UNITED STATES
                 SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549
                              FORM 10-Q

(Mark One)

[ x ]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

          For the quarterly period ended September 30, 2008
                                         __________________


[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
EXCHANGE ACT

    For the transition period from __________ to __________


                  Commission file number 000-15888
                                         _________

                      IGENE Biotechnology, Inc.
        ______________________________________________________
        (Exact name of registrant 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
        _____________________________________________________
        (Registrant's telephone number, including area code)

                                None
        _____________________________________________________
        (Former name, former address and former fiscal year,
                    if changed since last report)

Indicate  by check mark whether the registrant (1) has filed  all
reports  required  to be filed by Section  13  or  15(d)  of  the
Securities  Exchange Act of 1934 during the preceding  12  months
(or  for such shorter period that the registrant was required  to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.

Yes      [X]          No      [ ]

Indicate  by  check  mark  whether  the  registrant  is  a  large
accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company.   See  the  definitions of "large
accelerated filer,"  "accelerated filer"  and  "smaller reporting
company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer  [ ]     Accelerated filer            [ ]
Non-accelerated filer    [ ]     Smaller reporting company    [X]


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

Yes      [ ]          No      [X]


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

There  were  110,337,072  shares of common stock, par value $.01,
_________________________________________________________________
issued and outstanding as of November 3, 2008.
_____________________________________________

<PAGE>
<TABLE>
<CAPTION>
                              FORM 10-Q
                      IGENE Biotechnology, Inc.


                                INDEX



PART I      -    FINANCIAL INFORMATION

 <S>                                                                    <C>
                                                                        Page

 Consolidated Balance Sheets .......................................... 5

 Consolidated Statements of Operations (Unaudited)..................... 6

 Consolidated Statement of Stockholders' Deficiency (Unaudited)........ 7

 Consolidated Statements of Cash Flows (Unaudited) .................... 8

 Notes to Consolidated Financial Statements (Unaudited) ............... 9-13

 Management's Discussion and Analysis of Financial
 Conditions and Results of Operations ................................. 14-18

 Controls and Procedures .............................................. 19


PART II     -     OTHER INFORMATION ................................... 20-21

SIGNATURES ............................................................ 22

EXHIBIT INDEX ......................................................... 23

</TABLE>

<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>
<CAPTION>
Item 1.   Financial Statements

                                     IGENE Biotechnology, Inc. and Subsidiary
                                           Consolidated Balance Sheets

                                                                             September 30,      December 31,
                                                                                     2008              2007
                                                                             _____________     _____________
                                                                              (Unaudited)
<S>                                                                          <C>               <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents                                                  $  1,151,096      $  1,026,350
  Accounts receivable                                                           1,383,817         2,718,884
  Inventory                                                                     3,728,527         8,059,777
  Prepaid expenses and other current assets                                        23,283            38,351
                                                                             _____________     _____________
     TOTAL CURRENT ASSETS                                                       6,286,723        11,843,362

  Property and equipment, net                                                     951,161           713,493
  5 year non-compete (net of amortization of $23,097 and $0, respectively)        130,881           153,977
  Customer contracts (net of amortization of $175,243 and $0, respectively)        58,415           233,658
  Intellectual property                                                           149,670           149,670
  Other assets                                                                      5,125             5,125
                                                                             _____________     _____________
     TOTAL ASSETS                                                            $  7,581,975      $ 13,099,285
                                                                             =============     =============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
  Accounts payable and accrued expenses                                      $  3,324,806      $  7,902,625
                                                                             _____________     _____________
     TOTAL CURRENT LIABILITIES                                                  3,324,806         7,902,625

LONG-TERM DEBT
  Notes payable (net of unamortized discount of
    $428,148 and $1,198,818, respectively)                                      5,414,119         4,643,449
  Convertible debentures (net of unamortized discount of
    $1,047,133 and $1,331,548, respectively)                                    3,529,079         3,244,664
  Contingent liability on joint venture separation                              5,000,000         5,000,000
  Accrued interest                                                              7,036,375         6,442,076

REDEEMABLE PREFERRED STOCK
  Carrying amount of redeemable preferred stock, 8% cumulative,
  convertible, voting, series A, $.01 par value per share. Stated
  value $20.80 and $20.32, respectively.  Authorized 1,312,500 shares;
  issued and outstanding 11,134 shares.                                           231,593           226,243
                                                                             _____________     _____________
     TOTAL LIABILITIES                                                         24,535,972        27,459,057
                                                                             _____________     _____________
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
  Common stock --- $.01 par value per share. Authorized 750,000,000
  shares; issued and outstanding 110,337,072 shares.                            1,103,371         1,103,371
  Additional paid-in capital                                                   33,276,687        33,276,687
  Accumulated deficit                                                         (51,364,171)      (48,739,830)
  Other comprehensive income                                                       30,116               ---
                                                                             _____________     _____________
     TOTAL STOCKHOLDERS' DEFICIENCY                                           (16,953,997)      (14,359,772)
                                                                             _____________     _____________
     TOTAL LIABILITIES AND STOCKHOLDERS'
     DEFICIENCY                                                              $  7,581,975      $ 13,099,285
                                                                             =============     =============
</TABLE>
The accompanying notes are an integral part of the financial
statements.

                              -5-
<TABLE>
<CAPTION>
                                       IGENE Biotechnology, Inc. and Subsidiary
                                         Consolidated Statements of Operations
                                                      (Unaudited)


                                                                       Three months ended             Nine months ended
                                                                  _____________________________  _____________________________
                                                                   September 30,  September 30,   September 30,  September 30,
                                                                           2008           2007            2008           2007
                                                                  ______________ ______________  ______________ ______________
<S>                                                               <C>            <C>             <C>            <C>
REVENUE
_______
  Sales                                                           $   1,734,366  $         ---   $   6,262,035  $         ---
  Cost of sales                                                       1,232,388            ---       4,829,894            ---
                                                                  ______________ ______________  ______________ ______________
GROSS PROFIT                                                            501,978            ---       1,432,141            ---

EQUITY IN REPAID ADVANCES
  (LOSS) OF JOINT VENTURE                                                   ---        (97,404)            ---        161,224
                                                                  ______________ ______________  ______________ ______________
OPERATING EXPENSES
__________________
  Marketing and selling                                                 179,204          9,891         641,199         49,216
  Research and development                                              402,774        223,774       1,192,312        721,060
  General and administrative                                            165,443        188,537         570,238        666,599
  Operating expenses reimbursed by Joint Venture                            ---       (476,167)            ---     (1,436,653)
                                                                  ______________ ______________  ______________ ______________

          TOTAL OPERATING EXPENSES                                      747,421        (53,965)      2,403,749            222
                                                                  ______________ ______________  ______________ ______________

          OPERATING PROFIT (LOSS)                                      (245,443)       (43,439)       (971,608)       161,002

GAIN ON DISPOSAL OF PROPERTY AND EQUIPMENT                                  ---          5,692             ---          5,692

OTHER INCOME                                                                ---          6,160           2,040         13,697

INTEREST EXPENSE (including amortization of debt discount
 of $351,695 for the three months ended September 30, 2008
 and 2007, and $1,055,085 for the nine months
 ended September 30, 2008 and 2007)                                    (553,024)      (552,995)     (1,654,773)    (1,658,111)
                                                                  ______________ ______________  ______________ ______________

     NET LOSS                                                     $    (798,467) $    (584,582)  $  (2,624,341) $  (1,477,720)
                                                                  ______________ ______________  ______________ ______________

Other comprehensive income (loss)
  Foreign exchange translation                                          (17,860)           ---          30,116            ---


     TOTAL COMPREHENSIVE LOSS                                     $    (816,327) $    (584,582)  $  (2,594,225) $  (1,477,720)
                                                                  ============== ==============  ============== ==============

BASIC AND DILUTED NET LOSS PER COMMON SHARE                       $       (0.01) $       (0.01)  $       (0.02) $       (0.01)
                                                                  ============== ==============  ============== ==============

WEIGHTED AVERAGE SHARES OUTSTANDING                                 110,337,072     109,337,072    110,337,072    109,337,072
                                                                  ============== ==============  ============== ==============

</TABLE>

The accompanying notes are an integral part of the financial
statements.

                               -6-
<TABLE>
<CAPTION>
                                                IGENE Biotechnology, Inc. and Subsidiary
                                           Consolidated Statement of Stockholders' Deficiency
                                                               (Unaudited)


                                                                  Additional                    Other          Total
                                            Common Stock          Paid-in        Accumulated    Comprehensive  Stockholders'
                                           (shares/amount)        Capital        Deficit        Income         Deficiency
                                    ____________________________  _____________  _____________  _____________  _____________
<S>                                 <C>            <C>            <C>            <C>            <C>            <C>
Balance at January 1, 2008           110,337,072   $  1,103,371   $ 33,276,687   $(48,739,830)  $        ---   $(14,359,772)

Gain due to currency translation             ---            ---            ---            ---         30,116         30,116

Net loss for the nine months ended
  September 30, 2008                         ---            ---            ---     (2,624,341)           ---     (2,624,341)
                                    _____________  _____________  _____________  _____________  _____________  _____________

Balance at Septemer 30, 2008         110,337,072   $  1,103,371   $ 33,276,687   $(51,364,171)  $     30,116   $(16,953,997)
                                    =============  =============  =============  =============  =============  =============

</TABLE>


The accompanying notes are an integral part of the financial
statements.

                               -7-

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


                                                                                   Nine months ended
                                                                            ______________________________
                                                                             September 30,   September 30,
                                                                                     2008            2007
                                                                            ______________  ______________
<S>                                                                         <C>             <C>
Cash flows from operating activities
  Net loss                                                                  $  (2,624,341)  $  (1,477,720)
  Adjustments to reconcile net loss to net cash provided by
  (used in) operating activities:
     Amortization of debt discount                                              1,055,085       1,055,085
     Gain on disposal of equipment                                                    ---          (5,692)
     Depreciation                                                                  13,308          14,020
     Increase in preferred stock for cumulative dividends
        classified as interest                                                      5,350           5,344
     Amortization of customer contracts and non-compete                           198,340             ---
     Recoupment of payment of joint venture                                           ---        (161,224)

     Decrease in:
        Accounts receivable                                                     1,335,067             ---
        Inventory                                                               4,331,249             ---
        Prepaid expenses and other current assets                                  15,068           6,596

     Increase (decrease) in:
        Accounts payable and accrued expenses                                  (3,983,520)        459,411
                                                                            ______________  ______________
  Net cash provided by (used in) operating activities                             345,606        (104,180)
                                                                            ______________  ______________
Cash flows from investing activities
  Purchase of equipment                                                          (250,976)            ---
  Cash proceeds from sale of property and equipment                                   ---          20,000
  Recoupment of payment to joint venture                                              ---         161,224
                                                                            ______________  ______________
  Net cash provided by (used in) financing activities                            (250,976)        181,224
                                                                            ______________  ______________

Cash flows from financing activities
  Proceeds from issuance of convertible debenture                                     ---         762,000
  Repayment of convertible debenture                                                  ---        (705,000)
                                                                            ______________  ______________
  Net cash provided by financing activities                                           ---          57,000
                                                                            ______________  ______________
Gain due to currency translation                                                   30,116             ---

Net increase in cash and cash equivalents                                         124,746         134,044

  Cash and cash equivalents at beginning of period                              1,026,350          21,786
                                                                            ______________  ______________
  Cash and cash equivalents at end of period                                $   1,151,096   $     155,830
                                                                            ==============  ==============
Supplementary disclosure and cash flow information
__________________________________________________

Cash paid for interest                                                      $        ---    $      57,637
Cash paid for income taxes                                                           ---              ---

See Note (4) for non-cash investing and financing activities.

</TABLE>

The accompanying notes are an integral part of the financial
statements.

                               -8-

            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (Unaudited)

(1)  Unaudited Consolidated Financial Statements

     The  September  30, 2008, 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 operations 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-Q should be  read
     in  conjunction  with the Annual Report on Form  10-KSB  for
     IGENE Biotechnology, Inc. ("Igene" or the "Company") for the
     year  ended  December  31, 2007.   The  December  31,  2007,
     consolidated  balance  sheet is  derived  from  the  audited
     balance sheet included therein.

(2)  Nature of Operations

     Igene  was incorporated in the State of Maryland on  October
     27,   1981,  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  a source of pigment for  coloring  farmed
     salmon   species.   Igene  is  also  venturing   to   supply
     astaxanthin as a nutraceutical ingredient.  Igene is focused
     on  research  and  development in the areas of  fermentation
     technology,  nutrition  and  health  and  the  marketing  of
     products and applications worldwide.  Igene is the developer
     of AstaXin(R),  a  natural  astaxanthin  product  made  from
     yeast,  which  is  used  as a source of pigment for coloring
     farmed salmonids.

     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 2000, Igene formed a wholly-owned subsidiary, Igene Chile
     Comercial, Ltda., in Chile.  The subsidiary has a sales  and
     customer  service  office  in Puerto  Varas,  Chile,  and  a
     product warehouse in Puerto Montt, Chile.

     In  an  effort to develop a dependable source of production,
     on  March  19,  2003,  Tate & Lyle PLC  ("Tate")  and  Igene
     announced  a  50:50  joint venture to produce AstaXin(R) for
     the aquaculture industry, which we refer to  as  the  "Joint
     Venture."     Production   utilized   Tate's    fermentation
     capability together with the unique technology developed  by
     Igene.  Part of Tate's existing citric acid facility located
     in Selby, England, was modified to include the production of
     this    product.    Tate's   investment   of   approximately
     $24,600,000  included  certain of its facility  assets  that
     were  used  in citric acid production.  Igene's contribution
     to  the  Joint Venture, including its intellectual  property
     and  its  subsidiary in Chile, was valued by the parties  as
     approximately equal to Tate's contribution.  For  accounting
     purposes,  Igene's  accounting contribution  was  valued  at
     zero.

     On  October  31,  2007,  Igene  and  Tate  entered  into   a
     Separation  Agreement pursuant to which  the  Joint  Venture
     Agreement   was  terminated.   As  part  of  the  Separation
     Agreement, Igene sold to Tate its 50% interest in the  Joint
     Venture and the Joint Venture sold to Igene its intellectual
     property,  inventory and certain assets  and  lab  equipment
     utilized by the Joint Venture, as well as Igene's subsidiary
     in Chile.   The purchase price paid by Tate to Igene for its
     50%  interest  in  the Joint Venture was 50%  of  the  Joint
     Venture's net working capital.  The purchase price  paid  by
     Igene  for the inventory was an amount equal to 50%  of  the
     Joint  Venture's  net  working capital,  the  assumption  of
     various  liabilities  and the current market  price  of  the
     inventory,  less  specified  amounts.   In  addition,  Igene
     agreed to pay to Tate an amount equal to 5% of Igene's gross
     revenues  from the sale of astaxanthin up to  a  maximum  of
     $5,000,000.  Tate agreed for a period of five years  not  to
     engage in the astaxanthin business.

     As  a result of the Joint Venture termination, Igene is  not
     currently producing astaxanthin products, and is researching
     several   alternatives  for  a  potential  new   source   of
     production.   At  the current pace, Igene  expects  to  have
     inventories  of  existing product necessary to  meet  demand
     through 2008.  Igene expects to be out of the market for  an
     uncertain  period of time until a new source  of  production
     can  be  identified, commence operations and  yield  salable
     product.
                               -9-

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

(3)  Going Concern

     Igene has incurred net losses in each year of its existence,
     aggregating  approximately  $51,364,000  from  inception  to
     September  30,  2008, and as of September 30, 2008,  Igene's
     liabilities    exceeded   its   assets   by    approximately
     $16,954,000.  These factors indicate that Igene may  not  be
     able  to  continue in existence unless it is able  to  raise
     additional capital and attain profitable operations.

     As   a  result  of  the  Joint  Venture  termination,  Igene
     maintains   the  salable  inventory  but  is  not  currently
     producing  astaxanthin products, and is researching  several
     alternatives  for a potential new source of production.   At
     the  current  pace,  Igene expects to  have  inventories  of
     existing  product  necessary to meet  demand  through  2008.
     Igene  expects  to  be out of the market  for  an  uncertain
     period  of  time  until a new source of  production  can  be
     identified,  commence operations and yield salable  product.
     No adjustments to the financial statements have been made as
     a  result  of this uncertainty. In the interim,  Igene  will
     sell  the  existing  inventory  in  order  to  maintain  its
     relationship  with customers and use these  funds  to  cover
     expenses.

(4)  Noncash Investing and Financing Activities

     During  the nine months ended September 30, 2008  and  2007,
     the Company recorded in each quarter dividends in arrears on
     8% redeemable preferred stock accumulating at $.48 per share
     aggregating to $5,350 and $5,344, respectively.

(5)  Amendment to Long - Term Liabilities

     Igene   entered  into  Convertible  Promissory  Notes   (the
     "Convertible Notes") with each of the following note holders
     for  the  following  respective  amounts  (a)  NorInnova  AS
     (formerly  Forskningsparken I Tromso AS) for  $106,500;  (b)
     Knut  Gjernes  for  $7,500;  (c)  Magne  Russ  Simenson  for
     $278,000; and (d) Nord Invest AS for $313,000.  Each of  the
     Convertible Notes had 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.

     On  November 29, 2006, the Convertible Note holders filed  a
     complaint against the Company in the Circuit Court of Howard
     County,  Maryland seeking payment of all outstanding amounts
     due under the Convertible Notes, the "Notes Litigation."  On
     February  23,  2007, the Company paid $762,638, representing
     the  full  amount due including interest, to the Convertible
     Note  holders  as settlement of all claims  related  to  the
     Notes   Litigation.   The  complaint  was   dismissed   with
     prejudice on March 6, 2007.

     In  an  attempt to settle the matter, the Note holders  were
     offered  the ability to extend the Convertible Notes  for  a
     period  of  ten  years  at  an interest  rate  of  5%.   The
     conversion would be changed from the original debenture rate
     of  $.10 (ten cents) per share to the current market rate of
     $.02 (two cents) per share.  They rejected the offer.

     The  funds  to settle the Notes Litigation were provided  by
     two  of Igene's directors through the issuance of debentures
     on the terms of the offering to the Convertible Note holders
     described  above.   On February 15, 2007, Igene  issued  and
     sold   $762,000  in  aggregate  principal   amount   of   5%
     convertible  debentures,  50% each  to  Thomas  Kempner  and
     Sidney  Knafel,  directors of Igene.  These  debentures  are
     convertible into shares of Igene's common stock at $.02  per
     share,  based on the market price of Igene's shares  at  the
     time  the  debentures were agreed to.  These debentures,  if
     not converted earlier, become due on February 15, 2017.

(6)  Previous Joint Venture

     On  March 18, 2003, the Company entered into a Joint Venture
     Agreement  with  Tate  &  Lyle  Fermentation  Products  Ltd.
     ("Tate").   Pursuant  to  the 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

                               -10-

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

    than  as  a  nutraceutical  or  otherwise  for  direct  human
    consumption.  Tate contributed $24,600,000, including certain
    facility  assets  that  were  used in citric acid production,
    while  the  Company  transferred  to  the Joint  Venture  its
    technology  relating  to  the  production  of astaxanthin and
    assets related thereto. The assets transferred by the Company
    were  used  by  the  Joint  Venture  in  the  same  manner as
    historically used by the  Company.  The Company and Tate each
    had a 50% ownership interest in  the  Joint Venture and equal
    representation  on  the  Board  of  Directors  of  the  Joint
    Venture. The value of the Company's initial investment in the
    Joint Venture was recorded  at  an  amount  equal to  Igene's
    historical  book  value.   As  the  cost  of  the   Company's
    technology and  intellectual  property  had  been  previously
    expensed and had a carrying amount of zero, the investment in
    the  Joint  Venture was originally recorded with a book value
    of  $316,869,  which  represented  the unamortized production
    costs contributed  to  the  Joint  Venture.  The Company also
    contributed $6,000 to the capital of the Joint Venture.

    Production  utilized Tate's fermentation capability  together
    with  the  unique  technology developed  by  Igene.  Part  of
    Tate's  existing  Selby, England, citric  acid  facility  was
    modified   to  produce  up  to  1,500  tons  per   annum   of
    astaxanthin.  Sales and cost of sales activity were  recorded
    as part of the earnings of the unconsolidated venture.

    On   October  31,  2007,  Igene  and  Tate  entered  into   a
    Separation  Agreement  pursuant to which  the  Joint  Venture
    Agreement   was  terminated.   As  part  of  the   Separation
    Agreement, Igene sold to Tate its 50% interest in  the  Joint
    Venture  and the Joint Venture sold to Igene its intellectual
    property,  inventory  and certain assets  and  lab  equipment
    utilized  by  the Joint Venture as well as the Chilean  sales
    subsidiary.    The purchase price paid by Tate to  Igene  for
    its  50%  interest was 50% of the Joint Venture's net working
    capital.   The purchase price paid by Igene for the inventory
    was  an  amount  equal  to  50% of the  Joint  Venture's  net
    working  capital, the assumption of various  liabilities  and
    the  current  market price of the inventory,  less  specified
    amounts.  In addition, Igene agreed to pay to Tate an  amount
    equal  to  5%  of  Igene's gross revenues from  the  sale  of
    astaxanthin up to a maximum of $5,000,000.  Tate  agreed  for
    a  period  of  five  years not to engage in  the  astaxanthin
    business.

    Upon  the  termination of the Joint Venture it was determined
    that   the  transaction  should  be  recorded  as  an   asset
    purchase.  This  determination  was  based  upon  the  assets
    received not constituting a business in accordance with  EITF
    98-3.   Based on that determination, an independent valuation
    expert  was  hired to determine the fair value of the  assets
    received  and  the liabilities assumed.  As  the  fair  value
    received exceeded the liabilities assumed, the fair value  of
    the  assets  received were reduced to equal  the  liabilities
    assumed.   Consistent  with  FASB  Statement  141,  in   this
    exchange  transaction between two parties the value  received
    is   considered  to  be  equal  to  what  was  assumed.   All
    contingent liabilities were recorded at their maximum  amount
    along  with  the value of the other consideration given.  The
    reduction  in  value  to  arrive at the  other  consideration
    given was allocated pro rata to the long term assets.

    As  a  result of the Joint Venture termination, Igene is  now
    researching several alternatives for a potential  new  source
    of  production.  At the current pace, Igene expects  to  have
    inventories  of  existing product necessary  to  meet  demand
    through 2008.  Igene expects to be out of the market  for  an
    uncertain  period  of time until a new source  of  production
    can  be  identified, commence operations  and  yield  salable
    product.

    Prior  to  the separation, sales and marketing of astaxanthin
    took   place  in  the  unconsolidated  Joint  Venture.   From
    inception  on  March  18, 2003 through  September  30,  2007,
    Igene's   portion  of  the  Joint  Venture's  net  loss   was
    $21,826,251.  The loss was a result of a 50% interest in  the
    negative gross profit from inception of $21,304,462 on  sales
    of  $38,380,752,  less  manufacturing  cost  of  $59,685,214,
    selling   and   general   and  administrative   expenses   of
    $16,592,813, and interest expense of $5,805,227.   The  total
    resulting  loss  was $43,652,502, of which  50%  was  Igene's
    portion.

    Because  the  Company  accounted for its  investment  in  the
    Joint  Venture  under  the equity method  of  accounting,  it
    would  ordinarily  recognize  a  loss  representing  its  50%
    equity  interest  in  the loss of the Joint  Venture  or  the
    amount  that is guaranteed by the Company, if any.   However,
    losses  in  the  Joint Venture were recognized  only  to  the
    extent  of  the  investment  in and  advances  to  the  Joint
    Venture.   Losses  in  excess of this amount  were  suspended
    from recognition in the financial statements.

                              -11-

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


    At  September  30,  2007,  prior to the  recognition  of  its
    portion of the Joint Venture loss, Igene's investment in  the
    Joint  Venture consisted of $322,869 and its net advances  to
    the  Joint  Venture amounted to $1,007,888, for  a  total  of
    $1,330,757.   Through  December 31,  2006,  Igene  recognized
    $1,491,981 of the $15,922,400 loss, which existed as part  of
    the  Joint  Venture.  In the first six months  of  2007,  the
    balance  of  the  funds due to Igene was  reduced  by  a  net
    repayment  of  $258,628,  representing  the  June  30,  2007,
    balance  of $1,233,353.  For the three months ended September
    30,  2007, Igene recognized a loss from the advance for  that
    period  of  $97,404.  This advance decreased  the  additional
    suspended   loss   of  $1,293,769  for  the   quarter.    The
    cumulative   suspended  loss  at  September  30,   2007   was
    $20,495,494  and was carried forward to offset Igene's  share
    of  any earnings from the Joint Venture.  The balance in  the
    Advances  to and Investment in Joint Venture account  on  the
    Company's  condensed  consolidated  financial  statements  is
    zero at September 30, 2008.

    The  following schedules display certain account balances  of
    the  Joint  Venture as of September 30, 2007, and the  period
    since initial investment at March 18, 2003 (inception):

<TABLE>
<CAPTION>

                                                                    September 30,
                                                                            2007
                                                                    _____________
          <S>                                                       <C>
          ASSETS
          CURRENT ASSETS
            Cash                                                    $  2,645,000
            Account Receivable                                         4,711,000
            Inventory                                                 13,069,000
                                                                    _____________
                                                                      20,425,000
          OTHER ASSETS
            Property, plant and equipment, net                        19,668,000
            Intangibles                                               24,614,000
                                                                    _____________
              TOTAL ASSETS                                          $ 64,707,000

          LIABILITIES AND EQUITY
          CURRENT LIABILITIES
            Accounts payable and accrued expenses
            (majority of which is due to one joint venturer)        $ 48,419,000
            Working capital loan                                       7,628,000
                                                                    _____________
              TOTAL LIABILITIES                                       56,047,000
            Equity                                                     8,660,000
                                                                    _____________
              TOTAL LIABILITIES AND EQUITY                          $ 64,707,000
                                                                    =============
</TABLE>
<TABLE>
<CAPTION>

                                                             Period from March 18, 2003
                                                              (initial investment) to
                                                                 September 30, 2007

                                                                    _____________
          <S>                                                       <C>
          Net Sales                                                 $ 38,380,752
          Less: manufacturing cost                                   (59,685,214)
                                                                    _____________
          Gross Profit (Loss)                                        (21,304,462)
          Less: selling, general and administrative                  (16,542,813)
                                                                    _____________
          Operating Loss                                             (37,847,275)
          Interest Expense                                            (5,805,227)
                                                                    _____________
          Net Loss                                                  $(43,652,502)
                                                                    =============
          Igene's 50% equity interest in the net loss               $(21,826,251)
          Igene's Investment in and Advances to the Joint Venture     (1,330,757)
                                                                    _____________
          Igene's suspended loss at September 30, 2007              $(20,495,494)
                                                                    =============
</TABLE>


                              -12-

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


     The  following  statement displays the significant  activity
     for  the Joint Venture for the three and nine months   ended
     September 30, 2007 and 2006.

<TABLE>
<CAPTION>

                                                           Three Months Ended               Nine Months Ended
                                                     _____________________________    _____________________________
                                                     Sept 30, 2007   Sept 30, 2006    Sept 30, 2007   Sept 30, 2006
                                                     _____________   _____________    _____________   _____________
      <S>                                            <C>             <C>              <C>             <C>
      Net Sales                                      $  3,544,013    $  1,995,800     $ 10,607,873    $  7,450,539
      Less: manufacturing cost                         (4,277,044)     (2,267,300)     (16,746,356)     (8,207,494)
                                                     _____________   _____________    _____________   _____________
      Gross Profit (Loss)                                (733,031)       (271,500)      (6,138,483)       (756,955)
      Less: selling, general and admin                 (1,021,530)       (897,000)      (3,452,526)     (2,780,319)
                                                     _____________   _____________    _____________   _____________
      Operating Loss                                   (1,754,561)     (1,168,500)      (9,591,009)     (3,537,274)
      Interest Expense                                   (832,977)       (495,100)      (2,216,693)     (1,619,300)
                                                     _____________   _____________    _____________   _____________
      Net Loss                                       $ (2,587,538)   $ (1,663,600)    $(11,807,702)   $ (5,156,574)
                                                     =============   =============    =============   =============

      50% equity interest                            $ (1,293,769)   $   (831,800)    $ (5,903,851)   $ (2,578,287)

      Igene's Repayments from and additional
         (Investment in and
          Advances to the Joint Venture)                  (97,404)         11,299          161,224          (6,964)
                                                     _____________   _____________    _____________   _____________
      Igene's incremental suspended loss for period  $ (1,196,365)   $   (843,099)    $ (6,065,075)   $ (2,571,323)
                                                     =============   =============    =============   =============
</TABLE>

(7)  Stockholders' Deficiency

     As  of  September 30, 2008, 22,268 shares of authorized  but
     unissued  common stock were reserved for conversion  of  the
     Company's outstanding preferred stock.

     As  of  September 30, 2008, 72,232,334 shares of  authorized
     but unissued common stock were reserved for distribution and
     exercise  pursuant  to the Company's employee  stock  option
     plans.

     As  of  September 30, 2008, 23,421,273 shares of  authorized
     but  unissued common stock were reserved for the  conversion
     of   outstanding  convertible  promissory  notes   held   by
     directors  of  the  Company  in  the  aggregate  amount   of
     $1,082,500.

     As  of  September 30, 2008, 104,527,651 shares of authorized
     but  unissued common stock were reserved for the  conversion
     of   outstanding  convertible  promissory  notes   held   by
     directors of the Company.

     As  of  September 30, 2008, 205,261,073 shares of authorized
     but unissued common stock were reserved for the exercise  of
     outstanding warrants.

(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, 2008 and 2007, are  based
     on  110,337,072 and 109,337,072, respectively,  of  weighted
     average common shares outstanding. The same figures for  the
     three month period then ended are based upon 110,337,072 and
     109,337,072, respectively, of weighted average common shares
     outstanding.   No adjustment has been made  for  any  common
     stock equivalents outstanding because their effects would be
     antidilutive.    As  of  September  30,   2008   and   2007,
     potentially   dilutive   shares  totaled   488,414,337   and
     405,614,599, respectively.






                              -13-

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

Item 2.   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 WITHIN THE BIOTECH AGRICULTURE AND
AQUACULTURE  INDUSTRIES,  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, INCLUDING THOSE DETAILED  IN
"RISK  FACTORS"  THAT  ARE  INCLUDED  FROM  TIME-TO-TIME  IN  THE
COMPANY'S  SECURITIES  AND  EXCHANGE  COMMISSION  FILINGS.    THE
COMPANY  ASSUMES NO DUTY TO UPDATE FORWARD-LOOKING STATEMENTS  TO
REFLECT   EVENTS  OR  CIRCUMSTANCES  AFTER  THE  DATE   OF   SUCH
STATEMENTS.


     The  following discussion should be read in conjunction with
our  unaudited  consolidated  interim  financial  statements  and
related  notes thereto included in this quarterly report  and  in
our  audited  consolidated financial statements and  Management's
Discussion  and  Analysis of Financial Condition and  Results  of
Operations  (MD&A)  contained  in our Form 10-KSB  for  the  year
ended December 31, 2007.

Results of Operations
_____________________

Sales and other revenue

     As  part  of  the  Joint  Venture Agreement,  all  sales  of
AstaXin(R) prior to October 31, 2007, were recognized through the
Joint Venture.  Therefore, Igene recorded no sales during 2006 or
in  2007  prior  to  October 31, 2007.   For  the  quarter  ended
September  30,  2008,  Igene recorded  sales  in  the  amount  of
$1,734,366.  For the nine months ended September 30, 2008,  Igene
recorded  sales in the amount of $6,262,035. As a result  of  the
Joint  Venture  termination,  Igene is  not  currently  producing
astaxanthin products, and is researching several alternatives for
a  potential  new source of production.  Sales have been  limited
due  to  insufficient  production quantity and  are  expected  to
decline  sometime during the fourth quarter of  2008  and  remain
negligible  until  a source of production can be  identified  and
production begins.  Igene expects to be out of the market for  an
uncertain period of time until a new source of production can  be
identified, commence operations and yield salable product.  Igene
is   currently  researching  various  alternatives   for   future
production  but has not yet engaged any new source of production.
Management   believes  that  this  decision  is  of   fundamental
importance   to  Igene  and  continues  to  seek  an  appropriate
production partner.



                              -14-

            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, beginning July 2003 through October
31,  2007, cost of sales and gross profit were recognized through
the Joint Venture.  Therefore, Igene recorded no cost of sales or
gross  profit during 2006 or in 2007 prior to October  31,  2007.
For the quarter ended September 30, 2008, Igene recorded cost  of
sales  in  the  amount of $1,232,388.  For the nine months  ended
September 30, 2008 Igene recorded cost of sales in the amount  of
$4,829,894.    This resulted in a gross profit  for  the  quarter
ended  September  30, 2008, of $501,978 or  29%.   For  the  nine
months  ended September 30, 2008, this resulted in a gross profit
of $1,432,141 or 23%.  The increase in gross profit is due mainly
to  the  discount  on  the  product that  was  purchased  at  the
conclusion  of  the Joint Venture.  With the termination  of  the
Joint  Venture,  there  can  be no  assurance  of  the  continued
dependability of production.  As a result, future cost  of  sales
is  expected to increase through the remainder of 2008, whereupon
sales,  and cost of sales, are expected to be negligible until  a
source  of  production can be identified and  production  begins.
Commencement  of  production  cannot  be  predicted.   Igene   is
currently researching various alternatives for future production.
No  assurances  can be provided with regard to a  new  source  of
production.

Marketing and selling expenses

     For  the  quarters ended September 30, 2008 and 2007,  Igene
recorded  marketing and selling expense in the amount of $179,204
and  $9,891, respectively, an increase of $169,313.  For the nine
months   ended  September  30,  2008  and  2007,  Igene  recorded
marketing  and  selling  expense in the amount  of  $641,199  and
$49,216,  respectively,  an  increase  of  $591,983.   With   the
termination   of   the   Joint  Venture,  Igene   has   reassumed
responsibility  for the marketing and selling function  that  was
being  done by the Joint Venture.  It is expected that this level
of  marketing and selling expense will be constant as  Igene  has
reassumed the activities of the Chilean subsidiary and  looks  to
maintain its customer base through the period in which it engages
a  new  source of production. However, no assurances can be  made
with  regard to a new source of production or maintenance of  the
customer base.  Prior to October 2007, all marketing and  selling
expenses incurred by Igene as part of the Joint Venture had  been
reimbursed  by  the  Joint Venture.  Since  October  2007,  these
expenses have been funded by cash flows from operations,  to  the
extent  available for such purposes.  However, we do  not  expect
cash  flows from operations to continue beyond the fourth quarter
of 2008 unless and until a source of production is identified and
production begins.


Research, development and pilot plant expenses

     For  the  quarters ended September 30, 2008 and 2007,  Igene
recorded research and development costs in the amount of $402,774
and  $223,774, respectively, an increase of $179,000 or 80%.  For
the nine months ended September 30, 2008 and 2007, Igene recorded
research  and  development costs in the amount of $1,192,312  and
$721,060, respectively, an increase of $471,252 or 65%.  Research
and  development costs have increased as Igene works  to  develop
new uses for its product.  It is expected these costs will remain
at   current  increased  levels  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  other  improvements  in  the  Company's  AstaXin(R)
technology.   Prior to October 2007, all research and development
expenses  incurred  by Igene as part of the  Joint  Venture  were
reimbursed  by  the  Joint Venture.  Since  October  2007,  these
expenses have been funded by cash flows from operations,  to  the
extent  available for such purposes.  However, we do  not  expect
cash  flows from operations to continue beyond the fourth quarter
of 2008 unless and until a source of production is identified and
production begins.



                              -15-

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


General and administrative expenses

     General  and  administrative expenses for the quarter  ended
September   30,  2008  and  2007,  were  $165,443  and  $188,537,
respectively,  a  decrease  of  $23,094  or  12%.   General   and
administrative expenses for the nine months ended  September  30,
2008  and  2007,  were  $570,238 and  $666,599,  respectively,  a
decrease  of $96,361 or 14%.  These costs are expected to  remain
constant.   Igene works to reduce overhead costs and spend  funds
on  research and development efforts.  Prior to October 2007, all
general  and administrative expenses incurred related to research
and  sales  of product by Igene as part of the Joint Venture  had
been  reimbursed by the Joint Venture.  Since October 2007, these
expenses have been funded by cash flows from operations,  to  the
extent  available for such purposes.  However, we do  not  expect
cash  flows from operations to continue beyond the fourth quarter
of 2008 unless and until a source of production is identified and
production begins.

Expenses reimbursement by Joint Venture

     As  part  of the Joint Venture Agreement, costs incurred  by
Igene related to production, research and development, as well as
those related to the marketing of AstaXin(R),  and  most  of  the
general and administrative expenses, were considered costs of the
Joint Venture and therefore were reimbursed by the Joint Venture.
For the nine months ended September 30, 2007, costs reimbursed by
the  Joint Venture totaled $1,436,653.  The costs covered $49,216
of  marketing  costs, $721,060 of research and development  costs
and $666,377 of general and administrative costs.

Interest expense

     Interest  expense for the quarters ended September 30,  2008
and 2007 was $553,024 and $552,995, respectively, an increase  of
less  than 1%.  This includes amortization of discount on Igene's
notes and debentures of $351,695 for the quarters ended September
30,  2008 and 2007.  For the nine months ended September 30, 2008
and   2007,  interest  expense  was  $1,654,773  and  $1,658,111,
respectively,  a  decrease  of $3,338  or  less  than  1%.   This
includes amortization of discount on Igene's notes and debentures
of  $1,055,085 for the nine months ended September 30,  2008  and
2007.   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 debentures in both periods.

Equity in earnings of unconsolidated Joint Venture

      Prior  to  the October 31, 2007, termination of  the  Joint
Venture, the production, sales and marketing of astaxanthin  took
place  in  the  unconsolidated Joint Venture.  From inception  on
March 18, 2003 through September 30, 2007, Igene's portion of the
Joint  Venture's net loss was $21,826,251.  The loss was a result
of  a 50% interest in the following:  Gross profit from inception
was   a  negative  $21,304,462  on  sales  of  $38,380,752,  less
manufacturing  cost  of  $59,685,214.  Selling  and  general  and
administrative  expenses were $16,542,813, and  interest  expense
was $5,805,227.  The resulting loss was $43,652,502.  Igene's 50%
portion of the Joint Venture loss was $21,826,251.

     Because  the  Company  accounted  for  its investment in the
Joint Venture under the equity method of  accounting,  it   would
ordinarily recognize a loss representing its 50% equity  interest
in the loss of the Joint Venture or the amount that is guaranteed
by  the  Company, if any.  However, losses in the  Joint  Venture
were  recognized  only  to the extent of the  investment  in  and
advances  to the Joint Venture.  Losses in excess of this  amount
were suspended from recognition in the financial statements.

                             -16-

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


     At  September  30,  2007,  prior to the recognition  of  its
portion  of  the  Joint Venture loss, Igene's investment  in  the
Joint  Venture consisted of $322,869 and its net advances to  the
Joint  Venture amounted to $1,007,888, for a total of $1,330,757.
Through  December  31, 2006, Igene recognized $1,491,981  of  the
$15,922,400 loss, which existed as part of the Joint Venture.  In
the  first six months of 2007, the balances of the funds  due  to
Igene  was  reduced by a net repayment of $258,628,  representing
the  June 30, 2007, balance of $1,233,353.  For the three  months
ended  September  30,  2007, Igene recognized  a  loss  from  the
advance  for that period of $97,404.  This advance decreased  the
additional  suspended loss of $1,293,769 for  the  quarter.   The
cumulative  suspended loss at September 30, 2007 was  $20,495,494
and  was 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  condensed
consolidated financial statements was zero at September 30, 2007.

Net loss and basic and diluted net loss per common share

     As   a   result  of  the  foregoing,  the  Company  reported
comprehensive losses of $816,327 and $584,582, respectively,  for
the  quarters ended September 30, 2008 and 2007, an  increase  in
the loss of $231,745 or 40%.  This represents a loss of $0.01 per
basic  and  diluted  common share in each of the  quarters  ended
September  30, 2008 and 2007.  The Company reported comprehensive
losses  of $2,594,225 and $1,477,720, respectively, for the  nine
months ended September 30, 2008 and 2007, an increase in the loss
of  $1,116,505 or 76%.  This represents a loss of $0.02 and $0.01
per  basic  and  diluted common share for the nine  months  ended
September 30, 2008 and 2007, respectively.  The weighted  average
number  of shares of common stock outstanding of 110,337,072  and
109,337,072 for the quarters and nine months ended September  30,
2008  and 2007, respectively, has increased by 1,000,000  shares.
The increase in outstanding shares resulted from the issuance  of
1,000,000  shares  of common stock to the Company's  Director  of
Manufacturing in October of 2007.

Financial Position

     During the nine months ended September 30, 2008 and 2007, in
addition  to  the  matters  previously discussed,  the  following
actions   also   materially  affected  the  Company's   financial
position:

   o  Decreases  in  accounts  receivables, inventory and prepaid
      expense  for the nine months ended September 30,  2008,  of
      $5,681,389 were a source of cash, offset by funds  used  to
      decrease   accounts   payable   and   accrued  expenses  by
      $3,983,520; and

   o  The  carrying  value  of  redeemable  preferred  stock  was
      increased  and  interest  expense recorded in the amount of
      $5,350  in 2008,  reflecting cumulative unpaid dividends on
      redeemable preferred stock.


     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 accumulate for future payment or addition to the
liquidation  preference  or redemption  value  of  the  preferred
stock.   As of September 30, 2008, total dividends in arrears  on
Igene's preferred stock total $142,515 ($12.80 per share) and are
included in the carrying value of the redeemable preferred stock.



                              -17-

            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,
2008, Igene had working capital of $2,961,917, and cash and  cash
equivalents of $1,151,096.

     Cash provided by operating activities during the  nine-month
period ended September 30, 2008, equaled $345,606 as compared  to
cash  used by operating activities of $104,180 for the nine-month
period ended September 30, 2007.

     Cash used  by  investing activities  during  the  nine-month
period ended September 30, 2008, equaled $250,976 resulting  from
the  purchase  of  equipment, as compared  to  cash  provided  by
investing  activities  of $181,224, which  was  a  recoupment  of
payment  to  the  Joint Venture for the nine-month  period  ended
September 30, 2007.

     No cash was used or provided by financing activities  during
the  first  nine  months  of 2008.  Cash  provided  by  financing
activities was $57,000 during the nine-months ended September 30,
2007,  and  was  used in connection with the  settlement  of  the
convertible debentures and payment of interest on those notes.

     Over  the  next twelve months, Igene believes it  will  need
additional working capital.  Part of this funding is expected  to
be received from sales of AstaXin(R), resulting in increased cash
through  the  fourth  quarter  of  2008.   Thereafter  sales  are
expected to decline to zero and remain negligible until a  source
of production is identified and production begins.  There will be
additional delay between the commencement of production  and  the
receipt of proceeds from any sale of such product.  There can  be
no  assurance  that  projected cash  from  sales,  or  additional
funding,  will  be  sufficient for Igene to  fund  its  continued
operations.

     The  Company   does  not  believe  that  inflation   had   a
significant  impact  on  its  operations  during  the  nine-month
periods ended September 30, 2008 and 2007.

Off-Balance Sheet Arrangements
______________________________

     There  have been no material changes in the risks related to
off-balance  sheet arrangements since the Company's disclosure in
its  Annual Report on Form 10-KSB for the year ended December 31,
2007.


Item 3.   Quantitative  and  Qualitative Disclosures About Market
          Risk

     The  Company  is a smaller reporting company as  defined  by
Rule  12b-2  of the Securities Exchange Act of 1934,  as  amended
(the  "Exchange  Act")  and  is  not  required  to  provide   the
information required under this item.



                              -18-

           IGENE Biotechnology, Inc. and Subsidiary
                     Controls and Procedures



Item 4.   Controls and Procedures

We  carried out an evaluation, under the supervision and with the
participation   of  our  management,  including   our   principal
executive  officer  and  principal  financial  officer,  of   the
effectiveness  of  our  disclosure controls  and  procedures  (as
defined  in  Rules  13a-15(e) and 15d-15(e) of the  Exchange  Act
(defined  below)).   Based  upon that evaluation,  our  principal
executive officer and principal financial officer concluded that,
as  of  the  end  of  the  period covered  in  this  report,  our
disclosure controls and procedures were effective to ensure  that
information required to be disclosed in reports filed  under  the
Securities Exchange Act of 1934, as amended (the "Exchange  Act")
is  recorded,  processed,  summarized  and  reported  within  the
required time periods and is accumulated and communicated to  our
management,   including  our  principal  executive  officer   and
principal  financial  officer, as  appropriate  to  allow  timely
decisions regarding required disclosure.

Our  management,  including our principal executive  officer  and
principal  financial officer, does not expect that our disclosure
controls and procedures or our internal controls will prevent all
error  or  fraud.  A control system, no matter how well conceived
and   operated,  can  provide  only  reasonable,  not   absolute,
assurance   that  the  objectives  of  the  control  system   are
met.   Further, the design of a control system must  reflect  the
fact  that  there  are resource constraints and the  benefits  of
controls must be considered relative to their costs.  Due to  the
inherent  limitations in all control systems,  no  evaluation  of
controls  can provide absolute assurance that all control  issues
and  instances of fraud, if any, have been detected. Accordingly,
management  believes  that the financial statements  included  in
this report fairly present in all material respects our financial
condition,  results of operations and cash flows for the  periods
presented.

(b)  Changes in internal control - There were no changes  in  our
internal control over financial reporting during our most  recent
fiscal  quarter  that  materially affected,  or  were  reasonably
likely  to materially affect, our internal control over financial
reporting.




                              -19-

            IGENE Biotechnology, Inc. and Subsidiary
                             PART II
                        OTHER INFORMATION

Item 1.   Legal Proceedings

     There  are  no material pending legal proceedings  to  which
Igene  is  a  party  or  to which any of Igene's  properties  are
subject;  nor are there pending material bankruptcy, receivership
or  similar  proceedings with respect to  Igene;  nor  are  there
material proceedings pending or known to be contemplated  by  any
governmental authority; nor are there material proceedings  known
to  Igene,  pending  or  contemplated, in which  any  of  Igene's
directors,   officers,  affiliates  or  any  principal   security
holders, or any associate of any of the foregoing, is a party  or
has an interest adverse to us.

Item 1A.  Risk Factors

     The  Company  is a smaller reporting company as  defined  by
Rule 12b-2 of the Exchange Act and is not required to provide the
information required under this item.

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

None.

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 October 21, 2008, total dividends in arrears on the
Company's  Series  A Convertible Preferred Stock  total  $142,515
($12.80 per share) and are included in the carrying value of  the
redeemable preferred stock.

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

None.

Item 5.   Other Information

None.

Item 6.  Exhibits



















                              -20-

EXHIBIT DESCRIPTION
NO.

3.1     Articles  of  Incorporation of  the  Registrant,  as
        amended   as  of  November  17,  1997,  constituting
        Exhibit  3.1 to the Registration Statement No.  333-
        41581  on  Form SB-2 filed with the SEC on  December
        5, 1997, are hereby incorporated by reference.

3.2     Articles  of  Amendment to Articles of Incorporation
        of  the  Registrant, constituting Exhibit 3.1(b)  to
        the Registration Statement No. 333-76616 on Form  S-
        8  filed  with  the  SEC on January  11,  2002,  are
        hereby incorporated by reference.

3.3     By-Laws of the Registrant, constituting Exhibit  3.2
        to the Registration Statement No. 33-5441 on Form S-
        1  filed  with  the SEC on May 6, 1986,  are  hereby
        incorporated by reference.

31.1    Rule  13a-14(a)  or 15d-14(a) Certification  of  the
        Registrant's principal executive officer.*

31.2    Rule  13a-14(a)  or 15d-14(a) Certification  of  the
        Registrant's principal financial officer.*

32.1    Rule  13a-14(b)  or 15d-14(b) Certification  of  the
        Registrant's  principal executive  officer  pursuant
        to  18  U.S.C. Section 1350 as adopted  pursuant  to
        Rule 906 of the Sarbanes-Oxley Act of 2002.*

32.2    Rule  13a-14(b)  or 15d-14(b) Certification  of  the
        Registrant's  principal financial  officer  pursuant
        to  18  U.S.C. Section 1350 as adopted  pursuant  to
        Rule 906 of the Sarbanes-Oxley Act of 2002.*


*Filed herewith.






                              -21-

                           SIGNATURES


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



                                IGENE BIOTECHNOLOGY, INC.
                                _________________________________
                                (Registrant)


     Date November 3, 2008   By /S/ STEPHEN F. HIU
          ________________      _________________________________
                                    STEPHEN F. HIU
                                    President
                                    (principal executive officer)




     Date November 3, 2008   By /S/ EDWARD J. WEISBERGER
          ________________      _________________________________
                                    EDWARD J. WEISBERGER
                                    Chief Financial Officer
                                    (principal financial officer)









                              -22-

                         EXHIBIT INDEX

EXHIBIT DESCRIPTION
NO.

3.1     Articles  of  Incorporation  of  the  Registrant, as
        amended  as  of  November  17,  1997,   constituting
        Exhibit  3.1  to the Registration Statement No. 333-
        41581  on  Form  SB-2 filed with the SEC on December
        5, 1997, are hereby incorporated by reference.

3.2     Articles  of  Amendment to Articles of Incorporation
        of  the  Registrant, constituting Exhibit 3.1(b)  to
        the Registration Statement No. 333-76616 on Form  S-
        8  filed  with  the  SEC on January  11,  2002,  are
        hereby incorporated by reference.

3.3     By-Laws of the Registrant, constituting Exhibit  3.2
        to the Registration Statement No. 33-5441 on Form S-
        1  filed  with  the SEC on May 6, 1986,  are  hereby
        incorporated by reference.

31.1    Rule  13a-14(a)  or 15d-14(a) Certification  of  the
        Registrant's principal executive officer.*

31.2    Rule  13a-14(a)  or 15d-14(a) Certification  of  the
        Registrant's principal financial officer.*

32.1    Rule  13a-14(b)  or 15d-14(b) Certification  of  the
        Registrant's  principal executive  officer  pursuant
        to  18  U.S.C. Section 1350 as adopted  pursuant  to
        Rule 906 of the Sarbanes-Oxley Act of 2002.*

32.2    Rule  13a-14(b)  or 15d-14(b) Certification  of  the
        Registrant's  principal financial  officer  pursuant
        to  18  U.S.C. Section 1350 as adopted  pursuant  to
        Rule 906 of the Sarbanes-Oxley Act of 2002.*


*Filed herewith.







                              -23-