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

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

        For the quarterly period ended September 30, 2007

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

   For the transition period from __________ to __________

                 Commission file number 0-15888

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

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

   9110 Red Branch Road, Columbia, Maryland 21045-2024
   ___________________________________________________
        (Address of Principal Executive Offices)


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

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

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

Yes   [x]          No   [ ]

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

Yes   [ ]          No   [x]

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

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

Yes   [ ]          No   [ ]

State  the  number of shares outstanding of each of the  issuer's
classes of common equity, as of the latest practicable date:
109,437,072  shares  of  common stock,  par  value  $.01,  as  of
_________________________________________________________________
December 11, 2007.
__________________

Transitional Small Business Disclosure Format (check one):
Yes   [ ]          No   [x]

<PAGE>

                           FORM 10-QSB
                    IGENE Biotechnology, Inc.
<PAGE>

                              INDEX



PART I     -     FINANCIAL INFORMATION
                                                                   Page

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

  Condensed Consolidated Statements of Operations ..............      6

  Condensed Consolidated Statements of Stockholders' Deficiency .     7

  Condensed Consolidated Statements of Cash Flows ...............     8

  Notes to Condensed Consolidated Financial Statements ..........  9-15

  Management's Discussion and Analysis of Financial
  Conditions and Results of Operations .......................... 16-20

  Controls and Procedures........................................    20

PART II   -     OTHER INFORMATION ............................... 21-22

SIGNATURES ......................................................    23

EXHIBIT INDEX ...................................................    24


<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
                              Condensed Consolidated Balance Sheets

                                                                         September 30,    December 31,
                                                                                  2007            2006
                                                                         _____________   _____________
                                                                           (Unaudited)        Restated
                                                                                              (Note 1)
<S>                                                                      <C>             <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents                                              $    155,830    $     21,786
  Prepaid expenses and other current assets                                     7,498          14,093
                                                                         _____________   _____________
     TOTAL CURRENT ASSETS                                                     163,328          35,879


  Property and equipment, net                                                   5,243          33,571
  Investment in and advances to unconsolidated joint venture                      ---             ---
  Other assets                                                                  5,125           5,125

     TOTAL ASSETS                                                        $    173,696    $     74,575
                                                                         =============   =============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
  Accounts payable and accrued expenses                                  $    129,705    $    210,424
  Convertible debenture                                                           ---         705,000
  Accrued interest                                                                ---          46,570
                                                                         _____________   _____________

     TOTAL CURRENT LIABILITIES                                                129,705         961,994

LONG-TERM LIABILITIES
  Notes payable (net of unamortized discount)                               4,386,559       3,615,889
  Convertible debentures (net of unamortized discount)                      3,149,859       2,103,444
  Accrued interest                                                          6,242,531       5,655,830

REDEEMABLE PREFERRED STOCK
  Carrying amount of redeemable preferred
     stock, 8% cumulative, convertible,
     voting, series A, $.01 par value per
     share. Stated value was $ 20.16
     and $19.68, respectively.  Authorized 1,312,500
     shares, issued 11,134. Redemption amount $224,461                        224,461         219,117
                                                                         _____________   _____________

     TOTAL LIABILITIES                                                     14,133,115      12,556,274
                                                                         _____________   _____________

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
  Common stock --- $.01 par value per share.
     Authorized 750,000,000 shares;
     issued and outstanding 109,337,072
     shares                                                                 1,093,371       1,093,371
  Additional paid-in capital                                               33,265,687      33,265,687
  Accumulated deficit                                                     (48,318,477)    (46,840,757)
                                                                         _____________   _____________

     TOTAL STOCKHOLDERS' DEFICIENCY                                       (13,959,419)    (12,481,699)
                                                                         _____________   _____________
     TOTAL LIABILITIES AND
     STOCKHOLDERS' DEFICIENCY                                            $    173,696    $     74,575
                                                                         =============   =============

</TABLE>

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

                               -5-
<TABLE>
<CAPTION>

                                   IGENE Biotechnology, Inc. and Subsidiary
                               Condensed Consolidated Statements of Operations
                                                (Unaudited)

                                                                  Three months ended                   Nine months ended
                                                          __________________________________   __________________________________
                                                             September 30,     September 30,      September 30,     September 30,
                                                                      2007              2006               2007              2006
                                                          ________________  ________________   ________________  ________________
                                                                                  (Restated)                           (Restated)
<S>                                                       <C>               <C>                <C>               <C>
EQUITY IN REPAID ADVANCES (LOSS) OF JOINT VENTURE         $       (97,404)  $        11,299    $       161,224   $        (6,964)

OPERATING EXPENSES
__________________
  Marketing and selling                                             9,891             5,328             49,216            95,538
  Research and development                                        223,774           173,526            721,060           619,263
  General and administrative                                      188,537           247,241            666,599           764,255
  Operating expenses reimbursed by Joint Venture                 (476,167)         (388,421)        (1,436,653)       (1,248,281)
                                                          ________________  ________________   ________________  ________________
          TOTAL OPERATING EXPENSES                                (53,965)           37,674                222           230,775
                                                          ________________  ________________   ________________  ________________
          OPERATING PROFIT (LOSS)                                 (43,439)          (26,375)           161,002          (237,739)

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

OTHER INCOME                                                        6,160            10,305             13,697            10,305
INTEREST EXPENSE (including amortization of debt discount
   of $351,695 and $351,694 for the three months ended
   September 30, 2007 and 2006 respectively and $1,055,085
   and $924,442 for the nine months ended
   September 30, 2007 and 2006 respectively)                     (552,995)         (560,996)        (1,658,111)       (1,547,335)
                                                          ________________  ________________   ________________  ________________
          NET LOSS                                        $      (584,582)  $      (577,066)   $    (1,477,720)  $    (1,774,769)
                                                          ================  ================   ================  ================
BASIC AND DILUTED NET LOSS PER COMMON SHARE               $         (0.01)  $         (0.01)   $         (0.01)  $         (0.02)
                                                          ================  ================   ================  ================
</TABLE>




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

                               -6-

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



                                                                                 Additional                      Total
                                                          Common Stock           Paid-in         Accumulated     Stockholders'
                                                         (shares/amount)         Capital         Deficit         Deficiency
                                                  ____________________________   _____________   _____________   _____________
<S>                                               <C>            <C>             <C>             <C>             <C>
Balance at January 1, 2007                         109,337,072   $  1,093,371    $ 33,265,687    $(46,840,757)   $(12,481,699)

Net loss for the nine months ended Sept 30, 2007           ---            ---             ---      (1,477,720)     (1,477,720)
                                                  _____________  _____________   _____________   _____________   _____________
Balance at September 30, 2007                      109,337,072   $  1,093,371    $ 33,265,687    $(48,318,477)   $(13,959,419)
                                                  =============  =============   =============   =============   =============
</TABLE>


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

                               -7-

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

                                                                                Nine months ended
                                                                        _______________________________
                                                                        September 30,     September 30,
                                                                                2007              2006
                                                                        _____________     _____________
                                                                                             (Restated)
<S>                                                                     <C>               <C>
Cash flows from operating activities
  Net loss                                                              $ (1,477,720)     $ (1,774,769)
  Adjustments to reconcile net loss to net cash
  used in operating activities:
     Amortization of debt discount                                         1,055,085           924,442
     Gain on disposal of equipment                                            (5,692)              ---
     Depreciation                                                             14,020            14,020
     Manufacturing cost paid in shares of common stock                           ---            30,360
     Shares issued to new Vice President of manufacturing                        ---            50,000
     (Recoupment of payment) Equity in loss of joint venture                (161,224)            6,964
     Increase in preferred stock for cumulative dividend
     classified as interest                                                    5,344             6,524

     Decrease in:
       Accounts receivable                                                       ---            10,692
       Prepaid expenses and other current assets                               6,596            10,557

     Increase in:
       Accounts payable and accrued expenses                                 459,411           622,620
                                                                        _____________     _____________
  Net cash provided by (used in) operating activities                       (104,180)          (98,590)
                                                                        _____________     _____________
Cash flows from investing activities
  Cash proceeds from sale of property and equipment                           20,000               ---
  Recoupment of payment (advances) to joint venture                          161,224            (6,964)
                                                                        _____________     _____________
  Net cash provided (used in) investing activities                           181,224            (6,964)

Cash flows from financing activities
  Proceeds from issuance of convertible debentures                           762,000               ---
  Repayment of convertible debentures                                       (705,000)              ---
  Proceeds from exercise of warrants                                             ---               788
  Proceeds from exercise of employee stock options                               ---            10,300
                                                                        _____________     _____________

  Net cash provided by financing activities                                   57,000            11,088
                                                                        _____________     _____________

  Net increase (decrease) in cash and cash equivalents                       134,044           (94,466)

  Cash and cash equivalents at beginning of period                            21,786           119,745
                                                                        _____________     _____________

  Cash and cash equivalents at end of period                            $    155,830      $     25,279
                                                                        =============     =============
Supplementary disclosure and cash flow information
__________________________________________________
Cash paid for interest                                                  $     57,637      $     35,250

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


</TABLE>

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

                               -8-

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



(1)  Unaudited consolidated financial statements

     The  September  30,  2007  condensed 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/A  for the year ended December 31,  2006.   The
     December  31, 2006 condensed consolidated balance  sheet  is
     derived from the audited balance sheet included therein.

     The nine and three months ended September 30, 2006 condensed
     consolidated statements of operations, the nine months ended
     September 30, 2006 condensed consolidated statement of  cash
     flows   and  the  December  31, 2006 condensed  consolidated
     balance  sheet contain restated financial data.  The Company
     historically when valuing the shares underlying the warrants
     of  the Company, has applied a discount to the value of  the
     shares based on the illiquidity of the shares, applying such
     things  as  blockage discounts to the value of  the  shares.
     Based  on  the  application  of  illiquidity  discounts  the
     Company  felt it was an immaterial adjustment  to  record  a
     valuation  to  the  shares  underlying  the  warrants.   The
     Company  has  determined to value the shares underlying  the
     warrants  using quoted market prices in connection with  the
     Company's  issuance  of  promissory  notes  and  convertible
     debentures  using  a Black Scholes model  and  ignoring  any
     discounts for illiquidity of shares or blockage discounts.

(2)  Nature of Operations

     Igene  Biotechnology, Inc. (the "Company"  or  "Igene")  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.  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   various   feed
     applications  and  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 18, 2003, Tate & Lyle PLC ("Tate & Lyle") and  the
     Company announced a 50:50 joint venture to produce AstaXin(R)
     for  the  aquaculture industry. Production utilized  Tate  &
     Lyle's  fermentation  capability together  with  the  unique
     technology  developed  by  Igene.  Part  of  Tate  &  Lyle's
     existing  Selby, England, citric acid facility was  modified
     to  include the production of 1,500 tons per annum  of  this
     product.   Tate & Lyle's investment of $25 million  included
     certain  of  its  facility assets then used in  citric  acid
     production.  On October 31, 2007, the Company and  Tate  and
     Lyle  terminated this joint venture (see Notes  6  and  11).
     The  Company  is  currently researching and  conducting  due
     diligence  in  connection with entering into  a  contractual
     relationship  with  a  third party  production  facility  to
     manufacture AstaXin(R) previously  produced  by  the   Joint
     Venture.




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


(3)  Uncertainty

     Igene has incurred net losses in each year of its existence,
     aggregating  approximately  $48,318,000  from  inception  to
     September  30, 2007 and its liabilities exceeded its  assets
     by  approximately $13,959,000 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.

     As discussed in Subsequent Event (note 11) as of October 31,
     2007 Igene has terminated its relationship  with  the  Joint
     Venture with Tate & Lyle.   Igene  maintains  the   saleable
     inventory  after  the termination of the relationship and is
     currently reviewing  alternatives for a future manufacturing
     alternative.    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,  2006,  7,375
     shares  of  redeemable  preferred  stock,  with  a  recorded
     aggregate  value  of  $141,600, were converted  into  14,750
     shares of common stock.

     During  the  nine months ended September 30,  2006,  Fermic,
     Igene's manufacturing agent, earned 545,569 shares of common
     stock  as part of the manufacturing agreement between Fermic
     and  the Company. Fermic earned 2,250 shares of common stock
     for each kilogram of pure astaxanthin produced and delivered
     as  part  of the agreement.  The average price was based  on
     the  market  value of the shares at the time the product  is
     produced.   With  the distribution in the first  quarter  of
     2006,  Fermic  has  earned the 20,000,000  shares  in  total
     available  under  the  agreement.  The 545,569  shares  were
     earned at an average price of $.056 per share for 2006.

     During  the  nine months ended September 30,  2006,  312,000
     shares of common stock were issued as part of employee stock
     option exercises.  The Company received $10,300 based on  an
     average exercise price of $.033 per share.

     During  the  nine  months ended September  30,  2006,  7,884
     warrants  were  exercised for $788.   7,884  new  shares  of
     common stock were issued pursuant to the exercise.

     During  the  nine months ended September 30, 2006  1,000,000
     shares of common stock were issued to the company's new Vice
     President  of  Manufacturing as part  of  his  agreement  in
     accepting the position.  The cost was expensed in the  third
     quarter  as  payroll expense, at a cost of $.05  per  share,
     total expense $50,000.

     During  the nine months ended September 30, 2007  and  2006,
     the  Company recorded dividends in arrears on 8%  redeemable
     preferred  stock accumulating at $.48 per share  aggregating
     to  $5,344 and $6,524, respectively on preferred stock.  The
     accrued  interest is included in the carrying value  of  the
     redeemable preferred stock.

(5)  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.





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


     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.

     The  funds  to settle the Notes Litigation were provided  by
     Igene's  directors.  On February 15, 2007, Igene issued  and
     sold   $762,000  in  aggregate  principal   amount   of   5%
     convertible  debentures, 50% each to  certain  directors  of
     Igene.   These  debentures are convertible  into  shares  of
     Igene's  common stock at $.02 per share.  These  debentures,
     if not converted earlier, become due on February 15, 2017.

(6)  Joint Venture

     On  March 18, 2003, the Company entered into a Joint Venture
     Agreement  with  Tate  &  Lyle  Fermentation  Products  Ltd.
     ("Tate & Lyle").  Pursuant to a Joint Venture Agreement, the
     Company and Tate & Lyle 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 & Lyle 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 were
     to  be  used  by  the Joint Venture in the  same  manner  as
     historically used by the Company.  The Company  and  Tate  &
     Lyle  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 investment in the
     Joint  Venture was 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 had  been  previously
     expensed  and  had  a carrying amount of zero,  the  initial
     investment  in  the Joint Venture has been 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.

     As  a result of the Joint Venture, the production, sales and
     marketing   of   Astaxanthin  now   takes   place   in   the
     unconsolidated Joint Venture.  From inception on  March  18,
     2003  through  September 30, 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 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.










                              -11-

            IGENE Biotechnology, Inc. and Subsidiary
      Notes to Condensed Consolidated Financial Statements
                           (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   is
     $20,495,494 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 condensed consolidated  financial
     statements is zero at September 30, 2007.

     On October 31, 2007, the Company and Tate & Lyle  terminated
     this joint venture (see Note 11).

     The  following condensed statement displays the activity  of
     the  Joint  Venture for the period of initial investment  at
     March  18,  2003 in the Joint Venture through September  30,
     2007.   As  shown  50% of the activity, limited  to  Igene's
     investment,  is  recorded  as  part  of  Igene's   Financial
     Statements as loss from investment in the Joint Venture:

<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 June 30, 2007                  $  (20,495,494)
                                                              ===============
</TABLE>
                              -12-

            IGENE Biotechnology, Inc. and Subsidiary
      Notes to Condensed Consolidated Financial Statements
                           (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, 2007, 22,268 shares of authorized  but
     unissued   common  stock  were  reserved  for   issue   upon
     conversion of the Company's outstanding preferred stock.

     As  of  September 30, 2007, 72,232,334 shares of  authorized
     but  unissued  common  stock were  reserved  for  issue  and
     exercise  pursuant  to the Company's Employee  Stock  Option
     Plans.

     As  of  September 30, 2007, 23,421,273 shares of  authorized
     but  unissued common stock were reserved for the  conversion
     of outstanding convertible promissory notes in the aggregate
     amount of $1,082,500 held by directors of the Company.

     As  of  September 30, 2007, 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.

     As  of  September 30, 2007, 38,250,000 shares of  authorized
     but  unissued common stock were reserved for the  conversion
     of  outstanding convertible promissory notes issued  to  the
     directors as part of the settlement of the ProBio notes.

     As  of  September 30, 2007, 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,  2007  and  2006,  are
     based on 109,337,072  and  108,067,437 shares, respectively,
     of weighted average  common  shares  outstanding.   The same
     figures for  the  three  month   period then ended are based
     upon  109,337,072 and 108,337,072  weighted  average  common
     shares outstanding.  No  adjustment  has  been  made for any
     common stock equivalents outstanding  because  their effects
     would be antidilutive as a result  of the  Company's losses.
     As of September 30, 2007  and  2006,  potentially   dilutive
     shares  totaled  405,614,599  and 369,969,462, respectively.



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


(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) Recent Accounting Pronouncements

     In September 2006, the Financial Accounting Standards  Board
     issued Statement  of Financial Accounting  Standards  Number
     157 - Fair Value Measurements ("SFAS 157"). SFAS 157 defines
     fair value, establishes a framework for measuring fair value
     in generally  accepted accounting principles  ("GAAP"),  and
     expands disclosures about fair value measurements.  Prior to
     SFAS 157, there were different definitions of fair value and
     limited  guidance  for  applying those definitions  in GAAP.
     Moreover,  that  guidance  was  dispersed  among   the  many
     accounting    pronouncements   that   require   fair   value
     measurements. SFAS 157 clarifies that the exchange  price is
     the   price   in   an  orderly  transaction  between  market
     participants  to sell the asset or transfer the liability in
     the  market in which the reporting entity would transact for
     the  asset  or  liability, that is,  the  principal  or most
     advantageous market for the asset or liability.  SFAS 157 is
     effective  for financial statements issued for  fiscal years
     beginning  after November 15, 2008. The Company is currently
     evaluating  the impact, if any, that SFAS 157  will have  on
     its  financial  position,  results  of  operations and  cash
     flows.

     In June  2006,  the  Financial  Accounting  Standards  Board
     ("FASB")  issued   Financial  Accounting   Standards   Board
     Interpretation ("FIN") No. 48, "Accounting  for  Uncertainty
     in  Income   Taxes-an  interpretation  of   FASB   Statement
     No. 109." FIN No. 48 provides a comprehensive model for  the
     recognition,  measurement  and disclosure  in  the financial
     statements  of uncertain tax positions taken or expected  to
     be  taken  on a tax return. The Company adopted FIN  No.  48
     effective January 1, 2007.  The interpretation had no impact
     on  financial  position, results of operations, earnings per
     share, or cash flows.

     In September  2006,  the Securities and Exchange  Commission
     issued SAB  No. 108, "Considering the Effects of Prior  Year
     Misstatements when Quantifying Misstatements in Current Year
     Financial  Statements." SAB No. 108  was  issued  to address
     diversity  in  practice  in quantifying  financial statement
     misstatements. Current practice allows for the evaluation of
     materiality  on the basis of either (1) the error quantified
     as the amount by which the current year income statement was
     misstated ("rollover  method") or (2) the  cumulative  error
     quantified as  the  cumulative amount by which  the  current
     year  balance sheet was misstated ("iron  curtain  method").
     The guidance provided in SAB 108 requires both methods to be
     used   in  evaluating  materiality  ("dual  approach").  SAB
     No. 108  permits companies to initially apply its provisions
     either by (1) restating prior financial statements as if the
     dual  approach  had  always been used or  (2)  recording the
     cumulative  effect of initially applying the "dual approach"
     as   adjustments  to  the  carrying  values  of  assets  and
     liabilities  as  of  January  1,  2006  with  an  offsetting
     adjustment  recorded  to  the  opening  balance of  retained
     earnings.   There  were no matters warranting the  Company's
     consideration  under  the provisions  of  SAB No.  108  and,
     therefore,  it  did  not  have an  impact  on the  Company's
     financial  position,  results  of  operations, earnings  per
     share or cash flows.


                              -14-

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



     In  February 2007, the FASB issued SFAS No. 159,  "The  Fair
     Value Option for Financial Assets and Financial Liabilities-
     Including  an  Amendment of FASB Statement  No.  115."  This
     Standard allows entities to voluntarily choose, at specified
     election  dates,  to  measure  many  financial  assets   and
     financial  liabilities  (as  well  as  certain  nonfinancial
     instruments  that are similar to financial  instruments)  at
     fair  value.  The  election  is made  on  an  instrument-by-
     instrument  basis  and is irrevocable.  If  the  fair  value
     option is elected for an instrument, the Statement specifies
     that   all  subsequent  changes  in  fair  value  for   that
     instrument  shall be reported in earnings. SFAS No.  159  is
     effective  beginning on January 1, 2008.  We  are  currently
     evaluating  the impact this new Standard could have  on  our
     financial position and results of operations.

(11) Subsequent Event

     On  October  31,  2007,  Igene   Biotechnology,  Inc.   (the
     "Company")  and  Tate  &  Lyle  Fermentation  Products  Ltd.
     ("T&L")   entered   into   a   Separation   Agreement   (the
     "Agreement")   pursuant   to   which   the   Joint   Venture
     Agreement  dated  March 19, 2003, as  amended,  between  the
     parties  (the  "Joint  Venture")  was terminated. As part of
     the Agreement, the Company sold to T&L its  50%  interest in
     the joint venture and the joint venture sold to the  Company
     its intellectual  property,  inventory  and  certain  assets
     and  lab  equipment  utilized  by  the  Joint Venture.   The
     purchase  price  paid  by  T&L  to the Company  for its  50%
     interest  was  50%  of  the  Joint   Venture's  net  working
     capital.  The purchase price  paid  by  the  Company 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.  The purchase price paid by  the  Company
     for the intellectual property was $1.00.  The purchase price
     paid  by  the  Company  for the assets and lab equipment was
     $1,000,000. In addition, the Company agreed to pay to T&L an
     amount  equal to 5%  of  the Company's gross  revenues  from
     the  sale  of  astaxanthin  up  to a  maximum of $5,000,000.
     T&L agreed for a period  of five years not to engage in  the
     astaxanthin business.






                              -15-

            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.

Critical Accounting Policies

     The  preparation  of  our  condensed consolidated  financial
statements  in  conformity with accounting  principles  generally
accepted  in the United States of America 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  Joint  Venture 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  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 condensed  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 its 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.











                              -16-
            IGENE Biotechnology, Inc. and Subsidiary
             Management's Discussion and Analysis of
          Financial Condition and Results of Operations
                           (continued)

Overview of Financial Position
______________________________

During the nine-month periods ended September 30, 2007 and  2006,
in  addition to the Joint Venture discussed in more detail below,
the following actions materially affected the Company's financial
position.

   o Increases  in  accounts  payable  and  accrued  expenses  of
     $459,411  and  decreases  in prepaid expenses of $6,596 were
     sources of cash.   These  were  in addition to decreases due
     from Joint Venture of $161,224.

   o The  carrying  value  of  redeemable  preferred   stock  was
     increased  by $5,344  in 2007 and $6,524 in 2006, reflecting
     cumulative unpaid dividends on redeemable preferred stock.

   o Net  proceeds  of  borrowing  provided  $57,000  in net cash
     provided by financing activities.   These funds were used to
     pay  outstanding  interest  in  the  settlement of the Notes
     Litigation   referenced  in  Note  4,  entitled   "Long-Term
     Liabilities."

   o During  the  nine  months  ended  September 30, 2006,  7,375
     shares  of  redeemable  preferred  stock,  with  a  recorded
     aggregate  value  of  $141,600,  were  converted into 14,750
     shares  of  common  stock.   This included the 8% Cumulative
     Convertible  Preferred  Stock, Series B preferred securities
     and  has  relieved the Company of this amount from 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 accumulate for future payment or addition to the
liquidation  preference  or redemption  value  of  the  preferred
stock.   As of September 30, 2007, total dividends in arrears  on
Igene's preferred stock were $135,389 ($12.16 per share) and  are
included in the carrying value of the redeemable preferred stock.

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) since the inception of the Joint Venture
on March 18, 2003.   On October 31, 2007, the  Joint  Venture was
terminated.   It is expected that all future sales in  connection
with  AstaXin(R)  shall  be  recognized  and recorded directly by
Igene.

Cost of sales and gross profit

     As with  Sales Revenue, Cost of Sales and Gross Profit  were
recognized  through  the  Joint  Venture.   As  a  result,  Igene
reported  no  gross  profit  on  sales  of  AstaXin(R)  since the
inception of  the  Joint  Venture.  The Joint Venture  attributed
poor  or  negative  gross  profit  to  a  combination  of pricing
pressure in the market and inefficiencies in production.

     Additionally, no cost of sales was recorded as they are also
recorded  as part of the Joint Venture activity.  On October  31,
2007 the Joint Venture was terminated.   It is expected that  all
future  Cost  of  Sales  and  Gross  Profit  in  connection  with
AstaXin(R) will be recognized and recorded directly by Igene.


                              -17-

            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 September 30, 2007 and 2006,  Igene
recorded  marketing and selling expense in the amount  of  $9,891
and  $5,328, respectively, an increase of $4,563 or 86%.  For the
nine  months  ended September 30, 2007 and 2006,  Igene  recorded
marketing  and  selling  expense in the  amount  of  $49,216  and
$95,538, respectively, a decrease of $46,322 or 48%.  During  the
second  quarter of 2006, a Director of Marketing had  been  hired
directly  through the Joint Venture, as a result the majority  of
the  marketing  cost  was  incurred directly  through  the  Joint
Venture rather than being incurred by Igene then being reimbursed
by the Joint Venture.

Research and development expenses

     For  the  quarters ended September 30, 2007 and 2006,  Igene
recorded research and development costs in the amount of $223,774
and  $173,526, respectively, an increase of $50,248 or 29%.   For
the nine months ended September 30, 2007 and 2006, Igene recorded
research  and  development costs in the amount  of  $721,060  and
$619,263,  respectively, an increase of $101,797 or  16%.   These
costs  are expected to remain relatively constant at the  current
level   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.  However no assurances can be made in that regard.
These  costs  were funded through reimbursement  from  the  Joint
Venture.  However, as of October 31, 2007, the Joint Venture  has
been  terminated,  and  as a result, the Joint  Venture  will  no
longer reimburse these costs.

Operating expenses

     General  and administrative expenses for the quarters  ended
September   30,  2007  and  2006  were  $188,537   and   $247,241
respectively,  a  decrease  of  $58,704  or  24%.   General   and
administrative expenses for the nine months ended  September  30,
2007 and 2006 were $666,599 and $764,255 respectively, a decrease
of  $97,656  or 13%.  These costs are expected to remain  at  the
current level.  During the nine months ended September 30,  2006,
1,000,000 shares of common stock were issued to the Company's new
Vice  President  of  Manufacturing as part of  his  agreement  in
accepting  the  position.  The cost was  expensed  in  the  third
quarter  as payroll expense, at a cost of $.05 per share,  for  a
total  expense of $50,000.  This is a one time cost.  Igene works
to  keep  overhead costs at a reduced level and spends  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 none of these can be
assured.   As  of  October 31, 2007, the Joint Venture  has  been
terminated,  and as a result, the Joint Venture  will  no  longer
reimburse these costs.

Interest expense

     Interest  expense for the quarters ended September 30,  2007
and  2006 was $552,995 and $560,996, respectively, a decrease  of
$8,001  or 1%.  This includes amortization of discount on Igene's
notes  and debentures of $351,695 for the quarter ended September
30,  2007 and $351,694 for the quarter ended September 30,  2006.
For  the  nine months ended September 30, 2007 and 2006, interest
expense  was $1,658,111 and $1,547,335, respectively, an increase
of  $110,776  or 7%.  This includes amortization of  discount  on
Igene's  notes and debentures of $1,055,085 for the  nine  months
ended  September 30, 2007 and $924,442 for the nine months  ended
September  30,  2006.  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.








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

Loss on disposal

     During the three months ended September 30, 2007, Igene sold
equipment  it  had  determined would not  be  of  use  in  future
operations and recorded a gain on disposal of $5,692. This  is  a
one time occurrence.

Expenses reimbursed by Joint Venture

     Under  the Joint Venture agreement, costs incurred by  Igene
related to production, research and development, as well as those
costs  related  to  the  marketing of AstaXin(R), were considered
costs  of  the  Joint  Venture  and  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.   For  the  nine  months  ended  September 30, 2006, costs
reimbursed by the Joint Venture totaled  $1,248,281.   The  costs
covered  $95,538   of  marketing  costs, $619,263 of research and
development  costs  and  $533,480  of  general and administrative
costs.  However,  as  of  October 31, 2007, the Joint Venture has
been  terminated,  and  as  a  result,  the Joint Venture will no
longer reimburse these costs.

Net loss and basic and diluted net loss per common share

     As  a  result  of  the foregoing, the Company  reported  net
losses  of $584,582 and $577,066, respectively, for the  quarters
ended  September 30, 2007 and 2006, an increase in  the  loss  of
$7,516  or  1%.   This represents a loss of $.01  per  basic  and
diluted common share in the quarters ended September 30, 2007 and
2006.

Liquidity and Capital Resources

     Historically, Igene  has  been funded  primarily  by  equity
contributions  and  loans  from stockholders  and  reimbursements
received from the Joint Venture. As of September 30, 2007,  Igene
had working capital of $33,623, and cash and cash equivalents  of
$155,830.

     Cash used  for  operating activities during  the  nine-month
period ended September 30, 2007 and 2006 amounted to $104,180 and
$98,590, respectively, a decrease in cash used of $5,590.

     Cash  provided by (used in) investing activities during  the
nine-month  period ended September 30, 2007 and 2006 amounted  to
$181,224 and $(6,964),  respectively, an increase of $188,188  in
investing activity.

     Cash provided  by  financing activities for  the  nine-month
period  ended September 30, 2007 and 2006,  amounted  to  $57,000
and  $11,088, respectively.  Financing activities during the nine
months  of 2007 were in settlement of the convertible debentures.
Cash  provided by financing activities during the first  half  of
2006  consisted primarily of employee stock option plan purchases
and exercise of warrants.

     Over the  next twelve months, Igene believes  it  will  need
additional  working  capital in order  to  continue  as  a  going
concern.   Management  is currently in the process  of  reviewing
production facilities in an effort to replace the lost production
now   that  the  Joint  Venture  with  Tate  and  Lyle  has  been
terminated.   Igene hopes to achieve profits from  sales  of  the
inventory of AstaXin(R) remaining after the  termination  of  the
Joint  Venture.  However, there can be no assurance that profits,
if  any,  from  sales 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, 2007 and 2006.







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


Item 3.   Controls and Procedures

Evaluation of Disclosure Controls and Procedures.  Our management
has  evaluated,  with  the participation of our  Chief  Executive
Officer  and our principal financial and accounting officer,  the
effectiveness  of  our  disclosure controls  and  procedures  (as
defined  in Rule 13a-15(e) under the Securities Exchange  Act  of
1934,  as  amended (the "Exchange Act")) as of  the  end  of  the
fiscal quarter covered by this Quarterly Report on Form 10-QSB/A.
Based  upon the evaluation, the Chief Executive Officer  and  the
principal financial and accounting officer have concluded that as
of  the  end  of  such  fiscal quarter,  our  current  disclosure
controls  and procedures were not effective, because of  material
weaknesses  in  the  internal control  over  financial  reporting
described  below.   We  have taken, and are continuing  to  take,
steps  to address these weaknesses as described below.  With  the
exception  of  such  weaknesses,  however,  the  Chief  Executive
Officer  and  principal financial and accounting officer  believe
that  our current disclosure controls and procedures are adequate
to  ensure  that  information required to  be  disclosed  in  the
reports  we  file under the Exchange Act is recorded,  processed,
summarized and reported on a timely basis.

Material Weaknesses and Changes in Internal Controls. During  the
review  of  our financial statements for the three and  six-month
periods  ended June 30, 2007, our current independent  registered
public  accounting  firm  identified as a material  weakness  our
procedure  regarding our internal controls over  the  non-routine
recording  of warrants issued in connection with certain  of  our
debt  obligations.  The procedure of valuation is one  that  that
the  Company  has  always followed and has been reported  in  the
Company's  previous  audited and unaudited financial  statements.
As  defined  by  the  Public Company Accounting  Oversight  Board
Auditing Standard No. 2, a material weakness is a deficiency or a
combination  of deficiencies, in internal control over  financial
reporting,  such  that there is a reasonable possibility  that  a
material   misstatement  of  the  annual  or  interim   financial
statements  will  not be prevented or detected.  Since  this  was
identified  as  a  material weakness by our  current  independent
registered  public accounting firm in connection with its  review
of  the  financial statements in the June 30, 2007, Form  10-QSB,
the  transactions subject to these issues are correctly accounted
for  and disclosed by us in the financial statements included  in
this  Form  10-QSB. However, on a going forward basis, management
will  continue  to evaluate our internal controls over  the  non-
routine  recording of warrants issued in connection with  certain
of our debt obligations in order to prevent the recurrence of the
circumstance that resulted in the material weakness identified in
connection  with the review of the financial statements  in  this
Form 10-QSB.

There  were no changes in Igene's internal control over financial
reporting identified in connection with our evaluation  of  these
controls during the period covered by this report that could have
significantly affected those controls subsequent to the  date  of
the  evaluation referred to in the previous paragraph,  including
any correction action with regard to significant deficiencies and
material weaknesses.





                              -20-

                    IGENE Biotechnology, Inc.
                             PART II
                        OTHER INFORMATION


Item 1.  Notes Litigation

     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, including interest,
the  full  amount  due,  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.

     The  funds  to settle the Notes Litigation were provided  by
Igene's  directors.  On February 15, 2007, Igene issued and  sold
$762,000   in   aggregate  principal  amount  of  5%  convertible
debentures,  50%  each  to  certain directors  of  Igene.   These
debentures are convertible into shares of Igene's common stock at
$.02  per  share.   These debentures, if not  converted  earlier,
become due on February 15, 2017.

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

Convertible Debentures to Settle Litigation

The funds to settle the Notes Litigation were provided by Igene's
directors.  On February 15, 2007, Igene issued and sold  $762,000
in  aggregate principal amount of 5% convertible debentures,  50%
each  to  certain  directors  of  Igene.   These  debentures  are
convertible  into  shares of Igene's common  stock  at  $.02  per
share.  These debentures, if not converted earlier, become due on
February  15,  2017.  For more information, see Notes  Litigation
referenced in Note 4, entitled "Long-Term Liabilities."

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 accumulate for future payment or addition to the
liquidation  preference  or redemption  value  of  the  preferred
stock.   As of September 30, 2007, total dividends in arrears  on
the  Company's preferred stock total $135,389 ($12.16 per  share)
and  are  included  in  the  carrying  value  of  the  redeemable
preferred stock.



                              -21-
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 10.1 - Separation  Agreement dated October 31,  2007
             between  Igene Biotechnology, Inc. and Tate  &  Lyle
             Fermentation  Products  Ltd.,  constituting  Exhibit
             10.1  to  the  Form  8-K filed  by  the  Company  on
             November 6, 2007.

     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.



                              -22-

                           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   December 11, 2007  By /S/ STEPHEN F. HIU
                                _________________________________
                                    STEPHEN F. HIU
                                    President




   Date   December 11, 2007  By /S/ EDWARD J. WEISBERGER
                                _________________________________
                                    EDWARD J. WEISBERGER
                                    Chief Financial Officer




                              -23-

                         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 10.1 - Separation Agreement dated October 31,  2007
             between  Igene Biotechnology, Inc. and Tate  &  Lyle
             Fermentation  Products  Ltd.,  constituting  Exhibit
             10.1  to  the  Form  8-K filed  by  the  Company  on
             November 6, 2007.

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

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

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

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



                              -24-