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, 2004
                                     _________________

[ ]  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               (IRS Employer
  of 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                NO    X
           ___               ___

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

     State issuer's revenues for its most recent fiscal year $0 .
                                                            ____

     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.  $2,958,931 as of August 30, 2005
                          ________________________________

(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  August  30,  2005 there were 101,732,453  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  RISK
AND  UNCERTAINTY.  CERTAIN STATEMENTS IN THIS  REPORT  SET  FORTH
MANAGEMENT'S   INTENTIONS,   PLANS,  BELIEFS,   EXPECTATIONS   OR
PREDICTIONS  OF THE FUTURE BASED ON CURRENT FACTS  AND  ANALYSES.
WHEN   WE   USE  THE  WORDS  "BELIEVE,"  "EXPECT,"  "ANTICIPATE,"
"ESTIMATE,"  "INTEND"  OR  SIMILAR  EXPRESSIONS,  WE  INTEND   TO
IDENTIFY FORWARD-LOOKING STATEMENTS.  YOU SHOULD NOT PLACE  UNDUE
RELIANCE ON THESE FORWARD-LOOKING STATEMENTS.  ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THOSE INDICATED IN SUCH STATEMENT, DUE  TO
A  VARIETY OF FACTORS, RISKS AND UNCERTAINTIES.  POTENTIAL  RISKS
AND  UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED  TO,  COMPETITIVE
PRESSURES  FROM OTHER COMPANIES AND WITHIN THE BIOTECH  INDUSTRY,
ECONOMIC  CONDITIONS IN THE COMPANY'S PRIMARY  MARKETS,  EXCHANGE
RATE FLUCTUATIONS, REDUCED PRODUCT DEMAND, INCREASED COMPETITION,
INABILITY   TO  PRODUCE  REQUIRED  CAPACITY,  UNAVAILABILITY   OF
FINANCING,  GOVERNMENT  ACTION,  WEATHER  CONDITIONS  AND   OTHER
UNCERTAINTIES,  INCLUDING THOSE DETAILED IN "RISK FACTORS"  BELOW
AND  FROM  TIME-TO-TIME IN THE COMPANY'S SECURITIES AND  EXCHANGE
COMMISSION FILINGS.

                             PART I

ITEM 1.   DESCRIPTION OF BUSINESS

General

     IGENE  Biotechnology,  Inc.  ("Igene")  is  engaged  in  the
business  of  developing, marketing, and manufacturing  specialty
ingredients for human and animal nutrition.   Igene was formed on
October  27,  1981  to  develop, produce and  market  value-added
specialty  biochemical products.  Igene is a supplier of  natural
astaxanthin, an essential nutrient in different feed applications
and  as  a  source of pigment for coloring farmed salmon species.
Igene   also   supplies   nutraceutical  ingredients,   including
astaxanthin.   Igene  is  focused  on  fermentation   technology,
nutrition   and   health  in  its  marketing  of   products   and
applications worldwide.

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

     During   the   year  2000,  Igene  formed  a  wholly   owned
subsidiary,  Igene  Chile  Comercial,  Ltda.,  in   Chile.    The
subsidiary  has  a  sales and customer service office  in  Puerto
Varas, Chile, and a product warehouse in Puerto Montt, Chile.

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

     Igene Biotechnology Inc., in an effort to focus on and  grow
its  core  business, on February 5, 2003 disposed of its interest
in  its  former subsidiary, ProBio.  Fermtech AS, a  joint  stock
company  incorporated in the Kingdom of Norway and owned  equally
by  our former chief executive officer, Stein Ulve and our former
chief marketing officer, Per Benjaminsen, purchased the shares of
ProBio.  Mr. Ulve has resigned as CEO and director of Igene while
Mr.  Benjaminsen continues to serve the Company  as  Director  of
Sales and Marketing, effective as of December 31, 2002.
<PAGE>
     Igene  currently  leases manufacturing  capacity  in  Mexico
City,  Mexico, through a contract manufacturer on  an  as  needed
basis.    In  an  effort  to  develop  a  dependable  source   of
production,  on  March  19,  2003, Tate  &  Lyle  PLC  and  Igene
Biotechnology,  Inc  announced a 50:50 joint venture  to  produce
AstaXin(R) for the aquaculture industry. Production utilizes Tate
&  Lyle's  fermentation capability  together  with   the   unique
technology  developed by Igene. Part of Tate  &  Lyle's  existing
Selby,  England, citric acid facility will be modified to include
the  production of 1,500 tons per annum of this product.  Tate  &
Lyle's investment of $25 million includes certain of its facility
assets  currently used in citric acid production.  The production
facility is generating product and it is hoped the facility  will
be  complete  and in full production by the end of  the  calendar
year 2005.

Government Regulation

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

     In  a notice published in the Federal Register July 6, 2000,
the FDA announced the amendment of its color additive regulations
to provide for the safe use of Phaffia yeast, such as that in the
Company's product, AstaXin(R), as a color additive in aquaculture
feeds.   This  ruling,  which became effective  August  8,  2000,
allows  Igene  to market its product, AstaXin(R), for aquaculture
feeds  and fish produced in, or imported into, the United States.
This  ruling is available to the public in the Federal  Register.
Igene  has  also previously obtained approval for AstaXin(R) from
the Canadian Food Inspection Agency (CFIA).   Additional  foreign
approval  applications  for AstaXin(R),  including those for  the
European  Union,  are in progress. Igene is required  to  perform
additional tests and prepare additional documentation as part  of
the  application process.  The initial application was  submitted
in  May of 2004.  It is hoped the application will be approved in
the latter half of 2005.

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

     Igene  has not incurred and does not anticipate any material
environmental compliance costs.

Research and Development

     As  of  December 31, 2004, Igene had expended  approximately
$14,622,000  on research and development since its  inception  on
October 27, 1981 and has, as of December 31, 2004, recognized  it
share  in  revenues, directly or through the Joint Venture,  from
product sales and royalties of approximately $14,500,000 from the
proprietary   processes   resulting  from   such   research   and
development.    Igene  will  continue  to  incur   research   and
development costs in connection with improvements in its existing
processes and products, but it does not anticipate development of
new processes and products in 2005.

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

          2004   $ 847,544
          2003   $ 745,364

     Igene's research and development activities have resulted in
the  development of processes to produce the products hereinafter
discussed.
<PAGE>
Commercial Products

AstaXin(R)

     AstaXin(R)  is  Igene's  registered  trademark for its dried
yeast product made from  a proprietary strain of yeast  developed
by  Igene.   AstaXin(R)  is  a  natural  source of astaxanthin, a
pigment  which  imparts the characteristic red color to the flesh
of salmon, trout, prawns and certain  other  types  of  fish  and
shellfish.   In  the  ocean, salmon and trout obtain  astaxanthin
from  krill  and other planktonic crustaceans in their  diet.   A
krill  and  crustacean diet would be prohibitively expensive  for
farm-raised salmonids.  Without the addition of astaxanthin,  the
flesh  of  such  fish is a pale, off-white color, which  is  less
appealing  to  consumers expecting "salmon-colored"  fish.   Fish
feeding trials in Europe, Asia, and North and South America  have
demonstrated  the efficacy of AstaXin(R) in pigmenting fish.   An
estimated  1,000,000  metric  tons  of  farm-raised  salmon   are
produced  annually worldwide.  Igene derived revenue during  2004
and  2003  from sales of AstaXin(R) (including sales  made by the
Joint  Venture) of which the majority were to fish  producers  in
the  aquaculture industry in Chile, as well as sales exported  to
Japan and Canada.

     On May 20, 2000, Igene renewed its manufacturing arrangement
with Fermic, S.A. de C.V., of Mexico City, Mexico ("Fermic"), for
the production of its natural astaxanthin pigment, AstaXin(R), in
Fermic's  manufacturing facility in Mexico. Commercial production
began in January of 1998.

     The  Fermic contract executed in May 2000, provides that the
manufacturer has the non-exclusive right and license  to  produce
AstaXin(R) for Igene, is paid a cash fee based  on  manufacturing
capacity, and may receive up to 20,000,000 shares of Igene common
stock  in  lieu of additional cash based on quantity  of  product
manufactured  over  the six year term. Of the  20,000,000  shares
available  to  be  earned, 14,730,014 have been earned  to  date.
Fermic provides equipment and facilities necessary to manufacture
and  store  the  product and is responsible  for  purchasing  raw
materials.   Igene  is  responsible for  sales  efforts  and  for
ensuring  the quality of the pigment.  Igene also has a  role  in
ensuring  that the manufacturing process works effectively.   The
contract  expires  May  20, 2006, unless  terminated  earlier  by
either party. See Item 2. Description of Property.

     On  March 18, 2003, the Company entered into a Joint Venture
Agreement  with Tate & Lyle Fermentation Products Ltd.   ("Tate")
Pursuant  to  a  Joint Venture Agreement, the  Company  and  Tate
agreed  to  form  a  joint  venture  (the  "Joint  Venture")   to
manufacture, market and sell Astaxanthin and derivative  products
throughout  the world for all uses other than as a  Nutraceutical
or  otherwise  for  direct human consumption.   Tate  contributed
$24,600,000  in  cash  to the Joint Venture,  while  the  Company
transferred to the Joint Venture its technology relating  to  the
production  of  Astaxanthin  and assets  related  thereto.  These
assets will continue to be used by the Joint Venture in the  same
manner as historically used by the Company.  The Company and Tate
each have a 50% ownership interest in the Joint Venture and equal
representation  on the Board of Directors of  the  Company.   The
initial  value  of the Company's investment in the Joint  Venture
has  been  recorded at an amount equal to the book value  of  the
Company's consideration contributed at the creation of the  Joint
Venture.    As   the  cost  of  the  Company's   technology   and
intellectual  property has been previously  expensed  and  had  a
carrying amount of zero, the investment in the Joint Venture  has
been  initially  recorded with a book value  of  $316,869,  which
represents  the unamortized production costs contributed  to  the
Joint  Venture.  In addition to the Company's initial  investment
in  the  Joint Venture, the Company has made $685,438 in advances
to the Joint Venture and $6,000 capital investment.

     Production utilizes Tate's fermentation capability  together
with  the  unique technology developed by Igene. Part  of  Tate's
existing Selby, England, citric acid facility will be modified to
produce  up  to  1,500 tons per annum of this  product.   Tate  &
Lyle's  investment of approximately $25 million includes  certain
of its facility assets currently used in citric acid production.

     Based  on  estimates of worldwide production of farm  raised
salmon,  Igene  believes the market for astaxanthin  as  a  color
additive  in salmon feed exceeds $200,000,000 per year worldwide,
which   would   require  approximately  10,000  metric  tons   of
AstaXin(R) to serve 100% of the market.  A single competitor, who
produces  a  chemically  synthesized  product, presently controls
more  than  80%  of the world market for astaxanthin as a pigment
for aquaculture. The Joint Venture's production through the first
half  of  2005  has  been  limited  by the development of the new
facility, it is hoped the by the  end  of  2005 the Joint Venture
will  have  successfully  completed  the new production facility.
However, there can be  no assurance  that the Company and venture
will be able  to  utilize these  additional sources of production
capacity,  or  that, if  it is  able  to  utilize  the additional
production  capacity,  that  it  will  be  able to do so on terms
favorable to Igene or that any level of demand will continue.
<PAGE>
      Previously reported litigation (original lawsuit filed July
21,  1997,  in  the U.S. District Court, Baltimore,  MD)  between
Archer   Daniels  Midland,  Inc.  ("ADM")  and  Igene,  involving
allegations  of patent infringement and counterclaims  concerning
the  theft  of trade secrets was settled on September  29,  2003.
ADM  had  requested injunctive relief as well as  an  unspecified
amount   of   damages,  and  Igene  had  filed   a   $300,450,000
counterclaim  concerning the theft of trade secrets.   Resolution
of  the  dispute  between ADM and Igene  did  not  result  in  an
unfavorable  outcome to Igene.   Accordingly,  no  liability  was
recorded  on  the  balance  sheet.   Under  the  terms   of   the
settlement, Igene is permitted to continue to make and  sell  its
product, AstaXin(R).   See Item 3. Legal Proceedings.

     During   2001  Igene  began  investigating  other   possible
commercial  uses of astaxanthin, including its application  as  a
human  nutritional  supplement.   Igene  has  formulated  natural
astaxanthin as a  super-antioxidant, AstaXin(R),  for  the  North
American dietary supplement market.  Antioxidants are one of  the
largest product categories in the health and nutrition industry.

Patents and Trademarks

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

     All  patents and trademarks are carefully reviewed and those
with  no  foreseeable commercial value are abandoned to eliminate
costly  maintenance fees.  Patents, trademarks on technology  and
products  with  recognized commercial value, and which  Igene  is
currently  maintaining, include those for AstaXin(R), which  have
remaining lives ranging from 4 to 8 years.

Competition

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

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

     Several  companies  are  also known  to  be  developing  and
marketing  other  natural astaxanthin products.   Some  of  these
companies'  products are made from algae, while others  are  made
from  yeast.   Igene  believes that AstaXin(R) will compete  with
other  companies' astaxanthin products which are made from algae,
due  to Igene's  higher  production capacity and lower production
costs, but can provide no assurances in that regard.  Igene  also
believes  that AstaXin(R)  will  compete  with  other  companies'
astaxanthin products which are also made from yeast  due  to  our
proprietary  process  to  disrupt yeast  cell  walls,  which,  as
studies have shown, makes AstaXin(R) more readily absorbed by the
fish.
<PAGE>

     Igene is also  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.
Igene  cannot  yet predict how competitive it would  be  in  this
market.

Sources and Availability of Raw Materials

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

Employees

     At  December  31,  2004, Igene had 12 full  time  employees.
Three 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 one representative in Norway.  The remainder of
the  employees are based in the U.S.  Igene also utilizes various
consultants on an as-needed or short-term basis.

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


ITEM 2.  DESCRIPTION OF PROPERTY

     Igene leases approximately 8,500 square feet of space in the
Oakland  Ridge Industrial Park located at 9110 Red  Branch  Road,
Columbia,  Maryland.   Igene occupies the  space  under  a  lease
extension expiring on January 31, 2011.  The approximate  current
rental  expense is $93,600.  Approximately 2,000 square  feet  of
this  space is used for executive and administrative offices  and
approximately  2,500  feet is used for research  and  development
activities. The remaining 4,000 square feet of space is used  for
Igene's intermediate-stage or scale-up pilot plant facility.

     Igene  also  leases,  under a contract  expiring  May  2006,
manufacturing capacity at Fermic S.A. de C.V. (Fermic) in  Mexico
City,  Mexico and leases warehouse space for product  storage  in
Mexico  City.  The lease for warehouse space is on an  as  needed
basis, and Igene is under no obligation to lease space.

     Igene began a one year lease in December 2001, which renewed
in  December  2004, of approximately 220 square  feet  of  office
space,  in  Chile,  to  conduct marketing and  technical  support
activities  by  its  full-time technical representatives.   Igene
also  leases warehouse space on a month-to-month basis as  needed
for product storage in Chile.

     Igene  currently  owns  or leases sufficient  equipment  and
facilities for its research operations and all of this  equipment
is  in  satisfactory condition and is adequately insured.   There
are  no  current  plans for improvement of  this  property.    If
demand for Igene's product continues to increase, Igene plans  to
lease additional warehouse space as needed in Chile.


ITEM 3.  LEGAL PROCEEDINGS

     Previously reported, litigation (original lawsuit filed July
21,  1997,  in  the U.S. District Court, Baltimore,  MD)  between
Archer   Daniels  Midland,  Inc.  ("ADM")  and  Igene,  involving
allegations  of patent infringement and counterclaims  concerning
the  theft  of trade secrets was settled on September  29,  2003.
ADM  had  requested injunctive relief as well as  an  unspecified
amount   of   damages,  and  Igene  had  filed   a   $300,450,000
counterclaim  concerning the theft of trade secrets.   Resolution
of  the  dispute  between ADM and Igene  did  not  result  in  an
unfavorable  outcome to Igene.   Accordingly,  no  liability  was
recorded  on  the  balance  sheet.   Under  the  terms   of   the
settlement, Igene is permitted to continue to make and  sell  its
product, AstaXin(R).   Igene had expenses of $40,580 and $133,464
in  2004 and 2003 respectively, associated with the resolution of
this litigation.
<PAGE>
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.
<PAGE>
                             PART II

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

Common Stock

     Commencing  on or about June 12, 1989, Igene's common  stock
began  trading on the over-the-counter market on a limited  basis
and  is  quoted on the National Quotation Bureau's OTC  "bulletin
board".   The  following  table shows, by calendar  quarter,  the
range  of representative bid prices for Igene's common stock  for
the first two quarters of 2005, as well as 2004 and 2003.
<TABLE>
<CAPTION>

          Calendar Quarter                   High          Low
          ________________                 ________     ________
   <S>                                     <C>          <C>
   2005:  First Quarter                    $  .1170     $  .0650
          Second Quarter                   $  .1000     $  .0300

   2004:  First Quarter                    $  .2100     $  .1000
          Second Quarter                   $  .2000     $  .0950
          Third Quarter                    $  .1050     $  .0700
          Fourth Quarter                   $  .1300     $  .0600

   2003:  First Quarter                    $  .1000     $  .0070
          Second Quarter                   $  .0800     $  .0400
          Third Quarter                    $  .0700     $  .0200
          Fourth Quarter                   $  .2100     $  .0600
</TABLE>
     Igene  obtained the above information through  Pink  Sheets,
LLC,  a  national quotation bureau.  Such quotations  are  inter-
dealer   quotations  without  retail  mark-up,   mark-downs,   or
commissions,  and  may  not represent actual  transactions.   The
above quotations do not reflect the "asking price" quotations  of
the stock.

     The  approximate number of record holders of Igene's  common
stock as of August 19, 2005 was 250.  As of August 19, 2005,  the
high  bid and low offer prices for the common stock, as shown  on
the  "over-the-counter  bulletin board" were  $0.05  and  $0.045,
respectively.

Dividend Policy

     When  and  if  funds are legally available for such  payment
under  statutory  restrictions, Igene may pay  annual  cumulative
dividends on the preferred stock of $.64 per share on a quarterly
basis.   During 1988 Igene declared and paid a cash  dividend  of
$.16  per share on its preferred stock.  In December 1988,  Igene
suspended payment of the quarterly dividend of $.16 per share  of
preferred  stock.  No dividends have been declared or paid  since
1988.   Any  resumption of dividend payments on  preferred  stock
would  require  significant improvement in cash flow.   Preferred
stock  dividends  are  payable when and if  declared  by  Igene's
board.   Unpaid  dividends  accumulate  for  future  payment   or
addition  to the liquidation preference and redemption  price  of
the preferred stock.  As of December 31, 2004, total dividends in
arrears on Igene's preferred stock equal $192,494 (or $10.40  per
share) on Igene's Series A and are included in the carrying value
of the redeemable preferred stock.

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

Sales of Unregistered Securities

     On  April  4,  2004, the Board of Directors, authorized  the
payment  of  250,000 common shares to the Company's  attorney  in
connection  with the settlement of the ADM matter.  These  shares
<PAGE>
were  issued at an estimated value of $.11 per share, aggregating
$27,500.  The costs were expensed in the second quarter  as  part
of  the  ADM legal expense.  Igene relied on Section 4(2) of  the
Securities  Act of 1933, as amended, to issue the shares  to  its
attorney  without registration under the Securities Act of  1933,
as amended.

     During  the  course  of 2004, Fermic, Igene's  manufacturing
agent,  earned 3,640,792 shares of common stock as  part  of  the
manufacturing  agreement.  Fermic earns 2,250  shares  of  common
stock  for  each kilogram pure astaxanthin produced and delivered
as  part  of  the agreement. The average price is  based  on  the
market  value of the shares at the time the product was produced.
Fermic  can  earn  up  to 20,000,000 shares in  total  under  the
contract.   The 3,640,792 shares were earned at an average  price
of   $.11  per  share  for  2004.   Through  December  31,  2004,
14,730,014 shares have been earned.  Any future shares earned  by
Fermic  will  be  issued on a quarterly basis.  Igene  relied  on
Section 4(2) of the Securities Act of 1933, as amended, to  issue
the  shares to Fermic without registration under that act.  Igene
relied  on the representations and warranties of Fermic  made  in
the   manufacturing  agreement  in  claiming  the  aforementioned
exemption.

     During  the  course of 2004, $295,000 of the  $1,000,000  of
Convertible  Debentures  issued  as  part  of  the  2001   ProBio
purchase,  were  converted to common stock.   These  shares  were
converted  at  $.10  per share for a total of  2,950,000  shares.
These  shares were issued and the notes cancelled.  This relieved
the  Company  of  $295,000 of long-term debt.   Igene  relied  on
Section 4(2) of the Securities Act of 1933, as amended, to  issue
the  shares  to  the holders converting these debentures  without
registration under that act.

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 competitive pressures from  other
companies and within the biotech industry, economic conditions in
Igene's  primary  markets,  exchange rate  fluctuations,  reduced
product   demand,   increased  competition,   unavailability   of
production  capacity,  unavailability  of  financing,  government
action,  weather  conditions and other  uncertainties,  including
those  detailed in "Risk Factors" below and from time-to-time  in
Igene's Securities and Exchange Commission filings.

Results of Operations

     On  March 18 2003, the Company entered into a Joint  Venture
Agreement  with Tate & Lyle Fermentation Products Ltd.  ("Tate").
Pursuant  to  a  Joint Venture Agreement, the  Company  and  Tate
agreed  to  form  a  joint  venture  (the  "Joint  Venture")   to
manufacture, market and sell Astaxanthin and derivative  products
throughout  the world for all uses other than as a  Nutraceutical
or  otherwise  for  direct human consumption.   Tate  contributed
$24,600,000  in  cash  to the Joint Venture,  while  the  Company
transferred to the Joint Venture its technology relating  to  the
production  of  Astaxanthin  and assets  related  thereto.  These
assets  continue  to  be used by the Joint Venture  in  the  same
manner as historically used by the Company.  The Company and Tate
each have a 50% ownership interest in the Joint Venture and equal
representation  on the Board of Directors of  the  Company.   The
initial  value  of the Company's investment in the Joint  Venture
has  been  recorded at an amount equal to the book value  of  the
Company's consideration contributed at the creation of the  Joint
Venture.    As   the  cost  of  the  Company's   technology   and
intellectual  property has been previously  expensed  and  has  a
carrying amount of zero, the investment in the Joint Venture  has
been recorded with a book value of $316,869, which represents the
unamortized  production costs contributed to the  Joint  Venture.
Added  to this was a purchase of common stock in the new  venture
of $6,000.

      Production  will  utilize  Tate's  fermentation  capability
together with the unique technology developed by Igene.  Part  of
Tate's  existing  Selby, England, citric acid  facility  will  be
modified  to produce up to 1,500 tons per annum of this  product.
Tate's  investment of approximately $25 million includes  certain
of  its facility assets currently used in citric acid production.
Sales and cost of sales activity are now recorded as part of  the
operations of the unconsolidated venture.

     As  a result of the Joint Venture, the production, sales and
marketing  of  Astaxanthin now takes place in the  unconsolidated
Joint Venture.  From inception on March 18, 2003 through December
31,  2004, the Joint Venture's results of operations included the
following:  Gross profit from inception was a negative $4,356,000
on  sales  of $6,784,000, less manufacturing cost of $11,140,000.
Selling  and general and administrative expenses were  $5,268,000
<PAGE>
and  interest  expense  was $151,000.   The  resulting  loss  was
$9,775,000.   Igene's 50% portion of the Joint Venture  loss  was
$4,887,500.

     Because the Company accounts for its investment in the Joint
Venture   under  the  equity  method  of  accounting,  it   would
ordinarily recognize a loss representing its 50% equity  interest
in  the loss of the Joint Venture.  However, losses in the  Joint
Venture  are  recognized only to the extent of the investment  in
and  advances  to the Joint Venture.  Losses in  excess  of  this
amount are suspended from recognition in the financial statements
and  are  carried forward to offset Igene's share  of  the  Joint
Venture's future income, if any.

    At December 31, 2004, prior to the recognition of its portion
of  the  Joint  Venture  loss, Igene's investment  in  the  Joint
Venture consisted of  $322,869 and its net advances to the  Joint
Venture amounted to $685,438, for a total of $1,008,307.  For the
year  ended December 31, 2003, Igene recognized $818,052  of  its
share of a $914,494 loss.   For the year ended December 31, 2004,
Igene recognized losses to the extent of the increase in advances
of  $190,255.   The remainder, of approximately 3.9  million,  is
suspended and will be carried forward to offset Igene's share  of
earnings  from  the Joint Venture, if any.  The  balance  in  the
Advances  to  and  Investment in Joint  Venture  account  on  the
Company's financial statements is zero at December 31, 2004.

     The following schedules display certain account balances of
the joint venture as of December 31, 2004 and for the period
since March 18, 2003 (inception):
<TABLE>
<CAPTION>
                                                  December 31,
                                                         2004
                                                  ____________
                                                   (Unaudited)
     <S>                                          <C>
     ASSETS
     CURRENT ASSETS
          Cash                                    $ 1,769,000
          Accounts Receivable                       1,602,000
          Inventories                               1,434,000
                                                  ____________
                                                    4,805,000
     OTHER ASSETS
          Fixed Assets                             20,765,000
          Intellectual property                    24,614,000
                                                  ___________
     	         TOTAL ASSETS                       $50,184,000
                                                  ===========
     LIABILITIES AND EQUITY

     CURRENT LIABILITIES
          Accounts payable and accrued expenses   $ 5,883,000
          Working capital loan                      5,347,360
                                                  ___________
               TOTAL LIABILITIES                   11,230,360
          Equity                                   38,953,640
                                                  ___________
               TOTAL LIABILITIES AND EQUITY       $50,184,000
                                                  ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                                                Period from
                                                           initial investment to
                                                             December 31, 2004
                                                           _____________________
                                                                (unaudited)
     <S>                                                        <C>
     Net Sales                                                  $ 6,784,000
     Less: manufacturing cost                                   (11,140,000)
                                                                ____________
     Gross Profit (Loss)                                         (4,356,000)
     Less: selling, general and administrative                   (5,268,000)
                                                                ____________
     Operating Loss                                              (9,624,000)
     Interest Expense                                              (151,000)
                                                                ____________
     Net Loss                                                   $(9,775,000)
                                                                ============

     Igene's 50% equity interest in the net loss                $(4,887,500)
     Igene's Investment in and Advances to the Joint Venture    $(1,008,307)
                                                                ____________
     Igene's suspended loss                                     $(3,879,193)
                                                                ============
</TABLE>
     The following schedule displays certain account balances  of
the  Joint  Venture  for the year ended December 31, 2004 and the
period  from  the initial investment (March 18, 2003) to December
31, 2003.  As shown, 50% of the activity is recorded as equity in
loss of Joint Venture:

<TABLE>
<CAPTION>
                                                          Year              Period from
                                                          Ended          March 18, 2003 to
                                                   December 31, 2004     December 31, 2003
                                                   _________________     _________________
     <S>                                           <C>                   <C>
     Net Sales                                     $      5,650,000      $      1,134,000
     Less: manufacturing cost                            (9,989,000)           (1,151,000)
                                                   _________________     _________________
     Gross Profit (Loss)                                 (4,339,000)              (17,000)
     Less: selling, general and admin                    (3,440,000)           (1,828,000)
                                                   _________________     _________________
     Operating Loss                                      (7,779,000)           (1,845,000)
     Interest Expense                                      (167,000)               16,000
                                                   _________________     _________________
     Loss before tax                               $     (7,946,000)     $     (1,829,000)
                                                   =================     =================
     50% equity interest Igene                     $     (3,973,000)     $       (914,494)
                                                   =================     =================
     Igene's additional Investment in
        and Advances to the Joint Venture          $       (190,255)     $       (818,052)
                                                   _________________     _________________
     Igene's incremental suspended loss            $     (3,782,745)     $        (96,442)
                                                   =================     =================
</TABLE>

Sales and other revenue

     As  part  of  the  Joint  Venture agreement,  all  sales  of
AstaXin(R) are recognized through the venture company. Therefore,
Igene  recorded no sales during 2004 or the last  half  of  2003.
For  2003  sales were $463,486.   Sales had been limited  in  the
past  quarters due to insufficient production quantity.  However,
the  primary  cause  for  the decreased sales  for  the  year  as
compared with the prior year is that, as of June, 2003, Igene had
sold its remaining inventory to the Joint Venture in anticipation
of  the  consummation of the Joint Venture Agreement.  Management
anticipates that the joint venture with Tate will provide a  more
dependable  product flow.  However, there can be no assurance  of
the  dependability  of  production,  or  that  any  increases  in
production or sales will occur, or that if they occur, they  will
be material.

Cost of sales and gross profit

    As  with sales revenue, beginning July 2003 forward, cost  of
sales  and  gross profit are recognized and will continue  to  be
recognized  through the Joint Venture.  Igene reported  no  gross
profit  on sales of AstaXin(R) for 2004 or the last half of 2003.
<PAGE>
Gross profit on sales of AstaXin(R) was $17,342 for 2003.  At the
time of transition to the Joint Venture, Igene's gross profit was
at  9% of sales.  The Company attributes the fall in gross profit
to   a  combination  of  pricing  pressure  in  the  market   and
inefficiencies  in  production.  Demand is expected  to  increase
both due to seasonal increases in customer usage and increases in
our  market  share.   Management expects  that  sales  and  gross
profits  may  be  limited  by  the  quantities  of AstaXin(R) the
Company  is  able  to  have  produced  by  its   current contract
manufacturer, while  the  Joint Venture prepares for  production.
The  Company believes   that  the  lack  of  production  capacity
should   be  alleviated  as  the Joint Venture plant continues to
develop  in 2005.  Unless  augmented  by  increases in production
resulting  from  the  Joint  Venture  and  increased   production
efficiency resulting from process research and development, sales
and   gross   profit   growth   may  be  limited  by   production
restrictions.   Management  expects  the level of gross profit to
improve in the future  as a percentage  of  sales,  with expected
increases  in  production  efficiency  received  from  the  Joint
Venture with Tate offsetting pricing competition, but can provide
no  assurances  in that regard to  future increased production or
future increased margin.  Cost of sales for 2003 was $446,144.

Marketing and selling expenses

    Marketing  and  selling expenses for 2004  were  $326,689,  a
decrease  of $1,704, of less then one percent from the  marketing
and  selling expenses of $328,393 for 2003.  As a result  of  the
Joint  Venture  with  Tate,  Igene is expecting  an  increase  in
salable product with a corresponding increase in selling expenses
at  the point the new facility is in full production.  However no
assurances  can  be made in regards to increased production  from
the  new  facility  nor  the corresponding  increase  in  selling
expenses.   All marketing and selling expenses incurred by  Igene
since  the inception of the Joint Venture, with the exception  of
the  cost related to the shares reissued to Fermtech as  part  of
the  ProBio agreement have been reimbursed by the Joint  Venture.
Approximately  $216,000  of the 2004 and  $181,000  of  the  2003
marketing  and  selling  expenses was  reimbursed  by  the  Joint
Venture.

Research, development and pilot plant expenses

    Research, development and pilot plant expenses for  2004  and
2003  were  $847,544  and $745,364, respectively,  reflecting  an
increase  of  $102,180 or 13.7%.  Costs increased in  support  of
increasing  the  efficiency of the manufacturing process  through
experimentation  in the Company's pilot plant, undertaken  in  an
attempt  to  develop higher yielding strains of yeast  and  other
improvements in the Company's AstaXin(R) technology,  as well  as
through travel to the Selby facility to aid in bringing the plant
to  full  production.   Igene is hoping  this  will  lead  to  an
increase  in salable product at a reduced cost to Igene  and  the
Joint  Venture.   However, no assurances  can  be  made  in  that
regard.  All $847,000 research and development costs in 2004 were
funded  through  reimbursement from the  Joint  Venture.   During
2003,  the Joint Venture reimbursed Igene approximately  $638,000
for the costs.

General and administrative expenses

    General and administrative expenses for 2004 remained  nearly
constant  with those of 2003 increasing less then 1 percent  from
$687,427  to  $688,125.  General and administrative expenses  are
expected  to  remain  at the current level.  These  expenses  are
expected  to  be funded by additional funding from  stockholders,
and  by  cash flows from operations, to the extent available  for
such  purposes.  However, we can provide no assurances that  such
additional  funding  or cash flows from operations,  will  become
available  or  that such funding, if any, will be available  upon
terms  favorable  to  us.   Of  the  general  and  administrative
expenses   incurred  during  2004  approximately  $550,000   were
reimbursed  by  the  Joint Venture.  During  2003,  approximately
$398,000 were reimbursed by the Joint Venture.

Litigation expenses

    Previously  reported litigation (original lawsuit filed  July
21,  1997,  U.S.  District Court, Baltimore,  MD  between  Archer
Daniels Midland, Inc. ("ADM") and Igene, involving allegations of
patent  infringement and counterclaims concerning  the  theft  of
trade secrets, was resolved on September 29, 2003.  Resolution of
the  dispute  between   ADM  and  Igene  did  not  result  in  an
unfavorable  outcome to Igene.  Igene will continue to  make  and
sell  its  product, AstaXin(R).  The Company incurred $40,580  of
litigation expenses for 2004 and $133,464 for 2003.
<PAGE>

Expenses reimbursement by Joint Venture

     As  part  of the Joint Venture agreement, costs incurred  by
Igene related to production, research and development, as well as
those  related  to  the marketing of AstaXin(R),  are  considered
costs  of the Joint Venture and therefore are reimbursed  by  the
Joint  Venture.  For  the  year ended December  31,  2004,  costs
reimbursed  by  the  Joint Venture totaled  $1,612,845.   Of  the
reimbursement  received  approximately  $847,000  was  to   cover
research  and development costs, $216,000 was to cover  marketing
and  selling  expenses  and $550,000 was  to  cover  general  and
administrative costs. For the year ended December 31, 2003, costs
reimbursed  by  the  Joint Venture totaled  $1,252,565.   Of  the
reimbursement  received  approximately  $638,000  was  to   cover
research  and development costs, $181,000 was to cover  marketing
and   selling  expenses,  $398,000  was  to  cover  general   and
administrative  costs,  and  the  balance  related   to   various
production related expenses.

Interest expense (net of interest income)

    Interest  expense (net of interest income) for 2004 and  2003
was $829,617 and $965,737 respectively, a decrease of $136,120 or
14%.   This interest expense (net of interest income) was  almost
entirely composed of interest on Igene's long term financing from
its  directors  and  other stockholders and interest  on  Igene's
subordinated  and  convertible debentures,  and  is  expected  to
remain  at the reduced level as the reduction of preferred shares
outstanding has reduced the related accrued dividends recorded as
interest.

Equity in earnings of Joint Venture

     As  a result of the Joint Venture, the production, sales and
marketing  of  Astaxanthin now take place in  the  unconsolidated
Joint  Venture.   For  the  years ended 2004  and  2003,  Igene's
portion  of  the Joint Venture loss was $3,973,000 and  $914,494,
respectively, an increased loss of $3,058,506 or 334%.  The  loss
was  a  result of a 50% interest in the following:  Gross  profit
for  2004  was  a  negative $4,339,000 compared with  a  negative
$17,600 for 2003, and increased loss of $4,321,400.  These losses
were  due  mainly  to  the increased costs  associated  with  the
development of production in the new facility.  As sales for 2004
increased  to  $5,650,000 from $1,133,675  for  2003,  associated
manufacturing  costs  increased  to  $9,989,000  for  2004   from
$1,151,275 for 2003.  Management expects the Joint Venture to  be
able  to  sell product at a gross profit.  The expected increases
in  production  efficiency received from the development  of  the
Joint Venture with Tate & Lyle should offset pricing competition,
but  can provide no assurances in that regard to future increased
production or future increased margin.

     Selling,  general and administrative expenses for the  years
ended  2004 and 2003 were $3,440,000 and $1,827,703, respectively
an increase of $1,612,297.  These expenses are expected to remain
at  2004  levels.   The increase is due mainly to  2003  being  a
partial  year  for  the venture.  Interest expense  increased  to
$167,000 in 2004 from interest income of $16,315 in 2003  as  the
venture  incurs  debt  to finance its operation.   The  resulting
losses  were $7,946,000 and $1,828,988 for the years  ended  2004
and  2003, respectively.  For 2004, Igene's 50 % equity  interest
in  the  Joint venture loss was $3,973,000.  Igene's  50%  equity
interest in the Joint Venture loss was $914,494 for 2003.

     Because the Company accounts for its investment in the Joint
Venture   under  the  equity  method  of  accounting,  it   would
ordinarily recognize a loss representing its 50% equity  interest
in  the loss of the Joint Venture.  However, losses in the  Joint
Venture  are  recognized only to the extent of the Investment  in
and  Advances  to the Joint Venture.  Losses in  excess  of  this
amount are suspended from recognition in the financial statements
and  carried  forward  to  offset  Igene's  share  of  the  Joint
Venture's future income, if any.

Disposition of ProBio Subsidiary and net income from discontinued
operations

     As  reported on Form 8-K on February 20, 2003, Igene, in  an
effort  to focus on and grow its core business, disposed  of  all
10,000 of the issued and outstanding shares of the capital  stock
of  ProBio.   Fermtech AS, a joint stock company incorporated  in
the  Kingdom  of  Norway and owned equally by  our  former  chief
executive  officer,  Stein Ulve and our  former  chief  marketing
officer,  Per Benjaminsen, purchased the shares of  ProBio.   Mr.
Ulve  has  resigned  as  CEO  and director  of  Igene  while  Mr.
Benjaminsen  continues  to serve the Company  as  in  independent
consultant, effective as of December 31, 2002.
<PAGE>
     Igene  sold ProBio to Fermtech AS in exchange for  aggregate
consideration  valued  at approximately $343,000,  consisting  of
7,000,000  shares  of Igene common stock that Fermtech  initially
received  in consideration for the purchase of ProBio in December
2001  (of  these  shares, 2,000,000 shares may  be  re-earned  by
Fermtech  as  described below), valued for the  purposes  of  the
acquisition  at $.03 per share, plus forgiveness of approximately
$168,000  of  debt  that  Igene owed to ProBio  at  the  time  of
purchase in 2001.  By Mr. Benjaminsen remaining employed by Igene
through  February 2005, Fermtech re-earned all 2,000,000  of  the
escrowed shares.  The remaining 5,000,000 shares of common  stock
of  Igene  were  retired effective February  5,  2003.   Gain  on
disposal during the year ended 2003 was $237,637.  This gain  was
a  one-time  occurrence  as a result of the  disposition  of  the
assets and liabilities associated with ProBio.

     The  amount  of consideration paid for ProBio was determined
through  arms-length  negotiations between Igene  management,  on
behalf  of  Igene, and Mr. Ulve, on behalf of Fermtech.   Factors
considered  in determining the amount paid for the ProBio  shares
involved  analysis of ProBio's cash flow, cash position,  revenue
and revenue prospects.

     The  equipment and other physical property owned  by  Probio
that  was  disposed of includes inventory, personal computers,  a
web site and trademark, other office equipment and furniture, and
accounts receivable and accounts payable related to nutraceutical
transactions.

Net loss and basic and diluted net loss per common share

     As  a  result  of the foregoing result of operations,  Igene
reported  net  losses of $1,309,965 and $2,170,893 for  2004  and
2003,  respectively, a decreased loss of $860,928 or 39%, a  loss
of  $.01 and $.02 per basic and diluted common share in 2004  and
2003,  respectively.  The weighted average number  of  shares  of
common  stock outstanding was 96,609,848 and 88,474,552 for  2004
and  2003,  respectively, an increase of 8,135,296  shares.   The
increase  in  outstanding  shares  resulted  from  primarily  the
weighted  average adjustment of the issuance of 2,950,000  shares
in conversion of debentures issued in the purchase of ProBio, the
issuance  of  250,000  shares of common stock  issued  for  legal
service  in  the  settlement of the ADM matter, the  issuance  of
3,640,792  shares to Igene's manufacturer under the manufacturing
agreement with Fermic, 750,000 shares in issuance for exercise of
employee   stock  incentive  plan,  389,192  in   conversion   of
redeemable preferred stock, 1,000,000 shares reissued to Fermtech
as part of the disposition of ProBio.

Financial Position

     During  2004  and 2003, the following also affected  Igene's
financial position:

     o   In April of 2004 the holder of Series B preferred stock,
         converted  the  187,500  shares  of preferred stock at a
         rate of two for one into  375,000 shares of common stock
         at a value of $4.00 per share. The preferred shares were
         retired  and  the  common  shares issued.  This relieved
         Igene of debt  recorded at $1,650,000 as of December 31,
         2003.

     o   During  2004,  decreases  in  accounts  receivable   and
         prepaid  assets  of  $161,474, and increases in accounts
         payable of $654,769 were sources of cash.

     o   Igene sold to third parties or sold to the Joint Venture
         its  entire  inventory  during  2003.  The result was an
         increase to cash in 2003 of $374,709.

     o   During  2004,  $190,255  used  in  advances to the Joint
         Venture,as compared with $495,183 used in  2003.

     o   Increase  in  cash  flow  for  2003  has allowed for the
         reduction  in  accounts payable of $409,784, in addition
         to  which  $250,000  was  used  for  the  repayment   of
         borrowings.

     o   During  2004,  holders  of  Series  A  preferred   stock
         converted  7,096  shares  of preferred stock into 14,192
         share of common stock, reducing the liquidation value of
         redeemable preferred  stock  by  $127,160.  During 2003,
         550 shares of preferred stock were converted  into 1,100
         shares of common stock, reducing  the  liquidation value
         of redeemable preferred stock by $9,416.
<PAGE>
     o   During  2004,  $295,000 of the $1,000,000 of Convertible
         Debentures  issued  as part of the 2001 ProBio purchase,
         were  converted  to  common  stock.    These shares were
         converted  at  $.10  per  share for a total of 2,950,000
         shares.    These  shares  were  issued  and  the   notes
         cancelled.    This  relieved  the Company of $295,000 of
         long-term debt.

     o   During  the  year  ended  December  31,  2003  3,750,000
         warrants,  were  exercised  using  $200,892  of 8% notes
         payable in a cashless exercise.  3,750,000 new shares of
         common stock were issued  pursuant to these exercises of
         warrants and $200,892 of 8% notes were cancelled.

     Since December 1988, as part of an overall effort to contain
costs  and  conserve working capital, Igene suspended payment  of
the quarterly dividend on its preferred stock.  Resumption of the
dividend  will  require significant improvements  in  cash  flow.
Unpaid  dividends cumulate for future payment or addition to  the
liquidation  preference  or redemption  value  of  the  preferred
stock.   As  of December 31, 2004, total dividends in arrears  on
Igene's preferred stock equal $192,494 (or $10.40 per share)  and
are  included  in the carrying value of the redeemable  preferred
stock.

Liquidity and Capital Resources

    Historically,  Igene  has  been funded  primarily  by  equity
contributions  and loans from stockholders. As  of  December  31,
2004, Igene had a negative working capital of $500,572, and  cash
and cash equivalents of $204,248.

    Cash  provided by operating activities in 2004  was  $303,301
as compared to $321,567 in 2003.

    Cash  used  by  investing activities in 2004 was  190,255  as
compared to $505,406 used by investing activities in 2003.

    During  2004,  cash  provided  by  financing  activities  was
$28,127.   During  2003  cash used by  financing  activities  was
$250,797.  It was comprised primarily of a $250,000 repayment  of
notes received from directors during 2002.

    Over  the  next twelve months, Igene believes  it  will  need
additional  working  capital.  This funding  is  expected  to  be
received  from  sales of AstaXin(R), resulting in income from the
Joint Venture.  However, there can be no assurance that projected
profits, if any, from sales, or additional funding from the Joint
Venture  will  be  sufficient for Igene  to  fund  its  continued
operations.

    Approximately $5,800,000 in long-term debt was  scheduled  to
become  payable  in  March 2003, and has been extended  to  March
2006.  We do not have the ability to repay such debt at this time
and  management feels any attempts to satisfy the  debt  at  this
time  would have adverse effects on the Company.  Management  had
negotiated  with  the holders of the debt to  extend  the  debt's
maturity  to a time the Company felt it would be better  able  to
satisfy  its obligation.  With seven months remaining  until  the
extended  maturity date, management is reviewing again  extending
this maturity date.

    Igene  does  not  believe that inflation  had  a  significant
impact on its operations during 2004 and 2003.
<PAGE>
Critical Accounting Policies

      The  preparation of our financial statements in  conformity
with  accounting  principles generally  accepted  in  the  United
States  requires  management to make judgments,  assumptions  and
estimates  that  affect  the amounts reported  in  our  financial
statements  and accompanying notes.  Actual results could  differ
materially  from  those  estimates.  The following  are  critical
accounting  policies  important to our  financial  condition  and
results  of operations presented in the financial statements  and
require  management  to  make judgments and  estimates  that  are
inherently uncertain:

      The Joint Venture's inventories are stated at the lower  of
cost  or  market.   Cost is determined using  a  weighted-average
approach,  which approximates the first-in first-out method.   If
the  cost of the inventories exceeds their expected market value,
provisions are recorded for the difference between the  cost  and
the  market  value.   Inventories consist of  currently  marketed
products.

     The Joint Venture recognizes revenue from product sales when
there is persuasive evidence that an arrangement exists, delivery
has   occurred,   the  price  is  fixed  and  determinable,   and
collectibility is reasonably assured.  Allowances are established
for   estimated  uncollectible  amounts,  product   returns   and
discounts.

     The  Joint Venture has entered into a lease of real property
with  an affiliate of Tate & Lyle in Selby, England upon which  a
new  manufacturing facility is being constructed and operated  by
the  Joint Venture.  The Joint Venture is accounted for under the
equity  method  of accounting as the Company has a 50%  ownership
interest.

     The  Company can not recognize the loss of the Joint Venture
beyond the investment in the Venture.  This excess loss, and  all
future losses incurred as a result of the Joint Venture, that are
in  excess  of  the  Company's investment and advances,  will  be
suspended until the point that the profits of the Joint  Venture,
if any, exceed the incurred losses.


ITEM 7. CONSOLIDATED FINANCIAL STATEMENTS

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


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

     As  of  February 15,  2005,  the   Company   dismissed   its
registered public accountant, Stegman & Company ("Stegman"),  due
to  the  Registrant's increased international audit  requirements
brought  about  by  the Company's 50% participation  in  a  joint
venture  with Tate & Lyle PLC (Tate & Lyle), which joint  venture
produces AstaXin(R) for the aquaculture industry at Tate & Lyle's
Selby,  England  facility.  The decision to dismiss  Stegman  was
recommended by the Board of Directors of the Registrant during  a
meeting held on February 8, 2005.     The audit reports issued by
Stegman   on  the  consolidated  financial  statements   of   the
Registrant  as  of  and for the years ended  December  31,  2003,
December  31, 2002 and prior, did not contain an adverse  opinion
or  a  disclaimer of opinion, and were not qualified or modified,
as  to  uncertainty, audit scope or accounting principles, except
as follows:

          Stegman's  reports contain explanatory paragraphs.
          The paragraph states that the Company has suffered
          recurring  losses from operations since  inception
          and  has a working capital deficiency that  raises
          substantial doubt about its ability to continue as
          a   going   concern.  The  consolidated  financial
          statements  do  not include any  adjustments  that
          might result from the outcome of that uncertainty.

     There  have  been  no  material  disagreements  between  the
Registrant and Stegman on any matter of accounting principles  or
practices, financial statement disclosure, or auditing  scope  or
<PAGE>
procedure,   which  disagreements,  if  not   resolved   to   the
satisfaction  of  Stegman,  would have  caused  Stegman  to  make
reference  to  the subject matter thereof in its  report  on  the
Registrant's consolidated financial statements for such periods.

     A letter from Stegman addressed to the Securities & Exchange
Commission   ("SEC")  stating  that  Stegman  agrees   with   the
statements contained herein has been filed as an exhibit to  this
Form 10-KSB.

    The Registrant has appointed Berenson LLP ("Berenson") as its
new  registered public accountants effective as of  February  14,
2005.  The  selection  of  Berenson was  approved  by  the  Audit
Committee of the Board of Directors of the Registrant on February
8, 2005.


ITEM 8A.    CONTROLS AND PROCEDURES

     Based  on  their  most  recent review, which  was  completed
within  90  days  of  the balance sheet date,  Igene's  principal
executive  officer and principal financial officer have concluded
that Igene's disclosure controls and procedures are effective  to
ensure that information required to be disclosed by Igene in  the
reports  that  it files or submits under the Securities  Exchange
Act  of  1934,  as  amended, is accumulated and  communicated  to
Igene's management, including its principal executive officer and
principal  financial  officer, as  appropriate  to  allow  timely
decisions  regarding  required disclosure and  are  effective  to
ensure  that such information is recorded, processed,  summarized
and reported within the time periods specified in the SEC's rules
and  forms. There were no significant changes in Igene's internal
controls  or  in  other  factors that could significantly  affect
those controls subsequent to the date of their evaluation.

     The  Company  has  restated its previously issued  financial
results  for  the second, third and fourth quarters of  2003,  as
well  as the first three quarters of 2004.  This restatement  was
primarily  the result of the Company's investment  in  the  Joint
Venture which should have been recorded at an amount equal to the
historical  book value of the Company's consideration contributed
at the creation of the Joint Venture (not its fair value).  As  a
result,  the  investment in the Joint Venture  should  have  been
initially  recorded  with a value of $316,860,  rather  than  the
$12,300,000 initially recorded in the Financial Statements.

     Additionally, the Company can not recognize the loss of  the
Joint  Venture beyond its investment in the Venture.  As  of  the
fourth quarter of 2003, the Company had an initial investment  of
and  amounts  due  from the Joint Venture of  $818,052.   Igene's
share  of  the  loss through December 31, 2003 equaled  $914,494,
exceeding the total investment by $96,442.  This excess loss, and
all future losses incurred as a result of the Joint Venture, that
are  in excess of the Company's investment and advances, will  be
suspended until the point that the profits of the Joint  Venture,
if any, exceed the incurred losses.

     The  restatement  also  included the classification  of  the
Company's  preferred  stock  as liabilities  in  accordance  with
Statement  of Financial Accounting Standards No. 150  "Accounting
for  certain Financial Instruments with Characteristics  of  both
Liabilities  and Equity" ("FASB 150"), which become effective  in
the  third  quarter  of  2003.   Amounts  previously  treated  as
dividends have been classified as interest expense.
<PAGE>
                            PART III


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


    Igene's directors are elected annually by the stockholders of
Igene.   The  directors, executive officers and key employees  of
Igene as of December 31, 2004 are as follows:

<TABLE>
<CAPTION>
Name                          Age    Position with Igene
__________________________   _____   ____________________________
<S>                          <C>     <C>
Michael G. Kimelman            66    Chairman of the Board of
                                     Directors, member of audit
                                     committee

Thomas L. Kempner              77    Vice Chairman of the Board
                                     of Directors, member of
                                     finance committee

Stephen F. Hiu                 48    Director, President, Chief
                                     Technical Officer, and
                                     Director of Research and
                                     Development

Patrick F. Monahan             54    Director, Vice-President,
                                     Secretary, and Director of
                                     Manufacturing

Sidney R. Knafel               74    Director, member of finance
                                     committee

Edward J. Weisberger           40    Chief Financial Officer

Per A. Benjaminsen             36    Director of Sales and
                                     Marketing

</TABLE>
Each of our directors was elected for a one-year term at our most
recent annual meeting, held in June of 2004.  Our officers  serve
at  the  pleasure  of  the  Board of Directors  and  until  their
respective successors are elected and qualified.

MICHAEL  G.  KIMELMAN  has served as a Director  of  Igene  since
February  1991  and as Chairman of the Board of  Directors  since
March 1991.  He is a founder and member of Kimelman & Baird, LLC,
as  well  as  Chairman of the Board of Directors  of  Astaxanthin
Partners  Ltd.   He  also serves on the Board and  the  Executive
Committee of the Hambletonian Society.

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

STEPHEN F. HIU was appointed Chief Technical Officer in 2002, and
has  served  as  President and Treasurer since  March  1991,  and
elected  a  Director  in August 1990.  He has  been  Director  of
Research  and Development since January 1989 and, prior  thereto,
was  Senior Scientist since December 1985, when he joined  Igene.
He  was  a  post-doctoral  Research  Associate  at  the  Virginia
Polytechnic Institute and State University, Blacksburg, Virginia,
from  January  1984 until December 1985.  Dr. Hiu holds  a  Ph.D.
degree  in microbiology from Oregon State University and  a  B.S.
degree  in biological sciences from the University of California,
Irvine.

PATRICK F. MONAHAN has served as  Vice-President since 2002,  and
as  Director  of Manufacturing and as a Director of  Igene  since
April 1991.  He has served as Secretary since September 1998.  He
has  managed  Igene's fermentation pilot plant  since  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>
SIDNEY  R. KNAFEL, has served as a Director of Igene since  1982,
has  also  been  Managing Partner of SRK  Management  Company,  a
private investment concern located in New York City, since  1981.
He  has also served  as Chairman of Insight Communications,  Inc.
since  1985.  He is also currently a Director of General American
Investors Company, Inc. as well as a number of private companies.

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

PER  A.  BENJAMINSEN served as Chief Marketing Officer  of  Igene
from December 2001 through December 2002.  He received his degree
in  fisheries science at the University of Tromso, Norway. He was
the  founder and entrepreneur of a specialty refining company  of
essential fatty acids in Norway.

Section 16(a) Beneficial Ownership Reporting Compliance

    Igene believes that during 2004 and through March of 2005 all
of  its  officers and directors of more than 10%  of  its  common
stock,  have filed all past due reports and come into  compliance
with  Section  16(a)  reporting  requirements  with  respect   to
acquisitions and dispositions of Igene's securities.    In making
this   disclosure,   Igene   has   relied   solely   on   written
representations  of its directors, officers  and  more  than  10%
holders  and  on copies furnished to Igene of reports  that  have
been filed with the Securities and Exchange Commission.

ITEM 10.    EXECUTIVE COMPENSATION

      The  following tables show the compensation paid or accrued
by  Igene  to each of the four most highly compensated  officers.
During  2004,  no Directors were compensated for their  Board  or
Committee  activities.  Other than the 1986, 1997 and 2001  Stock
Incentive  Plan  and the Simple Retirement Plan described  below,
Igene has no profit sharing or incentive compensation plans.
<TABLE>
<CAPTION>
                          SUMMARY COMPENSATION TABLE

                                            Salary                      Salary
                                         Compensation                Compensation
Name and Principal Position    Year           ($)          Year           ($)
___________________________    ____      ____________      ____      ____________
<S>                            <C>       <C>               <C>       <C>
Stephen Hiu ...............    2004        $140,200        2003        $113,400
President

Patrick Monahan ...........    2004        $112,055        2003        $103,506
Director

Per Bejaminsen ............    2004        $125,000        2003        $100,000
Chief Marketing Officer

Edward Weisberger .........    2004        $109,605        2003        $103,906
Chief Financial Officer
</TABLE>

Retirement Plans

     Effective February 1, 1997 Igene adopted a Simple Retirement
Plan under Internal Revenue Code Section 408(p).  The plan was  a
defined  contribution plan, which covered  all  of  Igene's  U.S.
employees  who  receive at least $5,000 of compensation  for  the
preceding    year.    The   plan   permits   elective    employee
contributions.  Effective January 1, 2003, Igene made an elective
contribution  of 3% of each eligible employee's compensation  for
each  year.   Igene's  contributions to the plan  for  2003  were
$17,631.

     Effective  February 1, 2004 Igene discontinued  use  of  the
Simple  Retirement  Plan  and began use  of  a  401K  plan.   All
employees  that have been employed for three months are  eligible
for  the  plan.   The  plan permits elective contributions  based
under  the  Internal Revenue code.  Effective  January  1,  2004,
Igene  made  an  elective contribution of  4%  of  each  eligible
employee's compensation for each year.  Igene's contributions  to
the  plan  for 2004 were $19,221, which is expensed in  the  2004
statement of operations.
<PAGE>
Stock Option Plans

    Igene   currently   maintains  two  stock  incentive   plans.
Igene's  2001 Stock Incentive Plan (the "2001 Plan"),  which  was
approved  by  Igene's stockholders on June 12,  2001,  authorized
55,000,000  options and shares of restricted stock  for  issuance
under  that  plan.   Igene's 1997 Stock Option  Plan  (the  "1997
Plan"),  which was approved by Igene's stockholders  on  November
17,  1997, authorized 20,000,000 options for issuance under  that
plan.  A  committee  of  the Board of Directors  administers  the
Plans.

    The  purpose  of  the  Plans  is  to  further  the  long-term
stability  and  financial  success of  Igene  by  attracting  and
retaining  employees and consultants through the  use  of  stock-
based  incentives,  and to provide non-employee  members  of  the
Board  of  Directors with an additional incentive to promote  the
success of Igene.  It is believed that ownership of Igene  common
stock  will stimulate the efforts of those employees, consultants
and  non-employee  directors upon whose  judgment  and  interests
Igene is and will be largely dependent for the successful conduct
of  its  business.   It  is also believed that  incentive  awards
granted  to  employees  under these plans will  strengthen  their
desire  to  remain  employed  with Igene  and  will  further  the
identification of employees' interests with those of Igene.

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

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

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

    The  Board  of  Directors may at any time withdraw  from,  or
amend,   the  Plans  and  any  options  not  heretofore  granted.
Stockholder  approval is required to (i) increase the  number  of
shares  issuable  under the Plans, (ii) increase  the  number  of
options  which  may be granted to any individual during  a  year,
(iii)  or  change  the class of persons to whom  options  may  be
granted.   No options shall be granted under the 2001 Plan  after
April  30, 2011 and under the 1997 Plan after September 19, 2007.
Igene  previously  maintained its 1986  Stock  Option  Plan,  but
additional options may no longer be granted under that plan.

    Options  to  acquire 47,973,250 shares of common  stock  have
been  granted under the three Stock Option Plans and   46,927,750
options are still outstanding under the Plans as of December  31,
2004.   11,989,500 were granted during 2004 and no  options  were
granted during 2003.

Compensation of Directors

    During  2003  Michael  G.  Kimelman  was  granted  11,000,000
warrants as compensation for his services as Igene's Chairman  of
the Board of Directors.
<PAGE>

ITEM 11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS  AND
             MANAGEMENT AND RELATED STOCKHOLDER MATTERS

    The  following table sets forth information as of August  25,
2005  with  respect to beneficial ownership of shares of  Igene's
outstanding  common stock and preferred stock by (i) each  person
known  to Igene to own or beneficially own more than five percent
of  its common stock or preferred stock, (ii) each Director,  and
(iii)  each  officer  named  in the  Summary  Compensation  Table
provided  in  Part II Item 10 above, and (iv) all  Directors  and
executive officers  as a group.
<TABLE>
<CAPTION>
                                       Common Stock                 Preferred Stock
                              ____________________________     ________________________
                                Number of                      Number of
 Name and Address               Shares          Percent *      Shares         Percent
______________________        ______________    __________     __________    __________
<S>                           <C>               <C>            <C>           <C>
Directors and officers
______________________

Joseph C. Abeles              16,273,483<F1>      14.04           7,375         39.84
  220 E. 42nd Street
  New York, NY  10017

Stephen F. Hiu                15,948,633<F2>      13.69             ---           ---
  9110 Red Branch Road
  Columbia, MD  21045

Thomas L. Kempner            143,139,072<F3>      63.12             ---           ---
  61 Broadway
  New York, NY  10006

Michael G. Kimelman           33,590,138<F4>      25.06             ---           ---
  100 Park Avenue
  New York, NY  10017

Sidney R. Knafel             141,326,146<F5>      62.85             ---           ---
  810 Seventh Avenue
  New York, NY  10019

Patrick F. Monahan             8,947,533<F6>       8.16             ---           ---
  9110 Red Branch Road
  Columbia, MD  21045

Per A. Benjaminsen            11,000,000<F7>       9.84             ---           ---
  9110 Red Branch Road
  Columbia, MD 21045

Edward J. Weisberger           3,070,000<F8>       2.93             ---           ---
  9110 Red Branch Road
  Columbia, MD 21045

All Directors and Officers   371,148,442<F9>      86.25           7,375         39.84
  as a Group (8 persons)

Others
______

Fraydun Manocherian            7,905,135<F10>      7.73             ---           ---
  3 New York Plaza
  New York, NY  10004

Fermic                        14,730,014          14.48             ---           ---

*  Under the rules of the Securities and Exchange Commission, the
calculation of the percentage assumes for each person  that  only
that  person's rights, warrants, options or convertible notes  or
preferred  stock are exercised or converted, and  that  no  other
person   exercises  or  converts  outstanding  rights,  warrants,
options or convertible notes or preferred stock.
<FN>
<F1>  Includes  the following: 2,113,544 shares held directly  or
  indirectly  by  Mr.  Abeles, 14,750 shares  issuable  upon  the
  conversion of 7,375 shares of preferred stock, 5,042,777 shares
  issuable  upon  the conversion of $311,663 of  long-term  notes
  issued by Igene, and 9,102,412 shares issuable upon exercise of
  warrants held by Mr. Abeles.

<F2>  Includes  the following: 1,148,633 shares held directly  or
  indirectly  by  Mr. Hiu and 14,800,000 shares issuable pursuant
  to options held by Dr. Hiu that are currently exercisable.

<F3>  Includes  386,972 shares and 536,920 shares  issuable  upon
  exercise  of  warrants held by Mr. Kempner that  are  currently
  exercisable.   Also  includes 8,661,245 shares held directly by
  Mr.  Kempner,  18,761,668  shares  issuable  upon conversion of
  notes  issued  by Igene and held by Mr. Kempner, and 41,582,728
  shares issuable upon exercise of warrants held by a trust under
  which  Mr.  Kempner  is  one  of  two  trustees  and  the  sole
  beneficiary, which are currently exercisable.   Also   includes
  8,621,247  shares  held  directly  by  Mr.  Kempner, 18,761,669
  shares  issuable  upon  the conversion of notes issued by Igene
  and  held  by  Mr.  Kempner and 41,561,125 shares issuable upon
  exercise  of  warrants  held a trust under which Mr. Kempner is
  one of two trustees and  one of  his  brothers   is   the  sole
  beneficiary,  which  are  currently exercisable.  Also includes
  1,530,222  shares  issuable  upon  the conversion of $79,200 of
  notes  issued  by  Igene and held by  Mr. Kempner and 2,079,411
  shares issuable upon exercise of warrants  held by trusts under
  which  Mr.  Kempner  is  one of two trustees and is a one-third
  beneficiary  that  are  currently exercisable.   Also  includes
  243, 360 shares and 131,414  shares  issuable upon  exercise of
  warrants held by trusts under which Mr. Kempner is executer and
  is a one-third beneficiary  that  are  currently   exercisable.
  Also  includes  182,526 shares and 98,565  warrants held by Mr.
  Kempner's wife.

<F4>  Includes  1,264,360  shares  held directly or indirectly by
  Mr.  Kimelman,  14,000,000  shares  issuable  upon  exercise of
  options  currently   exercisable,  1,072,756   shares  issuable
  upon  the  conversion  of  $63,070 of notes issued by Igene and
  held  by  Mr. Kimelman,  and  17,253,022  shares issuable  upon
  exercise  of  warrants  held  directly  or  indirectly  by  Mr.
  Kimelman.

<F5>  Includes 18,190,551 shares, 38,168,101 shares issuable upon
  the  conversion of notes issued by Igene and held by Mr. Knafel
  and  84,967,495 shares issuable upon the exercise  of  warrants
  owned  or  beneficially owned by Mr. Knafel that are  currently
  exercisable.

<F6>  Includes  1,047,533  shares  held directly or indirectly by
  Mr. Monahan  and  7,900,000 shares issuable upon  the  exercise
  of options held by Mr. Monahan that are currently exercisable.

<F7>  Includes  1,000,000 shares of common stock  and  10,000,000
  shares   issuable   upon   exercise  of  options  held  by  Mr.
  Benjaminsen that are currently exercisable.

<F8>  Includes 70,000 shares held directly by Mr. Weisberger  and
  3,000,000  shares  issuable upon exercise of options  that  are
  currently exercisable.

<F9>  Includes  42,576,099 shares of common stock, 14,750  shares
  issuable upon the conversion of 7,375 shares of preferred stock;
  49,667,250  shares issuable upon exercise of options  that  are
  currently  exercisable,  82,680,765 shares  issuable  upon  the
  conversion  of  notes  issued by Igene and  196,209,578  shares
  issuable  upon  the  exercise of warrants  that  are  currently
  exercisable.

<F10> Includes 7,375,935 shares of common stock owned directly or
  indirectly by Mr. Manocherian and 529,200 shares issuable  upon
  the  exercise of warrants owned directly or indirectly  by  Mr.
  Manocherian that are currently exercisable.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                       Equity Compensation Plan Information as of December 31, 2004
                                                                                        Number of securities
                                                                                        remaining available for
                                                                                        future issuance under
                              Number of securities to      Weighted-average             equity compensation
                              be issued upon exercise      exercise price of            plans (excluding
                              of outstanding options,      outstanding options,         securities reflected in
  Plan category               warrants and rights          warrants and rights          column)
  ________________________    ________________________     ________________________     ________________________
  <S>                         <C>                          <C>                          <C>
  Equity compensation              46.9 million<F1>              $0.06.1 <F2>               27.026 million <F3>
  plans approved by
  security holders

  Equity compensation              $0                            $0                          5.269 million <F4>
  plans not approved
  by security holders

  Total                            46.9 million                  $0.061                     32.295 million




<FN>
<F1>  Total shares issued under employee stock option plan.
<F2>  Exercise  price of outstanding options under compensation plans.
<F3>  All shares remaining issuable under employee option plan.
<F4>  All shares remaining earnable under the Fermic manufacturing agreement.
</FN>
</TABLE>

Fermic, Igene's manufacturing agent, earns shares of common stock
as  part  of  the  manufacturing agreement.  Fermic  earns  2,250
shares  of  common  stock for each kilogram of  pure  astaxanthin
produced  and  delivered  as part of the agreement.  The  average
price is based on the market value of the shares at the time  the
product  was produced.   Fermic can earn up to 20,000,000  shares
in  total under the contract.  3,640,792 shares were earned at an
average  price  of $.11 per share for 2004, and 2,785,957  shares
were earned at an average price of $.05 per share for 2003.
<PAGE>
ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     On  April  3,  2003,  the  Board of Directors,  in  lieu  of
additional compensation, authorized the payment of shares to  Mr.
Stephen  Hiu  and Mr. Patrick Monahan.  In compensation  each  of
them  was  awarded  83,333  shares of Igene  common  stock.   The
aggregate 166,666 shares was issued and expensed based on  market
value  at  the  time  of award, $.060 per share,  or  $10,000  of
combined compensation.

     As  reported on Form 8-K filed February 20, 2003, Igene,  in
an effort to focus on and grow its core business, sold all 10,000
of  the  issued and outstanding shares of capital stock of ProBio
that  it  owned as of February 4, 2003 to Fermtech  AS,  a  joint
stock  company  incorporated in the Kingdom of Norway  and  owned
equally by our former chief executive officer, Stein Ulve, and by
Per  Benjaminsen, our Chief Marketing Officer.  Mr. Ulve resigned
as  CEO and director of Igene and Mr. Benjaminsen resigned as our
chief  marketing  officer,  effective  December  31,  2002.   Mr.
Benjaminsen has agreed to continue to provide sales and marketing
services to Igene as an independent contractor.

      Igene  sold ProBio to Fermtech AS in exchange for aggregate
consideration valued at approximately $343,000, a portion of  the
consideration received by Igene consisted of 7,000,000 shares  of
common  stock of Igene that Fermtech owned as a result of Igene's
purchase  of ProBio in January 2001, (of these shares,  2,000,000
shares  have  been  re-earned by Fermtech  as  described  below),
valued  for  the purposes of the acquisition at $.03  per  share,
plus  forgiveness of approximately $168,000 of  debt  that  Igene
owed  to  ProBio  at  the  time of  purchase  in  2001.   By  Mr.
Benjaminsen  remaining employed by Igene through  February  2005,
all  2,000,000  of  the  escrowed shares  of  common  stock  were
delivered  to  Fermtech.  The remaining shares  of  Igene  common
stock were retired on February 5, 2003.
<PAGE>


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

(a)(1)   The following financial statements relating to 2004  and
         2003 are filed as a part of this Report:

         Reports  of  Independent  Registered  Public  Accounting
         Firm.

         Consolidated Balance Sheet as of December 31, 2004.

         Consolidated  Statements  of  Operations for  the  years
         ended December 31, 2004 and 2003.

         Consolidated Statements of Stockholders' Deficiency  for
         the years ended December 31, 2004 and 2003.

         Consolidated  Statements  of  Cash Flows for  the  years
         ended December 31, 2004 and 2003.

         Notes to Consolidated Financial Statements.

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

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

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

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

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

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

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

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

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

    10.7 Toll  manufacturing  agreement  effective  as of May 20,
         2000  between  Igene Biotechnology, Inc. and Fermic S.A.
         de  C.V. constituting  exhibit  10.7  to Igene's  annual
         report  on  Form  10-KSB  filed  on  April  2,  2001, is
         incorporated  herein  by  reference.    Portions of this
         exhibit  have  been  omitted  pursuant  to a request for
         confidential treatment.
<PAGE>
    10.8 First amendment to lease made September 13, 2000 between
         Igene  Biotechnology,  Inc.  and  Red Branch Center, LLC
         constituting  Exhibit  10.8  to Igene's annual report on
         Form  10-KSB  filed  on  April 2, 2001,  is incorporated
         herein by reference.

    10.9 Consulting Agreement between Igene and Martin L. Gerson,
         Exhibit  10.9  to  Igene's  annual report on Form 10-KSB
         filed  on  March  28,  2003,  is  incorporated herein by
         reference.

   10.10 Stock  Purchase  and Severance Agreement dated as of the
         4th day of February 2003 among Igene, Fermtech AS, Stein
         Ulve  and Per Benjaminsen, constituting Exhibit 10.10 to
         Igene's annual  report on Form 10-KSB filed on March 28,
         2003, is incorporated herein by reference.

   21.   Subsidiaries

         Igene Chile Comercial, Ltda.

         Igene Norway AS (divested pursuant to Stock Purchase and
         Severance  Agreement  dated  February  4,  2003 attached
         hereto as Exhibit 10.10)

   23.a. Consent of Berenson LLP

   23.b. Consent of Stegman & Company

   31.1  Rule  13a-14(a)  or  15d-14(a)  Certification   of   the
         Company's principal executive officer filed herewith.

   31.2  Rule  13a-14(a)  or  15d-14(a)  Certification   of   the
         Company's principal financial officer filed herewith.

   32.1  Rule  13a-14(b)  or  15d-14(b)  Certification   of   the
         Company's principal  executive officer  pursuant  to  18
         U.S.C.  Section 1350 as adopted pursuant to Rule  906 of
         the Sarbanes-Oxley Act of 2002 filed herewith.

   32.2  Rule  13a-14(b)  or  15d-14(b)  Certification   of   the
         Company's  principal  financial officer  pursuant  to 18
         U.S.C. Section 1350 as adopted pursuant to Rule  906  of
         the Sarbanes-Oxley Act of 2002 filed herewith.

ITEM 14. PRINCIPAL ACCOUNTANTS FEES AND SERVICES

                  REGISTERED PUBLIC ACCOUNTANTS

     The  accounting  firm  of  Berenson  LLP,  Certified  Public
Accountants, has been engaged to audit the books and accounts  of
the  Company for the next fiscal year.  Berenson LLP serviced  as
the  Company's registered public auditor in 2004.   Berenson  LLP
has  advised the Company that neither the accounting firm nor any
of its members of associates has any direct financial interest in
or  any  connection  with the Company other than  as  independent
public auditors.
<PAGE>

                     AUDIT FEES AND SERVICES

     The  following table shows the fees paid by the Company  for
the audit and other services provided by  Stegman  &  Company for
fiscal years 2004 and 2003:

<TABLE>

                                   FY 2004            FY 2003
                                ____________       ____________
          <S>                   <C>                <C>
          Audit Fees            $ 30,924.00        $ 25,750.00
          Tax Fees                 3,000.00           2,500.00
          All Other Fees               0.00               0.00
                                ____________       ____________

          TOTAL                 $ 33,924.00        $ 28,250.00
</TABLE>

      Audit  services of Stegman & Company for fiscal years  2004
and  2003  consisted  of  the  examination  of  the  consolidated
financial  statements  of the Company and  quarterly  reviews  of
financial statements.  "Tax Fees" in fiscal years 2004  and  2003
include  charges primarily related to tax return preparation  and
tax  consulting  services.   In 2003,  the  SEC  adopted  a  rule
pursuant  to the Federal Sarbanes-Oxley Act of 2002 that,  except
with  respect  to  certain de minimis services  discussed  below,
requires  Audit  Committee pre-approval of  audit  and  non-audit
services provided by the Company's independent auditors.  All  of
the  2004 services described above were pre-approved by the Audit
Committee pursuant to this SEC rule to the extent that  rule  was
applicable during fiscal year 2004.

     The Audit Committee's policy is to pre-approve all audit and
permitted  non-audit services, except that de  minimis  non-audit
services,  as  defined in Section 10A(i)(1) of the Exchange  Act,
may  be  approved  prior  to the completion  of  the  independent
auditor's  audit.  The Audit Committee has reviewed summaries  of
the  services  provided and the related fees and  has  determined
that  the  provision  of non-audit services  is  compatible  with
maintaining the independence of Stegman & Company.
<PAGE>

      REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

To the Audit Committee and Stockholders
IGENE Biotechnology, Inc.

We  have  audited the accompanying consolidated balance sheet  of
IGENE Biotechnology, Inc. and subsidiary as of December 31, 2004,
and   the   related   consolidated  statements   of   operations,
stockholders' deficiency and cash flows for the year then  ended.
These consolidated financial statements are the responsibility of
the  Company's management.  Our responsibility is to  express  an
opinion on these consolidated financial statements based  on  our
audit.

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

In our opinion, the consolidated financial statements referred to
above  present  fairly, in all material respects,  the  financial
position  of  IGENE  Biotechnology, Inc.  and  subsidiary  as  of
December 31, 2004, and the results of their operations and  their
cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming
that  the Company will continue as a going concern.  As discussed
in   Note  13  to  the  consolidated  financial  statements,  the
Company's  recurring losses, production limitations  and  limited
capitalization  raise  substantial doubt  about  its  ability  to
continue as a going concern.  Management's plans regarding  those
matters  also are described in Note 13.  The financial statements
do not include any adjustments that might result from the outcome
of this uncertainty.


                                     /s/ BERENSON LLP
                                     ___________________________
                                         BERENSON LLP
New York, New York
March 25, 2005

<PAGE>
     REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Audit Committee and Stockholders
IGENE Biotechnology, Inc.

      We have audited the accompanying consolidated statements of
operations,  stockholders'  deficit  and  cash  flows  of   IGENE
Biotechnology, Inc. and Subsidiary (the "Company") for  the  year
ended December 31, 2003.  These consolidated financial statements
are   the  responsibility  of  the  Company's  management.    Our
responsibility  is  to express an opinion on  these  consolidated
financial statements based on our audit.

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

      In  our  opinion,  the  consolidated  financial  statements
referred  to above present fairly, in all material respects,  the
results of operations and cash flows of the Company for the  year
ended December 31, 2003, in conformity with accounting principles
generally accepted in the United States of America.

      The  accompanying financial statements have  been  prepared
assuming  that the Company will continue as a going concern.   As
discussed  in  Note 13 to the consolidated financial  statements,
the   Company's  recurring  losses,  production  limitations  and
limited  capitalization raise substantial doubt about its ability
to  continue  as  a going concern.  Management's plans  regarding
those  matters  also  are described in Note  13.   The  financial
statements do not include any adjustments that might result  form
the outcome of this uncertainty.


                                      /s/ STEGMAN & COMPANY
                                      ______________________
                                          STEGMAN & COMPANY


Baltimore, Maryland
August 18, 2005
<PAGE>
<TABLE>
<CAPTION>
                            IGENE Biotechnology, Inc. and Subsidiary
                                   Consolidated Balance Sheet
                                       December 31, 2004

<S>                                                                     <C>
ASSETS
_______

CURRENT ASSETS
  Cash and cash equivalents                                             $    204,248
  Accounts receivable                                                         79,638
  Prepaid expenses and other current assets                                   10,764
                                                                        _____________
     TOTAL CURRENT ASSETS                                                    294,650

  Property and equipment, net                                                124,904
  Loan receivable from manufacturing agent                                    70,982
  Investment in and advances to unconsolidated joint venture                     ---
  Other assets                                                                 5,125
                                                                        _____________
      TOTAL ASSETS                                                      $    495,661
                                                                        =============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
________________________________________

CURRENT LIABILITIES
  Accounts payable and accrued expenses                                 $     78,472
  Convertible debenture                                                      705,000
  Accrued interest                                                            11,750
                                                                        _____________
     TOTAL CURRENT LIABILITIES                                               795,222

LONG-TERM DEBT
  Notes payable                                                            5,842,267
  Convertible Debentures                                                   3,814,212
  Accrued interest                                                         4,148,681

REDEEMABLE PREFERRED STOCK
  Carrying amount of redeemable preferred stock, 8% cumulative,
  convertible, voting, series A, $.01 par value per share.
  Stated value $18.40 per share.   Authorized 1,312,500 shares;
  issued and outstanding 18,509 shares. Redemption amount
  $340,566.                                                                  340,566
                                                                        _____________
     TOTAL LIABILITIES                                                    14,940,948
                                                                        _____________

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
  Common stock -- $.01 par value per share.  Authorized
    750,000,000 shares; issued and outstanding 101,732,453 shares          1,017,325
  Additional paid-in capital                                              25,138,748
  Accumulated Deficit                                                    (40,601,360)
                                                                        _____________
     TOTAL STOCKHOLDERS' DEFICIENCY                                      (14,445,287)
                                                                        _____________
     TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                     $    495,661
                                                                        =============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
<TABLE>
<CAPTION>
                           IGENE Biotechnology, Inc. and Subsidiary
                            Consolidated Statements of Operations

                                                                  Years ended December 31,
                                                                    2004           2003
                                                               _____________   _____________
<S>                                                            <C>             <C>
REVENUE
_______

  Sales                                                        $        ---    $    463,486
  Cost of sales                                                         ---         446,144
                                                               _____________   _____________

  GROSS PROFIT                                                          ---          17,342
                                                               _____________   _____________

EQUITY IN LOSS OF JOINT VENTURE                                    (190,255)       (818,052)
                                                               _____________   _____________
OPERATING EXPENSES
__________________

   Marketing and selling                                            326,689         328,393
   Research, development and pilot plant                            847,544         745,364
   General and administrative                                       688,125         687,427
   Litigation expenses                                               40,580         133,464
   Less expenses reimbursed by Joint Venture                     (1,612,845)     (1,252,565)
                                                               _____________   _____________

   TOTAL OPERATING EXPENSES                                         290,093         642,083
                                                               _____________   _____________

   OPERATING LOSS                                                  (480,348)     (1,442,793)

INTEREST EXPENSE                                                   (829,617)       (965,737)
                                                               _____________   _____________

   NET LOSS FROM CONTINUING OPERATIONS                           (1,309,965)     (2,408,530)
                                                               _____________   _____________

   Gain on disposal of discontinued operations                          ---         237,637
                                                               _____________   _____________

   NET LOSS                                                    $ (1,309,965)   $ (2,170,893)
                                                               =============   =============

   BASIC AND DILUTED NET LOSS PER COMMON SHARE                 $      (0.01)   $      (0.02)
   FROM CONTINUING OPERATIONS

   BASIC AND DILUTED NET INCOME PER COMMON SHARE                       0.00            0.00
   FROM DISCONTINUED OPERATIONS                                _____________   _____________

   BASIC AND DILUTED NET LOSS PER COMMON SHARE                 $      (0.01)   $      (0.02)
                                                               =============   =============
</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
<TABLE>
<CAPTION>
                                       IGENE Biotechnology, Inc. and Subsidiary
                                  Consolidated Statements of Stockholders' Deficiency
                                    For The years ended December 31, 2004 and 2003

                                                                            Additional                     Total
                                                     Common Stock            Paid-in      Accumulated   Stockholders'
                                               # Shares       Amount         Capital        Deficit      Deficiency
                                            _____________  _____________  _____________  _____________  _____________
<S>                                         <C>            <C>            <C>            <C>            <C>
BALANCE AT JANUARY 1, 2003                    92,943,746   $    929,437   $ 22,387,604   $(37,120,502)  $(13,803,461)

Retirement of common stock
  related to sale of ProBio                   (7,000,000)       (70,000)      (140,000)           ---       (210,000)

Cumulative undeclared dividends
  on redeemable preferred stock                      ---            ---        (98,193)           ---        (98,193)

Conversion of redeemable
  preferred stock into common stock                1,100             11          9,405            ---          9,416

Exercise of warrants                           3,750,000         37,500        243,750            ---        281,250

Shares issued to S. Hiu and P. Monahan
  in lieu of compensation                        166,666          1,667          8,333            ---         10,000

Shares issued for employee stock
  incentive program                              100,000          1,000          1,500            ---          2,500

Shares issued for manufacturing
  agreement                                    2,785,957         27,860        144,154            ---        172,014

Net loss for 2003                                    ---            ---            ---     (2,170,893)    (2,170,893)
                                            _____________  _____________  _____________  _____________  _____________

BALANCE AT DECEMBER 31, 2003                  92,747,469        927,475     22,556,553    (39,291,395)   (15,807,367)

Conversion of redeemable
  preferred stock into common stock              389,192          3,892      1,803,268            ---      1,807,160

Shares issued to attorney in settlement
  of ADM matter                                  250,000          2,500         25,000            ---         27,500

Conversion of 8% Notes                             5,000             50            325            ---            375

Re-issuance or shares held in escrow
  related to sale of ProBio                    1,000,000         10,000        100,000            ---        110,000

Conversion of debentures issued
  as part of ProBio purchase                   2,950,000         29,500        265,500            ---        295,000

Shares issued for employee stock
  incentive program                              750,000          7,500         22,250            ---         29,750

Shares issued for manufacturing
  agreement                                    3,640,792         36,408        365,852            ---        402,260

Net loss for 2004                                    ---            ---            ---     (1,309,965)    (1,309,965)
                                            _____________  _____________  _____________  _____________  _____________

BALANCE AT DECEMBER 31, 2004                 101,732,453   $  1,017,325   $ 25,138,748   $(40,601,360)  $(14,445,287)
                                            =============  =============  =============  =============  =============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
<TABLE>
<CAPTION>
                                    IGENE Biotechnology, Inc. and Subsidiary
                                     Consolidated Statements of Cash Flows

                                                                                  Years ended December 31,
                                                                                     2004           2003
                                                                                _____________  _____________
<S>                                                                             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
____________________________________

     Net loss                                                                   $ (1,309,965)  $ (2,170,893)
     Adjustments to reconcile net loss to net
     cash provided by operating activities:
        Depreciation                                                                  24,027         29,057
        Amortization of deferred costs                                                   ---         54,729
        Gain on disposal of discontinued operations                                      ---       (237,637)
        Compensation paid in shares of common stock                                      ---         10,000
        Issuance of shares to Fermtech per ProBio agreement                          110,000            ---
        Issuance of common stock for legal service                                    27,500            ---
        Manufacturing cost paid in shares of common stock                            402,260        172,014
        Increase in preferred stock for cumulative dividend
          classified as interest                                                      42,981         68,194
        Equity in loss of unconsolidated joint venture                               190,255        818,052
        Decrease (increase) in:
             Accounts receivable                                                      76,820        359,059
             Inventory                                                                   ---        374,709
             Prepaid expenses and other assets                                        84,654      1,254,067
        Increase (decrease) in:
             Accounts payable and other accrued expenses                             654,769       (409,784)
                                                                                _____________  _____________

             NET CASH PROVIDED BY OPERATING ACTIVITIES                               303,301        321,567
                                                                                _____________  _____________

CASH FLOWS FROM INVESTING ACTIVITIES
____________________________________

     Cash transferred to Joint Venture                                                   ---         (4,223)
     Advances to Joint Venture                                                      (190,255)      (495,183)
     Investment in Joint Venture Capital Stock                                           ---         (6,000)
                                                                                _____________  _____________

             NET CASH USED IN INVESTING ACTIVITIES                                  (190,255)      (505,406)
                                                                                _____________  _____________

CASH FLOWS FROM FINANCING ACTIVITIES
____________________________________

     Repayment of equipment lease payable                                             (1,498)        (3,297)
     Proceeds from exercise of employee stock options                                 29,750          2,500
     Repayment of borrowing                                                             (125)      (250,000)
                                                                                _____________  _____________

             NET CASH PROVIDED(USED)BY FINANCING ACTIVITIES                           28,127       (250,797)
                                                                                _____________  _____________

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                 141,173       (434,636)

CASH AND CASH EQUIVALENTS - BEGINNING OF THE YEAR                                     63,075        497,711

CASH AND CASH EQUIVALENTS - END OF THE YEAR                                     $    204,248   $     63,075
                                                                                =============  =============

SUPPLEMENTARY DISCLOSURE AND CASH FLOW INFORMATION
__________________________________________________

     Cash paid during the year for interest                                     $     24,480   $     61,171
     Cash paid during the year for income taxes                                          ---            ---
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
          For the years ended December 31, 2004 and 2003

(1) Summary of Significant Accounting Policies
    __________________________________________

    Nature of Operations
    ____________________

    Igene  Biotechnology, Inc. ("Igene") was  incorporated  under
    the  laws  of  the State of Maryland on October 27,  1981  as
    "Industrial Genetics, Inc."  Igene changed its name  to  "IGI
    Biotechnology,  Inc."  on  August  17,  1983  and  to  "Igene
    Biotechnology, Inc." on April 14, 1986.  Igene is located  in
    Columbia,  Maryland  and  is  engaged  in  the  business   of
    industrial  microbiology and related biotechnologies.   Igene
    has  an  operational subsidiary in Chile and through February
    2003  had a subsidiary in Norway.  IGENE Biotechnology,  Inc.
    is engaged  in  the  business  of  developing, marketing, and
    manufacturing  specialty ingredients  for  human  and  animal
    nutrition.   Igene was formed to develop, produce and  market
    value-added  specialty  biochemical   products.  Igene  is  a
    supplier of natural astaxanthin,  an  essential  nutrient  in
    different feed applications and as a  source  of pigment  for
    coloring  farmed  salmon   species.   Igene  also    supplies
    nutraceutical ingredients, as well  as  consumer ready health
    food supplements, including astaxanthin.  Igene is focused on
    fermentation  technology, pharmacology, nutrition and  health
    in its marketing of products and applications worldwide.

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

    In  an  effort to develop a dependable source of  production,
    on  March 18, 2003, Tate and Lyle and Igene announced a 50:50
    joint  venture to  produce  AstaXin(R)  for  the  aquaculture
    industry.  Production will utilize Tate & Lyle's fermentation
    capability  together with the unique technology developed  by
    Igene.  Part of Tate & Lyle's existing Selby, England, citric
    acid  facility will be modified to include the production  of
    1,500  tons  per  annum  of  this  product.   Tate  &  Lyle's
    investment  of $25 million includes certain of  its  facility
    assets currently used in citric acid production.

    Principles of Consolidation
    ___________________________

    In  December  2001  Igene purchased its  sales  agent  ProBio
    Nutraceuticals,  AS,  a  Norwegian  corporation   ("ProBio").
    During 2003, Igene executed a formal agreement to dispose  of
    ProBio.  For the 2002 consolidated financial statements,  the
    earnings   and   losses  had  been  treated  as   loss   from
    discontinued operations.   The accounts of our other  wholly-
    owned   subsidiary,   Igene  Chile  are   included   in   the
    consolidation    of   these   financial   statements.     All
    significant intercompany accounts and transactions have  been
    eliminated in consolidation.

    Cash and cash equivalents
    _________________________

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

    Accounts Receivable
    ___________________

    Accounts  receivable  are  stated at  the  amount  management
    expects   to   collect   from   the   outstanding   balances.
    Management   provides  for  probable  uncollectible   amounts
    through  a  charge to earnings and a credit  to  a  valuation
    allowance   based  upon  its  assessment   of   the   current
    collection   status  of  individual  accounts.     Delinquent
    amounts  that are outstanding after management has  conducted
    reasonable  collection  efforts, are written  off  through  a
    charge  to  the valuation allowance and a credit to  accounts
    receivable.   The valuation allowance did not change  in  the
    current period.
<PAGE>
             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
          For the years ended December 31, 2004 and 2003


    Investment in and advances to unconsolidated joint venture
    __________________________________________________________

    The  investment in the Joint Venture is accounted  for  under
    the   equity  method  whereby  the  Company's  50%  ownership
    percentage in the Joint Venture is reflected as an  asset  in
    the  consolidated balance sheet and the changes in the  Joint
    Venture's  equity as a result of its operations is  reflected
    in  the Company's consolidated statement of operations.   The
    Company  evaluates  its investment in the Joint  Venture  for
    impairment,  as  it  does  for all  long  term  assets.   The
    Company  can  not  recognize the loss of  the  Joint  Venture
    beyond its investment in the Venture.  This excess loss,  and
    all  future losses incurred as a result of the Joint Venture,
    that  are in excess of the Company's investment and advances,
    are  suspended until the point that the profits of the  Joint
    Venture,  if any, exceed the incurred losses.  The accounting
    policies  followed  by the Joint Venture  are  in  conformity
    with  accounting principles generally accepted in the  United
    States of America.

    Research and development costs
    ______________________________

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

    Property and Equipment
    ______________________

    Property  and  equipment are stated at cost less  accumulated
    depreciation  and amortization computed using  the  straight-
    line  method.   Premises and equipment are  depreciated  over
    the  useful  lives of the assets, which generally range  from
    three  to  ten  years for furniture, fixtures and  equipment,
    three  to  five  years  for computer software  and  hardware.
    Leasehold  improvements are amortized over the terms  of  the
    respective  leases  or  the estimated  useful  lives  of  the
    improvements,  whichever  is  shorter.   The  cost  of  major
    renewals and betterments are capitalized, while the costs  of
    ordinary maintenance and repairs are expensed as incurred.

    Estimates
    _________

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

    Foreign Currency Translation and Transactions
    _____________________________________________

    Since   the   day-to-day  operations   of   Igene's   foreign
    subsidiary   in   Chile  are  dependent   on   the   economic
    environment of the parent's currency, the financial  position
    and  results of operations of Igene's foreign subsidiary  are
    determined  using Igene's reporting currency (US dollars)  as
    the  functional currency.  All exchange gains and losses from
    remeasurement  of  monetary assets and liabilities  that  are
    not  denominated  in US dollars are recognized  currently  in
    income.  The  gains  are  due to large  fluctuations  in  the
    Chilean Peso.

    Fair value of financial instruments
    ___________________________________

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

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
          For the years ended December 31, 2004 and 2003

    Accounting for stock based compensation
    _______________________________________

    The  Company  has adopted the disclosure-only  provisions  of
    Statement   of  Financial  Accounting  Standards   No.   123,
    "Accounting  for  Stock-Based Compensation" (SFAS  No.  123),
    and  SFAS  No. 148, "Accounting for Stock-Based Compensation-
    Transition    and   Disclosure",   but   applies   Accounting
    Principals  Board Opinion No. 25 and related  interpretations
    in  accounting  for its stock option plans.  No  compensation
    expense  related  to the Company's stock  option  plans  were
    recorded during the two years ended December 31, 2004.

    The  Company  accounts for those plans under the  recognition
    and   measurement   principles  of  APB   Opinion   No.   25,
    "Accounting  for  Stock  Issued to  Employees",  and  related
    interpretations.     No   stock   option    based    employee
    compensation  cost is reflected in net loss, as  all  options
    granted  under the plan had an exercise price  equal  to  the
    market  value of the underlying common stock on the  date  of
    grant.   The  following table illustrates the effect  on  net
    loss  and  earnings per share if the Company had applied  the
    fair   value   recognition  provisions  of  SFAS   No.   123,
    "Accounting  for  Stock-Based  Compensation"  and  disclosure
    provisions  of  SFAS  No.  148  "Accounting  for  Stock-Based
    Compensation-Transition  and  Disclosure",   to   stock-based
    employee compensation for the two years ended December 31:

<TABLE>
<CAPTION>

                                                                 2004            2003
                                                            _____________   _____________
         <S>                                                <C>             <C>
         Net loss, as reported                              $ (1,309,965)   $ (2,170,893)

         Pro forma stock-based employee compensation
           expense determined under fair value based method
           net of related tax effects                         (1,174,213)       (529,000)
         Pro forma net loss                                 $ (2,484,178)   $ (2,699,893)
         Net loss per Share:
           Basic - as reported                              $      (0.01)   $      (0.02)
           Basic - pro forma                                $      (0.03)   $      (0.03)

           Diluted - as reported                            $      (0.01)   $      (0.02)
           Diluted - pro forma                              $      (0.03)   $      (0.03)
</TABLE>
    The  fair value of each option grant is estimated on the date
    of  grant  using the Black-Scholes option-pricing model  with
    the  following weighted average assumptions used  for  grants
    during the two years ended December 31:
<TABLE>
<CAPTION>
                                                                 2004            2003
                                                            _____________   _____________
         <S>                                                <C>             <C>
         Dividend yield                                              ---             ---
         Expected volatility                                      144.90%          51.79%
         Risk-free interest rate                                    4.63%           4.21%
         Expected lives in years                                      10              10
         Fair value of options granted                             $0.10           $0.04
</TABLE>
    New accounting pronouncements
    _____________________________

    In   November   2004,  the   FASB   issued  SFAS   No.   151,
    "Inventory  Costs,  an amendment of ARB  No.43,  Chapter  4."
    SFAS  amends  Accounting  Research  Bulletin  ("ARB")  No.43,
    Chapter  4, to clarify that abnormal amounts of idle facility
    expense,   freight,  handling  costs  and  wasted   materials
    (spoilage)  should  be recognized as current-period  charges.
    In  addition, SFAS No.151 requires that allocation  of  fixed
    production  overhead  to inventory be  based  on  the  normal
    capacity  of  the  production  facilities.   SFAS  No.151  is
    effective  for  inventory costs incurred  during  the  fiscal
    years  beginning  after  June  15,  2005.   The  Company   is
    currently assessing the impact SFAS      No.151 will have  on
    the results of operations, financial position or cash flows.
<PAGE>
             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
          For the years ended December 31, 2004 and 2003

    In  April  2003,  the  Financial Accounting  Standards  Board
    ("FASB")  issued Statement of Financial Accounting  Standards
    ("SFAS")  No. 149, "Amendment of Statement 133 on  Derivative
    Instruments  and Hedging Activities".  SFAS  No.  149  amends
    and   clarifies   financial  accounting  and  reporting   for
    derivative    instruments,   including   certain   derivative
    instruments  embedded  in other contracts,  and  for  hedging
    activities  under  SFAS No. 133, "Accounting  for  Derivative
    Instruments  and  Hedging  Activities".   The  Statement   is
    effective  for contracts entered into or modified after  June
    30,  2003 and for hedging relationships designated after June
    30,  2003.   There  was no material impact on  the  Company's
    financial  condition or results of operations  upon  adoption
    of this Statement.

    In  May  2003, the FASB issued SFAS No. 150, "Accounting  for
    Certain  Financial Instruments with Characteristics  of  both
    Liabilities  and Equity". SFAS No. 150 establishes  standards
    for  how  an issuer classifies and measures certain financial
    instruments  with  characteristics of both  a  liability  and
    equity.    It  requires  that  an  issuer  classify   certain
    financial  instruments as a liability, although the financial
    instrument  may  previously have been classified  as  equity.
    This   Statement  is  effective  for  financial   instruments
    entered into or modified after May 31, 2003 and otherwise  is
    effective  at  the  beginning of  the  first  interim  period
    beginning  after June 15, 2003.  The effect of adopting  this
    pronouncement required the reclassification of $2.04  million
    of redeemable preferred stock as a liability.

    In  January  2003,  the  FASB issued Interpretation  No.  46,
    "Consolidation  of  Variable Interest Entities"  ("FIN  46"),
    which  explains identification of variable interest  entities
    and  the assessment of whether to consolidate these entities.
    FIN  46  requires  existing unconsolidated variable  interest
    entities  to  be consolidated by their primary  beneficiaries
    if  the entities do not effectively disperse risks among  the
    involved  parties.  The provisions of FIN  46  are  effective
    for  all  financial statements issued after January 1,  2003.
    The  Company  has  no significant variable interests  in  any
    entities  which  would require disclosure  or  consolidation.
    The  Company's investment in the Joint Venture does not  meet
    the criteria of a variable interest entity under FIN 46.

(2) Non-cash investing and financing activities:
    ___________________________________________

    On  March 18, 2003,  the Company entered into a Joint Venture
    Agreement  with  Tate  &  Lyle  Fermentation  Products   Ltd.
    ("Tate").   Pursuant  to  a  Joint  Venture  Agreement,   the
    Company  and Tate agreed to form a joint venture (the  "Joint
    Venture")  to  manufacture, market and sell  Astaxanthin  and
    derivative  products throughout the world for all uses  other
    than  as  a  Nutraceutical  or  otherwise  for  direct  human
    consumption.   Tate contributed $24,600,000 in  cash  to  the
    Joint  Venture, while the Company contributed  to  the  Joint
    Venture   its  technology  relating  to  the  production   of
    Astaxanthin  and  assets related thereto. These  assets  will
    continue  to be used by the Joint Venture in the same  manner
    as  historically used by the Company.  The Company  and  Tate
    each  have a 50% ownership interest in the Joint Venture  and
    equal  representation  on  the  Board  of  Directors  of  the
    Company.  In  addition, unamortized production costs  in  the
    amount  of $316,869 were contributed to the Joint Venture  by
    Igene.

    On  April  3,  2003,  the  Board of  Directors,  in  lieu  of
    additional compensation, authorized the payment of shares  to
    Mr.  Stephen Hiu and Mr. Patrick Monahan.  Each of  them  was
    awarded  83,333 shares of Igene common stock.  The  aggregate
    166,666 shares was issued and expensed based on market  value
    at  the  time  of  award,  $.060 per  share,  or  $10,000  of
    combined compensation.

    During  the  course  of 2004, $295,000 of the  $1,000,000  of
    Convertible  Debentures issued as part  of  the  2001  ProBio
    purchase, were converted to common stock.  These shares  were
    converted at $.10 per share for a total of 2,950,000  shares.
    These  shares  were  issued and the  notes  cancelled.   This
    relieved the Company of $295,000 of long-term debt.
<PAGE>
             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
          For the years ended December 31, 2004 and 2003

    During   the  course  of  2004  and  2003,  Fermic,   Igene's
    manufacturing  agent, earned 3,640,792 and 2,785,957  shares,
    respectively,  of  common stock as part of the  manufacturing
    agreement.   Fermic earns 2,250 shares of  common  stock  for
    each  kilogram  pure astaxanthin produced  and  delivered  as
    part  of  the  agreement. The average price is based  on  the
    market  value  of  the  shares at the time  the  product  was
    produced.   Fermic can earn up to 20,000,000 shares in  total
    under  the contract.  The 3,640,792 shares were earned at  an
    average  price  of  $.11 per share for  2004,  and  2,785,957
    shares were earned at an average price of $.05 per share  for
    2003.   Through  December  31, 2004, 14,730,014  shares  have
    been  earned.   Any future shares earned by  Fermic  will  be
    issued on a quarterly basis.

    On  February  4,  2003, Igene sold its subsidiary  ProBio  to
    Fermtech  AS  in exchange for aggregate consideration  valued
    at  approximately $343,000, consisting of 7,000,000 shares of
    Igene  common stock that ProBio owned (2,000,000 shares  were
    re-earned  by  Fermtech as described below), valued  for  the
    purposes   of  the  acquisition  at  $.03  per  share,   plus
    forgiveness  of  approximately $168,000 of  debt  that  Igene
    owed  to  ProBio  at  the  time of  purchase  in  2001.   Mr.
    Benjaminsen  remained  employed  by  Igene  through  February
    2004,  therefore 1,000,000 of the escrowed shares  of  common
    stock   were   delivered  to  Fermtech.  As  Mr.  Benjaminsen
    remained  employed  by  Igene  through  February  2005,   the
    remaining 1,000,000 escrowed shares were being released  from
    escrow and delivered to Fermtech in 2005.

    During  2003,  the  Company extended scheduled  repayment  on
    demand  notes of $6,043,659 and related accrued  interest  of
    $2,865,810 until March 31, 2006.

    In  April  of  2004 the holder of preferred stock  Series  B,
    converted the 187,500 shares of preferred stock at a rate  of
    two  for  one into 375,000 shares of common stock at a  value
    of  $4.00  per share.  The preferred shares were retired  and
    the common shares issued.

    During  2004  and 2003, 7,096 and 550 shares respectively  of
    redeemable  preferred  stock were exercised  and  retired  in
    exchange  for  14,192  and 1,100 new shares  respectively  of
    common stock which were issued pursuant to the conversion.

    During   2003,   3,750,000  warrants  were  exercised   using
    $200,892  of 8% notes payable and $80,358 of accrued interest
    in  a  cashless  exercise.  3,750,000 new  shares  of  common
    stock were issued pursuant to these exercises of options  and
    $200,892 of 8% notes were cancelled.

    During 2004 and 2003, Igene recorded dividends in arrears  on
    8%  redeemable preferred stock at $.64 per share  aggregating
    $12,981  and  $16,387  respectively, on  Series  A  preferred
    stock  which  has  been  removed  from  paid-in  capital  and
    included  in  the carrying value of the redeemable  preferred
    stock. (see also note 9)

(3) Concentration of Credit Risk
    ____________________________

    The Joint Venture is potentially subject to the effects of  a
    concentration   of   credit  risk  in  accounts   receivable.
    Accounts  receivable is substantially composed of receivables
    from  customers  in Chile, which is an important  market  for
    Igene's product, AstaXin(R).  Chile has  from  time  to  time
    experienced   political  unrest  and  currency   instability.
    Because  of  the volume of business transacted by  the  Joint
    Venture  in  Chile, recurrence of such unrest or  instability
    could  adversely  affect the businesses of its  customers  in
    Chile   or  the  Joint  Venture's  ability  to  collect   its
    receivables  from  these customers.   In  order  to  minimize
    risk,  the Joint Venture strictly evaluates the companies  to
    which it extends credit and all prices are denominated in  US
    dollars  as  to minimize currency fluctuation  risk.   Losses
    due  to  credit risks in accounts receivable are expected  to
    be immaterial.
<PAGE>
             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
          For the years ended December 31, 2004 and 2003

(4) Property and Equipment
    ______________________

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

<TABLE>
<CAPTION>
    <S>                                      <C>
    Laboratory equipment and fixtures        $    181,043
    Pilot plant equipment and fixtures             91,503
    Idle equipment                                 56,150
    Office furniture and fixtures                  36,990
                                             _____________
                                                  365,685
    Less accumulated depreciation                (240,781)
                                             _____________
                                             $    124,904
                                             =============
</TABLE>

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

(5) Investment in Joint Venture
    ___________________________

    On  March  18 2003, the Company entered into a Joint  Venture
    Agreement  with  Tate  &  Lyle  Fermentation  Products   Ltd.
    ("Tate")  Pursuant to a Joint Venture Agreement, the  Company
    and   Tate  agreed  to  form  a  joint  venture  (the  "Joint
    Venture")  to  manufacture, market and sell  Astaxanthin  and
    derivative  products throughout the world for all uses  other
    than  as  a  nutraceutical  or  otherwise  for  direct  human
    consumption.   Tate contributed $24,600,000 in  cash  to  the
    Joint  Venture, while the Company transferred  to  the  Joint
    Venture   its  technology  relating  to  the  production   of
    Astaxanthin   and  assets  related  thereto.   These   assets
    continue  to be used by the Joint Venture in the same  manner
    as  historically used by the Company.  The Company  and  Tate
    each  have a 50% ownership interest in the Joint Venture  and
    equal  representation  on  the  Board  of  Directors  of  the
    Venture.   The  value of the Company's initial investment  in
    the  Joint  Venture has been recorded at an amount  equal  to
    Igene's  historical book value.  As the cost of the Company's
    technology  and  intellectual property  has  been  previously
    expensed  and  has a carrying amount of zero, the  investment
    in  the Joint Venture has been recorded with a book value  of
    $316,869,  which represents the unamortized production  costs
    contributed  to  the  Joint Venture.  Added  to  this  was  a
    purchase of common stock in the new venture of $6,000.

    Production  utilizes Tate's fermentation capability  together
    with  the  unique  technology developed  by  Igene.  Part  of
    Tate's existing Selby, England, citric acid facility will  be
    modified  to  produce  up to 1,500 tons  per  annum  of  this
    product.   Tate's  investment of  approximately  $25  million
    includes  certain  of its facility assets currently  used  in
    citric  acid  production.  Sales and cost of  sales  activity
    are  now  recorded as part of the earnings of  unconsolidated
    venture.

    As  a result of the Joint Venture, the production, sales  and
    marketing   of   Astaxanthin   now   takes   place   in   the
    unconsolidated Joint Venture.  From inception  on  March  18,
    2003  through December 31, 2004, Igene's portion of the Joint
    Venture's net loss was $4,887,500.  The loss was a result  of
    a   50%  interest  in  the  following:   Gross  profit   from
    inception  was a negative $4,356,000 on sales of  $6,784,000,
    less  manufacturing cost of $11,140,000.  Selling and general
    and  administrative  expenses were  $5,268,000  and  interest
    expense  was  $151,000.  The resulting loss  was  $9,775,000.
    Igene's   50%   portion  of  the  Joint  Venture   loss   was
    $4,887,500.

    Because the Company accounts for its investment in the  Joint
    Venture  under  the  equity method of  accounting,  it  would
    ordinarily recognize it's 50% equity interest in the loss  of
    the  Joint Venture.  However, losses in the Joint Venture are
    recognized  only  to  the extent of  the  Investment  in  and
    Advances  to  the Joint Venture.  Losses in  excess  of  this
<PAGE>
             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
          For the years ended December 31, 2004 and 2003

    amount  are  suspended  from  recognition  in  the  financial
    statement and carried forward to offset Igene's share of  the
    Joint Venture's future income, if any.

    At  December 31, 2004, prior to the recognition of its  share
    of  the  Joint Venture loss, Igene's investment in the  Joint
    Venture  consisted of  $322,869 and its net advances  to  the
    Joint   Venture  amounted  to  $685,438,  for  a   total   of
    $1,008,307.   For the period March 18, 2003 through  December
    31,  2003,  Igene  recognized $818,052  of  its  share  of  a
    $914,494  loss  in  the Joint Venture.  For  the  year  ended
    December  31 2004, Igene recognized losses to the  extent  of
    the  increase  in  the advance for that period  of  $190,255.
    The  remainder  is suspended and will be carried  forward  to
    offset  Igene's share of earnings from the Joint Venture,  if
    any.   The balance in the Advances to and Investment in Joint
    Venture  account  on  the Company's financial  statements  is
    zero at December 31, 2004.

    The following schedules display certain account balances of
    the joint venture as of December 31, 2004 and for the period
    since March 18, 2003 (inception).
<TABLE>
<CAPTION>
                                                                       December 31,
                                                                              2004
                                                                  _________________
                                                                        (Unaudited)
     <S>                                                          <C>
     ASSETS
     CURRENT ASSETS
     Cash                                                         $      1,769,000
     Accounts Receivable                                                 1,602,000
     Inventory                                                           1,434,000
                                                                  _________________
                                                                         4,805,000
     OTHER ASSETS
     Fixed Assets                                                       20,765,000
     Intellectual property                                              24,614,000
                                                                 _________________
     TOTAL ASSETS                                                 $     50,184,000
                                                                  =================
     LIABILITIES AND EQUITY
     CURRENT LIABILITIES
     Accounts payable and accrued expenses                        $      5,883,000
     Working capital loan                                                5,347,360
                                                                  _________________
        TOTAL LIABILITIES                                               11,230,360
     Equity                                                             38,953,640
                                                                  _________________
        TOTAL LIABILITIES AND EQUITY                              $     50,184,000
                                                                  =================

</TABLE>
<TABLE>
<CAPTION>
                                                                        Period from
                                                              initial investment to
                                                                  December 31, 2004
                                                              _____________________
                                                                        (unaudited)
     <S>                                                      <C>
     Net Sales                                                $          6,784,000
     Less: manufacturing cost                                          (11,140,000)
                                                              _____________________
     Gross Profit (Loss)                                                (4,356,000)
     Less: selling, general and administrative                          (5,268,000)
                                                              _____________________
     Operating Loss                                                     (9,624,000)
     Interest Expense                                                     (151,000)
                                                              _____________________
     Net Loss                                                 $         (9,775,000)
                                                              =====================
     Igene's 50% equity interest in the net loss              $         (4,887,500)
     Igene's Investment in and Advances to the Joint Venture  $         (1,008,307)
                                                              _____________________
     Igene's suspended loss                                   $         (3,879,193)
                                                              =====================
</TABLE>
<PAGE>
             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
          For the years ended December 31, 2004 and 2003
<TABLE>
<CAPTION>
                                                                                Period from
                                                          Year Ended         March 18, 2003 to
                                                       December 31, 2004     December 31, 2003
                                                       _________________     _________________
     <S>                                               <C>                   <C>
     Net Sales                                         $      5,650,000      $      1,134,000
     Less: manufacturing cost                                (9,989,000)           (1,151,000)
                                                       _________________     _________________
     Gross Profit (Loss)                                     (4,339,000)              (17,000)
     Less: selling, general and admin                        (3,440,000)           (1,828,000)
                                                       _________________     _________________
     Operating Loss                                          (7,779,000)           (1,845,000)
     Interest Expense                                          (167,000)               16,000
                                                       _________________     _________________
     Loss before tax                                   $     (7,946,000)     $     (1,829,000)

     50% equity interest Igene                         $     (3,973,000)     $       (914,494)
                                                       =================     =================
     Igene's additional Investment in
       and Advances to the Joint Venture               $       (190,255)     $       (818,052)
                                                       _________________     _________________
     Igene's incremental suspended loss                $     (3,782,745)     $        (96,442)
                                                       =================     =================
</TABLE>

    As  a result of the Joint Venture, the production, sales  and
    marketing   of   Astaxanthin   now   take   place   in    the
    unconsolidated Joint Venture.  For the years ended  2004  and
    2003,   Igene's  portion  of  the  Joint  Venture  loss   was
    $3,973,000 and $914,494, respectively .

(6) Convertible Debentures
    ______________________

    In   2002,  Igene  issued  and  sold  $250,000  in  aggregate
    principal  amount of 8% demand notes to certain directors  of
    Igene.   During  2003 Igene repaid these notes  plus  accrued
    interest in satisfaction of the debt.

    On   July  17,  2002,  Igene  issued  and  sold  $300,000  in
    aggregate principal amount of 8% convertible debentures,  50%
    each  to  certain directors of Igene.  These  debentures  are
    convertible into shares of Igene's common stock at  $.03  per
    share  based  on the market price of Igene's  shares  at  the
    time the debentures were agreed to.  In consideration of  the
    commitment  to  purchase the 8% convertible debenture,  these
    directors  also received an aggregate of 10,000,000  warrants
    to   purchase   common  stock  at  $.03  per  share.    These
    debentures, if not converted earlier, become due on July  17,
    2012.

    On  February  22, 2002, Igene issued and sold  $1,000,000  in
    aggregate principal amount of 8% convertible debentures,  50%
    each  to  certain directors of Igene.  These  debentures  are
    convertible into shares of Igene's common stock at  $.04  per
    share  based  on the market price of Igene's  shares  at  the
    time the debentures were agreed to.  In consideration of  the
    commitment  to  purchase the 8% convertible debenture,  these
    directors  also received an aggregate of 25,000,000  warrants
    to   purchase   common  stock  at  $.04  per  share.    These
    debentures, if not converted earlier, become due on  February
    22, 2012.

    In  March  2001,  Igene  issued  $1,014,211  of 8%,  10-year,
    convertible  debentures  to certain  directors  of  Igene  in
    exchange  for  the cancellation of $800,000 of  demand  notes
    payable  (including accrued interest of $14,212) and $200,000
    in  cash.  $600,000 of these demand notes were issued  during
    2000   and   $200,000   were  issued   subsequently.    These
    debentures are convertible into 10,142,110 shares of  Igene's
    common  stock  at  $.08  per  share.   These  directors  also
    received  10,142,110  warrants to purchase  common  stock  at
    $.08 per share.  Interest is payable at maturity.

    In  March 2001, certain directors of Igene also committed  to
    provide  additional  funding in  the  form  of  8%,  10-year,
    convertible  debentures  in the  amount  of  $1,500,000.   In
    consideration  of  this  commitment,  these  directors   also
    received  18,750,000  warrants to purchase  common  stock  at
    $.08  per  share.   These  debentures  are  convertible  into
<PAGE>
             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
          For the years ended December 31, 2004 and 2003

    18,750,000 shares of Igene's common stock at $.08 per  share.
    Interest is payable at maturity.

    In  December  2001,  Igene issued $1,000,000  of  6%,  3-year
    convertible,  debentures in connection with the  purchase  of
    ProBio,  now  known  as Igene Norway AS.   These  convertible
    debentures  are  convertible into the Company's  stock  at  a
    price   of  $.10  per  share,  10,000,000  shares  in  total.
    Accrued  interest on this note is due every  six  months.  Of
    these $295,000 have been converted to common stock.

    Convertible  debentures  are  summarized  as  follows  as  of
    December 31, 2004:
<TABLE>
<CAPTION>
                                                                           Accrued
                                                           Principal       Interest
                                                         _____________   _____________
    <S>                                                  <C>             <C>
    8%, 10-year, convertible debenture issued 7/17/02    $    300,000    $     58,719
    8%, 10-year, convertible debenture issued 2/22/02       1,000,000         224,877
    8%, 10-year, convertible debenture issued 3/1/01        1,014,212         310,863
    8%, 10-year, convertible debenture issued 3/27/01       1,500,000         414,180
    10%, 3-year, convertible debenture issued 11/30/01        705,000          11,750
                                                         _____________   _____________
                                                         $  4,519,212    $  1,020,389
    Less current maturities                                  (705,000)        (11,750)
                                                         _____________   _____________
                                                         $  3,814,212    $  1,008,639
                                                         =============   =============
</TABLE>

(7) Notes Payable
    _____________

    This  long  term  debt,  approximately $5,800,000  which  was
    scheduled to become payable in March 2003, has been  extended
    and  is now due March 2006.  Management felt any attempts  to
    satisfy  the  debt on it's original due date would  have  had
    materially adverse effects on the Company.

    As  a  part of the terms of the debt, the exercise prices  of
    the  warrants  and any conversion features was discounted  by
    25% thus a  $.10 warrant is now convertible at $.075 cents.

    Beginning  November 16, 1995 and continuing  through  May  8,
    1997, Igene issued promissory notes to certain directors  for
    aggregate  consideration of $1,082,500.  These notes  specify
    that  at any time prior to repayment the holder has the right
    to  convert  the  notes to common stock of  Igene  at  prices
    ranging  from $0.05 per share to $0.135 per share,  based  on
    the  market  price  of common shares at the respective  issue
    dates.   The  notes were convertible in total  to  13,174,478
    shares  of  common stock.  As a result of the extension  they
    are  now  convertible to 17,565,970 shares of  common  stock.
    Concurrently,  with  each  of the  $1,082,500  of  promissory
    notes,  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.   As  a  result of the extension of debt  the  warrant
    exercise  prices  were  reduced by  25%.   These  notes  were
    modified in conjunction with the 1998 rights offering  to  be
    due  on  March 31, 2003, and have been extended to March  31,
    2006  as  part of the extension.  The notes bear interest  at
    the prime rate.

    In  conjunction with the rights offering in March 1998, Igene
    issued  $5,000,000  of  8%  Notes  due  March  31,  2003  and
    50,000,000 warrants to purchase one share of common stock  at
    an  exercise  price  of $0.10 per share  expiring  March  31,
    2008.   As a result of the extension these notes are now  due
    March  31,  2006  and the exercise price  is  now  $.075  per
    share.
<PAGE>
             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
          For the years ended December 31, 2004 and 2003


    Notes Payable are summarized as follows as of December 31,
    2004:
<TABLE>
<CAPTION>
                                                                          Accrued
                                                           Principal       Interest
                                                         _____________   _____________
    <S>                                                  <C>             <C>
    Long-term unsecured notes payable, bearing interest
       at prime, scheduled to mature
       March 31, 2003, extended to March 31,
       2006, convertible into common stock               $  1,082,500    $    567,421
    Long-term unsecured notes payable, bearing interest
       at 8%, scheduled to mature
       March 31, 2003, extended to March 31, 2006           4,759,767       2,572,621
                                                         _____________   _____________
                                                         $  5,842,267    $  3,140,042
                                                         =============   =============
</TABLE>

    Combined  aggregate amounts of maturities for all convertible
    debentures and notes payable are as follows:
<TABLE>
<CAPTION>
                  Year                   Amount
                 ______               _____________
                 <S>                  <C>
                  2005                $    705,000
                  2006                         ---
                  2007                   5,842,267
                  2008                         ---
                  2009                         ---
                  Thereafter          $  3,814,212
</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 Igene's common stock at the rate of two shares  of
    common  stock  for each share of preferred stock  (equivalent
    to  a conversion price of $4.00 per common share), subject to
    adjustment under certain conditions.

    Shares of redeemable preferred stock are redeemable for  cash
    in  whole  or in part at the option of Igene at any  time  at
    the  stated  value plus accrued and unpaid dividends  to  the
    redemption  date.   Dividends  are  cumulative  and   payable
    quarterly on January 1, April 1, July 1 and October 1,  since
    January 1, 1988.

    The  preferred shares, Series B, were retired and the  common
    shares  issued.   This  relieved Igene of  debt  recorded  at
    $1,650,000 as of December 31, 2003.

    Mandatory  redemption  of preferred stock  Series  A  was  by
    agreement  due  by  Igene  in  October  2002.   As  Igene  is
    operating  at  a  negative cash flow and  negative  earnings,
    Maryland  law  does  not allow for the  redemption  of  these
    shares.   As  such they will remain outstanding and  continue
    to  accrue  dividends until such time as  Igene  is  able  to
    undertake  redemption, though there can be no assurance  this
    will develop.

    In  December  1988, as part of an overall effort  to  contain
    costs  and conserve working capital, Igene suspended  payment
    of   the   quarterly   dividend  on  its   preferred   stock.
    Resumption   of   the   dividend  will  require   significant
    improvements  in  cash flow.  Unpaid dividends  cumulate  for
    future  payment or addition to the liquidation preference  or
    redemption value of the preferred stock.  As of December  31,
    2004,  total dividends in arrears on Igene's preferred  stock
    equal $192,494 (or $10.40 per share) on Igene's Series A  and
    are   included  in  the  carrying  value  of  the  redeemable
    preferred stock.
<PAGE>
             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
          For the years ended December 31, 2004 and 2003

(9) Stockholders' Equity
    ____________________

    Options
    _______

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

    The   following   is  a  summary  of  options   granted   and
    outstanding  under  the  plans as of December  31,  2004  and
    2003:
<TABLE>
<CAPTION>

                                                2004                        2003
                                     _________________________   _________________________
                                                      Weighted                    Weighted
                                                       Average                     Average
                                                      Exercise                    Exercise
                                         Number          Price     Number            Price
                                     ____________  ___________   ____________  ___________
    <S>                              <C>           <C>           <C>           <C>
    Options outstanding
      and exercisable,
      beginning of year               35,488,250        $.047     35,588,250        $.047

    Options granted                   11,989,500        $.010            ---          ---

    Options exercised                   (550,000)       $.025       (100,000)       $.025

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

    Options expired                          ---          ---            ---          ---
                                     ____________  ___________   ____________  ___________
    Options outstanding
      and exercisable,
      end of year                     46,927,750        $.061     35,488,250        $.047
                                     ============  ===========   ============  ===========
</TABLE>
<TABLE>
<CAPTION>

                                Options Outstanding

                                                    Weighted Average
              Exercise Price       Shares        Remaining Life (Years)
              ______________    ____________     ______________________
              <S>               <C>              <C>
              $.025              16,550,000                         7.6
              $.050               9,342,666                         4.9
              $.053                  97,719                         2.0
              $.060                 162,865                         2.0
              $.065                  45,000                         4.5
              $.080               5,500,000                         6.8
              $.100              11,989,000                         9.6
              $.100               3,240,000                         3.3
                                ____________

              $.061              46,927,750
                                ============
</TABLE>
             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
          For the years ended December 31, 2004 and 2003

    In  addition  to  the  options listed  above,  the  following
    additional  unregistered options were issued outside  of  the
    2001,  1997 and 1986 plans.  Per Benjaminsen and Stein  Ulve,
    were  each granted 10,000,000 options, as part of their Igene
    employment  agreement  signed concurrently  with  the  ProBio
    purchase.   The options vest over a three year  period.   Mr.
    Ulve  had  vested in the first third of his options and  with
    his  resignation  from Igene forfeited the balance.   He  had
    until  January  21,  2004 to exercise the  options  that  had
    vested,  200,000  were exercised and the shares  issued,  the
    balance  was  forfeited.  Mr. Benjaminsen has vested  in  his
    options.  These options expire October 9, 2011.  All  options
    were exercised or were exercisable at $0.08 per share.

    Warrants
    ________

    In  consideration for his work on the Board of Directors  Mr.
    Kimelman  was awarded on May 13, 2003 11,000,000 warrants  to
    purchase  Igene common stock at $.06 per share.  The warrants
    shall expire March 26, 2013.

    The  following table summarizes warrants issued,  outstanding
    and exercisable:

<TABLE>
<CAPTION>
                                           As of December 31,
                                    ____________________________
                                         2004           2003
                                    _____________  _____________
    <S>                             <C>            <C>
    Issued                           205,261,073    205,266,073
    Outstanding                      205,261,073    205,266,073
    Exercisable                      205,261,073    205,266,073

</TABLE>

    Common Stock
    ____________

    At  December  31, 2004, 205,261,073 shares of authorized  but
    unissued   common  stock  were  reserved  for   exercise   of
    outstanding  warrants, 46,927,750 shares  of  authorized  but
    unissued common stock were reserved for exercise pursuant  to
    the  1986,  1997  and  2001  Stock Option  Plans,  10,000,000
    shares  were  reserved for exercise of options  held  by  Mr.
    Benjaminsen, 37,018 shares of authorized but unissued  common
    stock  were reserved for issuance upon conversion of  Igene's
    outstanding  preferred stock, 5,269,986 shares were  reserved
    for  issue in accordance with Igene's manufacturing agreement
    with   Fermic  (see  note  11)  and  91,043,621   shares   of
    authorized  but  unissued stock were  reserved  for  issuance
    upon conversion of outstanding convertible notes.

    Preferred Stock
    _______________

    In  April of 2004 the holder of the Series B preferred stock,
    converted the 187,500 shares of preferred stock at a rate  of
    two  for  one into 375,000 shares of common stock at a  value
    of  $4.00  per share.  The preferred shares were retired  and
    the  common  shares  issued.  This  relieved  Igene  of  debt
    recorded at $1,650,000 as of December 31, 2003.

    As  of  December  31,  2004, total dividends  in  arrears  on
    Igene's preferred stock equal $192,494 (or $10.40 per  share)
    on  Igene's  Series A and are included in the carrying  value
    of the redeemable preferred stock.

(10) Net Loss Per Common Share
     _________________________

    Net  loss  per  common share for 2004 and 2003  is  based  on
    96,609,848   and   88,474,552   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.
<PAGE>
             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
          For the years ended December 31, 2004 and 2003

    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 2004 and 2003 because  to  do  so
    would  have been anti-dilutive.  However, these common  stock
    equivalents  could have potentially dilutive effects  in  the
    future.

(11) Commitments
     ___________

    Igene  is obligated for office and laboratory facilities  and
    other  rentals under operating lease agreements, which expire
    in  2011.  The base annual rentals are approximately $94,000,
    increasing  to  $106,000 by the end of the lease  term,  plus
    the  Company's  share of taxes, insurance  and  other  costs.
    Annual  rent  expense relating to the leases  for  the  years
    ended  December 31, 2004 and 2003 approximated  $113,000  and
    $94,000, respectively.

    Future  minimum  rental payments, in the  aggregate  and  for
    each of the next five years are as follows:
<TABLE>
<CAPTION>
              Year           Amount
             ______        __________
             <S>           <C>
             2005          $  94,000
             2006             96,000
             2007             98,000
             2008            101,000
             2009            103,000
             Thereafter      114,000
                           __________

                           $ 606,000
                           ==========
</TABLE>

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

     Based on  production of AstaXin(R), Igene  has  committed to
     issue  to  Fermic  up to a maximum of 20,000,000  shares  of
     Igene common stock during a six year period expiring May 20,
     2006  in accordance with the manufacturing agreement.  Based
     on  quantities  of AstaXin(R) produced, 14,730,014 shares of
     Igene  common  stock has been issued to Fermic.   Since  the
     inception  of  the agreement stock has been  recorded  as  a
     manufacturing  expense  and also as an  increase  in  common
     stock  and  additional paid in capital of $1,005,024.   This
     amount  has  been computed based on the fair  value  of  the
     stock as of the period in which the shares were earned.

(12) Income Taxes
     ____________

     No  income tax benefit or deferred tax asset is reflected in
     the   financial   statements.   Deferred  tax   assets   are
     recognized  for  future deductible temporary difference  and
     tax loss carry forwards if their realization is "more likely
     than not".

     At  December  31,  2004  Igene has  federal  and  state  net
     operating loss carry-forwards of approximately   $22,000,000
     that  expire at various dates from 2004 through  2024.   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 2004
     and 2003.
<PAGE>
             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
          For the years ended December 31, 2004 and 2003

    The  sources  of the deferred tax asset are approximately  as
follows:
<TABLE>
<CAPTION>
      <S>                                          <C>
      Net operating loss carry-forward benefit     $  8,580,000
      Valuation allowance                            (8,580,000)
                                                   _____________

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

(13) Uncertainty
     ___________

    Igene  has incurred net losses in each year of its existence,
    aggregating  approximately  $44,400,000  from  inception   to
    December   31,  2004  and  its  liabilities  and   redeemable
    preferred   stock   exceeded  its  assets  by   approximately
    $14,445,000 at that date.  These factors indicate that  Igene
    will  not be able to continue in existence unless it is  able
    to   raise   additional   capital   and   attain   profitable
    operations.

    On  March  18 2003, the Company entered into a Joint  Venture
    Agreement  with  Tate  &  Lyle  Fermentation  Products   Ltd.
    ("Tate")  Pursuant to a Joint Venture Agreement, the  Company
    and   Tate  agreed  to  form  a  joint  venture  (the  "Joint
    Venture")  to  manufacture, market and sell  Astaxanthin  and
    derivative  products throughout the world for all uses  other
    than  as  a  nutraceutical  or  otherwise  for  direct  human
    consumption.   Tate contributed $24,600,000 in  cash  to  the
    Joint  Venture, while the Company transferred  to  the  Joint
    Venture   its  technology  relating  to  the  production   of
    Astaxanthin   and  assets  related  thereto.   These   assets
    continue  to be used by the Joint Venture in the same  manner
    as  historically used by the Company.  The Company  and  Tate
    each  have a 50% ownership interest in the Joint Venture  and
    equal  representation  on  the  Board  of  Directors  of  the
    Company.  The value of the Company's investment in the  Joint
    Venture  has  been recorded at an amount equal  to  the  book
    value  of the Registrant's consideration contributed  at  the
    creation of the Joint Venture.

    Igene  believes  that should this Joint Venture  be  able  to
    reach  a  profitable  manufacturing level,  eventually  gross
    profits,  and  subsequently  profitable  operation,  can   be
    achieved.

(14) Nature of Risks and Concentrations
     __________________________________

    Revenue during 2004 and 2003 were derived from sales  of  the
    product, AstaXin(R).  The majority of the Joint Venture's and
    Igene's  2004  and 2003 sales were to fish producers  in  the
    aquaculture industry in Chile.

    The  preceding concentrations subject Igene to certain risks.
    For  example,  it is considered at least reasonably  possible
    that  any particular customer, distributor, product line,  or
    provider of services or facilities could be lost in the  near
    term.   It  is  also considered at least reasonably  possible
    that  operations located outside the United States  could  be
    disrupted  in the near term.  However, Igene has  at  present
    no  information that would lead it to believe  that  it  will
    lose  its  principal  product, principal  customers,  or  its
    contracted  manufacturer; or that its  operations  in  Mexico
    City  or Chile will be disrupted, though this belief can  not
    be assured.

(15) Simple Retirement Plan
     ______________________

    Effective January 1, 1997, Igene adopted a Simple  Retirement
    Plan under Internal Revenue Code Section 408(p). The Plan  is
    a defined contribution plan, which covers all of Igene's U.S.
    employees who receive at least $5,000 of compensation for the
    preceding  year.   The   Plan   permits   elective   employee
    contributions.   Effective January  1,  2003,  Igene  made an
    elective contribution  of  3%  of  each  eligible  employee's
    compensation  for  each year.  Igene's  contributions  to the
    plan for 2004 and 2003 were $19,221 and 17,631, respectively.
<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 Howard County,
Maryland on March 26, 2004.


                              IGENE Biotechnology, Inc.
                              __________________________________
                              (Registrant)


                         By   /s/ STEPHEN F. HIU
                              __________________________________
                                  STEPHEN F. HIU
                                  President, Chief Technical
                                  Officer and Treasurer

                         Date     October 06, 2005

In  accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature                Title                          Date
_______________________  _____________________________  ________________
<S>                      <C>                            <C>
/s/STEPHEN F. HIU        Director, President, Chief     October 06, 2005
_______________________  Technical  Officer, Treasurer
   STEPHEN F. HIU


/s/EDWARD J. WEISBERGER  Chief Financial Officer        October 06, 2005
_______________________  (principal financial and
   EDWARD J. WEISBERGER  accounting officer)


/s/THOMAS L. KEMPNER     Vice Chairman of Board         October 06, 2005
_______________________  of Directors
   THOMAS L. KEMPNER


/s/MICHAEL G. KIMELMAN   Chairman of the Board          October 06, 2005
_______________________  of Directors
   MICHAEL G. KIMELMAN


/s/SIDNEY R. KNAFEL      Director                       October 06, 2005
_______________________
   SIDNEY R. KNAFEL


/s/PATRICK F. MONAHAN    Director, Vice President       October 06, 2005
_______________________  Secretary and
   PATRICK F. MONAHAN    Director of Manufacturing

</TABLE>