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**FORM      10-Q**

| (Mark                One) |                                                                                                                                                                         |
|---------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ý                    | QUARTERLY                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF                1934                FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007 |   |
|                      |                                                                                                                                                                         |   |
| o                         | TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 FOR THE TRANSITION PERIOD FROM TO      |   |

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| Delaware                                | 22-2322400                                          |
|-----------------------------------------|-----------------------------------------------------|
| (State                of Incorporation) | (I.R.S.                Employer Identification No.) |

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| Large                Accelerated Filer o | Accelerated                Filer ý | Non-                Accelerated Filer o |
|-----------------------------------------------|----------------------------------------------|----------------------------------------------|

| Class:                Common Stock, $.01 par value | Outstanding                at May 4, 2007: 29,644,484 |
|----------------------------------------------------|-------------------------------------------------------|

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Table          of Contents

CYTOGEN      CORPORATION

|                                                                                                                                                        |  Page  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|
|  PART                  I. FINANCIAL                  INFORMATION                                                                                  |  1          |
|  Item                  1. Consolidated                  Financial Statements (unaudited)                                                          | 1                |
|  Consolidated                  Balance Sheets as of March 31, 2007 and                  December 31, 2006                                         | 2                |
|  Consolidated                  Statements of Operations for the Three Months                  Ended March 31, 2007 and 2006                            | 3                |
|  Consolidated                  Statements of Cash Flows for the Three Months                  Ended March 31, 2007 and 2006                            | 4                |
|  Notes                  to Consolidated Financial                  Statements                                                                          | 5                |
|  Item                  2. Management's                  Discussion and Analysis of Financial Condition and Results of                  Operations | 13               |
|  Item                  3. Quantitative                  and Qualitative Disclosures About Market Risk                                             | 27               |
|  Item                  4. Controls                  and Procedures                                                                                | 27               |
|  PART                  II. OTHER                  INFORMATION                                                                                     | 29               |
|  Item                  1. Legal                  Proceedings                                                                                      | 29               |
|  Item                  1A. Risk                  Factors                                                                                          | 29               |
|  Item                  6. Exhibits                                                                                                                | 41               |
|  SIGNATURES                                                                                                                                            | 42               |

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Table          of Contents

**PART      I****- FINANCIAL INFORMATION**

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

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Table          of Contents

**CYTOGEN****CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEETS**

*(All      amounts in thousands, except share and per share data)*

*(Unaudited*
*)*

|                                                                                                                                                                                                                                  |   | **March                31,****2007** |     | **December                31,****2006** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|----------|-----------------------------------------|--------|
| **ASSETS:**                                                                                                                                                                                                                           |   |                                 |     |                                    |   |   |   |
| Current                assets:                                                                                                                                                                                                        |   |                                 |     |                                    |   |   |   |
| Cash                and cash equivalents                                                                                                                                                                                              |   | $                                    | 25,585   |                                    | $      | 32,507 |   |
| Restricted                cash                                                                                                                                                                                                        |   |                                 | 1,100    |                                    |   | 1,100 |   |
| Accounts                receivable, net                                                                                                                                                                                               |   |                                 | 2,176    |                                    |   | 2,113 |   |
| Inventories                                                                                                                                                                                                                           |   |                                 | 3,889    |                                    |   | 2,538 |   |
| Inventories                at wholesalers                                                                                                                                                                                             |   |                                 | 157      |                                    |   | 93 |   |
| Prepaid                expenses                                                                                                                                                                                                       |   |                                 | 2,623    |                                    |   | 1,571 |   |
| Other                current assets                                                                                                                                                                                                   |   |                                 | 52       |                                    |   | 63 |   |
|                                                                                                                                                                                                                                  |   |                                 |     |                                    |   |   |   |
| Total                current assets                                                                                                                                                                                                   |   |                                 | 35,582   |                                    |   | 39,985 |   |
|                                                                                                                                                                                                                                  |   |                                 |     |                                    |   |   |   |
| Property                and equipment, less accumulated depreciation and amortization of                $1,535                and $1,409 at March 31, 2007 and December 31, 2006,                respectively                    |   |                                 | 780      |                                    |   | 691 |   |
| Product                license fees, less accumulated amortization of $2,889 and $2,577                at March                31, 2007 and December 31, 2006, respectively                                                      |   |                                 | 11,300   |                                    |   | 11,612 |   |
| Other                assets                                                                                                                                                                                                      |   |                                 | 2,096    |                                    |   | 2,065 |   |
|                                                                                                                                                                                                                                  |   |                                 |     |                                    |   |   |   |
|                                                                                                                                                                                                                                  |   | $                                    | 49,758   |                                    | $      | 54,353 |   |
|                                                                                                                                                                                                                                  |   |                                 |     |                                    |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS' EQUITY:**                                                                                                                                                                              |   |                                 |     |                                    |   |   |   |
| Current                liabilities:                                                                                                                                                                                                   |   |                                 |     |                                    |   |   |   |
| Current                portion of long-term liabilities                                                                                                                                                                          |   |                                 | 86       |                                    |   | 64 |   |
| Accounts                payable and accrued liabilities                                                                                                                                                                          |   |                                 | 10,909   |                                    |   | 10,104 |   |
|                                                                                                                                                                                                                                  |   |                                 |     |                                    |   |   |   |
| Total                current liabilities                                                                                                                                                                                         |   |                                 | 10,995   |                                    |   | 10,168 |   |
|                                                                                                                                                                                                                                  |   |                                 |     |                                    |   |   |   |
| Warrant                liabilities                                                                                                                                                                                               |   |                                 | 5,369    |                                    |   | 6,464 |   |
| Other                long-term liabilities                                                                                                                                                                                       |   |                                 | 92       |                                    |   | 59 |   |
| Total                liabilities                                                                                                                                                                                            |   |                                 | 16,456   |                                    |   | 16,691 |   |
|                                                                                                                                                                                                                                  |   |                                 |     |                                    |   |   |   |
| 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, 29,623,985 and                29,605,631 shares issued and outstanding at March 31, 2007 and December                31, 2006, respectively           |   |                                 | 296      |                                    |   | 296 |   |
| Additional                paid-in capital                                                                                                                                                                                        |   |                                 | 465,478  |                                    |   | 465,016 |   |
| Accumulated                other comprehensive income                                                                                                                                                                            |   |                                 | 30       |                                    |   | 20 |   |
| Accumulated                deficit                                                                                                                                                                                               |   |                                 | (432,502 | )                                       |   | (427,670 | ) |
|                                                                                                                                                                                                                                  |   |                                 |     |                                    |   |   |   |
| Total                stockholders' equity                                                                                                                                                                                        |   |                                 | 33,302   |                                    |   | 37,662 |   |
|                                                                                                                                                                                                                                  |   |                                 |     |                                    |   |   |   |
|                                                                                                                                                                                                                                  |   | $                                    | 49,758   |                                    | $      | 54,353 |   |

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Table          of Contents

**CYTOGEN****CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

*(All      amounts in thousands, except per share data)*

*(Unaudited*
*)*

|                                                                         |   |  **Three                Months Ended March 31,** |    |
|------------------------------------------------------------------------------|--------|-------------------------------------------------------|---------|
|                                                                         |   |  **2007**                                        |    |  **2006** |   |
|  **Revenues:**                                                          |   |                                                  |    |   |   |   |   |
| Product                revenue:                                              |   |                                                  |    |   |   |   |   |
| QUADRAMET                                                               |   | $                                                     | 2,350   |   | $ | 2,256 |   |
| PROSTASCINT                                                             |   |                                                  | 2,456   |   |   | 2,184 |   |
| Total                product revenue                                         |   |                                                  | 4,806   |   |   | 4,440 |   |
|                                                                         |   |                                                  |    |   |   |   |   |
| Contract                revenue                                         |   |                                                  | 2       |   |   | 2 |   |
|                                                                         |   |                                                  |    |   |   |   |   |
| Total                revenues                                                |   |                                                  | 4,808   |   |   | 4,442 |   |
|                                                                         |   |                                                  |    |   |   |   |   |
| **Operating                expenses:**                                       |   |                                                  |    |   |   |   |   |
| Cost                of product revenue                                  |   |                                                  | 2,902   |   |   | 2,362 |   |
| General                and administrative                                    |   |                                                  | 2,410   |   |   | 2,363 |   |
| Selling                and marketing                                    |   |                                                  | 8,131   |   |   | 3,874 |   |
| Research                and development                                      |   |                                                  | 1,604   |   |   | 3,036 |   |
| Equity                in loss of joint venture                          |   |                                                  | --      |   |   | 133 |   |
|                                                                         |   |                                                  |    |   |   |   |   |
| Total                operating expenses                                      |   |                                                  | 15,047  |   |   | 11,768 |   |
|                                                                         |   |                                                  |    |   |   |   |   |
| Operating                loss                                                |   |                                                  | (10,239 | ) |   | (7,326 | ) |
|                                                                         |   |                                                  |    |   |   |   |   |
| **Interest                income**                                      |   |                                                  | 376     |   |   | 297 |   |
| **Interest                expense**                                     |   |                                                  | (10     | ) |   | (6 | ) |
| **Advanced                Magnetics Inc. litigation settlement, net**   |   |                                                  | 3,946   |   |   | -- |   |
| **(Increase)                decrease in value of warrant liabilities**  |   |                                                  | 1,095   |   |   | (631 | ) |
|                                                                         |   |                                                  |    |   |   |   |   |
| **Net                loss**                                             |   | $                                                     | (4,832  | ) | $ | (7,666 | ) |
|                                                                         |   |                                                  |    |   |   |   |   |
| **Basic                and diluted net loss per share**                 |   | $                                                     | (0.16   | ) | $ | (0.34 | ) |
|                                                                         |   |                                                  |    |   |   |   |   |
| **Weighted-average                common shares outstanding**           |   |                                                  | 29,606  |   |   | 22,474 |   |
|                                                                         |   |                                                  |    |   |   |   |   |

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**CYTOGEN****CORPORATION AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

*(All      amounts in thousands)*

*(Unaudited*
*)*

|                                                                     |   |  **Three                Months Ended March 31,** |   |
|--------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|
|                                                                     |   |  **2007**                                        |   |  **2006** |   |
|  **CASH                FLOWS FROM OPERATING ACTIVITIES:**           |   |                                                  |   |   |   |   |   |
| Net                loss                                             |   | $                                                     | (4,832 | ) | $ | (7,666 | ) |
| Adjustments                to reconcile net loss to net cash used        |   |                                                  |   |   |   |   |   |
| in                operating activities:                                  |   |                                                  |   |   |   |   |   |
| Depreciation                and amortization                        |   |                                                  | 438    |   |   | 285 |   |
| Increase                (decrease) in value of warrant liabilities  |   |                                                  | (1,095 | ) |   | 631 |   |
| Share-based                compensation expense                     |   |                                                  | 428    |   |   | 462 |   |
| Other                                                               |   |                                                  | (11    | ) |   | 4 |   |
| Changes                in assets and liabilities:                        |   |                                                  |   |   |   |   |   |
| Accounts                receivables                                 |   |                                                  | (57    | ) |   | (210 | ) |
| Inventories                                                         |   |                                                  | (1,351 | ) |   | 1,493 |   |
| Other                assets                                         |   |                                                  | (1,099 | ) |   | 389 |   |
| Accounts                payable and accrued liabilities             |   |                                                  | 792    |   |   | 450 |   |
|                                                                     |   |                                                  |   |   |   |   |   |
| Net                cash used in operating activities                |   |                                                  | (6,787 | ) |   | (4,162 | ) |
|                                                                     |   |                                                  |   |   |   |   |   |
| **CASH                FLOWS FROM INVESTING ACTIVITIES:**                 |   |                                                  |   |   |   |   |   |
| Purchases                of property and equipment                  |   |                                                  | (153   | ) |   | (57 | ) |
|                                                                     |   |                                                  |   |   |   |   |   |
| Net                cash used in investing activities                |   |                                                  | (153   | ) |   | (57 | ) |
|                                                                     |   |                                                  |   |   |   |   |   |
| **CASH                FLOWS FROM FINANCING ACTIVITIES:**                 |   |                                                  |   |   |   |   |   |
| Proceeds                from issuances of common stock              |   |                                                  | 34     |   |   | -- |   |
| Payment                of long-term liabilities                     |   |                                                  | (16    | ) |   | (6 | ) |
|                                                                     |   |                                                  |   |   |   |   |   |
| Net                cash provided by (used in) financing activities  |   |                                                  | 18     |   |   | (6 | ) |
|                                                                     |   |                                                  |   |   |   |   |   |
| Net                decrease in cash and cash equivalents            |   |                                                  | (6,922 | ) |   | (4,225 | ) |
|                                                                     |   |                                                  |   |   |   |   |   |
| Cash                and cash equivalents, beginning of period       |   |                                                  | 32,507 |   |   | 30,337 |   |
|                                                                     |   |                                                  |   |   |   |   |   |
| Cash                and cash equivalents, end of period             |   | $                                                     | 25,585 |   | $ | 26,112 |   |
|                                                                     |   |                                                  |   |   |   |   |   |
| Supplemental                disclosure of non-cash information:          |   |                                                  |   |   |   |   |   |
| Capital                lease of equipment                           |   | $                                                     | 71     |   | $ | 84 |   |
| Unrealized                holding gain on marketable securities     |   | $                                                     | 10     |   | $ | 96 |   |
|                                                                     |   |                                                  |   |   |   |   |   |
| Supplemental                disclosure of cash information:              |   |                                                  |   |   |   |   |   |
| Cash                paid for interest                               |   | $                                                     | 10     |   | $ | 5 |   |

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**CYTOGEN****CORPORATION AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

***(Unaudited)***

**1.**
**THE      COMPANY **

**Background**

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**Basis      of Consolidation**

**Basis      of Presentation**

**Summary      of Significant Accounting Policies**

*Use      of Estimates *

*Cash      and Cash Equivalents *

*Restricted      Cash*

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*Inventories*

|                               |   | **March                31, 2007** |   | **December                31, 2006** |   |
|------------------------------------|--------|-----------------------------------|--------|--------------------------------------|--------|
|  Raw                materials |   | $                                 | 274    |                                 | $      | 325 |   |
| Work-in-process                    |   |                              | 2,903  |                                 |   | 1,296 |   |
| Finished                goods      |   |                              | 712    |                                 |   | 917 |   |
|                               |   | $                                 | 3,889  |                                 | $      | 2,538 |   |

*Net      Loss Per Share*

**Other      Comprehensive Income or Loss**

**Recent      Accounting Pronouncements**

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*Fair      Value Measurement*

*Income      Taxes*

**Reclassification**

**2.      SHARE-BASED COMPENSATION**

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|                                     | **Three                  Months Ended****March                  31, 2007** |   | **Three                  Months Ended****March                  31, 2006** |
|------------------------------------------|----------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|
|                                     |                                                                       |   |                                                                       |
| Expected                  life (years)   | 5.98                                                                       |   | 5.95                                                                       |
| Expected                  volatility     | 83%                                                                        |   | 99%                                                                        |
| Dividend                  yield          | 0%                                                                         |   | 0%                                                                         |
| Risk-free                  interest rate | 4.7%                                                                       |   | 4.6%                                                                       |

**3.      LAUREATE PHARMA, L.P.**

**4.      WARRANT LIABILITY**

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|                                        | **March                  31,****2007** |   | **March                  31,****2006** |
|---------------------------------------------|----------------------------------------|--------|----------------------------------------|
| Dividend                  yield             | 0%                                     |   | 0%                                     |
| Expected                  volatility        | 82%                                    |   | 106%                                   |
| Expected                  life(1)           | 5.3                  years             |   | 9.3                  years             |
| Risk-free                  interest rate    | 4.6%                                   |   | 4.4%                                   |
| Company                  Common Stock Price | $2.09                                  |   | $3.62                                  |
| Outstanding                  warrants       | 4,322,203                              |   | 776,096                                |

|   | (1) | The                      expected life assumptions at March 31, 2007 and 2006 for the                      warrants                      issued in July and August 2005 were 8.3 years and 9.3 years,                      respectively.                      The expected life assumption at March 31, 2007 for the warrants                      issued in                      November 2006 was 4.6                      years. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**5.**
**ONCOLOGY      THERAPEUTICS NETWORK, J.V.**

**6.      INPHARMA AS**

**7.      HOLOPACK VERPACKUNGSTECHNIK GMBH**

**8.      LITIGATION**

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**9.      INCOME TAXES**

*Accounting      for Uncertainty in Income Taxes*
*Accounting      for Income Taxes*

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

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**Overview**

**Significant      Events in 2007**

*Settlement*
*Agreement      with Advanced Magnetics*

*Initiation      of Phase 1 Trial for Radiolabeled Antibody for the Treatment of      Hormone-Refractory Prostate Cancer*

*Introduction      of CAPHOSOL in the United States*

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**Results      of Operations **

**Three      Months Ended March 31, 2007 and 2006 **

**Revenues**

|                            |   |                                                                                         |   |     |   | **Increase/(Decrease)** |   |
|---------------------------------|--------|----------------------------------------------------------------------------------------------|--------|----------|--------|-------------------------|--------|
|                            |   | **2007**                                                                                     |   | **2006** |   |  $                 |   | % |   |
|                            |   | ***(All                amounts in thousands, except percentage                data)* ** |
| QUADRAMET                       |   | $                                                                                            | 2,350  |     | $      | 2,256                   |   | $ | 94 |   |   | 4 | % |
| PROSTASCINT                     |   |                                                                                         | 2,456  |     |   | 2,184                   |   |   | 272 |   |   | 12 | % |
| Contract                revenue |   |                                                                                         | 2      |     |   | 2                       |   |   | -- |   |   | -- | % |
| Total                revenues   |   | $                                                                                            | 4,808  |     | $      | 4,442                   |   | $ | 366 |   |   | 8 | % |

***QUADRAMET.***

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***PROSTASCINT.***

**Operating      Expenses**

|                                             |   |                                                                                       |        |     |   | **Increase/(Decrease)** |   |
|--------------------------------------------------|--------|--------------------------------------------------------------------------------------------|-------------|----------|--------|-------------------------|--------|
|                                             |   | **2007**                                                                                   |        | **2006** |   | $                       |   | % |   |
|                                             |   | ***(All                  amounts in thousands, except percentage                  data)*** |        |
| Cost                  of product revenue         |   | $                                                                                          | 2,902       |     | $      | 2,362                   |   | $ | 540 |   |   | 23 | % |
| General                and administrative        |   |                                                                                       |  2,410 |     |   | 2,363                   |   |   | 47 |   |   | 2 | %  |
| Selling and                  marketing      |   |                                                                                       | 8,131       |     |   | 3,874                   |   |   | 4,257 |   |   | 110 | % |
| Research                  and development        |   |                                                                                       | 1,604       |     |   | 3,036                   |   |   | (1,432 | ) |   | (47 | )% |
| Equity                  in loss of joint venture |   |                                                                                       | --          |     |   | 133                     |   |   | (133 | ) |   | (100 | )% |
|                                             |   | $                                                                                          | 15,047      |     | $      | 11,768                  |   | $ | 3,279 |   |   | 28 | % |

***Cost      of Product Revenue.***

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***Selling,      General and Administrative.***

***Research      and Development.***

***Equity      in Loss of Joint Venture.***

***Interest      Income/Expense.***

***Decrease/Increase      in Warrant Liability.***

***Net      Loss.***
** **
** **

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**COMMITMENTS**

|                                           |   | **Less****Than****1                Year**       |   |  **1                to 3****Years** |   |  **4                to 5****Years** |   | **More                Than****5                Years** |     |   **Total** |   |
|------------------------------------------------|--------|-------------------------------------------------|--------|------------------------------------------|--------|------------------------------------------|--------|--------------------------------------------------------|----------|-----------------------|--------|
|                                           |   | ***(All                amounts in thousands)*** |   |
| Capital                lease obligations       |   | $                                               | 86     |                                     | $      | 92                                       |   | $                                                 | --       |                  | $      | -- |   | $ | 178 |   |
| Facility                leases                 |   |                                            | 338    |                                     |   | 536                                      |   |                                                   |  -- |                       |   | -- |   |   | 874 |   |
| Research                and development        |   |                                            | 95     |                                     |   | 150                                      |   |                                                   | 150      |                  |   | 463 |   |   | 858 |   |
| Marketing                and other obligations |   |                                            | 3,057  |                                     |   | --                                       |   |                                                   | --       |                  |   | -- |   |   | 3,057 |   |
| Manufacturing                contracts(1)      |   |                                            | 5,237  |                                     |   | 4,859                                    |   |                                                   | --       |                  |   | -- |   |   | 10,096 |   |
| Minimum                royalty payments(2)     |   |                                            | 1,208  |                                     |   | 2,416                                    |   |                                                   | 2,416    |                  |   | 2,883 |   |   | 8,923 |   |
|                                           |   |                                            |   |                                     |   |                                     |   |                                                   |     |                  |   |   |   |   |   |   |
| Total                                          |   | $                                               | 10,021 |                                     | $      | 8,053                                    |   | $                                                      | 2,566    |                  | $      | 3,346 |   | $ | 23,986 |   |

|   | (1) | Effective                January 1, 2004, we entered into a manufacturing and supply agreement                with                Bristol-Myers Squibb Medical Imaging, Inc. (“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 $4.9 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 March 31, 2009. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | 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 2007 through 2012 and $833,000 in                2013. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Liquidity      and Capital Resources**

**Condensed      Statement of Cash Flows:**

|                                                                                                    |   | **Three                Months Ended****March                31, 2007** |   |
|---------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------|--------|
|                                                                                                    |   | ***(All                amounts in thousands)***                        |   |
|  Net                loss                                                                           |   | $                                                                      | (4,832 | ) |
| Adjustments                to reconcile net loss to net cash used inoperating                activities |   |                                                                   | (1,955 | ) |
| Net                cash used in operating activities                                                    |   |                                                                   | (6,787 | ) |
| Net                cash used in investing activities                                                    |   |                                                                   | (153   | ) |
| Net                cash provided by financing activities                                                |   |                                                                   | 18     |   |
| Net                decrease in cash and cash equivalents                                                |   | $                                                                      | (6,922 | ) |

**Overview**

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**Other      Liquidity Events**

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**CRITICAL      ACCOUNTING POLICIES AND ESTIMATES**

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**Revenue      Recognition**

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** **

**Accounts      Receivable**

**Inventories**

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**Carrying      Value of Fixed and Intangible Assets**

**Warrant      Liability**

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**Share-Based      Compensation**

**Recent      Accounting Pronouncements**

*Fair      Value Measurement*

*Income      Taxes*

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

**Item      4****.** **Controls      and Procedures**

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**PART      II****- OTHER INFORMATION**

**Item 1.        ****Legal      Proceedings**

**Item      1A.   ****Risk      Factors**

*We      have a history of operating losses and an accumulated deficit and expect to      incur losses in the future. *

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|   | · | undergoing                  steps to realign and implement our focus as a product-driven                  biopharmaceutical company. |
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|   | · | establishing                    and maintaining our in-house specialty sales force;                    and |
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|   | · | enhancing                  our marketed product portfolio through marketing alliances and                  strategic                  arrangements. |
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*We      depend on sales of QUADRAMET and PROSTASCINT for substantially all of our      near-term revenues. *

*We      will depend on market acceptance of SOLTAMOX and CAPHOSOL for future      revenues.*

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*A      small number of customers account for the majority of our sales, and the loss      of      one of them, or changes in their*
* *
*purchasing      patterns, could result in reduced sales, thereby adversely affecting our      operating results.*

*There      are risks associated with the manufacture and supply of our products.*

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*We      rely heavily on our collaborative partners. *

|   | · | a                  license agreement with The Dow Chemical Company relating to the                  QUADRAMET                  technology; |
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|   | · | a                  manufacturing and supply agreement for the manufacture of QUADRAMET                  with                  BMSMI; |
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|   | · | a                  manufacturing agreement for the manufacture of PROSTASCINT with                  Laureate                  Pharma, L.P.; |
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|   | · | a                  distribution services agreement with Cardinal Health 105, Inc.                  (formerly                  CORD Logistics, Inc.) for                  PROSTASCINT; |
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|   | · | a                  license agreement with The Dow Chemical Company relating to Dow's                  proprietary MeO-DOTA bifunctional chelant technology for use with                  our                  CYT-500 program; |
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|   | · | a                  distribution agreement and a manufacture and supply agreement with                  Rosemont Pharmaceuticals Limited related to the supply and marketing                  of                  SOLTAMOX; |
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|   | · | a                  purchase and supply agreement with OTN for the distribution of                  SOLTAMOX                  and CAPHOSOL; |
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|   | · | a                  license agreement with InPharma AS for the marketing of CAPHOSOL;                  and |
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|   | · | a                  manufacturing agreement with Holopack for the manufacturing and                  supply of                  CAPHOSOL. |
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*Certain      of our products are in the early stages of development and commercialization      and      we may never achieve the revenue goals set forth in our business plan.*

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|   | · | to                  obtain sufficient capital to support the expenses of developing                  our                  technology and commercializing our                  products; |
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|   | · | to                  ensure that our products are safe and                  effective; |
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|   | · | to                  obtain regulatory approval for the use and sale of our                  products; |
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|   | · | to                  manufacture our products in sufficient quantities and at a reasonable                  cost; |
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|   | · | to                  develop a sufficient market for our products;                  and |
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|   | · | to                  attract and retain qualified management, sales, technical and scientific                  staff. |
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*We      depend on attracting and retaining key personnel. *

*Failure      of third party payors to provide adequate coverage and reimbursement for our      products could limit market acceptance and affect pricing of our products and      affect our revenues. *

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*We      will need to raise additional capital which may not be available or only      available on less favorable terms. *

|   | · | success                  of our product commercialization                  efforts; |
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|   | · | success                  of any future acquisitions of complementary products and technologies                  we                  may make; |
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|   | · | magnitude,                  scope and results of our product development and research and development                  efforts; |
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|   | · | progress                  of preclinical studies and clinical                  trials; |
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|   | · | progress                  toward regulatory approval for our                  products; |
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|   | · | costs                  of filing, prosecuting, defending and enforcing patent claims and                  other                  intellectual property rights; |
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|   | · | competing                  technological and market developments;                  and |
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|   | · | expansion                  of strategic alliances for the sale, marketing and distribution                  of our                  products. |
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*Our      capital raising efforts may dilute stockholder interests. *

*We      have limited sales, marketing and distribution capabilities for our products.      *

*We      may need to raise funds other than through the issuance of equity securities.      *

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*A      significant portion of our total outstanding shares of common stock may be      sold      in the market in the near future, which could cause the market price of our      common stock to drop significantly.*

*Our      common stock has a limited trading market, which could limit your ability to      resell your shares of common stock at or above your purchase      price.*

*Our      common stock may be subject to the "penny stock" regulations which may affect      the ability of our stockholders to sell their shares.*

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*The      liquidity of our common stock could be adversely affected if we are delisted      from the NASDAQ Global Market.*

*Our      stock price has been and may continue to be volatile, and your investment in      our      stock could decline in value or fluctuate significantly. *

|   | Ÿ | results                of clinical trials; |
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|   | Ÿ | technological                innovations or new commercial                products; |
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|   | Ÿ | changes                in governmental regulation or the status of our regulatory approvals                or                applications; |
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|   | Ÿ | changes                in earnings; |
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|   | Ÿ | changes                in health care policies and                practices; |
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|   | Ÿ | developments                or disputes concerning proprietary                rights; |
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|   | Ÿ | litigation                or public concern as to safety of the our potential products;                and |
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|   | Ÿ | changes                in general market conditions. |
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**Item      6.**  **Exhibits.**

| Exhibit                No. | Description                                                                                                                                                                                                                                                                                                                                                  |
|----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.1                  | Settlement                and Release Agreement dated February 15, 2007 between the Company                and                Advanced Magnetics, Inc. Filed as an exhibit to the Company's Annual                Report on Form 10-K, filed with the Commission on March 16, 2007,                and                incorporated herein by reference.      |
| 10.2                  | Contract                Manufacturing Agreement dated as of January 8, 2007 between the Company                and Holopack Verpackungstechnik GmbH*. Filed as an exhibit to the                Company's Annual Report on Form 10-K, filed with the Commission on                March                16, 2007, and incorporated herein by reference.       |
| 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, Finance 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. Furnished herewith.                                                                                                            |
| 32.2                  | Certification                of Senior Vice President, Finance 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. Furnished                herewith.                                                                             |

| * | The                Company has submitted an application for confidential treatment with                the                Securities and Exchange Commission with respect to certain provisions                contained in this exhibit. The copy filed as an exhibit omits the                information subject to the confidentiality                application. |
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**SIGNATURES**

| Date:                May 10, 2007 | CYTOGEN                CORPORATION |
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|                              |                               |   |
|                              | By:                                | /s/ MICHAEL                D. BECKER |
|                              |                               | Michael                D. Becker, |
|                              |                               | President                and Chief Executive Officer |

| Date:                May 10, 2007 | CYTOGEN                CORPORATION |
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|                              |                               |   |
|                              | By:                                | /s/ KEVIN                J. BRATTON |
|                              |                               | Kevin                J. Bratton |
|                              |                               | Senior                Vice President, Finance, andChief                Financial Officer(Principal                Financial and Accounting Officer) |

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