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, 2005
                               -------------

                                       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 5, 2005
----------------------------                       -----------------------------
Common Stock, $.01 par value                                17,155,933



<PAGE>


                               CYTOGEN CORPORATION

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


                                                                            Page
                                                                            ----

PART I.   FINANCIAL INFORMATION............................................  1

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

               Consolidated Balance Sheets as of June 30, 2005 and
                   December 31, 2004.......................................  2

               Consolidated Statements of Operations for the Three Months
                   and Six Months Ended June 30, 2005 and 2004.............  3

               Consolidated Statements of Cash Flows for the Six Months
                   Ended June 30, 2005 and 2004 ...........................  4

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

     Item 2.   Management's Discussion and Analysis of Financial Condition
               and Results of Operations...................................  15

     Item 3.   Quantitative and Qualitative Disclosures About Market Risk..  31

     Item 4.   Controls and Procedures.....................................  31

PART II.  OTHER INFORMATION................................................  33

     Item 4.   Submission of Matters to a Vote of Security Holders.........  33

     Item 6.   Exhibits....................................................  34

SIGNATURES.................................................................  35


     ProstaScint(R),  Quadramet(R) and OncoScint(R) are registered United States
trademarks  of  Cytogen  Corporation.  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
its subsidiaries.

                                      -i-

<PAGE>















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










                                      -1-
<PAGE>


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

<TABLE>
<CAPTION>

                                                                               JUNE 30,               DECEMBER 31,
                                                                                2005                      2004
                                                                            -------------            -------------
<S>                                                                         <C>                      <C>
ASSETS:
Current assets:
     Cash and cash equivalents.......................................       $      20,532            $      13,046
     Short-term investments..........................................                  --                   22,779
     Accounts receivable, net........................................               1,821                    1,406
     Inventories.....................................................               5,103                    3,623
     Prepaid expenses................................................                 563                    1,242
     Other current assets............................................                 145                      258
                                                                            -------------            -------------

       Total current assets..........................................              28,164                   42,354

Property and equipment, net..........................................                 801                      787
Quadramet license fee, net...........................................               6,675                    7,024
Other assets.........................................................                 400                      248
                                                                            -------------            -------------

                                                                            $      36,040            $      50,413
                                                                            =============            =============

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
     Current portion of long-term liabilities........................       $       2,298            $       2,296
     Liability related to joint venture..............................               1,100                      396
     Accounts payable and accrued liabilities........................               6,130                    7,644
                                                                            -------------            -------------

       Total current liabilities.....................................               9,528                   10,336
                                                                            -------------            -------------

Long-term liabilities................................................                  38                       47
                                                                            -------------            -------------
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, 50,000,000 shares
       authorized, 15,527,920 and 15,489,116 shares issued
       and outstanding at June 30, 2005 and December 31,
       2004, respectively............................................                 155                      155
     Additional paid-in capital......................................             427,228                  426,153
     Unearned compensation...........................................                (847)                      --
     Common stock to be issued (92,799 shares).......................                 500                       --
     Accumulated other comprehensive income..........................                  50                       --
     Accumulated deficit.............................................            (400,612)                (386,278)
                                                                            -------------            -------------

       Total stockholders' equity....................................              26,474                   40,030
                                                                            -------------            -------------
                                                                            $      36,040            $      50,413
                                                                            =============            =============
</TABLE>

          The accompany notes are an integral part of these statements.

                                      -2-

<PAGE>


                      CYTOGEN CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                (All amounts in thousands, except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                              THREE MONTHS                      SIX MONTHS
                                                                             ENDED JUNE 30,                    ENDED JUNE 30,
                                                                   ------------------------------     -----------------------------
                                                                        2005             2004             2005             2004
                                                                   -------------     ------------     ------------     ------------
<S>                                                                <C>               <C>              <C>              <C>
REVENUES:
     Product revenue:
       Quadramet.............................................      $       2,153     $      1,616     $      4,207     $      3,470
       ProstaScint...........................................              1,924            2,312            3,823            4,039
       Other.................................................                 --               --               --                1
                                                                   -------------     ------------     ------------     ------------
           Total product revenue.............................              4,077            3,928            8,030            7,510

     License and contract revenue............................                 79               24              120               43
                                                                   -------------     ------------     ------------     ------------

           Total revenues....................................              4,156            3,952            8,150            7,553
                                                                   -------------     ------------     ------------     ------------

OPERATING EXPENSES:
     Cost of product revenue.................................              2,251            2,396            4,678            4,795
     Selling, general and administrative.....................              6,692            4,914           13,716            8,805
     Research and development................................              1,362              541            2,101            1,345
     Equity in loss of joint venture.........................              1,704              542            2,202            1,351
                                                                   -------------     ------------     ------------     ------------

           Total operating expenses..........................             12,009            8,393           22,697           16,296
                                                                   -------------     ------------     ------------     ------------

           Operating loss....................................             (7,853)          (4,441)         (14,547)          (8,743)

INTEREST INCOME..............................................                154              106              297              170
INTEREST EXPENSE.............................................                (42)             (49)             (84)             (93)
                                                                   -------------     ------------     ------------     ------------

NET LOSS                                                           $      (7,741)    $     (4,384)    $    (14,334)    $     (8,666)
                                                                   =============     ============     ============     ============

BASIC AND DILUTED NET LOSS PER SHARE.........................      $       (0.50)    $      (0.30)    $      (0.92)    $      (0.63)
                                                                   =============     ============     ============     ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING...................             15,525           14,848           15,519           13,859
                                                                   =============     ============     ============     ============
</TABLE>

          The accompany notes are an integral part of these statements.


                                      -3-
<PAGE>


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

<TABLE>
<CAPTION>
                                                                              SIX MONTHS ENDED JUNE 30,
                                                                     ----------------------------------------
                                                                            2005                     2004
                                                                     -----------------       ----------------
<S>                                                                    <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                               $     (14,334)          $     (8,666)
Adjustments to reconcile net loss to net cash used in
  operating activities:
     Depreciation and amortization.................................              492                    534
     Stock-based compensation expenses.............................               13                     11
     Stock-based milestone obligation..............................              500                     --
     Decrease in provision for doubtful accounts...................              (39)                    --
     Amortization of premiums/discounts on
      investments, net.............................................               52                     28
     Deferred rent.................................................               21                     17
     Loss on disposition of assets.................................               --                      3
     Write down of property and equipment..........................               --                    100
     Changes in assets and liabilities:
      Receivables..................................................             (376)                  (501)
      Inventories..................................................           (1,474)                   455
      Other assets.................................................              690                    247
      Liability related to joint venture...........................              704                     --
      Accounts payable and accrued liabilities.....................           (1,535)                (1,144)
                                                                       -------------          -------------

  Net cash used in operating activities............................          (15,286)                (8,916)
                                                                       -------------          -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities of short-term investments...............................           22,727                  8,000
Purchases of short-term investments................................               --                (15,383)
Purchases of property and equipment................................             (163)                  (371)
                                                                       -------------          -------------

  Net cash provided by (used in) investing activities..............           22,564                 (7,754)
                                                                       -------------          -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock.............................              215                 24,021
Payment of long-term liabilities...................................               (7)                   (81)
                                                                       -------------          -------------

  Net cash provided by financing activities........................              208                 23,940
                                                                       -------------          -------------
Net increase in cash and cash equivalents..........................            7,486                  7,270

Cash and cash equivalents, beginning of period.....................           13,046                 13,630
                                                                       -------------          -------------
Cash and cash equivalents, end of period...........................    $      20,532          $      20,900
                                                                       =============          =============
Supplemental disclosure of non-cash information:
Capital lease of equipment.........................................    $           1          $          70
                                                                       =============          =============

Unrealized holding gain on marketable securities...................    $          50          $          --
                                                                       =============          =============
Supplemental disclosure of cash information:
Cash paid for interest.............................................    $          84          $          93
                                                                       =============          =============
</TABLE>

          The accompany 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,  NJ is a product-driven  biopharmaceutical  company that develops and
commercializes   innovative   molecules  that  can  be  used  to  build  leading
franchises.  The Company's  marketed  products  include  QUADRAMET(R)  (samarium
Sm-153 lexidronam injection) and PROSTASCINT(R) (capromab pendetide) kit for the
preparation  of Indium  In-111  capromab  pendetide  in the United  States.  The
Company  also has  exclusive  United  States  marketing  rights  to  COMBIDEX(R)
(ferumoxtran-10)  for all  applications,  and the exclusive  right to market and
sell  ferumoxtol  (formerly Code 7228) for oncology  applications  in the United
States.  On March 3, 2005, the U.S. Food and Drug  Administration's  (the "FDA")
Oncologic Drugs Advisory Committee (ODAC) voted to not recommend approval of the
proposed broad indication for COMBIDEX.  On March 24, 2005,  Advanced Magnetics,
Inc. informed Cytogen that Advanced Magnetics received an approvable letter from
the FDA for Combidex, subject to certain conditions.

     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.

     The Company 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 NMP22  BLADDERCHEK,  BRACHYSEED
and ONCOSCINT,  that the Company previously believed would generate  significant
revenues. 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,
among other things, to manufacture its products, to secure raw materials, and to
provide  licensing rights to their  proprietary  technologies for the Company to
sell and market to others.  The Company is also subject to credit  concentration
risks as a limited  number of its customers  provide a high  percentage of total
revenues and corresponding receivables.

     The Company has also incurred negative cash flows from operations since its
inception,  and has  expended,  and expects to  continue to expend,  substantial
funds  to  implement  its  planned  product   development   efforts,   including
acquisition   of  products   and   complementary   technologies,   research  and
development,  clinical  studies and  regulatory  activities,  and to further the
Company's  marketing and sales  programs.  The Company expects that it will have
additional  requirements for debt or equity capital,  irrespective of whether or
when it reaches profitability,


                                      -5-
<PAGE>


for further product development costs, product and technology  acquisition costs
and working capital.

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
footnote  disclosures  normally  included in  financial  statements  prepared in
accordance with U.S. generally accepted accounting principles 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, as amended, filed with the
Securities and Exchange  Commission,  which includes financial  statements as of
and for  the  year  ended  December  31,  2004.  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.

USE OF ESTIMATES

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

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

     The  Company had no  short-term  investments  at June 30, 2005  compared to
$22.8  million at December 31, 2004,  which  consisted  of  investments  in U.S.
government  agency  notes.  The Company had the ability and intent to hold these
investments  until  maturity and therefore had  classified  the  investments  as
held-to-maturity.  Held-to-maturity investments were recorded at amortized cost,
adjusted for the accretion of discounts or premiums.  Discounts or premiums were
accreted into interest income over the life of the related  investment using the
straight-line  method,  which approximated the effective yield method.  Dividend
and interest income were recognized when earned.


                                      -6-
<PAGE>


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, 2005   DECEMBER 31, 2004
                                             ---------------  -----------------
   Raw materials........................       $       283       $      427
   Work-in-process......................             4,616            2,345
   Finished goods.......................               204              851
                                               -----------       ----------
                                               $     5,103       $    3,623
                                               ===========       ==========

NET LOSS PER SHARE

     Basic net loss per common share is calculated by dividing the Company's 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, 2005 and 2004 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

     The Company  follows  the  revised  Financial  Accounting  Standards  Board
("FASB") Interpretation No. 46 ("FIN 46R"),  "Consolidation of Variable Interest
Entities",  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.

     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).  Cytogen  accounts  for the Joint
Venture  using the equity method of  accounting.  The Company 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.


                                      -7-
<PAGE>


     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,
                                                                    -----------------------          --------------------

                                                                       2005           2004             2005           2004
                                                                       ----           ----             ----           ----
<S>                                                                 <C>            <C>             <C>            <C>
Net loss, as reported......................................         $ (7,741)      $ (4,384)       $  (14,334)    $  (8,666)
  Add: Stock-based employee compensation
   expense included in reported net loss ..................               13              -                13            11
  Deduct: Total stock-based employee
   compensation expense determined under
   fair value-based method for all awards..................             (565)          (341)           (1,128)         (574)
                                                                    --------       --------        ----------     ---------
Pro forma net loss.........................................         $ (8,293)      $ (4,725)       $  (15,449)    $  (9,229)
                                                                    ========       ========        ==========     =========
Basic and diluted net loss per
   share, as reported......................................         $  (0.50)      $  (0.30)       $    (0.92)    $   (0.63)
                                                                    ========       ========        ==========     =========
Pro forma basic and diluted net
   loss per share..........................................         $  (0.53)      $  (0.32)       $    (1.00)    $   (0.67)
                                                                    ========       ========        ==========     =========
</TABLE>


     On June 14, 2005,  the Company  awarded an  aggregate of 168,600  shares of
restricted common stock,  $0.01 par value per share, to employees of the Company
pursuant to the terms of the Company's 2004 Stock Incentive Plan, as a long term
incentive. Such restricted shares are subject to future vesting over a period of
six years, and will be issued upon the  satisfaction of such vesting  provisions
and other terms and conditions related thereto. The Company recorded $868,000 of
unearned   compensation  upon  the  granting  of  the  restricted  stock,  which
represented  the fair  market  value of  Cytogen's  common  stock on the date of
grant. The unearned  compensation is amortized on a straight-line basis over the
six year vesting  period.  For the three months ended June 30, 2005, the Company
recorded a charge of $9,000 in the accompanying statements of operations for the
amortization of unearned compensation.  The Company reversed $12,000 of unearned
compensation  related  to  unvested  restricted  stock upon the  termination  of
certain employees in the second quarter of 2005.

OTHER COMPREHENSIVE INCOME OR LOSS

     Other comprehensive  income consisted of an unrealized holding gain or loss
on  marketable  securities.  For the  three  months  ended  June 30,  2005,  the
unrealized  holding loss of those securities was $19,000,  and as a result,  the
comprehensive loss for the three months ended June 30, 2005 was $7,760,000.  For
the  six  months  ended  June  30,  2005,  the  unrealized  holding  gain of the
securities was $50,000 and as a result the comprehensive loss for the six months
ended June 30, 2005 was $14,284,000.  There was no other comprehensive income or
loss in the three and six months ended June 30, 2004.


                                      -8-
<PAGE>


RECENT ACCOUNTING PRONOUNCEMENTS

ABNORMAL INVENTORY COSTS

     In  November  2004,  the FASB issued SFAS No.  151,  "Inventory  Costs,  an
amendment of ARB No. 43,  Chapter 4" ("SFAS No. 151"),  to clarify that abnormal
amounts of idle facility expense,  freight,  handling costs, and wasted material
(spoilage)  should be  recognized  as  current  period  charges,  and that fixed
production  overheads  should be  allocated  to  inventory  based on the  normal
capacity of  production  facilities.  This  statement is effective for inventory
costs incurred during fiscal years  beginning after June 15, 2005.  Accordingly,
the  Company  will adopt SFAS No. 151 in its fiscal  year  beginning  January 1,
2006. The Company is currently evaluating the impact of adopting this statement.

SHARE-BASED PAYMENT

     In December 2004, the FASB issued SFAS No. 123(R),  "Share-Based  Payment",
which revised SFAS No. 123 and  superseded APB Opinion No. 25,  "Accounting  for
Stock Issued to Employees."  SFAS No. 123(R)  requires that companies  recognize
compensation  expense  associated  with grants of stock options and other equity
instruments to employees in the financial  statements  effective as of the first
interim or annual  reporting  period that begins after June 15,  2005.  In April
2005,  the SEC  announced  the  adoption  of a new rule  allowing  companies  to
implement SFAS No. 123(R) at the beginning of their next fiscal year that begins
after June 15, 2005.  Compensation cost will be measured based on the fair value
of the  instrument  on the grant date and will be  recognized  over the  vesting
period. This pronouncement applies to all grants after the effective date and to
the unvested portion of stock options outstanding as of the effective date. SFAS
No. 123(R)  eliminates  the ability to account for such  transactions  using the
intrinsic  method  currently used by the Company.  SFAS No. 123(R) also requires
that  companies  recognize  compensation  expense  associated  with purchases of
shares of common stock by employees at a discount to market value under employee
stock purchase plans that meet certain criteria.  Accordingly,  the Company will
adopt SFAS No.  123(R) in the fiscal year  beginning  January 1, 2006.  Although
management  has not yet  determined the impact of the adoption of this standard,
it is expected to have a material effect on the Company's consolidated financial
statements.

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"),  a development  stage
enterprise. The Joint Venture is currently developing antibody-based and vaccine
immunotherapeutic  products utilizing Cytogen's proprietary PSMA technology. The
Joint Venture is owned equally by Cytogen and Progenics.


                                      -9-
<PAGE>


     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 for the three and six months ended
June 30, 2005 and 2004. On June 6, 2005,  Cytogen and Progenics agreed on a work
plan and annual budget for the Joint Venture for 2005. In 2005, the Members each
expect to provide up to $5.7 million in funding for the  development of the PSMA
technologies  through the Joint Venture.  Each Member has funded $1.6 million to
the Joint Venture as of June 30, 2005. The report of the independent auditors on
the financial  statements of the Joint Venture  included in the Company's Annual
Report on Form 10-K, as amended, for the year ended December 31, 2004 filed with
the Securities and Exchange Commission, contained an explanatory paragraph which
states that the Joint Venture has suffered  recurring losses from operations and
has a net capital  deficiency that raises substantial doubt about its ability to
continue as a going  concern,  and that its financial  statements do not include
any  adjustments  that might  result from the outcome of that  uncertainty.  The
Members have not committed to fund the Joint Venture beyond December 31, 2005 at
this time, except for obligations under existing  contractual  commitments as of
that date.  The Joint  Venture  may incur  losses in future  years  provided  an
agreement  between the Members is reached on research  program goals and budgets
for periods after 2005 and the Joint Venture's operations are funded.

     For the three and six months ended June 30, 2005,  Cytogen  recognized $1.7
million and $2.2 million,  respectively, of the Joint Venture's losses, compared
to $542,000 and $1.4 million of the Joint  Venture's  losses in the same periods
of 2004. As of June 30, 2005, the carrying value of the Company's  investment in
the Joint Venture was $102,000, which represents the Company's investment in the
Joint  Venture,  less its  cumulative  share of losses,  which net investment is
recorded in other  assets.  At June 30, 2005 and December  31,  2004,  Cytogen's
liability to the Joint Venture was $1.1 million and $396,000,  respectively. The
respective  liability,  as reported in the Liability related to Joint Venture in
the accompanying  consolidated  balance sheets,  represents Cytogen's obligation
related to the capital  contribution  to the Joint  Venture at June 30, 2005 and
Cytogen's  cumulative  share of losses in excess of its  investment in the Joint
Venture at December 31, 2004.  Selected financial  statement  information of the
Joint Venture is as follows (all amounts in thousands):


                                      -10-
<PAGE>


BALANCE SHEET DATA:

<TABLE>
<CAPTION>
                                                                                   JUNE 30,          DECEMBER 31,
                                                                                     2005                2004
                                                                               ----------------    ----------------

                                   ASSETS:
<S>                                                                              <C>                 <C>
Cash......................................................................       $       161         $        --
Prepaid expenses..........................................................                28                  12
                                                                               ---------------     ---------------
                                                                                 $       189         $        12
                                                                               ===============     ===============

                      LIABILITIES AND MEMBERS' DEFICIT:

Accounts payable to Cytogen Corporation, a related party..................       $       131         $         4
Accounts payable to Progenics Pharmaceuticals, Inc.,
   a related party........................................................             1,257                 189
Accounts payable and accrued expenses.....................................               814                 629
                                                                               ---------------     ---------------

     Total liabilities....................................................             2,202                 822
                                                                               ---------------     ---------------
Capital contributions.....................................................            28,698              23,298
Contributions receivable..................................................            (2,200)                 --
Deficit accumulated during the development stage..........................           (28,511)            (24,108)
                                                                               ---------------     ---------------
         Total members' deficit...........................................            (2,013)               (810)
                                                                               ---------------     ---------------
         Total liabilities and members' deficit...........................       $       189         $        12
                                                                               ===============     ===============

INCOME STATEMENT DATA:
</TABLE>


<TABLE>
<CAPTION>

                                               THREE                           SIX                  FOR THE PERIOD
                                            MONTHS ENDED                  MONTHS ENDED            FROM JUNE 15, 1999
                                              JUNE 30,                       JUNE 30,               (INCEPTION) TO
                                  ---------------------------    ----------------------------        JUNE 30, 2005
                                        2005           2004            2005           2004        ------------------
                                        ----           ----            ----           ----
<S>                               <C>             <C>            <C>             <C>               <C>
Interest income...................$          2    $         2    $          3    $          5      $          244
Total expenses....................       3,409          1,086           4,406           2,707              28,755
                                  ------------    -----------    ------------    ------------      --------------

Net loss..........................$     (3,407)   $    (1,084)   $     (4,403)   $     (2,702)     $      (28,511)
                                  ============    ===========    ============    ============      ==============
</TABLE>


     In June 2005, the Joint Venture entered into a collaboration agreement (the
"SGI Agreement") with Seattle Genetics,  Inc. ("SGI").  Under the SGI Agreement,
SGI provided an exclusive  worldwide  license to its  proprietary  antibody-drug
conjugate  technology  (the "ADC  Technology")  to the Joint Venture.  Under the
license,  the  Joint  Venture  has the right to use the ADC  Technology  to link
cell-killing  drugs to the Joint  Venture's  monoclonal  antibodies  that target
prostate-specific  membrane antigen. During the initial research term of the SGI
Agreement,  SGI will also provide  technical  information  to the Joint  Venture
related  to  implementation  of the  licensed  technology,  which  period may be
extended for an additional  period upon payment of an additional  fee. The Joint
Venture may replace PSMA with another antigen,  subject to certain restrictions,
upon payment of an antigen  replacement  fee. The ADC  Technology  is based,  in
part, on technology  licensed by SGI from third parties (the  "Licensors").  The
Joint Venture is responsible for research,  product  development,  manufacturing
and commercialization of all products under the SGI Agreement. The Joint Venture
may sub-license the ADC Technology to a third-party to


                                      -11-
<PAGE>


manufacture  the ADC's for both research and  commercial  use. The Joint Venture
made a $2.0 million  technology  access payment to SGI upon execution of the SGI
Agreement and will make additional  maintenance  payments during the term of the
SGI  Agreement.  In addition,  the Joint Venture will make payments  aggregating
$15.0 million,  upon the achievement of certain defined  milestones and will pay
royalties to SGI and its Licensors, as applicable, on a percentage of net sales,
as defined.  In the event that SGI  provides  materials or services to the Joint
Venture  under the SGI  Agreement,  SGI will  receive  supply  and/or labor cost
payments  from the Joint  Venture  at  agreed-upon  rates.  The Joint  Venture's
monoclonal  antibody project is currently in the pre-clinical  phase of research
and development. All costs incurred by the Joint Venture under the SGI Agreement
during the research and development phase of the project will be expensed in the
period  incurred.  The SGI  Agreement  terminates  at the later of (a) the tenth
anniversary  of the  first  commercial  sale of each  licensed  product  in each
country or (b) the latest date of expiration of patents  underlying the licensed
products. The Joint Venture may terminate the SGI Agreement upon advance written
notice to SGI. SGI may terminate the SGI Agreement if the Joint Venture breaches
an SGI in-license that is not cured within a specified time period after written
notice. In addition,  either party may terminate the SGI Agreement,  upon breach
by the other  party  that is not cured  within a  specified  time  period  after
written notice or in the event of bankruptcy of the other party.  The ability of
the Joint Venture to comply with the terms of the SGI  Agreement  will depend on
agreement by the Members  regarding  work plans and budgets of the Joint Venture
in future years.

3. BRISTOL-MYERS SQUIBB MEDICAL IMAGING, INC.

     Effective January 1, 2004, the Company entered into a new manufacturing and
supply  agreement with  Bristol-Myers  Squibb Medical Imaging,  Inc.  ("BMSMI"),
whereby BMSMI will  manufacture,  distribute  and provide order  processing  and
customer  service for  Cytogen  relating  to  Quadramet.  Under the terms of the
agreement,  Cytogen is obligated to pay at least $4.2 million annually,  subject
to future annual price  adjustment,  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 each of the three month periods ended
June 30, 2005 and 2004 Cytogen incurred $1.0 million of manufacturing  costs for
Quadramet,  all of which is included in cost of product revenue.  During each of
the six month  periods  ended  June 30,  2005 and 2004,  Cytogen  incurred  $2.1
million of  manufacturing  costs for  Quadramet.  The Company  also pays BMSMI a
variable  amount per month for each Quadramet order placed to cover the costs of
customer  service  which is  included in  selling,  general  and  administrative
expenses.

     The two primary  components of  Quadramet,  particularly  Samarium-153  and
EDTMP, are provided to BMSMI by outside  suppliers.  BMSMI obtains its supply of
Samarium-153  from a sole  supplier,  and  EDTMP  from  another  sole  supplier.
Alternative  sources for these components may not be readily available,  and any
alternate  suppliers  would have to be identified and qualified,  subject to all
applicable regulatory  guidelines.  If BMSMI cannot obtain sufficient quantities
of these components on commercially  reasonable terms, or in a timely manner, it
would be unable to manufacture Quadramet on a timely and cost-effective basis.


                                      -12-
<PAGE>


4. LAUREATE PHARMA, L.P.

     In September 2004, the Company  entered into a non-exclusive  manufacturing
agreement  with  Laureate  Pharma,   L.P.   pursuant  to  which  Laureate  shall
manufacture  ProstaScint and its primary raw materials for Cytogen in Laureate's
Princeton, New Jersey facility. Laureate is the sole manufacturer of ProstaScint
and its antibodies.  The agreement will  terminate,  unless  terminated  earlier
pursuant to its terms,  upon Laureate's  completion of the specified  production
campaign for ProstaScint and shipment of the resulting  products from Laureate's
facility.  Under the terms of the agreement,  the Company is obligated to pay at
least an aggregate of $5.1 million through 2006.  Approximately $4.1 million has
been incurred  under this  agreement  through June 30, 2005,  and is recorded as
inventory in the accompanying balance sheet as of June 30, 2005. Of this amount,
approximately  $1.1 million and $1.8 million were recorded  during the three and
six month periods ended June 30, 2005.

5. THE DOW CHEMICAL COMPANY

     On May 6, 2005, the Company  entered into a license  agreement with The Dow
Chemical  Company  to  create a  targeted  oncology  product  designed  to treat
prostate  and  other  cancers.   The  agreement  applies  proprietary   MeO-DOTA
bifunctional  chelant  technology  from  Dowpharma to radiolabel  Cytogen's PSMA
antibody  with a  therapeutic  radionuclide.  Under the  agreement,  proprietary
chelation  technology  and  other  capabilities,   provided  through  ChelaMedSM
radiopharmaceutical   services  from  Dowpharma,   will  be  used  to  attach  a
therapeutic  radioisotope  to the same murine  monoclonal  antibody  utilized in
Cytogen's  ProstaScint  molecular  imaging  agent which is called  7E11-C5.3 (or
7E11).  The 7E11 antibody was excluded from the PSMA technology  licensed to the
Joint  Venture.  As a result of the  agreement,  Cytogen is  obligated  to pay a
minimal license fee and aggregate future milestone  payments of $1.9 million for
each licensed product and royalties based on sales of related products,  if any.
Unless terminated earlier,  the Dow agreement terminates at the later of (a) the
tenth anniversary of the date of first commercial sale for each licensed product
or (b) the  expiration of the last to expire valid claim that would be infringed
by the sale of the  licensed  product.  The  Company may  terminate  the license
agreement with Dow on 90 days written notice.

6. INCREASE IN AUTHORIZED COMMON STOCK

     On June 14, 2005, the Company's  stockholders  approved an amendment to the
Company's  Certificate of Incorporation to increase the total authorized  shares
of common stock of the Company from 25,000,000 to 50,000,000 shares.

7. SALE OF COMMON STOCK AND WARRANTS

     On July 19, 2005,  the Company  announced that it entered into a Securities
Purchase   Agreement  (the   "Securities   Purchase   Agreement")  with  certain
institutional investors for the sale of 3,104,380 shares of its common stock and
776,096  warrants (the "Warrants") to purchase shares of its common stock having
an exercise price of $6.00 per share,  through a registered direct offering.  In
exchange for $4.50,  the  purchasers  received one share of common stock and .25
warrants to purchase common stock. These warrants are exercisable for ten years,
beginning  six months  after their  issuance.  The  transaction  provided  gross
proceeds of approximately $14.0

                                      -13-
<PAGE>


million to Cytogen before  deducting  costs  associated  with the offering.  The
transaction  closed on July 20, 2005 and August 2, 2005.  There was no placement
agent in this transaction.

     The shares of common  stock and the shares of common stock  underlying  the
Warrants  offered by the Company in this  transaction  will be  registered  upon
issuance under the Company's existing shelf Registration  Statement (referred to
below).  The Company is not  listing the  Warrants on an exchange or any trading
system and does not expect that a trading market for the Warrants will develop.

8. PROSTAGEN MILESTONE PAYMENT

     Pursuant to a Stock Exchange Agreement (the "Prostagen  Agreement") related
to the Company's acquisition of Prostagen Inc. ("Prostagen") in 1999, as amended
in May 2002,  August 2002,  and November 2004, the Company agreed to issue up an
additional  $1.5 million worth of Cytogen common stock to the  shareholders  and
debtholders of Prostagen (the "Prostagen  Partners"),  if certain milestones are
achieved in the PSMA  development  programs.  During the second quarter of 2005,
the Company recorded a $500,000 charge to research and development  expense upon
the achievement of certain milestone related to PSMA program as specified in the
Prostagen Agreement with the corresponding amount recorded in Common Stock To Be
Issued in the accompanying consolidated balance sheets. 92,799 shares of Cytogen
common  stock  will be issued  in the  third  quarter  of 2005  related  to this
milestone.  The remaining $1.0 million of future milestone payment, if any, will
be paid in Cytogen common stock upon the  achievement of a certain  milestone in
the PSMA development programs.


                                      -14-
<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 the
impact  of SFAS No.  123(R),  additional  funding  and  development  of the PSMA
technologies,  growth and market  penetration  for  Quadramet  and  ProstaScint,
revenues, if any, from our joint venture with Progenics  Pharmaceuticals,  Inc.,
increased  expenses  resulting  from our sales  force and  marketing  expansion,
including  sales and  marketing  expenses for  ProstaScint  and  Quadramet,  the
sufficiency  of our  capital  resources  and supply of  products  for sale,  the
continued  cooperation of our contractual and collaborative  partners,  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  under  the  caption
"Additional Factors That May Affect Future Results" in our Annual Report on Form
10-K for the year ended  December  31,  2004,  as  amended,  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, 2004, as amended,  and from time to time in our other filings
with the Securities and Exchange Commission.


                                      -15-
<PAGE>


OVERVIEW

     Founded in 1980, Cytogen  Corporation of Princeton,  NJ is a product-driven
biopharmaceutical  company that develops and commercializes innovative molecules
that can be used to build  leading  franchises.  Our marketed  products  include
Quadramet(R) (samarium Sm-153 lexidronam injection) and ProstaScint(R) (capromab
pendetide) kit for the  preparation of Indium In-111  capromab  pendetide in the
United  States.  We also  have  exclusive  United  States  marketing  rights  to
Combidex(R)  (ferumoxtran-10)  for all applications,  and the exclusive right to
market and sell  ferumoxytol  (formerly Code 7228) for oncology  applications in
the   United   States.   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.

SIGNIFICANT EVENTS IN 2005

FDA COMMITTEE VOTES  NOT TO RECOMMEND APPROVAL OF PROPOSED BROAD INDICATION FOR
COMBIDEX

     On March 3, 2005, the FDA's Oncologic Drugs Advisory Committee voted to not
recommend approval of the proposed broad indication for Combidex.

ADVANCED MAGNETICS RECEIVES APPROVABLE LETTER FOR COMBIDEX

     On March  24,  2005,  we  announced  that  Advanced  Magnetics,  Inc.,  the
developer of Combidex(R) which is exclusively  licensed to Cytogen for marketing
in the United States,  had informed Cytogen that Advanced  Magnetics received an
approvable letter from the FDA for Combidex, subject to certain conditions.

COLLABORATION  WITH  THE  DOW CHEMICAL  COMPANY  TO  DEVELOP PSMA  ANTIBODY  FOR
TREATMENT OF CANCER

     On May 6, 2005, we announced that we had entered into a collaboration  with
The Dow Chemical Company to create a targeted oncology product designed to treat
prostate  and  other  cancers.   The  agreement  applies  proprietary   MeO-DOTA
bifunctional   chelant   technology  from  Dowpharma  to  radiolabel   Cytogen's
prostate-specific   membrane   antigen   (PSMA)   antibody  with  a  therapeutic
radionuclide.  PSMA is a protein  highly  expressed  on the  surface of prostate
cancer cells and the  neovasculature of many solid tumors.  Under the agreement,
proprietary  chelation  technology  and  other  capabilities,  provided  through
ChelaMedSM radiopharmaceutical services from Dowpharma, will be used to attach a
therapeutic  radioisotope  to the same murine  monoclonal  antibody  utilized in
Cytogen's  ProstaScint(R)  (capromab  pendetide)  molecular  imaging agent. This
antibody,  called  7E11-C5.3  (or 7E11),  is directed  against an  intracellular
epitope of PSMA.  Dowpharma's MeO-DOTA  bifunctional chelant will be utilized to
attach  the beta  emitting  radionuclide  lutetium-177  as a payload to the 7E11
antibody,  enabling targeted delivery of this cytotoxic agent. The 7E11 antibody
was excluded from the PSMA  technology  licensed to our PSMA joint  venture.  We
intend to develop the resulting innovative molecule for the treatment of various
cancers, initially in prostate, that express the PSMA marker.


                                      -16-
<PAGE>


CYTOGEN AND PROGENICS APPROVE 2005 WORK PLAN AND BUDGET FOR JOINT VENTURE

     On June 6, 2005, we and Progenics  Pharmaceuticals,  Inc.  agreed on a work
plan and annual budget for 2005 for our PSMA joint venture.

SALE OF COMMON STOCK AND WARRANTS

     On July 19, 2005, we announced  that we entered into a Securities  Purchase
Agreement with certain institutional  investors for the sale of 3,104,380 shares
of our common stock and 776,096  warrants to purchase shares of our common stock
having  an  exercise  price of $6.00 per  share,  through  a  registered  direct
offering.  In exchange for $4.50,  the  purchasers  received one share of common
stock and .25 warrants to purchase common stock.  These warrants are exercisable
for ten years,  beginning  six months  after  their  issuance.  The  transaction
provided gross proceeds of  approximately  $14.0 million to us before  deducting
costs associated with the offering.  The transaction closed on July 20, 2005 and
August 2, 2005. There was no placement agent in this transaction.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2005 AND 2004

REVENUES

                                                             INCREASE/(DECREASE)
                                    2005         2004            $         %
                                    ----         ----       ---------  ---------
                              (ALL AMOUNTS IN THOUSANDS, EXCEPT PERCENTAGE DATA)
Quadramet....................    $  2,153     $   1,616     $    537       33%
ProstaScint..................       1,924         2,312         (388)    (17)%
License and Contract.........          79            24           55      229%
                                 --------     ---------     --------
                                 $  4,156     $   3,952     $    204        5%
                                 ========     =========     ========

     Total revenues for the second quarter of 2005 were $4.2 million compared to
$4.0 million for the same period in 2004. Product revenues accounted for 98% and
99% of  total  revenues  for the  second  quarters  of each  of 2005  and  2004,
respectively.  License and  contract  revenues  accounted  for the  remainder of
revenues.

     QUADRAMET.  Quadramet  sales were $2.2  million  for the second  quarter of
2005,  compared to $1.6 million in the second quarter of 2004.  Quadramet  sales
accounted for 53% and 41% of product revenues for the second quarters of each of
2005 and 2004,  respectively.  We believe  such  increase  was due, in part,  to
increased demand  associated with our focused  marketing  programs.  We have the
right to market  Quadramet in North  America and Latin  America.  Currently,  we
market  Quadramet only in the United  States.  We believe that the future growth
and market  penetration of Quadramet is dependent upon, among other things:  (i)
distinguishing the physical properties of Quadramet from first-generation agents
within its class,  (ii) empowering and marketing to key  prescribing  audiences,
(iii)  broadening  palliative use within label beyond prostate cancer to include
breast,  lung,  multiple  myeloma,  (iv)  evaluating  the role of  Quadramet  in
combination with other commonly used oncology agents, and (v)


                                      -17-
<PAGE>

expanding clinical  development to demonstrate the potential  tumoricidal versus
palliative attributes of Quadramet.  We cannotprovide 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 $1.9 million for the second quarter of
2005, compared to $2.3 million in the second quarter of 2004.  ProstaScint sales
accounted for 47% and 59% of product revenues for the second quarters of each of
2005 and  2004,  respectively.  We  believe  that  ProstaScint  sales  have been
consistent,  except for the increased  purchases by  distributors  in the second
quarter of 2004  associated  with the  implementation  of a price  increase  for
ProstaScint  in late June  2004.  We  believe  that  future  growth  and  market
penetration of ProstaScint is dependent upon, among other things,  (i) improving
image quality through fusion technology, (ii) validating the antigen targeted by
ProstaScint as an  independent  prognostic  factor,  (iii) the  publication  and
presentation  of outcomes data, (iv)  development of  image-guided  applications
including  brachytherapy,  intensity modulated radiation therapy,  surgery,  and
cryotherapy, and (v) expanding clinical development to demonstrate the potential
for  ProstaScint  to monitor  response to  cytotoxic  therapies  and image other
cancers.  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.

     LICENSE AND CONTRACT  REVENUES.  License and contract revenues were $79,000
and $24,000 for the second quarters of 2005 and 2004,  respectively.  During the
second quarter of 2005, we recognized  $78,000 of contract  revenues compared to
$15,000  in the second  quarter of 2004 for  limited  research  and  development
services  provided by us to the PSMA Development  Company LLC, our joint venture
with Progenics.  The level of future revenues for the remainder of 2005, 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)
                                                                           ----------------------
                                                2005           2004            $           %
                                                ----           ----        ---------   ----------
                                             (ALL AMOUNTS IN THOUSANDS, EXCEPT PERCENTAGE DATA)
<S>                                          <C>            <C>            <C>           <C>
Cost of product revenue................      $  2,251       $  2,396       $  (145)      (6)%
Selling, general and administrative....         6,692          4,914         1,778        36%
Research and development...............         1,362            541           821       152%
Equity in loss of joint venture........         1,704            542         1,162       214%
                                             --------       --------       -------
                                             $ 12,009       $  8,393       $ 3,616        43%
                                             ========       ========       =======
</TABLE>

     Total operating  expenses for the second quarter of 2005 were $12.0 million
compared to $8.4 million in the same quarter of 2004.

     COST OF PRODUCT REVENUE. Cost of product revenue for the second quarters of
2005 and 2004 were $2.3 million and $2.4  million,  respectively,  and primarily
reflects  manufacturing  costs for ProstaScint  and Quadramet,  royalties on our
sales  of  products  and   amortization  of  the  up-front   payment  to  Berlex
Laboratories to reacquire the marketing rights to Quadramet in 2003.


                                      -18-
<PAGE>

     SELLING,  GENERAL AND ADMINISTRATIVE.  Selling,  general and administrative
expenses  for the second  quarter  of 2005 were $6.7  million  compared  to $4.9
million in the same period of 2004.  The increase  from the prior year period is
primarily driven by the expanded  investment for the commercial  support of both
Quadramet  and  ProstaScint,  including  the  implementation  of  new  marketing
initiatives and expansion of our sales force which was  substantially  completed
in January 2005.

     RESEARCH AND DEVELOPMENT.  Research and development expenses for the second
quarter of 2005 were $1.4  million  compared  to  $541,000 in the same period of
2004.  The  increase  from the  prior  year  period is  primarily  driven by new
clinical  development  initiatives  for both  Quadramet  and  ProstaScint  and a
$500,000  charge  in  the  second  quarter  of  2005  for a  non-cash  milestone
obligation incurred related to the progress of PSMA development programs and the
preclinical  development  costs  associated  with our  radiolabeled  therapeutic
program to attach the therapeutic radionuclide  lutetium-177 as a payload to the
7E11  monoclonal  antibody  utilized in  ProstaScint.  The increase is partially
offset by savings  from the  closure of our AxCell  Biosciences  facility in the
fourth quarter of 2004. During the second quarter of 2005, we incurred $6,000 in
expenses relating to AxCell's operations compared to $167,000 in the same period
of  2004.  Research  projects  through  academic,   governmental  and  corporate
collaborators  to be supported and additional  applications for the intellectual
property and technology at AxCell are being pursued.

     EQUITY  IN LOSS  OF  JOINT  VENTURE.  Our  share  of the  loss of the  PSMA
Development Company LLC, our joint venture with Progenics,  was $1.7 million and
$542,000 during the second quarters of 2005 and 2004, respectively. Such amounts
represented  50% of the joint  venture's  operating  losses.  We  equally  share
ownership  and costs of the joint  venture  with  Progenics  and account for the
joint venture using the equity method of accounting. The increase over the prior
year  period is  primarily  due to our  share of the $2.0  million  upfront  fee
incurred by the joint  venture to license  proprietary  antibody-drug  conjugate
technology  from  Seattle  Genetics,  Inc.  for use  with  the  joint  venture's
antibodies  targeting  PSMA. On June 6, 2005, we and Progenics  agreed on a work
plan and annual budget for the joint venture for 2005. In 2005, we and Progenics
each expect to provide up to $5.7 million in funding for the  development of the
PSMA  technologies  through the joint venture.  Each member of the joint venture
has funded $1.6 million as of June 30, 2005. We and Progenics have not committed
to fund the joint  venture  beyond  December  31, 2005 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 of the joint venture, although we cannot provide any assurance
that any further  agreements  between us and Progenics will be reached regarding
the joint venture.

     The joint  venture's  work plan and budget for 2005 includes  funding to be
made by the joint venture in accordance with a collaboration agreement (the "SGI
Agreement") with Seattle Genetics, Inc. ("SGI"),  commencing in June 2005. Under
the  SGI  Agreement,   SGI  provided  an  exclusive  worldwide  license  to  its
proprietary  antibody-drug  conjugate  technology (the "ADC  Technology") to the
joint venture. Under the license, the joint venture has the right to use the ADC
Technology  to  link  cell-killing  drugs  to  the  joint  venture's  monoclonal
antibodies that targets  prostate-specific  membrane antigen. During the initial
research term of the Agreement,  SGI will also provide technical  information to
the joint venture related to  implementation of the licensed  technology,  which
period may be extended for an additional period upon payment of an


                                      -19-
<PAGE>

additional fee. The joint venture may replace PSMA with another antigen, subject
to certain  restrictions,  upon payment of an antigen  replacement  fee. The ADC
Technology is based, in part, on technology  licensed by SGI from third parties.
The  joint   venture  is   responsible   for  research,   product   development,
manufacturing and commercialization of all products under the SGI Agreement. The
joint venture may sub-license the ADC Technology to a third-party to manufacture
the ADC's for both  research and  commercial  use. The joint venture made a $2.0
million  technology  access  payment to SGI, upon execution of the SGI Agreement
during  June 2005,  following a capital  contribution  by the  members.  The SGI
Agreement  requires the joint venture to make  maintenance  payments  during the
term  of the SGI  Agreement,  aggregate  payments  of  $15.0  million  upon  the
achievement of certain defined milestones, and royalties, on a percentage of net
sales, as defined,  to SGI and its third party licensors.  In the event that SGI
provides materials or services to the joint venture under the SGI Agreement, SGI
will receive  supply and/or labor cost payments from the joint venture at agreed
upon rates. Unless terminated earlier, the SGI Agreement terminates at the later
of (a) the tenth  anniversary  of the  first  commercial  sale of each  licensed
product  in  each  country  or (b) the  latest  date of  expiration  of  patents
underlying  the licensed  products.  The ability of the joint  venture to comply
with the terms of the SGI  Agreement  will  depend on  agreement  by the members
regarding work plans and budgets of the joint venture in future years.

     INTEREST INCOME/EXPENSE. Interest income for the second quarter of 2005 was
$154,000  compared to $106,000 in the same period of 2004.  The increase in 2005
from the prior year period was due to higher  average  yield on cash balances in
2005.  Interest  expense for the second quarter of 2005 was $42,000  compared to
$49,000  in the same  period in 2004.  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 2005 was $7.7 million compared
to $4.4 million  reported in the second  quarter of 2004.  The basic and diluted
net loss per  share  for the  second  quarter  of 2005 was  $0.50  based on 15.5
million  weighted  average  common shares  outstanding,  compared to a basic and
diluted  net loss per  share of $0.30  based on 14.8  million  weighted  average
common shares outstanding for the same period in 2004.

SIX MONTHS ENDED JUNE 30, 2005 AND 2004

REVENUES
<TABLE>

                                                                             INCREASE/(DECREASE)
                                                                             -------------------
                                                    2005         2004          $               %
                                                    ----         ----      ---------       --------
                                                 (ALL AMOUNTS IN THOUSANDS, EXCEPT PERCENTAGE DATA)

<S>                                               <C>          <C>         <C>                <C>
Quadramet....................................     $ 4,207      $ 3,470     $    737           21%
ProstaScint..................................       3,823        4,039         (216)         (5)%
NMP22 BladderChek............................          --            1           (1)       (100)%
License and Contract.........................         120           43           77          179%
                                                  -------      -------     --------
                                                  $ 8,150      $ 7,553     $    597            8%
                                                  =======      =======     ========
</TABLE>


                                      -20-
<PAGE>

     Total  revenues  for the first half of 2005 were $8.2  million  compared to
$7.6 million for the same period in 2004.  Product revenues accounted for 99% of
total revenues for the first half of each of 2005 and 2004. License and contract
revenues accounted for the remainder of revenues.

     QUADRAMET.  Cytogen recorded  Quadramet sales of $4.2 million for the first
half of 2005  compared to $3.5 million of Quadramet  sales during the first half
of 2004.  Quadramet sales accounted for 52% and 46% of product revenues for such
periods,  respectively.  We have the right to market  Quadramet in North America
and Latin America.  Currently, we market Quadramet only in the United States. We
believe that the future growth and market  penetration of Quadramet is dependent
upon,  among  other  things:  (i)  distinguishing  the  physical  properties  of
Quadramet from earlier  generation  agents within its class, (ii) empowering and
marketing to key prescribing  audiences,  (iii) broadening palliative use within
label beyond prostate cancer to include breast,  lung,  multiple  myeloma,  (iv)
evaluating  the role of  Quadramet  in  combination  with  other  commonly  used
oncology  agents,  and (v) expanding  clinical  development to  demonstrate  the
potential  tumoricidal  versus  palliative  attributes of  Quadramet.  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 $3.8  million  for the first half of
2005, a decrease of $216,000 from $4.0 million in the first half of 2004.  Sales
of ProstaScint  accounted for 48% and 54% of product  revenues for such periods,
respectively. We believe that ProstaScint sales have been consistent, except for
the increased purchases by distributors in the second quarter of 2004 associated
with the  implementation  of a price increase for ProstaScint in late June 2004.
We believe that future growth and market penetration of ProstaScint is dependent
upon, among other things, (i) improving image quality through fusion technology,
(ii) validating the antigen targeted by ProstaScint as an independent prognostic
factor,   (iii)  the  publication  and   presentation  of  outcomes  data,  (iv)
development of  image-guided  applications  including  brachytherapy,  intensity
modulated  radiation  therapy,  surgery,  and  cryotherapy,  and  (v)  expanding
clinical  development  to demonstrate  the potential for  ProstaScint to monitor
response to cytotoxic  therapies and image other cancers.  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
first  half of 2005  compared  to $1,000 in the same  period in 2004.  Effective
December 31, 2004, we stopped selling NMP22 BladderChek.

     LICENSE AND CONTRACT REVENUES.  License and contract revenues were $120,000
and $43,000 for the first half of 2005 and 2004, respectively.  During the first
half of 2005, we recognized $119,000 of contract revenues compared to $28,000 in
the first half of 2004 for limited research and development services provided by
us to the PSMA  Development  Company LLC, our joint venture with  Progenics.  We
expect that the level of future  revenues for the remainder of 2005, 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.


                                      -21-
<PAGE>


OPERATING EXPENSES

<TABLE>
<CAPTION>

                                                                                      INCREASE/(DECREASE)
                                                                                      -------------------
                                                     2005             2004             $              %
                                                     ----             ----         --------       ----------
                                                     (ALL AMOUNTS IN THOUSANDS, EXCEPT PERCENTAGE DATA)

<S>                                               <C>              <C>             <C>              <C>
 Cost of product revenues.....................    $  4,678         $  4,795        $  (117)         (2)%
 Selling, general and administrative..........      13,716            8,805          4,911           56%
 Research and development.....................       2,101            1,345            756           56%
 Equity in loss of joint venture..............       2,202            1,351            851           63%
                                                  --------         --------        -------
                                                  $ 22,697         $ 16,296        $ 6,401           39%
                                                  ========         ========        =======
</TABLE>

     Total  operating  expenses  for the first half of 2005 were  $22.7  million
compared to $16.3 million in the same period of 2004.

     COST OF PRODUCT  REVENUES.  Cost of product  revenues for the first half of
2005 were $4.7  million  compared to $4.8 million in the same period of 2004 and
primarily reflects manufacturing costs for ProstaScint and Quadramet,  royalties
on our sales of products  and  amortization  of the  up-front  payment to Berlex
Laboratories to reacquire the marketing rights to Quadramet in 2003.

     SELLING,  GENERAL AND ADMINISTRATIVE.  Selling,  general and administrative
expenses for the first half of 2005 were $13.7 million  compared to $8.8 million
in the same period of 2004. The increase from the prior year period is primarily
driven by the expanded  investment for the commercial  support of both Quadramet
and ProstaScint,  including the implementation of new marketing  initiatives and
expansion of our sales force which was substantially  completed in January 2005.

     RESEARCH AND DEVELOPMENT.  Research and development  expenses for the first
half of 2005 were $2.1  million  compared to $1.3  million in the same period of
2004.  The  increase  from the  prior  year  period is  primarily  driven by new
clinical  development  initiatives  for both  Quadramet  and  ProstaScint  and a
$500,000  charge  in  the  second  quarter  of  2005  for a  non-cash  milestone
obligation incurred related to the progress of PSMA development programs and the
preclinical  development  costs  associated  with our  radiolabeled  therapeutic
program to attach the therapeutic radionuclide  lutetium-177 as a payload to the
7E11  monoclonal  antibody  utilized in  ProstaScint.  The increase is partially
offset by savings  from the  closure of our AxCell  Biosciences  facility in the
fourth  quarter of 2004.  During the first  half of 2005 and 2004,  we  incurred
$12,000 and $418,000, 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 $2.2 million
during the first half of 2005  compared  to $1.4  million in the same  period of
2004 and  represented 50% of the joint venture's  operating  losses.  We equally
share  ownership and costs of the joint  venture with  Progenics and account for
the joint venture using the equity method of  accounting.  The increase over the
prior year period is primarily due to our share of the $2.0 million  upfront fee
incurred by the joint  venture to license  proprietary  antibody-drug  conjugate
technology  from  Seattle  Genetics,  Inc.  for use  with  the  joint  venture's
antibodies targeting PSMA. On June 6, 2005, we and Progenics


                                      -22-
<PAGE>


agreed on a work plan and annual budget for the joint venture for 2005. In 2005,
we and  Progenics  each expect to provide up to $5.7  million in funding for the
development of the PSMA technologies  through the joint venture.  Each member of
the joint  venture has funded $1.6 million as of June 30, 2005. We and Progenics
have not  committed to fund the joint venture  beyond  December 31, 2005 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 of the joint venture,  although we cannot provide
any  assurance  that any further  agreements  between us and  Progenics  will be
reached regarding the joint venture.

     The joint  venture's  work plan and budget for 2005 includes  funding to be
made by the joint venture in accordance with a collaboration agreement (the "SGI
Agreement") with Seattle Genetics, Inc. ("SGI"),  commencing in June 2005. Under
the  SGI  Agreement,   SGI  provided  an  exclusive  worldwide  license  to  its
proprietary  antibody-drug  conjugate  technology (the "ADC  Technology") to the
joint venture. Under the license, the joint venture has the right to use the ADC
Technology  to  link  cell-killing  drugs  to  the  joint  venture's  monoclonal
antibodies that targets  prostate-specific  membrane antigen. During the initial
research term of the Agreement,  SGI will also provide technical  information to
the joint venture related to  implementation of the licensed  technology,  which
period may be extended for an  additional  period upon payment of an  additional
fee. The joint venture may replace PSMA with another antigen, subject to certain
restrictions,  upon payment of an antigen replacement fee. The ADC Technology is
based,  in part, on  technology  licensed by SGI from third  parties.  The joint
venture is responsible  for research,  product  development,  manufacturing  and
commercialization of all products under the SGI Agreement. The joint venture may
sub-license  the ADC Technology to a third-party  to  manufacture  the ADC's for
both  research  and  commercial  use.  The  joint  venture  made a $2.0  million
technology  access  payment to SGI, upon  execution of the SGI Agreement  during
June 2005,  following a capital  contribution by the members.  The SGI Agreement
requires the joint venture to make  maintenance  payments during the term of the
SGI  Agreement,  aggregate  payments of $15.0  million upon the  achievement  of
certain  defined  milestones,  and royalties,  on a percentage of net sales,  as
defined,  to SGI and its third party  licensors.  In the event that SGI provides
materials or services to the joint  venture  under the SGI  Agreement,  SGI will
receive  supply and/or labor cost payments from the joint venture at agreed upon
rates. Unless terminated earlier,  the SGI Agreement  terminates at the later of
(a) the tenth  anniversary of the first commercial sale of each licensed product
in each country or (b) the latest date of expiration of patents  underlying  the
licensed products.  The ability of the joint venture to comply with the terms of
the SGI Agreement  will depend on agreement by the members  regarding work plans
and budgets of the joint venture in future years.

         INTEREST INCOME/EXPENSE. Interest income for the first half of 2005 was
$297,000 compared to $170,000 in the same period of 2004. The increase in 2005
from the prior year period was due to a higher average yield on cash balances in
2005. Interest expense was $84,000 and $93,000 for the first half of 2005 and
2004, respectively. 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 first half of 2005 was $14.3 million compared to
$8.7 million  reported in the first half of 2004. The basic and diluted net loss
per share for the first half of 2005 was $0.92  based on 15.5  million  weighted
average common shares outstanding, compared

                                      -23-
<PAGE>


to a basic  and  diluted  net loss per  share  of  $0.63  based on 13.9  million
weighted average common shares outstanding for the same period in 2004.

COMMITMENTS

     We have entered into various  contractual and commercial  commitments.  The
following table summarizes our obligations with respect to these  commitments as
of June 30, 2005:

<TABLE>
<CAPTION>
                                                      LESS
                                                      THAN        1 TO 3        4 TO 5      MORE THAN
                                                     1 YEAR       YEARS          YEARS       5 YEARS       TOTAL
                                                    ---------    --------      --------    -----------  -----------
                                                                     (ALL AMOUNTS IN THOUSANDS)
<S>                                                  <C>         <C>           <C>          <C>           <C>
Long-term debt(1)..................................  $ 2,300     $     --      $     --     $    --       $  2,300
Capital lease obligations..........................       18           38            --          --             56
Facility leases....................................      338          451            --          --            789
Research and development and
   other obligations...............................      159          162           151         588          1,060
Manufacturing contracts(2).........................    5,410        4,401            --          --          9,811
Capital contribution to joint venture(3)...........    4,100           --            --          --          4,100
Minimum royalty payments(4)........................    1,077        2,000         2,000       3,333          8,410
                                                     -------     --------      --------     -------       --------

      Total........................................  $13,402     $  7,052      $  2,151     $ 3,921       $ 26,526
                                                     =======     ========      ========     =======       ========
</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  semiannually,  however,  such interest was
          not payable in cash but was added to the principal of the note through
          August 2000. For subsequent periods,  interest is payable in cash. The
          note contains certain non-financial  covenants,  with which we were in
          compliance as of June 30, 2005.

     (2)  Effective  January 1, 2004,  we entered into a new  manufacturing  and
          supply agreement with BMSMI for QUADRAMET whereby BMSMI  manufactures,
          distributes and provides order processing and customer services for us
          relating  to  QUADRAMET.  Under  the  terms of our  agreement,  we are
          obligated  to pay at least $4.2  million  annually,  subject to future
          annual price  adjustment,  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, 2007.

          Additionally,  in  September  2004,  we entered  into a  non-exclusive
          manufacturing  agreement with Laureate Pharma,  L.P. pursuant to which
          Laureate shall  manufacture  ProstaScint for us in its Princeton,  New
          Jersey  facility.   The  agreement  will  terminate,   unless  earlier
          terminated  pursuant to its terms,  upon Laureate's  completion of the
          production  campaign for  PROSTASCINT  and  shipment of the  resulting
          products from Laureate's  facility.  Under the terms of the agreement,
          we are obligated to pay at least an aggregate of $5.1 million  through
          2006, of which  approximately  $4.1 million was incurred  through June
          30,  2005.  We  expect  that  the  agreement  will  provide  us with a
          sufficient   supply  of   ProstaScint   to  satisfy   our   commercial
          requirements for approximately the next four years, based upon current
          sales  levels.  In  addition,  we believe the  agreement  will provide
          sufficient supply of 7E11 required for initial clinical development of
          our therapeutic program.


     (3)  On June 6,  2005,  we and  Progenics  agreed on a work plan and annual
          budget for the joint  venture for 2005.  In 2005,  we have each funded
          $1.6  million  as of June  30,  2005.  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

                                      -24-
<PAGE>


          sure that any  further  agreements  between us and  Progenics  will be
          reached regarding the joint venture. The joint venture's work plan and
          budget for 2005  includes  funding to be made by the joint  venture in
          accordance  with the SGI Agreement with SGI,  commencing in June 2005.
          The joint  venture made a $2.0 million  technology  access  payment to
          SGI, upon execution of the SGI Agreement during June 2005, following a
          capital  contribution by the members.  The SGI Agreement  requires the
          joint venture to make maintenance  payments during the term of the SGI
          Agreement, aggregate payments of $15.0 million upon the achievement of
          certain  defined  milestones,  and  royalties,  on a percentage of net
          sales,  as defined,  to SGI and its  licensors.  In the event that SGI
          provides  materials  or  services to the joint  venture  under the SGI
          Agreement, SGI will receive supply and/or labor cost payments from the
          joint  venture at agreed upon rates.  The ability of the joint venture
          to comply with the terms of the SGI Agreement will depend on agreement
          by the members  regarding  work plans and budgets of the joint venture
          in future years.

     (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 2005 through 2012 and $833,000 in
          2013.

     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:

                                                              JUNE 30, 2005
                                                      --------------------------
                                                      (ALL AMOUNTS IN THOUSANDS)
         Net loss..........................................  $   (14,334)
         Adjustments to reconcile net loss to net cash
           used in operating activities..................           (952)
                                                             -----------
         Net cash used in operating activities.............      (15,286)
         Net cash provided by investing activities.........       22,564
         Net cash provided by financing activities.........          208
                                                             -----------
         Net increase in cash and cash equivalents.........  $     7,486
                                                             ===========

OVERVIEW

     Our cash and cash  equivalents  were  $20.5  million  as of June 30,  2005,
compared to $13.0  million as of December  31, 2004.  As of June 30,  2005,  our
total cash,  cash  equivalents  and  short-term  investments  was $20.5  million
compared to $35.8  million as of December 31, 2004.  The decrease in cash,  cash
equivalents  and short term  investments  from the December 31, 2004 balance was
primarily  due  to the  build-up  of  ProstaScint  inventory  and  to  increased
operating  expenditures  in 2005,  including  costs to promote  and  support our
oncology  products  and  to  expand  our  internal  sales  force,  new  clinical
development  initiatives  for both Quadramet and ProstaScint and funding for the
PSMA Development Company joint venture.  During the first half of 2005 and 2004,
net cash used for  operating  activities  was $15.3  million  and $8.9  million,
respectively.  In 2005, we expect  operating  expenditures to increase over 2004
levels.

     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


                                      -25-
<PAGE>


from contract research services, fees paid under license agreements and interest
earned on cash and short-term investments.

     On July 19, 2005, we announced  that we entered into a Securities  Purchase
Agreement with certain institutional  investors for the sale of 3,104,380 shares
of its common stock and 776,096  warrants (the "Warrants") to purchase shares of
its  common  stock  having  an  exercise  price of $6.00  per  share,  through a
registered direct offering.  In exchange for $4.50, the purchasers  received one
share of common stock and .25 warrants to purchase common stock.  These warrants
are  exercisable for ten years,  beginning six months after their issuance.  The
transaction  provided gross proceeds of approximately $14.0 million to us before
deducting costs associated with the offering. The transaction closed on July 20,
2005 and August 2, 2005. There was no placement agent in this  transaction.  The
shares of common  stock and the shares of common stock  underlying  the Warrants
offered by us in this  transaction  will be registered  upon issuance  under the
Company's existing shelf Registration  Statement (referred to below). We are not
listing the Warrants on an exchange or any trading system and do not expect that
a trading market for the Warrants will develop.  On November 5, 2004, we filed a
registration  statement (File No. 333-120262) (the "Registration  Statement") on
Form S-3 with the Securities and Exchange Commission (the "Commission") relating
to the public offering pursuant to Rule 415 under the Securities Act of 1933, as
amended, of up to an aggregate of $70,000,000 of debt securities,  common stock,
preferred stock,  warrants and units of the Company. The Commission declared the
Registration Statement effective on November 14, 2004.

     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, debt or other
securities as market conditions permit or enter into credit facilities.

OTHER LIQUIDITY EVENTS

     In September 2004, we entered into a non-exclusive  manufacturing agreement
with  Laureate  Pharma,   L.P.  pursuant  to  which  Laureate  is  manufacturing
ProstaScint  for us in its Princeton,  New Jersey  facility.  Our agreement will
terminate,  unless  terminated  earlier  pursuant to its terms,  upon Laureate's
completion of the  production  campaign and shipment of the  resulting  products
from Laureate's facility.  Under the terms of the agreement, we are obligated to
pay at least an aggregate  of $5.1  million  through  2006.  Approximately  $4.1
million has been incurred  under this  agreement  through June 30, 2005,  and is
recorded as inventory in the accompanying  balance sheet as of June 30, 2005. Of
this amount,  approximately  $1.8 million was recorded  during the first half of
2005. We expect that the agreement  will provide us with a sufficient  supply of
ProstaScint to satisfy our commercial  requirements for  approximately  the next
four  years,  based upon  current  sales  levels.  In  addition,  we believe the
agreement will provide  sufficient  supply of 7E11 required for initial clinical
development of our therapeutic


                                      -26-
<PAGE>

program. In October 2004, Laureate was acquired by Safeguard  Scientifics,  Inc.
Laureate  has  continued  to operate as a full  service  contract  manufacturing
organization   and  we  have  not   experienced  any  disruption  in  Laureate's
performance of its obligations to produce ProstaScint.

     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,
subject to future annual price  adjustment,  through 2008,  unless terminated by
BMSMI or us on two years prior written notice. During the first half of 2005, 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 2005.

     Beginning  in  December  2001,  we began to equally  share the costs of the
joint venture with Progenics. On June 6, 2005, we and Progenics agreed on a work
plan and annual budget for the Joint Venture for 2005. In 2005, we and Progenics
each expect to provide up to $5.7 million in funding for the  development of the
PSMA  technologies  through the Joint Venture.  Each member of the joint venture
has funded $1.6 million as of June 30, 2005.  The joint  venture's work plan and
budget for 2005  includes  funding to be made by the joint venture in accordance
with the SGI Agreement with SGI, commencing in June 2005. The joint venture made
a $2.0  million  technology  access  payment to SGI,  upon  execution of the SGI
Agreement during June 2005, following a capital contribution by the members. The
SGI Agreement requires the joint venture to make maintenance payments during the
term  of the SGI  Agreement,  aggregate  payments  of  $15.0  million  upon  the
achievement of certain defined milestones, and royalties, on a percentage of net
sales,  as defined,  to SGI and its  licensors.  In the event that SGI  provides
materials or services to the joint  venture  under the SGI  Agreement,  SGI will
receive  supply and/or labor cost payments from the joint venture at agreed upon
rates.  The  ability of the joint  venture  to comply  with the terms of the SGI
Agreement  will  depend on  agreement  by the members  regarding  work plans and
budgets  of the  joint  venture  in  future  years.  We and  Progenics  have not
committed  to fund the Joint  Venture  beyond  December  31,  2005 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. If no agreement is reached with Progenics, we also may
have  commitments for certain wind down costs under third party  agreements with
the joint venture.

     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 2005 through 2012 and $833,000 in 2013.

                                      -27-
<PAGE>


     On May 6, 2005, we entered into a license  agreement  with The Dow Chemical
Company to create a targeted  oncology  product  designed to treat  prostate and
other cancers. The agreement applies proprietary  MeO-DOTA  bifunctional chelant
technology  from  Dowpharma to  radiolabel  our PSMA antibody with a therapeutic
radionuclide.  Under the agreement,  proprietary  chelation technology and other
capabilities,  provided  through  ChelaMedSM  radiopharmaceutical  services from
Dowpharma,  will  be used to  attach  a  therapeutic  radioisotope  to the  7E11
monoclonal  antibody  utilized in our ProstaScint  molecular imaging agent. As a
result of the  agreement,  we are  obligated  to pay a minimal  license  fee and
aggregate  future  milestone  payments of $1.9 million for each licensed product
and royalties  based on sales of related  products,  if any.  Unless  terminated
earlier,  the Dow Agreement terminates at the later of (a) the tenth anniversary
of the  date of first  commercial  sale for  each  licensed  product  or (b) the
expiration of the last to expire valid claim that would be infringed by the sale
of the licensed  product.  We may terminate the license agreement with Dow on 90
days written notice.

     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,
along with the $14 million gross proceeds from the July 2005  financing,  should
be adequate to fund our  operations and  commitments at least into mid-2006.  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.


                                      -28-
<PAGE>


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,  2004,  as amended,
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  revenues  include  product sales by us to our  customers.  Product
sales are  recognized  when the  customer  takes  ownership  of the products and
assumes  risk of  loss,  collection  of the  relevant  receivable  is  probable,
persuasive  evidence  of an  agreement  exists and the sales  price is fixed and
determinable.  Product returns are accepted under limited  circumstances and are
estimated  based upon historical  experience.  We may provide rebates and volume
discounts to our  customers  from time to time.  Such rebates and  discounts are
recorded as a reduction of product sales when earned by the customer.

     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"  ("SAB
104")  replaced  Staff  Accounting  Bulletin No. 101,  "Revenue  Recognition  In
Financial  Statements"  ("SAB  101"),  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  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 the 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.


                                      -29-
<PAGE>


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 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.

RECENT ACCOUNTING PRONOUNCEMENTS

ABNORMAL INVENTORY COSTS

     In  November  2004,  the FASB issued SFAS No.  151,  "Inventory  Costs,  an
amendment of ARB No. 43,  Chapter 4" ("SFAS No. 151"),  to clarify that abnormal
amounts of idle facility expense,  freight,  handling costs, and wasted material
(spoilage)  should be  recognized  as  current  period  charges,  and that fixed
production  overheads  should be  allocated  to  inventory  based on the  normal
capacity of  production  facilities.  This  statement is effective for inventory
costs incurred during fiscal years  beginning after June 15, 2005.  Accordingly,
we will adopt SFAS No. 151 in our fiscal year beginning  January 1, 2006. We are
currently evaluating the impact of adopting this statement.

SHARE-BASED PAYMENT

     In December 2004, the FASB issued SFAS No. 123(R),  "Share-Based  Payment",
which revised SFAS No. 123 and  superseded APB Opinion No. 25,  "Accounting  for
Stock Issued to Employees."  SFAS No. 123(R)  requires that companies  recognize
compensation  expense  associated  with grants of stock options and other equity
instruments to employees in the financial  statements  effective as of the first
interim or annual  reporting  period that begins after June 15,  2005.  In April
2005,  the SEC  announced  the  adoption  of a new rule  allowing  companies  to
implement SFAS No. 123(R) at the beginning of their next fiscal year that begins
after June 15, 2005.  Compensation cost will be measured based on the fair value
of the  instrument  on the grant date and will be  recognized  over the  vesting
period. This pronouncement applies to all grants


                                      -30-
<PAGE>


after  the  effective  date  and  to  the  unvested  portion  of  stock  options
outstanding as of the effective date. SFAS No. 123(R)  eliminates the ability to
account for such  transactions  using the intrinsic method currently used by us.
SFAS No. 123(R) also  requires that  companies  recognize  compensation  expense
associated  with  purchases of shares of common stock by employees at a discount
to market value under employee stock purchase plans that meet certain  criteria.
Accordingly,  we will adopt SFAS No. 123(R) in the fiscal year beginning January
1, 2006.  Although  management has not yet determined the impact of the adoption
of this standard,  it is expected to have a material effect on our  consolidated
financial statements.

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.
Our  exposure  to  market  risk  is   principally   confined  to  interest  rate
sensitivity. Our cash equivalents and short-term investments are conservative in
nature, with a focus on preservation of capital. Due to the short-term nature of
our investments and our investment  policies and procedures,  we have determined
that the risks  associated  with  interest  rate  fluctuations  related to these
financial  instruments are not material to our business. As of June 30, 2005, 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 any fixed interest
rate debt.

ITEM 4 - CONTROLS AND PROCEDURES

(a) 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  of  June  30,  2005.  The  term  "disclosure  controls  and
procedures,"  as defined in Rules  13a-15(e) and 15d-15(e)  under the Securities
Exchange Act of 1934,  means controls and other procedures of a company that are
designed to ensure that  information  required to be disclosed by the Company in
the reports that it files or submits under the  Securities  Exchange Act of 1934
is  recorded,  processed,  summarized  and  reported,  within  the time  periods
specified  in the SEC's  rules and forms.  Disclosure  controls  and  procedures
include,  without  limitation,  controls and procedures  designed to ensure that
information  required to be  disclosed by a company in the reports that it files
or  submits  under  the  Securities  Exchange  Act of  1934 is  accumulated  and
communicated to the company's management,  including its principal executive and
principal financial officers, as appropriate to allow timely decisions regarding
required disclosure.  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,  2005,  our  disclosure  controls  and
procedures were effective.


                                      -31-
<PAGE>


(2) Changes in Internal Control Over Financial Reporting

     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 as of June 30, 2005 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.


                                      -32-
<PAGE>


                           PART II - OTHER INFORMATION

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

     On June 14, 2005, we held our annual meeting of stockholders  to: (i) elect
nine  directors;  (ii) consider and vote upon a proposal to approve an amendment
to the Company's  Certificate of  Incorporation to increase the total authorized
shares  of  common  stock,  $0.01  par value  per  share,  of the  Company  from
25,000,000 to  50,000,000;  and (iii)  transact such other  business as may come
before the meeting.

     There were  represented at the our annual  meeting,  either in person or by
proxy, 14,500,670 shares of our common stock out of a total number of 15,571,688
shares of common  stock  issued  and  outstanding  and  entitled  to vote at the
meeting.

     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.

     (i)  Election of Directors:

<TABLE>
<CAPTION>
                                                                                                      Broker Non-
          Nominees                            For                Withheld        Abstentions             Votes
    ----------------------------        ---------------     ----------------   ---------------     -----------------
      <S>                                  <C>                  <C>                  <C>                  <C>
      John E. Bagalay, Jr.                 12,283,163           2,217,507            N/A                  N/A
      Michael D. Becker                    12,814,980           1,685,690            N/A                  N/A
      Allen Bloom                          12,818,453           1,682,217            N/A                  N/A
      Stephen K. Carter                    12,780,677           1,719,993            N/A                  N/A
      James A. Grigsby                     12,749,748           1,750,922            N/A                  N/A
      Dennis H. Langer                     12,817,960           1,682,710            N/A                  N/A
      Robert F. Hendrickson                12,799,781           1,720,879            N/A                  N/A
      Kevin G. Lokay                       12,818,490           1,682,180            N/A                  N/A
      Joseph A. Mollica                    12,815,962           1,684,708            N/A                  N/A

</TABLE>

     (ii) Proposal to approve  an  amendment  to the  Company's  Certificate  of
          Incorporation:


                                                                    Broker Non-
                  For                Against       Abstentions        Votes
          -------------------   ---------------   -------------   -------------
               11,951,000            916,347        1,633,323           0


                                      -33-
<PAGE>


ITEM 6.  EXHIBITS.

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

             3.1          Certificate of Amendment to the  Restated  Certificate
                          of Incorporation dated June 15, 2005. Filed herewith.

            31.1          Certification of President and Chief Executive Officer
                          pursuant  to   Rule 13a-14(a)  or  15d-14(a)  of   the
                          Securities  Exchange Act of 1934, as  adopted 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 Rule 13a-14(a) or 15d-14
                          (a) of the Securities Exchange Act of 1934, as adopted
                          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,   as  adopted
                          pursuant to  Section 906 of the Sarbanes-Oxley  Act of
                          2002. Filed herewith.

            32.2          Certification  of  Senior  Vice  President  and  Chief
                          Financial Officer pursuant to 18 U.S.C.  Section 1350,
                          as  adopted pursuant  to Section  906 of the Sarbanes-
                          Oxley Act of 2002. Filed herewith.


                                      -34-
<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, 2005             By:/s/ Michael D. Becker
                                    ------------------------------------
                                    Michael D. Becker
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)



Date: August 9, 2005             By:/s/ Christopher P. Schnittker
                                    -------------------------------------
                                    Christopher P. Schnittker
                                    Senior Vice President and
                                      Chief Financial Officer
                                    (Principal Financial and Accounting Officer)



                                      -35-