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, 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:

109,337,072 shares of common stock, par value $.01, as of May  1,
2007.
_________________________________________________________________

Transitional Small Business Disclosure Format (check one):

Yes   [ ]          No   [x]

                                 -1-

                             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 ...............    9-15

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

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

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

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

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

                                 -2-

                      IGENE BIOTECHNOLOGY, INC.

             QUARTERLY REPORT UNDER SECTION 13 OR 15(D)

               OF THE SECURITIES EXCHANGE ACT OF 1934

                                 -3-

                               PART I

                        FINANCIAL INFORMATION

                                 -4-

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


                                                                      March 31,     December 31,
                                                                          2007             2006
                                                                   ____________     ____________
                                                                    (Unaudited)
<S>                                                                <C>              <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents                                        $     4,198      $    21,786
  Prepaid expenses and other current assets                              9,833           14,093
                                                                   ____________     ____________

     TOTAL CURRENT ASSETS                                               14,031           35,879

  Property and equipment, net                                           28,898           33,571
  Investment in and advances to unconsolidated joint venture               ---              ---
  Other assets                                                           5,125            5,125
                                                                   ____________     ____________
     TOTAL ASSETS                                                  $    48,054      $    74,575
                                                                   ============     ============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
  Accounts payable and accrued expenses                            $   131,035      $   210,424
  Convertible debenture                                                    ---          705,000
  Accrued interest                                                         ---           46,570
                                                                   ____________     ____________

     TOTAL CURRENT LIABILITIES                                         131,035          961,994

LONG-TERM DEBT
  Notes payable                                                      5,842,267        5,842,267
  Convertible debentures                                             4,576,212        3,814,212
  Accrued interest                                                   5,822,201        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 $19.84 and $19.68, respectively.  Authorized 1,312,500
  shares, issued and outstanding 11,134                                220,899          219,117
                                                                   ____________     ____________

          TOTAL LIABILITIES                                         16,592,614       16,493,420
                                                                   ____________     ____________

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                                        25,659,696       25,659,696
  Accumulated deficit                                              (43,297,627)     (43,171,912)
                                                                   ____________     ____________

     TOTAL STOCKHOLDERS' DEFICIENCY                                (16,544,560)     (16,418,845)
                                                                   ____________     ____________

     TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                $    48,054      $    74,575
                                                                   ============     ============







The accompanying notes are an integral part of the financial statements.
</TABLE>
                               -5-
<TABLE>
<CAPTION>
                           IGENE Biotechnology, Inc. and Subsidiary
                             Consolidated Statements of Operations
                                         (Unaudited)


                                                                Three months ended
                                                         _____________     _____________
                                                             March 31,         March 31,
                                                                 2007              2006
                                                         _____________     _____________

<S>                                                      <C>               <C>
RECOUPMENT OF LOSS (EQUITY IN LOSS) OF JOINT VENTURE     $     58,956      $   (189,902)
                                                         _____________     _____________
OPERATING EXPENSES
__________________

  Marketing and selling                                         1,892            42,811
  Research, development and pilot plant                       252,114           208,649
  General and administrative                                  202,913           224,783
  Less operating expenses reimbursed by Joint Venture        (445,044)         (399,943)
                                                         _____________     _____________

     TOTAL OPERATING EXPENSES                                  11,875            76,300
                                                         _____________     _____________

     OPERATING PROFIT (LOSS)                                   47,081          (266,202)
                                                         _____________     _____________

OTHER INCOME                                                    6,382               ---

INTEREST EXPENSE                                             (179,178)         (206,399)
                                                         _____________     _____________

     NET LOSS                                            $   (125,715)     $   (472,601)
                                                         =============     =============

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




The accompanying notes are an integral part of the financial statements.
</TABLE>
                               -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, 2007              109,337,072  $  1,093,371   $ 25,659,696   $(43,171,912)  $(16,418,845)

Net loss for the three months ended
  March 31, 2007                               ---            ---            ---       (125,715)      (125,715)
                                       _____________ _____________  _____________  _____________  _____________

Balance at March 31, 2007               109,337,072  $  1,093,371   $ 25,659,696   $(43,297,627)  $(16,544,560)
                                       ============= =============  =============  =============  =============




The accompanying notes are an integral part of the financial statements.
</TABLE>

                               -7-

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

                                                                          Three months ended
                                                                    _____________________________
                                                                       March 31,       March 31,
                                                                           2007            2006
                                                                    _____________   _____________
<S>                                                                 <C>             <C>
Cash flows from operating activities
   Net loss                                                         $   (125,715)   $   (472,601)
   Adjustments to reconcile net loss to net cash provided
   (used) by operating activities:
        Depreciation                                                       4,673           4,673
        Increase in preferred stock for cumulative dividend
        classified as interest                                             1,781           2,961
        Manufacturing cost paid in shares of common stock                    ---          30,360
        (Recoupment of payment) Equity in loss of joint venture          (58,956)        189,902
        Decrease (increase) in:
           Accounts receivable                                               ---          10,312
           Prepaid expenses and other current assets                       4,260          12,083
        Increase (decrease) in
           Accounts payable and accrued expenses                          40,413         224,664
                                                                    _____________   _____________
           Net cash provided by (used in) operating activities          (133,544)          2,354
                                                                    _____________   _____________

Cash flows from investing activities
        Recoupment of payment (advances) to Joint Venture                 58,956        (189,902)
                                                                    _____________   _____________
        Net cash provided by (used in) investing activities               58,956        (189,902)
                                                                    _____________   _____________

Cash flows from financing activities
   Proceeds from issuance of convertible debentures                      762,000             ---
   Repayment of convertible debentures                                  (705,000)            ---
   Proceeds from exercise of warrants                                        ---             788
   Bank overdraft                                                            ---          61,715
   Proceeds from exercise of employee stock options                          ---           5,300
                                                                    _____________   _____________
        Net cash provided by financing activities                         57,000          67,803
                                                                    _____________   _____________

        Net decrease in cash and cash equivalents                        (17,588)       (119,745)

        Cash and cash equivalents at beginning of period                  21,786         119,745
                                                                    _____________   _____________
        Cash and cash equivalents at end of period                  $      4,198    $          0
                                                                    =============   =============

Supplementary disclosure and cash flow information
__________________________________________________

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

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


The accompanying notes are an integral part of the financial statements.
</TABLE>

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

(1)  Unaudited consolidated financial statements

     The   March   31,  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 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, 2006.  The December 31,
     2006  consolidated balance sheet is derived from the audited
     balance sheet included therein.

(2)  Nature of Operations

     IGENE  Biotechnology,  Inc.  ("Igene")  is  engaged  in  the
     business   of   developing,  marketing,  and   manufacturing
     specialty   ingredients  for  human  and  animal  nutrition.
     Igene was formed on October 27, 1981 to develop, produce and
     market value-added specialty biochemical products.  Igene is
     a  supplier of natural astaxanthin, an essential nutrient in
     different  feed  applications and a source  of  pigment  for
     coloring  farmed salmon species.  Igene is also  endeavoring
     to  supply astaxanthin as a nutraceutical ingredient.  Igene
     is  focused  on  research  and development  of  fermentation
     technology,  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 2000, Igene formed a wholly-owned subsidiary, Igene Chile
     Comercial, Ltda., in Chile.  The subsidiary has a sales  and
     customer  service  office  in Puerto  Varas,  Chile,  and  a
     product  warehouse in Puerto Montt, Chile.  Igene  currently
     leases   manufacturing  capacity  in  Mexico  City,  Mexico,
     through a contract manufacturer on an as needed basis.

     In  an  effort to develop a dependable source of production,
     on  March  19, 2003, Tate & Lyle PLC and Igene  announced  a
     50:50   joint   venture   to   produce  AstaXin(R)  for  the
     aquaculture industry,  which  we  refer  to  as  the  "Joint
     Venture".   Production  utilizes  Tate & Lyle's fermentation
     capability  together with the unique technology developed by
     Igene. Part  of  Tate & Lyle's existing citric acid facility
     located  in  Selby, England,  was  modified  to  include the
     production of this product.  Tate & Lyle's investment of $25
     million  included  certain  of its facility assets that were
     used in citric acid production.  The production facility has
     been completed and is now in full production.

(3)  Noncash investing and financing activities

     During  the three months ended March 31, 2007 and 2006,  the
     Company recorded in each quarter dividends in arrears on  8%
     redeemable  preferred stock cumulating  at  $.16  per  share
     aggregating to $1,781 and $2,961, respectively.

     During  the  three  months  ended March  31,  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  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.

     The  545,571 shares were earned at an average price of $.056
     per  share.   Through March 31, 2006, all 20,000,000  shares
     had been earned.



                               -9-

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

(4)  Amendment to Long - Term Liabilities

     Igene   entered  into  Convertible  Promissory  Notes   (the
     "Convertible Notes") with each of the following note holders
     for  the  following  respective  amounts  (a)  NorInnova  AS
     (formerly  Forskningsparken I Tromso AS) for  $106,500;  (b)
     Knut  Gjernes  for  $7,500;  (c)  Magne  Russ  Simenson  for
     $278,000; and (d) Nord Invest AS for $313,000.  Each of  the
     Convertible Notes had a maturity date of November  1,  2004.
     On  November 18, 2005, each of the Convertible Note  Holders
     provided Igene with written notice of default under each  of
     the Convertible Notes.

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

     The  funds  to settle the Notes Litigation were provided  by
     Igene's  directors  using the terms  offered  above  to  the
     debenture  holders.  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.

(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 transferred 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
     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 initial investment  in
     the  Joint Venture has been recorded at an amount  equal  to
     Igene's historical book value.  As the cost of the Company's
     technology  and  intellectual property has  been  previously
     expensed  and had a carrying amount of zero, the  investment
     in  the  Joint Venture was originally recorded with  a  book
     value   of   $316,869,  which  represents  the   unamortized
     production  costs  contributed to the  Joint  Venture.   The
     Company also contributed $6,000 to the capital of the  Joint
     Venture.

     Production utilizes Tate's fermentation capability  together
     with  the  unique  technology developed by  Igene.  Part  of
     Tate's  existing  Selby, England, citric acid  facility  was
     modified  to  produce up to 1,500 tons  per  annum  of  this
     astaxanthin.  Tate's investment of approximately $25 million
     includes certain of its facility assets previously  used  in
     citric  acid  production.  Sales and cost of sales  activity
     are   now   recorded  as  part  of  the  earnings   of   the
     unconsolidated venture.

     As  a result of the Joint Venture, the production, sales and
     marketing   of   astaxanthin   now   take   place   in   the
     unconsolidated Joint Venture.  From inception on  March  18,
     2003 through March 31, 2007, the Joint Venture's results  of
     operations  included  the  following:   Gross  profit   from
     inception   was   a  negative  $19,763,827   on   sales   of
     $31,353,167,   less  manufacturing  cost   of   $51,116,994.
     Selling   and  general  and  administrative  expenses   were
     $14,302,539,  and  interest  expense  was  $4,244,994.   The
     resulting loss for such period was $38,311,360.  Igene's 50%
     portion  of the Joint Venture loss was $19,155,680 for  such
     period.


                              -10-

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

    Because the Company accounts for its investment in the  Joint
    Venture  under  the  equity method of  accounting,  it  would
    ordinarily  recognize  a  loss representing  its  50%  equity
    interest in the loss of the Joint Venture or the amount  that
    is  guaranteed  by the Company, if any.  However,  losses  in
    the  Joint Venture 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  are  carried  forward  to  offset
    Igene's share of the Joint Venture's future income, if any.

    On  June  15, 2005, the Company executed a limited  guarantee
    for  one  of the debt obligations of the Joint Venture  owing
    to  the  Royal  Bank of Scotland.  Under  the  terms  of  the
    limited  guarantee,  the company agreed to  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) where by  Tate  &  Lyle  has
    agreed  to  arrange  funds  for the  Joint  Venture,  without
    recourse  to The Company, until the Joint Venture produces  a
    regular  monthly cash flow, as defined, for four  consecutive
    months.     As of May 1, 2007, the Joint Venture had not  met
    the  cash  flow  requirements.  The Company has  subsequently
    been released from the guarantee by the bank.

    At  March  31, 2007, prior to the recognition of its  portion
    of  the  Joint Venture loss, Igene's investment in the  Joint
    Venture  consisted of $322,869 and its net  advances  to  the
    Joint  Venture  amounted  to  $1,110,156,  for  a  total   of
    $1,433,025.  Through the year ended December 31, 2006,  Igene
    recognized  $1,491,981 of its share of  a  $15,922,400  loss.
    The  remainder  of  $14,430,419, was suspended  and  will  be
    carried forward to offset Igene's share of earnings from  the
    Joint  Venture, if any.  During the quarter ended  March  31,
    2007  the  balance  of  funds due to  Igene  from  the  Joint
    Venture  was reduced through repayments to Igene.   This  net
    repayment totaled $58,956, and is treated as a recoupment  of
    prior  loss.  In addition the JV incurred an additional  loss
    of  $6,466,560, Igene's 50% share of this was $3,233,280, the
    combination  increased  the  suspended  loss  by  $3,292,236,
    during  the  quarter ended March 31, 2007.  This brought  the
    March  31,  2007 suspended loss to $17,722,655.  The  balance
    in  the  advances to and investment in Joint Venture  account
    on  the  Company's financial statements is zero at March  31,
    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 March 31, 2007.

    The  following schedules display certain account balances  of
    the  Joint Venture as of March 31, 2007 and the period  since
    initial investment at March 18, 2003 (inception):




                              -11-
<TABLE>
<CAPTION>
                             IGENE Biotechnology, Inc. and Subsidiary
                            Notes to Consolidated Financial Statements
                                           (continued)

                                                                                       March 31,
                                                                                           2007
                                                                                   _____________
                                                                                    (unaudited)
     <S>                                                                           <C>
     ASSETS
     CURRENT ASSETS
        Cash and cash equivalents                                                  $  1,042,000
        Accounts Receivable                                                           4,229,000
        Inventories                                                                  10,491,000
                                                                                   _____________
                                                                                     15,762,000
     OTHER ASSETS
        Property, plant and equipment, net                                           20,053,000
        Intangibles                                                                  24,614,000
                                                                                   _____________
             TOTAL ASSETS                                                          $ 60,429,000
                                                                                   =============

     LIABILITIES AND EQUITY
     CURRENT LIABILITIES
        Accounts payable and accrued expenses                                      $ 35,211,000
        Working capital loan                                                         11,812,000
                                                                                   _____________

             TOTAL CURRENT LIABILITIES                                               47,023,000
        Equity                                                                       13,406,000
                                                                                   _____________

             TOTAL LIABILITIES AND EQUITY                                          $ 60,429,000
                                                                                   =============
</TABLE>
<TABLE>
<CAPTION>
                                                                            Period from March 18, 2003
                                                                             (initial investment) to
                                                                                  March 31, 2007
                                                                            __________________________
                                                                                    (unaudited)
        <S>                                                                        <C>
        Net Sales                                                                  $ 31,353,167
        Less: manufacturing cost                                                    (51,116,994)
                                                                                   _____________
        Gross Profit (Loss)                                                         (19,763,827)
        Less: selling, general and administrative                                   (14,302,539)
                                                                                   _____________
        Operating Loss                                                              (34,066,366)
        Interest Expense                                                             (4,244,994)
                                                                                   _____________
        Net Loss                                                                   $(38,311,360)
                                                                                   =============
        Igene's 50% equity interest in the net loss                                $(19,155,680)
        Igene's Investment in and Advances to the Joint Venture                      (1,433,025)
        Igene's suspended loss                                                     $(17,722,655)
                                                                                   =============

</TABLE>
<TABLE>
<CAPTION>
                                                                        Quarter ended        Quarter ended
                                                                        March 31, 2007       March 31, 2006
                                                                       ________________     ________________
                                                                         (unaudited)          (unaudited)
         <S>                                                           <C>                  <C>
         Net Sales                                                     $     3,580,288      $     3,190,139
         Less: manufacturing cost                                           (8,178,136)          (3,348,894)
                                                                       ________________     ________________
         Gross Profit (Loss)                                                (4,597,848)            (158,755)
         Less: selling, general and administrative                          (1,212,252)          (1,104,719)
                                                                       ________________     ________________
         Operating Loss                                                     (5,810,100)          (1,263,474)
         Interest Expense                                                     (656,460)            (700,900)
                                                                       ________________     ________________
         Net Loss before taxes                                              (6,466,560)          (1,964,374)
                                                                       ================     ================

         Tax Expense                                                               ---           (1,205,900)
         Net Loss before taxes                                         $    (6,466,560)     $    (3,170,274)
                                                                       ================     ================
         Igene's 50% equity interest in the net loss                   $    (3,233,280)     $    (1,585,137)
         Igene's additional Recoupment from
          (Investment in and Advances to) the Joint Venture                     58,956             (189,902)
                                                                       ________________     ________________
         Igene's incremental suspended loss                            $    (3,292,236)     $    (1,395,235)
                                                                       ================     ================
</TABLE>
                              -12-
            IGENE Biotechnology, Inc. and Subsidiary
           Notes to Consolidated Financial Statements
                           (continued)

(6)  Stockholders' Deficiency

     As  of  March  31,  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  March 31, 2007, 72,232,334 shares of authorized  but
     unissued  common  stock were reserved for  distribution  and
     exercise  pursuant  to the Company's Employee  Stock  Option
     Plans.

     As  of  March 31, 2007, 23,421,273 shares of authorized  but
     unissued  common stock were reserved for the  conversion  of
     outstanding  convertible promissory notes held by  directors
     of the Company in the aggregate amount of 1,082,500.

     As  of  March 31, 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  March  31, 2007 38,250,000 shares of authorized  but
     unissued  common stock were reserved for the  conversion  of
     outstanding convertible promissory notes issued as  part  of
     the settlement of the ProBio notes.

     As  of March 31, 2007, 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, 2007 and 2006  are  based  on
     109,337,072  and  107,561,565,  respectively,  of   weighted
     average  common shares outstanding.  No adjustment has  been
     made  for  any common stock equivalents outstanding  because
     their  effects would be antidilutive.  As of March 31,  2007
     and  2006,  potentially dilutive shares totaled  487,564,337
     and 462,779,784, respectively.

(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  $43,300,000  from  inception  to
     March 31, 2007 and as of March 31, 2007, Igene's liabilities
     exceeded  its  assets by approximately  $16,500,000.   These
     factors  indicate that Igene may not be able to continue  in
     existence unless it is able to raise additional capital  and
     attain profitable operations.

     The continuing  marketing  of Igene's  product,  AstaXin(R),
     permitted  Igene to attract additional capital  through  its
     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.




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

(10) Recent Accounting Pronouncements

     In  May  2005,  the  FASB issued SFAS No.  154,  "Accounting
     Changes  and Error Corrections"("SFAS 154"), which  replaces
     APB  Opinion  No.  20 Accounting Changes and   SFAS  No.  3,
     "Reporting   Accounting   Changes   in   Interim   Financial
     Statements-An  Amendment of APB Opinion No. 28."   SFAS  154
     requires   retrospective  application  to   prior   periods'
     financial  statement  of a voluntary  change  in  accounting
     principal unless it is not practical.  SFAS 154 is effective
     for  accounting  changes and corrections of errors  made  in
     fiscal  years  beginning after December  15,  2005,  and  is
     required  to be adopted by the Company in the first  quarter
     of  fiscal 2007.  The Company adopted this pronouncement  in
     the  first quarter of 2007.  There was no impact on  results
     of operations, cash flows or financial position.

     In  September 2006, the Financial Accounting Standards Board
     issued  Statement  of Financial Accounting Standards  Number
     157  - Fair Value Measurements ("SFAS157"). 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.

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



                              -14-

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


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



                                  -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 WITHIN THE BIOTECH AGRICULTURE AND
AQUACULTURE  INDUSTRIES,  ECONOMIC CONDITIONS  IN  THE  COMPANY'S
PRIMARY  MARKETS,  EXCHANGE  RATE FLUCTUATIONS,  REDUCED  PRODUCT
DEMAND,  INCREASED  COMPETITION, INABILITY  TO  PRODUCE  REQUIRED
CAPACITY, UNAVAILABILITY OF FINANCING, GOVERNMENT ACTION, WEATHER
CONDITIONS  AND OTHER UNCERTAINTIES, INCLUDING THOSE DETAILED  IN
"RISK  FACTORS"  THAT  ARE  INCLUDED  FROM  TIME-TO-TIME  IN  THE
COMPANY'S SECURITIES AND EXCHANGE COMMISSION FILINGS.

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 such 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  and  advances
repaid.   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 guaranteed repayment
by  the  Joint Venture to the Royal Bank of Scotland of 4,200,000
British  pounds sterling.  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 the Company until  the  Joint
Venture  produces a regular monthly cash flow,  as  defined,  for
four  consecutive months.  As of May 1, 2007, the  Joint  Venture
had  not  met  the  cash  flow  requirements.   The  Company  has
subsequently been released from the guarantee by the bank.

                              -16-

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


     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.


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.

     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  inefficiency  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 offsetting pricing competition, but can provide
no assurances of future increased production or future profits.

     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,  2007  and  2006,  Igene
recorded  marketing and selling expense in the amount  of  $1,892
and  $42,811, respectively, a decrease of $40,919 or  96%.   Over
the past year, the majority of the marketing and selling expenses
are  being  incurred  directly by the Joint Venture  rather  than
being incurred by Igene and then reimbursed by the Joint Venture.
It  is  expected that this level of marketing and selling expense
will  be constant as the Joint Venture assumes the marketing  and
sales  function,  based on the current level of  salable  product
currently available.  As a result of the Joint Venture, Igene  is
expecting  an  increase in salable product with  a  corresponding
increase  in  sales costs incurred at the Joint  Venture.   These
expenses  have  been  reimbursed to Igene by the  Joint  Venture.
However  no  assurances  can be made  with  regard  to  increased
production  from  the Joint Venture or the likelihood  of  future
reimbursements.

Research, development and pilot plant expenses

     For  the  quarters  ended March 31,  2007  and  2006,  Igene
recorded research and development costs in the amount of $252,114
and $208,649, respectively, an increase of $43,465 or 21%.  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.    These  costs  are currently
funded through reimbursement from the Joint Venture.    Igene  is
hoping  this  will  lead  to  an increase in salable product at a
reduced cost to the Joint Venture.   However no assurances can be
made in that regard or with respect to future reimbursements from
the Joint Venture.



                              -17-

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

Operating expenses

     General  and  administrative expenses for the quarter  ended
March  31, 2007 and 2006 were $202,913 and $224,783 respectively,
a  decrease  of  $21,870 or 10%.   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.   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.

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,
2007,  costs reimbursed  by  the  Joint Venture totaled $445,044.
The  costs  covered   $1,892  of  marketing  costs,  $252,114  of
research   and  development  costs  and  $191,038 of general  and
administrative costs. 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.  Igene can provide no assurance of future reimbursements.

Interest expense

     Interest  expense for the quarters ended March 31, 2007  and
2006,  was  $179,178 and $206,399, respectively,  a  decrease  of
$27,221  or  13%.     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 take place in  the  unconsolidated
Joint  Venture.  From inception on March 18, 2003  through  March
31,  2007, the Joint Venture's results of operations included the
following:    Gross  profit  from  inception   was   a   negative
$19,763,827 on sales of $31,353,167, less manufacturing  cost  of
$51,116,994.   Selling  and general and  administrative  expenses
were  $14,302,539,  and  interest expense  was  $4,244,994.   The
resulting loss was $38,311,360.  Igene's 50% portion of the Joint
Venture loss was $19,155,680.

     Because the Company accounts for its investment in the Joint
Venture   under  the  equity  method  of  accounting,  it   would
ordinarily recognize a loss representing its 50% equity  interest
in the loss of the Joint Venture or the amount that is guaranteed
by the Company, if any.  However, losses in the Joint Venture 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  are
carried  forward  to offset Igene's share of the Joint  Venture's
future income, if any.

     On  June  15, 2005, the Company executed a limited guarantee
for  one of the debt obligations of the Joint Venture owed to the
Royal   Bank  of  Scotland.   Under  the  terms  of  the  limited
guarantee,  the  Company  agreed to  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)  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 May 1, 2007,  the
Joint  Venture  had  not  met the cash  flow  requirements.   The
Company has subsequently been released from the guarantee by  the
bank.


                              -18-

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

     At  March  31, 2007, prior to the recognition of its portion
of  the  Joint  Venture  loss, Igene's  investment  in  the Joint
Venture  consisted  of $322,869 and its net advances to the Joint
Venture  amounted  to  $1,110,156,  for  a  total  of $1,433,025.
Through  the  year  ended  December  31,  2006,  Igene recognized
$1,491,981 of its share  of a $15,922,400 loss.  The remainder of
$14,430,419,  was suspended and will be carried forward to offset
Igene's  share  of  earnings  from  the  Joint Venture,  if  any.
During the quarter ended  March 31, 2007 the balance of funds due
to Igene from the Joint  Venture was reduce through repayments to
Igene.   This  net  repayment totaled $58,956.    This amount  is
treated as a recoupment  of  prior  loss and added  back  to  the
$14,430,419  suspended  loss.    In  addition  the JV incurred an
additional loss  of  $6,466,560,  Igene's  50% share of this  was
$3,233,280,  the  combination   increased  the  suspended loss by
$3,292,236, during the quarter ended March 31, 2007. This brought
the  March  31, 2007  suspended loss to $17,722,655.  The balance
in the advances to and investment in Joint Venture account on the
Company's financial statements is zero at March 31, 2007.


Net loss and basic and diluted net loss per common share

     As  a  result  of  the  foregoing,  the Company reported net
losses of  $125,715  and $472,601, respectively, for the quarters
ended March 31, 2007 and 2006, a decrease in the loss of $346,886
or 73%.  This represents a loss of $0.00 per  basic  and  diluted
common  share  in each of the quarters ended March 31,  2007  and
2006.   The  weighted average number of shares  of  common  stock
outstanding  of  109,337,072 and  107,561,566  for  the  quarters
ended  March   31, 2007 and 2006, respectively, has increased  by
1,775,506  shares.  The increase in outstanding  shares  resulted
from  primarily  from  the  weighted average  adjustment  of  the
issuance  545,569  shares  to  Igene's  manufacturer  under   the
manufacturing  agreement  with Fermic, and  1,000,000  shares  of
common  stock were issued to the Company's new Vice President  of
Manufacturing as part of his agreement in accepting the position.

Financial Position

     During  the  quarters  ended March 31,  2007  and  2006,  in
addition  to  the  matters  previously discussed,  the  following
actions   also   materially  affected  the  Company's   financial
position:

   o  Increases  in  accounts payable and accrued expense for the
      quarter  ended  March  31,  2007 of $40,413 was a source of
      cash,  in  addition to a net decrease in prepaid expense of
      $4,260;

   o  The   carrying  value  of  redeemable preferred  stock  was
      increased  and  interest expense recorded in the amounts of
      $1,781  in  2007, 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 Section 4, entitled "Amendment to
      Long-Term Liabilities."

      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, 2007, total dividends  in  arrears  on
Igene's preferred stock total $131,827 ($11.84 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,  2007,
Igene had negative working capital of $117,004, and cash and cash
equivalents  of  $4,198.   Currently  Igene  is  also  funded  by
research  and development and selling, general and administrative
expense reimbursements from the Joint Venture.

     Cash used  by  operating activities during  the  three-month
period ended March 31, 2007 equaled $133,544 versus cash provided
by  operating  activities of $2,354 for  the  three-month  period
ended March 31, 2006.

                              -19-

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

     Cash provided by investing activities during the three-month
period  ended March 31, 2007 equaled $58,956 versus cash used  by
investing activities of $189,902 for the three-month period ended
March 31, 2006.

     Cash provided by financing activities was $57,000 during the
first   quarter  of  2007,  in  settlement  of  the   convertible
debentures and used in payment of interest on those notes.   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.

     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,  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, 2007 and 2006.


Item 3.   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.



                              -20-

            IGENE Biotechnology, Inc. and Subsidiary
                             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 using the terms offered above to the debenture
holders.  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 using the terms offered above to the debenture
holders.  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
Section 4, 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 cumulate for future payment or addition to  the
liquidation  preference  or redemption  value  of  the  preferred
stock.   As of March 31, 2007, total dividends in arrears on  the
Company's  preferred stock total $131,827 ($11.84 per share)  and
are  included  in the carrying value of the redeemable  preferred
stock.

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.








                               -21-

            IGENE Biotechnology, Inc. and Subsidiary
                             PART II
                        OTHER INFORMATION
                           (continued)

     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 May 14, 2007    By  /S/ STEPHEN F. HIU
          ____________        ___________________________________
                                  STEPHEN F. HIU
                                  President




     Date May 14, 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
          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.




                                -24-