UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                          -----------------------------

                                    FORM 10-Q

      (Mark One)

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934

 For the quarterly period ended June 30, 2004
                                -------------

                                       OR

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

For the transition period from            to
                               ----------    ----------

                        Commission file number 000-14879
                                               ---------

                               Cytogen Corporation
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

            Delaware                                             22-2322400
-------------------------------                           ----------------------
(State or Other Jurisdiction of                               (I.R.S. Employer
Incorporation or Organization)                            Identification Number)


           650 College Road East, Suite 3100, Princeton, NJ 08540-5308
           -----------------------------------------------------------
              (Address of Principal Executive Offices and Zip Code)

       Registrant's Telephone Number, Including Area Code: (609) 750-8200

           Indicate  by check mark  whether  the  registrant:  (1) has filed all
reports  required to be filed by Section 13 or 15(d) of the Securities  Exchange
Act of 1934 during the preceding 12 months (or for such shorter  period that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days: Yes X  No   .
                                             ---   ---

           Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). Yes X  No    .
                                                   ---    ---

           Indicate  the number of shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date:

            Class                                 Outstanding at August 1, 2004
------------------------------                  --------------------------------
Common Stock, $.01 par value                                15,509,293


<PAGE>



                               CYTOGEN CORPORATION

                                TABLE OF CONTENTS
                                -----------------

<TABLE>
<CAPTION>


                                                                                   Page
                                                                                   ----

<S>                                                                                <C>
PART I.   FINANCIAL INFORMATION.................................................     1

     Item 1.  Consolidated Financial Statements (unaudited).....................     1

              Consolidated Balance Sheets as of June 30, 2004 and
                  December 31, 2003.............................................     2

              Consolidated Statements of Operations for the Three Months and
                  Six Months Ended June 30, 2004 and 2003.......................     3

              Consolidated Statements of Cash Flows for the Six Months
                  Ended June 30, 2004 and 2003 .................................     4

              Notes to Consolidated Financial Statements........................     5

     Item 2.  Management's Discussion and Analysis of Financial Condition
              and Results of Operations.........................................    13

     Item 3.  Quantitative and Qualitative Disclosures About Market Risk........    27

     Item 4.  Controls and Procedures...........................................    27

PART II.  OTHER INFORMATION.....................................................    27

     Item 1.  Legal Proceedings.................................................    27

     Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.......    29

     Item 4.  Submission of Matters to a Vote of Security Holders...............    29

     Item 5.  Other Information.................................................    30

     Item 6.  Exhibits and Reports on Form 8-K..................................    31

SIGNATURES......................................................................    32
</TABLE>



                                      -i-
<PAGE>











                         PART I - FINANCIAL INFORMATION
                         ------------------------------
             ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

















                                       1
<PAGE>
<TABLE>
<CAPTION>


                                CYTOGEN CORPORATION AND SUBSIDIARIES
                                     CONSOLIDATED BALANCE SHEETS
                     (All amounts in thousands, except share and per share data)
                                             (Unaudited)



                                                                                    JUNE 30,     DECEMBER 31,
                                                                                      2004           2003
                                                                                   ---------     -----------
<S>                                                                                <C>            <C>
ASSETS:
Current assets:
  Cash and cash equivalents ....................................................   $  20,900      $  13,630
  Short-term investments .......................................................      23,940         16,585
  Accounts receivable, net .....................................................       1,946          1,445
  Inventories ..................................................................       1,432          1,887
  Other current assets .........................................................       1,130            975
                                                                                   ---------      ---------

    Total current assets .......................................................      49,348         34,522

Property and equipment, net ....................................................         747            595
Quadramet license fee, net .....................................................       7,372          7,720
Other assets ...................................................................         456            858
                                                                                   ---------      ---------
                                                                                   $  57,923      $  43,695
                                                                                   =========      =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
  Current portion of long-term liabilities .....................................   $      58      $      76
  Accounts payable and accrued liabilities .....................................       4,002          5,125
                                                                                   ---------      ---------

    Total current liabilities ..................................................       4,060          5,201
                                                                                   ---------      ---------

Long-term liabilities ..........................................................       2,457          2,454
                                                                                   ---------      ---------

Commitments and Contingencies

Stockholders' equity:
  Preferred  stock,  $.01 par value, 5,400,000 shares authorized -
    Series C Junior Participating Preferred Stock, $.01 par value,
    200,000 shares authorized, none issued and outstanding .....................           -              -

  Common stock, $.01 par value, 25,000,000 shares authorized,
    15,434,211 and 12,857,488 shares issued and outstanding
    at June 30, 2004 and December 31, 2003, respectively .......................         155            129
  Additional paid-in capital ...................................................     425,655        401,649
  Accumulated deficit ..........................................................    (374,404)      (365,738)
                                                                                   ---------      ---------

    Total stockholders' equity .................................................      51,406         36,040
                                                                                   ---------      ---------

                                                                                   $  57,923      $  43,695
                                                                                   =========      =========
</TABLE>
                The accompanying notes are an integral part of these statements.

                                                  2
<PAGE>
<TABLE>
<CAPTION>
                                     CYTOGEN CORPORATION AND SUBSIDIARIES
                                     CONSOLIDATED STATEMENTS OF OPERATIONS
                               (All amounts in thousands, except per share data)
                                                  (Unaudited)


                                                         THREE MONTHS             SIX MONTHS
                                                        ENDED JUNE 30,          ENDED JUNE 30,
                                                    --------------------    --------------------
                                                      2004        2003        2004        2003
                                                    --------    --------    --------    --------

<S>                                                 <C>         <C>         <C>         <C>
REVENUES:
  Product related:
    Quadramet ..................................... $  1,616    $      -    $  3,470    $      -
    ProstaScint ...................................    2,312       1,599       4,039       3,219
    Others ........................................        -          98           1         363
                                                    --------    --------    --------    --------
          Total product revenues ..................    3,928       1,697       7,510       3,582

    Quadramet royalties ...........................        -         465           -         914
                                                    --------    --------    --------    --------
          Total product related revenues ..........    3,928       2,162       7,510       4,496

    License and contract ..........................       24         164          43         307
                                                    --------    --------    --------    --------

          Total revenues ..........................    3,952       2,326       7,553       4,803
                                                    --------    --------    --------    --------

OPERATING EXPENSES:
  Cost of product related revenues ................    2,396         900       4,795       1,810
  Selling, general and administrative .............    4,914       2,967       8,805       5,366
  Research and development ........................      541         718       1,345       1,530
  Equity in loss of joint venture .................      542       1,086       1,351       1,966
                                                    --------    --------    --------    --------

          Total operating expenses ................    8,393       5,671      16,296      10,672
                                                    --------    --------    --------    --------

          Operating loss ..........................   (4,441)     (3,345)     (8,743)     (5,869)

INTEREST INCOME  ..................................      106          23         170          59
INTEREST EXPENSE ..................................      (49)        (46)        (93)        (93)
                                                    --------    --------    --------    --------

          Loss before income taxes ................   (4,384)     (3,368)     (8,666)     (5,903)

INCOME TAX BENEFIT ................................        -           -           -        (584)
                                                    --------    --------    --------    --------

NET LOSS .......................................... $ (4,384)   $ (3,368)   $ (8,666)   $ (5,319)
                                                    ========    ========    ========    ========

BASIC AND DILUTED NET LOSS PER SHARE .............. $  (0.30)   $  (0.37)   $ ((0.63)   $  (0.60)
                                                    ========    ========    ========    ========

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING ........   14,848       9,051      13,859       8,909
                                                    ========    ========    ========    ========
</TABLE>
                The accompanying notes are an integral part of these statements.

                                                 3

<PAGE>
<TABLE>
<CAPTION>

                             CYTOGEN CORPORATION AND SUBSIDIARIES
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (All amounts in thousands)
                                          (Unaudited)

                                                                  SIX MONTHS ENDED JUNE 30,
                                                                  -------------------------
                                                                     2004           2003
                                                                  ----------     ----------
<S>                                                               <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss    ...................................................   $ (8,666)      $ (5,319)
Adjustments to reconcile net loss to net cash used in
     operating activities:
       Depreciation and amortization ..........................        534            306
       Stock-based compensation expenses ......................         11            502
       Amortization of deferred revenue .......................          -           (192)
       Non-cash interest income ...............................         28              -
       Loss on disposition of assets ..........................          3              -
       Write down of property and equipment ...................        100              -
       Changes in assets and liabilities:
         Receivables, net .....................................       (501)           488
         Inventories ..........................................        455           (767)
         Other assets .........................................        247           (293)
         Accounts payable, accrued liabilities and
          other liabilities ...................................     (1,127)          (574)
                                                                  --------       --------

       Net cash used in operating activities ..................     (8,916)        (5,849)
                                                                  --------       --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment ...........................       (371)            (2)
Increase in short-term investments ............................     (7,383)             -
                                                                  --------       --------

       Net cash used in investing activities ..................     (7,754)            (2)
                                                                  --------       --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock ........................     24,021          4,739
Payment of long-term liabilities ..............................        (81)           (84)
                                                                  --------       --------

       Net cash provided by financing activities ..............     23,940          4,655
                                                                  --------       --------

Net increase (decrease) in cash and cash equivalents ..........      7,270         (1,196)

Cash and cash equivalents, beginning of period ................     13,630         14,725
                                                                  --------       --------

Cash and cash equivalents, end of period ......................   $ 20,900       $ 13,529
                                                                  ========       ========

Supplemental disclosure of non-cash information:
  Capital leases of equipment.................................    $     70       $      -
                                                                  ========       ========
Supplemental disclosure of cash information:
  Cash paid for interest......................................    $     93       $     93
                                                                  ========       ========
</TABLE>
                The accompanying notes are an integral part of these statements.

                                                   4
<PAGE>


                      CYTOGEN CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.  THE COMPANY

BACKGROUND

         Founded in 1980,  Cytogen  Corporation  (the "Company" or "Cytogen") of
Princeton,  New Jersey is a product-driven,  oncology-focused  biopharmaceutical
company  that  develops  and  commercializes  a balanced  portfolio  of oncology
products  that address the unmet  medical  needs of patients and the  physicians
that serve them. The Company  directly  markets  Quadramet(TM)  (samarium Sm-153
lexidronam   injection),   ProstaScint(R)   (capromab  pendetide)  kit  for  the
preparation  of Indium In-111  capromab  pendetide  and NMP22(R)  BladderChek(R)
(nuclear  matrix  protein 22) in the United  States.  The Company has  exclusive
United   States   marketing   rights   to   Combidex(R)   (ferumoxtran-10),   an
investigational  molecular imaging agent consisting of iron oxide  nanoparticles
for  use  in  conjunction  with  magnetic   resonance  imaging  to  aid  in  the
differentiation  of cancerous  from  non-cancerous  lymph nodes,  which is under
review by the U.S. Food and Drug Administration (the "FDA"). The Company is also
developing therapeutics targeting prostate-specific membrane antigen ("PSMA"), a
protein  highly  expressed  on the  surface  of  prostate  cancer  cells and the
neovasculature of solid tumors.

         Cytogen has had a history of operating losses since its inception.  The
Company  currently  relies  on two  products,  ProstaScint  and  Quadramet,  for
substantially  all of its revenues.  In addition,  the Company has, from time to
time,  stopped selling  certain  products,  such as  OncoScint(R)  CR/OV and the
BrachySeed(TM)  products,  that the Company  previously  expected would generate
significant  revenues for its business.  The  Company's  products are subject to
significant  regulatory  review by the FDA and other federal and state agencies,
which requires  significant  time and  expenditures in seeking,  maintaining and
expanding product  approvals.  In addition,  the Company relies on collaborative
partners  to a  significant  degree to,  among  other  things,  manufacture  its
products,   secure  raw  materials,   and  provide  licensing  rights  to  their
proprietary products for the Company to sell and market to others.

BASIS OF CONSOLIDATION

         The consolidated  financial statements include the financial statements
of Cytogen and its subsidiaries. All intercompany balances and transactions have
been eliminated in consolidation.

BASIS OF PRESENTATION

         The consolidated  financial statements and notes thereto of Cytogen are
unaudited and include all adjustments,  which in the opinion of management,  are
necessary to present fairly the financial condition and results of operations as
of  and  for  the  periods  set  forth  in  the  Consolidated   Balance  Sheets,
Consolidated Statements of Operations and Consolidated Statements of Cash Flows.
All  such  accounting  adjustments  are  of  a  normal,  recurring  nature.  The
consolidated  financial  statements  do not include all of the  information  and

                                       5
<PAGE>
footnote  disclosures  normally  included in  financial  statements  prepared in
accordance with accounting principles generally accepted in the United States of
America  and  should  be read in  conjunction  with the  consolidated  financial
statements  and notes thereto  included in the  Company's  Annual Report on Form
10-K,  filed  with  the  Securities  and  Exchange  Commission,  which  includes
financial statements as of and for the year ended December 31, 2003. The results
of  the  Company's  operations  for  any  interim  period  are  not  necessarily
indicative  of the results of the  Company's  operations  for any other  interim
period or for a full year.

CASH AND CASH EQUIVALENTS

         Cash and cash  equivalents  include cash on hand, cash in banks and all
highly-liquid investments with a maturity of three months or less at the time of
purchase.

SHORT-TERM INVESTMENTS

         Short-term  investments  at June 30,  2004 and  December  31, 2003 were
$23.9 million and $16.6 million,  respectively,  and consisted of investments in
U.S.  government  agency  notes.  The Company has the ability and intent to hold
these investments until maturity.  Held-to-maturity  investments are recorded at
amortized cost,  adjusted for the accretion of discounts or premiums.  Discounts
or  premiums  are  accreted  into  interest  income over the life of the related
investment on a straight-line basis. Dividend and interest income are recognized
when earned. These investments mature at various times through April 15, 2005.

IMPAIRMENT OF LONG-LIVED ASSETS

         In accordance with Statement of Financial Accounting Standards ("SFAS")
No. 144,  "Accounting  for the Impairment or Disposal of Long-Lived  Assets," if
indicators of impairment exist,  management  assesses the  recoverability of the
affected  long-lived  assets by  determining  whether the carrying value of such
assets can be recovered  through  undiscounted  future  operating cash flows and
eventual  disposition  of the asset.  If  impairment  is  indicated,  management
measures the amount of such  impairment by comparing  the carrying  value of the
assets to the present value of the expected  future cash flows  associated  with
the use of the asset.

         During the  second  quarter of 2004,  the  Company  recorded a non-cash
charge of $100,000 for equipment impairment  associated with the planned closure
of the facilities at the Company's  AxCell  BioSciences  subsidiary in July 2004
(see Note 7, "Subsequent  Event").  This charge is included in selling,  general
and  administrative  expenses for the three and six month periods ended June 30,
2004 in the accompanying consolidated statement of operations.

COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES

         In accordance with the SFAS No. 146,  "Accounting for Costs  Associated
with Exit or Disposal Activities," the Company is required to record a liability
for costs associated with an exit or disposal activity,  measured at fair value,
in the  period in which the  liability  is  incurred.  A  liability  related  to
one-time  termination  benefits provided to severed employees as a result of the
exit or disposal  activity will be recorded when certain  criteria have been met
and the employees are notified of the details of the plan. A liability for costs

                                       6
<PAGE>
to  terminate  a lease or other  contract  before  the end of its term  shall be
recognized  and  measured  at its fair value  when the  Company  terminates  the
contract in accordance  with the contract terms. If the contract is an operating
lease, the fair value of the liability at the cease-use date shall be determined
based on the remaining lease rentals, reduced by estimated sublease rentals that
could be  reasonably  obtained  for the  property,  even if the Company does not
intend to enter into a sublease.

         In July 2004, as part of our continuing effort to reduce  non-strategic
expenses,  the Company initiated a closure of facilities at the Company's AxCell
BioSciences  subsidiary,  which will be  accounted  for pursuant to SFAS No. 146
(see Note 7, "Subsequent Event").

INVENTORIES

         The  Company's   inventories  are  primarily  related  to  ProstaScint.
Inventories  are  stated  at the lower of cost or  market  using  the  first-in,
first-out method and consisted of the following (all amounts in thousands):

                                             JUNE 30, 2004     DECEMBER 31, 2003
                                             -------------     -----------------
   Raw materials...........................    $       -           $      11
   Work-in-process.........................        1,229               1,089
   Finished goods..........................          203                 787
                                               ---------           ---------
                                               $   1,432           $   1,887
                                               =========           =========
NET LOSS PER SHARE

         Basic net loss per common share is  calculated  by dividing net loss by
the weighted average common shares outstanding  during each period.  Diluted net
loss per  common  share is the same as basic  net loss per share for each of the
three and six month  periods  ended June 30, 2004 and 2003 because the inclusion
of common stock  equivalents,  which consist of warrants and options to purchase
shares of the Company's common stock, would be antidilutive due to the Company's
losses.

VARIABLE INTEREST ENTITIES

         In December 2003,  the Financial  Accounting  Standards  Board ("FASB")
issued  FASB   Interpretation  No.  46  (revised  December  2003)  ("FIN  46R"),
"Consolidation of Variable Interest  Entities"  ("VIEs"),  which addresses how a
business  enterprise  should  evaluate  whether it has a  controlling  financial
interest in an entity  through  means other than voting  rights and  accordingly
should consolidate the entity. FIN 46R replaced FASB Interpretation No. 46 ("FIN
46") which was issued in January 2003.  The Company is required to apply FIN 46R
to variable  interests in VIEs  created  after  December 31, 2003.  For variable
interests in VIEs created before  January 1, 2004, FIN 46R applied  beginning on
March 31, 2004. For any VIEs that must be  consolidated  under FIN 46R that were
created  before  January 1, 2004,  the assets,  liabilities  and  noncontrolling
interests of the VIE initially are measured at their  carrying  amounts with any
difference  between the net amount added to the balance sheet and any previously
recognized  interest being recognized as the cumulative  effect of an accounting
change.  If determining the carrying amounts is not  practicable,  fair value at

                                       7
<PAGE>

the date FIN 46R first  applies may be used to measure  the assets,  liabilities
and noncontrolling interest of the VIE.

         In June 1999,  Cytogen  entered  into a joint  venture  with  Progenics
Pharmaceuticals   Inc.   ("Progenics,"  and  collectively   with  Cytogen,   the
"Members"),  to form the PSMA Development Company LLC (the "Joint Venture"). The
Joint   Venture   is   currently    developing    antibody-based   and   vaccine
immunotherapeutic    products   utilizing   Cytogen's    exclusively    licensed
prostate-specific  membrane  antigen ("PSMA")  technology.  The Joint Venture is
owned  equally by the Members (see Note 2, "Equity Loss in the PSMA  Development
Company LLC"). Cytogen accounts for the Joint Venture using the equity method of
accounting.

         The  Company  believes  it is not  required  to  consolidate  the Joint
Venture under the requirements of FIN 46R.

STOCK-BASED COMPENSATION

         The Company  follows  the  intrinsic  value  method of  accounting  for
stock-based  employee  compensation  in  accordance  with APB  Opinion  No.  25,
"Accounting  for Stock Issued to Employees,"  and related  interpretations.  The
Company  records  deferred  compensation  for option grants to employees for the
amount,  if any, by which the market price per share exceeds the exercise  price
per share at the measurement date, which is generally the grant date.

         The  Company  follows  the  disclosure  provisions  of  SFAS  No.  123,
"Accounting  for  Stock-Based   Compensation,"  as  amended  by  SFAS  No.  148,
"Accounting  for  Stock-Based  Compensation  - Transition and  Disclosure."  Had
compensation cost for options been recognized in the consolidated  statements of
operations using the fair value method of accounting, the Company's net loss and
net loss per share would have been as follows (all amounts in thousands,  except
per share data):
<TABLE>
<CAPTION>


                                                           THREE MONTHS ENDED          SIX MONTHS ENDED
                                                                 JUNE 30,                   JUNE 30,
                                                          --------------------      ----------------------

                                                             2004        2003          2004         2003
                                                             ----        ----          ----         ----
<S>                                                       <C>         <C>           <C>          <C>
Net loss, as reported.............................        $(4,384)    $(3,368)      $ (8,666)    $ (5,319)
  Add: Stock-based employee compensation
   expense included in reported net loss .........              -           -             11            1

  Deduct: Total stock-based employee
   compensation expense determined under
   fair value-based method for all awards.........           (341)       (361)          (574)        (712)
                                                          -------     -------       --------     --------
Pro forma net loss................................        $(4,725)    $(3,729)      $ (9,229)    $ (6,030)
                                                          =======     =======       ========     ========
Basic and diluted net loss per
   share, as reported.............................        $ (0.30)    $ (0.37)      $  (0.63)    $  (0.60)
                                                          =======     =======       ========     ========
Pro forma basic and diluted net
   loss per share.................................        $ (0.32)    $ (0.41)      $  (0.67)    $  (0.68)
                                                          =======     =======       ========     ========
</TABLE>


                                       8
<PAGE>


RECLASSIFICATION

         Certain amounts in prior years' consolidated  financial statements have
been reclassified to conform to the current year presentation.

2.   EQUITY LOSS IN THE PSMA DEVELOPMENT COMPANY LLC

         In June 1999,  Cytogen  entered into a joint venture with  Progenics to
form the PSMA  Development  Company LLC. The Joint  Venture is owned  equally by
Cytogen and Progenics.  Cytogen  accounts for the Joint Venture using the equity
method  of  accounting.  Cytogen  has  recognized  50%  of the  Joint  Venture's
operating  results  in its  consolidated  statements  of  operations.  The Joint
Venture is  expected to continue  to incur  losses in future  years  provided an
agreement  between the Members is reached on research  program goals and budgets
for periods after 2004 and the Joint Venture's  operations are funded.  In 2004,
the Members each expect to provide  $4.2 million in funding for the  development
of the PSMA technologies through the Joint Venture.  Cytogen has funded $950,000
as of June 30,  2004 and an  additional  $1.0  million  in July 2004 of its $4.2
million  commitment.  The Members have not  committed to fund the Joint  Venture
beyond  December 31, 2004 at this time,  except for  obligations  under existing
contractual commitments as of that date.

         For the three months ended June 30, 2004 and 2003,  Cytogen  recognized
$542,000 and $1.1 million,  respectively, of the Joint Venture's losses. For the
six months  ended June 30, 2004 and 2003,  Cytogen  recognized  $1.4 million and
$2.0 million,  respectively,  of the Joint Venture's losses. As of June 30, 2004
and December 31, 2003, the carrying  value of Cytogen's  investment in the Joint
Venture was $148,000 and  $550,000,  respectively,  which  represents  Cytogen's
investment to date in the Joint Venture less its cumulative  share of losses and
is recorded in other assets.  Selected  financial  statement  information of the
Joint Venture is as follows (all amounts in thousands):

BALANCE SHEET DATA:

<TABLE>
<CAPTION>

                                                                 JUNE 30,     DECEMBER 31,
                                                                   2004           2003
                                                                ----------   --------------


<S>                                                              <C>            <C>
Cash ........................................................    $    523       $  1,173
Prepaid expenses.............................................          31              -
Accounts receivable from Progenics, a related party..........           -            108
                                                                 --------       --------
       Total assets.........................................     $    554       $  1,281
                                                                 ========       ========

Accounts payable to Progenics, a related party...............    $     14       $      -
Other accounts payable and accrued expenses..................         260            199
                                                                 --------       --------
       Total liabilities....................................          274            199
                                                                 --------       --------

Capital contributions........................................      21,298         19,398
Accumulated deficit..........................................     (21,018)       (18,316)
                                                                 --------       --------
       Total stockholders' equity...........................          280          1,082
                                                                 --------       --------
       Total liabilities and stockholders' equity...........     $    554       $  1,281
                                                                 ========       ========
</TABLE>

                                       9
<PAGE>
INCOME STATEMENT DATA:
<TABLE>
<CAPTION>

                                                    THREE                       SIX
                                                MONTHS ENDED                MONTHS ENDED        FOR THE PERIOD
                                                  JUNE  30,                   JUNE 30,        FROM JUNE 15, 1999
                                          ----------------------      -----------------------   (INCEPTION) TO
                                             2004        2003            2004         2003       JUNE 30, 2004
                                          ----------   ---------      ----------   ---------- ------------------

<S>                                       <C>          <C>            <C>          <C>             <C>
Interest income..............             $       2    $       1      $       5    $        1      $     239
Total expenses...............                 1,086        2,173          2,707         3,932         21,257
                                          ---------    ---------      ---------     ---------      ---------

Net loss.....................             $  (1,084)   $  (2,172)     $  (2,702)    $  (3,931)     $ (21,018)
                                          =========    =========      =========     =========      =========
</TABLE>


3.  BRISTOL-MYERS SQUIBB MEDICAL IMAGING, INC.

         As a result  of the  Company's  reacquisition  of  marketing  rights to
Quadramet from Berlex  Laboratories Inc.  ("Berlex") in August 2003, the Company
assumed all of Berlex's  obligations  under a manufacturing and supply agreement
with Bristol-Myers Squibb Medical Imaging, Inc. ("BMSMI").  Effective January 1,
2004, the Company  entered into a new  manufacturing  and supply  agreement with
BMSMI whereby BMSMI manufactures,  distributes and provides order processing and
customer services for Cytogen relating to Quadramet.  Under the terms of the new
agreement,  Cytogen is obligated to pay at least $4.2 million  annually  through
2008,  unless  terminated by BMSMI or Cytogen on two years prior written notice.
This agreement will  automatically  renew for five successive  one-year  periods
unless terminated by BMSMI or Cytogen on two years prior written notice.  During
the three and six month  periods  ended June 30,  2004,  Cytogen  incurred  $1.0
million and $2.1 million,  respectively,  of manufacturing  costs for Quadramet,
all of which is included in cost of product related  revenues.  The Company also
pays BMSMI a variable  amount  per month for each order of  Quadramet  placed to
cover the costs of customer service,  which is included in selling,  general and
administrative expenses.

4.  LITIGATION AND OTHER RELATED MATTERS

         On March 17,  2000,  the  Company  was served  with a  complaint  filed
against us in the United States District Court for the District of New Jersey by
M. David Goldenberg and  Immunomedics,  Inc.  (collectively  "Plaintiffs").  The
litigation  claims that the  Company's  ProstaScint  product  infringes a patent
purportedly owned by Goldenberg and licensed to Immunomedics.  The patent sought
to be enforced in the litigation has now expired;  as a result,  the claim, even
if successful,  would not result in an injunction  barring the continued sale of
ProstaScint  or affect any other of the Company's  products or  technology.  The
Company  believes that  ProstaScint  did not infringe this patent,  and that the
patent was invalid and  unenforceable.  On December  17, 2001,  Cytogen  filed a
motion for summary  judgment of  non-infringement  of the asserted claims of the
patent-in-suit.   The  Plaintiffs  opposed  that  motion  and  filed  their  own
cross-motion for summary judgment of infringement. On July 3, 2002, the District
Court denied both parties' summary judgment  motions,  with leave to renew those
motions after  presenting  expert  testimony and legal  argument based upon that
testimony.  The parties  subsequently  presented  expert testimony and submitted
additional  briefing.  On April 29,  2003,  the  Company's  motion  for  summary

                                       10
<PAGE>

judgment of  non-infringement  of all asserted  claims was granted,  Plaintiffs'
motion for summary  judgment of infringement was denied and the case was ordered
closed.  On May 12, 2003,  Plaintiffs  filed a Notice of Appeal  regarding  this
decision  to the  U.S.  Court  of  Appeals  for the  Federal  Circuit  ("Federal
Circuit"),  and  subsequently  filed their  opening  brief on July 28, 2003.  On
September 22, 2003,  Cytogen filed its  responsive  brief.  On October 23, 2003,
Plaintiffs  filed  their  reply  brief.  The appeal was fully  briefed  and oral
argument was held on March 2, 2004. The Federal  Circuit on June 23, 2004 issued
a  ruling  on the  appeal  in which  it  affirmed  the  District  Court's  claim
construction  ruling and  summary  judgment  of no literal  infringement  by the
Company.  However,  the Federal  Circuit  determined  that there was an issue of
material fact as to infringement under the doctrine of equivalents. As a result,
it reversed the District  Court's grant of summary  judgment of no  infringement
under the doctrine of  equivalents  and remanded the case to the District  Court
for further  proceedings on this issue.  Given the  uncertainty  associated with
litigation,  the Company cannot give any assurance that the litigation could not
result in a  material  adverse  effect  on the  Company's  financial  condition,
results of operations or liquidity.

         In  connection  with a  recent  review  of  certain  of  the  Company's
intellectual  property,  it was  determined  that the Company was the recipient,
beginning in 1998, of correspondence from legal counsel  representing the former
employer of Dr. Julius  Horoszewicz,  the sole inventor on the principal  United
States patent covering ProstaScint.  Such correspondence alleged that the patent
rights  to Dr.  Horoszewicz's  discoveries  were  the  property  of such  former
employer  and that Dr.  Horoszewicz  had no right to assign them to the Company.
The Company vigorously disputed those allegations, and the Company has no record
of the matter having been pursued by such former  employer  subsequent to August
2000.  The Company  believes  that in view of the  marketing  of the  technology
covered  by the patent  through  the sale of  ProstaScint  by the  Company,  the
Company's  right to use the underlying  technology in its continuing  production
and sale of  ProstaScint  should not be at risk.  However,  if such  claims were
reasserted,  and if it were to be concluded that Dr.  Horoszewicz in fact had no
right to assign the patent to the  Company,  a court  could  determine  that the
Company  has no right to use the  technology  covered  by the patent or that any
royalties  paid by or payable by the Company in respect of the use of the patent
should have been paid in the past,  and should in the future be payable,  to Dr.
Horoszewicz's former employer in lieu of Dr. Horoszewicz. The amount of any such
payments,  and the Company's liability for them, is not presently  determinable,
and the Company  cannot give any assurance that an adverse  determination  could
not result in a material  expenditure to the Company or have a material  adverse
effect on the Company's financial condition, results of operations or liquidity.

         The Company has certain rights to  indemnification  against  litigation
and  litigation  expenses from the inventor of technology  used in  ProstaScint,
which may be offset against royalty  payments on sales of ProstaScint.  However,
given the uncertainty associated with litigation, the Company may incur material
expenditures.


                                       11
<PAGE>
5.  SALE OF COMMON STOCK

           In April  2004,  the  Company  issued and sold  through a  registered
direct  offering  2,570,000  shares of its  common  stock at $10.10  per  share,
resulting in net proceeds to the Company of  approximately  $24.0  million after
the payment of placement agency fees and expenses related to the offering.

6.  STOCK INCENTIVE PLANS

         At the Company's 2004 Annual Meeting of  Stockholders  held on June 15,
2004,  the  stockholders  of the Company  approved the adoption of the Company's
2004 Stock Incentive Plan (the "2004 Plan") and the Company's 2004  Non-Employee
Director  Stock  Incentive  Plan (the "2004 Director Plan" and together with the
2004 Plan, collectively,  the "2004 Incentive Plans"). An aggregate of 1,200,000
and 375,000 shares of the Company's common stock have been reserved for issuance
upon the exercise of option  grants or restricted  stock awards (as  applicable)
under the 2004 Plan and 2004 Director Plan, respectively. The 2004 Plan provides
for the  grant of  incentive  stock  options,  non-qualified  stock  options  or
restricted stock to the Company's employees, officers, consultants and advisors.
The 2004 Director Plan provides for the grant of non-qualified stock options and
shares of the Company's  common stock, in certain  circumstances,  to members of
the  Company's  Board of Directors  who are not  employees  of the Company.  The
Company intends to file a registration statement on Form S-8 with the Securities
and Exchange  Commission  to register the shares of the  Company's  common stock
underlying  option  grants  or other  awards  under  the 2004  Incentive  Plans.
Furthermore,  upon approval of the 2004 Incentive Plans by our stockholders,  no
further  option  grants or awards  were,  or will be,  made under the  Company's
existing 1995 Stock Option Plan or 1999 Non-Employee Director Stock Option Plan.
Any unissued and unallocated  options previously reserved under these plans were
released from reserves.

7.  SUBSEQUENT EVENT

Planned Closure of AxCell BioSciences Facilities

         In July 2004,  the Company  initiated the closure of the  facilities at
its AxCell BioSciences subsidiary as part of the Company's continuing efforts to
reduce  non-strategic  expenses.  As a result of the  closure,  the Company will
record  additional  charges  in the third  quarter of 2004  related to  employee
severance  costs and the potential  charge for future rental  payments on leased
facilities that will no longer be used in operations.  Research projects through
academic, governmental and corporate collaborators will continue to be supported
and  additional  applications  for the  intellectual  property and technology at
AxCell are being pursued.

                                       12

<PAGE>


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

         This Quarterly Report on Form 10-Q contains forward-looking  statements
within the meaning of the Private  Securities  Litigation Reform Act of 1995 and
Section  21E  of  the  Securities  Exchange  Act  of  1934,  as  amended.  These
forward-looking  statements  regarding  future events and our future results are
based on current  expectations,  estimates,  forecasts,  and projections and the
beliefs and assumptions of our management  including,  without  limitation,  our
expectations   regarding   results   of   operations,   selling,   general   and
administrative  expenses,  research and development expenses and the sufficiency
of our cash for future operations.  Forward-looking statements may be identified
by the use of  forward-looking  terminology  such as  "may,"  "will,"  "expect,"
"estimate," "anticipate," "continue," or similar terms, variations of such terms
or the  negative  of  those  terms.  These  forward-looking  statements  include
statements  regarding  our  intent  to  hold  our  investments  until  maturity,
additional  funding of the PSMA  technologies,  potential charges resulting from
the closure of AxCell  Biosciences,  growth and market penetration for Quadramet
and  ProstaScint,  revenues,  if any, from NMP22  BladderChek and from our joint
venture with Progenics  Pharmaceuticals  Inc., increased expenses resulting from
our sales force and marketing expansion,  including sales and marketing expenses
for Quadramet, the sufficiency of our capital resources, our need for additional
capital and other statements included in this Quarterly Report on Form 10-Q that
are not historical facts. Such  forward-looking  statements  involve a number of
risks  and  uncertainties  and  investors  are  cautioned  not to put any  undue
reliance on any  forward-looking  statement.  We cannot  guarantee  that we will
actually  achieve the plans,  intentions or  expectations  disclosed in any such
forward-looking  statements.  Factors that could cause actual  results to differ
materially,  include,  market  acceptance  of our  products,  the results of our
clinical trials,  our ability to hire and retain employees,  economic and market
conditions  generally,  our receipt of requisite  regulatory  approvals  for our
products and product candidates,  the continued cooperation of our marketing and
other  collaborative  and  strategic  partners,   our  ability  to  protect  our
intellectual  property,  and the other risks  identified in our Annual Report on
Form 10-K for the year ended  December  31, 2003 under the  caption  "Additional
Factors  That May Affect  Future  Results"  and those  under the  caption  "Risk
Factors," as included in certain of our other filings,  from time to time,  with
the Securities and Exchange Commission.

         Any forward-looking  statements made by us do not reflect the potential
impact of any future  acquisitions,  mergers,  dispositions,  joint  ventures or
investments  we may make.  We do not  assume,  and  specifically  disclaim,  any
obligation  to update  any  forward-looking  statements,  and  these  statements
represent our current outlook only as of the date given.

         The following  discussion  and analysis  should be read in  conjunction
with the consolidated  financial  statements and related notes thereto contained
elsewhere  herein,  as well as in our  Annual  Report  on Form 10-K for the year
ended  December  31,  2003 and from time to time in our other  filings  with the
Securities and Exchange Commission.

OVERVIEW

         Founded in 1980,  Cytogen  Corporation  of  Princeton,  New Jersey is a
product-driven,  oncology-focused  biopharmaceutical  company that  develops and
commercializes a balanced  portfolio of oncology products that address the unmet

                                       13
<PAGE>

medical needs of patients and the physicians that serve them. We directly market
Quadramet(TM) (samarium Sm-153 lexidronam injection),  ProstaScint(R)  (capromab
pendetide)  kit for the  preparation  of Indium  In-111  capromab  pendetide and
NMP22(R)  BladderChek(R)  (nuclear  matrix protein 22) in the United States.  We
have exclusive United States  marketing rights to Combidex(R)  (ferumoxtran-10),
an   investigational   molecular   imaging   agent   consisting  of  iron  oxide
nanoparticles  for use in conjunction with magnetic  resonance imaging to aid in
the  differentiation of cancerous from non-cancerous lymph nodes, which is under
review  by the  U.S.  Food  and  Drug  Administration.  We are  also  developing
therapeutics  targeting  prostate-specific  membrane  antigen (PSMA),  a protein
highly expressed on the surface of prostate cancer cells and the  neovasculature
of solid tumors.  Full prescribing  information for our products is available at
www.cytogen.com  or by calling  1-800-833-3533.  ProstaScint(R) and OncoScint(R)
are registered United States trademarks of Cytogen Corporation. We are the owner
of a pending United States trademark application,  Serial No. 78374967, relating
to Quadramet.  All other trade names,  trademarks or  servicemarks  appearing in
this Quarterly Report on Form 10-Q are the property of their respective  owners,
and not the property of Cytogen Corporation or any of our subsidiaries.

SIGNIFICANT EVENTS IN 2004

ADDITION TO SENIOR MANAGEMENT

         In  April  2004, Thomas  S. Lytle joined  the  Company  as Senior  Vice
President of Sales and  Marketing.  Mr. Lytle has over 25 years of experience in
the pharmaceutical  industry and has held senior level positions at Amgen, Inc.,
Pfizer and  Lederle  Laboratories.  At Cytogen,  Mr.  Lytle is  responsible  for
overseeing strategic sales and marketing initiatives for our existing and future
oncology products.

CAPITAL RAISING

         In April 2004, we issued and sold 2,570,000  shares of our common stock
for $10.10 per share  through a  registered  direct  offering  resulting  in net
proceeds of  approximately  $24.0 million after the payment of placement  agency
fees and expenses  related to the offering.  The shares in this transaction were
registered  under our existing shelf  registration  statement on Form S-3, which
was declared effective by the Securities and Exchange  Commission on October 30,
2003.

PATENT INFRINGEMENT LITIGATION UPDATE

         In June 2004,  we  announced a ruling by the U.S.  Court of Appeals for
the Federal Circuit regarding the recent decision of the U.S. District Court for
the District of New Jersey in a patent  infringement suit filed by Immunomedics,
Inc.  The U.S.  Court of Appeals for the  Federal  Circuit  determined  that the
district court correctly construed the claims and, under that construction,  our
ProstaScint  product was not an "intracellular  marker  substance," and affirmed
the  district  court's  grant of summary  judgment  of no literal  infringement.
Regarding  infringement  under the doctrine of  equivalents,  however,  the U.S.
Court of Appeals for the Federal  Circuit  disagreed  with the district  court's
conclusion  that there is no issue of material  fact and  reversed  the district
court's  grant of  summary  judgment  on this  point and  remanded  for  further
proceedings on the issue.

                                       14
<PAGE>

ADVANCED MAGNETICS SUBMITS RESPONSE TO APPROVABLE LETTER FOR COMBIDEX

         In June 2004,  Advanced  Magnetics,  Inc.  and Cytogen  announced  that
Advanced  Magnetics  submitted a response to the approvable letter received from
the  U.S.  Food  and  Drug  Administration  for  Combidex,  Advanced  Magnetics'
investigational  molecular imaging agent to aid in the non-invasive diagnosis of
metastatic  lymph nodes that Cytogen will market upon receipt of all appropriate
regulatory  approvals.  In response to the  submission,  the FDA requested  that
Advanced  Magnetics provide certain  additional  details underlying the existing
supporting  data  submitted.  The FDA  subsequently  communicated  that the data
Advanced Magnetics is in the process of gathering, look encouraging to provide a
complete response to the approvable letter.

PLANNED CLOSURE OF AXCELL BIOSCIENCES FACILITIES

         In  July 2004,  as  part  of  our  continuing  efforts to  reduce  non-
strategic  expenses,  we  initiated  the  closure  of  facilities  at our AxCell
BioSciences  subsidiary.  As a result of the closure,  we will record additional
charges in the third  quarter 2004 related to employee  severance  costs and the
potential  charge for future rental  payments on leased  facilities that will no
longer be used in operations.  Research projects through academic,  governmental
and  corporate  collaborators  will  continue  to be  supported  and  additional
applications  for the  intellectual  property and technology at AxCell are being
pursued.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2004 AND 2003

REVENUES
<TABLE>
<CAPTION>

                                                                       INCREASE/(DECREASE)
                                                 2004        2003         $           %
                                                 ----        ----     ---------    -------
                                           (ALL AMOUNTS IN THOUSANDS, EXCEPT PERCENTAGE DATA)
<S>                                           <C>         <C>         <C>          <C>
Quadramet
  Product Sales (commenced August 2003).....  $  1,616    $      -    $  1,616        n/a
  Royalties (ceased July 2003)..............         -         465        (465)    (100)%
ProstaScint.................................     2,312       1,599         713        45%
NMP22 BladderChek...........................         -          98         (98)    (100)%
License and Contract........................        24         164        (140)     (85)%
                                              --------    --------    --------
                                              $  3,952    $  2,326    $  1,626        70%
                                              ========    ========    ========
</TABLE>

           Total  revenues  for the  second  quarter  of 2004 were $4.0  million
compared to $2.3 million for the same period in 2003.  Product related revenues,
which include product sales and royalties in 2003,  accounted for 99% and 93% of
total revenues for the second quarters of 2004 and 2003,  respectively.  License
and contract revenues accounted for the remainder of revenues.

           QUADRAMET.  Cytogen recorded  Quadramet sales of $1.6 million for the
second quarter of 2004 compared to $465,000 of Quadramet  royalty revenue during
the second quarter of 2003.  Quadramet sales and royalties accounted for 41% and
22% of  product  related  revenues  for the  second  quarters  of 2004 and 2003,

                                       15
<PAGE>

respectively.  Berlex  Laboratories  marketed  Quadramet  in the  United  States
through July 31, 2003.  On August 1, 2003,  we  reacquired  marketing  rights to
Quadramet  from  Berlex  and began  marketing  Quadramet  through  our  internal
specialty  sales  force.  Effective  upon the  reacquisition  of such  marketing
rights,  we no longer receive  royalty  revenue from Berlex for Quadramet and we
pay royalties to Berlex on our sales of  Quadramet.  On August 1, 2003, we began
recognizing  product revenue from our sales of Quadramet.  Currently,  we market
Quadramet  only in the United  States and have no rights to market  Quadramet in
Europe. We believe that the future growth and market penetration of Quadramet is
dependent  upon,  among other  things:  (i) new  clinical  data  supporting  the
expanded and earlier use of Quadramet in various  cancers;  (ii) novel  research
supporting combination uses with other therapies,  such as chemotherapeutics and
bisphosphonates;  and (iii) establishing the use of Quadramet at higher doses to
target and treat primary bone cancers.  We cannot  provide any assurance that we
will be able to  successfully  market  Quadramet or that  Quadramet will achieve
greater market  penetration on a timely basis or result in significant  revenues
for us.

         PROSTASCINT. ProstaScint sales were $2.3 million for the second quarter
of 2004,  an  increase of $713,000  from $1.6  million in the second  quarter of
2003. Sales of ProstaScint accounted for 59% and 74% of product related revenues
for the second  quarters of 2004 and 2003,  respectively.  We believe  that such
increase in  ProstaScint  sales is due to a combination  of factors.  First,  we
believe that customer  demand for  ProstaScint  has increased due to our focused
marketing programs and a higher ProstaScint  reimbursement value established for
2004  compared  to  2003  that  appropriately  accounts  for  the  cost  of  the
ProstaScint kit, requisite radioisotope,  and compounding costs. Furthermore, we
identified  new  distribution  channels to better  accommodate  customer  needs.
Finally, for the first time in several years, we implemented price increases for
both  ProstaScint and Quadramet in late June 2004, while limiting the quantities
of  ProstaScint  that could be purchased  by  distributors  at the  pre-increase
price.  ProstaScint has historically  been a challenging  product for physicians
and  technologists  to use,  in part  due to  inherent  limitations  in  nuclear
medicine  imaging.  We believe  that  future  growth and market  penetration  of
ProstaScint  is dependent  upon,  among other  things,  the  implementation  and
continued  research  relating  to advances  in imaging  technology,  new product
applications and the validation of PSMA as an independent  prognostic indicator.
We cannot  provide any  assurance  that we will be able to  successfully  market
ProstaScint,  or that ProstaScint  will achieve greater market  penetration on a
timely basis or result in significant revenues for us.

         NMP22 BLADDERCHEK.  There were no sales of NMP22 BladderChek during the
second  quarter of 2004  compared to $98,000 in the second  quarter of 2003.  We
began  promoting  NMP22  BladderChek to both  urologists and  oncologists in the
United  States in November 2002 using our internal  sales force.  On October 30,
2003,  we entered  into an amended  and  restated  distribution  agreement  with
Matritech   whereby,   effective   November  8,  2003,   we  had  the  right  to
non-exclusively market NMP22 BladderChek to urologists through December 31, 2003
and have the  right to  exclusively  market  NMP22  BladderChek  to  oncologists
through December 31, 2004. We do not expect that sales of NMP22 BladderChek will
result in significant revenues for us.

         LICENSE AND  CONTRACT  REVENUES.  License and  contract  revenues  were
$24,000 and  $164,000  for the second  quarters of 2004 and 2003,  respectively.
Under SAB 101, which we adopted in 2000, license revenues from certain up-front,
non-refundable  license fees previously  recognized were deferred and were being
amortized over the estimated  performance  period.  During the second quarter of

                                       16
<PAGE>

2003, we recognized $96,000 of previously deferred license revenue. The deferred
revenue was fully recognized as of December 31, 2003.  During the second quarter
of 2004, we recognized  $15,000 of contract  revenues compared to $53,000 in the
second quarter of 2003 for limited research and development services provided by
us to the PSMA  Development  Company  LLC,  our  joint  venture  with  Progenics
Pharmaceuticals  Inc.  We  expect  that the  level of  future  revenues  for the
remainder of 2004, if any, for contract  services  provided to the joint venture
may vary and will depend upon the extent of research  and  development  services
required by the joint venture.

OPERATING EXPENSES
<TABLE>
<CAPTION>

                                                                               INCREASE/(DECREASE)
                                                       2004        2003            $         %
                                                       ----        ----       ---------  --------
                                                  (ALL AMOUNTS IN THOUSANDS, EXCEPT PERCENTAGE DATA)
<S>                                                 <C>         <C>           <C>           <C>
  Cost of product related revenues.............     $  2,396    $    900      $  1,496      166%
  Selling, general and administrative..........        4,914       2,967         1,947       66%
  Research and development.....................          541         718          (177)    (25)%
  Equity in loss of joint venture..............          542       1,086          (544)    (50)%
                                                    --------    --------      --------
                                                    $  8,393    $  5,671      $  2,722       48%
                                                    ========    ========      ========
</TABLE>

         Total  operating  expenses  for the  second  quarter  of 2004 were $8.4
million compared to $5.7 million in the same quarter of 2003.

         COST OF PRODUCT RELATED REVENUES.  Cost of product related revenues for
the second  quarter of 2004 were $2.4  million  compared to $900,000 in the same
period of 2003.  The increase from the prior year period is due primarily to our
assumption,  in August 2003, of the responsibility  for manufacturing  costs for
Quadramet including  contractual  increases in 2004 related to our new agreement
with Bristol Myers Squibb Medical  Imaging,  royalties to Berlex on our sales of
Quadramet and the  amortization  of the up-front  payment to Berlex to reacquire
Quadramet.

         SELLING,    GENERAL   AND   ADMINISTRATIVE.    Selling,   general   and
administrative  expenses  for the  second  quarter  of 2004  were  $4.9  million
compared to $3.0 million in the same period of 2003. The increase from the prior
year  period  is due  primarily  to the  expansion  of our  sales  force and the
implementation  of  other  marketing  initiatives  for  our  existing  products,
including  Quadramet,  which we  reacquired  from Berlex in August  2003.  As of
August 1, 2004, we employed 38 people in sales and  marketing.  The employees in
sales and marketing included 8 Clinical Oncology Specialists and 22 Regional and
Territory Managers. By comparison, we had 31 employees in sales and marketing as
of December 31, 2003. We  anticipate  that  expenditure  levels will continue to
increase as we continue this expansion.

         RESEARCH AND  DEVELOPMENT.  Research and  development  expenses for the
second quarter of 2004 were $541,000  compared to $718,000 in the same period of
2003.  The current  year  expenses  reflect the  reduction  in certain  research
activities  at AxCell,  which were  partially  offset by our  increased  product
development  efforts in  support  of new and  expanded  uses for  Quadramet  and
ProstaScint.  During the second  quarter of 2004 and 2003, we incurred  $167,000
and $357,000, respectively, in expenses relating to AxCell's operations.

                                       17
<PAGE>

         EQUITY  IN LOSS OF  JOINT  VENTURE.  Our  share of the loss of the PSMA
Development Company LLC, our joint venture with Progenics, was $542,000 and $1.1
million during the second quarters of 2004 and 2003, respectively.  Such amounts
represented  50%  of  the  joint  venture's   operating  losses.  We  may  incur
significant  and  increasing  costs  in the  future  to fund  our  share  of the
development  costs  from the  joint  venture,  although  we cannot  provide  any
assurance that any further  agreements  between us and Progenics will be reached
regarding the joint venture.

         INTEREST INCOME/EXPENSE. Interest income for the second quarter of 2004
was  $106,000  compared to $23,000 in the same period of 2003.  The  increase in
2004 from the prior year period was due to higher average cash balances in 2004.
Interest  expense for the second quarter of 2004 was $49,000 compared to $46,000
in the same period of 2003.  Interest expense  includes  interest on outstanding
debt and finance charges related to various  equipment leases that are accounted
for as capital leases.

         NET LOSS.  Net loss for the  second  quarter  of 2004 was $4.4  million
compared to $3.4 million  reported in the second  quarter of 2003. The basic and
diluted  net loss per share for the second  quarter  of 2004 was $0.30  based on
14.8 million weighted average common shares outstanding, compared to a basic and
diluted net loss per share of $0.37 based on 9.1 million weighted average common
shares outstanding for the same period in 2003.

SIX MONTHS ENDED JUNE 30, 2004 AND 2003

REVENUES
<TABLE>
<CAPTION>
                                                                                     INCREASE/(DECREASE)
                                                                                   -----------------------
                                                            2004        2003           $             %
                                                            ----        ----       ---------     ---------
                                                         (ALL AMOUNTS IN THOUSANDS, EXCEPT PERCENTAGE DATA)
<S>                                                      <C>         <C>           <C>            <C>
Quadramet
    Product Sales (commenced August 2003)............    $  3,470    $      -      $  3,470          n/a
    Royalties (ceased July 2003).....................           -         914          (914)      (100)%
ProstaScint..........................................       4,039       3,219           820          25%
NMP22 BladderChek....................................           1         123          (122)        (99)%
BrachySeed (ceased January 2003).....................           -         240          (240)       (100)%
License and Contract.................................          43         307          (264)        (86)%
                                                         --------    --------       -------
                                                         $  7,553    $  4,803      $  2,750           57%
                                                         ========    ========      ========
</TABLE>

           Total revenues for the first half of 2004 were $7.6 million  compared
to $4.8 million for the same period in 2003.  Product  related  revenues,  which
include product sales and royalties, accounted for 99% and 94% of total revenues
for the first half of 2004 and 2003, respectively. License and contract revenues
accounted for the remainder of revenues.

           QUADRAMET.  Cytogen recorded  Quadramet sales of $3.5 million for the
first half of 2004 compared to $914,000 of Quadramet  royalty revenue during the
first half of 2003.  Quadramet sales and royalties  accounted for 46% and 20% of
product related  revenues for such periods,  respectively.  Berlex  Laboratories
marketed  Quadramet in the United  States  through  July 31, 2003.  On August 1,
2003,  we  reacquired  marketing  rights  to  Quadramet  from  Berlex  and began
marketing  Quadramet through our internal specialty sales force.  Effective upon

                                       18
<PAGE>

the reacquisition of such marketing rights, we no longer receive royalty revenue
from  Berlex  for  Quadramet  and we pay  royalties  to  Berlex  on our sales of
Quadramet.  On August 1, 2003,  we began  recognizing  product  revenue from our
sales of Quadramet. Currently, we market Quadramet only in the United States and
have no rights to market Quadramet in Europe.  We believe that the future growth
and market  penetration of Quadramet is dependent upon, among other things:  (i)
new  clinical  data  supporting  the  expanded  and earlier use of  Quadramet in
various  cancers;  (ii) novel research  supporting  combination  uses with other
therapies, such as chemotherapeutics and bisphosphonates; and (iii) establishing
the use of Quadramet at higher doses to target and treat  primary bone  cancers.
We cannot  provide any  assurance  that we will be able to  successfully  market
Quadramet or that Quadramet will achieve greater market  penetration on a timely
basis or result in significant revenues for us.

           PROSTASCINT.  ProstaScint  sales were $4.0 million for the first half
of 2004,  an increase of $820,000  from $3.2  million in the first half of 2003.
Sales of ProstaScint  accounted for 54% and 72% of product related  revenues for
such periods,  respectively.  We believe that such increase in ProstaScint sales
is due to a combination of factors.  First,  we believe that customer demand for
ProstaScint  has  increased due to our focused  marketing  programs and a higher
ProstaScint  reimbursement  value  established  for 2004  compared  to 2003 that
appropriately   accounts  for  the  cost  of  the  ProstaScint  kit,   requisite
radioisotope, and compounding costs. Furthermore, we identified new distribution
channels to better accommodate  customer needs.  Finally,  for the first time in
several years, we implemented price increases for both ProstaScint and Quadramet
in late June 2004,  while limiting the  quantities of ProstaScint  that could be
purchased  by  distributors   at  the   pre-increase   price.   ProstaScint  has
historically been a challenging product for physicians and technologists to use,
in part due to inherent limitations in nuclear medicine imaging. We believe that
future growth and market  penetration of ProstaScint  is dependent  upon,  among
other things,  the implementation and continued research relating to advances in
imaging  technology,  new product  applications and the validation of PSMA as an
independent  prognostic indicator.  We cannot provide any assurance that we will
be able to successfully  market  ProstaScint,  or that  ProstaScint will achieve
greater market  penetration on a timely basis or result in significant  revenues
for us.

         NMP22  BLADDERCHEK.  NMP22  BladderChek  sales during the first half of
2004 were $1,000  compared  to  $123,000  in the same  period in 2003.  We began
promoting  NMP22  BladderChek to both  urologists and  oncologists in the United
States in November 2002 using our internal sales force.  On October 30, 2003, we
entered  into an amended and  restated  distribution  agreement  with  Matritech
whereby,  effective November 8, 2003, we had the right to non-exclusively market
NMP22 BladderChek to urologists  through December 31, 2003 and have the right to
exclusively  market NMP22 BladderChek to oncologists  through December 31, 2004.
We do not expect  that sales of NMP22  BladderChek  will  result in  significant
revenues for us.

         BRACHYSEED.  There were no  BrachySeed  sales  during the first half of
2004 compared to $240,000 during the first half of 2003, which represented 5% of
product related  revenues.  Effective January 24, 2003, we stopped accepting and
filling new orders for the BrachySeed products.

         LICENSE AND  CONTRACT  REVENUES.  License and  contract  revenues  were
$43,000 and  $307,000 for the first half of 2004 and 2003,  respectively.  Under
SAB 101,  which we adopted in 2000,  license  revenues  from  certain  up-front,

                                       19
<PAGE>

non-refundable  license fees previously  recognized were deferred and were being
amortized over the estimated  performance period. During the first half of 2003,
we recognized  $193,000 of previously  deferred  license  revenue.  The deferred
revenue was fully  recognized as of December 31, 2003.  During the first half of
2004, we  recognized  $28,000 of contract  revenues  compared to $100,000 in the
first half of 2003 for limited research and development  services provided by us
to  the  PSMA  Development   Company  LLC,  our  joint  venture  with  Progenics
Pharmaceuticals  Inc.  We  expect  that the  level of  future  revenues  for the
remainder of 2004, if any, for contract  services  provided to the joint venture
may vary and will depend upon the extent of research  and  development  services
required by the joint venture.

OPERATING EXPENSES
<TABLE>
<CAPTION>

                                                                                 INCREASE/(DECREASE)
                                                                                ---------------------
                                                       2004          2003           $            %
                                                    ---------     ---------     ---------    --------
                                                   (ALL AMOUNTS IN THOUSANDS, EXCEPT PERCENTAGE DATA)
<S>                                                 <C>           <C>           <C>           <C>
  Cost of product related revenues.............     $  4,795      $  1,810      $  2,985       165%
  Selling, general and administrative..........        8,805         5,366         3,439        64%
  Research and development.....................        1,345         1,530          (185)     (12)%
  Equity in loss of joint venture..............        1,351         1,966          (615)     (31)%
                                                    --------      --------      --------
                                                    $ 16,296      $ 10,672      $  5,624        53%
                                                    ========      ========      ========
</TABLE>

         Total operating  expenses for the first half of 2004 were $16.3 million
compared to $10.7 million in the same period of 2003.

         COST OF PRODUCT RELATED REVENUES.  Cost of product related revenues for
the first half of 2004 were $4.8  million  compared to $1.8  million in the same
period of 2003.  The increase from the prior year period is due primarily to our
assumption,  in August 2003, of the responsibility  for manufacturing  costs for
Quadramet including  contractual  increases in 2004 related to our new agreement
with Bristol Myers Squibb Medical  Imaging,  royalties to Berlex on our sales of
Quadramet and the  amortization  of the up-front  payment to Berlex to reacquire
Quadramet.  The increase is partially  offset by lower costs associated with our
discontinuation of BrachySeed products in January 2003.

         SELLING,    GENERAL   AND   ADMINISTRATIVE.    Selling,   general   and
administrative expenses for the first half of 2004 were $8.8 million compared to
$5.4 million in the same period of 2003. The increase from the prior year period
is due primarily to the expansion of our sales force and the  implementation  of
other marketing  initiatives  for our existing  products,  including  Quadramet,
which we  reacquired  from  Berlex in August  2003.  As of  August 1,  2004,  we
employed 38 people in sales and marketing.  The employees in sales and marketing
included 8 Clinical Oncology Specialists and 22 Regional and Territory Managers.
By  comparison,  we had 31 employees  in sales and  marketing as of December 31,
2003.  We  anticipate  that  expenditure  levels will continue to increase as we
continue this expansion.

         RESEARCH AND  DEVELOPMENT.  Research and  development  expenses for the
first half of 2004 were $1.3 million compared to $1.5 million in the same period
of 2003.  The current year expenses  reflect the  reduction in certain  research
activities  at AxCell,  which were  partially  offset by our  increased  product
development  efforts in  support  of new and  expanded  uses for  Quadramet  and

                                       20
<PAGE>

ProstaScint.  During the first half of 2004 and 2003,  we incurred  $418,000 and
$807,000, respectively, in expenses relating to AxCell's operations.

         EQUITY  IN LOSS OF  JOINT  VENTURE.  Our  share of the loss of the PSMA
Development  Company LLC, our joint  venture  with  Progenics,  was $1.4 million
during the first half of 2004  compared  to $2.0  million in the same  period of
2003 and represented 50% of the joint venture's  operating  losses. We may incur
significant  and  increasing  costs  in the  future  to fund  our  share  of the
development  costs  from the  joint  venture,  although  we cannot  provide  any
assurance that any further  agreements  between us and Progenics will be reached
regarding the joint venture.

         INTEREST INCOME/EXPENSE. Interest income for the first half of 2004 was
$170,000  compared to $59,000 in the same period of 2003.  The  increase in 2004
from the prior year  period was due to higher  average  cash  balances  in 2004.
Interest  expense  was  $93,000  for each of the first  halves of 2004 and 2003.
Interest  expense  includes  interest on  outstanding  debt and finance  charges
related to various equipment leases that are accounted for as capital leases.

         INCOME TAX BENEFIT. During the first half of 2003, we sold a portion of
our New Jersey state net operating  losses and research and  development  credit
carryforwards,  which  resulted  in the  recognition  of  $584,000 in income tax
benefit. No such sales occurred in the first half of 2004. Assuming the State of
New Jersey continues to fund this program, which is uncertain, the future amount
of net operating losses and research and development credit  carryforwards which
we may sell will also depend upon the allocation among  qualifying  companies of
an annual pool established by the State of New Jersey.

         NET LOSS. Net loss for the first half of 2004 was $8.7 million compared
to $5.3  million  reported in the first half of 2003.  The basic and diluted net
loss per  share  for the  first  half of 2004 was  $0.63  based on 13.9  million
weighted average common shares outstanding,  compared to a basic and diluted net
loss per share of $0.60  based on 8.9 million  weighted  average  common  shares
outstanding for the same period in 2003.

                                       21
<PAGE>

COMMITMENTS

      We have  entered  into  various  contractual  obligations  and  commercial
commitments.  The following table  summarizes our contractual  obligations as of
June 30, 2004 (all amounts in thousands):
<TABLE>
<CAPTION>

                                                       LESS
                                                       THAN        1 TO 3       4 TO 5      MORE THAN
                                                      1 YEAR       YEARS         YEARS       5 YEARS        TOTAL
                                                     --------     -------      --------     ---------      -------
<S>                                                  <C>          <C>          <C>          <C>            <C>
Long-term debt(1) .................................  $     -      $ 2,280      $     -      $     -        $ 2,280
Capital lease obligations..........................       58           39           16            -            113
Facility leases....................................      567          849          113            -          1,529
Other..............................................       10           16            1            -             27
Manufacturing and research and
 development contracts(2) .........................    4,494        4,447          200          750          9,891
Investor relations and consulting services.........      492            -            -            -            492
Capital contribution to joint venture(3) ..........    3,250            -            -            -          3,250
Minimum royalty payments(4)........................    1,314        2,000        2,000        4,333          9,647
                                                     -------      -------      -------      -------        -------

   Total........................................     $10,185      $ 9,631      $ 2,330      $ 5,083        $27,229
                                                     =======      =======      =======      =======        =======
</TABLE>

     (1) In August 1998, we received $2.0 million from Elan Corporation,  plc in
          exchange for a convertible  promissory  note.  The note is convertible
          into  shares  of  our  common  stock  at $28  per  share,  subject  to
          adjustments,  and  matures  in  August  2005.  The note  bears  annual
          interest of 7%, compounded  semi-annually,  however, such interest was
          not  payable  in cash but was added to the  principal  through  August
          2000;  thereafter,  interest  is  payable in cash.  The note  contains
          certain non-financial  covenants,  with which we were in compliance as
          of June 30, 2004.

     (2) As a result of the August 2003  reacquisition  of  marketing  rights to
         Quadramet, we assumed all of Berlex's obligations under a manufacturing
         and  supply  agreement  with  BMSMI,  including  an  obligation  to pay
         manufacturing  costs.  Effective January 1, 2004, we entered into a new
         manufacturing   and  supply   agreement   with  BMSMI   whereby   BMSMI
         manufactures,  distributes  and provides order  processing and customer
         services  for us  relating  to  Quadramet.  Under  the terms of the new
         agreement,  we are  obligated  to pay at least  $4.2  million  annually
         through  2008,  unless  terminated  by BMSMI or us on a two year  prior
         written  notice.  This  agreement  will  automatically  renew  for five
         successive  one-year  periods  unless  terminated  by  BMSMI or us on a
         two-year  prior  written  notice.  Accordingly,  we have  not  included
         commitments beyond June 30, 2006.

     (3) In 2004, each of Cytogen and Progenics  expects to provide $4.2 million
         in funding for the  development  of the PSMA  technologies  through our
         joint venture with  Progenics.  Cytogen has funded  $950,000 as of June
         30,  2004  and an  additional  $1.0  million  in July  2004 of its $4.2
         million  commitment.  Cytogen and  Progenics  have not yet committed to
         fund the joint venture  beyond  December 31, 2004 at this time,  except
         for obligations under existing contractual commitments as of that date.
         We may incur significant and increasing costs in the future to fund our
         share of the  development  costs from the joint  venture,  although  we
         cannot be sure that any  further  agreements  between us and  Progenics
         will be reached regarding the joint venture.

     (4) We acquired an  exclusive  license  from The Dow  Chemical  Company for
         Quadramet for the treatment of  osteoblastic bone metastases in certain
         territories. The agreement requires us to  pay Dow royalties based on a
         percentage  of net sales of  Quadramet,  or  a  guaranteed  contractual
         minimum  payment,  whichever  is  greater,  and future  payments   upon
         achievement of certain  milestones. Future annual minimum royalties due
         to Dow are $1.0  million  per year in 2004 through 2012 and $833,000 in
         2013.

                                       22
<PAGE>
In addition to the above,  we are  obligated  to make certain  royalty  payments
based on sales of the  related  product and  certain  milestone  payments if our
collaborative  partners  achieve specific  development  milestones or commercial
milestones.

LIQUIDITY AND CAPITAL RESOURCES

CONDENSED STATEMENT OF CASH FLOWS:
                                                                  2004
                                                             -------------
                                                      (ALL AMOUNTS IN THOUSANDS)
     Net loss........................................        $    (8,666)
     Adjustment to reconcile net loss to net cash
         used in operating activities................               (250)
                                                             -----------
     Net cash used in operating activities...........             (8,916)
     Net cash used in investing activities...........             (7,754)
     Net cash provided by financing activities.......             23,940
                                                             -----------
     Net increase in cash and cash equivalents.......        $     7,270
                                                             ===========

OVERVIEW

         Our cash and cash  equivalents  were $20.9 million as of June 30, 2004,
compared to $13.6 million as of December 31, 2003. The increase in cash and cash
equivalents  from the December 31, 2003 balance was primarily due to our receipt
of net proceeds of approximately $24.0 million from a registered direct offering
of our common stock in April 2004, offset by increased operating expenditures in
2004, including costs to manufacture,  promote and support our existing oncology
products and to expand our internal  sales force.  During the first half of 2004
and 2003,  net cash used for  operating  activities  was $8.9  million  and $5.8
million,  respectively.  In 2004, we expect  operating  expenditures to increase
over 2003 levels.

         As of June 30, 2004, our total cash,  cash  equivalents  and short-term
investments  were $44.8  million  compared to $30.2  million as of December  31,
2003.

         Historically,  our primary  sources of cash have been proceeds from the
issuance and sale of our stock through public offerings and private  placements,
product related revenues,  revenues from contract research  services,  fees paid
under license agreements and interest earned on cash and short-term investments.

         Our  financial  objectives  are  to  meet  our  capital  and  operating
requirements through revenues from existing products and licensing arrangements.
To  achieve  these  objectives,  we may  enter  into  research  and  development
partnerships and acquire, in-license and develop other technologies, products or
services.  Certain of these strategies may require payments by us in either cash
or stock in addition to the costs  associated  with  developing  and marketing a
product or technology.  However, we believe that, if successful, such strategies
may increase long-term revenues.  There can be no assurance as to the success of
such  strategies  or that  resulting  funds  will  be  sufficient  to meet  cash
requirements until product revenues are sufficient to cover operating  expenses,
if ever. To fund these strategic and operating activities, we may sell equity or
debt securities as market conditions permit or enter into credit facilities.

                                       23
<PAGE>


         We  have  incurred  negative  cash  flows  from  operations  since  our
inception,  and have  expended,  and expect to continue to expend in the future,
substantial  funds  to  implement  our  planned  product  development   efforts,
including acquisition of products and complementary  technologies,  research and
development,  clinical  studies and  regulatory  activities,  and to further our
marketing  and sales  programs.  We expect that our existing  capital  resources
should be adequate to fund our operations and  commitments  into 2007. We cannot
assure you that our  business  or  operations  will not change in a manner  that
would consume available resources more rapidly than anticipated.  We expect that
we will have additional requirements for debt or equity capital, irrespective of
whether and when we reach profitability,  for further product development costs,
product and technology acquisition costs, and working capital.

         Our future  capital  requirements  and the adequacy of available  funds
will depend on numerous factors, including: (i) the successful commercialization
of our products; (ii) the costs associated with the acquisition of complementary
products and technologies; (iii) progress in our product development efforts and
the magnitude and scope of such efforts; (iv) progress with clinical trials; (v)
progress  with  regulatory  affairs   activities;   (vi)  the  cost  of  filing,
prosecuting,  defending  and  enforcing  patent  claims  and other  intellectual
property rights;  (vii) competing  technological  and market  developments;  and
(viii)  the  expansion  of  strategic   alliances  for  the  sales,   marketing,
manufacturing and distribution of our products. To the extent that the currently
available  funds and  revenues  are  insufficient  to meet  current  or  planned
operating  requirements,  we will be required to obtain additional funds through
equity or debt  financing,  strategic  alliances  with  corporate  partners  and
others,  or through other sources.  There can be no assurance that the financial
sources  described above will be available when needed or at terms  commercially
acceptable  to us. If adequate  funds are not  available,  we may be required to
delay,  further  scale back or eliminate  certain  aspects of our  operations or
attempt to obtain funds  through  arrangements  with  collaborative  partners or
others that may require us to relinquish  rights to certain of our technologies,
product  candidates,  products or potential  markets.  If adequate funds are not
available,  our business,  financial condition and results of operations will be
materially and adversely affected.

2004 CAPITAL RAISING

         In April 2004, we sold 2,570,000  shares of our common stock to certain
institutional  investors  for  $10.10  per  share  through a  registered  direct
offering,  resulting in net proceeds of  approximately  $24.0  million after the
payment of placement agency fees and expenses related to the offering.

OTHER LIQUIDITY EVENTS

         In 2003, we reacquired  the marketing  rights to Quadramet from Berlex.
Accordingly, effective August 1, 2003, we began recording all revenue from sales
of Quadramet.  Effective upon the  reacquisition of such marketing rights, we no
longer receive royalty revenue from Berlex and pay Berlex royalties on our sales
of  Quadramet.  As a result of the  reacquisition,  we assumed  all of  Berlex's
obligations  under a manufacturing  and supply  agreement with BMSMI.  Effective
January 1, 2004, we entered into a new  manufacturing  and supply agreement with
BMSMI whereby BMSMI manufactures,  distributes and provides order processing and

                                       24
<PAGE>

customer  services  for us  relating  to  Quadramet.  Under the terms of the new
agreement,  we are obligated to pay at least $4.2 million annually through 2008,
unless  terminated  by BMSMI or us on two years prior  written  notice.  For the
first  half of 2004,  we  incurred  $2.1  million  of  manufacturing  costs  for
Quadramet.  This agreement will automatically renew for five successive one-year
periods unless  terminated by BMSMI or us on a two year prior written notice. We
also pay BMSMI a variable  amount per month for each  Quadramet  order placed to
cover the costs of customer service. In addition,  we expect our Quadramet sales
and marketing expenses to increase in 2004.

         Beginning in December  2001, we began to equally share the costs of the
joint  venture  with  Progenics.  Cytogen and  Progenics  each expect to provide
funding of $4.2 million in 2004. Cytogen has funded $950,000 as of June 30, 2004
and an  additional  $1.0  million in July 2004 of its $4.2  million  commitment.
Cytogen  and  Progenics  have not  committed  to fund the joint  venture  beyond
December  31,  2004  at  this  time,   except  for  obligations  under  existing
contractual commitments as of that date. We may incur significant and increasing
costs in the  future to fund our share of the  development  costs from the joint
venture  although we cannot  provide any assurance  that any further  agreements
between  us and  Progenics  will be reached  regarding  the joint  venture.  Any
funding  amount in  subsequent  periods  may vary  dependent  upon,  among other
things,  the  results  of the  clinical  trials  and  research  and  development
activities,    competitive   and   technological   developments,    and   market
opportunities.

         We acquired an  exclusive  license  from The Dow  Chemical  Company for
Quadramet  for  the  treatment  of  osteoblastic   bone  metastases  in  certain
territories.  The  agreement  requires  us  to  pay  Dow  royalties  based  on a
percentage  of net  sales of  Quadramet,  or a  guaranteed  contractual  minimum
payment,  whichever is greater,  and future payments upon achievement of certain
milestones. Future annual minimum royalties due to Dow are $1.0 million per year
in 2004 through 2012 and $833,000 in 2013.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         Financial  Reporting Release No. 60 requires all companies to include a
discussion of critical accounting policies or methods used in the preparation of
financial  statements.  Note 1 to our Consolidated  Financial  Statements in our
Annual  Report on Form 10-K for the year  ended  December  31,  2003  includes a
summary  of  our  significant  accounting  policies  and  methods  used  in  the
preparation of our Consolidated  Financial Statements.  The following is a brief
discussion of the more significant  accounting  policies and methods used by us.
The preparation of our  Consolidated  Financial  Statements  requires us 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.  Our actual results could differ  materially  from
those estimates.

REVENUE RECOGNITION

         Product  related  revenues  include  product  sales by  Cytogen  to its
customers  and  Quadramet  royalties.  Product  sales  are  recognized  when the
customer  takes  ownership and assumes risk of loss,  and when the collection of
the relevant receivable is probable,  persuasive evidence of an agreement exists

                                       25
<PAGE>

and the sales price is fixed and determinable. Product sales are recorded net of
discounts,  rebates and estimated  allowances  for product  returns based on our
historical  experience  and any specific  product return issues that we may have
identified.

         Prior to the  reacquisition  of marketing  rights to Quadramet from our
marketing partner,  Berlex  Laboratories,  in August 2003, we recognized royalty
revenue on Quadramet  sales made by Berlex during each period as Berlex sold the
product.  As a result of our  reacquisition,  effective August 1, 2003, we began
recognizing  revenue from the sales of Quadramet and no longer receive Quadramet
royalty revenue.

         License and contract revenues include milestone payments and fees under
collaborative  agreements with third parties,  revenues from research  services,
and revenues from other miscellaneous sources.

         In 2003,  Staff  Accounting  Bulletin  No. 104,  "Revenue  Recognition"
replaced Staff Accounting  Bulletin No. 101,  "Revenue  Recognition In Financial
Statements,"  which the  Company  adopted  in 2000.  The  provisions  related to
non-refundable,  up-front license fees were unchanged in SAB 104 compared to SAB
101. Accordingly,  we defer non-refundable,  up-front license fees and recognize
them over the estimated  performance  period of the related  agreement,  when we
have continuing involvement. Since the term of performance periods is subject to
management's  estimates,  future revenues to be recognized  could be affected by
changes in such estimates.

ACCOUNTS RECEIVABLE

         Our accounts  receivable balances are net of an estimated allowance for
uncollectible  accounts.  We continuously  monitor collections and payments from
our customers and maintain an allowance for  uncollectible  accounts  based upon
our historical  experience and any specific  customer  collection issues that we
have identified. While we believe our reserve estimate to be appropriate, we may
find it  necessary to adjust our  allowance  for  uncollectible  accounts if the
future  bad debt  expense  exceeds  our  estimated  reserve.  We are  subject to
concentration  risks as a limited number of our customers provide a high percent
of total revenues, and corresponding receivables.

INVENTORIES

         Inventories  are stated at the lower of cost or market,  as  determined
using the first-in,  first-out method,  which most closely reflects the physical
flow  of our  inventories.  Our  products  and  raw  materials  are  subject  to
expiration  dating. We regularly review quantities on hand to determine the need
for  reserves  for  excess  and  obsolete  inventories  based  primarily  on our
estimated  forecast of product sales.  Our estimate of future product demand may
prove to be inaccurate,  in which case we may have understated or overstated our
reserve for excess and obsolete inventories.

CARRYING VALUE OF FIXED AND INTANGIBLE ASSETS

         Our fixed  assets  and  certain  of our  acquired  rights to market our
products have been recorded at cost and are being  amortized on a  straight-line
basis  over  the  estimated  useful  life of  those  assets.  If  indicators  of

                                       26
<PAGE>

impairment exist, we assess the recoverability of the affected long-lived assets
by  determining  whether  the  carrying  value of such  assets can be  recovered
through undiscounted future operating cash flows. If impairment is indicated, we
measure the amount of such  impairment  by comparing  the carrying  value of the
assets to the present value of the expected  future cash flows  associated  with
the use of the asset. Adverse changes regarding future cash flows to be received
from  long-lived  assets could  indicate  that an impairment  exists,  and would
require the write down of the carrying value of the impaired asset at that time.

ITEM 3 -  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We do  not  have  operations  subject  to  risks  of  foreign  currency
fluctuations,  nor do we use derivative financial  instruments in our operations
or  investment  portfolio.  As of June 30,  2004,  we had $2.3  million  of debt
outstanding  with a fixed interest rate of 7%. We do not have exposure to market
risks associated with changes in interest rates, as we have no variable interest
rate debt outstanding.  However, downward changes in interest rates could expose
us to market risk associated with our fixed interest rate debt.

ITEM 4 - CONTROLS AND PROCEDURES

         (a) Evaluation of disclosure  controls and procedures.  Our management,
with the  participation  of our chief  executive  officer  and  chief  financial
officer,  evaluated the effectiveness of our disclosure  controls and procedures
(as defined in Rules  13a-15(e) and 15d-15(e) under the Exchange Act) as of June
30, 2004. In designing and evaluating our  disclosure  controls and  procedures,
our management  recognized that any controls and procedures,  no matter how well
designed and operated,  can provide only reasonable assurance of achieving their
objectives  and  management  necessarily  applied its judgment in evaluating the
cost-benefit  relationship of possible  controls and  procedures.  Based on this
evaluation,  our chief executive  officer and chief financial  officer concluded
that,  as of June 30, 2004,  our  disclosure  controls and  procedures  were (1)
designed to ensure that  material  information  relating  to us,  including  our
consolidated  subsidiaries,  is made known to our chief  executive  officer  and
chief financial officer by others within those entities, particularly during the
period in which this report was being prepared and (2)  effective,  in that they
provide reasonable  assurance that information required to be disclosed by us in
the  reports  that  we  file or  submit  under  the  Exchange  Act is  recorded,
processed,  summarized  and reported  within the time  periods  specified in the
SEC's rules and forms.

         (b) Changes in internal  controls.  No change in our  internal  control
over financial  reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange  Act) occurred  during the fiscal  quarter ended June 30, 2004 that has
materially affected,  or is reasonably likely to materially affect, our internal
control over financial reporting.

PART II  - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         On March 17, 2000, we were served with a complaint  filed against us in
the United  States  District  Court for the  District  of New Jersey by M. David
Goldenberg and Immunomedics,  Inc. (collectively  "Plaintiffs").  The litigation
claims that our  ProstaScint  product  infringes a patent  purportedly  owned by

                                       27
<PAGE>

Goldenberg and licensed to Immunomedics. The patent sought to be enforced in the
litigation has now expired;  as a result,  the claim, even if successful,  would
not result in an injunction  barring the continued sale of ProstaScint or affect
any other of our products or  technology.  We believe that  ProstaScint  did not
infringe  this  patent,  and that the patent was invalid and  unenforceable.  On
December 17, 2001, we filed a motion for summary judgment of non-infringement of
the asserted claims of the  patent-in-suit.  The Plaintiffs  opposed that motion
and filed their own cross-motion  for summary judgment of infringement.  On July
3, 2002, the District Court denied both parties' summary judgment motions,  with
leave to renew  those  motions  after  presenting  expert  testimony  and  legal
argument based upon that testimony.  The parties  subsequently  presented expert
testimony and submitted additional  briefing.  On April 29, 2003, our motion for
summary  judgment  of  non-infringement  of all  asserted  claims  was  granted,
Plaintiffs'  motion for summary judgment of infringement was denied and the case
was  ordered  closed.  On May 12,  2003,  Plaintiffs  filed a Notice  of  Appeal
regarding  this  decision to the U.S.  Court of Appeals for the Federal  Circuit
("Federal  Circuit"),  and  subsequently  filed their  opening brief on July 28,
2003. On September 22, 2003, we filed our responsive brief. On October 23, 2003,
Plaintiffs  filed  their  reply  brief.  The appeal was fully  briefed  and oral
argument was held on March 2, 2004. The Federal  Circuit on June 23, 2004 issued
a  ruling  on the  appeal  in which  it  affirmed  the  District  Court's  claim
construction ruling and summary judgment of no literal  infringement by Cytogen.
However, the Federal Circuit determined that there was an issue of material fact
as to infringement  under the doctrine of equivalents.  As a result, it reversed
the District  Court's  grant of summary  judgment of no  infringement  under the
doctrine of equivalents  and remanded the case to the District Court for further
proceedings on this issue. Given the uncertainty associated with litigation,  we
cannot give any  assurance  that the  litigation  could not result in a material
adverse effect on the Company's  financial  condition,  results of operations or
liquidity.

         In  connection  with a recent  review of  certain  of our  intellectual
property,  it was determined  that we were the recipient,  beginning in 1998, of
correspondence from legal counsel representing the former employer of Dr. Julius
Horoszewicz,  the sole inventor on the principal  United States patent  covering
ProstaScint.   Such  correspondence  alleged  that  the  patent  rights  to  Dr.
Horoszewicz's discoveries were the property of such former employer and that Dr.
Horoszewicz  had no right to assign  them to us. We  vigorously  disputed  those
allegations,  and we have no record of the matter  having  been  pursued by such
former  employer  subsequent  to August  2000.  We  believe  that in view of the
marketing  of  the  technology  covered  by  the  patent  through  the  sale  of
ProstaScint by us, our right to use the underlying  technology in our continuing
production  and sale of  ProstaScint  should  not be at risk.  However,  if such
claims were reasserted,  and if it were to be concluded that Dr.  Horoszewicz in
fact had no right to assign the patent to us, a court  could  determine  that we
have no right to use the technology  covered by the patent or that any royalties
paid by or payable by us in  respect of the use of the patent  should  have been
paid in the past,  and should in the  future be  payable,  to Dr.  Horoszewicz's
former employer in lieu of Dr. Horoszewicz. The amount of any such payments, and
our liability for them,  is not presently  determinable,  and we cannot give any
assurance  that  an  adverse  determination  could  not  result  in  a  material
expenditure to us or have a material adverse effect on our financial  condition,
results of operations or liquidity.

         In  addition,  we  have  certain  rights  to  indemnification   against
litigation  and  litigation  expenses  from the inventor of  technology  used in
ProstaScint,   which  may  be  offset  against  royalty  payments  on  sales  of

                                       28
<PAGE>

ProstaScint.  However, given the uncertainty associated with litigation,  we may
incur material expenditures.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

CHANGES IN SECURITIES

         The following  information  relates to all of the securities sold by us
within the past quarter that were not registered  under the  securities  laws at
the time of grant, issuance and/or sale:

         OPTION GRANTS

         During the second quarter of 2004, we granted stock options pursuant to
our 2004 Stock  Incentive Plan and 2004  Non-Employee  Director Stock  Incentive
Plan,  both of which were approved by our  stockholders at our Annual Meeting of
Stockholders  on June 15,  2004.  Such  options  were not  registered  under the
Securities Act of 1933, as amended,  or the Securities  Act. The Company intends
to file a  registration  statement on Form S-8 with the  Securities and Exchange
Commission  to register  the shares of the  Company's  common  stock  underlying
option  grants or other  awards  under the 2004  Stock  Incentive  Plan and 2004
Non-Employee  Director  Stock  Incentive  Plan.  All of such option  grants were
granted at the then current fair value of the common stock.  The following table
sets forth certain information regarding such grants during the quarter:

                                            Number           Weighted Average
            Plan                          of Shares     Exercise Price Per Share
            ----                          ---------     ------------------------
2004 Stock Incentive Plan..............    160,000               $11.50

2004 Non-Employee Director Stock
      Incentive Plan...................    147,500               $11.51

         We did not employ an underwriter in connection with the issuance of the
securities  described  above.  We believe  that the  issuance  of the  foregoing
securities  was exempt from  registration  under  either (i) Section 4(2) of the
Securities  Act as  transactions  not  involving  any public  offering  and such
securities  having  been  acquired  for  investment  and  not  with  a  view  to
distribution,  or (ii) Rule 701 under the  Securities Act as  transactions  made
pursuant  to a  written  compensatory  benefit  plan or  pursuant  to a  written
contract  relating  to  compensation.  All  recipients  had  adequate  access to
information about the Company.

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

         On June 15, 2004, we held our Annual  Meeting of  Stockholders  to: (i)
elect  eight  directors;  (ii)  consider  and vote upon a proposal  to adopt the
Company's 2004 Stock Incentive Plan;  (iii) consider and vote upon a proposal to
adopt the Company's 2004  Non-Employee  Director Stock  Incentive Plan; and (iv)
transact such other business as may come before the meeting.

         There were  represented at the our annual meeting,  either in person or
by  proxy  13,552,506  shares  of our  common  stock  out of a total  number  of
15,214,249 shares of common stock issued and outstanding and entitled to vote at
the meeting.

                                       29
<PAGE>


         The  following  tables set forth  information  regarding  the number of
votes cast for, withheld, abstentions and broker non-votes, with respect to each
matter  presented  at the meeting.  Under the rules of the Nasdaq Stock  Market,
brokers who hold shares in street name for customers who are  beneficial  owners
of those  shares may be  prohibited  from giving a proxy to vote shares held for
such  customers  on certain  matters  without  specific  instructions  from such
customers  (broker  non-votes).  Under  Delaware  law,  abstentions  and  broker
non-votes  are counted as shares  represented  at the  meeting  for  purposes of
determining the presence or absence of a quorum at a stockholders  meeting.  The
election  of  directors  is  decided  by a  plurality  of the  votes  cast,  and
therefore,  votes that are  withheld  have no effect on the outcome of the vote.
Adoption of the  proposals  relating to our 2004 Stock  Incentive  Plan and 2004
Non-Employee  Director Stock Incentive Plan,  required the affirmative vote of a
majority  of shares  cast at the  meeting.  Therefore,  abstentions  and  broker
non-votes have no effect on the vote.

         (i) Election of Directors:
<TABLE>
<CAPTION>

                                                                                         BROKER NON-
               NOMINEES                   FOR           WITHHELD        ABSTENTIONS         VOTES
      ----------------------          ----------      -----------       -----------      -----------
<S>                                   <C>              <C>                  <C>              <C>
      James A. Grigsby                13,241,502         311,004            N/A              N/A
      Michael D. Becker               13,298,108         254,398            N/A              N/A
      John E. Bagalay, Jr.            11,755,093       1,797,413            N/A              N/A
      Allen Bloom                     13,202,905         349,601            N/A              N/A
      Stephen K. Carter               13,299,637         252,869            N/A              N/A
      Robert F. Hendrickson           13,209,732         342,774            N/A              N/A
      Kevin G. Lokay                  13,204,050         348,456            N/A              N/A
      H. Joseph Reiser                13,237,927         314,579            N/A              N/A

</TABLE>

         (ii) Proposal to approve the adoption of our 2004 Stock Incentive Plan:


                                                                    BROKER NON-
             FOR              AGAINST           ABSTENTIONS            VOTES
      ---------------    ----------------     ---------------     --------------
          4,052,703          2,708,281             40,910            6,750,612


         (iii) Proposal   to  approve the  adoption  of  our  2004  Non-Employee
               Director Stock Incentive Plan:

                                                                    BROKER NON-
             FOR              AGAINST           ABSTENTIONS            VOTES
      ---------------    ----------------     ---------------     --------------
          3,896,138          2,864,779             40,977            6,750,612


ITEM 5.  OTHER INFORMATION

         On April 14, 2004,  Thomas S. Lytle  joined  Cytogen as our Senior Vice
President of Sales and Marketing.  On June 15, 2004, we entered into a Change of
Control Severance Agreement, in the form we utilize with our executive officers,
with Mr. Lytle.


                                       30
<PAGE>

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K.

      (a) Exhibits:


        Exhibit No.  Description
        -----------  -----------


           10.1      Cytogen  Corporation   2004  Stock  Incentive  Plan.  Filed
                     herewith.

           10.2      Cytogen  Corporation  2004   Non-Employee   Director  Stock
                     Incentive Plan. Filed herewith.

           31.1      Certification  of President  and  Chief  Executive  Officer
                     pursuant to Section 302 of the Sarbanes-Oxley  Act of 2002.
                     Filed herewith.

           31.2      Certification of Senior Vice President and Chief  Financial
                     Officer  pursuant to  Section 302 of the Sarbanes-Oxley Act
                     of 2002. Filed herewith.

           32.1      Certification  of President  and  Chief  Executive  Officer
                     pursuant to 18 U.S.C. Section 1350. Filed herewith.

           32.2      Certification  of Senior Vice President and Chief Financial
                     Officer pursuant to 18 U.S.C. Section 1350. Filed herewith.


      (b) Reports on Form 8-K

           On April 14, 2004, we filed a Current  Report on Form 8-K  disclosing
correspondence related to the technology underlying our ProstaScint product.

           On April 15, 2004, we filed a Current  Report on Form 8-K relating to
our sale and  issuance  of  2,570,000  shares  of our  common  stock to  certain
investors.

           On May 4, 2004,  we furnished a Current  Report on Form 8-K dated May
4, 2004,  containing a copy of our  earnings  release for the period ended March
31,  2004  (including  financial  statements)  pursuant  to Item 12  (Results of
Operations and Financial Condition).

           On June 25, 2004,  we filed a Current  Report on Form 8-K relating to
Advanced  Magnetics,  Inc.'s  submission of a response to the approvable  letter
received from the United States Food and Drug Administration for Combidex.

           On August 5, 2004,  we  furnished a Current  Report on Form 8-K dated
August 5, 2004,  containing a copy of our earnings  release for the period ended
June 30, 2004 (including  financial  statements) pursuant to Item 12 (Results of
Operations and Financial Condition).


                                       31
<PAGE>



                                   SIGNATURES

           Pursuant to the requirements of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                        CYTOGEN CORPORATION





Date: August 9, 2004              By: /s/ Michael D. Becker
                                    --------------------------------------------
                                    Michael D. Becker
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)



Date: August 9, 2004              By: /s/ Christopher P. Schnittker
                                     -------------------------------------------
                                    Christopher P. Schnittker
                                    Senior Vice President and
                                     Chief Financial Officer
                                    (Principal Financial and Accounting Officer)