================================================================================



                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB


(Mark One)

[X]   QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
               For the quarterly period ended September 30, 2005

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
       For the transition period from _________________ to _________________

                         Commission file number 0-19724



                       PROTEIN POLYMER TECHNOLOGIES, INC.
        (Exact name of small business issuer as specified in its charter)


       Delaware                                            33-0311631
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)


                 10655 Sorrento Valley Road, San Diego, CA 92121
                    (Address of principal executive offices)

                                 (858) 558-6064
                           (Issuer's telephone number)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes __X__ No _____

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes ______ No __X__

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of November 4, 2005, 67,265,905
shares of common stock were outstanding.

Transitional Small Business Disclosure Format (check one): Yes ____ No __X__


================================================================================

                                       1
<PAGE>


                       PROTEIN POLYMER TECHNOLOGIES, INC.

                                   FORM 10-QSB

INDEX


                                                                        Page No.
                                                                        --------
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

               Balance Sheets -
September 30, 2005 and December 31, 2004 ...................................3

               Statements of Operations -
                     For the three months and nine months ended
                     September 30, 2005 and 2004 and the period
                     July 6, 1988 (inception) to September 30, 2005.........4

               Statements of Cash Flows -
                     For the nine months ended September 30, 2005
                     and 2004 and the period July 6, 1988
                     (inception) to September 30, 2005......................5

              Notes to Financial Statements.................................7

Item 2.       Management's Discussion and Analysis or Plan of Operation....10

Item 3.       Controls and Procedures......................................14


PART II.      OTHER INFORMATION

Item 6.       Exhibits and Reports on Form 8-K.............................15


              Signatures...................................................16


                                       2
<PAGE>


                                     PART I.
                              FINANCIAL INFORMATION

Item 1.  Financial Statements

                       PROTEIN POLYMER TECHNOLOGIES, INC.
                          (A Development Stage Company)
                                 Balance Sheets
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                                        September 30,      December 31,
                                                                                            2005              2004
                                                                                     --------------------------------------
<S>                                                                                   <C>                <C>
Assets
Current assets:
   Cash and cash equivalents                                                           $     3,248,018   $        82,222
   Contract receivable                                                                          44,400                 -
   Rent receivable, current portion                                                             88,477            60,000
   Prepaid expenses                                                                             47,122            12,770
                                                                                     --------------------------------------
Total current assets                                                                         3,428,017           154,992

Deposits                                                                                        30,479            29,679
Rent receivable, net of current portion and reserve                                             41,050           104,527
Notes receivable                                                                               199,496                 -
Deferred acquisition costs                                                                      55,115                 -
Equipment and leasehold improvements, net                                                      272,121            84,580
                                                                                     --------------------------------------
                                                                                       $     4,026,278   $       373,778
                                                                                     ======================================
Liabilities and stockholders' equity (deficit)
Current liabilities:
   Accounts payable                                                                    $       430,695   $       315,357
   Deposits payable                                                                                  -            33,000
   Notes payable, related party                                                                      -         1,032,842
   Accrued expenses                                                                            163,415           201,910
   Deferred revenue                                                                                  -           102,784
                                                                                     --------------------------------------
Total current liabilities                                                                      594,110         1,685,893

Stockholders' equity (deficit):
    Convertible Preferred Stock, $.01 par value, 5,000,000 shares authorized,
     66,245 and 82,945 shares issued and outstanding at September 30, 2005 and
     December 31, 2004, respectively - liquidation preference of $6,624,500 and
     $8,294,500 at September 30, 2005 and December 31, 2004, respectively                    6,079,917         7,749,917
    Common stock, $.01 par value, 120,000,000 shares authorized, 67,265,905 and
     39,651,123 shares issued and outstanding at September 30, 2005 and December
     31, 2004, respectively                                                                    672,670           396,523
   Additional paid-in capital                                                               54,077,187        43,278,106
   Deficit accumulated during development stage                                            (57,397,606)      (52,736,661)
                                                                                     --------------------------------------
Total stockholders' equity (deficit)                                                         3,432,168        (1,312,115)
                                                                                     --------------------------------------
                                                                                       $     4,026,278   $       373,778
                                                                                     ======================================
See accompanying notes.
</TABLE>


                                       3
<PAGE>


                       PROTEIN POLYMER TECHNOLOGIES, INC.
                          (A Development Stage Company)

                            Statements of Operations
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                                                               For the period
                                                                                                                July 6, 1988
                                                                                                               (inception) to
                                             Three months ended                      Nine months ended          September 30,
                                               September 30,                           September 30,
                                          2005               2004                 2005             2004            2005
                                   -------------------------------------------------------------------------------------------
<S>                               <C>                   <C>              <C>                 <C>             <C>
Revenues:
   Contract revenue                $          44,400    $     19,523     $      702,396      $     407,939   $  12,011,435
   Product and other income                    1,756               -              2,856                  6         697,640
                                   ------------------------------------ ------------------------------------ -----------------
Total revenues                                46,156          19,523            705,252            407,945      12,709,075

Expenses:
   Research and development                  661,040         530,056          1,909,415          1,756,610      38,938,983
   Selling, general and
   administrative                            640,031         461,222          2,920,028          1,263,471      24,615,188
                                   --------------------------------------- --------------------------------- -----------------
Total expenses                             1,301,071         991,278          4,829,443          3,020,081      63,554,171
                                   --------------------------------------- --------------------------------- -----------------

Net loss from operations                  (1,254,915)       (971,755)        (4,124,191)        (2,612,136)    (50,845,096)

Other income (expense):
   Interest income                            15,750             273             31,951              3,098       1,302,774
   Interest expense                             (249)           (110)           (87,123)            (2,508)       (353,659)
                                   --------------------------------------- -------------------------------- ------------------
Total other income (expense)                  15,501             163            (55,172)               590         949,115
                                  --------------------------------------- --------------------------------- ------------------

Net loss                                  (1,239,414)       (971,592)        (4,179,363)        (2,611,546)    (49,895,981)

Undeclared, imputed and/or
   paid dividends on
   preferred stock                            69,980          69,980            689,242            207,659      10,388,750
                                   --------------------------------------- ------------------------------- -------------------

Net loss applicable to
   common shareholders             $      (1,309,394)   $ (1,041,572)    $   (4,868,605)     $  (2,819,205)  $ (60,284,731)
                                   ===========================================================================================

Basic and diluted net loss
   per common share                $           (0.02)   $      (0.03)    $        (0.09)     $       (0.07)
                                   =========================================================================

Shares used in computing
  basic and diluted net loss
  per common share                        67,262,112      38,113,618         55,846,564         37,840,496
                                   =========================================================================

See accompanying notes.

</TABLE>


                                       4
<PAGE>


                       PROTEIN POLYMER TECHNOLOGIES, INC.
                          (A Development Stage Company)

                            Statements of Cash Flows
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                                                   For the period July
                                                                                                   6, 1988 (inception)
                                                                      Nine months ended              to September 30,
                                                                        September 30,
                                                                   2005               2004                 2005
                                                           ------------------------------------------------------------
<S>                                                            <C>                <C>             <C>
  Operating activities
  Net loss                                                     $ (4,179,363)      $ (2,611,546)   $ (49,895,981)
  Adjustments to reconcile net loss to net cash used
  for operating activities:
      Depreciation and amortization                                  30,340             23,757        2,476,650
      Stock issued for compensation and interest                          -                  -          472,676
      Warrants and options issued for services                    1,247,132                  -        1,247,132
      Amortization of discounts on notes payable                     56,493             73,966          171,835
      Write-off of purchased technology                                   -                  -          503,500
  Changes in operating assets and liabilities:
      Deposits                                                         (800)              (800)         (30,479)
      Prepaid expenses                                              (34,352)              (768)         (47,122)
      Rent receivable                                                35,000              5,000         (129,527)
      Contracts receivable                                          (44,400)           252,026          (44,400)
      Accounts payable                                              115,338             81,894          430,695
      Deposits payable                                              (33,000)                 -                -
      Accrued expenses                                               15,360              4,269          217,270
      Advance                                                             -            147,883                -
      Deferred revenue                                             (102,784)                 -                -
      Deferred rent                                                       -            (18,083)               -
                                                           ------------------------------------------------------------
  Net cash used for operating activities                         (2,895,036)        (2,042,402)     (44,627,751)

  Investing activities
      Purchase of technology                                              -                  -         (570,000)
      Purchase of equipment and improvements                       (217,881)            (1,517)      (2,036,743)
      Purchases of short-term investments                                 -                  -      (16,161,667)
      Sales of short-term investments                                     -                  -       16,161,667
      Notes receivable                                             (199,496)                 -         (199,496)
      Deferred acquisition costs                                    (55,115)                 -          (55,115)
                                                          -------------------------------------------------------------
Net cash used for investing activities                        $    (472,492)                 -   $   (3,131,354)
</TABLE>



       See accompanying notes.



                                       5
<PAGE>


                       PROTEIN POLYMER TECHNOLOGIES, INC.
                          (A Development Stage Company)
                            Statements of Cash Flows
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                                   For the period July
                                                                                                   6, 1988 (inception)
                                                                     Nine months ended              to September 30,
                                                                       September 30,
                                                                    2005                2004                2005
                                                            --------------------------------------------------------------
<S>                                                            <C>                <C>             <C>
   Financing activities
      Net proceeds from exercise of options and warrants,
        and sale of common stock                               $    6,423,324     $       236,076     $    30,427,795
      Net proceeds from issuance and conversion of
        preferred stock                                                     -                   -          18,398,068
      Net proceeds from convertible notes and detachable
        warrants                                                            -                   -           1,068,457
      Payments on capital lease obligations                                 -                   -            (288,770)
      Proceeds from notes payable                                           -             900,000             484,323
      Payments on note payable                                              -                   -            (242,750)
      Proceeds from issuance of debt - related party                  260,000                   -           1,310,000
      Payments on notes payable - related party                      (150,000)                  -            (150,000)
                                                            --------------------------------------------------------------
   Net cash provided by financing activities                        6,533,324           1,136,076          51,007,123
                                                            --------------------------------------------------------------
   Net increase (decrease) in cash and cash equivalents             3,165,796            (907,843)          3,248,018

   Cash and cash equivalents at beginning of period                    82,222           1,085,314                   -
                                                            --------------------------------------------------------------
   Cash and cash equivalents at end of period                  $    3,248,018    $        177,471      $    3,248,018
                                                            ==============================================================

   Supplemental disclosures of cash flow information
      Interest paid                                            $       87,123   $          86,132   $         238,317

   Non Cash Investing and Financing Activity
      Equipment purchased by capital leases                                 -                   -             288,772
      Imputed dividend on Series E stock                                    -                   -           3,266,250
      Imputed dividend on Series I stock                                    -                   -           1,928,237
      Imputed dividend on warrant repricing                           481,552                   -           1,624,943
      Conversion of Series D preferred stock to common
        stock                                                               -                   -           2,142,332
      Conversion of Series E preferred stock to common
        stock                                                               -                   -           5,277,813
      Conversion of Series G preferred stock to common
        stock                                                          20,000                   -             870,000
      Conversion of Series I preferred stock to common
        stock                                                       1,650,000                   -           1,855,000
      Series D stock issued for Series C stock                              -                   -           2,073,925
      Series C dividends paid with Series D stock                           -                   -             253,875
      Series D dividends paid with common stock                             -                   -             422,341
      Conversion of notes payable and accrued interest to
        common stock and warrants                                   1,213,885                   -           1,213,855
      Warrants issued for financing fees                              608,371                   -             608,371

</TABLE>


  See accompanying notes.


                                       6
<PAGE>


                       PROTEIN POLYMER TECHNOLOGIES, INC.
                          (A Development Stage Company)

                     Notes to Condensed Financial Statements
                                   (unaudited)


Note 1.    Basis of Presentation

The condensed financial statements of Protein Polymer Technologies, Inc. (the
"Company") for the three months and the nine months ended September 30, 2005 and
2004 and for the period July 6, 1988 (inception) to September 30, 2005 are
unaudited. These financial statements reflect all adjustments, consisting of
only normal recurring adjustments which, in the opinion of management, are
necessary to state fairly the financial position, results of operations and cash
flows for the interim periods presented. The balance sheet as of December 31,
2004 was derived from the Company's audited financial statements. The results of
operations for the three months and the nine months ended September 30, 2005 are
not necessarily indicative of the results to be expected for the year ending
December 31, 2005. These financial statements and the notes thereto should be
read in conjunction with the audited financial statements included in our Annual
Report on Form 10-KSB and 10KSB/A for the year ended December 31, 2004, filed
with the Securities and Exchange Commission.

Note 2.    Accounting for Stock-Based Compensation

SFAS No. 123, "Accounting for Stock-Based Compensation", encourages but does not
require companies to record compensation cost for stock-based employee
compensation plans at fair value. The Company accounts for stock-based
compensation using the intrinsic value method prescribed in Accounting
Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees", and related interpretations. Accordingly, compensation cost for
stock options is measured as the excess, if any, of the quoted market price of
the Company's stock at the date of the grant over the amount an employee must
pay to acquire the stock. Had compensation cost for the Company's stock option
awards been determined based upon the fair value at the grant date and
recognized on a straight-line basis over the related vesting period, in
accordance with the provisions of SFAS No. 123, the Company's net loss and
earnings per share would have been reduced to the proforma amounts indicated
below:

<TABLE>
<CAPTION>
<S>                                                 <C>                 <C>                 <C>                <C>
                                                          For the three months                    For the nine months
                                                           Ended September 30,                    Ended September 30,
                                                         2005               2004                2005                2004
                                                         ----               ----                ----                ----

Net loss applicable to common
  shareholders, as reported                         $(1,309,394)       $(1,041,572)       $(4,868,605)        $(2,819,205)
Deduct: total stock-based employee
  compensation expense determined
  under fair value based methods for all
  options, net of related tax effects                  (154,642)          (440,073)          (422,936)         (1,828,433)
                                                  ------------------------------------------------------------------------------
Pro forma net loss                                  $(1,464,036)       $(1,481,645)       $(5,291,541)        $(4,647,638)
                                                  ==============================================================================

Earnings per share:
  Basic - as reported                                    (0.02)              (0.03)             (0.09)              (0.07)
  Basic - pro forma                                      (0.02)              (0.04)             (0.11)              (0.12)
</TABLE>

Note 3.    Revenue and Expense Recognition

Research and development contract revenues are recorded as earned in accordance
with the terms and performance requirements of the contracts. If the research
and development activities are not successful, we are not obligated to refund
payments previously received. Fees from the sale or license of technology are
recognized on a straight-line basis over the term required to complete the
transfer of technology or the substantial satisfaction of any performance
related responsibilities. License fee payments received in advance of amounts
earned are recorded as deferred revenue. Milestone payments are recorded as
revenue based upon the completion of certain contract specified events that
measure progress toward completion under certain long-term contracts. Royalty
revenue related to licensed technology is recorded when earned and in accordance
with the terms of the license agreement. Research and development costs are
expensed as incurred.



                                       7
<PAGE>


Note 4.    Promissory Notes Receivable

On July 12, 2005, the Company entered into a non-binding letter of intent to
acquire Surgica Corporation, a medical device company that develops,
manufactures and markets embolization products. The letter of intent was
extended by mutual agreement until December 12, 2005. (See Management Discussion
and Analysis - Recent Events: Surgica Corporation)

As specified in the Letter of Intent, the Company agreed to advance Surgica
certain funds for on-going operations in return for Promissory Notes. As of
September 30, 2005, the Company had loaned Surgica a total of $198,000 --
$65,000 on July 12, 2005, $63,000 on July 29, 2005, and $70,000 on September 9,
2005. Each Promissory Note becomes due and payable on January 5, 2008. Interest
on the unpaid balance of each Promissory Note accrues at the rate of 6.00% per
annum, payable annually on the 5th day of January, from the date of issuance
through the date that the principal of the Promissory Note is paid in full. As
of September 30, 2005, Surgica had accrued $1,800 in interest payable.

Note 5.    Rent Receivable

The Company subleases 6,183 square feet of its office and research facilities to
a third party ("Biopraxis") under a month to month arrangement for $13,000 per
month plus utilities. From December 2002 through July 2004, the sublessee did
not make monthly rental payments. In August 2004 the sublessee resumed making
rental payments and in September 2004, began paying an additional $5,000 per
month for credit against past due rental obligations. Obligations under the
sublease are secured by certain listed property and equipment of the sublessee.
As of September 30, 2005 the current portion of rent receivable was $88,477 and
the long-term portion was $41,050, net of reserve of $128,273.

Note 6.    Equipment and Leasehold Improvements

Equipment and leasehold improvements at September 30, 2005 and December 31, 2004
are comprised of the following:
                                                September 30,     December 31,
                                                     2005              2004
                                           -------------------------------------

     Laboratory equipment                    $    1,369,000     $    1,184,000
     Office equipment                               210,000            200,000
     Leasehold improvements                         329,000            306,000
                                           -------------------------------------
                                                  1,908,000          1,690,000
    Less accumulated depreciation
    and amortization                             (1,636,000)        (1,605,000)
                                           -------------------------------------
                                             $      272,000     $       85,000
                                           =====================================

Depreciation expense was $14,000 for the quarter ended September 30, 2005 and
$30,000 for the year ended December 31, 2004.

Note 7.    Exercise and Exchange of Warrants

In January 2005, certain holders of warrants issued in conjunction with the sale
of the Company's Series G convertible preferred stock exercised their warrants
to purchase 855,303 shares of the Company's common stock. These warrants were
due to expire on January 31, 2005. The exercise price of such warrants was $0.55
per share. In order to induce the warrant holders to exercise their warrants
prior to the expiration date, the Company offered to reduce the exercise price
of the warrants from $0.55 to $0.33 per share and offered each warrant holder a
new warrant, for the same number of shares of the Company's common stock, at an
exercise price of $0.50 per share. As a result, the Company raised $282,000. The
newly issued warrants will expire January 31, 2006. In connection with the
repricing and issuance of additional warrants to the investors, the Company
recorded an imputed dividend of $482,000 during the first quarter of 2005 to
reflect the additional benefit created for such investors.

Note 8.  Notes Payable, Related Party

On March 31, 2005, notes payable to certain shareholders of $150,000, plus
accrued interest of $11,000, were paid in full.

In April 2005, notes payable to certain shareholders entered into during 2004
and 2005, with an aggregate principal balance of $1,160,000, plus accrued
interest of $54,000, were converted into common stock and warrants in the equity
transaction completed on April 1, 2005.


                                       8
<PAGE>


Note 9.    Common Stock and Warrants

On April 1, 2005, the Company completed the initial closing for the private
placement of shares of the Company's common stock at a price of $0.33 per share
pursuant to a Securities Purchase Agreement with a group of individual and
institutional investors. At the initial closing, the Company sold an aggregate
of 12,728,269 shares of its common stock to the initial investors for an
aggregate purchase price of $4,200,331, including approximately $1,214,000 of
short-term promissory bridge notes and accumulated interest thereon previously
issued by the Company to certain of the initial investors which was converted
into the Company's common stock. As part of the transaction, the Company also
issued warrants to the initial investors which entitle the warrant holders to
purchase an aggregate of 6,364,132 shares of the Company's common stock at an
exercise price of $0.50 per share. The warrants expire on April 1, 2009.

On or about April 15, 2005, the Company, in a subsequent closing pursuant to the
Securities Purchase Agreement, sold an aggregate of 10,827,955 shares of the
Company's common stock to additional investors for an aggregate purchase price
of $3,573,225. As part of the transaction, the Company also issued warrants to
the investors, which entitle the warrant holders to purchase an aggregate of
5,413,976 shares of the Company's common stock at an exercise price of $0.50 per
share. The warrants expire on April 15, 2009.

In connection with this private placement, the Company issued a total of
23,556,224 shares of common stock at price of $0.33 per share, for aggregate
total proceeds of $7,773,556 (including approximately $1,214,000 of converted
short-term promissory bridge notes, and the accrued interest thereon, previously
issued by the Company to certain of the initial investors), together with
warrants exercisable for the purchase of an aggregate of approximately
11,778,108 shares of the Company's common stock at an exercise price of $0.50
per share.

In connection with the Securities Purchase Agreement, the Company agreed to file
a registration statement registering these securities with the Securities and
Exchange Commission, and on June 6, 2005 registration of the securities became
effective.

The Company incurred aggregate selling fees of approximately $1,108,000, of
which $500,000 was paid in cash and $608,000 was paid by issuing warrants to
purchase 751,088 shares of the Company's common stock at an exercise price of
$0.55 per share exercisable at any time and expiring approximately 5 years from
the date of issuance. The fair value of the warrants was estimated by management
using the Black-Scholes option-pricing model.

On April 22, 2005 the Company agreed to issue a warrant to purchase an aggregate
of 2,000,000 shares of the Company's common stock to William N. Plamondon,  III,
a director of the Company who earlier in the month was appointed to serve as the
Company's Chief Executive Officer. The warrant is immediately  exercisable at an
exercise price of $0.67 per share (closing  market price at date of grant),  and
expires three years from the date of grant.  In connection  with the issuance of
the warrant,  the Company recorded a non-cash  expense of $1,245,295  during the
quarter  ended June 30, 2005 based on a  Black-Scholes  model  valuation,  and a
corresponding increase to additional paid in capital.


                                       9
<PAGE>


Item 2.    Management's Discussion and Analysis or Plan of Operation

Forward Looking Statements

     Certain statements contained or incorporated by reference in this Quarterly
Report on Form 10-QSB constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause actual results, performance or achievements of the company, or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by forward-looking statements.
Such risks and uncertainties include, among others, history of operating losses,
raising adequate capital for continuing operations, early stage of product
development, scientific and technical uncertainties, competitive products and
approaches, reliance upon collaborative partnership agreements and funding,
regulatory testing and approvals, patent protection uncertainties and
manufacturing scale-up and required qualifications. While these statements
represent management's current judgment and expectations for the company, such
risks and uncertainties could cause actual results to differ materially from any
future results suggested herein. We undertake no obligation to release publicly
the results of any revisions to these forward-looking statements to reflect
events or circumstances arising after the date hereof.

General Overview

Protein Polymer Technologies, Inc., is a development-stage biotechnology company
engaged in the research, development, production and clinical testing of medical
products based on materials created from our patented technology to produce
proteins of unique design. Since 1992, we have focused primarily on developing
technology and products to be used for soft tissue augmentation, tissue
adhesives and sealants, wound healing support, and drug delivery devices. We
have been unprofitable to date, and as of September 30, 2005 had an accumulated
deficit of $57,000,000.

Protein polymers are synthetic proteins created "from scratch" through chemical
DNA (gene) synthesis, and are produced in quantity by traditional large-scale
microbial fermentation methods. As a result, protein polymers contain no human
or animal components that could potentially transmit or cause disease. Due to
their synthetic design, protein polymers are capable of combining the biological
functionality of natural proteins with the chemical functionality and
exceptional physical properties of synthetic polymers. Our primary goal is to
develop medical products for use inside the body with significantly improved
outcomes as compared to current products and practices.

Our product candidates for surgical repair, augmentation and regeneration of
human tissues are in various stages of research and development. The more
advanced programs are (i) bulking agents for soft tissue augmentation,
particularly for use in urethral tissue for the treatment of female stress
incontinence and in dermal tissue for cosmetic and reconstructive procedures,
(ii) tissue adhesive formulations for the repair of spinal discs damaged due to
injury or aging, and (iii) preclinical development of a new surgical sealant
designed to prevent air and fluid leaks following lung, gastrointestinal, and
cardiovascular surgery. We are currently devoting the majority of our resources
to the development and FDA approval of these products.

Because of the breadth of commercial applications of our technology and the
risks associated in any one program, we are pursuing multiple routes for
commercial development. Currently, we are independently developing the
incontinence and the dermal augmentation products, which share similar
technology and product characteristics. We have entered into a comprehensive
license and development agreement with Genencor International for their use of
our materials and technology to develop, manufacture and commercialize products
for industrial markets. Genencor International is one of the world's largest
manufacturers of industrial enzymes and other biologically derived products.
Through this arrangement, we could receive payments, upon the accomplishment of
specified milestones and royalties on the sale of products, if any. To
accelerate the development and commercialization of our spinal disc repair
product, we entered into agreements with Spine Wave, Inc., which we expect will
provide us with both near term research and development support and royalties on
the sale of licensed products, if any.

Recent Events: Surgica Corporation

On July 12, 2005, the Company entered into a non-binding letter of intent to
acquire Surgica Corporation, a medical device company that develops,
manufactures and markets embolization products. The letter of intent was amended
on October 13, 2005 in order to extend the provisions contained in the
non-binding letter of intent to December 12, 2005. The Company and Surgica
continue to negotiate toward this transaction but there can be no assurance that
the transaction will occur, or if it does, on terms currently contemplated in
the letter of intent. (See Note 4 of notes to condensed financial statements
above.)


                                       10
<PAGE>


Significant Collaborative Agreements

Our collaborative development agreements generally provide for specific payments
for defined activities and services, royalties on the sales of developed
products, and/or payments upon the accomplishment of specified performance
benchmarks. Certain of these agreements also provide for equity investments or
other financial incentives. We usually enter into technology license agreements
in connection with collaborative development agreements, but occasionally we
will agree to license certain of our technologies without an accompanying
development agreement.

Spine Wave
----------

In April 2001, we entered into agreements with Spine Wave, Inc., to develop and
commercialize an injectable protein-based formulation for the repair of spinal
discs damaged either by injury or aging. As consideration for entering into an
exclusive, worldwide license agreement with Spine Wave, we received one million
shares of the founding common stock in Spine Wave, initially valued at $10,000.
These shares were subject to a vesting schedule; however, Spine Wave's right to
repurchase unvested shares terminated in 2002 upon their merger with VERTx, Inc.
Royalties from the sale or sublicensing of licensed products will be calculated
as a percentage of the gross margin (sales revenue less the cost of goods)
realized by Spine Wave from the sale of products.

In connection with the license agreement, we entered into a separate supply and
services agreement to provide Spine Wave with a variety of research and
development services, and to supply materials to Spine Wave for pre-clinical and
clinical testing. Spine Wave, in return, agreed to reimburse us for both our
direct costs and the associated overhead costs for the services provided. During
2001, we recognized contract revenues of $450,000 related to activities
performed under the collaborative agreement.

In March 2002, we executed additional agreements with Spine Wave that expanded
our contractual research and development relationship and provided us with
additional equity incentives in the form of Spine Wave common stock and warrants
to purchase Spine Wave common stock. Under the amended supply and services
agreement, the Company, on behalf of Spine Wave, is proceeding with pre-clinical
safety and performance studies of a product for spinal disc repair to support
Spine Wave's filing of an investigational device exemption with the FDA to
obtain approval to initiate human clinical testing. During the subsequent period
leading to regulatory marketing approval, our contractual responsibilities
include the supply of product to be used in clinical testing. Research and
development services performed for Spine Wave, including both direct costs and
associated overhead costs, are reimbursed. Spine Wave is responsible for
clinical testing, regulatory approvals and commercialization. For the quarter
ended September 30, 2005 and for the period from project inception to September
30, 2005, we received $44,000 and $5,221,000, respectively, in contract revenue
from Spine Wave, which represents the reimbursement of direct costs plus
overhead costs allocated to the research and development resources used in
performing the collaborative activities.

Additional equity incentives offered in conjunction with the expanded supply and
services agreement of March 2002 consist of a four year warrant to purchase (a)
1,000,000 shares of Spine Wave common stock at an exercise price of $0.50 per
share (recently issued Spine Wave preferred stock was priced at $0.55 per
share), and (b) 400,000 shares of common stock valued at $0.05 per share subject
to repurchase at cost until each of three performance goals is achieved. The
performance goals consist of: (i) completion of certain studies for filing an
investigational device exemption application (100,000 shares); (ii) completion
of additional studies for filing of the investigational device exemption and
provision of inventory for the pilot clinical study (150,000 shares); and (iii)
completion of certain manufacturing arrangements, and production of certain
quantities of product (150,000 shares). As of September 30, 2005, two of the
three performance goals had been met.

In October 2003, we executed a second amendment to the supply and services
agreement with Spine Wave that further defined the cost basis for reimbursement
of services provided by us to Spine Wave.

Significant License Agreements

Our license agreements customarily include provision for up-front compensation
and eventual royalties on the sale of licensed products, if any. Terms of
license agreements customarily commence as of the date executed and continue for
a period of the greater of twenty (20) years from execution date or the date
upon which the last of the patented technology under license expires.

Femcare, Ltd.
-------------

                                       11

<PAGE>

In January 2000, we entered into an agreement with Femcare, Ltd. ("Femcare"),
for the commercialization in Europe and Australia of our product for treatment
of stress urinary incontinence. Under the terms of the license agreement,
Femcare paid the Company a $1 million non-refundable license fee in exchange for
the patented technology and a three year commitment from the Company to provide
support to Femcare in its efforts to clinically test our products in Great
Britain and to achieve European regulatory approval. We have not incurred any
research and development costs associated with our support efforts to date. As a
result of the arrangement, we recognized approximately $333,000 in deferred
license fee revenue for each of 2000, 2001, and 2002. In 2004, Femcare notified
us that it was going to close its urology business, and in July, 2005, we
mutually agreed to terminate the license agreement and discharged each other
from any claims, obligations, liabilities, or other causes of action.

Genencor International, Inc.
----------------------------

In December 2000, we signed a broad-based, worldwide exclusive license agreement
with Genencor International, Inc. ("Genencor") enabling Genencor to potentially
develop a wide variety of new products for industrial markets. In October 2002,
we amended the license agreement to provide Genencor with an additional one-year
option to initiate development of products in the field of non-medical personal
care. In March 2005, we amended the licence to fully incorporate the field of
personal care products into the license. As a result of the amendments, Genencor
may use our patented protein polymer design and production technology, in
combination with Genencor's extensive gene expression, protein design, and
large-scale manufacturing technology, to design and develop new products with
improved performance properties for defined industrial fields and the field of
non-medical personal care products.

In exchange for the licensed rights, Genencor paid us an up-front license fee of
$750,000, and will pay royalties on the sale of any products commercialized by
Genencor under the agreement. The licensed technology was transferred to
Genencor upon execution of the license agreement without any further product
development obligation on our part. Future royalties on the net sales of
products developed by Genencor incorporating the technology under license, if
any, would be calculated based on a royalty rate to be determined at a later
date. In addition, the Company is entitled to receive up to $5 million in
milestone payments upon Genencor's achievement of various specified industrial
product development milestones incorporating the licensed technology. There is
no limitation on the amount of milestone payments we can receive from Genencor
for Genencor's product development in the field of non-medical personal care
products. In March 2005 we received a second license milestone payment of
$250,000 from Genencor for Genencor's initiation of a product development
project based on technology licensed from us.

In connection with the license agreement, the Company issued Genencor two
warrants, each convertible by formula into $500,000 of our common stock. The
first warrant has expired. The second warrant may be exercised for 1,250,000
shares of our common stock at an exercise price of $0.40 per share. As a result
of the collaboration, in 2000, we recognized $750,000 in license fee revenue
(less the issuance of warrants to purchase $1 million of our common stock,
valued at $319,000). The license agreement terminates on the date of expiration
of the last remaining patent.

Research and Development

We currently maintain detailed project costs (direct costs plus allocated
overhead) for contractual research and development services. However, we do not
maintain cost breakdowns for our independent internal research and development
projects due to the extensive degree of overlap between our tissue augmentation
and sealant projects, such as common manufacturing, quality control and
developmental product testing.

Our product for the treatment of female stress urinary incontinence is in pilot
human clinical testing. Due to the rate of patient enrollment, we now project
beginning pivotal clinical testing in 2006. We expect that these trials,
including patient follow-up, will take approximately 24 months and that the
subsequent Food and Drug Administration review of our pre-market approval
submission may take an additional 12 months. Assuming that this schedule is met
and the product is approved, and that the requisite capital is available, U.S.
sales of the product are projected to begin by the end of 2008. Commercial
manufacturing process development and completion of the clinical trials are
estimated to cost approximately $10 million.

Our tissue augmentation product for use in cosmetic and reconstructive surgery
applications is in pilot human clinical testing. We recently obtained FDA
approval to expand the pilot clinical study to obtain additional data in support
of our application to begin a pivotal clinical study. We now project beginning
pivotal clinical testing in early 2006. We expect that these trials, including
patient follow-up, will take approximately 15 months, and that the subsequent
Food and Drug Administration review of our pre-market approval submission may
take up to an additional 12 months. Assuming that this schedule is met and the
product is approved, and that the requisite capital is available, U.S. sales are
projected to begin in late 2007. Our estimate for the pivotal clinical trial has
been updated and is now projected to cost approximately $3.2 million. Our tissue
augmentation product is based on the same manufacturing technology as our
product for the treatment of female stress urinary incontinence, and thus, the
incremental cost of manufacturing development is estimated to be approximately
$0.1 million.


                                       12
<PAGE>


Our product for sealing tissue following pulmonary, abdominal and cardiovascular
surgery is in preclinical development. We project that we will file an
Investigational Device Exemption with the FDA requesting permission to begin
human clinical trials in the second quarter of 2006.

We currently do not have sufficient cash to complete the development of all
these products. We expect to obtain the necessary cash either by additional
equity financings, by sharing the cost of development with potential marketing
partners or by a combination of both methods. If we are unable to obtain the
necessary cash, we would not be able to complete product development, which will
have a material adverse effect on us.

Our spinal disc repair product being developed for our licensee, Spine Wave,
Inc., initiated clinical testing of the product in Europe in 2004, and is
seeking approval from the U. S. Food and Drug Administration to begin human
clinical testing in the United States under an Investigational Device
Exemption. Spine Wave controls the timing of this project. Under our contract
with Spine Wave, we are responsible for development of the formulated product,
its pilot manufacturing process and product production for both clinical trials.
Spine Wave is responsible for funding all expenses associated with these
activities. Contract revenue received from Spine Wave is approximately equal to
our cost (direct project costs plus allocated laboratory and corporate overhead
expenses) of the work performed. Total research and development costs for the
quarter ended September 30, 2005, and for the period from project inception to
such date are approximately $189,000 and $5,044,000 respectively.

To the extent sufficient capital resources are available, we continue to
research the use of our patented technology to produce proteins of unique design
for other tissue repair and medical device applications, principally for use in
supporting the wound healing process, including devices based on tissue
engineering, and in drug delivery devices. Our strategy for most of our programs
is to enter into collaborative development agreements with product marketing and
distribution companies. Although these relationships, to the extent any are
consummated, may provide significant near-term revenues through up-front
licensing fees, research and development payments and milestone payments, we
expect to continue to incur operating losses for the next several years.

Results of Operations

We recognized $44,000 in contract and licensing revenue for the three months
ended September 30, 2005 as compared to $20,000 for the three months ended
September 30, 2004. For the nine-month period ended September 30, 2005, we
recognized $702,000 in contract and licensing income compared to $408,000 for
the same period in 2004. The contract revenue for the three and nine months
ended September 30, 2005 was for research and development services for Spine
Wave. The increase in contract and licensing revenue in 2005 is due primarily to
a $250,000 benchmark payment from Genencor International. During the nine month
period ended September 30, 2005, our work for Spine Wave has focused on
production of the injectable spinal disc nucleus product for Spine Wave's
clinical trials in Europe and in anticipation of approval of an Investigational
Device exemption from the Food and Drug Administration requesting permission to
initiate human clinical trials in the United States.

Interest income was $16,000 and $32,000, respectively ,for the three months and
nine months ended September 30, 2005, versus $273 and $3,000, respectively, for
the same periods in 2004.

Research and development expenses for the three and nine-month periods ended
September 30, 2005 were $661,000 and $1,909,000, respectively, compared to
$530,000 and $1,757,000, respectively, for the same periods in 2004. We expect,
in general, that our research and development, human clinical testing and
manufacturing expenses will increase over time if our incontinence and dermal
products, and our other products in development, successfully progress and
additional capital is obtained.

Selling, general and administrative expenses for the three and nine month
periods ended September 30, 2005 were $640,000 and $2,920,000, respectively, as
compared to $461,000 and $1,263,000, respectively, for the same periods in 2004.
This increase is due primarily to the inclusion of a non-cash expense in the
second quarter of 2005 in the amount of $1,245,000, related to the issuance of
warrants for services to William N. Plamondon III, the Company's Chief Executive
Officer (See Note 8 to the Condensed Financial Statements), and to increased
personnel costs in 2005 and legal, accounting, and investor relation costs
incurred in connection with the private placements closed in 2005. In the third
quarter of 2005 we recorded a non-cash expense of $1,800 related to the issuance
of options to Howard Asher, our newly contracted consultant. We expect that our
selling, general and administrative expenses will remain largely unchanged in
the near term, but may increase in the future, to the extent capital is
available, as support for our research and development and manufacturing efforts
require additional resources.

For the quarter ended September 30, 2005, we recorded a net loss applicable to
common shareholders of $1,309,000, or $0.02 per share, as compared to a net loss
of $1,042,000, or $0.03 per share, for the same period in 2004. For the nine
months ended

                                       13
<PAGE>


September 30, 2005, we recorded a net loss applicable to common shareholders of
$4,868,000, or $0.09 per share, as compared to a net loss of $2,819,000, or
$0.07 per share, for the same period in 2004. In addition to the $1,245,000
charge to earnings associated with the issuance of the warrants for services to
William N. Plamondon III in the second quarter of 2005, and the $1,800
associated with the issuance of options for services to Howard Asher in the
third quarter of 2005, the net loss and the net loss per share also included
$70,000 and $689,000 in each of the three-month and the nine-month periods of
2005, respectively, and $70,000 and $208,000, respectively, for the same periods
in 2004 for undeclared dividends and/or imputed dividends related to our
preferred stock.

In general, there can be significant fluctuation in revenue from quarter to
quarter due to variability in outside contract and licensing payments. In
general, we expect to incur increasing operating losses in the future (to the
extent additional capital is obtained), due primarily to increases in our soft
tissue augmentation program's development, manufacturing and business
development activities, and the continuation of our tissue adhesive and sealant
product development activities. Our financial results depend on our ability to
establish strategic alliances and generate contract revenues, increased
research, development and manufacturing efforts, pre-clinical and clinical
product testing and commercialization expenditures, expenses incurred for
regulatory compliance and patent prosecution, and other factors.

To date we believe that inflation and changing prices have had only a modest
effect on our continuing operations. However, increases in utility costs,
insurance and employee benefits may have a greater impact on our profitability
in the future.

Liquidity and Capital Resources

As of September 30, 2005, we had cash, cash equivalents and short-term
investments totaling $3,248,000 as compared to $82,000 at December 31, 2004. As
of September 30, 2005, we had a working capital of $2,834,000, compared to a
negative working capital of $1,531,000 at December 31, 2004.

As of September 30, 2005, we did not have any off balance sheet financing
activities and did not have any special purpose entities. We had no long-term
capital lease obligations as of September 30, 2005 or December 31, 2004. For the
nine month period ended September 30, 2005, our cash expenditures for capital
equipment and leasehold improvements totaled $218,000, compared with $1,517 for
the same period in the prior year. To the extent capital is available, we
anticipate that these expenditures will continue to increase in 2005 for
laboratory renovations and additional equipment required to meet the FDA's
applicable Quality System regulation as we scale up our manufacturing operations
to meet product requirements for expanded clinical testing. We may enter into
capital equipment lease arrangements in the future if available at desirable
rates and terms.

We believe our existing available cash, cash commitments, cash equivalents and
short-term investments as of October 1, 2005, in combination with continuing
contractual commitments, will be sufficient to meet our anticipated capital
requirements through the first quarter of 2006. Substantial additional capital
resources will be required to fund continuing expenditures related to our
research, development, manufacturing and business development activities. We are
pursuing a number of alternatives available to meet the continuing capital
requirements of our operations, such as collaborative agreements and public and
private financings. Further, we are continuing our reimbursed services to Spine
Wave. We are currently engaged in discussions with potential financing sources
and collaborative partners regarding funding in the form of license fees,
milestone payments and research and development payments. There can be no
assurance that any of these fundings will be consummated in the timeframes
necessary to allow us to continue operations or favorable terms. If adequate
funds are not available, we will be required to significantly curtail our
operating plans and would likely have to sell or license out significant
portions of our technology, and possibly cease operations.


Item 3.    Controls and Procedures

          (a) Disclosure Controls and Procedures. Based on their evaluation, as
              of the end of the period covered by this quarterly report, our
              principal executive officer and principal financial officer have
              concluded that our disclosure controls and procedures (as defined
              in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act
              of 1934 ("Exchange Act")) are effective based on their evaluation
              of these controls and procedures required by paragraph (b) of
              Rules 13a-15 or 15d-15 under the Exchange Act.

           (b)Internal Control Over Financial Reporting. There were no changes
              in our internal control over financial reporting identified in
              connection with the evaluation required by paragraph (d) of Rules
              13a-15 or 15d-15 under the Exchange Act that occurred during our
              last fiscal quarter that has materially affected, or is reasonably
              likely to materially affect, our internal control over financial
              reporting.


                                       14
<PAGE>


                                    PART II.
                                OTHER INFORMATION


Item 6.    Exhibits and Reports on Form 8-K

           a. Exhibits

                    31.1  Certification of Chief Executive Officer pursuant to
                          Securities Exchange Act Rules 13a- 14(a)/15d-14(a), as
                          adopted pursuant to Section 302 of the Sarbanes-Oxley
                          Act of 2002.

                    31.2  Certification of Director of Finance (Principal
                          Financial Officer) pursuant to Securities Exchange Act
                          Rules 13a-14(a)/15d-14(a), as adopted pursuant to
                          Section 302 of the Sarbanes-Oxley Act of 2002

                    32.1  Certification of Chief Executive Officer and Director
                          of Finance (Principal Financial Officer) pursuant to
                          18 U.S.C. Section 1350, as adopted pursuant to Section
                          906 of the Sarbanes-Oxley Act of 2002.

           b. Reports on Form 8-K

                  On July 20, 2005,  the Company filed a Current  Report on
                  Form 8-K announcing that on July 12, 2005, the Company entered
                  into a non-binding, letter of intent with Surgica Corporation
                  to acquire Surgica's assets through a combination of the
                  Company's common stock and cash.

                  On September 9, 2005, the Company filed a Current Report on
                  Form 8-K announcing that on September 9, 2005, the Company
                  sent a noticed to the American Stock Exchange expressing its
                  intention of withdrawing its application for listing on the
                  American Stock Exchange, filed on April 29, 2005.


                                       15
<PAGE>


                                   SIGNATURES


In accordance with the requirements of the Exchange Act, the registrant caused
this  report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                         PROTEIN POLYMER TECHNOLOGIES, INC.



      Date:  November 14, 2005          By  /s/  William N. Plamondon, III
                                           -------------------------------
                                           William N. Plamondon, III
                                           Chief Executive Officer


      Date:  November 14, 2005         By  /s/  Janis Y. Neves
                                           -------------------
                                           Janis Y. Neves
                                           Director of Finance, Controller
                                           and Corporate Secretary


                                       16
<PAGE>

                                  EXHIBIT INDEX


    Exhibit
    Number              Description
    ------              -----------

     31.1      Certification of Chief Executive Officer pursuant to Securities
               Exchange Act Rules 13a- 14(a)/15d-14(a), as adopted pursuant to
               Section 302 of the Sarbanes-Oxley Act of 2002.

     31.2      Certification of Director of Finance (Principal Financial
               Officer) pursuant to Securities Exchange Act Rules
               13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002.

     32.1      Certification of Chief Executive Officer and Director of Finance
               (Principal Financial Officer) pursuant to 18 U.S.C. Section 1350,
               as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
               2002.


                                       17