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

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

            For the quarterly period ended June 30, 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.


                                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 .........................  17-19

  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>
<CAPTION>
                          IGENE Biotechnology, Inc.  and Subsidiary
                            Condensed Consolidated Balance Sheets


                                                                     June 30,      December 31,
                                                                         2007              2006
                                                                _____________     _____________
                                                                  (Unaudited)        (Restated)
                                                                                       (Note 1)
<S>                                                             <C>               <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents                                     $    193,663      $     21,786
  Prepaid expenses and other current assets                            2,574            14,093
                                                                _____________     _____________
     TOTAL CURRENT ASSETS                                            196,237            35,879

  Property and equipment, net                                         24,224            33,571
  Investment in and advances to unconsolidated joint venture             ---               ---
  Other assets                                                         5,125             5,125
                                                                _____________     _____________

     TOTAL ASSETS                                               $    225,586      $     74,575
                                                                =============     =============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
  Accounts payable and accrued expenses                         $    150,035      $    210,424
  Convertible debenture                                                  ---           705,000
  Accrued interest                                                       ---            46,570
                                                                _____________     _____________

     TOTAL CURRENT LIABILITIES                                       150,035           961,994

LONG-TERM LIABILITIES
  Notes payable (net of unamortized discount)                      4,129,668         3,615,889
  Convertible debentures (net of unamortized discount)             3,055,054         2,103,444
  Accrued interest                                                 6,042,986         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 $ 20.00 and $19.68,
     respectively.  Authorized 1,312,500
     shares, issued 11,134.                                          222,680           219,117
                                                                _____________     _____________

     TOTAL LIABILITIES                                            13,600,423        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                                            (47,733,895)      (46,840,757)
                                                                _____________     _____________

     TOTAL STOCKHOLDERS' DEFICIENCY                              (13,374,837)      (12,481,699)
                                                                _____________     _____________

     TOTAL LIABILITIES AND
     STOCKHOLDERS' DEFICIENCY                                   $    225,586      $     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             Six months ended
                                                                     June 30,       June 30,        June 30,       June 30,
                                                                         2007           2006            2007           2006
                                                                _____________  _____________   _____________  _____________
                                                                                (Restated)                      (Restated)
<S>                                                             <C>            <C>             <C>            <C>
EQUITY IN REPAID ADVANCES (LOSS)
     OF JOINT VENTURE                                           $    199,672   $    171,639    $    258,628   $    (18,263)
                                                                _____________  _____________   _____________  _____________
OPERATING EXPENSES
__________________
  Marketing and selling                                               37,433         47,399          39,325         90,210
  Research and development                                           245,172        237,088         497,286        445,737
  General and administrative                                         275,149        292,231         478,062        517,014
  Operating expenses reimbursed by Joint Venture                    (515,442)      (459,917)       (960,486)      (859,860)
                                                                _____________  _____________   _____________  _____________

          TOTAL OPERATING EXPENSES                                    42,312        116,801          54,187        193,101
                                                                _____________  _____________   _____________  _____________

          OPERATING PROFIT (LOSS)                                    157,360         54,838         204,441       (211,364)
                                                                _____________  _____________   _____________  _____________

OTHER INCOME                                                           1,155            ---           7,537            ---

INTEREST EXPENSE (including amortization of debt discount
  of $351,695 and $351,694 for the three months ended June 30,
  2007 and 2006 respectively and $703,389 and $572,748 for the
  six months ended June 30, 2007 and 2006 respectively)             (574,244)      (558,886)     (1,105,116)      (986,339)
                                                                _____________  _____________   _____________  _____________

          NET LOSS                                              $   (415,729)  $   (504,048)   $   (893,138)  $ (1,197,703)
                                                                =============  =============   =============  =============

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


</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 six months ended June 30, 2007                    ---         ---            ---        (893,138)       (893,138)
                                                          ____________ ___________   _____________   _____________   _____________
Balance at June 30, 2007                                   109,337,072 $ 1,093,371   $ 33,265,687    $(47,733,895)   $(13,374,837)
                                                          ============ ===========   =============   =============   =============

</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)


                                                                              Six months ended
                                                                      _______________________________
                                                                           June 30,          June 30,
                                                                               2007              2006
                                                                      _____________     _____________
                                                                                          (Restated)
<S>                                                                   <C>               <C>
Cash flows from operating activities
  Net loss                                                            $   (893,138)     $ (1,197,703)
  Adjustments to reconcile net loss to net cash used
  by operating activities:
     Amortization of debt discount                                         703,389           572,748
  Depreciation                                                               9,347             9,347
     Increase in preferred stock for cumulative dividends
       classified as interest                                                3,563             4,743
     Manufacturing cost paid in shares of common stock                         ---            30,360
     (Recoupment of payment) Equity in loss of joint venture              (258,628)           18,263

     Decrease in:
        Accounts receivable                                                    ---             7,092
        Prepaid expenses and other current assets                           11,519            12,225

     Increase in:
        Accounts payable and accrued expenses                              280,197           439,882
                                                                      _____________     _____________
  Net cash used by operating activities                                   (143,751)         (103,043)
                                                                      _____________     _____________

Cash flows from investing activities
  Recoupment of payment (advances) to joint venture                        258,628           (18,263)
                                                                      _____________     _____________

Cash flows from financing activities
  Proceeds from issuance of convertible debenture                          762,000               ---
  Repayment of convertible debenture                                      (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                     171,877          (110,218)

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

  Cash and cash equivalents at end of period                          $    193,663      $      9,527
                                                                      =============     =============
Supplementary disclosure and cash flow information
__________________________________________________

Cash paid for interest                                                $     57,637      $     35,250
Cash paid for income taxes                                                     ---               ---

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

</TABLE>




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


                                 -8-

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


(1)  Unaudited consolidated financial statements

     The  June  30, 2007 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 consolidated balance sheet is derived  from
     the audited balance sheet included therein.

     The   six  and  three  month  ended  June  30,  2006  condensed
     consolidated  statements of operations, the  six  months  ended
     June  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 from time to time 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  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.


                                -9-

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

(3)  Uncertainty

     Igene  has  incurred net losses in each year of its  existence,
     aggregating  approximately $47,734,000 from inception  to  June
     30,   2007   and  its  liabilities  exceeded  its   assets   by
     approximately $13,375,000 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  six  months ended June 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 and has relieved the company of this amount from long-
     term debt.  During the six months ended June 30, 2007 and 2006,
     the Company recorded in each quarter dividends in arrears on 8%
     redeemable  preferred  stock accumulating  at  $.16  per  share
     aggregating to $3,563 and $4,743, respectively.

     During  the  six  months ended June 30, 2006,  Fermic,  Igene's
     manufacturing agent, earned 545,571 shares of common  stock  as
     part of the manufacturing agreement. Fermic earned 2,250 shares
     of common stock for each kilogram pure Astaxanthin produced and
     delivered as part of the agreement. The average price  of  .056
     per  share was based on the market value of the shares  at  the
     time  the product was produced.   With the distribution in  the
     first  quarter of 2006, Fermic has earned the 20,000,000 shares
     in total under the contract.

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

(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.

     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.

                                -10-

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


     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  continue
     to  be  used  by  the  Joint Venture  in  the  same  manner  as
     historically used by the Company.  The Company and Tate &  Lyle
     each  have  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 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.   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  June
     30,  2007, Igene's portion of the Joint Venture's net loss  was
     $20,532,070.   The loss was a result of a 50% interest  in  the
     following:    Gross  profit  from  inception  was  a   negative
     $20,570,606 on sales of $34,836,739, less manufacturing cost of
     $55,407,345.   Selling and general and administrative  expenses
     were  $15,521,283,  and interest expense was  $4,972,250.   The
     resulting  loss  was $41,064,139.  Igene's 50% portion  of  the
     Joint Venture loss was $20,532,070.

     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 would guarantee  up
     to 4,200,000 British pounds sterling.  The Company subsequently
     entered  into  an  agreement with Tate & Lyle  (the  other  50%
     partner in the Joint Venture) whereby 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  July 30, 2007, the Joint Venture has not met the cash  flow
     requirements.  The Company was released from the  guarantee  by
     the bank.


                                 -11-

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


     At  June  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  $910,484,  for a total  of  $1,233,353.   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 quarter of 2007, the balances of the funds due to
     Igene  was  reduced by a net repayment of $58,956, representing
     the March 31, 2007 balance of $1,433,025.  For the three months
     ended  June 30 2007, Igene recognized a gain for the  repayment
     of  the  advance  for that period of $199,672.  This  repayment
     increased the suspended loss in addition to the $2,753,602 loss
     for  the  quarter.  The cumulative suspended loss at  June  30,
     2007  is  $19,298,717 and it will be carried forward to  offset
     Igene's share of earnings from the Joint Venture, if any.   The
     balance  in  the  Advances to and Investment in  Joint  Venture
     account  on the Company's financial statements is zero at  June
     30, 2007.

     On March 29, 2007 the Company was informed by their 50% partner
     in  the  Joint Venture, Tate and Lyle, that they determined  to
     write  down  their  portion  of the  investment  in  the  Joint
     Venture.  There has been no impairment charge reflected by  the
     Joint Venture in the enclosed financial statements as they have
     not completed their annual impairment assessment as of June 30,
     2007.

     The  following condensed statement displays the activity of the
     Joint Venture for the period of initial investment at March 18,
     2003 in the Joint Venture through June 30, 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>

                                                                     June 30,
                                                                         2007
                                                                _____________
          <S>                                                   <C>
          ASSETS
          CURRENT ASSETS
            Cash                                                $  1,211,000
            Account Receivable                                     5,697,000
            Inventory                                             11,925,000
                                                                _____________

                                                                  18,833,000
          OTHER ASSETS
            Property, plant and equipment, net                    19,958,000
            Intangibles                                           24,614,000
                                                                _____________
                 TOTAL ASSETS                                   $ 63,405,000
                                                                =============
        LIABILITIES AND EQUITY
          CURRENT LIABILITIES
            Accounts payable and accrued expenses
            (majority of which is due to one joint venturer)    $ 41,947,000
            Working capital loan                                  10,525,000
                                                                _____________
                 TOTAL LIABILITIES                                52,472,000
            Equity                                                10,933,000
                                                                _____________
                 TOTAL LIABILITIES AND EQUITY                   $ 63,405,000
                                                                =============
</TABLE>



                                -12-
<TABLE>
<CAPTION>

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



                                                               Period from
                                                             March 18, 2003
                                                         (initial investment) to
                                                             June 30, 2007
                                                             _____________
     <S>                                                     <C>
     Net Sales                                               $ 34,836,739
     Less: manufacturing cost                                 (55,407,345)
                                                             _____________
     Gross Profit (Loss)                                      (20,570,606)
     Less: selling, general and administrative                (15,521,283)
                                                             _____________
     Operating Loss                                           (36,091,889)
     Interest Expense                                          (4,972,250)
                                                             _____________
     Net Loss                                                $(41,064,139)
                                                             =============
     Igene's 50% equity interest in the net loss             $(20,532,070)
     Igene's Investment in and Advances to the Joint Venture   (1,233,353)
                                                             _____________
     Igene's suspended loss at June 30, 2007                 $(19,298,717)
                                                             =============

</TABLE>

     The  following statement displays the significant activity  for
     the  Joint Venture for the three and six months  ended June 30,
     2007.

<TABLE>
<CAPTION>

                                                          Three Months Ended             Six Months Ended
                                                   _____________________________   _____________________________
                                                   June 30, 2007   June 30, 2006   June 30, 2007   June 30, 2006
                                                   _____________   _____________   _____________   _____________
     <S>                                           <C>             <C>             <C>             <C>
     Net Sales                                     $  3,483,572    $  2,264,600    $  7,063,860    $  5,454,739
     Less: manufacturing cost                        (4,291,174)     (2,591,300)    (12,469,311)     (5,940,194)
                                                   _____________   _____________   _____________   _____________
     Gross Profit (Loss)                               (807,602)       (326,700)     (5,405,451)       (485,455)
     Less: selling, general and admin                (1,218,744)       (778,600)     (2,430,995)     (1,883,319)
                                                   _____________   _____________   _____________   _____________
     Operating Loss                                  (2,026,346)     (1,105,300)     (7,836,446)     (2,368,774)
     Interest Expense                                  (727,256)       (423,300)     (1,383,716)     (1,124,200)
                                                   _____________   _____________   _____________   _____________
     Net Loss Before tax                             (2,753,602)     (1,528,600)     (9,220,162)     (3,492,974)
     Reversal of tax expense                                ---       1,205,900             ---             ---
                                                   _____________   _____________   _____________   _____________
     Net Loss                                      $ (2,753,602)   $   (322,700)   $ (9,220,162)   $ (3,492,974)
                                                   =============   =============   =============   =============

     50% equity interest                           $ (1,376,801)   $   (161,350)   $ (4,610,081)   $ (1,746,487)

     Igene's Repayments from and additional
     (Investment in and Advances to
     the Joint Venture)                                 199,672         171,639         258,628         (18,263)
                                                   _____________   _____________   _____________   _____________
     Igene's incremental suspended loss for period $ (1,576,473)   $   (322,989)   $ (4,868,709)   $ (1,728,224)
                                                   =============   =============   =============   =============
</TABLE>

(7)  Stockholders' Deficiency

     As  of  June 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  June  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  June  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.


                                 -13-

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


     As  of  June  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  June  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  June  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 six-month
     periods  ended June 30, 2007 and 2006, are based on 109,337,072
     and  107,930,385  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  108,295,152
     weighted average common shares outstanding.  No adjustment  has
     been  made for any common stock equivalents outstanding because
     their  effects would be antidilutive.  As of June 30, 2007  and
     2006,  potentially  dilutive  shares  totaled  405,614,599  and
     379,969,462, respectively.

(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, 2007, and interim periods  within
     those  fiscal  years. 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.




                                 -14-

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


     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.

     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 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.

                                -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 six-month periods ended June 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 $280,197
     and  decreases  in  prepaid expenses of $11,519 were sources of
     cash.   These  were  in  addition  to  decreases due from Joint
     Venture of $258,628.

  o  The  carrying value of redeemable preferred stock was increased
     by  $3,563  in  2007  and $4,743 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  six  months  ended  June 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 June 30, 2007, total dividends in arrears on Igene's preferred
stock  were  $133,608  ($12.00 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.

Cost of sales and gross profit

    As  with  Sales  Revenue,  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 Joint Venture 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.


                                -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 June 30, 2007 and 2006, Igene recorded
marketing and selling expense in the amount of $37,433 and  $47,399,
respectively, a decrease of $9,966 or 21%.  For the six months ended
June 30, 2007 and 2006, Igene recorded marketing and selling expense
in  the  amount of $39,325 and $90,210, respectively, a decrease  of
$50,885 or 56%.  As a result of the Joint Venture with Tate &  Lyle,
Igene   is  expecting  an  increase  in  salable  product   with   a
corresponding increase in marketing and sales costs.  These cost are
being  incurred  as part of the selling costs of the Joint  Venture.
Additionally, as a result of the Joint Venture, these expenses  that
are  incurred  by  Igene  are  reimbursed  to  Igene.  However,   no
assurances can be made concerning increased production from the  new
facility or marketing and selling costs.

Research and development expenses

     For  the  quarter ended June 30, 2007 and 2006, Igene  recorded
research  and  development  costs in  the  amount  of  $245,172  and
$237,088,  respectively, an increase of $8,084 or 3%.  For  the  six
months  ended  June 30, 2007 and 2006, Igene recorded  research  and
development   costs  in  the  amount  of  $497,286   and   $445,737,
respectively,  an  increase of $51,549  or  12%.   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 to Igene and 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 quarter ended  June
30,  2007  and  2006  were  $275,149 and  $292,231  respectively,  a
decrease of $17,082 or 6%.  General and administrative expenses  for
the  six  months  ended  June 30, 2007 and 2006  were  $478,062  and
$517,014 respectively, a decrease of $38,952 or 8%.  These costs are
expected to remain constant at this current level.  Cost levels  are
due  to  increased audit and reporting costs.  Igene works  to  keep
overhead  costs at a reduced level and spend funds on  research  and
development  efforts.   A  portion  of  this  cost  is   funded   by
reimbursement through the Joint Venture and the remainder is  funded
through  operations or through contributions from directors;  though
none of these can be assured.

Interest expense

     Interest expense for the quarters ended June 30, 2007 and  2006
was  $574,244 and $558,886, respectively, an increase of $15,358  or
3%.   This  includes amortization of discount on Igene's  notes  and
debentures  of  $351,695 for the quarter ended  June  30,  2007  and
$351,694  for the quarter ended June 30, 2006.  For the  six  months
ended  June  30, 2007 and 2006, interest expense was $1,105,116  and
$986,339,  respectively,  a  decrease  of  $118,777  or  12%.   This
includes amortization of discount on Igene's notes and debentures of
$703,389 for the six months ended June 30, 2007 and $572,748 for the
six  months  ended June 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)


Expenses reimbursed 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 six months ended June 30, 2007, costs reimbursed by
the Joint Venture totaled $960,486.  The costs  covered  $39,325  of
marketing  costs,  $497,286 of research and  development  costs  and
$423,875  of  general and administrative costs. For the  six  months
ended  June 30, 2006, costs reimbursed by the Joint Venture  totaled
$859,860.  The costs covered $90,210 of marketing costs, $445,737 of
research   and  development  costs  and  $323,913  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  $415,729 and $504,048, respectively, for the quarters ended June
30,  2007 and 2006, a decrease in the loss of $88,319 or 18%.   This
represents a loss of $.00 per basic and diluted common share in  the
quarters ended June 30, 2007 and 2006.

Liquidity and Capital Resources

     Historically, Igene  has  been  funded  primarily   by   equity
contributions  and  loans from stockholders. As of  June  30,  2007,
Igene  had working capital of $46,202, and cash and cash equivalents
of  $193,663.   Currently  Igene is  also  funded  by  research  and
development and general and administrative reimbursements  from  the
Joint Venture.

     Cash used for operating activities during the six-month  period
ended  June  30,  2007 and 2006 amounted to $143,751  and  $103,043,
respectively, an increase in cash used of $40,708.

     Cash  provided  by  (used  for) investing activities during the
six-month  period  ended June 30, 2007 and 2006 amounted to $258,628
and ($18,263),  respectively, provided by a net decrease in advances
to the Joint Venture.

     Cash provided by financing activities for the six-month  period
ended  June  30,  2007 and 2006,  amounted to $57,000  and  $11,088,
respectively.   Financing activities during the six 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. Igene hopes to  achieve  profits  from
sales of AstaXin(R) through the Joint Venture. However, there can be
no  assurance  that projected 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
                       Controls and Procedures


Subsequent events

     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 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.


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.
5,  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/A. 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/A.

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 5, entitled "Amendment to 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  June  30, 2007, total dividends in arrears on the  Company's
preferred  stock total $133,608 ($12.00 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 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 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-