U.S. SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549
                            FORM 10-QSB/A
                          (Amendment No. 1)

(Mark One)

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

         For the quarterly period ended September 30, 2004

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

      For the transition period from __________ to __________


                   Commission file number 0-15888
                   ______________________________

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


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


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

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

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



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

Yes                No    x
      ___               ___

State  the  number  of  shares  outstanding  of  each of the issuer's
classes of common equity, as of the latest practicable date:
99,024,568 shares as of November 9, 2004.
_________________________________________

Transitional Small Business Disclosure Format (check one):

Yes                No    x
      ___               ___

<PAGE>

Explanatory Note:

As  disclosed  in  the  Notification of Late Filing  filed  by  Igene
Biotechnology, Inc. (the "Registrant") with the Commission  on  April
1,   2005  (the  "Notification"),  Berenson  LLP  ("Berenson"),   the
Registrant's  independent  registered  public  accounting  firm,  has
questioned the Registrant's historical method of recording the  value
of  its  50% interest in its joint venture with Tate & Lyle PLC  (the
"Joint  Venture"), as reflected in the Registrant's previously issued
consolidated  financial  statements  contained  in  the  Registrant's
Annual Report on Form 10-KSB for the year ended December 31, 2003 and
consolidated   interim   financial  statements   contained   in   the
Registrant's  Quarterly  Reports on Form  10-QSB  for  the  quarterly
periods  ended March 31, 2004, June 30, 2003 and 2004, and  September
30, 2003 and 2004 (collectively, the "Financial Statements").

As disclosed in the Notification, the Registrant contacted the Office
of  Chief Accountant of the Commission requesting further guidance on
this  accounting matter.  The Registrant engaged in discussions  with
the  Staff of the Commission relating to the accounting treatment  of
the  Registrant's  interest  in the Joint  Venture.   The  Commission
advised  the registrant that the historical accounting treatment  was
not appropriate.  In a letter dated May 12, 2005, and received by the
Company  on the same date, Berenson notified the Registrant that  the
Financial  Statements  should no longer be  relied  upon  because  of
errors  in those Financial Statements.  The Registrant is now in  the
process  of  correcting and restating the Financial  Statements  (the
"Restatement").   The  Registrant  has  filed  restatements  for  the
quarterly periods ended June 30, 2003 and September 30, 2003 and  the
annual  report for the year ended December 31, 2003.  The  registrant
plans  to file the remainder of the restated Financial Statements  as
soon  as  is  practicable after the necessary corrections  have  been
made.

The historical Financial Statements filed with the Commission treated
the  Registrant's  investment in the Joint Venture under  the  equity
method  of  accounting  as  a one-line caption  on  its  consolidated
balance  sheet  and  consolidated statement of  operations  with  the
excess of fair value of such investment in the Joint Venture over the
historical  cost  basis  of consideration paid  for  such  investment
reflected as an adjustment to additional paid-in capital.

The Restatement of the Financial Statements pertains primarily to the
manner  in which the Registrant recorded the investment in the  Joint
Venture  in the Financial Statements. The Registrant has been advised
that  while the Registrant's investment in the Joint Venture has been
correctly  accounted for under the equity method of accounting  as  a
one-line  caption on its consolidated balance sheets and consolidated
statements  of operations, the Registrant's investment in  the  Joint
Venture should have been recorded at an amount equal to the value  of
the  Registrant's consideration contributed at the  creation  of  the
Joint  Venture  (not as the excess of fair value of the  Registrant's
investment in the Joint Venture over the historical cost basis).   As
a  result,  the  investment  in the Joint Venture  should  have  been
initially  recorded  with  a  value  of  $316,869;  rather  than  the
$12,300,000 initially recorded in the Financial Statements.

The  Company can not recognize losses of the Joint Venture beyond its
investment  (including advances) in the Joint  Venture.   As  of  the
third  quarter of 2004 the Company had an initial investment  of  and
amounts  due from the Joint Venture of $1,034,748.  Igene's share  of
the loss through September 30, 2004 equaled $3,568,500, exceeding the
total  investment by $2,533,752.  This excess loss,  and  all  future
losses  incurred as a result of the Joint Venture, that are in excess
of the Company's investment and advances, will be suspended until the
point  that  the  profits of the Joint Venture, if  any,  exceed  the
incurred losses.

As  in  the  originally  issued financial statements,  the  Company's
preferred  stock has been classified as liabilities in  the  restated
financial  statement  in accordance with the Statement  of  Financial
Accounting  Standards  No.  150  "Accounting  for  Certain  Financial
Instruments  with  Characteristics of both  Liabilities  and  Equity"
("FASB  150").   However the amounts previously stated  as  dividends
after  the effective date of FASB 150, which was at the beginning  of
the  third  quarter of 2003,  have been recharacterized  as  interest
expense    in    the    restated    financial    statements.      The
recharacterization increases interest expense by $2,961  and  $40,019
for  the  three  months  and nine months ended  September  30,  2004,
respectively.


For  the convenience of the reader, this Form 10-QSB/A sets forth the
Form  10-QSB originally filed with the SEC on November 11, 2004  (the
"Form  10-QSB")  in its entirety.  However, this Form  10-QSB/A  only
amends and restates Items [1 and 2 of Part I] of the Form 10-QSB,  in
each case, solely as a result of, and to reflect the Restatement  and
no  other  information  in the Form 10-QSB is  amended  hereby.   The
foregoing  items  have  not  been updated  to  reflect  other  events
occurring  after the original filing date of the Form  10-QSB  or  to
modify or update those disclosures affected by subsequent events.  In
addition, pursuant to the rules of the SEC, Item 6 of Part II of  the
Form   10-QSB   has   been   amended   to   contain   currently-dated
certifications from the Company's Chief Executive Officer  and  Chief
Financial  Officer,  as  required by Sections  302  and  906  of  the
Sarbanes-Oxley  Act  of 2002.  The certifications  of  the  Company's
Chief  Executive Officer and Chief Financial Officer are attached  to
this Form 10-QSB/A as Exhibits 31(a), 31(b), 32(a) and 32(b).
<PAGE>
Except  for  the  foregoing amended information, this  Form  10-QSB/A
continues to speak as of the original filing date of the Form 10-QSB,
and  the  Company has not updated the disclosure contained herein  to
reflect events that occurred at a later date.  Other events occurring
after the filing of the Form 10-QSB or other disclosures necessary to
reflect  subsequent events are addressed, or will  be  addressed,  in
subsequent filings with the SEC.

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


                                INDEX



PART I    -    FINANCIAL INFORMATION

                                                            Page

     Consolidated Balance Sheets .........................  5-6

     Consolidated Statements of Operations ...............  7

     Consolidated Statements of Stockholders' Deficit ....  8-9

     Consolidated Statements of Cash Flows ...............  10

     Notes to Consolidated Financial Statements ..........  11-19

     Management's Discussion and Analysis of Financial
     Conditions and Results of Operations ................  20-27

PART II    -    OTHER INFORMATION ........................  28-29

SIGNATURES ...............................................  30

EXHIBIT INDEX ............................................  31
<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 Subsidiaries
                             Consolidated Balance Sheets


                                                    September 30,     December 31,
                                                            2004             2003
                                                    _____________    _____________
                                                      (Unaudited)
                                                       (Restated)
<S>                                                 <C>              <C>
ASSETS
CURRENT ASSETS

  Cash and cash equivalents                         $     12,087     $     63,075
  Accounts receivable                                    199,095          156,458
  Prepaid expenses and other current assets               19,287           43,675
                                                    _____________    _____________

                                                         230,469          263,208

OTHER ASSETS
  Property and equipment, net                            134,495          148,931
  Loans receivable from manufacturing agent              118,965          122,964
  Other assets                                             5,125            4,886
                                                    _____________    _____________

     TOTAL ASSETS                                   $    489,054     $    539,989
                                                    =============    =============
</TABLE>



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

                               -5-
<TABLE>
<CAPTION>
                          IGENE Biotechnology, Inc. and Subsidiaries
                                 Consolidated Balance Sheets
                                         (continued)

                                                                  September 30,      December 31,
                                                                          2004              2003
                                                                  _____________     _____________
                                                                    (Unaudited)
                                                                     (Restated)
<S>                                                               <C>               <C>
LIABILITIES, REDEEMABLE PREFERED STOCK
  AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
  Accounts payable and accrued expenses                           $    207,705      $    185,862
  Equipment lease payable                                                  ---             1,498
                                                                  _____________     _____________

     TOTAL CURRENT LIABILITIES                                         207,705           187,360

LONG-TERM LIABILITIES
  Notes payable                                                      5,842,267         5,842,767
  Convertible debentures                                             4,624,212         4,814,212
  Accrued interest                                                   3,968,070         3,398,272

REDEEMABLE PREFERRED STOCK
  Carrying amount of redeemable preferred
     stock, 8% cumulative, convertible,
     voting, series A, $.01 par value per
     share. Stated value was $ 18.24
     and $17.44, respectively.  Authorized
     1,312,500 shares, issued 18,509 and 25,605 respectively           337,604           454,745
                                                                  _____________     _____________

  Carrying amount of redeemable preferred stock,
     8% cumulative, convertible, voting, series B,
     $.01 par value per share.  Stated value $8.80 per share.
     Authorized, issued and outstanding zero and 187,500
     shares, respectively                                                  ---         1,650,000
                                                                  _____________     _____________

     TOTAL LIABILITIES                                              14,979,858        16,347,356
                                                                  _____________     _____________

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT
  Common stock --- $.01 par value per share.
     Authorized 750,000,000 shares;
     issued and outstanding 99,024,568
     and 92,747,469 shares, respectively.                              990,246           927,475
  Additional paid-in capital                                        24,939,078        22,556,553
  Deficit                                                          (40,420,128)      (39,291,395)
                                                                  _____________     _____________

     TOTAL STOCKHOLDERS' DEFICIT                                   (14,490,804)      (15,807,367)
                                                                  _____________     _____________
     TOTAL LIABILITIES AND
     STOCKHOLDERS' DEFICIT                                        $    489,054      $    539,989
                                                                  =============     =============

</TABLE>


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

                               -6-
<TABLE>
<CAPTION>
                               IGENE Biotechnology, Inc. and Subsidiaries
                                 Consolidated Statements of Operations
                                             (Unaudited)


                                                     Three months ended                Nine months ended
                                                ____________________________      ____________________________
                                                September 30,  September 30,      September 30,  September 30,
                                                        2004           2003               2004           2003
                                                _____________  _____________      _____________  _____________
                                                   (Restated)                        (Restated)
<S>                                             <C>            <C>                <C>            <C>
REVENUE
_______

  Sales - AstaXin(R)                            $        ---   $        ---       $        ---   $    463,486
  Cost of sales - AstaXin(R)                             ---            ---                ---        444,946
                                                _____________  _____________      _____________  _____________

          GROSS PROFIT                                   ---            ---                ---         18,540
                                                _____________  _____________      _____________  _____________

OPERATING EXPENSES
__________________

  Marketing and selling                               45,536         57,265            254,803        277,120
  Research, development and pilot plant              227,103        198,195            631,035        576,596
  General and administrative                         154,077        172,804            514,905        557,131
  Litigation expense                                     ---         75,610             40,580         75,610
  Operating expenses reimbursed by Joint Venture    (420,519)      (327,310)        (1,163,694)      (891,691)
                                                _____________  _____________      _____________  _____________

          TOTAL OPERATING EXPENSES                     6,197        176,564            277,629        594,766
                                                _____________  _____________      _____________  _____________

          OPERATING LOSS                              (6,197)      (176,564)          (277,629)      (576,226)

EQUITY IN LOSS OF UNCONSOLIDATED SUBSIDIARY          (14,636)      (222,000)          (216,696)      (569,000)

INTEREST EXPENSE                                    (194,432)      (267,635)          (634,408)      (650,767)
                                                _____________  _____________      _____________  _____________

  NET LOSS FROM CONTINUING OPERATIONS               (215,265)      (666,199)        (1,128,733)    (1,795,993)

DISCONTINUED OPERATIONS
_______________________

Gain on disposal of discontinued operations              ---            ---                ---        237,437
                                                _____________  _____________      _____________  _____________

           NET LOSS                             $   (215,265)  $   (666,199)      $ (1,128,733)  $ (1,558,556)
                                                =============  =============      =============  =============

BASIC AND DILUTED NET LOSS
  PER COMMON SHARE
  FROM CONTINUING OPERATIONS                    $      (0.00)         (0.01)      $      (0.01)         (0.02)
                                                _____________  _____________      _____________  _____________

BASIC AND DILUTED NET INCOME (LOSS)
  PER COMMON SHARE
  FROM DISCONTINUED OPERATIONS                  $      (0.00)         (0.00)      $      (0.00)         (0.00)
                                                _____________  _____________      _____________  _____________

BASIC AND DILUTED NET LOSS PER COMMON SHARE     $      (0.00)         (0.01)      $      (0.01)         (0.02)
                                                =============  =============      =============  =============

</TABLE>

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

                               -7-
<TABLE>
<CAPTION>
                            IGENE Biotechnology, Inc. and Subsidiaries
                         Consolidated Statements of Stockholders' Deficit
                                          (Unaudited)


                                                              Redeemable Preferred Stock
                                                                   (shares/amount)
                                                           _______________________________
<S>                                                        <C>               <C>
Balance at January 1, 2003                                      213,655      $  1,947,774

Cumulative undeclared dividends
  on redeemable preferred stock                                     ---            98,194

Cumulative undeclared dividends
  on redeemable preferred stock
  classified as interest                                            ---            34,096

Conversion of preferred stock to common                             550            (9,416)

Exercise of warrants                                                ---               ---

Net loss for the nine months ended September 30, 2003               ---               ---
                                                           _____________     _____________

Balance at September 30, 2003                                   213,105      $  2,070,648
                                                           =============     =============

Balance at January 1, 2004                                      213,105      $  2,104,745

Cumulative undeclared dividends
  on redeemable preferred stock                                     ---            40,019

Conversion of preferred stock to common                        (194,596)       (1,807,160)

Exercise of warrants                                                ---               ---

Net loss for the nine months ended  September 30, 2004              ---               ---
                                                           _____________     _____________

Balance at September 30, 2004 (Restated)                         18,509      $    337,604
                                                           =============     =============
</TABLE>

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

                               -8-
<TABLE>
<CAPTION>
                                               IGENE Biotechnology, Inc. and Subsidiaries
                                            Consolidated Statements of Stockholders' Deficit
                                                         (Unaudited - Continued)

                                                                                                       Accumulated
                                                                           Additional                    Other         Total
                                                      Common Stock          Paid-in                   Comprehensive Stockholders'
                                                     (shares/amount)        Capital        Deficit    Income(Loss)    Deficit
                                                _________________________ _____________ _____________ _____________ _____________
<S>                                             <C>          <C>          <C>           <C>           <C>           <C>
Balance at January 1, 2003                       92,943,746  $   929,437  $ 22,387,604  $(37,120,502)          ---  $(13,803,461)

Cumulative undeclared dividends
  on redeemable preferred stock                         ---          ---       (98,194)          ---           ---       (98,194)

Cumulative undeclared dividends
  on redeemable preferred stock
  classified as interest                                ---          ---           ---           ---           ---           ---

Shares received and retired in
   ProBio Sale                                   (7,000,000)     (70,000)     (140,000)          ---           ---      (210,000)

Conversion of preferred stock to common               1,100           11         9,405           ---           ---         9,416

Shares issued for manufacturing agreement         2,066,541       20,666        70,896           ---           ---        91,562

Net loss for the nine months ended
  September 30, 2003                                    ---          ---           ---    (1,558,556)          ---    (1,558,556)
                                                ____________ ____________ _____________ _____________ _____________ _____________

Balance at September 30, 2003                    88,011,387  $   880,114  $ 22,229,711  $(38,679,058) $        ---  $(15,569,233)
                                                ============ ============ ============= ============= ============= =============
Balance at January 1, 2004                       92,747,469  $   927,475  $ 22,556,553  $(39,291,395)          ---  $(15,807,367)

Cumulative undeclared dividends
  on redeemable preferred stock
  classified as interest                                ---          ---           ---           ---           ---           ---

Conversion of preferred stock to common             389,192        3,892     1,803,268           ---           ---     1,807,160

Shares issued for manufacturing agreement         2,382,907       23,829       266,682           ---           ---       290,511

Shares reissued for ProBio Agreement              1,000,000       10,000       100,000           ---           ---       110,000

Conversion of ProBio debentures                   1,900,000       19,000       171,000           ---           ---       190,000

Shares issued for payment of legal services         250,000        2,500        25,000           ---           ---        27,500

Exercise of employee stock options                  350,000        3,500        16,250           ---           ---        19,750

Conversion of notes payable                           5,000           50           325           ---           ---           375

Net loss for the nine months ended
  September 30, 2004                                    ---          ---           ---    (1,128,733)          ---    (1,128,733)
                                                ____________ ____________ _____________ _____________ _____________ _____________

Balance at September 30, 2004 (Restated)         99,024,568  $   990,246  $ 24,939,078  $(40,420,128) $        ---  $(14,490,804)
                                                ============ ============ ============= ============= ============= =============
</TABLE>


 The accompanying notes are an integral part of the financial statements.
                               -9-
<TABLE>
<CAPTION>
                         IGENE Biotechnology, Inc. and Subsidiaries
                            Consolidated Statements of Cash Flows
                                        (Unaudited)

                                                                Nine months ended
                                                           ____________________________
                                                           September 30,  September 30,
                                                                   2004           2003
                                                           _____________  _____________
                                                              (Restated)
<S>                                                        <C>            <C>
Cash flows from operating activities
  Net loss                                                 $ (1,128,733)  $ (1,558,556)
  Adjustments to reconcile net loss to net cash used
  by operating activities:
     Depreciation                                                14,436         16,596
     Amortization                                                   ---         54,729
     Issuance of Shares to Fermtech per ProBio agreement        110,000            ---
     Manufacturing cost paid in shares of common stock          290,511         91,562
     Issuance of common stock for legal services                 27,500            ---
     Equity in loss of unconsolidated subsidiary                216,696        569,000

     Decrease (increase) in:
        Accounts receivable                                     (42,637)       403,724
        Inventory                                                   ---        374,709
        Prepaid expenses and other current assets                28,148        264,478

     Increase (decrease) in:
        Accounts payable and accrued expenses                   591,641       (199,703)
                                                           _____________  _____________
  Net cash provided by operating activities                     107,562         16,539
                                                           _____________  _____________

Cash flows from investing activities
  Advances to joint venture                                    (216,696)      (278,691)
  Capital (expenditures) and sales                                  ---          7,194
                                                           _____________  _____________

  Net cash used in investing activities                        (216,696)      (271,497)
                                                           _____________  _____________

Cash flows from financing activities
  Proceeds (repayment) from borrowing                              (125)      (250,000)
  Increase in preferred stock for cumulative dividend
     classified as interest                                      40,019         34,096
  Payment of equipment lease                                     (1,498)           ---
  Proceeds from exercise of employee stock options               19,750            ---
                                                           _____________  _____________

  Net cash (used) provided by financing activities               58,146       (215,904)
                                                           _____________  _____________

  Net decrease in cash and cash equivalents                     (50,988)      (470,862)

  Cash and cash equivalents at beginning of period               63,075        497,711
                                                           _____________  _____________

  Cash and cash equivalents at end of period               $     12,087   $     26,849
                                                           =============  =============
Supplementary disclosure and cash flow information
__________________________________________________

Cash paid for interest                                     $     24,347   $     72,964
Cash paid for income taxes                                          ---            ---

See Note (3) for non-cash investing and financing activities.
</TABLE>

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

                              -10-
            IGENE Biotechnology, Inc. and Subsidiary
                  Notes to Financial Statements

(1)  Unaudited consolidated financial statements

     The  September  30, 2004, 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/A should  be
     read  in conjunction with Igene's Annual Report on Form  10-
     KSB/A for the year ended December 31, 2003.

(2)  Nature of Operations

     Igene  Biotechnology, Inc. (the "Company") was  incorporated
     under the laws of the State of Maryland on October 27,  1981
     as  "Industrial Genetics, Inc."  Igene changed its  name  to
     "IGI  Biotechnology, Inc." on August 17, 1983 and to  "Igene
     Biotechnology, Inc." on April 14, 1986.  Igene is located in
     Columbia,  Maryland  and  is  engaged  in  the  business  of
     industrial microbiology and related biotechnologies.   Igene
     had operational subsidiaries in Norway and Chile through the
     first  quarter  of  2003.   IGENE Biotechnology,  Inc.  (the
     "Company")   is  engaged  in  the  business  of  developing,
     marketing, and manufacturing specialty ingredients for human
     and animal nutrition.   Igene was formed to develop, produce
     and   market  value-added  specialty  biochemical  products.
     Igene  is  a  supplier of natural astaxanthin, an  essential
     nutrient  in different feed applications and as a source  of
     pigment  for  coloring farmed salmon  species.   Igene  also
     supplies  nutraceutical ingredients,  as  well  as  consumer
     ready health food supplements, including astaxanthin.  Igene
     is   focused   on   fermentation  technology,  pharmacology,
     nutrition  and  health  in  its marketing  of  products  and
     applications worldwide.

     Igene  has  devoted  its  resources to  the  development  of
     proprietary  processes to convert selected agricultural  raw
     materials  or feedstocks into commercially useful  and  cost
     effective   products  for  the  food,   feed,   flavor   and
     agrochemical industries.  In developing these processes  and
     products,  Igene has relied on the expertise and  skills  of
     its  in-house  scientific staff and, for  special  projects,
     various consultants.

     In  an  effort to develop a dependable source of production,
     March  19,  2003,  Tate & Lyle PLC and Igene  Biotechnology,
     Inc.  announced  a 50:50 joint venture to produce AstaXin(R)
     for the aquaculture industry. Production will utilize Tate &
     Lyle's  fermentation  capability together  with  the  unique
     technology  developed  by  Igene.  Part  of  Tate  &  Lyle's
     existing  Selby,  England,  citric  acid  facility  will  be
     modified  to include the production of 1,500 tons per  annum
     of  this  product.  Tate & Lyle's investment of $25  million
     includes the contribution of certain of its facility  assets
     currently   used  in  citric  acid  production.   Commercial
     production is commencing in the calendar year 2004.

(3)  Noncash investing and financing activities

     During  the  nine months ended September 30,  2004,  194,596
     shares  of  redeemable  preferred  stock,  with  a  recorded
     aggregate  value of $1,777,159, were converted into  389,192
     shares  of  common  stock.   This portion  included  the  8%
     Cumulative  Convertible Preferred Stock, Series  B  and  has
     relieved the Company of this amount from long-term debt.

     During the nine months ended September 30, 2004, $190,000 of
     the  $1,000,000 of Convertible Debentures issued as part  of
     the  2001  ProBio purchase, were converted to common  stock.
     These  shares were converted at $.10 per share, for a  total
     of 1,900,000 shares.  These shares were issued and the notes
     cancelled.  This relieved the Company of $190,000  of  long-
     term debt.








                              -11-

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

     During  the  nine months ended September 30,  2004,  250,000
     shares  were issued to the Company's attorney in  connection
     with  the  settlement of the ADM matter.  These shares  were
     issued  at an estimated value of $.11 per share, aggregating
     to $27,500.  These costs were expensed in the second quarter
     as part of the ADM legal expense.

     During  the  nine months ended September 30, 2004,  $500  of
     Notes  Payable were converted using 5,000 warrants at  $.075
     per  share.  The notes and warrants were cancelled and 5,000
     shares of common stock were issued.

     During  the  nine months ended September 30,  2004,  350,000
     shares of common stock were issued as part of employee stock
     option exercises.  The Company received $19,750 based on  an
     average exercise price of $.056 per share.

     During  the nine months ended September 30, 2004  and  2003,
     Fermic,  Igene's manufacturing agent, earned  2,382,907  and
     2,066,738 shares, respectively, of common stock as  part  of
     the  manufacturing agreement. Fermic earns 2,250  shares  of
     common  stock for each kilogram of pure Astaxanthin produced
     and  delivered  as part of the manufacturing agreement.  The
     average price is based on the market value of the shares  at
     the  time the product is produced.   Fermic can earn  up  to
     20,000,000   shares  in  total  under  the  contract.    The
     2,382,907  shares were earned at an average price  of  $.122
     per  share for 2004, and 2,066,738 shares were earned at  an
     average   price  of  $.044  per  share  for  2003.   Through
     September 30, 2004, 13,472,129 shares have been earned.  Any
     shares earned by Fermic will be issued on a quarterly basis.
     Igene  relied on Section 4(2) of the Securities Act of 1933,
     as   amended,   to  issue  the  shares  to  Fermic   without
     registration   under  that  act.   Igene   relied   on   the
     representations  and  warranties  of  Fermic  made  in   the
     manufacturing   agreement  in  claiming  the  aforementioned
     exemption.

     During  the nine months ended September 30, 2004  and  2003,
     the   Company  recorded  in  dividends  in  arrears  on   8%
     redeemable  preferred stock cumulating  at  $.48  per  share
     aggregating  $40,019 and $34,096, respectively on  preferred
     stock.   The interest is included in the carrying  value  of
     the redeemable preferred stock. In accordance with FASB 150,
     the   dividends  accrued  in  the  third  quarter  2003  and
     thereafter have been reclassified to interest expense.  This
     reclassification increases interest expense $40,019 for  the
     nine months ended September 30, 2004.

     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  will
     continue to be used by the Joint Venture in the same  manner
     as  historically used by the Company.  The Company and  Tate
     each have a 50% ownership interest in the Joint Venture  and
     equal  representation  on  the Board  of  Directors  of  the
     Company.  The value of the Company's investment in the Joint
     Venture  has  been recorded at an amount equal to  the  book
     value  of the Registrant'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  investment
     in the Joint Venture has been initially recorded with a book
     value   of   $316,869,  which  represents  the   unamortized
     production  costs  contributed to  the  Joint  Venture.   In
     addition  to the Company's initial investment in  the  Joint
     Venture,  the Company has made $697,243 in advances  to  the
     Joint Venture and a $6,000 capital investment.








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

     In  February,  2003,  Igene sold its  subsidiary  ProBio  to
     Fermtech  AS in exchange for aggregate consideration  valued
     at approximately $343,000, consisting of 7,000,000 shares of
     Igene  common  stock (including 2,000,000 shares  that  were
     placed  into  escrow  and  may be reissued  to  Fermtech  as
     described below), valued for the purposes of the acquisition
     at   $.03  per  share,  plus  forgiveness  of  approximately
     $168,000  of debt that Igene owed to ProBio at the  time  of
     purchase in 2001.  The escrowed 2,000,000 shares   were   to
     be   earned   by   Fermtech based  upon  Mr.   Benjaminsen's
     continued employment with  the  Company.  As Mr. Benjaminsen
     remained employed by Igene  through  2003,  1,000,000 of the
     escrowed shares  of common stock were delivered to Fermtech.
     These shares were expensed  in  the  second quarter of 2004,
     as a marketing  expense  of $110,000.   If  Mr.  Benjaminsen
     remains  employed  by  Igene   through  2004,  the remaining
     1,000,000 escrowed shares  will   be  released  from  escrow
     and delivered to  Fermtech.   The   expenses incurred by the
     Company related to the delivery  of the  remaining  escrowed
     shares will be  determined  by the market value of the stock
     at the time of delivery.

     During the nine months ended September 30, 2003, the Company
     elected  to  extend repayment on demand notes of  $6,043,659
     and  related accrued interest of $2,865,810 until March  31,
     2006.

(4)  Foreign Currency Translation and Transactions

     Since   the   day-to-day  operations  of   Igene's   foreign
     subsidiary   in   Chile  are  dependent  on   the   economic
     environment of the parent's currency, the financial position
     and  results  of  operations of Igene Chile  are  determined
     using  Igene's  reporting  currency  (US  dollars)  as   the
     functional  currency.  All exchange gains  and  losses  from
     remeasurement  of monetary assets and liabilities  that  are
     not  denominated in US dollars are recognized  currently  in
     income.   These  losses and gains occurred  primarily  as  a
     result  of  the effect of valuation of the Chilean  Peso  on
     Igene's  accounts receivables, which are mostly  denominated
     in Pesos.

(5)  Joint Venture

     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 has agreed to transfer  to
     the  Joint Venture its technology relating to the production
     of Astaxanthin and assets related thereto. These assets will
     continue to be used by the Joint Venture in the same  manner
     as  historically used by the Company.  The Company and  Tate
     each have a 50% ownership interest in the Joint Venture  and
     equal  representation  on  the Board  of  Directors  of  the
     Company.  The value of the Company's investment in the Joint
     Venture  has  been recorded at an amount equal to  the  book
     value  of the Registrant's consideration contributed at  the
     creation of the Joint Venture.  As the cost of the Company's
     technology  and  intellectual property has  been  previously
     expensed  and  has  a carrying amount of zero,  the  initial
     investment  in  the Joint Venture has been recorded  with  a
     book  value  of  $316,869, which represents the  unamortized
     production costs contributed to the Joint Venture.  Added to
     this  was  a purchase of common stock in the new venture  of
     $6,000.

     As  a result of the Joint Venture, the production, sales and
     marketing   of   Astaxanthin  now   takes   place   in   the
     unconsolidated Joint Venture subsidiary.  From inception  on
     March  18, 2003 through September 30, 2004, Igene's  portion
     of  the  Joint Venture's net loss was $3,568,500.  The  loss
     was  a  result  of  a 50% interest in the following:   Gross
     profit from inception was a negative $2,731,000 on sales  of
     $4,802,000, less manufacturing cost of $7,533,000.   Selling
     and  general and administrative expenses were $4,337,000 and
     interest expense was $69,000.  The resulting loss before tax
     was  $7,137,000.  Igene's 50% portion of the  Joint  Venture
     loss was $3,568,500.






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

     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 will be recognized only
     to the extent of the Investment in and Advances to the Joint
     Venture.   Losses in excess of this amount will be suspended
     from  recognition  in  the financial statement  and  carried
     forward  to  offset  Igene's share of  the  Joint  Venture's
     future  income, if any.  Igene does not expect to  recognize
     income   from   the  Joint  Venture  until  all  accumulated
     unrecognized losses have been eliminated.

     At  September  30,  2004, prior to the  recognition  of  its
     portion of the Joint Venture loss, Igene's investment in the
     Joint Venture consisted of its $322,869 and its net advances
     to  the  Joint Venture amounted to $711,879, for a total  of
     $1,034,748.   For  the year ended December 31,  2003,  Igene
     recognized  $818,052 of the $914,494 loss which  existed  as
     part  of  the Joint venture in that year.  In the first  six
     months of 2004, Igene recognized losses to the extent of the
     increase in the advance $202,060, the June 30, 2004  balance
     of  $1,020,112,  less  the  December  31,  2003  balance  of
     $818,052.   For  the three months ended September  30  2004,
     Igene will recognize losses to the extent of the increase in
     the  advance for that period $14,636 (the September 30, 2004
     balance  of  $1,034,748 less the June 30,  2004  balance  of
     $1,020,112).  The remainder of the loss, which  is  $877,364
     for   the   quarter,  will  be  suspended.   The  cumulative
     suspended  loss at September 30, 2004 is $2,533,752  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 September 30, 2004.

(6)  Stockholders' Equity (Deficit)

     As  of  September, 2004 and 2003, 37,018 and 52,310  shares,
     respectively, of authorized but unissued common  stock  were
     reserved   for  issue  upon  conversion  of  the   Company's
     outstanding preferred stock.

     As of September 30, 2004 and 2003, 74,354,500 and 74,604,500
     shares,  respectively,  of authorized  but  unissued  common
     stock  were reserved for issue and exercise pursuant to  the
     Company's Employee Stock Option Plans.

     As  of September 30, 2004 and 2003, 10,000,000 and 6,666,666
     shares,  respectively,  of authorized  but  unissued  common
     stock  were reserved for distribution and exercise  pursuant
     to  a  stock  option  agreement with past  officers  of  the
     Company.

     As  of  September  30, 2004 and 2003, 17,565,970  shares  of
     authorized but unissued common stock were reserved  for  the
     conversion  of outstanding convertible promissory  notes  in
     the  aggregate amount of $1,082,500 held by directors of the
     Company.

     As  of  September  30, 2004 and 2003, 66,427,651  shares  of
     authorized but unissued common stock were reserved  for  the
     conversion  of outstanding convertible promissory  notes  in
     the  aggregate amount of $3,414,212 held by directors of the
     Company.

     As  of September 30, 2004 and 2003, 8,100,000 and 10,000,000
     shares,  respectively,  of authorized  but  unissued  common
     stock  were  reserved  for  the  conversion  of  outstanding
     convertible  promissory  notes in the  aggregate  amount  of
     $810,00 and $1,000,000, respectively, issued as part of  the
     purchase of ProBio.

     As   of  September  30,  2004  and  2003,  205,261,073   and
     198,016,073 shares, respectively, of authorized but unissued
     common  stock were reserved for the exercise of  outstanding
     warrants.

     As of  September 30, 2004 and 2003, 6,527,871 and  9,629,997
     shares, respectively,  of  authorized  but  unissued  common
     stock were  reserved for issuance to the Company's  contract
     manufacturer  pursuant  to  the   terms   of   the   current
     manufacturing contract.




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

(7)  Basic and diluted net loss per common share

     Basic  and  diluted net loss per common share for the  nine-
     month  periods ended September 30, 2004 and 2003, are  based
     on   95,594,321  and  87,314,094  shares,  respectively,  of
     weighted  average  common  shares  outstanding.   The   same
     figures  for  the three month periods then ended  are  based
     upon  98,003,270  and  87,074,869  weighted  average  common
     shares  outstanding. For purposes of computing net loss  per
     common  share, the amount of net loss has been increased  by
     cumulative  undeclared  dividends in  arrears  on  preferred
     stock  in  the  amount of $40,019 and $98,194 for  the  nine
     months ended September 30, 2004 and 2003, respectively.   No
     adjustment  has  been made for any common stock  equivalents
     outstanding because their effects would be antidilutive.

(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  $40,400,000  from  inception  to
     September  30,  2004  and  its  liabilities  and  redeemable
     preferred   stock  exceeded  its  assets  by   approximately
     $14,490,000 at that date.  These factors indicate that Igene
     will  not be able to continue in existence unless it is able
     to   raise   additional   capital  and   attain   profitable
     operations.

     The  continuing  successful marketing  of  Igene's  product,
     AstaXin(R), has permitted Igene the opportunity  to  attract
     additional capital through it's venture with Tate and  Lyle.
     Igene began manufacturing and selling AstaXin(R) during 1998
     and  has  continued  to  do so to date  through  it's  joint
     venture  with  Tate,  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 goals cannot be assured.




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

(10) Stock Based Compensation

     The  Company accounts for its stock based compensation plans
     under  the  recognition and measurement  principles  of  APB
     opinion  No. 25, "Accounting for Stock Issued to Employees",
     and related interpretations.  No stock option based employee
     compensation cost is reflected in net income, as all options
     granted  under the plan had an exercise price equal  to  the
     market  value of the underlying common stock on the date  of
     grant.   The following table illustrates the effect  on  net
     income and earnings per share if the Company had applied the
     fair   value  recognition  provisions  of  SFAS   No.   123,
     "Accounting  for  Stock-Based Compensation"  and  disclosure
     provisions  of  SFAS  No. 148, "Accounting  for  Stock-Based
     Compensation-Transition  and  Disclosure",  to   stock-based
     employee  compensation for the three and  six  months  ended
     September 30:

<TABLE>
<CAPTION>
                                                     Three months ended               Nine months ended
                                                  ___________________________     ___________________________
                                                  September 30, September 30,     September 30, September 30,
                                                          2004          2003              2004          2003
                                                  _____________ _____________     _____________ _____________
     <S>                                          <C>           <C>               <C>           <C>
     Net loss:
       As reported                                $   (215,265) $   (666,199)     $ (1,128,733) $ (1,558,556)
     Less pro forma stock-based employee
       compensation expense determined under
       fair value based method net of related
       tax effects                                  (1,317,790)     (159,578)       (1,648,237)     (423,756)
                                                  _____________ _____________     _____________ _____________

     Net loss                                     $ (1,533,055) $   (825,777)     $ (2,776,970) $ (1,982,312)
                                                  ============= =============     ============= =============
     Net loss per Share:
       Basic - as reported                        $      (0.01) $      (0.01)     $      (0.01) $      (0.02)
       Basic - pro forma                          $      (0.02) $      (0.01)     $      (0.03) $      (0.02)

       Diluted - as reported                      $      (0.01) $      (0.01)     $      (0.01) $      (0.02)
       Diluted - pro forma                        $      (0.02) $      (0.01)     $      (0.03) $      (0.02)

</TABLE>

(11) Recent Accounting Pronouncements

     In  April  2003,  the Financial Accounting  Standards  Board
     ("FASB") issued Statements of Financial Accounting Standards
     ("SFAS") No. 149, "Amendment of  Statement 133 on Derivative
     Instruments and Hedging Activities". SFAS No. 149 amends and
     clarifies  financial accounting and reporting for derivative
     instruments,   including   certain  derivative   instruments
     embedded  in  other  contracts, and for  hedging  activities
     under  SFAS  No. 133, "Accounting for Derivative Instruments
     and  Hedging  Activities".  This statement is effective  for
     contracts entered into or modified after June 30,  2003  and
     for  hedging relationships designated after June  30,  2003.
     There  was  no  material impact on the  Company's  financial
     condition  or  results of operations upon adoption  of  this
     statement.





                              -16-
            IGENE Biotechnology, Inc. and Subsidiary
                  Notes to Financial Statements
                           (continued)

     In  May  2003,  the  Financial  Accounting  Standards  Board
     ("FASB")  issued  SFAS  No.  150,  "Accounting  for  Certain
     Financial   Instruments   with   Characteristics   of   Both
     Liabilities and Equity".  SFAS No. 150 establishes standards
     for  how an issuer classifies and measures certain financial
     instruments  with  characteristics of both  liabilities  and
     equity.     It  requires  that an  issuer  classify  certain
     financial   instruments  as   a   liability,   although  the
     financial  instrument  may  previously  have been classified
     as  equity.   This  statement  is  effective  for  financial
     instruments  entered  into  or  modified  after May 31, 2003
     and otherwise is  effective  at the  beginning  of the first
     interim period beginning  after June  15,  2003.  The effect
     of adopting this pronouncement required the reclassification
     of  $2.04  million  of  redeemable  preferred  stock  as   a
     liability as of December 31, 2003.

     In  January  2003,  the  FASB issued Interpretation  No.  46
     "Consolidation  of  Variable Interest Entities"  ("FIN  46")
     which  explains identification of variable interest entities
     and  the  assessment of whether to consolidate the entities.
     FIN  46  requires existing unconsolidated variable  interest
     entities  to  be consolidated by their primary beneficiaries
     if  the entities do not effectively disperse risk among  the
     involved  parties.  The provisions of FIN 46  are  effective
     for  all financial statements issued after January 1,  2003.
     The  Company  had  no significant variable interest  in  any
     entities  which  would require disclosure or  consolidation.
     The  Company's investment in the Joint Venture does not meet
     the criteria of a variable interest entity under Fin 46.

(12) Summary of Significant Activity of Joint Venture

     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 has agreed to transfer  to
     the  Joint Venture its technology relating to the production
     of Astaxanthin and assets related thereto. These assets will
     continue to be used by the Joint Venture in the same  manner
     as  historically used by the Company.  The Company and  Tate
     each have a 50% ownership interest in the Joint Venture  and
     equal  representation  on  the Board  of  Directors  of  the
     Company.  The value of the Company's investment in the Joint
     Venture  has  been recorded at an amount equal to  the  book
     value  of the Registrant's consideration contributed at  the
     creation of the Joint Venture.  As the cost of the Company's
     technology  and  intellectual property has  been  previously
     expensed  and  has  a carrying amount of zero,  the  initial
     investment  in  the Joint Venture has been recorded  with  a
     book  value  of  $316,869, which represents the  unamortized
     production costs contributed to the Joint Venture.  Added to
     this  was  a purchase of common stock in the new venture  of
     $6,000.

     As  a result of the Joint Venture, the production, sales and
     marketing   of   Astaxanthin  now   takes   place   in   the
     unconsolidated Joint Venture subsidiary.  From inception  on
     March  18, 2003 through September 30, 2004, Igene's  portion
     of  the  Joint Venture's net loss was $3,568,500.  The  loss
     was  a  result  of  a 50% interest in the following:   Gross
     profit from inception was a negative $2,731,000 on sales  of
     $4,802,000, less manufacturing cost of $7,533,000.   Selling
     and  general and administrative expenses were $4,337,000 and
     interest expense was $69,000.  The resulting loss before tax
     was  $7,137,000.  Igene's 50% portion of the  Joint  Venture
     loss was $3,568,500.

     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 will be recognized only
     to the extent of the Investment in and Advances to the Joint
     Venture.   Losses in excess of this amount will be suspended
     from  recognition  in  the financial statement  and  carried
     forward  to  offset  Igene's share of  the  Joint  Venture's
     future income, if any.   The cumulative suspended loss  from
     the Joint Venture is $2,533,752 at September 30, 2004.




                              -17-
           Notes to Consolidated Financial Statements
           IGENE Biotechnology, Inc. and Subsidiaries
                           (continued)

     At September  30,  2004,  prior to the  recognition  of  its
     portion of the Joint Venture loss, Igene's investment in the
     Joint Venture consisted of its $322,869 and its net advances
     to the  Joint Venture amounted to $711,879, for a  total  of
     $1,034,748.   For the year ended December  31,  2003,  Igene
     recognized $818,052 of the $914,494 loss  which  existed  as
     part of  the Joint venture in that year.  In the  first  six
     months of 2004, Igene recognized losses to the extent of the
     increase in the advance $202,060, the June 30, 2004  balance
     of  $1,020,112,  less  the  December  31,  2003  balance  of
     $818,052.  For  the  three months ended September  30  2004,
     Igene will recognize losses to the extent of the increase in
     the  advance for that period $14,636 (the September 30, 2004
     balance of  $1,034,748 less the June  30,  2004  balance  of
     $1,020,112).  The remainder of the loss, which  is  $877,364
     for  the   quarter,  will  be  suspended.   The   cumulative
     suspended loss  at September 30, 2004 is $2,533,752  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 September 30, 2004.

     The following  statement displays the  significant  activity
     for the  joint venture for the initial investment  at  March
     18, 2003  in the Joint Venture through September  30,  2004.
     As shown 50% of the activity is recorded as part of  Igene's
     Financial Statements  as  income from  investment  in  Joint
     Venture:

<TABLE>
<CAPTION>
                                                  September 30,
                                                          2004
                                                  _____________
                                                   (Unaudited)
          <S>                                     <C>
          ASSETS
          CURRENT ASSETS
            Cash                                  $  2,502,000
            Accounts Receivable                      1,500,000
            Inventory                                  886,000
                                                  _____________
                                                     4,888,000
          OTHER ASSETS
            Fixed Assets Receivable                 21,191,000
            Intellectual property                   24,614,000
                                                  _____________
               TOTAL ASSETS                       $ 50,693,000
                                                  =============
          LIABILITIES AND EQUITY
          CURRENT LIABILITIES
            Accounts payable and accrued expenses $  3,769,000
            Working capital loan                     4,467,000
                                                  _____________
          TOTAL LIABILITIES                          8,236,000
            Equity                                  42,457,000
                                                  _____________
          TOTAL LIABILITIES AND EQUITY            $ 50,693,000
                                                  =============
</TABLE>

                              -18-
<TABLE>
<CAPTION>
                          Notes to Consolidated Financial Statements
                          IGENE Biotechnology, Inc. and Subsidiaries
                                          (continued)


                                                                 Period from March 18, 2003
                                                                   (initial investment) to
                                                                     September 30, 2004
                                                                 ___________________________
                                                                         (unaudited)
     <S>                                                                <C>
     Net Sales                                                          $  4,802,000
     Less: manufacturing cost                                             (7,533,000)
     Gross Profit (Loss)                                                  (2,731,000)
     Less: selling, general and administrative                            (4,337,000)
     Operating Loss                                                       (7,068,000)
     Interest Expense                                                        (69,000)
     Net Loss                                                           $ (7,137,000)
     Igene's 50% equity interest in the net loss                        $ (3,568,500)
     Igene's Investment in and Advances to the Joint Venture              (1,034,748)
     Igene's suspended loss at September 30, 2004                       $ (2,533,752)

</TABLE>
     The  following  statement displays the significant  activity
     for  the Joint Venture for the three and nine months   ended
     September  30,  2004.   As shown, 50%  of  the  activity  is
     recorded  as part of Igene's Financial Statements as  income
     from investment in Joint Venture:

<TABLE>
<CAPTION>

                                                           Three Months          Nine Months
                                                               Ended                Ended
                                                         September 30, 2004   September 30, 2004
                                                         __________________   __________________
     <S>                                                 <C>                  <C>
     Net Sales                                           $       1,662,000    $       3,668,000
     Less: manufacturing cost                                   (2,394,000)          (6,382,000)
                                                         __________________   __________________

     Gross Profit (Loss)                                          (732,000)          (2,714,000)
     Less: selling, general and admin                             (977,000)          (2,509,000)
                                                         __________________   __________________

     Operating Loss                                             (1,709,000)          (5,233,000)
     Interest Expense                                              (75,000)             (85,000)
                                                         __________________   __________________

     Loss before tax                                     $      (1,784,000)   $      (5,308,000)
                                                         ==================   ==================
     50% equity interest Igene                           $        (892,000)   $      (2,654,000)
     Igene's additional Investment in
       and Advances to the Joint Venture                           (14,636)            (216,696)
                                                         __________________   __________________

     Igene's suspended loss for the period               $        (877,364)   $      (2,437,304)
                                                         ==================   ==================

</TABLE>



                              -19-
           IGENE Biotechnology, Inc. and Subsidiaries
             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  IDENTIFIED IN THE COMPANY'S FILING WITH  THE  U.S.
SECURITIES AND EXCHANGE COMMISSION.

Overview of Financial Position

     During  the nine-month periods ended September 30, 2004  and
2003,  in addition to the Joint Venture discussed in more  detail
below,  the  following actions affected the  Company's  financial
position.

   o  During  the  nine  months ended September 30, 2004, 194,596
      shares  of  redeemable  preferred stock,  with  a  recorded
      aggregate  value of $1,777,160, were converted into 389,192
      shares  of  common  stock.   This  portion  included the 8%
      Cumulative Convertible Preferred Stock, Series B  preferred
      securities and has relieved the Company of this amount from
      long-term debt.

   o  During  the  nine months ended September 30, 2004, $190,000
      dollars  of the $1,000,000 of Convertible Debentures issued
      as  part  of  the  2001  ProBio purchase, were converted to
      common stock.   These  shares  were  converted  at $.10 per
      share, for a total of 1,900,000  shares.  These shares were
      issued and the  notes cancelled, which relieved the Company
      of $190,000, of long-term debt.

   o  Increases  in  accounts  payables  and accrued expenses  of
      $591,641  were  a  source  of  cash.  This  was  reduced by
      increases in  advances to the Joint Venture of $216,696 and
      increases in accounts receivable of $42,637.

   o  The  carrying  value  of  redeemable  preferred  stock  was
      increased   and   paid-in   capital   available  to  common
      shareholders  was decreased by $40,019 in 2004 and  $12,290
      in  2003,  reflecting   cumulative  unpaid   dividends   on
      redeemable preferred stock.

   o  Proceeds of employee stock options provided $19,750 in cash
      flows.

During  2004,  the  Joint  Venture has been  in  the  process  of
commissioning the production facility.  Through the  period  this
plant  has been in the start-up phase.  This has resulted in  the
reported losses for the quarter and year-to-date as equipment  is
brought on-line and initially utilized for production activity.








                              -20-
           IGENE Biotechnology, Inc. and Subsidiaries
             Management's Discussion and Analysis of
          Financial Condition and Results of Operations
                           (continued)

      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 September 30, 2004, total dividends in arrears  on
Igene's preferred stock total $189,532 ($10.24 per share) and are
included in the carrying value of the redeemable preferred stock.

Critical Accounting Policies
____________________________

     The  preparation  of our financial statements in  conformity
with  accounting  principles generally  accepted  in  the  United
States  requires  management to make judgments,  assumptions  and
estimates  that  affect  the amounts reported  in  our  financial
statements  and accompanying notes.  Actual results could  differ
materially  from  those  estimates.  The following  are  critical
accounting  policies  important to our  financial  condition  and
results   presented  in  the  financial  statements  and  require
management  to  make judgments and estimates that are  inherently
uncertain.

     The  investment  in the Joint Venture is accounted for under
the  equity method whereby the Company's 50% ownership percentage
in  the  Joint Venture's equity is reflected as an asset and  the
changes  in   the  Joint Venture's equity  as  a  result  of  its
operations  is reflected in the company's consolidated  statement
of  operations subject to certain limitations.  Igene's share  of
losses in the Joint Venture will be recognized only to the extent
of  Igene's consideration paid for it's initial investment in the
Joint  Venture and any net advances Igene has made to  the  Joint
Venture.  Losses in excess of this amount will be suspended  from
recognition  in  the financial statement and carried  forward  to
offset Igene's share of the Joint Venture future income, if  any.
Income  in the future, if any, will only be recognized  once  all
previously  deferred  losses have been  exhausted.   The  Company
evaluates its investment in the Joint Venture for impairment,  as
it  does  for all other assets.  The accounting policies followed
by the Joint Venture are in conformity with accounting principals
generally accepted in the United States of America.

     The  Joint Venture's inventories are stated at the lower  of
cost  or  market.   Cost is determined using  a  weighted-average
approach,  which approximates the first-in first-out method.   If
the  cost of the inventories exceeds their expected market value,
provisions are recorded for the difference between the  cost  and
the  market  value.   Inventories consist of  currently  marketed
products.

     The Joint Venture recognizes revenue from product sales when
there is persuasive evidence that an arrangement exists, delivery
has   occurred,   the  price  is  fixed  and  determinable,   and
collectibility is reasonably assured.  Allowances are established
for   estimated  uncollectible  amounts,  product   returns   and
discounts.

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

Results of Operations
_____________________

Sales and other revenue

    As  part  of  the Joint Venture Agreement, all further  sales
are  recognized  through  the Joint  Venture.   Therefore,  Igene
recorded no sales  of  AstaXin(R) during the  nine  months  ended
September 30, 2004.   Sales of AstaXin(R) during  the  nine-month
period  ended  September 30, 2003 were $463,486.  Sales  activity
for  the  Joint  Venture  are reported below.   Sales  have  been
limited  in  the  past  quarters due to  insufficient  production
quantity.   As  of  June 30, 2003, Igene had sold  the  remaining
inventory  in the Company's possession to the Joint  Venture  per
the  Joint  Venture Agreement.  Management anticipates  that  the
Joint  Venture  with Tate & Lyle will provide a  more  dependable
product  flow.   However,  there  can  be  no  assurance  of  the
dependability of production, or that any increases in sales  will
occur, or that they will be material.





                              -21-
           IGENE Biotechnology, Inc. and Subsidiaries
             Management's Discussion and Analysis of
          Financial Condition and Results of Operations
                           (continued)

Cost of sales and gross profit

    As  with  sales  revenue,  future cost  of  sales  and  gross
profits  will  be  recognized through the Joint  Venture.   Igene
reported  no  gross  profit  on  sales of AstaXin(R) for the nine
months  ended  September  30,  2004.   Gross  profit  on sales of
AstaXin(R) was  $18,540 for the nine month period ended September
30, 2003. Gross profit was  4% of sales for the nine months ended
September  30,  2003.   The  Company attributes the fall in gross
profit  to  a combination  of pricing  pressure in the market and
inefficiencies  in  production.   Management expects the level of
gross profit to improve in the future as a percentage  of  sales.
Demand is expected  to increase as the Company increases customer
usage  and  market  share.  Management expects the level of gross
profit  to  improve  through  the  Joint  Venture,  with expected
increases  in  production  efficiency  received  from  the  Joint
Venture with Tate & Lyle offsetting pricing competition, but  can
provide no assurances as to future increased production or  gross
profit.

     Cost of sales for the nine month period ended September  30,
2003, was $444,946.  No cost of sales were recorded for the  nine
month period ended September 30, 2004.

Marketing and selling expenses

     For  the  quarters ended September 30, 2004 and 2003,  Igene
recorded  marketing and selling expense in the amount of  $45,536
and $57,265, respectively, a decrease of $11,729 or 20%.  For the
nine  months  ended September 30, 2004 and 2003,  Igene  recorded
marketing  and  selling  expense in the amount  of  $254,803  and
$277,120, respectively, a decrease of $22,317 or 8%.  As a result
of  the  disposition of it's ProBio subsidiary in February  2003,
Igene  had expected reduced marketing and selling costs  incurred
as part of the prior combination with ProBio, such as the removal
of  the  ProBio  marketing  and sales force.   In  addition,  the
reduction  of salable product currently available to  Igene  from
its  current  manufacturer was expected to cause a  corresponding
reduction  in  marketing and selling expense.  The marketing  and
selling  expense increased during the second quarter as a  result
of  recognizing the expense associated with the shares issued  to
Fermtech.  As Mr. Benjaminsen remained employed by Igene  through
2003,  1,000,000  of  the escrowed shares of  common  stock  were
delivered  to  Fermtech.   A marketing  and  selling  expense  of
$110,000 was recognized in the second quarter as a result of  the
issuance  of  the  shares of common stock.   If  Mr.  Benjaminsen
remains  employed by Igene through 2004, the remaining  1,000,000
escrowed  shares  will be released from escrow and  delivered  to
Fermtech.   As a result of the Joint Venture with Tate and  Lyle,
Igene  is  expecting  an  increase  in  salable  product  with  a
corresponding increase in marketing and sales costs once the  new
facility increases its level of production.  Additionally,  as  a
result  of  the  Joint Venture, these expenses are reimbursed  to
Igene. However, no assurances can be made in regards to increased
production  from  the  new  facility  nor  with  regard  to   the
corresponding increase in marketing and selling costs.

Research, development and pilot plant expenses

     For  the  quarter ended September 30, 2004 and  2003,  Igene
recorded research and development costs in the amount of $227,103
and  $198,195, respectively, an increase of $28,908 or 15%.   For
the nine months ended September 30, 2004 and 2003, Igene recorded
research  and  development costs in the amount  of  $631,035  and
$576,596,  respectively, an increase of  $54,439  or  9%.   These
costs  are  expected to remain relatively constant in support  of
increasing  the  efficiency of the manufacturing process  through
experimentation  in the Company's pilot plant, developing  higher
yielding  strains of yeast and making other improvements  in  the
Company's AstaXin(R)  technology.  Igene is hoping this will lead
to  an increase in salable product at a reduced cost to Igene and
the  Joint  Venture.    However no assurances can be made in that
regard.   These  costs are currently funded through reimbursement
from the Joint Venture.









                              -22-
           IGENE Biotechnology, Inc. and Subsidiaries
             Management's Discussion and Analysis of
          Financial Condition and Results of Operations
                           (continued)

Operating expenses

     General  and  administrative expenses for the quarter  ended
September   30,  2004  and  2003  were  $154,077   and   $172,804
respectively,  a  decrease  of  $18,727  or  11%.   General   and
administrative expenses for the nine months ended  September  30,
2004 and 2003 were $514,905 and $557,131 respectively, a decrease
of $42,226 or 7.6%.  These costs are expected to remain constant,
as  Igene  works  to keep overhead costs at a reduced  level  and
spend  funds on research and development efforts.  A  portion  of
these costs are funded by reimbursement through the Joint Venture
and  the  remainder  will  need to be funded  through  profitable
operations  or  through  contributions  from  directors;   though
neither of these can be assured.

Litigation expenses

    Previously  reported litigation (original lawsuit filed  July
21,  1997,  U.S.  District Court, Baltimore, MD)  between  Archer
Daniels Midland, Inc. ("ADM") and Igene, involving allegations of
patent  infringement and counterclaims concerning  the  theft  of
trade secrets, was resolved on September 29, 2003.  Resolution of
the  dispute  between  ADM  and  Igene  did  not  result  in   an
unfavorable  outcome to Igene.  Igene will continue to  make  and
sell its product, AstaXin(R).   The  Company incurred $40,580 for
the nine months ended September 30, 2004.  During the nine months
ended  September  30, 2004, 250,000 shares  were  issued  to  the
Company's attorney in connection with the settlement of  the  ADM
matter.   These shares were issued at an estimated value of  $.11
per share, aggregating $27,500.  These costs were expensed in the
second  quarter  as  part of the litigation  expense.   With  the
settlement  of  this matter, the related costs  are  expected  to
cease.

Interest expense

     Interest  expense for the quarters ended September 30,  2004
and  2003 was $194,432 and $267,635, respectively, a decrease  of
$73,203 or 27%.  For the nine months ended September 30, 2004 and
2003, interest expense was $634,408 and $650,767, respectively, a
decrease  of  $16,359  or  3%  The interest  expense  was  almost
entirely  composed  of  interest  on  the  Company's  long   term
financing from its directors and other stockholders, and interest
on  the  Company's subordinated debenture in both periods.   This
number may decrease as the intrest expense recorded as related to
the  preferred shares decreases as the number of preferred shares
outstanding has been reduced.

Equity in earnings of unconsolidated subsidiary

     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  has
agreed  to transfer to the Joint Venture its technology  relating
to  the  production  of Astaxanthin and assets  related  thereto.
These assets will continue to be used by the Joint Venture in the
same manner as historically used by the Company.  The Company and
Tate each have a 50% ownership interest in the Joint Venture  and
equal  representation on the Board of Directors of  the  Company.
The  value  of the Company's investment in the Joint Venture  has
been  recorded  at  an  amount equal to the  book  value  of  the
Registrant'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 investment in the Joint Venture  has
been recorded with a book value of $316,869, which represents the
unamortized  production costs contributed to the  Joint  Venture.
Added  to this was a purchase of common stock in the new  venture
of $6,000.

     As  a result of the Joint Venture, the production, sales and
marketing  of  Astaxanthin now takes place in the  unconsolidated
Joint  Venture  subsidiary.  From inception  on  March  18,  2003
through  September  30,  2004,  Igene's  portion  of  the   Joint
Venture's  net loss was $3,568,500.  The loss was a result  of  a
50% interest in the following:





                              -23-
           IGENE Biotechnology, Inc. and Subsidiaries
             Management's Discussion and Analysis of
          Financial Condition and Results of Operations
                           (continued)

Gross profit from inception was a negative $2,731,000 on sales of
$4,802,000,  less manufacturing cost of $7,533,000.  Selling  and
general  and administrative expenses were $4,337,000 and interest
expense   was  $69,000.   The  resulting  loss  before  tax   was
$7,137,000.   Igene's 50% portion of the Joint Venture  loss  was
$3,568,500.

     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 will be recognized only to the extent
of  the  Investment in and Advances to the Joint Venture.  Losses
in  excess  of this amount will be suspended from recognition  in
the  financial  statement and carried forward to  offset  Igene's
share  of  the  Joint  Venture's future  income,  if  any.    The
cumulative suspended loss from the Joint Venture is $2,533,752 at
September 30, 2004.

     At  September  30,  2004, prior to the  recognition  of  its
portion  of  the  Joint Venture loss, Igene's investment  in  the
Joint  Venture consisted of its $322,869 and its net advances  to
the   Joint  Venture  amounted  to  $711,879,  for  a  total   of
$1,034,748.   For  the  year  ended  December  31,  2003,   Igene
recognized $818,052 of the $914,494 loss which existed as part of
the Joint venture in that year.  In the first six months of 2004,
Igene  recognized  losses to the extent of the  increase  in  the
advance  $202,060, the June 30, 2004 balance of $1,020,112,  less
the  December 31, 2003 balance of $818,052.  For the three months
ended  September  30  2004, Igene will recognize  losses  to  the
extent  of  the  increase in the advance for that period  $14,636
(the  September 30, 2004 balance of $1,034,748 less the June  30,
2004 balance of $1,020,112). The remainder of the loss, which  is
$877,364  for  the  quarter, will be suspended.   The  cumulative
suspended loss at September 30, 2004 is $2,533,752 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 September 30, 2004.

     The  following  statement displays the significant  activity
for  the  joint venture from the initial investment at March  18,
2003  in the Joint Venture through September 30, 2004.  As  shown
50%  of  the  activity is recorded as part of  Igene's  Financial
Statements as income from investment in Joint Venture:

<TABLE>
<CAPTION>
                                                September 30,
                                                        2004
                                               ______________
                                                  (Unaudited)
    <S>                                        <C>
    ASSETS
    CURRENT ASSETS
      Cash                                     $   2,502,000
      Accounts Receivable                          1,500,000
      Inventory                                      886,000
                                               ______________
                                                   4,888,000
    OTHER ASSETS
      Fixed Assets Receivable                     21,191,000
      Intellectual property                       24,614,000
                                               ______________
         TOTAL ASSETS                          $  50,693,000
                                               ==============

    LIABILITIES AND EQUITY
    CURRENT LIABILITIES
      Accounts payable and accrued expenses    $   3,769,000
      Working capital loan                         4,467,000
                                               ______________
         TOTAL LIABILITIES                         8,236,000
      Equity                                      42,457,000
                                               ______________
         TOTAL LIABILITIES AND EQUITY          $  50,693,000
                                               ==============
</TABLE>





                              -24-
<TABLE>
<CAPTION>
                            IGENE Biotechnology, Inc. and Subsidiaries
                             Management's Discussion and Analysis of
                          Financial Condition and Results of Operations
                                            (continued)

                                                              Period from March 18, 2003
                                                               (initial investment) to
                                                                  September 30, 2004
                                                              __________________________
                                                                      (unaudited)
     <S>                                                            <C>
     Net Sales                                                      $    4,802,000
     Less: manufacturing cost                                           (7,533,000)
                                                                    _______________
     Gross Profit (Loss)                                                (2,731,000)
     Less: selling, general and administrative                          (4,337,000)
                                                                    _______________
     Operating Loss                                                     (7,068,000)
     Interest Expense                                                      (69,000)
                                                                    _______________
     Net Loss                                                       $   (7,137,000)
                                                                    ===============

     Igene's 50% equity interest in the net loss                    $   (3,568,500)
     Igene's Investment in and Advances to the Joint Venture            (1,034,748)
                                                                    _______________
     Igene's suspended loss at September 30, 2004                   $   (2,533,752)
                                                                    ===============
</TABLE>

     The  following  statement displays the significant  activity
     for  the Joint Venture for the three and nine months   ended
     September  30,  2004.   As shown, 50%  of  the  activity  is
     recorded  as part of Igene's Financial Statements as  income
     from investment in Joint Venture:

<TABLE>
<CAPTION>
                                                              Three Months          Nine Months
                                                                 Ended                  Ended
                                                           September 30, 2004    September 30, 2004
                                                           __________________    __________________
     <S>                                                   <C>                   <C>
     Net Sales                                             $       1,662,000     $       3,668,000
     Less: manufacturing cost                                     (2,394,000)           (6,382,000)
                                                           __________________    __________________
     Gross Profit (Loss)                                            (732,000)           (2,714,000)
     Less: selling, general and admin                               (977,000)           (2,509,000)
                                                           __________________    __________________
     Operating Loss                                               (1,709,000)           (5,233,000)
     Interest Expense                                                (75,000)              (85,000)
                                                           __________________    __________________
     Loss before tax                                       $      (1,784,000)    $      (5,308,000)
                                                           ==================    ==================

     50% equity interest Igene                             $        (892,000)    $      (2,654,000)
     Igene's additional Investment in
       and Advances to the Joint Venture                             (14,636)             (216,696)
                                                           __________________    __________________
     Igene's suspended loss for the period                 $        (877,364)    $      (2,437,304)
                                                           ==================    ==================
</TABLE>
     As  a result of the Joint Venture, the production, sales and
marketing  of  Astaxanthin now take place in  the  unconsolidated
Joint  Venture  subsidiary.  For the quarter ended September  30,
2004,  Igene's  portion of the Joint Venture loss  was  $892,000.
The  loss was a result of a 50% interest in the following:  Gross
profit  (loss)  for  the  quarter  was  $(732,000)  on  sales  of
$1,662,000,  less manufacturing cost of $2,394,000.  Selling  and
general  and administrative expenses for the period were $977,000
and  interest income (expense) was $(75,000).  The resulting loss
before  tax was $1,784,000.  For the quarter ended September  30,
2004, Igene's 50% portion of the Joint Venture loss was $892,000.







                              -25-
           IGENE Biotechnology, Inc. and Subsidiaries
             Management's Discussion and Analysis of
          Financial Condition and Results of Operations
                           (continued)

     During  2004,  the  Joint  Venture  is  in  the  process  of
commissioning the Selby Production facility.  Through the  period
this plant has been in the start-up phase.  This has resulted  in
the reported losses for the quarter and year to date as equipment
is   brought   on-line  and  initially  utilized  for  production
activity.

Disposition of ProBio Subsidiary

     As  reported  on Form 8-K filed on February  20,  2003,  the
Company,  in  an  effort to focus on and grow its core  business,
disposed  of all 10,000 of the issued and outstanding  shares  of
capital  stock  of its former subsidiary, ProBio  Nutraceuticals,
AS,  a Norwegian corporation.  Fermtech AS, a joint stock company
incorporated  in the Kingdom of Norway and owned equally  by  our
then  chief  executive officer, Stein Ulve  and  our  then  chief
marketing  officer,  Per  Benjaminsen, purchased  the  shares  of
ProBio.   Effective December 31, 2002, Mr. Ulve resigned  as  CEO
and  director of Igene and Mr. Benjaminsen ceased acting  as  our
chief marketing officer, though Mr. Benjaminsen has maintained  a
position with Igene.

     The  amount  of consideration paid for ProBio was determined
through  arms-length  negotiations between Igene  management,  on
behalf  of  Igene,  and  Mr. Ulve, on behalf  of  Fermtech.   The
principles followed in determining the amount paid for the ProBio
shares  involved  consideration  of  ProBio's  cash  flow,   cash
position, revenue and revenue prospects.

     The  equipment  and  other  physical  property  disposed  of
belonging to ProBio included inventory, personal computers, a web
site  and  trademark, other office equipment and  furniture,  and
accounts   receivables   and   accounts   payables   related   to
nutraceuticals.   For the nine months ended September  30,  2002,
the  net operating loss of the division being sold as ProBio  was
$340,632,  on  sales  of  $1,555,014, and  is  reflected  on  the
September  30,  2002 income statement of Igene  as  a  loss  from
discontinued operations.

Gain on disposition

     Igene  sold ProBio to Fermtech AS in exchange for  aggregate
consideration  valued  at approximately $343,000,  consisting  of
7,000,000  shares of Igene common stock that was owned by  ProBio
(including 2,000,000 shares that were placed into escrow and  may
be  reissued  to  Fermtech as described below),  valued  for  the
purposes  of  the acquisition at $.03 per share, plus forgiveness
of  approximately $168,000 of debt that Igene owed to  ProBio  at
the  time  of  purchase  in  2001. As  Mr.  Benjaminsen  remained
employed by Igene through 2003, 1,000,000 of the escrowed  shares
of  common  stock were delivered to Fermtech. These  shares  were
expensed in the second quarter of 2004, as a marketing expense of
$110,000.   If Mr. Benjaminsen remains employed by Igene  through
2004,  the  remaining 1,000,000 escrowed shares will be  released
from  escrow and delivered to Fermtech.  Gain on disposal  during
the first quarter of 2003 was $237,427.  This gain was a one-time
occurrence  as  a  result of the disposition of  the  assets  and
liabilities associated with ProBio.

Net loss and basic and diluted net loss per common share

     As a  result  of  the  foregoing, the Company  reported  net
losses  of $215,265 and $666,199, respectively, for the  quarters
ended  September 30, 2004 and 2003, a decrease  in  the  loss  of
$450,934  or 68%.  This represents a loss of $.01 per  basic  and
diluted common share in the quarters ended September 30, 2004 and
2003.   The  weighted average number of shares  of  common  stock
outstanding of 98,003,270 and 87,074,869, for the quarters  ended
September 30, 2004 and 2003, respectively, increased by 9,991,883
shares.  This  resulted from the weighted average adjustments  of
the  following  transactions: the issuance  of  1,905,000  shares
issued  in  conversion of debentures, 389,192  shares  of  common
stock  in conversion of preferred stock, 3,750,000 shares  issued
in  the  exercise  of warrants, 3,102,323 shares  issued  to  the
manufacturer as part of the agreement, 1,000,000 shares issued to
Fermtech as part of the ProBio disposition agreement, and 450,000
shares  issued  as part of employee stock option  exercises,  and
250,000 shares issued as a bonus to the Company attorney  in  the
ADM matter.





                              -26-
           IGENE Biotechnology, Inc. and Subsidiaries
             Management's Discussion and Analysis of
          Financial Condition and Results of Operations
                           (continued)


Liquidity and Capital Resources

    Historically,  Igene  has  been funded  primarily  by  equity
contributions  and loans from stockholders. As of  September  30,
2004,  Igene  had working capital of $22,764, and cash  and  cash
equivalents  of  $12,087.   Currently Igene  is  also  funded  by
research and development reimbursements from the Joint Venture.

    Cash  provided by operating activities during the  nine-month
period ended September 30, 2004 and 2003 amounted to $107,562 and
$16,539, respectively, an increase in cash provided of $91,023.

     Cash  used  by  financing activities during  the  nine-month
period ended September 30, 2004 and 2003 amounted to $216,696 and
$271,497, respectively, a decrease in cash used of $54,801.

    Cash  was  used by financing activities, mainly in  repayment
of  loans  in  the  amount of $215,904 for the nine-month  period
ended  September 30, 2003, as opposed to the $58,146 provided  by
financing  activities for the nine-month period  ended  September
30, 2004. Financing activities in this period consisted primarily
of  employee stock option plan purchases and dividends accrued on
preferred shares.

    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.  Funding  is  also
expected  to be received from the new venture with Tate  &  Lyle.
However,  there  can be no assurance that projected  profits,  if
any, from sales, or additional funding from the Joint Venture, if
any,   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  nine-month
periods ended September 30, 2004 and 2003.

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.
















                              -27-
                    IGENE Biotechnology, Inc.
                             PART II
                        OTHER INFORMATION

Item 2.    Changes  in  Securities  and  Small  Business   Issuer
           Purchases of Equity Securities.

     During  the  nine months ended September 30,  2004,  250,000
shares  were issued to the Company's attorney in connection  with
the settlement of the ADM matter.  These shares were issued at an
estimated  value of $.11 per share, aggregating to $27,500.   The
cost  was expensed in the second quarter as part of the ADM legal
expense.

     In  February,  2003,  Igene sold its  subsidiary  ProBio  to
Fermtech  AS  in exchange for aggregate consideration  valued  at
approximately $343,000, consisting of 7,000,000 shares  of  Igene
common  stock (including 2,000,000 shares that were  placed  into
escrow  and  may  be  reissued to Fermtech as  described  below),
valued  for  the purposes of the acquisition at $.03  per  share,
plus  forgiveness of approximately $168,000 of  debt  that  Igene
owed  to  ProBio at the time of purchase in 2001.   The  escrowed
2,000,000  shares were to be earned by Fermtech  based  upon  Mr.
Benjamin's  continued  employment  with  the  Company.   As   Mr.
Benjaminsen remained employed by Igene through 2003, 1,000,000 of
the  escrowed shares of common stock were delivered to  Fermtech.
These  shares were expensed in the second quarter of 2004,  as  a
marketing  expense  of  $110,000.   If  Mr.  Benjaminsen  remains
employed  by Igene through 2004, the remaining 1,000,000 escrowed
shares will be released from escrow and delivered to Fermtech.

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 September 30, 2004, total dividends in arrears  on
the  Company's preferred stock total $189,532 ($10.24 per  share)
and  are  included  in  the  carrying  value  of  the  redeemable
preferred stock.

Item 4.  Submission of Matters to a Vote of Security Holders.

     At  the annual meeting of stockholders held on June 8, 2004,
the  following matter was submitted for a stockholders' vote  and
was  approved by the requisite number of votes: the  election  of
five  directors  of  the  Company. The  directors  nominees  were
Stephen F. Hiu, Thomas L. Kempner, Michael G. Kimelman, Sidney R.
Knafel, and Patrick F. Monahan.

     Results of the voting were as follows:
<TABLE>
<CAPTION>

                                                                                    Broker
                                        Votes          Against or     Votes         Non-
                                        For            Withheld       Abstained     Votes
                                        __________     __________     _________     _______
     <S>                                <C>            <C>            <C>           <C>
     (1)  Election of Directors
             Stephen F. Hiu             73,185,546     98,950         ---           ---
             Thomas L. Kempner          73,185,546     98,950         ---           ---
             Michael G. Kimelman        73,185,546     98,950         ---           ---
             Sidney R. Knafel           73,185,546     98,950         ---           ---
             Patrick F. Monahan         73,185,546     98,950         ---           ---

</TABLE>





                              -28-
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.












                              -29-
                           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   September 29, 2005        By /s/STEPHEN F. HIU
       __________________           __________________________
                                       STEPHEN F. HIU
                                       President




Date   September 29, 2005        By /s/EDWARD J. WEISBERGER
       __________________           __________________________
                                       EDWARD J. WEISBERGER
                                       Chief Financial Officer




                              -30-
                          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.












































                              -31-

Exhibit 31(a)

                         CERTIFICATIONS
                         ______________

I, Stephen F. Hiu, certify that:

  1.   I  have reviewed this quarterly report on Form 10 QSB/A of
       IGENE Biotechnology, Inc.;

  2.   Based  on  my  knowledge, this report does not contain any
       untrue  statement  of  a  material fact or omit to state a
       material  fact  necessary  to make the statements made, in
       light  of  the  circumstances  under which such statements
       were  made,  not  misleading  with  respect  to the period
       covered by this report;

  3.   Based on my knowledge, the financial statements, and other
       financial  information  included  in  this  report, fairly
       present in  all material respects the financial condition,
       results of operations and cash flows of the small business
       issuer  as  of,  and  for,  the  periods presented in this
       report;

  4.   The  small  business  issuer's other certifying officer(s)
       and  I  are  responsible  for establishing and maintaining
       disclosure controls and procedures (as defined in Exchange
       Act Rules 13a-15(e) and 15d-15(e)) for the small  business
       issuer and have:

          (a)  Designed such disclosure controls and  procedures,
          or caused such disclosure controls and procedures to be
          designed under our supervision, to ensure that material
          information  relating  to the  small  business  issuer,
          including its consolidated subsidiaries, is made  known
          to  us  by  others within those entities,  particularly
          during  the  period  in  which  this  report  is  being
          prepared;

          (b)  Evaluated the effectiveness of the small  business
          issuer's   disclosure  controls  and   procedures   and
          presented  in  this  report our conclusions  about  the
          effectiveness   of   the   disclosure   controls    and
          procedures, as of the end of the period covered by this
          report based on such evaluation; and

          (c)  Disclosed in this report any change in  the  small
          business   issuer's  internal  control  over  financial
          reporting  that  occurred  during  the  small  business
          issuer's most recent fiscal quarter (the small business
          issuer's fourth fiscal quarter in the case of an annual
          report)  that has materially affected, or is reasonably
          likely   to  materially  affect,  the  small   business
          issuer's internal control over financial reporting; and

  5.   The  small  business  issuer's other certifying officer(s)
       and  I have disclosed, based on our most recent evaluation
       of internal control over financial reporting, to the small
       business issuer's  auditors and the audit committee of the
       small business issuer's   board  of  directors (or persons
       performing  the  equivalent  functions):

          (a)   All   significant   deficiencies   and   material
          weaknesses  in  the  design or  operation  of  internal
          control  over financial reporting which are  reasonably
          likely  to adversely affect the small business issuer's
          ability  to  record,  process,  summarize  and   report
          financial information; and

          (b)  Any  fraud, whether or not material, that involves
          management  or  other employees who have a  significant
          role  in  the small business issuer's internal  control
          over financial reporting.

Date: September 29, 2005

/s/ STEPHEN F. HIU
___________________
    STEPHEN F. HIU
    President

Exhibit 31(b)

                         CERTIFICATIONS
                         ______________

I, Edward J. Weisberger, certify that:

1.   I have  reviewed  this  quarterly report on Form 10-QSB/A of
     IGENE Biotechnology, Inc.;

2.   Based on  my  knowledge, this report does  not  contain  any
     untrue  statement  of a material fact or  omit  to  state  a
     material  fact  necessary to make the  statements  made,  in
     light of the circumstances under which such statements  were
     made,  not misleading with respect to the period covered  by
     this report;

3.   Based on  my knowledge, the financial statements, and  other
     financial  information  included  in  this  report,   fairly
     present  in  all material respects the financial  condition,
     results  of operations and cash flows of the small  business
     issuer as of, and for, the periods presented in this report;

4.   The small business issuer's other certifying officer(s)  and
     I   are   responsible  for  establishing   and   maintaining
     disclosure  controls and procedures (as defined in  Exchange
     Act  Rules  13a-15(e) and 15d-15(e)) for the small  business
     issuer and have:

          (a)  Designed such disclosure controls and  procedures,
          or caused such disclosure controls and procedures to be
          designed under our supervision, to ensure that material
          information  relating  to the  small  business  issuer,
          including its consolidated subsidiaries, is made  known
          to  us  by  others within those entities,  particularly
          during  the  period  in  which  this  report  is  being
          prepared;

          (b)  Evaluated the effectiveness of the small  business
          issuer's   disclosure  controls  and   procedures   and
          presented  in  this  report our conclusions  about  the
          effectiveness   of   the   disclosure   controls    and
          procedures, as of the end of the period covered by this
          report based on such evaluation; and

          (c)  Disclosed in this report any change in  the  small
          business   issuer's  internal  control  over  financial
          reporting  that  occurred  during  the  small  business
          issuer's most recent fiscal quarter (the small business
          issuer's fourth fiscal quarter in the case of an annual
          report)  that has materially affected, or is reasonably
          likely   to  materially  affect,  the  small   business
          issuer's internal control over financial reporting; and

5.   The  small  business  issuer's  other certifying  officer(s)
     and I have disclosed, based on our most recent evaluation of
     internal  control  over financial reporting,  to  the  small
     business  issuer's auditors and the audit committee  of  the
     small  business  issuer's  board of  directors  (or  persons
     performing the equivalent functions):

          (a)   All   significant   deficiencies   and   material
          weaknesses  in  the  design or  operation  of  internal
          control  over financial reporting which are  reasonably
          likely  to adversely affect the small business issuer's
          ability  to  record,  process,  summarize  and   report
          financial information; and

          (b)  Any  fraud, whether or not material, that involves
          management  or  other employees who have a  significant
          role  in  the small business issuer's internal  control
          over financial reporting.

Date: September 29, 2005


/s/ EDWARD J. WEISBERGER
____________________________
    EDWARD J. WEISBERGER
    Chief Financial Officer

<PAGE>
Exhibit 32(a)


            CERTIFICATION OF CHIEF EXECUTIVE OFFICER
               PURSUANT TO 18 U.S.C. SECTION 1350,
                     AS ADOPTED PURSUANT TO
          SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

      In  connection  with  the  IGENE Biotechnology,  Inc.  (the
"Company") Quarterly Report on Form 10-QSB/A for the period ended
September  30,  2004, as filed with the Securities  and  Exchange
Commission on the date hereof (the "Report"), I, Stephen F.  Hiu,
President  of the Company, certify pursuant to 18 U.S.C.  Section
1350,  as  adopted pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that, to the best of my knowledge:

          (1). The Report fully complies with the requirements of
          Section  13(a) or 15(d) of the Securities Exchange  Act
          of 1934, as amended; and

          (2).  The  information contained in the  Report  fairly
          presents,  in  all  material  respects,  the  financial
          condition and results of operations of the Company.


Date: September 29, 2005        By: /s/STEPHEN F. HIU
                                    _____________________________
                                       STEPHEN F. HIU
                                       President



A signed original of this written statement required by Section
906 has been provided to the Company and will be retained by the
Company and furnished to the Securities and Exchange Commission
or its staff upon request.


<PAGE>

Exhibit 32(b)

            CERTIFICATION OF CHIEF FINANCIAL OFFICER
               PURSUANT TO 18 U.S.C. SECTION 1350,
                     AS ADOPTED PURSUANT TO
          SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In  connection  with  the  IGENE  Biotechnology,  Inc.  (the
"Company") Quarterly Report on Form 10-QSB/A for the period ended
September  30,  2004, as filed with the Securities  and  Exchange
Commission  on  the  date  hereof (the "Report"),  I,  Edward  J.
Weisberger,  Chief  Financial Officer  of  the  Company,  certify
pursuant  to  18  U.S.C.  Section 1350, as  adopted  pursuant  to
Section 906 of the Sarbanes-Oxley Act of 2002, that, to the  best
of my knowledge:

          (1). The Report fully complies with the requirements of
          Section 13(a) or 15(d) of the  Securities  Exchange Act
          of 1934, as amended; and

          (2). The  information  contained  in  the Report fairly
          presents,  in  all  material  respects,  the  financial
          condition and results of operations of the Company.


Date: September 29, 2005        By:/s/EDWARD J. WEISBERGER
                                   ______________________________
                                      EDWARD J. WEISBERGER
                                      Chief Financial Officer




A signed original of this written statement required by Section
906 has been provided to the Company and will be retained by the
Company and furnished to the Securities and Exchange Commission
or its staff upon request.