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 June 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     [ ]          No      [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]

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 ............. 10-16

     Management's Discussion and Analysis of Financial
     Conditions and Results of Operations ................... 17-20

     Controls and Procedures ................................ 21

PART II   -     OTHER INFORMATION ........................... 22-23

SIGNATURES .................................................. 24

EXHIBIT INDEX ............................................... 25




<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>
                                                                June 30,     December 31,
                                                                   2005             2004
                                                            ____________     ____________
                                                             (Unaudited)
<S>                                                         <C>              <C>
ASSETS
CURRENT ASSETS

  Cash and cash equivalents                                 $    47,112      $   204,248
  Accounts receivable                                            11,793           79,638
  Prepaid expenses and other current assets                       9,081           10,764

     TOTAL CURRENT ASSETS                                        67,986          294,650


  Property and equipment, net                                   115,280          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                                           $   259,374      $   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>
                                                      June 30,    December 31,
                                                         2005            2004
                                                 _____________   _____________
                                                  (Unaudited)
<S>                                              <C>             <C>
LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
  Accounts payable and accrued expenses          $    181,265    $     78,472
  Convertible debenture                               705,000         705,000
  Equipment lease payable                                 ---          11,750

     TOTAL CURRENT LIABILITIES                        886,265         795,222

LONG-TERM LIABILITIES
  Notes payable                                     5,842,267       5,842,267
  Convertible debentures                            3,814,212       3,814,212
  Accrued interest                                  4,539,065       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 $ 18.72
     and $18.40, respectively.  Authorized
     1,312,500 shares, issued 18,509                  346,488         340,566

     TOTAL LIABILITIES                             15,428,299      14,940,948

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
  Common stock --- $.01 par value per share.
     Authorized 750,000,000 shares;
     issued and outstanding 103,964,926
     and 101,732,453 shares, respectively.          1,039,650       1,017,325
  Additional paid-in capital                       25,313,660      25,138,748
  Accumulated Deficit                             (41,522,235)    (40,601,360)

     TOTAL STOCKHOLDERS' DEFICIENCY               (15,168,925)    (14,445,287)

     TOTAL LIABILITIES AND
     STOCKHOLDERS'  DEFICIENCY                   $    259,374    $    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            Six months ended
                                                       __________________________   ___________________________
                                                          June 30,      June 30,       June 30,       June 30,
                                                             2005          2004           2005           2004
                                                       ____________  ____________   ____________   ____________
<S>                                                    <C>           <C>            <C>            <C>

EQUITY IN LOSS OF JOINT VENTURE                        $  (282,977)  $ (169,744)    $  (466,070)   $  (202,060)

OPERATING EXPENSES

  Marketing and selling                                     70,876      161,245         119,164        209,267
  Research, development and pilot plant                    217,082      195,522         383,089        403,932
  General and administrative                               246,592      210,950         435,500        360,828
  Litigation expense                                           ---       27,500             ---         40,580
  Operating expenses reimbursed by Joint Venture          (527,398)    (380,131)       (938,737)      (743,175)

          TOTAL OPERATING EXPENSES                           7,152      215,086            (984)       271,432

          OPERATING LOSS                                  (290,129)    (384,830)       (465,086)      (473,492)

LOSS ON DISPOSAL                                           (50,000)         ---         (50,000)           ---

INTEREST EXPENSE                                          (192,709)    (216,015)       (405,789)      (439,976)

           NET LOSS                                    $  (532,838)  $ (600,845)    $  (920,875)   $  (913,468)


BASIC AND DILUTED NET LOSS PER COMMON SHARE            $     (0.01)       (0.01)    $     (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           1,361,609       13,616        171,263            ---        184,879

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 six months ended June 30, 2004           ---          ---            ---       (913,468)      (913,468)

                                                  ============ ============  =============  =============  =============
Balance at June 30, 2004                           98,003,270   $  980,033   $ 24,843,659   $(40,204,863)  $(14,381,171)
                                                  ============ ============  =============  =============  =============
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           2,232,473       22,325        174,912            ---        197,237

Net loss for the six months ended June 30, 2005           ---          ---            ---       (920,875)      (920,875)
                                                  ============ ============  =============  =============  =============
Balance at June 30, 2005                          103,964,926   $1,039,650   $ 25,313,660   $(41,522,235)  $(15,168,925)
                                                  ============ ============  =============  =============  =============































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>
                                                                          Six months ended
                                                                    ___________________________
                                                                        June 30,       June 30,
                                                                           2005           2004
                                                                    ____________   ____________
<S>                                                                 <C>            <C>
Cash flows from operating activities
  Net loss                                                          $  (920,875)   $  (913,468)
  Adjustments to reconcile net loss to net cash provided
  by operating activities:
     Depreciation                                                         9,624          9,624
     Increase in preferred stock for cumulative dividends
     classified as interest                                               5,922         37,058
     Issuance of Shares to Fermtech per ProBio agreement                    ---        110,000
     Manufacturing cost paid in shares of common stock                  197,237        184,879
     Issuance of common stock for legal services                            ---         27,500
     Equity in loss of joint venture                                    466,070        202,060
     Loss on receivable from disposal of equipment                       50,000            ---

     Decrease (increase) in:
        Accounts receivable                                              17,845         58,125
        Prepaid expenses and other current assets                         1,683         12,866

     Increase (decrease) in:
        Accounts payable and accrued expenses                           481,428        428,800
                                                                    ____________   ____________

  Net cash provided by operating activities                             308,934        157,444
                                                                    ____________   ____________
Cash flows from investing activities
  Advances to joint venture                                            (466,070)      (202,060)
                                                                    ____________   ____________

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                                 ---         18,127
                                                                    ____________   ____________

  Net decrease in cash and cash equivalents                            (157,136)       (26,489)

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

  Cash and cash equivalents at end of period                        $    47,112    $    36,586
                                                                    ============   ============

Supplementary disclosure and cash flow information

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

See Note (2) 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   June   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
     has  operational  subsidiaries in Norway and  Chile.   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  certain of its facility assets  currently
     used  in citric acid production.  Commercial production  has
     commenced.

(3)  Noncash investing and financing activities

     During  the  six  months ended June 30,  2004,  the  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 six months ended June 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  six months ended June 30, 2004, 250,000  shares
     were  issued  to  the  Company's  attorney  as  a  bonus  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 ADM legal expense.




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

     During  the  six months ended June 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 six months ended June 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 six months ended June 30, 2005 and 2004, Fermic,
     Igene's  manufacturing agent, earned 2,232,473 and 1,361,609
     shares,  respectively,  of  common  stock  as  part  of  the
     manufacturing agreement. Fermic earns 2,250 shares of common
     stock  for  each  kilogram  pure  Astaxanthin  produced  and
     delivered  as  part of the 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 2,232,473  shares
     were earned at an average price of $.085 per share for 2005,
     and  1,361,609  shares were earned at an  average  price  of
     $.135 per share for 2004.  Through June 30, 2005, 16,962,486
     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  six months ended June 30, 2005  and  2004,  the
     Company  recorded  dividends in  arrears  on  8%  redeemable
     preferred stock cumulating at $.32 per share aggregating  to
     $5,922  and  $37,058, respectively on preferred  stock.  The
     accrued  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 classified to interest expense.

     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.    Benjamin'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 remains
     employed by Igene through 2005  and  the remaining 1,000,000
     escrowed shares  will  be released from escrow and delivered
     to Fermtech.

(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  June 30, 2005, Igene's portion  of  the  Joint
    Venture's net loss was $8,092,320.  The loss was a result  of
    a   50%  interest  in  the  following:   Gross  profit   from
    inception  was a negative $7,688,088 on sales of $12,517,400,
    less  manufacturing cost of $20,205,488.  Selling and general
    and  administrative  expenses were  $7,292,077  and  interest
    expense  was $1,204,475.  The resulting loss before  tax  was
    $16,184,640.   Igene's 50% portion of the Joint Venture  loss
    was $8,092,320.

    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  June 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 $1,151,508, for  a  total  of
    $1,474,377.   Through  December 31,  2004,  Igene  recognized
    $1,008,307  of the $4,887,494 loss which existed as  part  of
    the  Joint  Venture.   In the first quarter  of  2005,  Igene
    recognized  losses  to  the extent of  the  increase  in  the
    advance  $183,093, the March 31, 2005 balance of  $1,191,400,
    less  the December 31, 2004 balance of $1,008,307.   For  the
    three  months ended June 30 2005, Igene recognized a loss  of
    $282,977  which is the extent of the increase in the  advance
    for  that  period (the June 30, 2005 balance   of  $1,474,377
    less  the  March  31,  2005  balance  of  $1,191,400).    The
    remainder  of the loss, which is $1,698,500 for the  quarter,
    is  suspended.   The cumulative suspended loss  at  June  30,
    2005  is $6,617,943 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 June 30, 2005.












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

    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 June 30,  2005.
    As  shown 50% of the activity is recorded as part of  Igene's
    Financial  Statements  as  loss  from  investment  in   Joint
    Venture:

<TABLE>
<CAPTION>
                                                                         June 30,
                                                                            2005
                                                                     _____________
                                                                      (Unaudited)
     <S>                                                             <C>
     ASSETS
     CURRENT ASSETS
       Account Receivable                                            $  2,367,400
       Inventory                                                        1,324,000
                                                                     _____________

                                                                        3,691,400

     OTHER ASSETS
       Fixed Assets Receivable                                         24,074,000
       Intellectual property                                           24,617,000
                                                                     _____________

          TOTAL ASSETS                                               $ 52,382,000
                                                                     =============

     LIABILITIES AND EQUITY
     CURRENT LIABILITIES
       Accounts payable and accrued expenses                         $ 14,560,600
       Working capital loan                                             2,206,700
                                                                     _____________

          TOTAL LIABILITIES                                            16,767,300

       Equity                                                          35,614,700
                                                                     _____________

          TOTAL LIABILITIES AND EQUITY                               $ 52,382,000
                                                                     =============
</TABLE>
<TABLE>
<CAPTION>
                                                               Period from March 18, 2003
                                                                 (initial investment) to
                                                                     June 30, 2005
                                                               __________________________
                                                                      (unaudited)
       <S>                                                           <C>
       Net Sales                                                     $ 12,517,400
       Less: manufacturing cost                                       (20,205,488)
                                                                     _____________

       Gross Profit (Loss)                                             (7,688,088)
       Less: selling, general and administrative                       (7,292,077)
                                                                     _____________

       Operating Loss                                                 (14,980,165)
       Interest Expense                                                (1,204,475)
                                                                     _____________

       Net Loss                                                      $(16,184,640)
                                                                     =============

       Igene's 50% equity interest in the net loss                   $ (8,092,320)
       Igene's Investment in and Advances to the Joint Venture         (1,474,377)
                                                                     _____________

       Igene's suspended loss at June 30, 2005                       $ (6,617,943)
                                                                     =============
</TABLE>














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

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

<TABLE>
<CAPTION>
                                                        Three Months       Six Months
                                                           Ended              Ended
                                                        June 30, 2005    June 30, 2005
                                                        _____________    _____________
     <S>                                                <C>              <C>
     Net Sales                                          $  3,379,000     $  5,733,400
     Less: manufacturing cost                             (5,448,000)      (9,065,488)
                                                        _____________    _____________

     Gross Profit (Loss)                                  (2,069,000)      (3,332,088)
     Less: selling, general and admin                     (1,260,000)      (2,024,077)
                                                        _____________    _____________

     Operating Loss                                       (3,329,000)      (5,356,165)
     Interest Expense                                        (68,000)      (1,053,475)
                                                        _____________    _____________

     Loss before tax                                    $ (3,397,000)    $ (6,409,640)
                                                        =============    =============

     50% equity interest Igene                          $ (1,698,500)    $ (3,204,820)
     Igene's additional Investment in
       and Advances to the Joint Venture                    (282,977)        (466,070)
                                                        _____________    _____________

     Igene's incremental suspended loss for period      $ (1,415,523)    $ (2,738,750)
                                                        =============    =============

</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  June  30,  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  June  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  June  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  June  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  June  30, 2005, 66,427,651 shares of authorized  but
     unissued  common stock were reserved for the  conversion  of
     outstanding  convertible promissory notes held by  directors
     of the Company.




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

     As  of  June  30,  2005, 7,050,000 shares of authorized  but
     unissued  common stock were reserved for the  conversion  of
     outstanding convertible promissory notes issued as  part  of
     the purchase of ProBio.

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

     As  of  June  30,  2005, 3,037,514 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  six-
     month  periods ended June 30, 2005 and 2004,  are  based  on
     102,266,230 and 94,376,611 shares, respectively, of weighted
     average common shares outstanding. The same figures for  the
     three month period then ended are based upon 102,794,142 and
     95,821,138  weighted average common shares outstanding.   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 $41,500,000 from inception to June
     30,  2005  and  its  liabilities  exceeded  its  assets   by
     approximately  $15,170,000  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 Joint Venture with  Tate  &
     Lyle.  Igene  began  manufacturing  and  selling  AstaXin(R)
     during 1998 and has continued to do so to  date,  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 cannot be
     assured.

(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
     June 30:




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

<CAPTION>
                                                        Three months ended          Six months ended
                                                     _________________________   _________________________
                                                       June 30,     June 30,       June 30,     June 30,
                                                          2005         2004           2005         2004
                                                     ____________ ____________   ____________ ____________
  <S>                                                <C>          <C>            <C>          <C>
  Net loss:
  As reported                                        $  (532,838) $  (600,845)   $  (920,875) $  (913,468)

  Less pro forma stock-based employee
     compensation expense determined under
     fair value based method net of related
     tax effects                                             ---     (156,892)           ---     (330,447)
                                                     ____________ ____________   ____________ ____________

  Net loss                                           $  (532,838) $  (757,737)   $  (920,875) $(1,243,915)
                                                     ============ ============   ============ ============
  Net loss per Share:
    Basic - as reported                              $     (0.01) $     (0.01)   $     (0.01) $     (0.01)
    Basic - pro forma                                $     (0.01) $     (0.01)   $     (0.01) $     (0.01)
    Diluted - as reported                            $     (0.01) $     (0.01)   $     (0.01) $     (0.01)
    Diluted - pro forma                              $     (0.01) $     (0.01)   $     (0.01) $     (0.01)

</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.

     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.

     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.



                              -16-
            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.

Overview of Financial Position

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

   -  Increases  in  accounts  payables  and accrued expenses  of
      $481,428 and decreases  in  accounts  receivable of $17,845
      were sources of cash.   These were reduced by increases due
      from Joint Venture of $466,070.

   -  The  carrying   value  of  redeemable preferred  stock  was
      increased  for  $5,922  in  2005  and  $37,058   in   2004,
      reflecting  cumulative  unpaid  dividends   on   redeemable
      preferred stock.

   -  During  the  six months ended June 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 six months ended June 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.


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  June  30, 2005, total dividends  in  arrears  on
Igene's preferred stock total $198,416 ($10.72 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)

Critical Accounting Policies

      The  preparation of our financial statements in  conformity
with   accounting  principles  generally  accepted  in  the  U.S.
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 new
manufacturing facility has been constructed and operated  by  the
Joint Venture.

Results of Operations
_____________________

Sales and other revenue

     As part  of  the  Joint  Venture agreement,  all  sales  are
recognized through the Joint Venture.  Therefore, Igene  recorded
no  sales of AstaXin(R) during the six months ended June 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.

Cost of sales and gross profit

     As with  sales revenue, all cost of sales and gross  profits
are recognized through the Joint Venture company.  Igene reported
no gross profit on sales of AstaXin(R) for the six  months  ended
June  30, 2005 or 2004.  The Company attributes this modest 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.
Demand  is expected to increase as the Company increases customer
usage  and market share.  Management expects the level  of  gross
profit   to   improve  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.





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

Marketing and selling expenses

     For  the  quarters  ended  June 30,  2005  and  2004,  Igene
recorded  marketing and selling expense in the amount of  $70,876
and  $161,245, respectively, a decrease of $90,369 or  56%.   For
the  six  months  ended  June 30, 2005 and 2004,  Igene  recorded
marketing  and  selling  expense in the amount  of  $119,164  and
$209,267,  respectively,  a decrease  of  $90,103  or  43%.   The
current  period  marketing and selling  expense  decreased  as  a
result of the 2004 recognition of the expense associated with the
shares  issued to Fermtech.  As Mr. Benjaminsen remained employed
by Igene through 2003, 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 of  2004
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.  This cost will be recognized in  the
latter  half  of 2005, leveling the costs with the 2004  expense.
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  at  the  point  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 June 30, 2005 and 2004, Igene recorded
research  and  development costs in the amount  of  $217,082  and
$195,522,  respectively, a increase of $21,560 or 11%.   For  the
six  months ended June 30, 2005 and 2004, Igene recorded research
and  development  costs in the amount of $383,089  and  $403,932,
respectively,  a  decrease of $20,843 or  5%.   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 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
June  30,  2005 and 2004 were $246,592 and $210,950 respectively,
an  increase  of  $35,642  or  17%.  General  and  administrative
expenses  for  the six months ended June 30, 2005 and  2004  were
$435,500  and  $360,828 respectively, an increase of  $74,672  or
21%.  These costs are expected to remain constant at this current
level.   Cost  increases  are due to increased  reporting  costs.
Igene  works to keep overhead costs at a reduced level and  spend
funds  on  research and development efforts.  A portion  of  this
cost is 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.

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  $27,500  of
litigation expenses for the three months ended June 30, 2004, and
$40,580  for the six months ended June 30, 2004.  During the  six
months  ended  June 30, 2004, 250,000 shares were issued  to  the
Company attorney, as a bonus 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, no costs were  incurred  in
2005.




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

Interest expense

     Interest  expense for the quarters ended June 30,  2005  and
2004  was  $192,709  and $216,015, respectively,  a  decrease  of
$23,306 or 11%.  For the six months ended June 30, 2005 and 2004,
interest  expense  was  $405,789 and $439,976,  respectively,  an
decrease  of  $34,187  or  8%  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.  It  is
expected  this  number  may decrease due to  the  conversions  by
holders of long term debt to equity.  This decrease is due mainly
to  reduced  cumulative dividends accrued  from  preferred  stock
which was recorded as interest expense

Loss on disposal

     During the second quarter of 2005, Igene wrote off a portion
of a receivable for the sale of equipment it had determined would
not  be  of use in the new Selby facility and recorded a loss  of
$50,000.

Net loss and basic and diluted net loss per common share

     As  a  result  of  the foregoing, the Company  reported  net
losses  of $532,838 and $600,845, respectively, for the  quarters
ended  June 30, 2005 and 2004, a decrease in the loss of  $68,007
or  11%.   This represents a loss of $.01 per basic  and  diluted
common  share in the quarters ended June 30, 2005 and 2004.   The
weighted average number of shares of common stock outstanding  of
102,794,142 and 95,821,138 for the quarters ended June  30,  2005
and  2004,  respectively,  increased by  6,973,004  shares.  This
resulted  from the weighted average adjustments of the  following
transactions:  the  issuance  of  1,050,000  shares   issued   in
conversion  of  debentures,  4,511,656  shares  issued   to   the
manufacturer as part of the agreement, and 400,000 shares  issued
as part of employee stock option exercises.

Liquidity and Capital Resources

     Historically, Igene  has  been funded  primarily  by  equity
contributions and loans from stockholders. As of June  30,  2005,
Igene had negative working capital of $818,279, and cash and cash
equivalents  of  $47,112.   Currently Igene  is  also  funded  by
research and development reimbursements from the Joint Venture.

    Cash  provided  by operating activities during the  six-month
period  ended  June 30, 2005 and 2004 amounted  to  $303,012  and
$120,386, respectively, an increase in cash provided of $182,626.

    Cash used by investing activities during the six-month period
ended  June 30, 2005 and 2004 amounted to $466,070 and  $202,060,
respectively, an increase of $264,010, from increases in advances
to the Joint Venture.

    Cash  provided  by  financing activities  for  the  six-month
period  ended  June  30,  2005 and 2004 amounted  to  $5,922  and
$55,185,   respectively,  a  decrease  of   $49,263.    Financing
activities  consisted  primarily of employee  stock  option  plan
purchases   and  increases  in  preferred  stock  for  cumulative
dividends classified as interest.

    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.  This  funding  is
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
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 six-month periods
ended June 30, 2005 and 2004.



                              -20-
            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.












































                              -21-
                    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 June 30, 2005, total dividends in arrears  on  the
Company's  preferred stock total $198,416 ($10.72 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.



























                              -22-

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.











































                              -23-
                           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




































                              -24-
                          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.












































                              -25-