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 March 31, 2006

[ ]     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:

108,222,324 shares of common stock, par value $.01, as of May 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

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

     Consolidated Statements of Stockholders' Deficiency.. 7

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

     Notes to Consolidated Financial Statements .......... 9-14

     Management's Discussion and Analysis of Financial
     Conditions and Results of Operations ................ 15-18

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

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

SIGNATURES ............................................... 21

EXHIBIT INDEX ............................................ 22

<PAGE>
                      IGENE BIOTECHNOLOGY, INC.

             QUARTERLY REPORT UNDER SECTION 13 OR 15(D)

               OF THE SECURITIES EXCHANGE ACT OF 1934
<PAGE>
                               PART I

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


                                                                          March 31,   December 31,
                                                                              2006           2005
                                                                       ____________   ____________
                                                                       (Unaudited)
<S>                                                                    <C>            <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents                                            $       ---    $   119,745
  Accounts receivable                                                        5,306         15,618
  Prepaid expenses and other current assets                                  8,437         20,520
                                                                       ____________   ____________

     TOTAL CURRENT ASSETS                                                   13,743        155,883

  Property and equipment, net                                               45,386         50,059
  Loans receivable from manufacturing agent                                 19,993         19,993
  Investment in and advances to unconsolidated joint venture                   ---            ---
  Other assets                                                               5,125          5,125
                                                                       ____________   ____________

     TOTAL ASSETS                                                      $    84,247    $   231,060
                                                                       ============   ============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
  Bank overdraft                                                       $    61,715    $       ---
  Accounts payable and accrued expenses                                    120,510         99,285
  Convertible debenture                                                    705,000        705,000
  Accrued interest                                                          29,375         11,750
                                                                       ____________   ____________

     TOTAL CURRENT LIABILITIES                                             916,600        816,035

LONG-TERM DEBT
  Notes payable                                                          5,842,267      5,842,267
  Convertible debentures                                                 3,814,212      3,814,212
  Accrued interest                                                       5,088,068      4,902,255

REDEEMABLE PREFERRED STOCK
  Carrying amount of redeemable preferred stock, 8% cumulative,
  Convertible, voting, series A, $.01 par value per share. Stated
  value was $19.20 and $19.04, respectively.  Authorized 1,312,500
  shares, issued and outstanding 18,509                                    355,373        352,411
                                                                       ____________   ____________

     TOTAL LIABILITIES                                                  16,016,520     15,727,180
                                                                       ____________   ____________

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
  Common stock --- $.01 par value per share. Authorized 750,000,000
  shares; issued and outstanding 108,222,324 and 107,456,869 shares,
  respectively.                                                          1,082,223      1,074,569
Additional paid-in capital                                              25,474,244     25,445,450
  Accumulated deficit                                                  (42,488,740)   (42,016,139)
                                                                       ____________   ____________

     TOTAL STOCKHOLDERS' DEFICIENCY                                    (15,932,273)   (15,496,120)
                                                                       ____________   ____________

     TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                    $    84,247    $   231,060
                                                                       ============   ============

</TABLE>

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

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


                                                              Three months ended
                                                        _____________________________
                                                           March 31,       March 31,
                                                               2006            2005
                                                        _____________   _____________
<S>                                                     <C>             <C>
EQUITY IN LOSS OF JOINT VENTURE                         $   (189,902)   $   (183,093)
                                                        _____________   _____________
OPERATING EXPENSES
__________________

  Marketing and selling                                       42,811          48,288
  Research, development and pilot plant                      208,649         166,007
  General and administrative                                 224,783         188,908
  Less operating expenses reimbursed by Joint Venture       (399,943)       (411,339)
                                                        _____________   _____________

     TOTAL OPERATING EXPENSES                                 76,300          (8,136)
                                                        _____________   _____________

     OPERATING LOSS                                         (266,202)       (174,957)
                                                        _____________   _____________

INTEREST EXPENSE                                            (206,399)       (213,080)
                                                        _____________   _____________

     NET LOSS                                           $   (472,601)   $   (388,037)
                                                        =============   =============


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

</TABLE>




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

                               -6-
<TABLE>
<CAPTION>
                                      IGENE Biotechnology, Inc. and Subsidiary
                                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, 2005                    101,732,453  $ 1,017,325   $ 25,138,748   $(40,601,360)  $(14,445,287)

Shares issued for manufacturing Agreement       1,061,689       10,617         97,520            ---        108,137

Net loss for the three months ended
  March 31, 2005                                      ---          ---            ---       (388,037)      (388,037)
                                              ____________ ____________  _____________  _____________  _____________

Balance at March 31, 2005                     102,794,142  $ 1,027,942   $ 25,236,268   $(40,989,397)  $(14,725,187)
                                              ============ ============  =============  =============  =============

Balance at January 1, 2006                    107,456,869  $ 1,074,569   $ 25,445,450   $(42,016,139)  $(15,496,120)

Shares issued for manufacturing Agreement         545,571        5,456         24,904            ---         30,360

Employee stock option purchase                    212,000        2,120          3,180            ---          5,300

Exercise of warrants                                7,884           78            710            ---            788

Net loss for the three months ended
  March 31, 2006                                      ---          ---            ---       (472,601)      (472,601)
                                              ____________ ____________  _____________  _____________  _____________

Balance at March 31, 2006                     108,222,324  $ 1,082,223   $ 25,474,244   $(42,488,740)  $(15,932,273)
                                              ============ ============  =============  =============  =============

</TABLE>

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

                               -7-
<TABLE>
<CAPTION>
                            IGENE Biotechnology, Inc. and Subsidiary
                             Consolidated Statements of Cash Flows
                                          (Unaudited)

                                                                      Three months ended
                                                                  __________________________
                                                                     March 31,     March 31,
                                                                         2006          2005
                                                                  ____________  ____________
<S>                                                               <C>           <C>
Cash flows from operating activities
   Net loss                                                       $  (472,601)  $  (388,037)
   Adjustments to reconcile net loss to net cash provided
   by operating activities:
     Depreciation                                                       4,673         4,812
     Increase in preferred stock for cumulative dividend
       classified as interest                                           2,961         2,961
     Manufacturing cost paid in shares of common stock                 30,360       108,137
     Equity in loss of joint venture                                  189,902       183,093
     Decrease (increase) in:
       Accounts receivable                                             10,312          (437)
       Prepaid expenses and other current assets                       12,083       (20,180)
     Increase (decrease) in:
       Accounts payable and accrued expenses                          224,664       174,873
                                                                  ____________  ____________

       Net cash provided by operating activities                        2,354        65,222
                                                                  ____________  ____________

Cash flows from investing activities
     Advances to Joint Venture                                       (189,902)     (183,093)
                                                                  ____________  ____________

       Net cash used in investing activities                         (189,902)     (183,093)
                                                                  ____________  ____________

Cash flows from financing activities
   Proceeds from exercise of warrants                                     788           ---
   Bank overdraft                                                      61,715           ---
   Proceeds from exercise of employee stock options                     5,300           ---
                                                                  ____________  ____________

       Net cash provided by financing activities                       67,803           ---
                                                                  ____________  ____________

       Net decrease in cash and cash equivalents                     (119,745)     (117,871)

       Cash and cash equivalents
         at beginning of period                                       119,745       204,248
                                                                  ____________  ____________
       Cash and cash equivalents
         at end of period                                         $         0   $    86,377
                                                                  ============  ============

Supplementary disclosure and cash flow information
__________________________________________________

Cash paid for interest                                            $       ---   $    21,220
Cash paid for income taxes                                                ---           ---

See Note (2) for non-cash investing and financing activities.

</TABLE>

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

                               -8-
            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements

(1)  Unaudited consolidated financial statements

     The   March   31,  2006  consolidated  financial  statements
     presented  herein  are  unaudited, and  in  the  opinion  of
     management,  include  all adjustments  (consisting  only  of
     normal recurring accruals) necessary for a fair presentation
     of financial position, results of operations and cash flows.
     Such  financial  statements  do  not  include  all  of   the
     information  and footnote disclosures normally  included  in
     financial  statements prepared in accordance with accounting
     principles  generally  accepted  in  the  United  States  of
     America.   This  quarterly report on Form 10-QSB  should  be
     read  in conjunction with Igene's Annual Report on Form  10-
     KSB for the year ended December 31, 2005.

(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.   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 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
     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  three months ended March 31, 2006, the  Company
     extended  scheduled  repayment on notes  of  $5,842,267  and
     related accrued interest of $5,088,068 until March 31, 2009.

     During  the three months ended March 31, 2006 and 2005,  the
     Company recorded in each quarter dividends in arrears on  8%
     redeemable  preferred stock cumulating  at  $.16  per  share
     aggregating  to $2,961.  In accordance with  FASB  150,  the
     dividends  accrued in the third quarter 2003 and  thereafter
     have been reclassified as interest expense.

     During the three months ended March 31, 2006, 7,884 warrants
     were  exercised for $788.  7,884 new shares of common  stock
     were issued pursuant to these exercises.

     During  the  three  months ended March 31,  2006  and  2005,
     Fermic,  Igene's  manufacturing agent,  earned  545,571  and
     1,061,689 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.   With the distribution in  the  first
     quarter of 2006, Fermic has earned the 20,000,000 shares  in
     total under the contract.

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

     The  545,571 shares were earned at an average price of $.056
     per share for 2006, and the 1,061,689 shares were earned  at
     an average price of $.102 per share for 2005.  Through March
     31,  2006,  all  20,000,000 shares have been earned.   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  that Fermic made in the manufacturing  agreement
     in claiming the aforementioned exemption.

(4)  Amendment to Long - Term Liabilities

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

(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 March 31, 2006, Igene's portion of  the  Joint
     Venture's net loss was $12,403,236.  The loss was  a  result
     of  a  50% interest in the following:  Gross profit for  the
     period  was  a negative $11,187,348 on sales of $20,935,362,
     less manufacturing cost of $32,122,710.  Selling and general
     and administrative expenses for the period were $10,320,296,
     interest  expense  was  $2,093,827,  and  tax  expense   was
     recorded for $1,205,000.  The resulting loss before tax  was
     $24,806,471.  Igene's 50% portion of the Joint Venture  loss
     was $12,403,236.

     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.

     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 March 29, 2006,
     the Joint Venture has not met the cash flow requirements.




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

     At  March 31, 2006, prior to the recognition of its  portion
     of  the Joint Venture loss, Igene's investment in the  Joint
     Venture consisted of its initial investment of $322,869  and
     its   net   advances  to  the  Joint  Venture  amounted   to
     $1,249,867,  for  a  total  of $1,572,736.   From  inception
     through  the year ended December 31, 2005, Igene  recognized
     $1,382,834 of the $10,818,549 loss which existed as part  of
     the  Joint  Venture.  In the first quarter  of  2006,  Igene
     recognized  losses  to the extent of  the  increase  in  the
     advance of $189,902, representing the March 31, 2006 balance
     of  $1,572,736,  less  the  December  31,  2005  balance  of
     $1,382,834.  The remainder of the cumulative loss  which  is
     $10,830,500  is  suspended and will be  carried  forward  to
     offset  Igene's share of future earnings, if any,  from  the
     Joint   Venture.   The  balance  in  the  Advances  to   and
     Investment  in  Joint  Venture  account  on  the   Company's
     financial statements is zero at March 31, 2006.

     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 March 31, 2006.
     As shown 50% of the activity is potentially recorded as part
     of  Igene's Financial Statements as loss from investment  in
     Joint Venture:

<TABLE>
<CAPTION>
                                                               March 31,
                                                                   2006
                                                           _____________
     <S>                                                   <C>
     ASSETS
     CURRENT ASSETS
          Cash and cash equivalents                        $    248,000
          Accounts Receivable                                 2,848,000
          Inventories                                         5,899,000
                                                           _____________

                                                              8,995,000
     OTHER ASSETS
          Property, plant and equipment, net                 21,004,000
          Intangibles                                        24,614,000
                                                           _____________

               TOTAL ASSETS                                $ 54,613,000
                                                           =============

     LIABILITIES AND EQUITY
     CURRENT LIABILITIES
          Accounts payable and accrued expenses            $ 19,396,000
          Maturities of debt                                  9,119,000
                                                           _____________

               TOTAL CURRENT LIABILITIES                     28,515,000
          Deferred tax liability                              1,205,000
                                                           _____________

               TOTAL LIABILITIES                             29,720,000

          Equity                                             24,893,000
                                                           _____________

               TOTAL LIABILITIES AND EQUITY                $ 54,613,000
                                                           =============
</TABLE>
<TABLE>
<CAPTION>

                                                               Period from March 18, 2003
                                                                (initial investment) to
                                                                     March 31, 2006
                                                               __________________________
                                                                      (unaudited)
     <S>                                                             <C>
     Net Sales                                                       $ 20,935,362
     Less: manufacturing cost                                         (32,122,710)
                                                                     _____________

     Gross Profit (Loss)                                              (11,187,348)
     Less: selling, general and administrative                        (10,320,296)
                                                                     _____________

     Operating Loss                                                   (21,507,644)
     Interest Expense                                                  (2,093,827)
                                                                     _____________

     Net loss before taxes                                            (23,601,471)
     Tax Expense                                                       (1,205,000)
                                                                     _____________

     Net Loss                                                        $(24,806,471)
                                                                     =============
     Igene's 50% equity interest in the net loss                     $(12,403,236)
     Igene's Investment in and Advances to the Joint Venture           (1,572,736)
                                                                     _____________
     Igene's suspended loss                                          $(10,830,500)
                                                                     =============
</TABLE>

                              -11-

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

<TABLE>
<CAPTION>

                                                     Quarter ended      Quarter ended
                                                     March 31, 2006     March 31, 2005
                                                     ______________     ______________
                                                      (unaudited)        (unaudited)
     <S>                                             <C>                <C>
     Net Sales                                       $   3,190,139      $   2,354,400
     Less: manufacturing cost                           (3,348,894)        (3,617,488)
                                                     ______________     ______________

     Gross Profit (Loss)                                  (158,755)        (1,263,088)
     Less: selling, general and administrative          (1,104,719)          (764,077)
                                                     ______________     ______________
     Operating Loss                                     (1,263,474)        (2,027,165)
     Interest Expense                                     (700,900)          (985,475)
                                                     ______________     ______________
     Net Loss before taxes                              (1,964,374)        (3,012,640)
     Tax Expense                                        (1,205,900)               ---
                                                     ______________     ______________
     Net Loss before taxes                           $  (3,170,274)     $  (3,012,640)
                                                     ==============     ==============
     Igene's 50% equity interest in the net loss     $  (1,585,137)     $  (1,506,320)
     Igene's additional Investment in and
       Advances to the Joint Venture                      (189,902)          (183,093)
                                                     ______________     ______________
     Igene's incremental suspended loss              $  (1,395,235)     $  (1,323,227)
                                                     ==============     ==============
</TABLE>


(6)  Stockholders' Deficiency

     As  of  March  31,  2006, 37,018 shares  of  authorized  but
     unissued   common  stock  were  reserved  for   issue   upon
     conversion of the Company's outstanding preferred stock.

     As  of  March 31, 2006, 73,742,500 shares of authorized  but
     unissued  common  stock were reserved for  distribution  and
     exercise  pursuant  to the Company's Employee  Stock  Option
     Plans.

     As  of  March 31, 2006, 10,000,000 shares of authorized  but
     unissued  common  stock were reserved for  distribution  and
     exercise  pursuant  to  stock option  agreements  with  past
     officers of the Company.

     As  of  March 31, 2006, 17,565,970 shares of authorized  but
     unissued  common stock were reserved for the  conversion  of
     outstanding  convertible promissory notes held by  directors
     of the Company in the aggregate amount of 1,082,500.

     As  of  March 31, 2006, 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  March  31, 2006 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 March 31, 2006, 205,261,073 shares of authorized  but
     unissued  common  stock were reserved for  the  exercise  of
     outstanding warrants.

 (7) Basic and diluted net loss per common share

     Basic  and diluted net loss per common share for the  three-
     month  periods ended March 31, 2006 and 2005  are  based  on
     106,559,965  and   101,732,453,  respectively,  of  weighted
     average   common  shares  outstanding.   For   purposes   of
     computing net loss per common share, the amount of net  loss
     has  been  increased by cumulative undeclared  dividends  in
     arrears  on  preferred stock prior to the third  quarter  of
     2003,  the  effective date of FASB 150.  No  adjustment  has
     been  made  for  any  common stock  equivalents  outstanding
     because their effects would be antidilutive.




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

(8)  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.

(9)  Uncertainty

     Igene has incurred net losses in each year of its existence,
     aggregating  approximately  $42,500,000  from  inception  to
     March  31,  2006 and its liabilities exceeded its assets  by
     approximately  $15,900,000  at  that  date.   These  factors
     indicate that Igene may not be able to continue in existence
     unless  it  is able to raise additional capital  and  attain
     profitable operations.

     The  continuing  successful marketing  of  Igene's  product,
     AstaXin(R), has permitted Igene the opportunity  to  attract
     additional  capital through it's venture with Tate  &  Lyle.
     Igene  began  manufacturing  and  selling  AstaXin(R) during
     1998.     Igene   will   aid  the  Joint  Venture  with  the
     manufacturing process, but will focus on research and sales,
     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.

(10) Stock Based Compensation

     Prior  to  January 1, 2006, the Company accounted for  those
     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 the net loss and loss per share if the Company had
     applied  the fair value recognition provisions of  SFAS  No.
     123  ( R ),   "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 periods ended March 31:

<TABLE>
<CAPTION>
                                                             2005
                                                        _____________
     <S>                                                <C>
     Net loss:
       As reported                                      $   (388,037)
       Less pro forma stock-based employee
         compensation expense determined under fair
         value based method net of related tax effects           ---
                                                        _____________

     Net loss per common share:                             (388,037)
                                                        =============

     Net loss per Share:
          Basic - as reported                           $      (0.00)
          Basic - pro forma                             $      (0.00)

          Diluted - as reported                         $      (0.00)
          Diluted - pro forma                           $      (0.00)

</TABLE>





                              -13-

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

(11) 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,  if any, 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  statements  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  2006.   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.

     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 adopted Statement
     123 (R) in the first quarter of fiscal 2006.



                              -14-

            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 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  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 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.

     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 March 29, 2006,  the
Joint Venture has not met the cash flow requirements.

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

                              -15-

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

Results of Operations
_____________________

Sales and other revenue

     As part  of  the Joint Venture agreement, all further  sales
are  recognized  through the venture company.   Therefore,  Igene
recorded no sales of AstaXin(R) since the inception of  the Joint
Venture  on March 18, 2003.  Sales have been limited in the  past
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 production or sales will occur, or that if they
occur, they will be material.

Cost of sales and gross profit

     As with Sales Revenue, future Cost of Sales and Gross Profit
is  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 Company attributes poor or
negative gross profit to a combination of pricing pressure in the
market and inefficiencies in production.  Management expects that
sales   and   gross   profits  may  continue  to  be  limited  by
production  efficiency   resulting  from   process  research  and
development.  Management   expects  the  level of gross profit to
improve in the future as production  efficiency is  realized from
the   Joint   Venture   with  Tate  &  Lyle  offsetting   pricing
competition, but  can  provide  no assurances of future increased
production or future increased margin.

     Additionally no cost of sales were recorded as they are also
recorded as part of the Joint Venture activity.

Marketing and selling expenses

     For  the  quarters  ended March 31,  2006  and  2005,  Igene
recorded  Marketing Expense in the amount of $42,811 and $48,288,
respectively,  a decrease of $5,477 or 11%.  It is expected  this
level of selling cost will be constant based on the current level
of salable product currently available.  As a result of the Joint
Venture  with  Tate  & Lyle, Igene is expecting  an  increase  in
salable  product with a corresponding increase in sales costs  at
the  point the new facility is in full production.  Additionally,
as  a  result  of  the  Joint Venture, these expenses  have  been
reimbursed  to Igene by the Joint Venture. However no  assurances
can  be  made  in regards to increased production  from  the  new
facility or the corresponding increase in selling costs.

Research, development and pilot plant expenses

     For  the  quarter  ended  March 31,  2006  and  2005,  Igene
recorded research and development costs in the amount of $208,649
and $166,007, respectively, an increase of $42,642 or 26%.  It is
expected  these costs will remain at current increased levels  in
support of increasing the efficiency of the manufacturing process
through  experimentation in the Company's pilot plant, developing
higher  yielding strains of yeast and other improvements  in  the
Company's AstaXin(R) technology.   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
March  31, 2006 and 2005 were $224,783 and $188,908 respectively,
an  increase  of  $35,875 or 19%.   These costs are  expected  to
remain  constant,  at  the current level.  Igene  works  to  keep
overhead costs at a reduced level and spend funds on research and
development efforts, but various costs associated with  reporting
costs related to SEC and public filing requirements has increased
general  and administrative expenses.  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.



                              -16-

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

Expenses reimbursement by Joint Venture

     As  part  of the Joint Venture agreement, costs incurred  by
Igene related to production, research and development, as well as
those   costs  related  to  the  marketing  of  AstaXin(R),   are
considered   costs  of  the  Joint  Venture  and  therefore   are
reimbursed by the Joint Venture.  For the quarter ended March 31,
2006, costs  reimbursed  by  the  Joint Venture totaled $399,943.
The  costs  covered  $42,811  of  marketing  costs,  $208,649  of
research  and  development  costs  and  $148,483  of general  and
administrative costs. For the quarter ended March 31, 2005, costs
reimbursed  by  the Joint Venture totaled $411,339.    The  costs
covered  $48,288  of  marketing  costs,  $166,007 of research and
development  costs  and  $197,044  of  general and administrative
costs.

Interest expense

     Interest  expense for the quarters ended March 31, 2006  and
2005,  was  $206,399 and $213,080, respectively,  a  decrease  of
$6,681  or  3%.     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.

Equity in earnings of unconsolidated 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  March
31,  2006,  Igene's portion of the Joint Venture's net  loss  was
$12,403,236.   The  loss was a result of a 50%  interest  in  the
following:    Gross  profit  for  the  period  was   a   negative
$11,187,348 on sales of $20,935,362, less manufacturing  cost  of
$32,122,710.  Selling and general and administrative expenses for
the  period were $10,320,296, interest expense was $2,093,827 and
tax  expense  was  recorded for $1,205,000.  The  resulting  loss
before  tax  was $24,806,471.  Igene's 50% portion of  the  Joint
Venture loss was $12,403,236.

     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 March 31, 2006, prior to the recognition of its portion of
the  Joint Venture loss, Igene's investment in the Joint  Venture
consisted  of  its  initial investment of $322,869  and  its  net
advances to the Joint Venture amounted to $1,249,867, for a total
of  $1,572,736.   From inception through the year ended  December
31,  2005,  Igene  recognized $1,382,834 of the $10,818,549  loss
which existed as part of the Joint venture.  In the first quarter
of 2006, Igene recognized losses to the extent of the increase in
the  advance of $189,902, representing the March 31, 2006 balance
of  $1,572,736, less the December 31, 2005 balance of $1,382,834.
The  remainder  of  the cumulative loss which is  $10,830,500  is
suspended and will be carried forward to offset Igene's share  of
future earnings, if any, from the Joint Venture.  The balance  in
the  Advances to and Investment in Joint Venture account  on  the
Company's financial statements is zero at March 31, 2006.

     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 March 29, 2006,  the
Joint Venture has not met the cash flow requirements.

     Igene's  share  of  net loss in the Joint  Venture  will  be
recognized only to the extent of Igene's consideration  exchanged
for  its  ownership portion of the Joint Venture as well  as  any
advances made to the Joint Venture.  Losses in excess of  Igene's
consideration  and  advances will not be  recognized  in  Igene's
Financial Statements but will be carried forward and will  offset
future income of the Joint Venture, if any.

                              -17-

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

Net loss and basic and diluted net loss per common share

    As a result of the foregoing, the Company reported net losses
of  $472,601  and $388,037, respectively, for the quarters  ended
March  31,  2006 and 2005, an increase in the loss of $84,564  or
22%.  This represents a loss of $.00 per basic and diluted common
share in each of the quarters ended March 31, 2006 and 2005.  The
weighted average number of shares of common stock outstanding  of
106,559,965  and  101,732,453 for the quarters ended  March   31,
2006  and 2005, respectively, has increased by 4,827,512  shares.
The  increase  in outstanding shares resulted from primarily  the
weighted  average adjustment of the issuance of 4,208,298  shares
to  Igene's  manufacturer under the manufacturing agreement  with
Fermic, 212,000 shares in issuance for exercise of employee stock
incentive plan, and 1,000,000 shares reissued to Fermtech as part
of the disposition of ProBio.

Financial Position

    During the three-month periods ended March 31, 2006 and 2005,
in  addition  to  the  Joint  Venture previously  discussed,  the
following   actions  also  materially  affected   the   Company's
financial position:

    -   Increases in accounts payable and accrued expense for the
        quarter  ended March 31, 2006 of $224,664 was a source of
        cash  as  well  as  decreases  in accounts receivable and
        prepaid expense of $22,395, these  increases  were offset
        by  increases  in  funds  due  from  the Joint Venture of
        $189,902;

     -  The  carrying  value  of redeemable preferred  stock  was
        increased and interest expense recorded in the amounts of
        $2,961  in  2006  and  in  2005, respectively, reflecting
        cumulative  unpaid  dividends  on  redeemable   preferred
        stock.

      In  December 1988, as part of an overall effort to  contain
costs  and  conserve working capital, Igene suspended payment  of
the quarterly dividend on its preferred stock.  Resumption of the
dividend  will  require significant improvements  in  cash  flow.
Unpaid  dividends cumulate for future payment or addition to  the
liquidation  preference  or redemption  value  of  the  preferred
stock.   As  of  March 31, 2006, total dividends  in  arrears  on
Igene's preferred stock total $207,301 ($11.20 per share) and are
included in the carrying value of the redeemable preferred stock.

Liquidity and Capital Resources

     Historically, Igene  has  been funded  primarily  by  equity
contributions and loans from stockholders. As of March 31,  2006,
Igene had negative working capital of $902,857, and cash and cash
equivalents  of $0.  Currently Igene is also funded  by  research
and development reimbursements from the Joint Venture.

     Cash provided by operating activities during the three-month
period  ended  March 31, 2006 and 2005, amounted  to  $2,354  and
$65,222, respectively.

     Cash used in investing activities for the three-month period
ended March 31, 2006 and 2005, amounted to $189,902 and $183,093,
respectively .

    Cash provided by financing activities was $67,803 during  the
first  quarter of 2006, this was due primarily to employee  stock
options exercised and bank overdraft.  No cash was provided by or
used in financing activities in the first quarter of 2005.

    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   had   a
significant  impact  on  its operations  during  the  three-month
periods ended March 31, 2006 and 2005.


                              -18-

            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.


                              -19-

            IGENE Biotechnology, Inc. and Subsidiary
                             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 March 31, 2006, total dividends in arrears on  the
Company's  preferred stock total $207,301 ($11.20 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 $278,000; 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.
Currently,  the indebtedness evidenced by each of the convertible
notes is accruing interest at the default rate.


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
          hereby incorporated herein by reference.

     Exhibit 3.2 - By-Laws of the Registrant, as amended to date,
          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.








                              -20-

                           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     May 19, 2006      By /S/ STEPHEN F. HIU
         ____________         _________________________________
                                  STEPHEN F. HIU
                                  President




Date     May 19, 2006      By /S/ EDWARD J. WEISBERGER
         ____________         _________________________________
                                  EDWARD J. WEISBERGER
                                  Chief Financial Officer



                                -21-

                            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   hereby
          incorporated herein by reference.

     Exhibit 3.2 - By-Laws  of  the  Registrant, as amended to  date,
          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.


                                 -22-