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, 1999

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

     For the transition period from __________ to __________

                 Commission file number 0-15888

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

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

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

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

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

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

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

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

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

YES    X            NO
      ___                ___

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

     State  issuer's  revenues for its most  recent  fiscal year.
$27,441

     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.     $9,228,393 as of March 1, 2000
(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, 2000 there were 48,098,758 shares of the  issuer's
common stock outstanding.

<PAGE>

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

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

                             PART I

ITEM 1.   DESCRIPTION OF BUSINESS

General

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

     The Company 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,  the
Company  has  relied on the expertise and skills of its  in-house
scientific staff and, for special projects, various consultants.

     The  Company  leases manufacturing capacity in Mexico  City,
Mexico,   and  also  has  pilot  plant  facilities  in  Columbia,
Maryland.  The Company is manufacturing its own products and  has
also licensed certain products to third party manufacturers.

Government Regulation

     The  manufacturing and marketing of most of the products the
Company  has developed are and will likely continue to be subject
to  regulation  by various governmental agencies  in  the  United
States,  including the Food and Drug Administration ("FDA"),  the
Department   of   Agriculture  ("USDA"),  and  the  Environmental
Protection  Agency  ("EPA"),  and comparable  agencies  in  other
countries.   Substantially all of the food products developed  by
the  Company to date have been reviewed by a panel of independent
scientific experts (the "Product Review Panel") who are qualified
by  scientific training and experience to evaluate,  among  other
things, the safety of ingredients intended to be used directly or
indirectly  in foods.  The Product Review Panel has  advised  the
Company   that  it  considers  such  products  to  be   Generally
Recognized  As Safe ("GRAS") under the regulations  of  the  FDA.
The  Company is not aware of any action by the FDA, the  USDA  or
the  EPA contesting these affirmations or of any basis for  their
doing so.  There can be no assurance, however, that the FDA,  the
USDA  or  the EPA will accept such independent expert evaluations
and  that  the Company will not be required to obtain costly  and
time-consuming  approvals  from  these  agencies  or   comparable
agencies  in  foreign countries.  The Company,  as  a  matter  of
policy,  requires  that  its products  conform  to  current  Good
Manufacturing Practices  (as defined under the Federal Food, Drug
and  Cosmetic  Act and the rules and regulations thereunder)  and
the  Company 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
affirmations, cannot be predicted.

<PAGE>

     Additional  foreign  approval  applications  for AstaXin(R),
including those for the European Union, are in progress.  The FDA
has  also  indicated  to the Company that all  of  the  necessary
documentation  for  the approval of the use of  astaxanthin  from
Phaffia  as a fish feed additive has been received and should  be
approved in the near future. When this occurs, it will allow  the
use of AstaXin(R)in fish feed in the United States.

     The  Company  is  beginning to explore the possible  use  of
AstaXin(R) as  a  human  nutritional  supplement.   If   pursued,
additional  safety  tests may be required as well  as  pre-market
notification  to  the FDA. Comparable agencies  in  the  European
Union  and  other foreign countries may have their own additional
registration  procedures.   No  applications  for   approval   of
AstaXin(R) as  a  human  nutritional  supplement  have  yet  been
submitted.

     The  Company  has not incurred and does not  anticipate  any
material environmental compliance costs due to the fact that  the
Company's  contract manufacturer and licensed  manufacturer  have
primary responsibility for environmental compliance and that  the
Company's  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,  1999,  the  Company  had   expended
approximately $11,526,000 on research and development  since  its
inception  on October 27, 1981 and has, as of December 31,  1999,
received   revenues   from  product  sales   and   royalties   of
approximately $2,040,000 from the proprietary processes resulting
from such research and development.  The Company 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 2000.

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

     1998  $452,755
     1999   350,659

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

      On  July  3,  1997,  the  Company  signed  a  non-exclusive
manufacturing  agreement  with  Fermic,  S.A.  de C.V., of Mexico
City,  Mexico,  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 the
Company  continues to  manufacture and intends to sell AstaXin(R)
worldwide,   directly   or   through   distributors  to  meet  an
anticipated  demand for the product.

<PAGE>

    The Fermic contract provides that the manufacturer has a non-
exclusive  right to produce AstaXin(R)and is paid a fee based  on
manufacturing capacity.  Fermic provides equipment and facilities
necessary to manufacture and store the product and is responsible
for  purchasing  raw materials.  The Company is  responsible  for
sales  efforts and for ensuring the quality of the pigment.   The
Company  also  has  a  role in ensuring  that  the  manufacturing
process  works  effectively.  The term of the contract  has  been
extended  through March 31, 2000.  (See also item 2.  Description
of  Property).  The Company is currently negotiating  a  contract
extension,  including a modification of its fee arrangement  with
the manufacturer so that future fees will be based on quantity of
product produced.

     Based  on  estimates of worldwide production of farm  raised
salmon,  the  Company believes the market for  astaxanthin  as  a
color  additive  in  salmon feed exceeds  $200,000,000  per  year
worldwide,  which  would  be equivalent to  approximately  10,000
metric tons of AstaXin(R). A single competitor, which produces  a
chemically synthesized product, presently controls more than  95%
of the world market for astaxanthin as a pigment for aquaculture.
Igene's production for the year 2000 will depend on market demand
for  the  product, but is projected to exceed 75 metric  tons  of
AstaXin(R),  which  would  be  less  than  1%  of  the  potential
worldwide  market  for  astaxanthin as a color additive in salmon
feed.  The Company has significant unused production capacity  at
its  manufacturing  plant  in  Mexico  City  which could be fully
utilized within 3 to 6 months to meet additional demand as deemed
necessary.

     The  Company  is presently engaged in commercial  trials  of
AstaXin(R) with fish farming companies in Chile, which have  been
successful and have resulted in total sales to date in  1999  and
through  February  4, 2000 totaling approximately  $100,000.  The
Company  is also beginning, during the first quarter of 2000,  to
investigate   other   possible  commercial  uses  of  AstaXin(R),
including its application as a human nutritional supplement  (See
also Competition).

     Sales of  AstaXin(R) amounted to 66% and 93% of revenue  for
1999  and  1998, respectively, of which 98% of the  1998  revenue
represented  sales  to  a single foreign distributor  located  in
Mexico.   This distributor, to date, has had limited  success  in
marketing   the   product.   Sales  of  AstaXin(R) in   1999   of
approximately  $18,000 and subsequent sales  during  the  quarter
ended  March 31, 2000 of approximately $78,000 resulted from  the
Company's marketing efforts on its own behalf, primarily based on
the  completion  of successful commercial sized  fish  production
trials with Chilean salmon farmers.

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

ClandoSan(R)

     ClandoSan(R) is the Company's registered trademark  for  its
natural  nematicide made from crab and crawfish exoskeletons  and
processed   into  pellets  or  granules  by  patented  technology
developed  by  the  Company.  The product  acts  in  soils  as  a
biological control agent by stimulating the growth of normal soil
microorganisms, which produce chitinase, and other  enzymes  that
degrade  chitin  present  in  the cuticles  and  eggs  of  plant-
pathogenic nematodes. ClandoSan(R) does not have a direct adverse
effect  on  plant-pathogenic nematodes  either  in  vitro  or  in
sterilized  or  irradiated  soils and  only  acts  indirectly  to
suppress nematode populations in soils.

     On March 17, 1988, ClandoSan(R) was  registered  by  the EPA
for use  with  agricultural and horticultural crops in accordance
with  the  Federal  Insecticide,  Fungicide, and  Rodenticide Act
("FIFRA") section 3(c)(5).  ClandoSan(R) is  now registered in 49
states and is produced and distributed by a licensed manufacturer
in the United States.

     The  Company  receives royalties based on  a  percentage  of
sales of ClandoSan(R). ClandoSan(R) royalties amounted to 34% and
7% of revenue for 1999 and 1998, respectively.

Patents and Trademarks

     It  is  the  Company'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.   The  Company  also relies  upon  trade  secrets  and

<PAGE>

improvements,  un-patented proprietary  know-how  and  continuing
technological innovation to develop and maintain its  competitive
position.  In this regard, the Company places restrictions in its
agreements  with  third  parties with  respect  to  the  use  and
disclosure  of  any of its proprietary technology.   The  Company
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 the  Company
is   currently  maintaining,  include  those  for  AstaXin(R) and
ClandoSan(R).

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  huge  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, this  Company  has
focused  its  own  activities on the development  of  proprietary
products   for   use  in  food,  fermentation  and   agricultural
industries.   In  the  future,  however,  competitors  may  offer
products,  which,  by  reason  of price,  or  efficacy,  or  more
adequate  resources for technology advances, may be  superior  to
the Company's existing or future products.

     A  single  large pharmaceutical company presently  dominates
the  market for astaxanthin pigment for aquaculture in which  the
Company's  product,  AstaXin(R), is  presently marketed and sold.
The  Company  believes  that  AstaXin(R)  will  be  able  to   be
competitive  with  this  dominant  producer,  and other producers
whose  products  are  chemically synthesized, since AstaXin(R) is
made  from  yeast, which is  a  natural ingredient.  As consumers
and producers of fish  become more aware  of  other alternatives,
the  Company  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.  The  Company  believes  that  AstaXin(R) will   be
competitive with other companies' astaxanthin products which  are
made  from  algae,  due to higher production  capacity,  ease  of
obtaining  additional  capacity as needed, and  lower  production
costs.    The  Company  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,  make  AstaXin(R)
more readily absorbed by the fish.

     The  Company  is  also interested in, and  is  beginning  to
explore,  the  possible use of AstaXin(R) 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.  The Company 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.
Raw materials  used  in  the manufacture of  ClandoSan(R) consist
principally of by-products of the seafood processing industry and
are  a  commodity  readily available from  many  suppliers,  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, 1999, the Company had 9 employees, 8 of whom
were full-time employees.  Four 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  the

<PAGE>

Company's  technical representative in Chile.  The  remainder  of
the  employees  are based in the U.S.  The Company also  utilizes
various consultants on an as-needed or short-term basis.

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

ITEM 2.  DESCRIPTION OF PROPERTY

     The  Company leases approximately 8,500 square feet of space
in  the  Oakland Ridge Industrial Park located at 9110 Red Branch
Road, Columbia, Maryland.  The Company occupies the space under a
five-year lease expiring on January 31, 2001.  Approximate rental
expense is $73,000 for each remaining year of the lease.

     Approximately 2,000 square feet of the space occupied by the
Company  is  used  for executive and administrative  offices  and
approximately  2,500  feet is used for research  and  development
activities.  Approximately 4,000 square feet of space is used for
the   Company's  intermediate-stage  or  scale-up   pilot   plant
facility.

     The   Company   also   leases,  on   a   continuing   basis,
manufacturing capacity at Fermic S.A. de C.V. (Fermic) in  Mexico
City,  Mexico. During 1997 the Company loaned $500,000 to  Fermic
for  the purchase of manufacturing equipment, which is being used
for  the  production  of AstaXin(R),  along  with other equipment
which  Fermic  already  owned.   Under  its  agreement  with this
manufacturer,  the  Company  was to be repaid on this loan over a
two year period, which began January 1998.  During 1999, the loan
has been modified so that it will be repaid by December 31, 2000.
The manufacturer owns  this equipment, with the Company retaining
only a  security  interest  until  the loan is fully repaid.  The
Company has also purchased approximately $245,000  of  additional
manufacturing equipment for  use in this manufacturing process in
Mexico,  in which the Company  currently retains full title.

     During the fourth quarter of 1999, the Company began leasing
office  space,  on  a month-to-month basis,  in  Chile,  for  the
conduct of marketing and technical support activities by its full-
time technical representative.

     The  Company  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 the
Company's  product,  AstaXin(R),  increases, the Company plans to
lease  additional, available manufacturing capacity at Fermic  in
Mexico City.

ITEM 3.  LEGAL PROCEEDINGS

     On  July  21, 1997 Archer Daniels Midland, Inc. (ADM)  filed
suit against the Company in the U.S. District Court in Baltimore,
Maryland   alleging   patent  infringement   and   requesting   a
preliminary injunction against the Company to cease  the  use  of
its  axtaxanthin manufacturing process.  On August 4,  1997,  the
Company   filed   a  $300,450,000  contract  and  trade   secrets
counterclaim  against ADM, alleging theft of trade secrets.   The
Company  is  also claiming breach of contract, in  regards  to  a
licensing agreement entered into by the Company and ADM in  1995.
The Company contends that it complied with all material terms  of
this  agreement.  On September 10, 1997 the District Court denied
ADM's request for a preliminary injunction on the basis that  ADM
could  not  demonstrate a likelihood of success on the merits  of
its  patent  infringement allegations.  To date,  the  court  has
imposed  a stay on all discovery, while a court-appointed  expert
analyzes  the  yeast products of both parties.   Pursuant  to  an
order issued by the judge on July 16, 1999, both the Company  and
ADM  communicated  to  the court their willingness  to  pursue  a
mediated  settlement  of this dispute.  During  the  period  from
October 1, 1999 through October 28, 1999, the parties were unable
to  resolve  the dispute through mediation.  Thus, the litigation
has been returned to the court for a judicial disposition.  It is
management's contention that it is not probable that this dispute
will result in an unfavorable outcome.  Accordingly, no liability
has  been  reflected  in  the accompanying  balance  sheet.   The
Company  had expenses of $530,882 and $399,492, respectively,  in
1999 and 1998 relating to this litigation, which is on going.

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

     None.

<PAGE>

                             PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS.

Common Stock

     Commencing  on or about June 12, 1989, the Company'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 the Company's
common stock for 1998 and 1999.

<TABLE>
<CAPTION>
            Calendar Quarter         High            Low
            ----------------         --------        --------
<S>                                  <C>             <C>
     1998:  First Quarter            $  .1100        $ .0600
            Second Quarter           $  .2100        $ .1000
            Third Quarter            $  .1500        $ .0500
            Fourth Quarter           $  .0600        $ .0400

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

</TABLE>

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

     The  approximate number of record holders of  the  Company's
common  stock as of March 1, 2000 was 250.  As of March 1,  2000,
the  high bid and low offer prices for the common stock, as shown
on the "bulletin board" were $0.52 and $0.55, respectively.

Preferred Stock

     There was no public market for the Company's preferred stock
during  1998  and 1999 and since January 25, 1988, no  quotations
for  the  preferred  stock  have been  reported  on  NASDAQ.  The
approximate  number of record holders of preferred  stock  as  of
March 1, 2000 was 12.

Dividend Policy

     When  and  if  funds are legally available for such  payment
under   statutory  restrictions,  the  Company  may  pay   annual
cumulative dividends on the preferred stock of $.64 per share  on
a  quarterly basis.  During 1988 the Company declared and paid  a
cash  dividend of $.16 per share.  In December 1988, the  Company
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 the Company'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, 1999 the total amount of
dividends  in  arrears  with respect to the  Company's  preferred
stock was $190,562.

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

<PAGE>

Sales of Unregistered Securities

      During  1999,  the Company issued to certain directors  and
other  accredited investors 24,791,668 new shares of common stock
at  prices ranging from $.05 to $.08, based on the current market
price  of  the Company's stock at the time of issue.   The  total
proceeds received in these issues was $1,500,000.  In return  for
committing  to  these investments, these investors also  received
24,791,668  warrants  to  purchase  shares  of  common  stock  at
equivalent prices (ranging from $.05 to $.08 per share, based  on
the  current market price of the Company's stock at the  time  of
issue),  expiring  10 years from the dates of issue.   The  funds
received  in  these  transactions  have  been  used  to  continue
operations  of the Company and to fund legal expenses  associated
with on going litigation (See item 3. Legal Proceedings).

     During  1999,  the  Company issued 80,000 shares  of  common
stock  to  The  Dow  Chemical Co. in payment  of  interest  on  a
variable  rate  subordinated debenture .  If paid  in  cash,  the
interest  would have been payable at 12%, or $180,000  per  year.
Shares  may  be  issued  in  lieu of  cash  under  the  debenture
agreement  at the higher of $2.25 per share or market  price  per
share.   The  stock was issued and related interest was  paid  in
1999 at $2.25 per share, or $180,000, in each year.

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

     All  of  the  foregoing securities were issued  pursuant  to
Section 4(2) of the Securities Act of 1933.

<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 product demand, increased
competition,  government action, weather  conditions,  and  other
factors.

Results of Operations

    Sales and other revenue
    During  the fourth quarter of 1999, the Company began  large-
scale commercial trials of AstaXin(R) with several of  the  major
salmon  farmers in Chile. These trials, which take  between  nine
and  twelve  months  each  to  complete,  resulted  in  sales  of
AstaXin(R) of $18,131 in 1999, and have also resulted in sales of
approximately $78,500 during the first quarter of 2000.   In  the
first  quarter  of 2000, two of these customers  completed  their
trials with excellent results, and have indicated their desire to
expand  their  usage of AstaXin(R) to 5 to 10 times their current
usage,  beginning in the second quarter of 2000.  In addition  to
sales  for  the first quarter of 2000, the Company  has  received
subsequent orders for approximately $150,000.  However, there can
be  no assurance that these communications and orders will result
in  sales,  or that they will be material. Throughout the  second
through  fourth quarters of 2000, other companies,  whose  trials
are  now  in  progress,  are expected to complete  those  trials.
These  trials  are  expected to have similar  results,  based  on
preliminary  data  obtained  thus  far,  and  should  result   in
additional  and  increased sales to these  companies  during  and
following  the  trials.  However, there can be no assurance  that
such  sales will occur or that they will be material. The Company
began  commercial production  of  AstaXin(R)  with   a   contract
manufacturer  in  January 1998.  During  1998,  the  Company  had
$203,860 in sales of AstaXin(R). This entire amount of 1998 sales
was  to  a  single distributor.  This distributor  had  not  made
significant sales  of AstaXin(R) to end users, and  therefore the
Company  discontinued marketing through this  distributor  during
1999  and  began substantial marketing efforts on its  own.   The
Company also earned licensing revenue of $9,310 from ClandoSan(R)
during  1999,  compared  with gross  revenue  from  licensing  of
ClandoSan(R) of $14,236 in 1998, which represents a  decrease  of
35%. The Company has continued to focus its efforts primarily  on
AstaXin(R) during 1999 and 1998.  The foregoing resulted in sales
and  other  revenues  for the year ended  December  31,  1999  of
$27,441, decreased from $218,095 in 1998.  This is a decrease  in
overall revenue of  $190,665 or 87%.

    Cost of sales
    During   a   successful  implementation   test   of   certain
improvements in its production process, which had been  developed
in the Company's pilot plant, commercial production was suspended
during  the  first  quarter of 1999.  A temporary  resumption  of
production during the second quarter of 1999 confirmed  that  the
improvements resulted in increased efficiency and yields  in  the
manufacturing  process.  In June 1999, and continuing  until  the
present,  production  has  been  suspended,  until  sales  volume
warranted additional production.  While production was suspended,
the  Company  provided product for the market from  its  existing
inventory.  The Company plans to resume commercial production  in
the  second  quarter  of 2000, since the successful  trials  have
resulted  and  are  expected to continue to result  in  increased
sales of AstaXin(R). However, there can be no assurance that such
sales  will  occur or that they will be material.  The  preceding
resulted  in  cost  of sales for 1999 and 1998  of  $157,966  and
$809,288,  respectively, a decrease of  $651,322 or  80%.  During
1999  and  1998,  gross losses on sales of AstaXin(R) of $139,835
and $605,428,  respectively,  were  recorded.  These gross losses
were  caused   by   inefficiencies  in  the  initial   commercial
production runs, the  costs  of which exceeded the  market  value
of the product. Production efficiency continued to improve during
1998 and 1999,  and the Company expects to achieve gross  profits
on sales of AstaXin(R) produced in 2000, provided that sufficient
sales are achieved.  However, there can be no assurance that such
gross  profits  will be realized or that they will  be  material.
The  Company  expects  to  incur  future  production  costs   for
AstaXin(R) of at least $200,000 per  month beginning  during  the
second  quarter  of  2000,  which  are  expected  to be funded by
product sales. However, there can be no assurance that such sales
will occur, or that they  will be material.  Once the Company  is
producing and selling  AstaXin(R) at a gross  profit,  management
plans  to expand production capacity to meet an expected increase
in demand for  AstaXin(R).  There were no  production  costs  for
ClandoSan(R) during 1999 and 1998.  The Company has  discontinued
direct  production  and sales of this product and  earns  revenue
only  through royalties on sales by its licensed manufacturer  in
1999 and 1998, incurring no costs of sales.

<PAGE>

    Marketing and selling expenses
    The  Company  substantially increased its  marketing  efforts
during  1999  as it escalated the promotion of AstaXin(R). During
the  commercial trials as described above, the Company  delivered
large  quantities of AstaXin(R) either free to the customer or at
reduced  prices in exchange for agreements to purchase additional
product  during  the trial period.  The Company's  administrative
and  marketing employees have traveled extensively  to  Chile  to
promote   AstaXin(R).  The  Company  also   hired   a   technical
representative in Chile during the fourth quarter  of  1999,  and
during  the first quarter of 2000 has formed a foreign subsidiary
entity  in  Chile.  The  Company  plans  to  hire  an  additional
technical representative during the second quarter of 2000.   The
Company  has also engaged, during the first quarter  of  2000,  a
full-time  consultant  to  market  AstaXin(R)  in  Europe  and to
explore  the  market  for  the  use  of  AstaXin(R)  as  a  human
nutritional   supplement.   This   consultant  has   considerable
experience in both the salmon farming industry and in  the  human
nutritional supplement market. The forgoing resulted in marketing
and selling expenses  for  1999  and 1998 of $493,535 and $9,862,
respectively, an  increase  of  $483,673.  Marketing expenses for
AstaXin(R) are expected to continue to increase, since to achieve
continuing and increasing sales the Company  will  need  to  make
additional  marketing  efforts  on  its  own and with the help of
distributors or marketers. These additional expenses are expected
to  be  funded  by revenues from product sales, if future product
sales occur.

    Research, development and pilot plant expenses
    A  decrease in research, development and pilot plant expenses
resulted  from the continuing transfer of efforts from the  pilot
plant  to direct support of commercial manufacturing during 1999.
Research, development and pilot plant expenses for 1999 and  1998
were $350,659 and $452,755, respectively, a decrease of $102,096,
or  23%. These expenses are expected to continue at approximately
$35,000  per month in the near term in support of increasing  the
efficiency  of  the manufacturing process through experimentation
in  the  Company's  pilot plant, development of  higher  yielding
strains   of  yeast  and  other  improvements  in  the  Company's
AstaXin(R) technology. However, there can  be  no  assurance that
such  improvements  in  efficiency  and yield will occur, or that
they will be material. These expenses are expected to  be  funded
through  June  of  2000 by available cash and additional  funding
from stockholders, and by profitable operations beyond that date,
if profitable operations occur.

    General and administrative expenses
    General  and administrative expenses for 1999 and  1998  were
$324,239  and $502,564, respectively, a decrease of $178,325,  or
35%.    This  decrease  resulted  primarily  from  the  Company's
operating without a designated CEO during 1999.  The Company does
not  plan  to  hire  a replacement in the near future,  but  will
continue  to be operated by its Board of Directors.  General  and
administrative  expenses are expected to  continue  in  the  near
future  at  approximately $36,000 per month.  These expenses  are
expected to be funded through June of 2000 by available cash  and
additional   funding  from  stockholders,   and   by   profitable
operations beyond that date, if profitable operations occur.

    Litigation expenses
    Management   expects   to   ultimately   recover   litigation
expenses,  which are associated with the suit filed  against  the
Company  by  ADM  and the Company's counterclaim, through  damage
awards  and through preservation of the commercial product rights
associated with AstaXin(R).  However, there can be  no  assurance
that  the  Company will receive damage awards or that its  rights
will  be  preserved.  Litigation expenses for 1999 and 1998  were
$530,882  and $399,492, respectively, an increase of $131,390  or
33%.  The  Company  estimates that the costs of  litigation  will
continue  in  the  near  future at levels based  on  management's
continuing assessments of potential costs and benefits of various
litigation  strategies  and  alternatives.  These  expenses   are
expected  to  be funded by available cash and additional  funding
from  stockholders.   A range of reasonably possible losses  from
the litigation cannot be estimated at this time.

    Interest expense (net of interest income)
    Net  interest  expense  for 1999 and 1998  was  $695,500  and
$540,275,  respectively, an increase of $155,225, or  29%.   This
increase  resulted from additional debt of $5,000,000  issued  in
the  Company's rights offering of March 1998 and a  reduction  in
interest income of $60,565.

<PAGE>

    Net loss and net loss per common share
    As  a  result  of  the  foregoing, the Company  reported  net
losses  of $(2,525,340) and $(2,499,694), respectively, for  1999
and  1998; an increased loss of $(25,646) or 1%.  This is a  loss
of  $(.08) and $(.12) per share, respectively, for 1999 and 1998.
The weighted average number of shares of common stock outstanding
of   33,979,575 and 20,672,092, respectively, for 1999  and  1998
have  increased  by  13,307,483 shares.  This resulted  from  the
issuance of 80,000 shares during 1999 in lieu of interest payment
on  a  subordinated debenture, the conversion of 3,125 shares  of
preferred stock into 6,250 shares of common stock, the  issue  of
24,791,668  shares of stock to directors and other  investors  in
direct  purchases, and the issuance of 866,667 shares  of  common
stock in payment of legal fees during 1999.

Financial Position

During  1999 and 1998, the following actions materially  affected
the Company's financial position:

   *  The  Company  loaned  $500,000  in  1997  to  its  contract
      manufacturer  of  AstaXin(R)  for  the  purchase   of manu-
      facturing   equipment   needed   for   the  production   of
      AstaXin(R).  The  loan  was  originally  repayable  over 23
      months,  beginning  January  1998,  with  interest  at 10%.
      During  1999,  the loan repayment schedule was modified  so
      that  the  loan  matures December 31, 2000.  The  remaining
      balance of this loan is $206,780 and $250,783, respectively
      as of December 31, 1999 and 1998.

   *  The Company purchased $73,171 in manufacturing equipment in
      1998  for use in the production of AstaXin(R).  The Company
      also purchased  $28,593 and $58,354, respectively, of other
      equipment in 1999 and 1998,  primarily for use in its pilot
      plant facility.

   *  The  Company  issued $950,000 in debt during 1998 which was
      cancelled  and repaid in March 1998 through use of proceeds
      from a rights offering.  The Company then issued $5,000,000
      in  debt  through  a  rights  offering in March 1998, which
      matures March 31, 2003.  The  Company  capitalized $211,713
      in debt issue costs  associated  with this debt,  of  which
      $42,342 and $31,757, respectively,  was  amortized  in 1999
      and 1998.  The  net proceeds from the  rights offering were
      $1,963,287.

   *  The   Company   retained  inventory   from  manufacture  of
      AstaXin(R) of  $707,595  and  $870,260, respectively, as of
      December 31, 1999  and 1998, a  decrease  of  $162,665 from
      1998.

   *  The  Company  issued 80,000 shares in each of 1999 and 1998
      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
      1999 and 1998.

   *  The   carrying   value  of redeemable preferred  stock  was
      increased   and   paid-in   capital  available   to  common
      shareholders   was   decreased  by  $18,438  and   $18,940,
      respectively,  in  1999  and  1998,  reflecting  cumulative
      unpaid dividends on redeemable preferred stock.

   *  Holders   of   redeemable  preferred  stock   and   limited
      redemption  preferred  stock  converted  3,125  and 187,500
      shares, respectively, in  1999 and 1998, of preferred stock
      into  6,250  and  375,000  shares,  respectively, of common
      stock,  providing  additional   capital  and  reducing  the
      liquidation value of redeemable preferred stock by  $47,000
      in 1999.

   *  The   Company   issued   866,667   and   2,190,000  shares,
      respectively,  of  common stock in payment of legal fees in
      1999  and  1998,  recording  additional  capital  and legal
      expenses  of  $49,750  and $162,000, respectively, based on
      the market value of the stock at date of issue.

   *  The Company recorded additional paid-in capital of $205,640
      in  1998  to reflect forgiveness of interest on outstanding
      promissory  notes in conjunction with the Company's  rights
      offering.

   *  The  Company received $1,500,000 in proceeds during 1999 in
      issuances  of 24,791,668 shares of new common stock through
      direct  purchases   by   directors   and  other  accredited
      investors.

<PAGE>

     In  December 1988, as part of an overall effort  to  contain
costs and conserve working capital, the Company 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, 1999, total dividends in arrears  on
the  Company's preferred stock total $190,562 ($7.20  per  share)
and  are  included  in  the  carrying  value  of  the  redeemable
preferred stock.

Liquidity and Capital Resources

    Historically,  the  Company  has  been  funded  primarily  by
equity  contributions and loans from stockholders. As of December
31,  1999 the Company had working capital of $1,040,018, and cash
and cash equivalents of $216,297.

    Cash  used by operating activities in 1999 and 1998  amounted
to $(1,670,093) and $(2,731,077), respectively.

    Cash  provided by investing activities decreased by $107,580,
from  $129,174 in 1998 to $21,594 in 1999.  This is a  result  of
capital  expenditures  for manufacturing  equipment  relating  to
production  of  AstaXin(R) in  1998,  and  repayments of $249,217
loaned  to  Fermic  for  the  purchase of manufacturing equipment
relating to production of AstaXin(R) in 1998.

    Cash   provided   by   financing  activities   decreased   by
$1,442,151  from  $2,942,151  in  1998  to  $1,500,000  in  1999.
Financing  activities  included net  proceeds  of  $950,000  from
issuance  of  notes to directors and $1,963,287 in  net  proceeds
from  a  rights  offering in 1998 and were entirely  composed  of
proceeds of $1,500,000 from issuances of new common stock through
direct  purchases by directors and other accredited investors  in
1999.

    Over  the  next twelve months, the Company believes  it  will
need  at  least  $2,000,000 in additional working  capital.   The
Company  hopes  to  achieve  this  from  profits  from  sales  of
AstaXin(R) and  additional  stockholder  funding  through  direct
purchases  of stock.  On  February 8, 2000, certain directors  of
the  Company committed  to provide up to $1,000,000 in additional
funding  to  the  Company  through  direct  purchases  of  stock.
However, there can be no assurance  that profits,  if  any,  from
sales,  or additional funding will be available to the Company to
fund  its  continued  operations.  The  Company  intends to spend
approximately  $420,000  on  technology  research  over  the next
twelve  months  to improve  manufacturing  processes and research
new  strains  for production of pigments.

    The  Company  does  not  believe that  inflation  has  had  a
significant impact on its operations during 1999 and 1998.


ITEM 7. FINANCIAL STATEMENTS

    The  financial  statements  appear  after  Part  IV  of  this
Report.

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

    None.

<PAGE>

                            PART III


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


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

<TABLE>
<CAPTION>

Name                     Age       Position with IGENE
---------------------    ---       -----------------------------
<S>                      <C>       <C>
Michael  G. Kimelman      61       Chairman of the Board
                                   of Directors

Thomas L. Kempner         72       Vice Chairman
                                   of the Board of Directors

Stephen F. Hiu            43       Director, President, Treasurer,
                                   and Director of Research and
                                   Development

Patrick F. Monahan        49       Director, Secretary,
                                   and Director of Manufacturing

Joseph C. Abeles          85       Director

John A. Cenerazzo         76       Director

Sidney R. Knafel          69       Director

</TABLE>

MICHAEL  G.  KIMELMAN was elected a Director of  the  Company  in
February  1991  and Chairman of the Board of Directors  in  March
1991.   He is the Managing Partner of Kimelman & Baird, LLC.   He
is  a  founder  of Blue Chip Farms, a standardbred horse-breeding
farm, and has been an officer of the same since its inception  in
1968.   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 the Company 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.,  Fuel
Cell  Energy,  Inc.  , Intermagnetics General  Corp.,  and  Roper
Starch  Worldwide, Inc.  He is a Director Emeritus  of  Northwest
Airlines, Inc.

STEPHEN  F.  HIU was appointed President and Treasurer  in  March
1991,  and  elected  a  Director in August  1990.   He  has  been
Director  of  Research and Development since  January  1989  and,
prior thereto, was Senior Scientist since December 1985, when  he
joined the Company.  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.

PATRICK  F.  MONAHAN was appointed Director of Manufacturing  and
elected  a Director of the Company in April 1991 and was  elected
Secretary  in  September  1998.  He  has  managed  the  Company'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.

<PAGE>

JOSEPH  C. ABELES, private investor, was elected Director of  the
Company  on February 28, 1991.  Mr. Abeles serves as Director  of
Intermagnetics  General  Corporation, Bluegreen  Corporation  and
Ultralife Batteries, Inc.

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

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

Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------

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

ITEM 10.    EXECUTIVE COMPENSATION

    During  1999  and  1998, no executive officer's  annual  cash
compensation exceeded $100,000.  Following the resignation of the
Company's   former  CEO,  Ramin  Abrishamian  during  1998,   the
functions of chief executive officer have been performed  by  the
Company's  Board  of Directors (Messrs. Abeles,  Cenerazzo,  Hiu,
Kempner, Kimelman, Knafel, and Monahan (see Item 9)) acting as  a
group.   During 1999 and 1998 the Directors were not  compensated
for their Board or Committee activities.

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

Simple Retirement Plan
----------------------

     Effective  February  1, 1997 the Company  adopted  a  Simple
Retirement Plan under Internal Revenue Code Section 408(p).   The
plan  is  a  defined contribution plan, which covers all  of  the
Company's  employees who receive at least $5,000 of  compensation
for  the  preceding  year.   The plan permits  elective  employee
contributions.   The Company makes a nonelective contribution  of
2%  of each eligible employee's compensation for each year.   The
Company's  contributions to the plan for 1998 were $6,979,  which
is  expensed in the 1998 statement of operations.  The  Company's
contributions to the plan for 1999 were $6,569, which is expensed
in the 1999 statement of operations.

Stock Option Plans
------------------

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

<PAGE>

    The  purpose of the Plans is to advance the interests of  the
Company  by encouraging and enabling the acquisition of a  larger
personal  proprietary interest in the Company by  directors,  key
employees,  consultants  and  independent  contractors  who   are
employed  by,  or  perform  services for,  the  Company  and  its
subsidiaries  and  upon  whose judgment  and  keen  interest  the
Company  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 the  Company  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,  (iii)  or  under
special  circumstances as determined by the  Committee.   Options
generally terminate on the tenth business day following cessation
of  service  as an employee, director, consultant or  independent
contractor.

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

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

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

    Options  to  acquire 8,660,584 shares of  common  stock  have
been  granted  under  the 1986 and 1997 Stock  Option  Plans  and
8,070,750 options are outstanding under the Plans as of  December
31,   1999.     1,742,865  options  were  granted  during   1999.
Subsequent to December 31, 1999, an additional 4,677,500  options
were granted to employees on January 19, 2000.

Compensation of Directors
-------------------------

    During  1999, Directors were not compensated for their  Board
or Committee activities.

<PAGE>

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS  AND
          MANAGEMENT

    The  following table sets forth information as  of  March  1,
2000  with  respect  to beneficial ownership  of  shares  of  the
Company's  outstanding common stock and preferred  stock  by  (i)
each  person known to the Company 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
                                  -----------------------------
                                     Number of
     Name and Address                Shares          Percent *
-------------------------         --------------   ------------
<S>                               <C>              <C>
Directors and officers
----------------------

Joseph C. Abeles                   15,012,789(1)       24.57
  220 E. 42nd Street
  New York, NY  10017

John A. Cenerazzo                   1,912,456(2)        3.84
  PO Box 4067
  Reading, PA  19606

Stephen F. Hiu                      5,030,500(3)        9.45
  9110 Red Branch Road
  Columbia, MD  21045

Thomas L. Kempner                  66,532,836(4)       65.75
  61 Broadway
  New York, NY  10006

Michael G. Kimelman                10,218,950(5)       18.00
  100 Park Avenue
  New York, NY  10017

Sidney R. Knafel                   63,659,933(6)       64.51


  126 East 56th Street
  New York, NY  10022

Patrick F. Monahan                  3,074,400(7)        6.00
  9110 Red Branch Road
  Columbia, MD  21045

All Directors and Officers        165,441,864(8)       90.50
  as a Group (7 persons)

Others
-------

Thomas R. Grossman                  3,192,150(9)        6.43
    461 Grant Road
    North Salem, NY  10560

Fraydun Manocherian                 9,232,500(10)      16.42
    3 New York Plaza
    New York, NY  10004

</TABLE>

*  Under the rules of the Securities and Exchange Commission, the
calculation of the percentage assumes for each person  that  only
that  person's rights, warrants, options or convertible notes  or
preferred  stock are exercised or converted, and  that  no  other
person   exercises  or  converts  outstanding  rights,  warrants,
options  or  convertible notes or preferred stock.   Accordingly,
these percentages are not on a fully-diluted basis.

<PAGE>

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

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

3.   Includes   the  following: 25,500 shares; 4,955,000  options
     currently exercisable; and 50,000 warrants held by Dr. Hiu.

4.   Includes  386,972  shares and 536,920 warrants held  by  Mr.
     Kempner.  Also includes 5,666,916  shares, 1,616,066  shares
     subject  to  the  conversion  of $140,872 of long-term notes
     issued  by  the  Company;  and 21,628,007 warrants held by a
     trust  under which  Mr.  Kempner  is  one  of  two  trustees
     and  the  sole beneficiary.  Also includes 5,626,918 shares;
     1,616,067  shares  subject  to the conversion of $140,873 of
     long-term  notes  issued  by  the  Company;  and  21,606,405
     warrants held a trust under  which Mr. Kempner is one of two
     trustees  and  one of his brothers is the sole  beneficiary.
     Also includes 203,880  shares  and  110,095 warrants held by
     a trust under which Mr. Kempner is one of  two trustees  and
     another  of  his  brothers  is  the  sole beneficiary.  Also
     includes 1,482,987 shares;  1,147,667 shares  subject to the
     conversion  of  $79,200  of  long-term  notes  issued by the
     Company; and  4,622,846  warrants held by trusts under which
     Mr. Kempner  is one  of  two  trustees  and  is  a one-third
     beneficiary.   Also  includes  182,526  shares  and   98,565
     warrants held by Mr. Kempner's wife.

5.   Includes  1,661,360  shares;   1,500,000  options  currently
     exercisable,  804,568  shares  subject  to the conversion of
     $63,070  of  long-term  notes  issued  by  the  Company; and
     6,253,022 warrants.

6.   Includes 13,190,551 shares;  3,715,706 shares subject to the
     conversion  of  $306,200  of  long-term  notes issued by the
     Company; and 46,753,676 warrants owned or beneficially owned
     by Mr. Knafel.

7.   Includes   24,400   shares;   3,000,000  options   currently
     exercisable; and 50,000 warrants held by Mr. Monahan.

8.   Includes  30,849,426 shares of common stock;  14,750  shares
     issuable upon  the  conversion  of 7,375 shares of preferred
     stock; 9,487,750 options currently  exercisable;  13,174,478
     shares  issuable  upon the conversion of $5,656,030 of long-
     term  notes issued by the Company; and 111,915,460 warrants.

9.   Includes  1,753,400  shares  of  common stock and  1,438,750
     warrants.

10.  Includes   1,201,500   shares  of  common  stock  owned   or
     beneficially owned by Mr. Manocherian and 8,031,000 warrants
     held or beneficially owned by Mr. Manocherian.


<PAGE>


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

    The Company distributed, to holders of record on February 13,
1998, transferable rights to subscribe for and purchase 0.54 of a
Unit  for each share of common share or equivalent owned by  such
holder.  Each Unit entitled the holder to receive $0.10 principal
amount  of  8% Notes due March 31, 2003 and warrants to  purchase
one  share  of  common stock at an exercise price  of  $0.10  per
share.   Common  shares  or equivalents  include:  common  stock,
preferred  stock,  unexpired warrants, options  exercisable,  and
convertible  notes  outstanding.  The Company  raised  $5,000,000
through  this  Rights Offering, which was fully  subscribed,  and
issued  $5,000,000 in 8% Notes due March 31, 2003 and  50,000,000
warrants  to subscribers. Certain directors and investors  agreed
to  purchase Units equal to the difference between $2,000,000 and
the  proceeds  from  the  Rights Offering; however,  concurrently
therewith  the  Company  was  required  to  repay  $1,875,000  in
promissory  notes.  The Rights Offering expired March  31,  1998.
In  consideration of  certain directors and investors agreeing to
subscribe  to  Units  such  that the Company  receives  at  least
$2,000,000,  the  Company  issued additional  warrants  to  these
directors  and investors to purchase 20,000,000 shares of  common
stock,  exercisable  at $0.10 per share and  expiring  ten  years
after issue.

     The  Company's stockholders purchased a total of  50,000,000
Units,  including additional Units available to fully subscribing
shareholders  as  a  result  of  unexercised  rights   of   other
shareholders, under the terms of the Rights Offering. The  Rights
Offering  period  expired March 31, 1998.   The  Company's  gross
proceeds  from  the  Rights Offering were  $5,000,000,  of  which
$1,875,000 was used to repay outstanding promissory notes due  on
March  31, 1998; and $950,000 was used to repay demand promissory
notes  issued from January 1, 1998 through March 31,  1998.   The
Company  incurred fees and costs of $211,713 in relation  to  the
Rights  Offering, resulting in net proceeds after fees  and  debt
repayment  of  $1,963,287.  The Company  recorded  $5,000,000  in
principal  of  new  notes issued to holders of subscribed  units,
which are payable five years from date of issue and bear interest
at  8%.   In connection with the Rights Offering, the holders  of
subscriber  Units  also received warrants to purchase  50,000,000
shares of common stock expiring ten years from date of issue  and
exercisable at $.10 per share. ($5,000,000 of these 8% notes  and
49,997,300 of these warrants remained outstanding as of March  1,
2000)

     During  1998, the Company also issued 4,000,000 warrants  to
purchase common shares, at $.10 per share, to its Chairman of the
Board; and 9,500,000 warrants to purchase common shares, at  $.10
per  share, to certain directors who were the holders of $950,000
in demand notes issued during 1998.

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

     During  1999,  the Company issued to certain  directors  and
other  accredited investors 24,791,668 new shares of common stock
at  prices ranging from $.05 to $.08, based on the current market
price  of  the Company's stock at the time of issue.   The  total
proceeds received in these issues was $1,500,000.  In return  for
committing  to  these investments, these investors also  received
24,791,668  warrants  to  purchase  shares  of  common  stock  at
equivalent prices (ranging from $.05 to $.08 per share, based  on
the  current market price of the Company's stock at the  time  of
issue),  expiring  10 years from the dates of issue.   The  funds
received  in  these  transactions  have  been  used  to  continue
operations  of the Company and to fund legal expenses  associated
with on going litigation (See item 3. Legal Proceedings).

<PAGE>

                             PART IV

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

A.1. The following financial statements relating to 1999 and 1988
     are filed as a part of this Report:

     Independent Auditors' Report.
     Balance Sheet as of December 31, 1999.
     Statements  of  Operations for the years ended  December  31,
         1999 and December 31, 1998.
     Statements  of  Stockholders' Deficit  for  the  years  ended
         December 31, 1999 and December 31, 1998.
     Statements  of  Cash Flows for the years ended  December  31,
         1999 and December 31, 1998.
     Notes to 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.

     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.

<PAGE>


     10.7 Toll  Manufacturing  Agreement effective as of  June 24,
          1997 between Igene Biotechnology, Inc. and Fermic,  S.A.
          de C.V., constituting Exhibit 10.7 to  the  Registrant's
          Report  on  Form  10-KSB for the year ended December 31,
          1997, is incorporated herein by  reference. (Portions of
          this exhibit have been omitted pursuant to a request for
          confidential treatment.)

     21.  Subsidiaries

                None

     23.  Consents of Berenson & Company LLP

     27.  Financial Data Schedule


(b)  No  reports  on Form 8-K were filed during the Fourth Quarter
     of 1999.

<PAGE>

                  INDEPENDENT AUDITORS' REPORT









Board of Directors
IGENE Biotechnology, Inc.
Columbia, MD


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

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

In  our  opinion,  the  financial statements  referred  to  above
present  fairly, in all material respects, the financial position
of  IGENE  Biotechnology, Inc. as of December 31,  1999  and  the
results of its operations and its cash flows for the years  ended
December  31, 1999 and 1998 in conformity with generally accepted
accounting principles.

The accompanying financial statements have been prepared assuming
that  IGENE Biotechnology, Inc. will continue as a going concern.
As  discussed  in  note  14  to  the  financial  statements,  the
Company's  recurring  losses  and  limited  capitalization  raise
substantial  doubt about the Company's ability to continue  as  a
going concern.  Management's plans in regard to these matters are
described  in note 14.  The financial statements do  not  include
any  adjustments  that  might result from  the  outcome  of  this
uncertainty.




                         BERENSON & COMPANY LLP



New York, NY
February 25, 2000

<PAGE>
<TABLE>
<CAPTION>
                    IGENE Biotechnology, Inc.
                          Balance Sheet
                        December 31, 1999
ASSETS

CURRENT ASSETS
<S>                                                             <C>
  Cash and cash equivalents                                     $    216,297
  Accounts receivable (note 15)                                       24,267
  Inventory                                                          707,595
  Loan Receivable (note 3)                                           206,780
  Prepaid expenses and other current assets                          153,160
                                                                -------------
      TOTAL CURRENT ASSETS                                         1,308,099

OTHER ASSETS
  Property and equipment, net (note 4)                               366,484
  Other assets (note 7)                                              142,489
                                                                -------------
      TOTAL ASSETS                                              $  1,817,072
                                                                =============
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
  Accounts payable and accrued expenses (note 5)                $    268,081
LONG-TERM DEBT
  Notes payable (note 7)                                           6,082,500
  Variable rate subordinated debenture (notes 6 and 7)             1,500,000
  Accrued interest (note 7)                                          851,550
                                                                -------------
      TOTAL LIABILITIES                                            8,702,131
                                                                =============
COMMITMENTS AND CONTINGENCIES (Notes 11, 12, 14 and 15)

REDEEMABLE PREFERRED STOCK
  Carrying amount of redeemable preferred stock, 8% cumulative,
  convertible, voting, series A, $.01 par value per share.
  Stated value $15.20 per share. Authorized 1,312,500 shares;
  issued and outstanding 26,467 shares. Redemption amount
  $402,298 (notes 8 and 9)                                           402,298
                                                                 ============
STOCKHOLDERS' DEFICIT (notes 8 and 9)
  Common stock -- $.01 par value per share. Authorized
     250,000,000 shares; issued and outstanding
     47,598,758 shares                                               475,988
  Additional paid-in capital                                      20,238,904
  Deficit                                                        (28,002,249)
                                                                 ============
    TOTAL STOCKHOLDERS' DEFICIT                                   (7,287,357)
                                                                 ------------
    TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                  $ 1,817,072
                                                                 ============
</TABLE>
The accompanying notes are an integral part of the financial statements.

<PAGE>
<TABLE>
<CAPTION>
                    IGENE Biotechnology, Inc.
                    Statements of Operations




                                              Years ended December 31,
                                               1999             1998
                                           -------------    -------------
<S>                                        <C>              <C>
Sales                                      $     18,131     $    203,860
Cost of sales                                   157,966          809,288
                                           -------------    -------------
    Gross profit (loss)                        (139,835)        (605,428)

Technology licensing income                       9,310           14,235
                                           -------------    -------------
    Net revenue                                (130,525)        (591,193)
                                           -------------    -------------
Operating expenses:

    Marketing and selling                       493,535            9,862
    Research, development and pilot plant       350,659          452,755
    General and administrative                  324,239          502,564
    Litigation expenses (note 12)               530,882          399,492
                                           -------------    -------------
    Total operating expenses                  1,699,315        1,364,673
                                           -------------    -------------
    Operating loss                           (1,829,840)      (1,955,866)

Other expenses:

    Miscellaneous                                   ---            3,553
    Interest expense (net of interest
    income of $14,000 and $74,565,
    respectively, in 1999 and 1998)             695,500          540,275
                                           -------------    -------------
    Net Loss                                 (2,525,340)      (2,499,694)

Deficit at beginning of year                (25,476,909)     (22,977,215)
                                           -------------    -------------
Deficit at end of year                     $(28,002,249)    $(25,476,909)
                                           =============    =============
Net loss per common share (note 10)        $      (0.08)    $      (0.12)
                                           =============    =============
</TABLE>

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

<PAGE>
<TABLE>
<CAPTION>

                    IGENE Biotechnology, Inc.
               Statements of Stockholders' Deficit

                                               Redeemable
                                             Preferred Stock        Preferred Stock
                                           -------------------    -------------------
                                           # shares  Amount       # shares  Amount
                                           --------- ---------    --------- ---------
<S>                                        <C>       <C>          <C>       <C>
Balance at December 31, 1997                 29,592  $411,920      187,500  $  1,875

Issuance of common stock in lieu
  of cash in payment of interest on
  subordinated debenture (note 6)               ---       ---          ---       ---

Cumulative undeclared dividends
  on redeemable preferred stock                 ---    18,940          ---       ---

Conversion of preferred stock
  into common stock                             ---       ---     (187,500)   (1,875)

Issuance of common stock in lieu of
  cash in payment of legal fees                 ---       ---          ---       ---

Exercise of warrants                            ---       ---          ---       ---

Capital contribution - forgiveness of
  interest on promissory notes                  ---       ---          ---       ---

Net loss for 1998                               ---       ---          ---       ---
                                           --------- ---------    --------- ---------

Balance at December 31, 1998                 29,592   430,860          ---       ---

Issuance of common stock in lieu
  of cash in payment of interest on
  subordinated debenture (note 6)               ---       ---          ---       ---

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

Conversion of redeemable preferred
  stock into common stock                    (3,125)  (47,000)         ---       ---

Issuance of common stock in lieu of
  cash in payment of legal fees                 ---       ---          ---       ---

Issuance of shares of common stock
  pursuant to direct purchase of shares
  by certain directors and other
  accredited investors (note 3)                 ---       ---          ---       ---

Net loss for 1999                               ---       ---          ---       ---
                                           --------- ---------    --------- ---------

Balance at December 31, 1999                 26,467  $402,298          ---  $    ---
                                           ========= =========    ========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>

                                        IGENE Biotechnology, Inc.
                           Statements of Stockholders' Deficit (Continued)

                                                                   Additional                  Total
                                            ----Common Stock----   Paid-in                     Stockholders'
                                            # Shares    Amount     Capital      Deficit        Deficit
                                            ----------  --------   -----------  -------------  -------------
<S>                                         <C>         <C>        <C>          <C>            <C>
Balance at December 31, 1997                19,206,473  $192,065   $18,233,670  $(22,977,215)  $(4,549,605)

Issuance of common stock in lieu
  of cash in payment of interest on
  subordinated debenture (note 6)               80,000       800       179,200           ---       180,000

Cumulative undeclared dividends
  on redeemable preferred stock                    ---       ---       (18,940)          ---       (18,940)

Conversion of preferred stock
  into common stock                            375,000     3,750        (1,875)          ---           ---

Issuance of common stock in lieu of
  cash in payment of legal fees              2,190,000    21,900       140,100           ---       162,000

Exercise of warrants                             2,700        27           243           ---           270

Capital contribution - forgiveness of
  interest on promissory notes                     ---       ---       205,640           ---       205,640

Net loss for 1998                                  ---       ---           ---    (2,499,694)   (2,499,694)

Balance at December 31, 1998                21,854,173   218,542    18,738,038   (25,476,909)   (6,520,329)
                                            ----------  --------   -----------  -------------  ------------
Issuance of common stock in lieu
  of cash in payment of interest on
  subordinated debenture (note 6)               80,000       800       179,200           ---       180,000

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

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

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

Issuance of shares of common stock
  pursuant to direct purchase of shares
  by certain directors and other
  accredited investors (note 3)             24,791,668   247,917     1,252,083           ---     1,500,000

Net loss for 1999                                  ---       ---           ---    (2,525,340)   (2,525,340)
                                            ----------  --------   -----------  -------------  ------------

Balance at December 31, 1999                47,598,758  $475,988   $20,238,904  $(28,002,249)  $(7,287,357)
                                            ==========  ========   ===========  =============  ============
</TABLE>

The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
                    IGENE Biotechnology, Inc.
                    Statements of Cash Flows

                                                                    Years ended December 31,
                                                                     1999             1998
                                                                --------------   --------------
<S>                                                             <C>              <C>
Cash flows from operating activities:
  Net loss                                                      $  (2,525,340)   $  (2,499,694)
  Adjustments to reconcile net loss to net
      Cash used by operating activities:
      Depreciation                                                     31,706           43,438
      Amortization of debt issue costs                                 42,342           31,757
      Loss on sale of assets                                              ---            3,553
      Interest on debenture paid in shares of common stock            180,000          180,000
      Legal fees paid in shares of common stock                        49,750          162,000
      Decrease (increase) in:
          Accounts receivable                                         (24,267)          14,494
          Inventory                                                   162,665         (870,260)
          Prepaid expenses and supplies                               (58,082)         (90,368)
      Increase (decrease) in:
          Accounts payable and other accrued expenses                 471,132          294,003
                                                                --------------   --------------
              Net cash used in operating activities                (1,670,094)      (2,731,077)
                                                                --------------   --------------
Cash flows from investing activities:
      Proceeds from disposal of equipment                                 460           11,482
      Return of security deposit                                        5,725              ---
      Capital expenditures                                            (28,593)        (131,525)
   Repayments of loan receivable                                       44,003          249,217
                                                                --------------   --------------
              Net cash provided by investing activities                21,595          129,174
                                                                --------------   --------------
Cash flows from financing activities:
      Repayments by stockholders                                          ---           28,594
  Proceeds from issuance of common stock                            1,500,000              270
  Proceeds from rights offering                                           ---        1,963,287
  Issuance of other debt                                                  ---          950,000
                                                                --------------   --------------
              Net cash provided by financing activities             1,500,000        2,942,151
                                                                --------------   --------------
              Net increase (decrease) in cash
              and cash equivalents                                   (148,499)         340,248

Cash and cash equivalents - beginning of the year                     364,796           24,548
                                                                --------------   --------------
Cash and cash equivalents - end of the year                     $     216,297    $     364,796
                                                                ==============   ==============
Supplementary disclosure and cash flow information:
  Cash paid during the year for interest                        $         558    $         924
  Cash paid during the year for income taxes                              ---              ---
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>

                    IGENE Biotechnology, Inc.
                    Statements of Cash Flows
                           (continued)

Non-cash investing and financing activities:

  During  1999  and  1998, the Company 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 1999  and  1998  at
$2.25 per share, or $180,000, in each year.  (See also note 6)

  During  1999 and 1998 the Company recorded dividends in arrears
on  8%  redeemable preferred stock at $.64 per share  aggregating
$18,438  and  $18,940, respectively, which has been removed  from
paid-in  capital  and  included in  the  carrying  value  of  the
redeemable preferred stock.  (See also note 8)

  During  the  year ended December 31, 1998, the  Company  issued
notes   payable   of   $5,000,000  through  a  rights   offering.
Stockholders  purchased  rights, using $1,875,000  in  promissory
notes  and $950,000 of demand notes due to the Company, resulting
in net cash proceeds of $1,963,287 which is after fees associated
with  the  offering  of $211,713. These related  fees  have  been
capitalized  as debt issue costs and will be amortized  over  the
term  of the debt.  As part of this transaction, the Company also
recorded  forgiveness of interest on certain promissory notes  of
$205,640 as additional paid-in capital.

  During  the year ended December 31, 1998, the Company cancelled
certain promissory notes payable to, and related amounts due from
a   stockholder  aggregating  $125,000  by  agreement  with   the
stockholder.

  During  the year ended December 31, 1998, the holder of 187,500
shares of preferred stock (par value of $.01 per share or $1,875)
as   to  which  mandatory  redemption  rights  had  been  waived,
converted the preferred stock into 375,000 shares of common stock
(par  value  of $0.01 per share or $3,750).  Paid-in capital  and
preferred stock have each been reduced by $1,875.

The  accompanying  notes  are  an  integral part of the financial
statements.
<PAGE>
                    IGENE Biotechnology, Inc.
                  Notes to Financial Statements


(1) Nature of Business
    ------------------

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

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

    Cash and cash equivalents

    For  purposes  of the financial statements, cash  equivalents
    have  been  combined with cash.  The Company  considers  cash
    equivalents to be short-term, highly liquid investments  that
    have  maturities  of less than three months.   These  include
    interest bearing money market accounts.

    Inventories
    -----------

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

<TABLE>
<S>                               <C>
      Raw materials               $      7,050
      Work-in-process                      ---
      Finished goods                   700,545
                                  ------------
      Total inventory             $    707,595
                                  ============
</TABLE>

    Inventory  has been reduced by approximately $185,000  during
    1999  to  reflect  the excess of inventory cost  over  market
    value.

    Research and development costs
    ------------------------------

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

    Depreciation
    ------------

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

    Estimates
    ---------

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

<PAGE>

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

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

    Fair value of financial instruments
    -----------------------------------

    The   carrying   amounts   of  cash  and   cash   equivalents
    approximate  fair  value because of  the  short  maturity  of
    those  instruments.  The carrying amount  of  long-term  debt
    approximates fair value because of similar current  rates  at
    which   the   Company  could  borrow  funds  with  consistent
    remaining maturities.

    Sales Returns
    -------------

    The  Company 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
    ------------------------------------------------

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

    Accounting for stock based compensation
    ---------------------------------------

    The   Company  applies  APB  Opinion  25  in  accounting  for
    employee  stock  option  plans  (note  9).   Accordingly,  no
    compensation cost has been recognized in 1999 or  1998.   Had
    compensation  cost  been determined  on  the  basis  of  FASB
    Statement 123, the following changes would have resulted:

<TABLE>

                             1999            1998
                        -------------   --------------
<S>                     <C>             <C>
    Net loss:
      As reported       $ (2,525,340)   $  (2,499,694)
      Pro forma           (2,567,336)      (2,572,480)

    Net loss per common share:
      As reported      $        (.08)   $        (.12)
      Pro forma                 (.08)            (.12)

</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.

<PAGE>

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

(3) Loan Receivable
    ---------------

    During  1997,  the Company loaned $500,000  to  its  contract
    manufacturer of AstaXin(R) for the purchase of  manufacturing
    equipment  needed for the production of AstaXin(R).  The loan
    was  originally payable over 23 months,  but its maturity has
    been extended to December 31, 2000 with interest at 10%.   As
    of  December 31, 1999, the  remaining balance of $206,780  is
    classified as a current asset.

(4) Property and Equipment
    ----------------------

    Property  and equipment are stated at cost and are summarized
    as follows:
<TABLE>
<S>                                          <C>
    Laboratory equipment and fixtures        $  122,998
    Pilot plant equipment and fixtures           98,429
    Manufacturing equipment                     267,464
    Idle equipment                               56,150
    Office  furniture and fixtures               29,820
                                             -----------
                                                574,861
    Less  accumulated depreciation             (208,377)
                                             -----------
                                             $  366,484
                                             ===========
</TABLE>

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

(5) Accounts Payable and Accrued Expenses
    -------------------------------------

    Accounts  payable  and  accrued  expenses  consist   of   the
    following:

    Accounts payable, trade                  $  205,681
    Accrued interest on variable rate
      subordinated debenture (see note 6)        45,000
    Audit fees                                   17,400
                                             ___________
                                             $  268,081
                                             ===========

(6) Variable Rate Subordinated Debenture
    ------------------------------------

    In  July  1988,  the Company and a principal  holder  of  the
    Company's  redeemable  preferred  stock  agreed  to  exchange
    187,500  shares  of  the Company'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 the Company,  interest
    may  be  paid in shares of the Company's common stock at  the
    greater  of $2.25 per share or the average market  value  per
    share.   During  1999  and  1998 the  Company  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 the Company 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 the Company  at
    any   interest  payment  date  at  par  value  plus   accrued
    interest.   Upon maturity of the debenture, the  Company,  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, 1999 is recorded in these financial statements.

<PAGE>

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


(7) Notes Payable
    -------------

    Beginning  November 16, 1995 and continuing  through  May  8,
    1997,   the  Company  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  the
    Company at prices ranging from $0.05 per share to $0.135  per
    share,  based  on the market price of common  shares  at  the
    issue   date.   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.

    The  notes are detailed, by issue date, and by conversion and
    warrant price, as follows:

<TABLE>
<CAPTION>
                                               Conversion
                                   Note        Warrant
          Issue Date               Amount      Price/Share
          ---------------------    ----------  -----------
<S>                               <C>         <C>
          November 16, 1995        $   40,000  $     0.050
          December 22, 1995            60,000        0.050
                                   ----------
          Total issued in 1995        100,000
                                   ----------

          February 14, 1996            70,000        0.100
          March 11, 1996               70,000        0.090
          April 23, 1996               36,000        0.060
          May 9, 1996                  71,000        0.060
          June 7, 1996                 70,000        0.050
          July 24, 1996                90,000        0.115
          September 24, 1996           70,000        0.125
          November 15, 1996            70,000        0.090
          December 11, 1996            70,000        0.090
                                   ----------

          Total issued in 1996        617,000
                                   ----------

          January 14, 1997             70,000        0.070
          February 24, 1997           100,000        0.110
          March 31, 1997               75,000        0.100
          April 3, 1997                24,500        0.100
          May 8, 1997                  80,000        0.135
          May 8, 1997                  16,000        0.135
                                   ----------

          Total issued in 1997        365,500
                                   ----------

          TOTAL                    $1,082,500
                                   ==========
</TABLE>

    Beginning  June  5, 1997 and continuing through  December  5,
    1997,   the  Company  issued  promissory  notes  to   certain
    directors  and  investors  for  aggregate  consideration   of
    $1,875,000. These notes specified that at any time  prior  to
    repayment  the holder had the right to convert the  notes  to
    common  stock of the Company at $.10 per share.  These  notes
    bore  interest  at 8% and were due on March  31,  1998.   All
    indebtedness  under  these  notes  was  repaid  and  canceled
    through  use  of proceeds from the Rights Offering  at  March
    31, 1998, as described below.
<PAGE>

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

(7) Notes Payable (continued)
    -------------------------

    The  Company distributed to holders of record on February 13,
    1998, transferable rights to subscribe for and purchase  0.54
    of  a Unit for each share of common share equivalent owned by
    such  holder.  Each Unit entitled the holder to receive $0.10
    principal amount of 8% Notes due March 31, 2003 and  warrants
    to  purchase  one share of common stock at an exercise  price
    of  $0.10  per  share. Common shares or equivalents  include:
    common  stock,  preferred stock, unexpired warrants,  options
    exercisable, and convertible notes outstanding.  The  Company
    raised  $5,000,000  through this Rights Offering,  which  was
    fully  subscribed. Concurrently therewith the Company  repaid
    $1,875,000  in promissory notes. The Rights Offering  expired
    March  31,  1998.   In  consideration  of  certain  investors
    agreeing  to  subscribe  to  Units  such  that  the   Company
    received  at least $2,000,000, the Company issued  20,000,000
    additional warrants to these investors, exercisable at  $0.10
    per share and expiring ten years after issue.

    On  January 13, February 2, February 23, March 10, and  March
    20,  1998 the Company issued non-convertible demand notes  to
    certain   directors   for  an  aggregate   consideration   of
    $950,000.   These loans bore interest at the prime  rate  and
    were  cancelled and repaid through use of proceeds  from  the
    rights offering.

    As of March 31, 1998, the Company's stockholders purchased  a
    total   of  50,000,000  Units,  including  additional   Units
    available  to fully subscribing shareholders as a  result  of
    unexercised rights of other shareholders, under the terms  of
    the  Rights  Offering.   The Rights Offering  period  expired
    March  31,  1998  and  has not been extended.  The  Company's
    gross  proceeds  from the Rights Offering was $5,000,000,  of
    which  $1,875,000  was  used to repay outstanding  promissory
    notes  due on March 31, 1998; and $950,000 was used to  repay
    demand  promissory notes issued from January 1, 1998  through
    March  31,  1998  as described above.  The  Company  incurred
    fees  and  costs  of  $211,713  in  relation  to  the  Rights
    Offering,  resulting  in net proceeds  after  fees  and  debt
    repayment of $1,963,287.  The Company recorded $5,000,000  in
    principal  of  new  notes  issued to  holders  of  subscribed
    units,  which are payable five years from date of  issue  and
    bear  interest at 8%. In connection with the Rights Offering,
    the  holders  of subscriber Units also received  warrants  to
    purchase  50,000,000  shares of  common  stock  expiring  ten
    years  from date of issue and exercisable at $.10  per  share
    (49,997,300  of  these  warrants  remain  outstanding  as  of
    December  31, 1999). The related fees and costs amounting  to
    $211,713  were  capitalized as debt issue  costs,  which  are
    being  amortized over the term of the debt, which is 5 years,
    on the straight-line method.

    As  of  December 31, 1999, these debt issue costs, which  are
    included  as part of other assets, are shown in the financial
    statements as follows:

         Debt issue costs                  $   211,713
         Accumulated amortization              (74,100)
                                           ------------
                                           $   137,613
                                           ============

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

(7) Notes Payable (continued)
    -------------------------

    Notes Payable are summarized as follows as of December 31,
    1999:
<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   $  151,550
    Long-term notes payable, bearing interest
        at 8%, maturing March 31, 2003             5,000,000      700,000
                                                  ----------   ----------
                                                  $6,082,500   $  851,550
                                                  ==========   ==========
</TABLE>

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

<TABLE>
<CAPTION>
                 Year                  Amount
                 ----                  ---------
<S>              <C>                   <C>
                 2000                        ---
                 2001                        ---
                 2002                  1,500,000
                 2003                  6,934,050
</TABLE>

(8) Redeemable Preferred Stock
    --------------------------

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

    Redeemable  preferred stock is convertible at the  option  of
    the  holder  at  any time, unless previously  redeemed,  into
    shares  of  the  Company'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 the Company 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 6  relating  the  exchange  of
    certain   redeemable  preferred  stock  for   a   debenture).
    Mandatory  redemption is required by  October  2002.   As  of
    December  31,  1999, cumulative dividends  in  arrears  total
    $190,562  ($7.20 per share) and are included in the  carrying
    value of redeemable preferred stock.

<PAGE>

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

(9) Stockholders' Equity
    --------------------

    Options
    -------

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

    The   following   is  a  summary  of  options   granted   and
    outstanding  under  the  plans as of December  31,  1999  and
    1998:

<TABLE>
<CAPTION>
                                   1999                  1998
                           --------------------  --------------------
                                       Weighted              Weighted
                                       Average               Average
                                       Exercise              Exercise
                           Number      Price     Number      Price
                           ----------  --------  ----------  --------
<S>                        <C>         <C>       <C>         <C>
    Options outstanding
    and exercisable,
    beginning of year      6,327,885   $  .077   1,670,750   $  .050

    Options granted        1,742,865   $  .055   4,947,719   $  .099

    Options exercised            ---       ---         ---       ---

    Options forfeited,
    or withdrawn with
    consent of holders           ---       ---    (290,584)  $  .055

    Options expired              ---       ---         ---       ---
                           ----------  --------  ----------  --------
    Options outstanding
    and exercisable,
    end of year            8,070,750   $  .072   6,327,885   $  .077
                           ==========  ========  ==========  ========
</TABLE>

    Warrants
    --------

    During  1998,  the  Company  issued  50,000,000  warrants  to
    purchase  common  stock at $.10 per share  to  investors  who
    exercised  rights in the rights offering of  March  1998,  in
    connection  with the issuance of $5,000,000  in  debt.  These
    warrants  expire on March 31, 2003.  During 1998,   2,700  of
    these   warrants   were  exercised,  and  49,997,300   remain
    outstanding as of December 31, 1999.

    During  1998, the Company also issued 4,000,000 warrants,  at
    $.10  per  share to its Chairman of the Board; and  9,500,000
    warrants at $.10 per share to certain directors who were  the
    holders of $950,000 in demand notes issued during 1998.

<PAGE>

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


(9) Stockholders' Equity (continued)
    --------------------------------

    During  1999,  the  Company issued  24,791,668  warrants   to
    certain  directors  and investors who committed  to  purchase
    new  shares  of  common  stock through  direct  purchases  of
    24,791,668  shares  of  common stock for  a  total  price  of
    $1,500,000.   The  shares  of stock  and  the  warrants  were
    issued  at  various  prices ranging from  $.05  to  $.08  per
    share,  based on the market value of the Company's  stock  at
    the time of the commitment.

    The  following table summarizes warrants issued,  outstanding
    and exercisable:

<TABLE>
<CAPTION>
                              As of December 31,
                      --------------------------------
                          1999                 1998
                      -----------          -----------
<S>                   <C>                  <C>
    Issued            125,756,545          100,964,877
    Outstanding       125,753,845          100,962,177
    Exercisable       125,753,845          100,962,177

</TABLE>

    Common Stock
    ------------

    At  December  31, 1999, 125,753,845 shares of authorized  but
    unissued   common  stock  were  reserved  for   exercise   of
    outstanding  warrants, 21,410,166 shares  of  authorized  but
    unissued common stock were reserved for exercise pursuant  to
    the  1986  and  1997  Stock Option Plans,  52,934  shares  of
    authorized  but  unissued  common  stock  were  reserved  for
    issuance   upon  conversion  of  the  Company's   outstanding
    preferred  stock, 140,000 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, and 13,174,478 shares of  authorized
    but   unissued   stock  were  reserved  for   issuance   upon
    conversion of outstanding convertible notes.

    Preferred Stock
    ---------------

    In  May  1988,  the  Company and a holder of  its  redeemable
    preferred  stock  entered into an agreement under  which  the
    mandatory  redemption  rights referred  to  in  note  8  were
    waived  as  to  187,500 shares of the preferred stock.  These
    shares  are  subject  to redemption  at  the  option  of  the
    Company  under  provisions  governing  the  preferred  stock,
    which  permit the Company to redeem such stock at  any  time.
    During 1998, the holder of the redeemable preferred stock  as
    to   which  mandatory  redemption  rights  were  waived,   as
    described  above, converted the 187,500 shares of such  stock
    into 375,000 shares of common stock of the Company.

    During  1999 holders of redeemable preferred stock  converted
    3,125  shares of preferred stock into 6,250 shares of  common
    stock of the Company.

    At   December  31,  1999,  cumulative  dividends  in  arrears
    totaled $190,562 ($7.20 per share) and were included  in  the
    aggregate  involuntary  liquidation value  of  the  preferred
    stock.

    At  December  31,  1999,  187,500 shares  of  authorized  but
    unissued  preferred  stock were reserved  for  issuance  upon
    maturity of the variable rate subordinated debenture.

<PAGE>

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

(10) Net Loss Per Common Share
     -------------------------

    Net  loss  per  common share for 1999 and 1998  is  based  on
    33,979,575   and   20,672,092   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 1999 and 1998 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 6, 7, 8 and 9).

(11) Commitments
     -----------

    The   Company   is   obligated  for  office  and   laboratory
    facilities  and other rentals under separate operating  lease
    agreements,  which expire in 2001. The basic  annual  rentals
    are  expected to be approximately $73,000 under such  leases.
    Annual  rent  expense relating to the leases  for  the  years
    ended  December  31, 1999 and 1998 approximated  $78,000  and
    $67,000, respectively.

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

<TABLE>
<CAPTION>
                 Year                  Amount
                 ----                  -------
                 <C>                   <C>
                 2000                  $59,360
                 2001                    4,947
                 2002                      ---
                 2003                      ---
                 2004                      ---
                                       -------
                                       $64,307
                                       =======
</TABLE>

     On   July  3,  1997,  the  Company  signed  a  non-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 non-exclusive right to produce AstaXin(R)
     and  is  paid  a  fixed  monthly  fee,  which  is  based  on
     manufacturing  capacity.   Fermic  provides  equipment   and
     facilities  necessary to manufacture and store  the  product
     and  is  responsible  for  purchasing  raw  materials.   The
     Company  is  responsible for sales efforts and for  ensuring
     the quality of the pigment.  The Company also has a role  in
     ensuring  that the manufacturing process works  effectively.
     The term of the contract has been extended through March 31,
     2000.  The  Company is currently negotiating to  extend  and
     modify  its  fee arrangement with the manufacturer  so  that
     fees  for  subsequent periods will be based on  quantity  of
     product produced.

<PAGE>

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


(12) Contingencies
     -------------

    On  July  21,  1997 Archer Daniels Midland, Inc. (ADM)  filed
    suit  against  the  Company in the  U.S.  District  Court  in
    Baltimore,   Maryland   alleging  patent   infringement   and
    requesting  a preliminary injunction against the  Company  to
    cease  the use of its axtaxanthin manufacturing process.   On
    August  4,  1997,  the Company filed a $300,450,000  contract
    and  trade  secrets counterclaim against ADM, alleging  theft
    of  trade  secrets.  The Company is also claiming  breach  of
    contract,  in  regards to a licensing agreement entered  into
    by  the Company and ADM in 1995. The Company contends that it
    complied  with  all  material terms of  this  agreement.   On
    September  10,  1997 the District Court denied ADM's  request
    for  a preliminary injunction on the basis that ADM could not
    demonstrate  a  likelihood of success on the  merits  of  its
    patent  infringement  allegations.  To date,  the  court  has
    imposed  a  stay  on  all discovery, while a  court-appointed
    expert   analyzes  the  yeast  products  of   both   parties.
    Pursuant  to an order issued by the judge on July  16,  1999,
    both  the  Company and ADM communicated to  the  court  their
    willingness to pursue a mediated settlement of this  dispute.
    During  the  period from October 1, 1999 through October  28,
    1999,  the parties were unable to resolve the dispute through
    mediation.   Thus, the litigation has been  returned  to  the
    court   for  a  judicial  disposition.   It  is  management's
    contention  that  it is not probable that this  dispute  will
    result  in an unfavorable outcome.  Accordingly, no liability
    has  been  reflected in the accompanying balance sheet.   The
    Company  had expenses of $530,882 and $399,492, respectively,
    in  1999  and 1998 relating to this litigation, which  is  on
    going.

(13) Income Taxes
     ------------

    At  December 31, 1999, the Company has federal and state  net
    operating  loss  carry-forwards of approximately  $23,003,000
    that  expire  at various dates from 2000 through  2019.   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  1999
    and 1998.

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

<TABLE>
        <S>                                         <C>
        Net operating loss carry-forward benefit    $ 9,201,000
        Valuation allowance                         ( 9,201,000)
                                                    ------------

        Deferred tax asset, net                     $       ---
                                                    ============
</TABLE>

(14) Uncertainty
     -----------

    The  Company  has  incurred net losses in each  year  of  its
    existence,   aggregating   approximately   $28,000,000   from
    inception  to  December  31, 1999  and  its  liabilities  and
    redeemable   preferred   stock   exceeded   its   assets   by
    approximately   $7,287,000  at  that  date.   These   factors
    indicate  that  the Company will not be able to  continue  in
    existence  unless it is able to raise additional capital  and
    attain profitable operations.

    Management  has  instituted  a program  of  significant  cost
    reductions,   deferred   all  except  immediately   necessary
    capital  expenditures, and suspended payment of dividends  on
    the  Company's preferred stock.  The implementation of  these
    measures  to  conserve  working  capital  together  with  the
    successful   marketing  and  licensing   of   the   Company's
    products,  which management hopes to achieve, may permit  the
    Company  to  attract  additional capital  and  enable  it  to
    continue.

    The Company began manufacturing and selling AstaXin(R) during
    1998  and  1999. The Company believes this technology  to  be
    highly marketable.

<PAGE>

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


(14) Uncertainty (continued)
     -----------------------

    To  increase  working capital, the Company  issued  a  rights
    offering  in  March  1998,  and  modified  the  maturity   of
    convertible  promissory notes. Since a  majority  of  the  8%
    Notes are held by officers and directors of the Company,  the
    Company  believes that these holders will use  the  notes  to
    exercise  warrants issued concurrently with those  notes,  so
    that  the  notes will not be repaid in cash.  However,  there
    can  be no assurance that these holders will use their  notes
    to exercise these warrants.

    During  1999, the Company funded its operations  through  the
    issuance  of stock through direct purchases by directors  and
    other   accredited   investors.   This  provided   additional
    capital of $1,500,000.

(15) Nature of Risks and Concentrations
     ----------------------------------

    The  Company derived approximately 66% and 93%, respectively,
    of  its  revenue  during  1999 and 1998  from  sales  of  the
    product, AstaXin(R).  During 1998, 98% of these sales were to
    one  foreign  distributor, located in  Mexico.  Substantially
    all  of  the  Company's 1999 sales were to fish producers  in
    the  aquaculture  industry  located  in  Chile.  All  of  the
    Company's   manufacturing   operations   for   AstaXin(R) are
    conducted in a single manufacturing facility in Mexico  City,
    Mexico.

    All  of  the preceding concentrations subject the Company  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,  the  Company  has  at  present   no
    information that would lead it to believe that it  will  lose
    its  principal  product, or its contracted  manufacturer;  or
    that  its  operations  in  Mexico  City   or  Chile  will  be
    disrupted.   The  Company discontinued its relationship  with
    its distributor in Mexico during 1999, and is now serving  as
    its  own distributor and marketer, since that distributor had
    been  unable  to  sell material quantities of  the  Company's
    product to end-users.

(16) Simple Retirement Plan
     ----------------------

    Effective January  1,  1997, the  Company  adopted  a  Simple
    Retirement Plan  under Internal Revenue Code Section  408(p).
    The Plan is a defined contribution plan, which covers all  of
    the Company's U.S. employees who receive at least  $5,000  of
    compensation  for  the  preceding  year.  The  Plan   permits
    elective  employee  contributions.   The  Company   makes   a
    nonelective contribution  of 2% of each  eligible  employee's
    compensation for  each year. The Company's  contributions  to
    the  Plan   for  1999  and  1998  were  $6,569  and   $6,979,
    respectively, which  are  expensed  in  the  1999  and   1998
    Statements of operations.

(17) Subsequent Events
     -----------------

    On  February  8,  2000,  certain  directors  of  the  Company
    committed  to provide up to $1,000,000 in additional  funding
    to  the  Company.  In return, these directors will be  issued
    up  to  10,000,000  new shares of common stock  at  $.10  per
    share,  which was the market price of the stock  on  February
    8,  2000.   In  return for committing to this funding,  these
    investors  will also receive 10,000,000 warrants to  purchase
    common  stock at $.10 per share expiring in 10  years.   This
    money  will  be  used to fund continuing  operations  of  the
    Company  and  projected  legal expenses  associated  with  on
    going  litigation.  The Company has not received any of these
    funds as of the report date.

<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 6, 2000.


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


                         By:    /S/ Stephen F. Hiu, President
                                --------------------------------

                         Date:  April   6, 2000
                                --------------------------------

                         By:    /S/ Melissa M. Stump, Controller
                                --------------------------------

                         Date:  April   6, 2000
                                --------------------------------


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.

<TABLE>
<CAPTION>
Signature                      Title                         Date
----------------------------   ---------------------------   --------------
<S>                            <C>                           <C>
  /s/  Joseph C. Abeles        Director                      April 6, 2000
----------------------------
      (Joseph C. Abeles)

  /s/  John A. Cenerazzo       Director                      April 6, 2000
----------------------------
      (John A. Cenerazzo)

  /s/  Stephen F. Hiu          Director, President,          April 6, 2000
----------------------------
      (Stephen F. Hiu)         Treasurer,
                               Chief Financial Officer, and
                               Chief Accounting Officer

  /s/  Thomas L. Kempner       Vice Chairman of Board        April 6, 2000
----------------------------
      (Thomas L. Kempner)      of Directors

  /s/  Michael G. Kimelman     Chairman of the Board         April 6, 2000
----------------------------
      (Michael G. Kimelman)    of Directors

  /s/  Sidney R. Knafel        Director                      April 6, 2000
----------------------------
      (Sidney R. Knafel)

  /s/  Patrick F. Monahan      Director and Secretary        April 6, 2000
----------------------------
      (Patrick F. Monahan)

</TABLE>
<PAGE>