U.S. SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                           FORM 10-QSB

(Mark One)
[x]  Quarterly report under Section 13 or 15(D) of the
     Securities Exchange Act of 1934

      For the quarterly period ended September 30, 2005

[ ]  Transition report under Section 13 or 15(D) of the
     Exchange Act

 For the transition period from __________ to __________

                 Commission file number 0-15888
                 ______________________________

                   IGENE Biotechnology, Inc.
   ________________________________________________________
   (Exact name of Small Business Issuer as Specified in its
                           Charter)

           Maryland                          52-1230461
 _______________________________        ___________________
 (State or Other Jurisdiction of         (I.R.S. Employer
  Incorporation or organization)        Identification No.)

     9110 Red Branch Road, Columbia, Maryland 21045-2024
     ___________________________________________________

          (Address of Principal Executive Offices)


                       (410) 997-2599
        ________________________________________________
        (Issuer's Telephone Number, Including Area Code)

                            None
      ___________________________________________________
      (Former Name, Former Address and Former Fiscal Year,
                  if Changed Since Last Report)

Check whether the Issuer: (1) filed all reports required to  be
filed  by  Section  13  or 15(D) of the Exchange Act during the
past 12 months (or for such  shorter period that the registrant
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

Yes     [x]          No      [ ]

Indicate  by  check  mark  whether  the  registrant  is a shell
company (as defined in Rule 12b-2 of the Exchange Act).

Yes     [ ]          No      [x]

  APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                DURING THE PRECEEDING FIVE YEARS

Check  whether  the  registrant filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange
Act after the distribution of securities under a plan confirmed
by a court.

Yes     [ ]          No      [ ]

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
106,003,661 shares of common stock, par value $.01, as of
_________________________________________________________
February 1, 2006.
_________________

Transitional Small Business Disclosure Format (check one):

Yes     [ ]          No       [x]



<PAGE>

                           FORM 10-QSB
                    IGENE Biotechnology, Inc.


                              INDEX



PART I    -     FINANCIAL INFORMATION

                                                            Page

     Consolidated Balance Sheets .........................  5-6

     Consolidated Statements of Operations ...............  7

     Consolidated Statements of Stockholders' Deficiency..  8

     Consolidated Statements of Cash Flows ...............  9

     Notes to Consolidated Financial Statements ..........  10-17

     Management's Discussion and Analysis of Financial
     Conditions and Results of Operations ................  18-22

     Controls and Procedures .............................  23


PART II   -     OTHER INFORMATION ........................  24

SIGNATURES ...............................................  25

EXHIBIT INDEX ............................................  26






<PAGE>
















                    IGENE BIOTECHNOLOGY, INC.

           QUARTERLY REPORT UNDER SECTION 13 OR 15(D)

             OF THE SECURITIES EXCHANGE ACT OF 1934




<PAGE>























                             PART I
                      FINANCIAL INFORMATION
<PAGE>
<TABLE>
                              IGENE Biotechnology, Inc.  and Subsidiary
                                    Consolidated Balance Sheets

<CAPTION>
                                                            September 30,    December 31,
                                                                    2005            2004
                                                            _____________   _____________
                                                             (Unaudited)
<S>                                                         <C>             <C>
ASSETS
CURRENT ASSETS

  Cash and cash equivalents                                 $     30,819    $    204,248
  Accounts receivable                                             15,227          79,638
  Prepaid expenses and other current assets                        9,361          10,764
                                                            _____________   _____________

     TOTAL CURRENT ASSETS                                         55,407         294,650

  Property and equipment, net                                    110,468         124,904
  Loans receivable from manufacturing agent                       70,982          70,982
  Investment in and advances to unconsolidated joint venture         ---             ---
  Other assets                                                     5,125           5,125
                                                            _____________   _____________

     TOTAL ASSETS                                           $    241,982    $    495,661
                                                            =============   =============


































The accompanying notes are an integral part of the financial
statements.
</TABLE>

                               -5-
<TABLE>
                            IGENE Biotechnology, Inc. and Subsidiary
                                  Consolidated Balance Sheets
                                         (continued)
<CAPTION>
                                                                September 30,    December 31,
                                                                        2005            2004
                                                                _____________   _____________
                                                                 (Unaudited)
<S>                                                             <C>             <C>
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
  Accounts payable and accrued expenses                         $     94,184    $     78,472
  Convertible debenture                                              705,000         705,000
  Accrued interest                                                    29,375          11,750
                                                                _____________   _____________

     TOTAL CURRENT LIABILITIES                                       828,559         795,222

LONG-TERM LIABILITIES
  Notes payable                                                    5,842,267       5,842,267
  Convertible debentures                                           3,814,212       3,814,212
  Accrued interest                                                 4,700,261       4,148,681

REDEEMABLE PREFERRED STOCK
  Carrying amount of redeemable preferred
     stock, 8% cumulative, convertible,
     voting, series A, $.01 par value per
     share. Stated value was $ 18.88
     and $18.40, respectively.  Authorized
     1,312,500 shares, issued 18,509                                 349,450         340,566
                                                                _____________   _____________

     TOTAL LIABILITIES                                            15,534,749      14,940,948
                                                                _____________   _____________

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
  Common stock --- $.01 par value per share.
     Authorized 750,000,000 shares;
     issued and outstanding 105,003,661
     and 101,732,453 shares, respectively.                         1,050,037       1,017,325
  Additional paid-in capital                                      25,360,926      25,138,748
  Accumulated Deficit                                            (41,703,730)    (40,601,360)
                                                                _____________   _____________

     TOTAL STOCKHOLDERS' DEFICIENCY                              (15,292,767)    (14,445,287)
                                                                _____________   _____________

     TOTAL LIABILITIES AND
     STOCKHOLDERS' DEFICIENCY                                   $    241,982    $    495,661
                                                                =============   =============













The accompanying notes are an integral part of the financial
statements.
</TABLE>

                               -6-
<TABLE>
                                     IGENE Biotechnology, Inc. and Subsidiary
                                       Consolidated Statements of Operations
                                                   (Unaudited)

<CAPTION>
                                                           Three months ended              Nine months ended
                                                      ____________________________    ____________________________
                                                      September 30,  September 30,    September 30,  September 30,
                                                              2005           2004             2005           2004
                                                      _____________  _____________    _____________  _____________
<S>                                                   <C>            <C>              <C>            <C>
EQUITY IN REPAID ADVANCES (LOSS) OF JOINT VENTURE     $     52,886   $    (14,636)    $   (413,184)  $   (216,696)

OPERATING EXPENSES
__________________

  Marketing and selling                                     44,934         45,536          164,098        254,803
  Research, development and pilot plant                    196,072        227,103          579,161        631,035
  General and administrative                               186,104        154,077          621,604        514,905
  Litigation expense                                           ---            ---              ---         40,580
  Operating expenses reimbursed by Joint Venture          (418,657)      (420,519)      (1,357,394)    (1,163,694)
                                                      _____________   ____________     ____________   ____________

          TOTAL OPERATING EXPENSES                           8,453          6,197            7,469        277,629
                                                      _____________   ____________     ____________   ____________

          OPERATING PROFIT (LOSS)                           44,433        (20,833)        (420,653)      (494,325)

GAIN (LOSS) ON DISPOSAL                                      3,006            ---          (46,994)           ---
INTEREST EXPENSE                                          (228,934)      (194,432)        (634,723)      (634,408)
                                                      _____________   ____________     ____________   ____________

          NET LOSS                                    $   (181,495)   $  (215,265)     $(1,102,370)   $(1,128,733)
                                                      =============   ============     ============   ============

BASIC AND DILUTED NET LOSS PER COMMON SHARE           $      (0.00)         (0.00)     $     (0.01)         (0.01)
                                                      =============   ============     ============   ============




































The accompanying notes are an integral part of the financial
statements.
</TABLE>

                               -7-
<TABLE>
                                            IGENE Biotechnology, Inc. and Subsidiary
                                      Consolidated Statements of Stockholders' Deficiency
                                                           (Unaudited)
<CAPTION>


                                                                                 Additional                      Total
                                                            Common Stock          Paid-in      Accumulated    Stockholders'
                                                           (shares/amount)        Capital        Deficit       Deficiency
                                                      ________________________  _____________  _____________  _____________
<S>                                                   <C>          <C>          <C>            <C>            <C>
Balance at January 1, 2004                             92,747,469  $  927,475   $ 22,556,553   $(39,291,395)  $(15,807,367)

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

Shares issued for manufacturing agreement               2,382,907      23,829        266,682            ---        290,511

Shares reissued for ProBio agreement                    1,000,000      10,000        100,000            ---        110,000

Conversion of ProBio debentures                         1,900,000      19,000        171,000            ---        190,000

Shares issued for payment of legal services               250,000       2,500         25,000            ---         27,500

Conversion of Notes Payable                                 5,000          50            325            ---            375

Exercise of employee stock options                        350,000       3,500         16,250            ---         19,750

Net loss for the nine months ended September 30, 2004         ---         ---            ---     (1,128,733)    (1,128,733)
                                                      ============ ===========  =============  =============  =============

Balance at September 30, 2004                          99,024,568  $  990,246   $ 24,939,078   $(40,420,128)  $(14,490,804)

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

Balance at January 1, 2005                            101,732,453  $1,017,325   $ 25,138,748   $(40,601,360)  $(14,445,287)

Shares issued for manufacturing agreement               3,271,208      32,712        222,178            ---        254,890

Net loss for the nine months ended September 30, 2005         ---         ---            ---     (1,102,370)    (1,102,370)
                                                      ============ ===========  =============  =============  =============

Balance at September 30, 2005                         105,003,661  $1,050,037   $ 25,360,926   $(41,703,730)  $(15,292,767)
                                                      ============ ===========  =============  =============  =============































The accompanying notes are an integral part of the financial
statements.
</TABLE>

                               -8-
<TABLE>
                           IGENE Biotechnology, Inc. and Subsidiary
                             Consolidated Statements of Cash Flows
                                         (Unaudited)

<CAPTION>
                                                                         Nine months ended
                                                                 ________________________________
                                                                  September 30,     September 30,
                                                                          2005              2004
                                                                 ______________    ______________
<S>                                                              <C>               <C>
Cash flows from operating activities
  Net loss                                                       $  (1,102,370)    $  (1,128,733)
  Adjustments to reconcile net loss to net cash provided
  by operating activities:
     Depreciation                                                       14,436            14,436
     Issuance of Shares to Fermtech per ProBio agreement                   ---           110,000
     Manufacturing cost paid in shares of common stock                 254,890           290,511
     Issuance of common stock for legal services                           ---            27,500
     Equity in loss of joint venture                                   413,184           216,696
     Increase in preferred stock for cumulative dividend
     classified as interest                                              8,884            40,019
     Loss on receivable form disposal of equipment                      46,994               ---

     Decrease (increase) in:
        Accounts receivable                                             17,418           (42,637)
        Prepaid expenses and other current assets                        1,403            28,148

     Increase (decrease) in:
        Accounts payable and accrued expenses                          584,916           591,641

                                                                 ______________    ______________

  Net cash provided by operating activities                            239,755           107,562
                                                                 ______________    ______________

Cash flows from investing activities
  Advances to joint venture                                           (413,184)         (216,696)
                                                                 ______________    ______________

  Net cash used in investing activities                               (413,184)         (216,696)
                                                                 ______________    ______________

Cash flows from financing activities
  Repayment of borrowing                                                   ---              (125)
  Payment of equipment lease                                               ---            (1,498)
  Proceeds from exercise of employee stock options                         ---            19,750
                                                                 ______________    ______________

  Net cash provided by financing activities                                ---            58,146
                                                                 ______________    ______________

  Net decrease in cash and cash equivalents                           (173,429)          (50,988)

  Cash and cash equivalents at beginning of period                     204,248            63,075
                                                                 ______________    ______________

  Cash and cash equivalents at end of period                     $      30,819     $      12,087
                                                                 ==============    ==============

Supplementary disclosure and cash flow information
__________________________________________________

Cash paid for interest                                           $      21,150     $      24,347
Cash paid for income taxes                                                 ---               ---

See Note (3) for non-cash investing and financing activities.









The accompanying notes are an integral part of the financial
statements.
</TABLE>

                               -9-
            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements

(1)  Unaudited consolidated financial statements

     The  September  30, 2005, consolidated financial  statements
     presented  herein  are  unaudited, and  in  the  opinion  of
     management,  include  all adjustments  (consisting  only  of
     normal recurring accruals) necessary for a fair presentation
     of  financial position, results of operation and cash flows.
     Such  financial  statements  do  not  include  all  of   the
     information  and footnote disclosures normally  included  in
     financial  statements prepared in accordance with accounting
     principles  generally  accepted  in  the  United  States  of
     America.   This  quarterly report on Form 10-QSB  should  be
     read  in conjunction with Igene's Annual Report on Form  10-
     KSB for the year ended December 31, 2004.

(2)  Nature of Operations

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

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

     In  an  effort to develop a dependable source of production,
     on March 19, 2003, Tate & Lyle PLC ("Tate & Lyle") and Igene
     Biotechnology,  Inc.  announced a  50:50  Joint  Venture  to
     produce AstaXin(R) for the aquaculture industry.  Production
     utilizes Tate & Lyle's fermentation capability together with
     the  unique technology developed by Igene. Part  of  Tate  &
     Lyle's  existing  Selby, England, citric acid  facility  has
     been  modified to include the production of 1,500  tons  per
     annum  of  this  product.  Tate & Lyle's investment  of  $25
     million includes the contribution of certain of its facility
     assets currently used in citric acid production.  Commercial
     production has commenced.

(3)  Noncash investing and financing activities

     During  the  nine months ended September 30,  2004,  194,596
     shares  of  redeemable  preferred  stock,  with  a  recorded
     aggregate  value of $1,807,160, were converted into  389,192
     shares  of  common  stock.   This portion  included  the  8%
     Cumulative  Convertible Preferred Stock, Series  B  and  has
     relieved the Company of this amount from long-term debt.

     During the nine months ended September 30, 2004, $190,000 of
     the  $1,000,000 of Convertible Debentures issued as part  of
     the  2001  ProBio purchase, were converted to common  stock.
     These  shares were converted at $.10 per share, for a  total
     of 1,900,000 shares.  These shares were issued and the notes
     cancelled.  This relieved the Company of $190,000  of  long-
     term debt.

     During  the  nine months ended September 30,  2004,  250,000
     shares  were issued to the Company's attorney in  connection
     with  the  settlement of the ADM matter.  These shares  were
     issued  at an estimated value of $.11 per share, aggregating
     $27,500.  These costs were expensed in the second quarter.




                              -10-
            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

     During  the  nine months ended September 30, 2004,  $500  of
     Notes  Payable were converted using 5,000 warrants at  $.075
     per  share.  The notes and warrants were cancelled and 5,000
     shares of common stock were issued.

     During  the  nine months ended September 30,  2004,  350,000
     shares of common stock were issued as part of employee stock
     option exercises.  The Company received $19,750 based on  an
     average exercise price of $.056 per share.

     During  the nine months ended September 30, 2005  and  2004,
     Fermic,  Igene's manufacturing agent, earned  3,271,208  and
     2,382,907 shares, respectively, of common stock as  part  of
     the  manufacturing agreement. Fermic earns 2,250  shares  of
     common  stock for each kilogram of pure Astaxanthin produced
     and  delivered  as part of the manufacturing agreement.  The
     average price is based on the market value of the shares  at
     the  time the product is produced.   Fermic can earn  up  to
     20,000,000   shares  in  total  under  the  contract.    The
     3,271,208  shares were earned at an average price  of  $.076
     per  share for 2005, and 2,382,907 shares were earned at  an
     average   price  of  $.122  per  share  for  2004.   Through
     September 30, 2005, 18,001,222 shares have been earned.  Any
     shares earned by Fermic will be issued on a quarterly basis.
     Igene  relied on Section 4(2) of the Securities Act of 1933,
     as   amended,   to  issue  the  shares  to  Fermic   without
     registration   under  that  act.   Igene   relied   on   the
     representations  and  warranties  of  Fermic  made  in   the
     manufacturing   agreement  in  claiming  the  aforementioned
     exemption.

     During  the nine months ended September 30, 2005  and  2004,
     the  Company recorded dividends in arrears on 8%  redeemable
     preferred  stock  cumulating at $.48 per  share  aggregating
     $8,884  and  $40,019, respectively on preferred stock.   The
     interest is included in the carrying value of the redeemable
     preferred  stock. In accordance with FASB 150, the dividends
     accrued  in the third quarter 2003 and thereafter have  been
     reclassified  to  interest expense.   This  reclassification
     increases interest expense $8,884 and $40,019 for  the  nine
     months  ended  September 30, 2005 and  September  30,  2004,
     respectively.

     In  February,  2003,  Igene sold its  subsidiary  ProBio  to
     Fermtech  AS in exchange for aggregate consideration  valued
     at approximately $343,000, consisting of 7,000,000 shares of
     Igene  common  stock (including 2,000,000 shares  that  were
     placed  into  escrow  and  may be reissued  to  Fermtech  as
     described below), valued for the purposes of the acquisition
     at   $.03  per  share,  plus  forgiveness  of  approximately
     $168,000  of debt that Igene owed to ProBio at the  time  of
     purchase in 2001.  The escrowed 2,000,000 shares were to  be
     earned by Fermtech based upon  Mr.  Benjaminsen's  continued
     employment  with  the  Company.  As Mr. Benjaminsen remained
     employed by Igene  through  2003,  1,000,000 of the escrowed
     shares  of  common  stock were delivered to Fermtech.  These
     shares  were  expensed in  the  second quarter of 2004, as a
     marketing  expense of $110,000.   Mr.  Benjaminsen  remained
     employed  by Igene through  February 2005, and the remaining
     1,000,000 escrowed  shares  will  be  released  from  escrow
     and  delivered  to  Fermtech.   The expenses incurred by the
     Company related to the delivery  of  the  remaining escrowed
     shares  will  be determined by the market value of the stock
     at the time of delivery.

(4)  Amendment to Long - Term Liabilities

     As  of  February 15th 2006, the Company's Notes payable  and
     Convertible debentures (other than the ProBio Debentures  in
     the amount of $705,000) were in the process of being changed
     from  a  maturity date of March 31, 2006 to March 31,  2009.
     Accordingly,  such notes payable and convertible  debentures
     have  been  classified  as  long-term  on  the  accompanying
     Consolidated Balance Sheet.










                              -11-
            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

(5)  Joint Venture

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

     As  a result of the Joint Venture, the production, sales and
     marketing   of   Astaxanthin  now   takes   place   in   the
     unconsolidated Joint Venture.  From inception on  March  18,
     2003  through  September 30, 2005, Igene's  portion  of  the
     Joint  Venture's net loss was $9,695,820.  The  loss  was  a
     result  of  a  50% interest in the following:  Gross  profit
     from  inception  was  a  negative  $9,541,088  on  sales  of
     $15,332,400,   less  manufacturing  cost   of   $24,873,488.
     Selling   and  general  and  administrative  expenses   were
     $8,559,077   and  interest  expense  was  $1,291,475.    The
     resulting  loss  before  tax was $19,391,640.   Igene's  50%
     portion of the Joint Venture loss was $9,695,820.

     Because the Company accounts for its investment in the Joint
     Venture  under  the  equity method of accounting,  it  would
     ordinarily recognize as part of loss from equity the loss of
     it's 50% ownership portion of the loss of the Joint Venture.
     However, losses in the Joint Venture are recognized only  to
     the  extent of the Investment in and Advances to  the  Joint
     Venture.  Losses in excess of this amount are suspended from
     recognition in the financial statements and carried  forward
     to  offset  Igene's  share  of the  Joint  Venture's  future
     income,  if any.  Igene does not expect to recognize  income
     from  the  Joint Venture until all accumulated  unrecognized
     losses have been eliminated.

     At  September  30,  2005, prior to the  recognition  of  its
     portion of the Joint Venture loss, Igene's investment in the
     Joint Venture consisted of its $322,869 and its net advances
     to  the Joint Venture amounted to $1,098,622, for a total of
     $1,421,491.   For  the year ended December 31,  2004,  Igene
     recognized  $1,008,307 of the $4,887,494 loss which  existed
     as part of the Joint Venture in that year.  In the first six
     months of 2005, Igene recognized losses to the extent of the
     increase in the advance $466,070, the June 30, 2005  balance
     of  $1,474,377,  less  the  December  31,  2004  balance  of
     $1,008,307.  For the three months ended September  30  2005,
     Igene will reduce the amount recognized as the amount of the
     advance  for  that  period  was  reduced  by  $52,886   (the
     difference between the reduced September 30, 2005 balance of
     $1,421,491  and  the June 30, 2005 balance  of  $1,474,377).
     The resulting increase in the suspended loss for the quarter
     is  $1,656,386  (the sum of the loss for  the  3rd  Quarter,
     $1,603,500 plus the amount additionally suspended based upon
     the  reduction  of  the  Advances to the  Joint  Venture  of
     $52,886).   The  cumulative suspended loss at September  30,
     2005  is $8,274,329 and it will be carried forward to offset
     Igene's  share of earnings from the Joint Venture,  if  any.
     The  balance  in  the  Advances to and Investment  in  Joint
     Venture  account  on the Company's financial  statements  is
     zero at September 30, 2005.

     The  following condensed statement displays the activity  of
     the  Joint  Venture for the period of initial investment  at
     March  18,  2003 in the Joint Venture through September  30,
     2005.   As shown 50% of the activity is recorded as part  of
     Igene's  Financial  Statements as loss  from  investment  in
     Joint Venture:




                              -12-
            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

<TABLE>
<CAPTION>

                                                                  September 30,
                                                                          2005
                                                                 ______________
                                                                  (Unaudited)
     <S>                                                         <C>
     ASSETS
     CURRENT ASSETS
       Cash                                                      $   9,138,000
       Accounts Receivable                                           2,082,000
       Inventory                                                     2,174,000
                                                                 ______________
                                                                    13,394,000
     OTHER ASSETS
       Fixed Assets Receivable                                      22,889,000
       Intellectual property                                        24,614,000
                                                                 ______________
          TOTAL ASSETS                                           $  60,897,000
                                                                 ==============

     LIABILITIES AND EQUITY

     CURRENT LIABILITIES
       Accounts payable and accrued expenses                     $  15,341,000
       Working capital loan                                         12,934,000
                                                                 ______________
          TOTAL LIABILITIES                                         28,275,000
      Equity                                                        32,622,000
                                                                 ______________
          TOTAL LIABILITIES AND EQUITY                           $  60,897,000
                                                                 ==============

</TABLE>
<TABLE>
<CAPTION>

                                                          Period from March 18, 2003
                                                           (initial investment) to
                                                              September 30, 2005
                                                          __________________________
                                                                  (unaudited)
     <S>                                                         <C>
     Net Sales                                                   $  15,332,400
     Less: manufacturing cost                                      (24,873,488)
                                                                 ______________
     Gross Profit (Loss)                                            (9,541,088)
     Less: selling, general and administrative                      (8,559,077)
                                                                 ______________
     Operating Loss                                                (18,100,165)
     Interest Expense                                               (1,291,475)
                                                                 ______________
     Net Loss                                                    $ (19,391,640)
                                                                 ==============
     Igene's 50% equity interest in the net loss                 $  (9,695,820)
     Igene's Investment in and Advances to the Joint Venture        (1,421,491)
                                                                 ______________
     Igene's suspended loss at September 30, 2005                $  (8,274,329)
                                                                 ==============

</TABLE>

     The  following  statement displays the significant  activity
     for  the Joint Venture for the three and nine months   ended
     September  30,  2005.   As shown, 50%  of  the  activity  is
     recorded  as  part of Igene's Financial Statements  as  loss
     from investment in Joint Venture:











                              -13-
            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

<TABLE>
<CAPTION>

                                                       Three Months          Nine Months
                                                          Ended                 Ended
                                                    September 30, 2005    September 30, 2005
                                                    __________________    __________________
  <S>                                               <C>                   <C>
  Net Sales                                         $       2,815,000     $       8,548,400
  Less: manufacturing cost                                 (4,668,000)          (13,733,488)
                                                    __________________    __________________
  Gross Profit (Loss)                                      (1,853,000)           (5,185,088)
  Less: selling, general and admin                         (1,267,000)           (3,291,077)
                                                    __________________    __________________
  Operating Loss                                           (3,120,000)           (8,476,165)
  Interest Expense                                            (87,000)           (1,140,475)
                                                    __________________    __________________
  Loss before tax                                   $      (3,207,000)    $      (9,616,640)
                                                    ==================    ==================

  50% equity interest Igene                         $      (1,603,500)    $      (4,808,320)
  Igene's (additional)/reduced Investment in
     and Advances to the Joint Venture                         52,886              (413,184)
                                                    __________________    __________________
  Igene's suspended loss for the period             $      (1,656,386)    $      (4,395,136)
                                                    ==================    ==================

</TABLE>

(6)  Guarantee of Joint Venture Debt

     On  June 15th 2005, the Company executed a limited guarantee
     for one of the debt obligations of the Joint Venture.  Under
     the  terms  of  the  limited  guarantee,  the  Company  will
     guarantee   up   to   4,200,000  british   pounds   sterling
     (approximately $7,350,000 at February 10, 2006).

     The Company subsequently entered into an agreement with Tate
     &  Lyle  (the other 50% partner in the Joint Venture)  where
     Tate  &  Lyle  has  agreed to arrange funds  for  the  Joint
     Venture,  without  recourse  to Igene  Biotechnology,  Inc.,
     until  the  Joint  Venture produces a regular  monthly  cash
     flow, as defined, for four consecutive months.

     As  of February 10, 2006, the Joint Venture has not met  the
     cash flow requirements, therefore Igene is not obligated for
     any  funding  to  the Joint Venture or responsible  for  the
     guarantee mentioned above.

(7)  Stockholders' Deficiency

     As  of  September,  2005  37,018 shares  of  authorized  but
     unissued   common  stock  were  reserved  for   issue   upon
     conversion of the Company's outstanding preferred stock.

     As  of  September 30, 2005, 73,954,500 shares of  authorized
     but  unissued  common  stock were  reserved  for  issue  and
     exercise  pursuant  to the Company's Employee  Stock  Option
     Plans.

     As of September 30, 2005 10,000,000 shares of authorized but
     unissued  common  stock were reserved for  distribution  and
     exercise  pursuant  to a stock option  agreement  with  past
     officers of the Company.

     As of September 30, 2005 17,565,970 shares of authorized but
     unissued  common stock were reserved for the  conversion  of
     outstanding  convertible promissory notes in  the  aggregate
     amount of $1,082,500 held by directors of the Company.

     As of September 30, 2005 66,427,651 shares of authorized but
     unissued  common stock were reserved for the  conversion  of
     outstanding  convertible promissory notes in  the  aggregate
     amount of $3,414,212 held by directors of the Company.





                              -14-
            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

     As  of September 30, 2005 7,050,000 shares of authorized but
     unissued  common stock were reserved for the  conversion  of
     outstanding  convertible promissory notes in  the  aggregate
     amount  of  $705,000 and $810,000, respectively,  issued  as
     part of the purchase of ProBio.

     As  of  September 30, 2005 205,261,073 shares of  authorized
     but unissued common stock were reserved for the exercise  of
     outstanding warrants.

     As  of September 30, 2005 1,998,778 shares of authorized but
     unissued  common  stock were reserved for  issuance  to  the
     Company's contract manufacturer pursuant to the terms of the
     current manufacturing contract.

(8)  Basic and diluted net loss per common share

     Basic  and  diluted net loss per common share for the  nine-
     month  periods ended September 30, 2005 and 2004, are  based
     on  102,838,685  and  95,594,321  shares,  respectively,  of
     weighted  average  common  shares  outstanding.   The   same
     figures  for  the three month periods then ended  are  based
     upon  105,107,398  and  98,003,270 weighted  average  common
     shares outstanding.  For purposes of computing net loss  per
     common  share, the amount of net loss has been increased  by
     cumulative  undeclared  dividends in  arrears  on  preferred
     stock  in  the  amount of $8,884 and $40,019  for  the  nine
     months ended September 30, 2005 and 2004, respectively.   No
     adjustment  has  been made for any common stock  equivalents
     outstanding because their effects would be antidilutive.

(9)  Income Taxes

     The  Company  uses  the liability method of  accounting  for
     income  taxes  as required by SFAS No. 109, "Accounting  for
     Income  Taxes".   Under  the liability method,  deferred-tax
     assets  and  liabilities are determined based on differences
     between the financial statement carrying amounts and the tax
     bases  of  existing assets and liabilities (i.e.,  temporary
     differences) and are measured at the enacted rates that will
     be  in  effect  when  these differences  reverse.   Deferred
     income  taxes  will  be recognized when it  is  deemed  more
     likely  than  not that the benefits of such deferred  income
     taxes will be realized; accordingly, all net deferred income
     taxes have been eliminated by a valuation allowance.

(10) Uncertainty

     Igene has incurred net losses in each year of its existence,
     aggregating  approximately  $41,700,000  from  inception  to
     September 30, 2005 and its liabilities exceed its assets  by
     approximately  $15,290,000  at  that  date.   These  factors
     indicate  that  Igene  will  not  be  able  to  continue  in
     existence unless it is able to raise additional capital  and
     attain profitable operations.

     The  continuing  successful marketing  of  Igene's  product,
     AstaXin(R), has permitted  Igene the opportunity to  attract
     additional  capital through it's venture with Tate  &  Lyle.
     Igene began manufacturing and selling AstaXin(R) during 1998
     and  has  continued  to  do so to date  through  it's  Joint
     Venture  with  Tate,  attempting  to   increase  sales   and
     manufacturing levels.  Igene believes this technology to  be
     highly marketable.  Igene hopes to continue increasing sales
     of  AstaXin(R), eventually  achieving  gross  profits   and,
     subsequently,    profitable   operations,    although    the
     achievement of these goals cannot be assured.












                              -15-
            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

(11) Stock Based Compensation

     The  Company accounts for its stock based compensation plans
     under  the  recognition and measurement  principles  of  APB
     opinion  No. 25, "Accounting for Stock Issued to Employees",
     and related interpretations.  No stock option based employee
     compensation cost is reflected in net income, as all options
     granted  under the plan had an exercise price equal  to  the
     market  value of the underlying common stock on the date  of
     grant.   The following table illustrates the effect  on  net
     income and earnings per share if the Company had applied the
     fair   value  recognition  provisions  of  SFAS   No.   123,
     "Accounting  for  Stock-Based Compensation"  and  disclosure
     provisions  of  SFAS  No. 148, "Accounting  for  Stock-Based
     Compensation-Transition  and  Disclosure",  to   stock-based
     employee  compensation for the three and  six  months  ended
     September 30:

<TABLE>
<CAPTION>
                                                     Three months ended            Nine months ended
                                                ____________________________  ____________________________
                                                September 30,  September 30,  September 30,  September 30,
                                                        2005           2004           2005           2004
                                                _____________  _____________  _____________  _____________
     <S>                                        <C>            <C>            <C>            <C>
     Net loss:
       As reported                              $   (181,495)  $   (215,265)  $ (1,102,370)  $ (1,128,733)
     Less pro forma stock-based employee
       compensation expense determined under
       fair value based method net of related
       tax effects                                       ---     (1,317,790)           ---     (1,648,237)
                                                _____________  _____________  _____________  _____________
     Net loss                                   $   (181,495)  $ (1,533,055)  $ (1,102,370)  $ (2,776,970)
                                                =============  =============  =============  =============
     Net loss per Share:
       Basic - as reported                      $      (0.00)  $      (0.00)  $      (0.01)  $      (0.01)
       Basic - pro forma                        $      (0.00)  $      (0.02)  $      (0.03)  $      (0.03)

       Diluted - as reported                    $      (0.00)  $      (0.00)  $      (0.01)  $      (0.01)
       Diluted - pro forma                      $      (0.00)  $      (0.02)  $      (0.03)  $      (0.03)


</TABLE>

(12) Recent Accounting Pronouncements

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

     In  May  2005,  the  FASB issued SFAS No.  154,  "Accounting
     Changes  and  Error Corrections" ("SFAS 154") which  replaces
     APB  Opinion  No. 20 Accounting Changes and   SFAS   No.  3,
     "Reporting   Accounting   Changes   in   Interim   Financial
     Statements-An  Amendment of APB Opinion No. 28."   SFAS  154
     requires   retrospective  application  to   prior   periods'
     financial  statement  of a voluntary  change  in  accounting
     principal unless it is not practical.  SFAS 154 is effective
     for  accounting  changes and corrections of errors  made  in
     fiscal  years  beginning after December  15,  2005,  and  is
     required  to be adopted by the Company in the first  quarter
     of  fiscal  2007.   Although  the Company  will  continually
     evaluate  its  accounting  policies,  management  does   not
     currently  believe adoption will have a material  impact  on
     the Company's results of operations, cash flows or financial
     position.






                              -16-
            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)


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

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

     On  December  16, 2004, the FASB issued FASB  Statement  No.
     123(revised   2004),  Share-Based   Payment,  which   is   a
     revision  of FASB Statement No. 123, Accounting  for  Stock-
     Based  Compensation. Statement 123(R) supersedes APB Opinion
     No. 25, Accounting for Stock Issued to Employees. Generally,
     the  approach in Statement 123(R) is similar to the approach
     described  in  Statement  123.  However,  Statement   123(R)
     requires  all  share-based payments to employees,  including
     grants  of employee stock options, to be  recognized in  the
     income  statement  based on their fair  values.   Pro  forma
     disclosure is no longer an alternative. In April  2005,  the
     SEC  amended the compliance dates for Statement 123(R)  from
     fiscal periods beginning after June 15, 2005 to fiscal years
     beginning after June 15, 2005. The Company expects to  adopt
     Statement  123 (R) in the fiscal year commencing January  1,
     2006.




























                              -17-
            IGENE Biotechnology, Inc. and Subsidiary
             Management's Discussion and Analysis of
          Financial Condition and Results of Operations


CAUTIONARY STATEMENTS FOR PURPOSES OF "SAFE HARBOR PROVISIONS" OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:

EXCEPT  FOR  HISTORICAL  FACTS, ALL  MATTERS  DISCUSSED  IN  THIS
REPORT, WHICH ARE FORWARD LOOKING, INVOLVE A HIGH DEGREE OF  RISK
AND  UNCERTAINTY.  CERTAIN STATEMENTS IN THIS  REPORT  SET  FORTH
MANAGEMENT'S   INTENTIONS,   PLANS,  BELIEFS,   EXPECTATIONS   OR
PREDICTIONS  OF THE FUTURE BASED ON CURRENT FACTS  AND  ANALYSES.
WHEN   WE   USE  THE  WORDS  "BELIEVE,"  "EXPECT,"  "ANTICIPATE,"
"ESTIMATE,"  "INTEND"  OR  SIMILAR  EXPRESSIONS,  WE  INTEND   TO
IDENTIFY FORWARD-LOOKING STATEMENTS.  YOU SHOULD NOT PLACE  UNDUE
RELIANCE ON THESE FORWARD-LOOKING STATEMENTS.  ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THOSE INDICATED IN SUCH STATEMENT, DUE  TO
A  VARIETY OF FACTORS, RISKS AND UNCERTAINTIES.  POTENTIAL  RISKS
AND  UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED  TO,  COMPETITIVE
PRESSURES  FROM OTHER COMPANIES AND WITHIN THE BIOTECH  INDUSTRY,
ECONOMIC  CONDITIONS IN THE COMPANY'S PRIMARY  MARKETS,  EXCHANGE
RATE FLUCTUATIONS, REDUCED PRODUCT DEMAND, INCREASED COMPETITION,
INABILITY   TO  PRODUCE  REQUIRED  CAPACITY,  UNAVAILABILITY   OF
FINANCING,  GOVERNMENT  ACTION,  WEATHER  CONDITIONS  AND   OTHER
UNCERTAINTIES  IDENTIFIED IN THE COMPANY'S FILING WITH  THE  U.S.
SECURITIES AND EXCHANGE COMMISSION.

Overview of Financial Position

     During  the nine-month periods ended September 30, 2005  and
2004,  in addition to the Joint Venture discussed in more  detail
below,  the  following actions affected the  Company's  financial
position.


   -  Increases  in  accounts  payables  and accrued expenses  of
      $584,916  and  decreases  in accounts receivable of $17,418
      were  sources  of  cash.   This was reduced by increases in
      advances to the Joint Venture of $413,184.

   -  The  carrying  value  of  redeemable  preferred  stock  was
      increased by $8,884 in 2005 and $40,019 in 2004, reflecting
      cumulative unpaid dividends on redeemable preferred stock.

   -  During  the  nine  months ended September 30, 2004, 194,596
      shares  of  redeemable  preferred  stock,  with  a recorded
      aggregate  value of $1,807,160, were converted into 389,192
      shares  of  common  stock.   This  portion  included the 8%
      Cumulative Convertible  Preferred Stock, Series B preferred
      securities and has relieved the Company of this amount from
      long-term debt.

   -  During the nine months ended September 30,  2004,  $190,000
      of  the $1,000,000 of Convertible Debentures issued as part
      of  the  2001  ProBio  purchase,  were  converted to common
      stock. These shares were converted at $.10 per share, for a
      total  of  1,900,000  shares.  These shares were issued and
      the notes cancelled, which relieved the Company of $190,000
      of long-term debt.

   -  Proceeds of employee stock options provided $19,750 in cash
      flows in 2004.

During  2005,  the  Joint  Venture began  commercial  production.
Through  the  period this plant has been in the  start-up  phase.
This has resulted in the reported losses for the quarter and year-
to-date  as  equipment is brought on-line and initially  utilized
for production activity.








                              -18-
            IGENE Biotechnology, Inc. and Subsidiary
             Management's Discussion and Analysis of
          Financial Condition and Results of Operations
                           (continued)

      In  December 1988, as part of an overall effort to  contain
costs  and  conserve working capital, Igene suspended payment  of
the quarterly dividend on its preferred stock.  Resumption of the
dividend  will  require significant improvements  in  cash  flow.
Unpaid  dividends cumulate for future payment or addition to  the
liquidation  preference  or redemption  value  of  the  preferred
stock.   As of September 30, 2005, total dividends in arrears  on
Igene's preferred stock total $201,378 ($10.88 per share) and are
included in the carrying value of the redeemable preferred stock.

Critical Accounting Policies
____________________________

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

      The  investment in the Joint Venture is accounted for under
the  equity method whereby the Company's 50% ownership percentage
in  the  Joint Venture's equity is reflected as an asset and  the
changes  in   the  Joint Venture's equity  as  a  result  of  its
operations  is reflected in the Company's consolidated  statement
of  operations subject to certain limitations.  Igene's share  of
losses in the Joint Venture are recognized only to the extent  of
Igene's  consideration paid for it's initial  investment  in  the
Joint  Venture and any net advances Igene has made to  the  Joint
Venture.   Losses  in  excess of this amount are  suspended  from
recognition  in the financial statements and carried  forward  to
offset Igene's share of the Joint Venture future income, if  any.
Income  in the future, if any, will only be recognized  once  all
previously  deferred  losses have been  exhausted.   The  Company
evaluates its investment in the Joint Venture for impairment,  as
it  does  for all other assets.  The accounting policies followed
by the Joint Venture are in conformity with accounting principals
generally accepted in the United States of America.

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

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

     The Joint Venture entered into a lease of real property with
an  affiliate  of Tate & Lyle in Selby, England  upon  which  the
manufacturing facility is being constructed and operated  by  the
Joint Venture.

Results of Operations
_____________________

Sales and other revenue

    As  part  of  the Joint Venture Agreement, all further  sales
are  recognized  through  the Joint  Venture.   Therefore,  Igene
recorded   no   sales   of  AstaXin(R)  during  the  nine  months
ended September 30, 2005 or 2004.  Sales have been limited in the
past   quarters   due  to  insufficient   production    quantity.
Management  anticipates  that  the Joint Venture with Tate & Lyle
will provide a more dependable product flow.   However, there can
be no assurance of  the  dependability  of  production,  or  that
any increases in sales will occur, or that they will be material.








                              -19-
            IGENE Biotechnology, Inc. and Subsidiary
             Management's Discussion and Analysis of
          Financial Condition and Results of Operations
                           (continued)

Cost of sales and gross profit

    As  with  sales  revenue,  future cost  of  sales  and  gross
profits are recognized through the Joint Venture.  Igene reported
no gross profit on sales of AstaXin(R) for the nine months  ended
September 30, 2005 or 2004.  The Company attributes the  fall  in
gross  profit to a combination of pricing pressure in the  market
and  inefficiencies in production.  Management expects the  level
of  gross  profit  to improve in the future as  a  percentage  of
sales.   Management expects the level of gross profit to  improve
through  the Joint Venture, with expected increases in production
efficiency  received  from the Joint Venture  with  Tate  &  Lyle
offsetting pricing competition, but can provide no assurances  of
future  increased production or gross profit.  No cost  of  sales
were  recorded for the nine month period ended September 30, 2005
or 2004.

Marketing and selling expenses

     For  the  quarters ended September 30, 2005 and 2004,  Igene
recorded  marketing and selling expense in the amount of  $44,934
and  $45,536, respectively, a decrease of $602 or  1%.   For  the
nine  months  ended September 30, 2005 and 2004,  Igene  recorded
marketing  and  selling  expense in the amount  of  $164,098  and
$254,803,  respectively,  a decrease  of  $90,705  or  36%.   The
marketing and selling expense increased during the second quarter
of  2004  as a result of recognizing the expense associated  with
the  shares  issued  to  Fermtech.  As Mr.  Benjaminsen  remained
employed by Igene through 2004, 1,000,000 of the escrowed  shares
of  common  stock  were delivered to Fermtech.  A  marketing  and
selling  expense of $110,000 was recognized in the second quarter
as  a  result of the issuance of the shares of common stock.   As
Mr.  Benjaminsen  remained employed by Igene  through  2005,  the
remaining 1,000,000 escrowed shares will be released from  escrow
and delivered to Fermtech.  As a result of this a similar expense
to  2004 will be recorded in the fourth quarter of 2005.    As  a
result  of the Joint Venture with Tate & Lyle, Igene is expecting
an  increase in salable product with a corresponding increase  in
marketing  and  sales costs once the new facility  increases  its
level  of  production.  Additionally, as a result  of  the  Joint
Venture,  these  expenses are reimbursed to  Igene.  However,  no
assurances  can  be made in regards to increased production  from
the new facility nor with regard to the corresponding increase in
marketing and selling costs.

Research, development and pilot plant expenses

     For  the  quarter ended September 30, 2005 and  2004,  Igene
recorded research and development costs in the amount of $196,072
and  $227,103, respectively, a decrease of $31,031 or  14%.   For
the nine months ended September 30, 2005 and 2004, Igene recorded
research  and  development costs in the amount  of  $579,161  and
$631,035, respectively, a decrease of $51,874 or 8%.  These costs
are  expected  to  remain  relatively  constant  in  support   of
increasing  the  efficiency of the manufacturing process  through
experimentation  in the Company's pilot plant, developing  higher
yielding  strains of yeast and making other improvements  in  the
Company's  AstaXin(R) technology.  Igene is hoping this will lead
to  an increase in salable product at a reduced cost to Igene and
the  Joint  Venture.    However no assurances can be made in that
regard.  These  costs  are currently funded through reimbursement
from the Joint Venture.

Operating expenses

     General  and  administrative expenses for the quarter  ended
September   30,  2005  and  2004  were  $186,104   and   $154,077
respectively,  an  increase  of  $32,027  or  21%.   General  and
administrative expenses for the nine months ended  September  30,
2005  and  2004  were  $621,604  and  $514,905  respectively,  an
increase   of   $106,699  or  21%.   Increases  in  general   and
administrative expenses are due mainly to increased audit  costs.
These costs are expected to remain constant.  Igene is working to
keep  overhead  costs  at  a reduced level  and  spend  funds  on
research  and development efforts.  A portion of these costs  are
funded  by  reimbursement  through  the  Joint  Venture  and  the
remainder will need to be funded through profitable operations or
through contributions from directors; though neither of these can
be assured.





                              -20-
            IGENE Biotechnology, Inc. and Subsidiary
             Management's Discussion and Analysis of
          Financial Condition and Results of Operations
                           (continued)

Litigation expenses

    Previously  reported litigation (original lawsuit filed  July
21,  1997,  U.S.  District Court, Baltimore, MD)  between  Archer
Daniels Midland, Inc. ("ADM") and Igene, involving allegations of
patent  infringement and counterclaims concerning  the  theft  of
trade secrets, was resolved on September 29, 2003.  Resolution of
the  dispute  between  ADM  and  Igene  did  not  result  in   an
unfavorable  outcome to Igene.  Igene will continue to  make  and
sell its product, AstaXin(R).   The  Company incurred $40,580 for
the nine months ended September 30, 2004.  During the nine months
ended  September  30, 2004, 250,000 shares  were  issued  to  the
Company's attorney in connection with the settlement of  the  ADM
matter.   These shares were issued at an estimated value of  $.11
per share, aggregating $27,500.  These costs were expensed in the
second  quarter  as  part of the litigation  expense.   With  the
settlement  of  this matter, the related costs  are  expected  to
cease.

Interest expense

     Interest  expense for the quarters ended September 30,  2005
and 2004 was $228,934 and $194,432, respectively, an increase  of
$34,502 or 18%.  For the nine months ended September 30, 2005 and
2004,  interest expense was $634,723 and $634,408,  respectively,
an  increase  of $315 or less than 1%  The interest  expense  was
almost  entirely composed of interest on the Company's long  term
financing from its directors and other stockholders, and interest
on  the  Company's subordinated debenture in both periods.   This
number  may decrease as the interest expense recorded as  related
to  the  preferred  shares decreases as the number  of  preferred
shares outstanding has been reduced.

Loss on disposal

    During the 2005, Igene sold equipment it had determined would
not  be  of use in the new Selby facility and recorded a loss  on
disposal of $46,994.  This is a one time occurrence.

Net loss and basic and diluted net loss per common share

    As a result of the foregoing, the Company reported net losses
of  $181,495  and $215,265, respectively, for the quarters  ended
September 30, 2005 and 2004, a decrease in the loss of $33,770 or
16%.  This represents a loss of $.00 per basic and diluted common
share  in  the quarters ended September 30, 2005 and  2004.   The
weighted average number of shares of common stock outstanding  of
105,107,398 and 98,003,270, for the quarters ended September  30,
2005  and  2004,  respectively, an increase of 7,104,128  shares.
This  resulted  from  the  weighted average  adjustments  of  the
following  transactions: the issuance of 1,050,000 shares  issued
in  conversion  of  debentures, 4,529,093 shares  issued  to  the
manufacturer as part of the agreement, and 400,000 shares  issued
as part of employee stock option exercises.

















                              -21-
            IGENE Biotechnology, Inc. and Subsidiary
             Management's Discussion and Analysis of
          Financial Condition and Results of Operations
                           (continued)


Liquidity and Capital Resources

    Historically,  Igene  has  been funded  primarily  by  equity
contributions  and loans from stockholders.  As of September  30,
2005,  Igene had negative working capital of $773,152,  and  cash
and  cash equivalents of $30,819.  Currently Igene is also funded
by   research  and  development  reimbursements  from  the  Joint
Venture.

    Cash  provided by operating activities during the  nine-month
period ended September 30, 2005 and 2004 amounted to $230,870 and
$107,562, respectively, an increase in cash provided of $123,308.

     Cash  used  by  financing activities during  the  nine-month
period ended September 30, 2005 and 2004 amounted to $413,184 and
$216,696, respectively, an increase in cash used of $196,488.

    Cash   provided  by  financing  activities  was  mainly   for
preferred  stock for cumulative dividends classified as interest.
Cash  provided for the nine-month period ended September 30, 2005
and 2004 was $8,884 and $58,146, respectively, a decrease in cash
provided of $49,262.

    On  June  15th 2005, the Company executed a limited guarantee
for   one   of  the  debt  obligations  of  the  Joint   Venture,
guaranteeing   up  to  4,200,000  British  pounds  sterling   and
subsequently  entered  into an agreement  with  Tate  &  Lyle  to
arrange  funds for the Joint Venture, without recourse  to  Igene
Biotechnology, Inc., until the Joint Venture produces  a  regular
monthly  cash flow, the Joint Venture has not met the  cash  flow
requirements.

    Over  the  next twelve months, Igene believes  it  will  need
additional  working capital. Igene hopes to achieve profits  from
sales of AstaXin(R) through the Joint Venture.  Funding  is  also
expected  to be received from the new venture with Tate  &  Lyle.
However,  there  can be no assurance that projected  profits,  if
any, from sales, or additional funding from the Joint Venture, if
any,   will  be  sufficient  for  Igene  to  fund  its  continued
operations.

     The  Company  does  not  believe  that  inflation  has had a
significant  impact  on  its  operations  during  the  nine-month
periods ended September 30, 2005 and 2004.


























                              -22-
            IGENE Biotechnology, Inc. and Subsidiary
             Management's Discussion and Analysis of
                     Controls and Procedures


As  of the end of the most recently completed fiscal quarter, the
Company's  management, with the participation  of  the  principal
executive  officer and principal financial officer, has evaluated
the  effectiveness  of  the  Company's  disclosure  controls  and
procedures,  and  has  concluded that  the  Company's  disclosure
controls  and procedures are effective 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,  as
amended,   is  accumulated  and  communicated  to  the  Company's
management,   including  its  principal  executive  officer   and
principal  financial  officer, as  appropriate  to  allow  timely
decisions  regarding  required disclosure and  are  effective  to
ensure  that such information is recorded, processed,  summarized
and reported within the time periods specified in the SEC's rules
and forms.

There  were no changes in Igene's internal control over financial
reporting that occurred during the last fiscal quarter  that  has
materially  affected,  or  is  reasonably  likely  to  materially
affect, the Company's internal control over financial reporting.











































                              -23-
                    IGENE Biotechnology, Inc.
                             PART II
                        OTHER INFORMATION

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

Limitation on Payment of Dividends
__________________________________

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

Item 3.  Defaults Upon Senior Securities.

     In  December 1988, as part of an overall effort  to  contain
costs and conserve working capital, the Company suspended payment
of  the quarterly dividend on its preferred stock.  Resumption of
the  dividend will require significant improvements in cash flow.
Unpaid  dividends cumulate for future payment or addition to  the
liquidation  preference  or redemption  value  of  the  preferred
stock.   As of September 30, 2005, total dividends in arrears  on
the  Company's preferred stock total $201,378 ($10.88 per  share)
and  are  included  in  the  carrying  value  of  the  redeemable
preferred stock.

     On   November  30,  2001,  Igene  entered  into  Convertible
Promissory  Notes  (the "Convertible Notes")  with  each  of  the
following  note holders for the respective amounts (a)  NorInnova
AS (formerly Forskningsparken I Tromso AS) for $106,500; (b) Knut
Gjernes for $7,500; (c) Magne Russ Simenson for $378,000; and (d)
Nord  Invest AS for $313,000 (collectively, the "Convertible Note
Holders").  Each of the Convertible Notes has a maturity date  of
November  1, 2004.  On November 18, 2005, each of the Convertible
Note  Holders provided Igene with written notice of default under
each  of  the Convertible Notes.  Igene and the Convertible  Note
Holders are currently in discussions to extend the maturity  date
of  each  of  the  Convertible Notes in return for  reducing  the
conversion  price  and  increasing  the  interest  rate  on  each
Convertible  Note, however it is not certain such amendment  will
be  consummated,  and so long as an event of  default  under  the
Convertible Note continues to exist, the Convertible Note Holders
have  the ability to accelerate the payment of the principal  and
interest due and owing on each of the Convertible Notes.

Item 6.  Exhibits

(a)  Exhibits

     Exhibit 3.1 - Articles of Incorporation of the Registrant as
             amended  to  date,  constituting  Exhibit   3.1   to
             Registration  Statement No. 333-41581 on  Form  SB-2
             are incorporated herein by reference.

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

     Exhibit 31(a) - Certification of Principal Executive Officer
             pursuant to Rule 13a-14(a) or Rule 15(d)-14(a)

     Exhibit 31(b) - Certification of Principal Financial Officer
             pursuant to Rule 13a-14(a) or Rule 15(d)-14(a)

     Exhibit  32(a)  -  Certification of Chief Executive  Officer
             pursuant to 18 U.S.C. SECTION 1350.

     Exhibit  32(b)  -  Certification of Chief Financial  Officer
             pursuant to 18 U.S.C. SECTION 1350.









                              -24-
                           SIGNATURES


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



                                   IGENE Biotechnology, Inc.
                                   ______________________________
                                   (Registrant)




Date   February 15, 2006       By  /s/ STEPHEN F. HIU
                                   ______________________________
                                       STEPHEN F. HIU
                                       President




Date   February 15, 2006       By  /s/ EDWARD J. WEISBERGER
                                   ______________________________
                                       EDWARD J. WEISBERGER
                                       Chief Financial Officer




































                              -25-
                          EXHIBIT INDEX


     Exhibit 3.1 - Articles of Incorporation of the Registrant as
             amended  to  date,  constituting  Exhibit   3.1   to
             Registration  Statement No. 333-41581 on  Form  SB-2
             are incorporated herein by reference.

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

     Exhibit 31(a) - Certification of Principal Executive Officer
             pursuant to Rule 13a-14(a) or Rule 15(d)-14(a)

     Exhibit 31(b) - Certification of Principal Financial Officer
             pursuant to Rule 13a-14(a) or Rule 15(d)-14(a)

     Exhibit  32(a)  -  Certification of Chief Executive  Officer
             pursuant to 18 U.S.C. SECTION 1350.

     Exhibit  32(b)  -  Certification of Chief Financial  Officer
             pursuant to 18 U.S.C. SECTION 1350.












































                              -26-