are filed as a part of this Report:

    Independent Auditors' Report.
    Consolidated Balance Sheet as of December 31, 2001.
    Consolidated  Statements of Operations for  the  years  ended
         December 31, 2001 and December 31, 2000.
    Consolidated  Statements  of Stockholders'  Deficit  for  the
         years ended December 31, 2001 and December 31, 2000.
    Consolidated  Statements of Cash Flows for  the  years  ended
         December 31, 2001 and December 31, 2000.
    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   were    omitted
         pursuant  to  a  request  for  confidential  treatment.)
         is incorporated herein by reference.
    <PAGE>
    10.8 First amendment to lease made September 13, 2000 between
         Igene Biotechnology, Inc. and Red Branch Center, LLC  is
         incorporated herein by reference.

    21.  Subsidiaries

         Igene Chile Comercial, Ltda.
         Igene Norway AS

    23.a.  Consent of Berenson & Company LLP-

    23.b.  Consent of Stegman & Company


(b)   On January 4, 2002, the company filed an 8-K disclosing the
  purchase  of its sales agent ProBio Nutraceuticals  related  to
  fourth quarter activity for 2001.

<PAGE>



                  INDEPENDENT AUDITORS' REPORT






To the Stockholders and Board of Directors
IGENE Biotechnology, Inc.

We  have  audited the accompanying consolidated balance sheet  of
IGENE  Biotechnology, Inc. and subsidiaries as  of  December  31,
2001,  and  the  related consolidated statements  of  operations,
stockholders'  deficit and cash flows for the  year  then  ended.
These consolidated financial statements are the responsibility of
the  Company's management.  Our responsibility is to  express  an
opinion on these consolidated financial statements based  on  our
audit.   The  financial statements of the Company as of  December
31,  2000,  and  for the year then ended were  audited  by  other
auditors whose report dated February 23, 2001 (March 27, 2001  as
to   Note  20),  included  an  explanatory  paragraph  describing
conditions  that  raised substantial doubt  about  the  Company's
ability  to  continue as a going concern.  We did not  audit  the
balance  sheet of ProBio, Inc., a wholly owned subsidiary,  which
reflects total assets of $928,732 as of December 31, 2001.   This
statement  was  audited by other auditors whose report  has  been
furnished  to us, and our opinion, insofar as it relates  to  the
amounts  included for ProBio, Inc. is based solely on the  report
of the other auditors.

We  conducted  our  audit in accordance with  auditing  standards
generally  accepted  in  the United  States  of  America.   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  audit  and the report of other auditors provide a reasonable
basis for our opinion.

In  our  opinion,  based on our audit and  the  report  of  other
auditors, the consolidated financial statements referred to above
present  fairly, in all material respects the financial  position
of  IGENE Biotechnology, Inc. and subsidiaries as of December 31,
2001,  and  the results of their operations and their cash  flows
for  the year then ended in conformity with accounting principles
generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming
that  the Company will continue as a going concern.  As discussed
in   Note  17  to  the  consolidated  financial  statements,  the
Company's  recurring losses, production limitations  and  limited
capitalization  raise  substantial doubt  about  its  ability  to
continue as a going concern.  Management's plans regarding  those
matters  also are described in Note 17.  The financial statements
do not include any adjustments that might result from the outcome
of this uncertainty.


                                        Stegman & Company
                                        _________________
                                        Stegman & Company

Baltimore, Maryland
February 20, 2002
(except for note 20, as to which the date is March 27, 2002)

<PAGE>

<TABLE>
                    IGENE Biotechnology, Inc. and Subsidiary
                           Consolidated Balance Sheet
                                December 31, 2001
<CAPTION>
ASSETS
<S>                                                               <C>
CURRENT ASSETS
  Cash and cash equivalents                                       $    394,487
  Accounts receivable, net of allowances of $24,000                    832,794
  Inventory                                                            959,856
  Prepaid expenses and other current assets                            290,553
  Deferred costs, current portion                                       74,160
                                                                  _____________

     TOTAL CURRENT ASSETS                                            2,551,850

OTHER ASSETS
  Property and equipment, net                                          232,923
  Deferred costs, net of current portion                               304,267
  Equipment deposits                                                   177,091
  Deposits on manufacturing equipment                                  211,380
  Other assets                                                          61,495
                                                                  _____________

     TOTAL ASSETS                                                 $  3,539,006
                                                                  =============

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
  Accounts payable and accrued expenses                           $  1,085,893
  Variable rate subordinated debenture                               1,500,000
  Equipment lease payable - current portion                              1,733
                                                                  _____________

     TOTAL CURRENT LIABILITIES                                       2,587,626

LONG-TERM DEBT
  Notes payable                                                      6,057,959
  Convertible Debentures                                             3,514,212
  Accrued interest                                                   1,927,256
                                                                  _____________

     TOTAL LIABILITIES                                              14,087,053
                                                                  _____________

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 $16.48 per share.  Authorized 1,312,500 shares;
  issued and outstanding 26,405 shares.
  Redemption amount $435,154                                           435,154
                                                                  _____________

STOCKHOLDERS' DEFICIT
  Common stock -- $.01 par value per share.  Authorized
    750,000,000 shares; issued and outstanding 75,848,599 shares       758,486
  Additional paid-in capital                                        22,188,836
  Deficit                                                          (33,930,523)
                                                                  _____________

     TOTAL STOCKHOLDERS' DEFICIT                                   (10,983,201)
                                                                  =============

     TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                  $  3,539,006
                                                                  =============


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

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

<CAPTION>

                                          Years ended December 31,
                                             2001          2000
                                         ____________   ____________
<S>                                      <C>            <C>
REVENUE
_______

  Sales                                  $ 4,181,037    $   702,533
  Cost of sales                            3,517,428        793,380
                                         ____________   ____________

  GROSS PROFIT (LOSS)                        663,609        (90,847)

OPERATING EXPENSES
__________________

  Marketing and selling                    1,088,173        639,015
  Research, development and pilot plant      536,638        355,659
  General and administrative                 611,620        424,120
  Litigation expenses                         65,258         13,249
                                         ____________   ____________

  TOTAL OPERATING EXPENSES                 2,301,689      1,432,043
                                         ____________   ____________

OPERATING LOSS                            (1,638,080)    (1,522,890)

OTHER INCOME (EXPENSES)
_______________________

  Miscellaneous                                6,000          8,150
  Gain (Loss) on disposal of equipment         3,720        (30,747)
  Contract termination expense            (1,231,176)           ---
  Interest expense
    (net of interest income of $10,349
    and $3,810 respectively,
    in 2001 and 2000)                       (813,423)      (709,828)
                                         ____________   ____________

    TOTAL OTHER INCOME (EXPENSE)          (2,034,879)      (732,425)
                                         ____________   ____________

  NET LOSS BEFORE INCOME TAX BENEFIT     $(3,672,959)   $(2,255,315)
                                         ============   ============

  INCOME TAX BENEFIT                             ---            ---
                                         ____________   ____________

  NET LOSS                               $(3,672,959)   $(2,255,315)
                                         ============   ============

  NET LOSS PER COMMON SHARE              $     (0.06)   $     (0.04)
                                         ============   ============


The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>
<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 JANUARY 1, 2000                     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)

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                       ---        ---       (16,900)           ---        (16,900)

Exercise of employee stock options                305,666      3,057        12,227            ---         15,284

Exercise of warrants                              170,910      1,709        15,382            ---         17,091

Shares issued for purchase of ProBio            8,000,000     80,000       320,000            ---        400,000

Shares issued for manufacturing
   agreement                                    5,043,019     50,430       267,283            ---        317,713

Net loss for 2001                                     ---        ---           ---     (3,672,959)    (3,672,959)
                                               __________  _________  _____________  _____________  _____________

BALANCE AT DECEMBER 31, 2001                   75,848,600  $ 758,486  $ 22,188,836   $(33,930,523)  $(10,983,201)
                                               ==========  =========  =============  =============  =============

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

<PAGE>

<TABLE>
                    IGENE Biotechnology, Inc. and Subsidiary
                      Consolidated Statements of Cash Flows
<CAPTION>

                                                                       Years ended December 31,
                                                                        2001             2000
                                                                   _______________  _______________
<S>                                                                <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
____________________________________
  Net loss                                                         $   (3,672,959)  $   (2,255,315)
  Adjustments to reconcile net loss to net
  Cash used by operating activities:
         Depreciation                                                      16,979           14,558
         Amortization of deferred costs                                   116,514           87,666
         Loss on disposal of assets                                         3,720           30,747
         Manufacturing cost paid in shares of common stock                317,713              ---
         ProBio Contract termination costs paid in common stock           222,538              ---
         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                                          (21,117)        (298,531)
             Inventory                                                    (49,714)         (54,837)
             Prepaid expenses and other assets                           (273,574)         (39,897)
         Increase (decrease) in:
             Accounts payable and other accrued expenses                1,020,383          521,863
                                                                   _______________  _______________

               NET CASH USED IN OPERATING ACTIVITIES                   (2,139,517)      (1,813,746)
                                                                   _______________  _______________

CASH FLOWS FROM INVESTING ACTIVITIES
____________________________________
  Capital ProBio expenditures                                             (69,470)          (8,979)
  Deposits on manufacturing equipment                                    (211,380)             ---
  Purchase of ProBio - less cash received                                (255,964)             ---
                                                                   _______________  _______________

               NET CASH USED IN INVESTING ACTIVITIES                     (536,814)          (8,979)

CASH FLOWS FROM FINANCING ACTIVITIES
____________________________________
  Proceeds from issuance of convertible debentures                      1,900,000          600,000
  Proceeds from ProBio issuance of convertible debentures               1,000,000              ---
  Net borrowing of Equipment Lease Payable                                  1,733              ---
  Proceeds from exercise of employee stock options                         13,034              ---
  Proceeds from exercise of warrants                                       14,212              ---
  Proceeds from issuance of common stock                                      ---        1,150,000
                                                                   _______________  _______________

              NET CASH PROVIDED BY FINANCING ACTIVITIES                 2,927,246        1,750,000
                                                                   _______________  _______________

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                      250,915          (72,725)

CASH AND CASH EQUIVALENTS - BEGINNING OF THE YEAR                         143,572          216,297

CASH AND CASH EQUIVALENTS - END OF THE YEAR                        $      394,487   $      143,572

SUPPLEMENTARY DISCLOSURE AND CASH FLOW INFORMATION
__________________________________________________
  Cash paid during the year for interest                           $        1,511   $        1,283
  Cash paid during the year for income taxes                                  ---              ---

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


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

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



(1) Summary of Significant Accounting Policies
    __________________________________________

    Nature of Operations
    ____________________

    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.   As  a
    result  of the stock purchase, ProBio became our wholly-owned
    subsidiary,   and  we  currently  intend  to   continue   its
    historical  business  as  a  specialty  marketing  and  sales
    company   within  the  nutraceuticals  and  feed  ingredients
    markets.   Igene has  operational subsidiaries in Norway  and
    Chile.

    Principles of Consolidation
    ___________________________

    During  2000  Igene formed a wholly-owned foreign  subsidiary
    in  Chile,  Igene Chile Comercial Ltda. ("Igene Chile").   In
    December  2001  Igene  purchased  it's  sales  agent   ProBio
    Nutraceuticals,  AS,  A  Norwegian  corporation   ("ProBio").
    These  consolidated financial statements include the accounts
    of  Igene  and of its wholly-owned subsidiaries, Igene  Chile
    and   ProBio,   for  the  periods  they  were   owned.    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, work in process, and finished  goods
    represents  product manufactured and held  for  sale,  is  as
    follows:

      Raw materials                   $      ---
      Work-in-process - AstaXin(R)        35,764
      Finished goods - AstaXin(R)        776,381
      Nutraceuticals                     147,711
                                      ___________

      Total inventory                 $  959,856
                                      ===========

    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)

(1) Summary of Significant Accounting Policies (continued)
    ______________________________________________________

    Estimates
    _________

    The  preparation  of financial statements in conformity  with
    accounting  principles  generally acceptable  in  the  United
    States  of America 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  losses  were approximately  US  $198,000  in
    amount during the year ended December 31, 2001, due to  large
    fluctuations  in the Chilean Peso during the second  half  of
    the year.

    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.   Management  believes  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 8) 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)

(1) Summary of Significant Accounting Policies (continued)
    ______________________________________________________

    Accounting for stock based compensation
    _______________________________________

    The  Company  has adopted the disclosure-only  provisions  of
    Statement   of  Financial  Accounting  Standards   No.   123,
    "Accounting  for  Stock-Based Compensation" (SFAS  No.  123),
    but  applies Accounting Principals Board Opinion No.  25  and
    related  interpretations in accounting for its  stock  option
    plans.   No  compensation expense related  to  the  Company's
    stock  option  plans  were recorded during  two  years  ended
    December 31, 2001.

<TABLE>
<CAPTION>

                                  2001           2000
                              ____________   ____________
<S>                           <C>            <C>
Net loss:
  As reported                 $(3,672,959)   $(2,255,315)
  Pro forma                   $(4,347,918)    (2,403,540)

Net loss per common share:
  As reported                 $      (.06)   $      (.04)
  Pro forma                          (.07)          (.04)

</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.

    New accounting pronouncements
    _____________________________

    In  July  2001,  the  Financial  Accounting  Standards  Board
    issued  SFAS No. 141, "Business Combinations" and   SFAS  No.
    142,  "Goodwill and Other Intangible Assets".  SFAS  No.  141
    requires  that the purchase method of accounting be used  for
    all  business combinations initiated after June 30, 2001,  as
    well  as  all purchase method business combinations completed
    after  June  30, 2001.  SFAS No. 141 also specifies  criteria
    that   intangible  assets  acquired  in  a  purchase   method
    business  combination must meet to be recognized and reported
    apart  from  goodwill.  SFAS No. 142 requires  that  goodwill
    and  intangible assets with indefinite useful lives no longer
    be  amortized, but instead be tested for impairment at  least
    annually in accordance with provisions of SFAS No. 142.  SFAS
    No.  142  also requires that intangible assets with  definite
    useful  lives  be  amortized over their respective  estimated
    useful  lives to their estimated residual values and reviewed
    for  impairment in accordance with SFAS No. 121,  "Accounting
    for  the  Impairment of Long-Lived Assets and for  Long-Lived
    Assets  to  be Disposed Of".  The acquisition of  ProBio  was
    accounted for under the provisions of SFAS Nos. 141 and 142.

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

(1) Summary of Significant Accounting Policies (continued)
    ______________________________________________________

    New accounting pronouncements (continued)
    _________________________________________

    In  August  2001,  the Financial Accounting  Standards  Board
    issued  SFAS  No.  144,  "Accounting for  the  Impairment  or
    Disposal  of Long-Lived Assets", which supersedes  both  SFAS
    No.  121, "Accounting for the Impairment of Long-Lived Assets
    to   Be   Disposed  Of"  and  the  accounting  and  reporting
    provisions  of APB Opinion No. 30, "Reporting the Results  of
    Operations-Reporting the Effects of Disposal of a Segment  of
    a  Business,  and  Extraordinary,  Unusual  and  Infrequently
    Occurring  Events and Transactions", for the  disposal  of  a
    segment  of  a  business  (as  previously  defined  in   that
    Opinion).   SFAS  No. 144 retains the fundamental  provisions
    in  SFAS  No.  121  for recognizing and measuring  impairment
    losses  in  long-lived  assets held for  use  and  long-lived
    assets  to  be  disposed  of by sale,  while  also  resolving
    significant  implementation issues associated with  SFAS  No.
    121.   The provisions of SFAS No. 144 are effective for years
    beginning  after December 15, 2001, and its adoption  is  not
    expected  to  affect  the financial position  or  results  of
    operations of the Company.

(2) Acquisition
    ___________

    On  December  21, 2001, Igene acquired 100  percent  of   the
    outstanding  common  stock of ProBio  Nutraceuticals,  AS,  a
    Norwegian corporation.  Previously ProBio had been acting  as
    Igene's  exclusive  marketing agent.  The  consideration  for
    ProBio  consisted  of  $400,000 in cash,  $1  million  in  6%
    convertible  debentures (convertible  into  common  stock  at
    $0.10) and 8,000,000 shares of common stock of Igene.   There
    was  no  goodwill  or other intangible asset  recorded  as  a
    result  of  this  acquisition.  The purchase  price  paid  in
    excess  of  the net assets of ProBio was charged  to  current
    operations  as  part  of  the expenses  associated  with  the
    termination  of  the exclusive marketing  contract  that  had
    existed between Igene and ProBio.

    The  following  summarizes the fair value of assets  acquired
    and  liabilities assumed, reconciled to the acquisition price
    at the date of acquisition:

    Current assets                                $   806,193
    Equipment and fixtures                             78,269
    Other assets                                       44,269
                                                  ____________

      Total assets acquired                       $   928,731
                                                  ____________

    Accounts payable - trade                          285,978
    Other current liabilities                          65,291
                                                  ____________

      Total current liabilities                       351,269
                                                  ____________

    Net assets acquired                               577,462

    Contract termination expense                    1,222,538
                                                  ____________

      Total acquisition price                     $ 1,800,000
                                                  ============

(3) Non-cash investing and financing activities:
    ____________________________________________

    During  2001 and 2000, 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)
<PAGE>
            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

(3) Non-cash investing and financing activities(continued):
    _______________________________________________________

    During  2001,  the  Company capitalized leased  equipment  by
    recording  a  lease  obligation payable of  $20,500  under  a
    capital lease.

    During  2001,  the  Company satisfied its  obligations  under
    demand  notes  payable  of  $1,000,000  and  related  accrued
    interest  of $14,211 by issuing new 8% convertible debentures
    in the aggregate principal amount of $1,014,211.

    During  2001, employees exercised 55,666 stock options  using
    $2,250  of 8% notes payable plus accrued interest of  $533.30
    in  a  cashless exercise.  55,666 new shares of common  stock
    were  issued  pursuant  to  these exercises  of  options  and
    $2,250 of 8% notes were cancelled.

    During  2001,  170,910 warrants were exercised using  $17,091
    of  8%  notes  payable in a cashless exercise.   170,910  new
    shares  of  common  stock  were  issued  pursuant  to   these
    exercises of options and $17,091 of 8% notes were cancelled.

    During 2001 and 2000, Igene recorded dividends in arrears  on
    8%  redeemable preferred stock at $.64 per share  aggregating
    $16,900  and  $16,929, 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)

    During  2000,  holders of 3,994,500 warrants  issued  in  the
    March  1998  Rights Offering exercised those  warrants  using
    $5,200  of  8%  notes  payable  and  also  utilizing  924,377
    warrants  in  cashless exercises.  3,070,123  new  shares  of
    common  stock  were issued and $5,200 of notes  payable  were
    cancelled in these transactions.

(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.


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

(5) Property and Equipment
    ______________________

    Property  and equipment are stated at cost and are summarized
    as follows:

    Laboratory equipment and fixtures              $  119,704
    Pilot plant equipment and fixtures                 87,544
    Idle equipment                                     56,150
    Office furniture and fixtures                     141,840
                                                   ___________

                                                      405,238
    Less accumulated depreciation                    (172,315)
                                                   ___________

                                                   $  232,923
                                                   ===========

    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
    $325,499,   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 $119,496 and $45,324 for the  years  ended
    December  31,  2001 and 2000, respectively, are  included  in
    cost of sales and inventory.

    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, 2001  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     (119,496)   (158,785)   (278,281)
                           _____________  __________  __________

  Deferred costs, net           325,499      52,928     378,427
  Less: current portion         (74,160)        ---     (74,160)
                           _____________  __________  __________

  Non-current portion      $    251,339   $  52,928   $ 304,267
                           =============  ==========  ==========

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

(7) Accounts Payable and Accrued Expenses
    _____________________________________

    Accounts  payable  and  accrued  expenses  consist   of   the
    following:

    Accounts payable, trade                    $   1,023,783
    Accrued  interest on variable rate
       subordinated debenture (see note 8)            45,000
    Other accrued expenses                            17,110
                                               ______________

                                               $   1,085,893
                                               ==============

(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  2001  and  2000 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, 2001 is recorded  in
    these financial statements.

(9) Convertible Debentures
    ______________________

    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. During 2001, the Company  satisfied
    its  obligations  under  demand  notes  payable  and  related
    accrued  interest  by  issuing new 8%,  10-year,  convertible
    debentures.

    In   March   2001,  Igene  issued $1,014,211 of 8%,  10-year,
    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 are convertible into 10,142,110 shares of  Igene's
    common  stock  at  $.08  per  share.   These  directors  also
    received  10,142,110  warrants to purchase  common  stock  at
    $.08 per share.  Interest is payable at maturity.

    In  March 2001, certain directors of Igene also committed  to
    provide  additional  funding in  the  form  of  8%,  10-year,
    convertible  debentures  in the  amount  of  $1,500,000.   In
    consideration  of  this  commitment,  these  directors   also
    received  18,750,000  warrants to purchase  common  stock  at
    $.08  per  share.   These  debentures  are  convertible  into
    18,750,000 shares of Igene's common stock at $.08 per  share.
    Interest is payable at maturity.

    In  December  2001,  Igene issued $1,000,000  of  6%,  3-year
    convertible,  debentures in connection with the  purchase  of
    ProBio,  now  known  as Igene Norway AS.   These  convertible
    debentures  are  convertible into the Company's  stock  at  a
    price   of  $.10  per  share,  10,000,000  shares  in  total.
    Accrued interest on this note is due every six months.

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

(9) Convertible Debentures (continued)
    __________________________________

    Convertible  debentures  are  summarized  as  follows  as  of
    December 31, 2001:
<TABLE>
<CAPTION>
                                                      Accrued
                                        Principle     Interest
                                        __________    __________
<S>                                     <C>           <C>
  8%, 10-year, convertible debenture
     issued 3/1/01                      $1,014,212    $   67,037
  8%, 10-year, convertible debenture
      issued 3/27/01                     1,500,000        53,689
  6%, 3-year, convertible debenture      1,000,000           ---
                                        __________    __________

                                        $3,514,212    $  120,726
                                        ==========    ==========
</TABLE>

(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,
    2001:

<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   $  324,750
  Long-term notes payable,
    bearing interest at 8%,
    maturing March 31, 2003            4,975,459    1,481,780
                                      __________   __________

                                      $6,057,959   $1,806,530
                                      ==========   ==========
</TABLE>
    Combined  aggregate amounts of principal maturities  for all
    long-term borrowings are as follows:
<TABLE>
<CAPTION>
                Year         Amount
                _____        __________
                <S>          <C>
                2002         $1,501,733
                2003          6,057,959
                2004                ---
                2005                ---
                2006                ---
                Thereafter    3,514,212
</TABLE>

(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.

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

(11) Redeemable Preferred Stock (continued)
     ______________________________________

    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.

    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 to the  exchange  of
    certain   redeemable  preferred  stock  for   a   debenture).
    Mandatory  redemption by Igene is required by  October  2002.
    As  of  December  31, 2001, cumulative dividends  in  arrears
    total  $223,914  ($8.48 per share) and are  included  in  the
    carrying value of redeemable preferred stock.

(12) Stockholders' Equity
     ____________________

    Options
    _______

    In  June  of  2001 the stockholders approved the  2001  Stock
    Option Plan (the "2001 Plan"), which succeeds the 1997  Stock
    Option  Plan (the "1997 Plan"), which succeeded Igene's  1986
    Stock  Option  Plan  (the  "1986  Plan"),  as  amended.   All
    outstanding, unexercised options granted under the  1997  and
    1986  Plan  remain  outstanding with  unchanged  terms.   The
    number of shares authorized for issuance under the 2001  Plan
    is  55,000,000.  This is in addition to the 20,000,000 shares
    authorized  for  issuance  under  the  1997  Plan,  and   the
    2,000,000  shares  authorized for  issuance  under  the  1986
    Plan.

    The   following   is  a  summary  of  options   granted   and
    outstanding  under  the  plans as of December  31,  2001  and
    2000:

    <TABLE>
    <CAPTION>

                                     2001                       2000
                            ______________________     ______________________
                                          Weighted                   Weighted
                                          Average                    Average
                                          Exercise                   Exercise
                            Number        Price        Number        Price
                            ___________   ________     ____________  ________
    <S>                     <C>           <C>          <C>           <C>
    Options outstanding
      and exercisable,
      beginning of year     11,298,250    $  .059       8,070,750    $  .072

    Options granted          8,045,000    $  .071       4,727,500    $  .050

    Options exercised         (305,666)   $  .050      (1,500,000)   $  .010

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

    Options expired                ---        ---             ---        ---
                            ___________   ________     ___________   ________
    Options outstanding
      and exercisable,
      end of year           19,037,584    $  .064      11,298,250    $  .059
                            ===========   ========     ===========   ========

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

(12) Stockholders' Equity (continued)
     ________________________________

     Options (continued)
     ___________________
<TABLE>
<CAPTION>

                         Option Outstanding

                                               Weighted Average
      Exercise Price     Shares                Remaining Life (Years)
      ______________     ___________           ______________________
      <S>                <C>                   <C>
      $  .050             9,832,000            7.9
      $  .053                97,719            5.0
      $  .060               162,865            5.0
      $  .065               125,000            7.5
      $  .080             5,500,000            9.8
      $  .100             3,320,000            6.3
                         ___________

      $  .064            19,037,584
                         ===========
</TABLE>

    Warrants
    ________

    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.

    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 are convertible
    into  10,142,110 shares of Igene's common stock at  $.08  per
    share.  These directors also received 10,142,110 warrants  to
    purchase common stock at $.08 per share

    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.  In consideration  of
    this  commitment,  these directors also  received  18,750,000
    warrants  to purchase common stock at $.08 per share.   These
    debentures are convertible into 18,750,000 shares of  Igene's
    common stock at $.08 per share.

    The  following table summarizes warrants issued,  outstanding
    and exercisable:
<TABLE>
<CAPTION>

                                    As of December 31,
                            _________________________________
                               2001                  2000
                            ___________           ___________
<S>                         <C>                   <C>
Issued                      163,016,075           131,759,345
Outstanding                 163,016,075           131,759,345
Exercisable                 163,016,075           131,759,345

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

(12) Stockholders' Equity (continued)
     ________________________________

    Common Stock
    ____________

    At  December  31, 2001, 163,016,075 shares of authorized  but
    unissued   common  stock  were  reserved  for   exercise   of
    outstanding  warrants, 19,037,584 shares  of  authorized  but
    unissued common stock were reserved for exercise pursuant  to
    the 1986, 1997 and 2001 Stock Option Plans, 52,810 shares  of
    authorized  but  unissued  common  stock  were  reserved  for
    issuance  upon  conversion of Igene's  outstanding  preferred
    stock, 80,000 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,  14,956,981  shares were  reserved  for  issue  in
    accordance  with Igene's manufacturing agreement with  Fermic
    (see  note  14)  and  44,602,129  shares  of  authorized  but
    unissued stock were reserved for issuance upon conversion  of
    outstanding convertible notes.

    Preferred Stock
    _______________

    At   December  31,  2001,  cumulative  dividends  in  arrears
    totaled $223,911 ($8.48 per share) and were included  in  the
    aggregate  involuntary  liquidation value  of  the  preferred
    stock.

    At  December  31,  2001,  187,500 shares  of  authorized  but
    unissued  preferred  stock were reserved  for  issuance  upon
    maturity of the variable rate subordinated debenture.

(13) Net Loss Per Common Share
     _________________________

    Net  loss  per  common share for 2001 and 2000  is  based  on
    62,657,779   and   56,042,471   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 2001 and 2000 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,  2001
    and 2000 approximated $86,500 and $81,000, 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>
            2002              $  90,000
            2003                 93,600
            2004                    ---
            2005                    ---
            2006                    ---
                              _________

                              $ 183,600
                              =========

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

(14) Commitments (continued)
     _______________________

     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  a  limited  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  &
     2001,  5,043,019  shares  of  Igene  common  stock  has been
     issued  to     Fermic.   This  stock has been recorded as  a
     manufacturing  expense  and also as increase in common stock
     and additional paid in capital of $317,712.  This amount has
     been computed based on the fair value of the stock as of the
     period in which the shares were earned.

     Igene has agreed to a capital investment agreement with  its
     manufacturing  partner Fermic.  The agreement commits  Igene
     to  purchase up to $500,000 of equipment on Fermic's behalf,
     to  date  Igene  has purchased $211,380 worth of  equipment,
     which is reported on the balance sheet as Other assets.   It
     is presumed the balance of this will be spent over the first
     two  quarters of 2003.  The investment will be credited back
     to  Igene  against  manufacturing  fees  incurred  over  the
     remainder of the May 20, 2000 manufacturing agreement.

 (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,  2001  and 2000 balance sheets. 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 $65,258 and $13,249, respectively  in
     2001 and 2000 associated with this on-going litigation.

(16) Income Taxes
     ____________

    At  December  31,  2001,  Igene has  federal  and  state  net
    operating  loss carry-forwards of approximately   $25,136,500
    that  expire  at various dates from 2002 through  2022.   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  2001
    and 2000.

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


(16) Income Taxes (continued)
     ________________________

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

     Net  operating  loss carry-forward  benefit  $ (9,707,700)
     Valuation allowance                            (9,707,700)
                                                  _____________

     Deferred tax asset, net                      $        ---
                                                  =============

(17) Uncertainty
     ___________

    Igene  has incurred net losses in each year of its existence,
    aggregating  approximately  $34,000,000  from  inception   to
    December   31,  2001  and  its  liabilities  and   redeemable
    preferred   stock   exceeded  its  assets  by   approximately
    $10,983,000 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 to date, increasing  sales  and
    manufacturing   levels  into  2001.   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.   Though
    the achievement of these can not be assured.

    During  2000, 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.

    During  2001, Igene continued to fund its operations  through
    the  issuance of warrants and convertible debentures  through
    direct  purchases and loans by directors and other accredited
    investors.  This provided additional capital of $2,514,212.

(18) Nature of Risks and Concentrations
     __________________________________

    Igene derived revenue during 2001 and 2000 from sales of  the
    product, AstaXin(R).  Substantially all of  Igene's  2001 and
    2000   sales  were  to  fish  producers  in  the  aquaculture
    industry  in  Chile.   During  2001,  3  customers,  who  are
    located in Chile, represented over 10% of sales each,  for  a
    total  of  83%  in the aggregate, accordingly, all  of  Igene
    Chile's  receivables are located in Chile.   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, though this belief can  not
    be assured.

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

(18) Nature of Risks and Concentrations (continued)
     ______________________________________________

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

    Chile                                       $   750,000
    Mexico                                          300,000
    Norway                                          900,000
                                                ____________

    Total assets located in foreign countries   $ 1,950,000
                                                ============

(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  2001  and  2000  were
   $7,997  and  $7,275, respectively, which are expensed  in  the
   2001 and 2000 statements of operations.

(20) Subsequent Events
     _________________

    In   March   2002,   certain  directors  of  Igene   provided
    additional  funding of $750,000 in the form of  demand  notes
    payable in two years at 8%.  All funds were received.

<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 1, 2002.


                         IGENE Biotechnology, Inc.
                         ___________________________________
                         (Registrant)

                         By     Stephen F. Hiu, President
                                ____________________________
                                Stephen F. Hiu

                         Date   April 1, 2002

                         By:    Edward J. Weisberger
                                ____________________________
                                Edward J. Weisberger

                         Date   April 1, 2002




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
______________________  __________________________  _____________

Joseph C. Abeles        Director                    April 1, 2002
____________________
Joseph C. Abeles

John A. Cenerazzo       Director                    April 1, 2002
____________________
John A. Cenerazzo

Stephen F. Hiu          Director, President, Chief  April 1, 2002
____________________    Technical Officer,
Stephen F. Hiu          Treasurer

Thomas L. Kempner       Vice Chairman of Board      April 1, 2002
____________________    of Directors
Thomas L. Kempner

Michael G. Kimelman     Chairman of the Board       April 1, 2002
____________________    of Directors
Michael G. Kimelman

Sidney R. Knafel        Director                    April 1, 2002
____________________
Sidney R. Knafel

Patrick F. Monahan      Director, Vice President    April 1, 2002
____________________    Secretary and
Patrick F. Monahan      Director of Manufacturing