SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 10549
                             FORM 10-QSB


(Mark One)

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

     For the quarterly period ended September 30, 2003

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

     For the transition period from __________ to __________


                   Commission file number 0-15888

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


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


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

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

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



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

Yes    x              No
      ___                  ___

State  the  number  of  shares  outstanding  of  each of the issuer's
classes of common equity, as of the latest practicable date:
91,070,033 shares as of September 30, 2003.
__________________________________________

Transitional Small Business Disclosure Format (check one):

Yes                   No    x
      ___                  ___

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


                                INDEX



PART I -  FINANCIAL INFORMATION

                                                            Page

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

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

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

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

     Notes to Consolidated Financial Statements ..........  11-15

     Management's Discussion and Analysis of Financial
     Conditions and Results of Operations ................  16-21

PART II - OTHER INFORMATION ..............................  22-23

SIGNATURES ...............................................  24

EXHIBIT INDEX ............................................  25

<PAGE>

                      IGENE BIOTECHNOLOGY, INC.

             QUARTERLY REPORT UNDER SECTION 13 OR 15(D)

               OF THE SECURITIES EXCHANGE ACT OF 1934
<PAGE>

                               PART I

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

                                                               September 30,   December 31,
                                                                       2003           2002
                                                               _____________  _____________
                                                                (Unaudited)
<S>                                                            <C>            <C>
ASSETS
CURRENT ASSETS

  Cash and cash equivalents                                    $     26,849   $    497,711
  Accounts receivable (net of allowances of $24,000 in 2002)        403,032        528,065
  Inventory                                                             ---        374,709
  Prepaid expenses and other current assets                         100,157        192,993
  Assets to be disposed of                                              ---        628,326
  Deferred costs, current portion                                       ---         74,160
                                                               _____________  _____________

                                                                    530,038      2,295,964

OTHER ASSETS
  Property and equipment, net                                       172,468        196,258
  Deferred costs, net of current portion                                ---        187,753
  Equipment deposits                                                    ---        199,685
  Investment in unconsolidated Joint Venture                     11,731,000            ---
  Loans receivable from manufacturing agent                         211,925        324,405
  Other assets                                                        4,886          5,188
                                                              ______________  _____________

     TOTAL ASSETS                                             $  12,650,317   $  3,209,253
                                                              ==============  =============


The accompanying notes are an integral part of the financial statements.
</TABLE>
                               -5-
<TABLE>
                           IGENE Biotechnology, Inc. and Subsidiaries
                                  Consolidated Balance Sheets
                                         (continued)
<CAPTION>
                                                                September 30,   December 31,
                                                                        2003           2002
                                                                _____________  _____________
                                                                 (Unaudited)
<S>                                                             <C>            <C>
LIABILITIES, REDEEMABLE PREFERED STOCK
  AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
  Accounts payable and accrued expenses                         $     77,674   $    595,646
  Notes payable - directors                                              ---        250,000
  Liabilities to be disposed of                                          ---        655,763
  Equipment lease payable                                              2,322          3,590
                                                                _____________  _____________

     TOTAL CURRENT LIABILITIES                                        79,996      1,504,999

LONG-TERM LIABILITIES
  Notes payable                                                    6,043,659      6,043,659
  Convertible debentures                                           4,814,212      4,814,212
  Equipment lease payable, net of current portion                        ---          1,205
  Accrued interest                                                 3,227,904      2,700,865
                                                                _____________  _____________

     TOTAL LIABILITIES                                            14,165,771     15,064,940
                                                                _____________  _____________

COMMITMENTS AND CONTINGENCIES

REDEEMABLE PREFERRED STOCK
  Carrying amount of redeemable preferred
     stock, 8% cumulative, convertible,
     voting, series A, $.01 par value per
     share. Stated value was $ 17.60
     and $17.12, respectively.  Authorized
     1,312,500 shares, issued 26,155 shares                          460,448        447,774
                                                                _____________  _____________

Carrying amount of redeemable preferred stock,
  8% cumulative, convertible, voting, series B,
  $.01 par value per share.  Stated value $8.00 per share.
  Authorized, issued and outstanding 187,000 shares.
  Redemption amount $1,500,000                                     1,500,000      1,500,000
                                                                _____________  _____________

STOCKHOLDERS' DEFICIT
  Common stock --- $.01 par value per share.
     Authorized 750,000,000 shares;
     issued and outstanding 88,010,484
     and 92,943,746 shares, respectively.                            880,103        929,437
  Additional paid-in capital                                      34,288,957     22,387,604
  Deficit                                                        (38,644,962)   (37,120,502)
                                                                _____________  _____________

     TOTAL STOCKHOLDERS' DEFICIT                                  (3,475,902)   (13,803,461)
                                                                _____________  _____________

     TOTAL LIABILITIES AND
       STOCKHOLDERS' DEFICIT                                    $ 12,650,317   $  3,209,253
                                                                =============  =============



The accompanying notes are an integral part of the financial statements.
</TABLE>
                               -6-
<TABLE>
                                       IGENE Biotechnology, Inc. and Subsidiaries
                                          Consolidated Statements of Operations
                                                      (Unaudited)
<CAPTION>
                                                        Three months ended                Nine months ended
                                                    September 30,  September 30,     September 30,  September 30,
                                                            2003           2002              2003           2002
                                                    _____________  _____________     _____________  _____________
<S>                                                 <C>            <C>               <C>            <C>
REVENUE
_______

  Sales - AstaXin(R)                                $        ---   $  1,240,278      $    463,486   $  2,409,193
  Cost of sales - AstaXin(R)                                 ---      1,136,670           444,946      2,171,311
                                                    _____________  _____________     _____________  _____________

     GROSS PROFIT                                            ---        103,608            18,540        237,882
                                                    _____________  _____________     _____________  _____________

OPERATING EXPENSES
__________________

  Marketing and selling                                   57,265        133,635           277,120        405,052
  Research, development and pilot plant                  198,195        162,540           576,596        484,557
  General and administrative                             172,804        540,674           557,131        928,669
  Litigation expense                                      75,610            ---            75,610            ---
  Less expenses reimbursed by Joint Venture             (327,310)           ---          (891,691)           ---
                                                    _____________  _____________     _____________  _____________

          TOTAL OPERATING EXPENSES                       176,564        836,849           594,766      1,818,278
                                                    _____________  _____________     _____________  _____________

          OPERATING LOSS                                (176,564)      (733,241)         (576,226)    (1,580,396)
                                                    _____________  _____________     _____________  _____________

EQUITY IN EARNINGS(LOSS)OF UNCONSOLIDATED SUB           (222,000)           ---          (569,000)           ---
INTEREST EXPENSE                                        (233,539)      (300,520)         (616,671)      (824,011)
                                                    _____________  _____________     _____________  _____________

     NET LOSS FROM CONTINUING OPERATIONS                (632,103)    (1,033,761)       (1,761,897)    (2,404,407)
                                                    _____________  _____________     _____________  _____________

DISCONTINUED OPERATIONS
_______________________

Net loss from discontinued operations                        ---       (207,629)              ---       (340,632)
Gain on disposal of discontinued operations                  ---            ---           237,437            ---
                                                    _____________  _____________     _____________  _____________

     NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS          ---       (207,629)          237,437       (340,632)
                                                    _____________  _____________     _____________  _____________

     NET LOSS                                       $   (632,103)  $ (1,241,390)     $ (1,524,460)  $ (2,745,039)
                                                    _____________  _____________     _____________  _____________

BASIC AND DILUTED NET LOSS PER COMMON SHARE
  FROM CONTINUING OPERATIONS                        $      (0.01)  $      (0.01)     $      (0.02)  $      (0.03)
                                                    _____________  _____________     _____________  _____________

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

BASIC AND DILUTED NET LOSS PER COMMON SHARE         $      (0.01)  $      (0.01)     $      (0.02)  $      (0.03)
                                                    =============  =============     =============  =============

The accompanying notes are an integral part of the financial statements.
</TABLE>
                               -7-
<TABLE>
                         IGENE Biotechnology, Inc. and Subsidiaries
                      Consolidated Statements of Stockholders' Deficit
                                        (Unaudited)

<CAPTION>
                                                          Redeemable Preferred Stock
                                                               (shares/amount)
                                                         ____________________________

<S>                                                      <C>            <C>
Balance at January 1, 2002                                     26,405   $    435,154

Cumulative undeclared dividends
  on redeemable preferred stock                                   ---         12,674

Exercise of employee stock options                                ---            ---

Exercise of warrants                                              ---            ---

Net loss for the nine months ended September 30, 2002             ---            ---
                                                         _____________  _____________

Balance at September 30, 2002                                  26,405   $    447,828
                                                         =============  =============

Balance at January 1, 2003                                    213,155   $  1,947,774

Cumulative undeclared dividends
  on redeemable preferred stock                                   ---         12,674

Exercise of employee stock options                                ---            ---

Exercise of warrants                                              ---            ---

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

Balance at September 30, 2003                                 213,155   $  1,960,448
                                                         =============  =============

The accompanying notes are an integral part of the financial statements.
</TABLE>
                               -8-
<TABLE>
                                            IGENE Biotechnology, Inc. and Subsidiaries
                                         Consolidated Statements of Stockholders' Deficit
                                                      (Unaudited - Continued)

<CAPTION>                                                                                          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, 2002                   75,848,600  $    758,486  $ 22,188,836  $(33,930,523)          ---   $(10,983,201)

Cumulative undeclared dividends
  on redeemable preferred stock                     ---           ---       (12,674)          ---           ---        (12,674)

Issuance of common stock in
  lieu of cash in payment of
  interest on subordinate debenture              40,000           400        89,600           ---           ---         90,000

Issuance of common stock in
  lieu of cash in payment for
  consulting fee                             12,000,000       120,000       180,000           ---           ---        300,000

Shares issued for manufacturing agreement     3,064,496        30,645        78,478           ---           ---        109,124

Comprehensive loss:

  Net loss for the nine months ended
    September 30, 2002                              ---           ---           ---    (2,745,038)          ---     (2,745,038)

Other comprehensive income-
  Foreign currency translation                      ---           ---           ---           ---        98,313         98,313
                                                                                                                  _____________

     Total comprehensive loss                       ---           ---           ---           ---           ---     (2,646,725)
                                           _____________ _____________ _____________ _____________ _____________  _____________

Balance at September 30, 2002                90,953,096  $    909,531  $ 22,524,240  $(36,675,562) $     98,313   $(13,143,477)
                                           ============= ============= ============= ============= =============  =============

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                     ---           ---       (12,674)          ---           ---        (12,674)

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

Investment in unconsolidated Joint Venture          ---           ---    11,983,131           ---           ---     11,983,131

Shares issued for manufacturing agreement     2,066,738        20,666        70,896           ---           ---         91,562

Net loss for the nine months ended
  September 30, 2003                                ---           ---           ---    (1,524,460)          ---     (1,524,460)
                                           _____________ _____________ _____________ _____________ _____________  _____________

Balance at September 30, 2003                88,010,484  $    880,103  $ 34,288,957  $(38,644,962) $        ---   $ (3,475,902)
                                           ============= ============= ============= ============= =============  =============


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

</TABLE>
                               -9-
<TABLE>
                                 IGENE Biotechnology, Inc. and Subsidiaries
                                   Consolidated Statements of Cash Flows
                                               (Unaudited)
<CAPTION>

                                                                           Nine months ended
                                                                  ___________________________________
                                                                    September 30,       September 30,
                                                                            2003                2002
                                                                  _______________     _______________
<S>                                                               <C>                 <C>
Cash flows from operating activities
     Net loss                                                     $   (1,524,460)     $   (2,745,038)
     Adjustments to reconcile net loss to net cash used
     by operating activities:
        Depreciation                                                      16,596              39,647
        Amortization                                                      54,729              87,386
        Consulting cost paid in shares of common stock                       ---             300,000
        Foreign currency translation adjustment                              ---              98,313
        Manufacturing cost paid in shares of common stock                 91,562             109,122
        Interest on debenture paid in shares of common stock                 ---              90,000
        Equity in earnings (loss) of unconsolidated sub                  569,000                 ---
        Decrease (increase) in:
          Accounts receivable                                            125,033            (228,819)
          Inventory                                                      374,709            (162,876)
          Prepaid expenses and other current assets                      264,478              36,415
        Increase (decrease) in:
          Accounts payable and accrued expenses                         (199,703)            929,520
                                                                  _______________     _______________

          Net cash used in operating activities                         (228,056)         (1,446,330)
                                                                  _______________     _______________

Cash flows from investing activities
     Capital (expenditures) & sales                                        7,194            (204,074)
                                                                  _______________     _______________

          Net cash provided (used) by investing activities                 7,194            (204,074)
                                                                  _______________     _______________

Cash flows from financing activities
     Proceeds (repayment) from borrowing                                (250,000)          1,300,000
     Proceeds of long-term debt                                              ---              (1,733)
                                                                  _______________     _______________

     Net cash (used) provided by financing activities                   (250,000)          1,298,267
                                                                  _______________     _______________

     Net decrease in cash and cash equivalents                          (470,862)           (352,137)

     Cash and cash equivalents at beginning of period                    497,711             394,487
                                                                  _______________     _______________

     Cash and cash equivalents at end of period                   $       26,849      $       42,350
                                                                  ===============     ===============

Supplementary disclosure and cash flow information
__________________________________________________

Cash paid for interest                                            $       72,964      $       67,973
Cash paid for income taxes                                                   ---                 ---

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


The accompanying notes are an integral part of the financial statements.
</TABLE>
                              -10-

            IGENE Biotechnology, Inc. and Subsidiary
                  Notes to Financial Statements


(1)  Unaudited consolidated financial statements

     The  September  30, 2003, consolidated financial  statements
     presented  herein  are  unaudited, and  in  the  opinion  of
     management,  include  all adjustments  (consisting  only  of
     normal recurring accruals) necessary for a fair presentation
     of  financial position, results of operation and cash flows.
     Such  financial  statements  do  not  include  all  of   the
     information  and footnote disclosures normally  included  in
     financial  statements prepared in accordance with accounting
     principles  generally  accepted  in  the  United  States  of
     America.   This  quarterly report on Form 10-QSB  should  be
     read  in conjunction with Igene's Annual Report on Form  10-
     KSB for the year ended December 31, 2002.

(2)  Noncash investing and financing activities

     During  the nine months ended September 30, 2003  and  2002,
     the Company recorded in each quarter dividends in arrears on
     8%  redeemable preferred stock cumulating at $.48 per  share
     aggregating  $12,674,  which has been removed  from  paid-in
     capital and included in the carrying value of the redeemable
     preferred stock.

     On  March 18, 2003, 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 contribute 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.   Unamortized production costs  in  the  amount  of
     $316,869 were contributed to the Joint Venture reducing  the
     adjustment to additional paid in capital.

     On  February  4, 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 that ProBio owned (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. Provided  Mr.  Benjaminsen
     remains  employed  by Igene through 2003, 1,000,000  of  the
     escrowed  shares  of  common  stock  will  be  delivered  to
     Fermtech.  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.

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

     During  the nine months ended September 30, 2002 the Company
     issued  40,000 shares of common stock in payment of interest
     on  the  variable rate subordinated debenture.  If  paid  in
     cash,  the  interest would have been payable at 12%  in  the
     amount  of  $90,000.  Shares may be issued in lieu  of  cash
     under the terms of the debenture agreement at the higher  of
     $2.25  per  share or market price per share.  The stock  was
     issued and related interest was paid at $2.25 per share,  or
     $90,000.

     During  the  nine  months ended September  30,  2002,  Igene
     issued and sold $300,000 in aggregate principal amount of 8%
     convertible debentures to certain directors of Igene.  These
     debentures  are  convertible into shares of  Igene's  common
     stock at $.03 per share.  In consideration of the commitment
     to  purchase  the 8% convertible debenture, these  directors
     also  received  an  aggregate  of  10,000,000  warrants   to
     purchase  common stock at $.03 per share.  These debentures,
     if not converted earlier, become due on July 17th 2012.




                              -11-

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

(2)  Noncash investing and financing activities - continued

     During  the nine months ended September 30, 2002, the  Board
     of   Directors,   in  further  attempts   to   ascertain   a
     manufacturing partner, authorized retention of the  services
     of  Mr. Martin Gerson.  The expected term of the service  is
     for  two  (2) years.  In compensation for this service,  Mr.
     Gerson was awarded 12,000,000 shares of Igene common stock.

(3)  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 occur primarily as a  result
     of  the  effect of valuation of the Chilean Peso on  Igene's
     accounts receivables, which are mostly denominated in Pesos.

(4)  Joint Venture

     On  March 18, 2003, 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 contribute 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 Joint
     Venture Company.  Unamortized production costs in the amount
     of  $316,869 were contributed to the Joint Venture  reducing
     the adjustment to additional paid in capital.

     The  Joint Venture is accounted for under the equity method.
     Astaxanthin  revenue is recorded on the books of  the  Joint
     Venture.  Certain costs incurred by Igene are reimbursed  by
     the  Joint Venture.  These reimbursements are reported as  a
     contra  amount  in  the  Operating Expense  section  of  the
     Igene's Consolidated Statements of Operations.

(5)  Inventories

     As  part  of the Joint Venture Agreement, inventory will  be
     maintained  by the Joint Venture.  As a result,  Igene  sold
     the  remainder  of  its inventory and  plans  to  no  longer
     maintain inventory.  December 31, 2002 figures for inventory
     are  stated at lower of cost, on a first-in first-out basis,
     or  market  value;  work  in  process,  and  finished  goods
     represents   product  manufactured  and   held   for   sale.
     Inventory at December 31, 2002 was as follows:


                                              December 31,
                                                     2002
                                              ____________

          Work-in-process - AstaXin(R)        $    11,308
          Finished goods - AstaXin(R)             363,401
                                              ____________

               Total inventory                $   374,709
                                              ============





                              -12-

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

(6)  Stockholders' Equity (Deficit)

     As  of September 30, 2003 and 2002, 52,310 and 52,810 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, 2003 and 2002, 74,604,500  shares  of
     authorized  but  unissued  common stock  were  reserved  for
     distribution and exercise pursuant to the Company's Employee
     Stock Option Plans.

     As of September 30, 2003, 6,666,666 shares of authorized but
     unissued  common  stock were reserved for  distribution  and
     exercise  pursuant  to a stock option  agreement  with  past
     officers  of the Company, which options shall be  valid  and
     executable until January 22, 2004.

     As of September 30, 2003 and 2002, 17,565,970 and 13,174,478
     shares,  respectively,  of authorized  but  unissued  common
     stock  were  reserved  for  the  conversion  of  outstanding
     convertible  promissory  notes  held  by  directors  of  the
     Company.

     As  of  September  30, 2003 and 2002, 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 $3,814,212 held by directors of the
     Company.

     As  of  September  30, 2003 and 2002, 10,000,000  shares  of
     authorized but unissued common stock were reserved  for  the
     conversion  of  outstanding  convertible  promissory   notes
     issued as part of the purchase of ProBio.

     As  of  September  30,  2003 and 2002,  198,016,073  shares,
     respectively, of authorized but unissued common  stock  were
     reserved for the exercise of outstanding warrants.

     As  of September 30, 2003 and 2002, 9,629,997 and 11,892,485
     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.

     As  of  September 30, 2002, 40,000 shares of authorized  but
     unissued common stock were reserved for issuance for payment
     of interest on the variable rate subordinated debenture.

(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, 2003 and 2002 is based  on
     88,030,624 and 91,147,995, respectively, of weighted average
     common  shares  outstanding.  For purposes of computing  net
     loss  per  common  share, the amount of net  loss  has  been
     increased  by cumulative undeclared dividends in arrears  on
     preferred stock in the amount of $12,674 for the nine months
     ended  September 30, 2003 and 2002.  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.



                              -13-

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

(9)  Contingency - Litigation

     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.  Accordingly, no liability has been or is recorded in
     the  balance sheet. Igene will continue to make and sell its
     product, AstaXin(R).

(10) Uncertainty

     Igene has incurred net losses in each year of its existence,
     aggregating  approximately  $38,500,000  from  inception  to
     September  30,  2003  and  its  liabilities  and  redeemable
     preferred   stock  exceeded  its  assets  by   approximately
     $3,476,000 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.    Igene   will  aid  the  Joint  Venture   with   the
     manufacturing process, but will focus on research and sales,
     attempting  to  increase  sales  and  manufacturing  levels.
     Igene  believes  this  technology to be  highly  marketable.
     Igene  hopes  to  continue increasing sales of  AstaXin(R),
     eventually   achieving  gross  profits  and,   subsequently,
     profitable operations, although the  achievement  of  these
     cannot be assured.

     During  2002 Igene continued to fund its operations  through
     the  issuance of warrants and convertible debentures through
     direct purchases and loans by directors and other accredited
     investors.  This provided additional capital of $1,550,000.

(11) Stock Based Compensation

     The  Company  accounts for such 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 nine  months  ended
     September 30:
<TABLE>
<CAPTION>
                                                       Three months ended           Nine months ended
                                                 ____________________________  ____________________________

                                                 September 30,  September 30,  September 30,  September 30,
                                                         2003           2002           2003           2002
                                                 _____________  _____________  _____________  _____________
      <S>                                        <C>            <C>            <C>            <C>
      Net loss:
      As reported                                $   (632,103)  $ (1,241,390)  $ (1,524,460)  $ (2,745,039)
      Less pro forma stock-based employee
      compensation expense determined under fair
      value based method net of related tax
      effects                                        (159,578)      (171,250)      (423,756)      (513,750)
                                                 _____________  _____________  _____________  _____________

      Net loss                                   $   (791,681)  $ (1,412,640)  $ (1,948,216)  $ (3,258,789)
                                                 =============  =============  =============  =============
        Net loss per Share:
          Basic - as reported                    $      (0.01)  $      (0.01)  $      (0.02)  $      (0.03)
          Basic - pro forma                      $      (0.01)  $      (0.01)  $      (0.03)  $      (0.04)

          Diluted - as reported                  $      (0.01)  $      (0.01)  $      (0.02)  $      (0.03)
          Diluted - pro forma                    $      (0.01)  $      (0.01)  $      (0.03)  $      (0.04)

</TABLE>
                              -14-

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

(12) Recent Accounting Pronouncements

     In  January  2003, the Financial Accounting Standards  Board
     ("FASB") issued Interpretation ("FIN") No. 46 "Consolidation
     of   Variable   Interest  Entities"  which   clarifies   the
     application   of  Accounting  Research  Bulletin   No.   51,
     "Consolidated Financial Statements".  The provision  of  FIN
     No.  46  are  effective July 1, 2003 for  variable  interest
     entities  created  before January  31,  2003.   The  company
     believes  that the implementation of the standard  will  not
     have a material effect on its financial statements.

     In  July  2002,  the  Financial Accounting  Standards  Board
     ("FASB")  issued Statement of Financial Accounting Standards
     No.  146  "Accounting  for  Costs Associated  with  Exit  or
     Disposal Activities" ("SFAS No. 146").  The requirements  of
     SFAS  No.  146  are effective prospectively  for  qualifying
     activities initiated after December 31, 2002.  SFAS No.  146
     applies  to cost associated with an exit activity, including
     restructuring, or with a disposal of long-lived assets.  The
     Statement   had   no  effect  on  the  Company's   financial
     statements.

     In  May 2003, The FASB issued SFAS No. 150, "Accounting  for
     Certain  Financial Instruments with Characteristics of  Both
     Liabilities  and  Equity" ("SFAS No.  150"),  effective  for
     financial instruments entered into or modified after May 31,
     2003.   This statement established standards for classifying
     and    measuring   certain   financial   instruments    with
     characteristics of both liabilities and equity.  It requires
     that  an  issuer  classify a financial  instrument  that  is
     within the scope of the statement as a liability rather than
     as  an  equity, such as obligations that a reporting  entity
     can  or must settle by issuing its own equity shares.   SFAS
     No.  150  did not have an impact on the Company's  earnings,
     financial condition or equity.

(13) Summary of Significant Activity of Joint Venture

     The  following  statement displays the significant  activity
     for  the  joint  venture for the Period ended September  30,
     2003.   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,
                                                         2003
                                                 _____________
     <S>                                         <C>
     Net Sales                                   $    716,000
     Less: manufacturing cost                        (636,000)
                                                 _____________

     Gross Profit                                      80,000
     Less: selling, general and administrative     (1,257,000)
                                                 _____________

     Operating Loss                                (1,177,000)
     Interest Income                                   14,000
                                                 _____________

     Loss before tax                             $ (1,163,000)
                                                 =============

     50% equity interest Igene                   $   (581,500)
                                                 =============

</TABLE>

                              -15-

           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 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 AND OTHER UNCERTAINTIES  DETAILED
FROM  TIME-TO-TIME  IN  THE  COMPANY'S  SECURITIES  AND  EXCHANGE
COMMISSION FILINGS.

CERTAIN   STATEMENTS  IN  THIS  REPORT  SET  FORTH   MANAGEMENT'S
INTENTIONS,  PLANS, BELIEFS, EXPECTATIONS OR PREDICTIONS  OF  THE
FUTURE  BASED ON CURRENT FACTS AND ANALYSES.  ACTUAL RESULTS  MAY
DIFFER MATERIALLY FROM THOSE INDICATED IN SUCH STATEMENTS, DUE TO
A  VARIETY OF FACTORS INCLUDING REDUCED PRODUCT DEMAND, INCREASED
COMPETITION,  CURRENCY FLUCTUATIONS, AVAILABILITY  OF  PRODUCTION
CAPACITY,  GOVERNMENT  ACTION,  WEATHER  CONDITIONS,  AND   OTHER
FACTORS.

Critical Accounting Policies
____________________________

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

     Our  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.

     Legal   proceedings   as   discussed  in  Item   1,   "Legal
Proceedings,"  in  Part II have not resulted  in  an  unfavorable
outcome  to Igene.  Accordingly, no liability has been  reflected
in the September 30, 2003 balance sheet.

     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 as referred to in the  following  Recent
Developments paragraph, will enter into a lease of real  property
with  an affiliate of Tate & Lyle in Selby, England upon which  a
new  manufacturing facility will be constructed and  operated  by
the  Joint Venture.  The Joint Venture is accounted for under the
equity  method  of accounting as the company has a 50%  ownership
interest.

Recent Developments
___________________

     On March 18, 2003, Igene Biotechnology, Inc. (the "Company")
entered into a Joint Venture Agreement (the "JV Agreement")  with
Tate & Lyle Fermentation Products Ltd. ("Tate").  Pursuant to the
JV 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 has contributed $24,614,000 in  cash  to  the
Joint  Venture, while the Company has contributed  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  used  by  the
Company.  Each of Igene and Tate has a 50% ownership interest  in
the  Joint Venture and has equal representation on the  Board  of
Directors of the Joint Venture Company.

                              -16-

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

Results of Operations
_____________________

Sales and other revenue

     As part  of  the Joint Venture agreement, all further  sales
are  recognized  through the venture company.   Therefore,  Igene
recorded  no  sales  of  AstaXin(R)  during  the   quarter  ended
September  30,  2003.  Sales  of AstaXin(R)  during  the  quarter
ended  September 30 2002, were $1,240,278.  Sales  for  the  nine
month period ended September 30, 2003 and 2002, were $463,486 and
$2,409,193,  respectively, a decrease  of  $1,945,707  or  80.7%.
Sales  had  been limited in the past quarters due to insufficient
production  quantity.   However,  the  primary  cause   for   the
decreased  sales  for the nine month period ended  September  30,
2003  as  compared with the comparable nine month  period  ending
September 31, 2002, is that, as of June, 2003, Igene had sold its
remaining  inventory in anticipation of the consummation  of  the
JV  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 production  or  sales  will
occur, or that if they occur, they will be material.

Cost of sales and gross profit

     As with  Sale Revenue, future Cost of Sale and Gross  Profit
will  be  recognized through the venture company.  Igene reported
no  gross  profit  on sales of AstaXin(R) for the  quarter  ended
September  30,  2003.  Gross  profit on sales of  AstaXin(R)  was
$18,540 for the nine month period ended September 30, 2003  which
is  a  decrease of $219,342 from the $237,882 for the nine months
ended  September 30, 2002.   Gross profit fell from 10% of  sales
for  the nine months ended September 30, 2002, to 4% 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.  Demand is expected  to
increase  both  due to seasonal increases in customer  usage  and
increases in our market share.  Management expects that sales and
gross profits may be limited by the quantities of AstaXin(R)  the
Company  is able to produce with its presently available capacity
with  its contract manufacturer, while the Joint Venture prepares
to  produce product.  If is felt the lack of capacity  should  be
alleviated as the joint venture plant begins production in  2004.
Sales  and  gross  profit growth, if any, may be  limited  unless
augmented by these increases in production, as well as production
efficiency  resulting  from  process  research  and  development.
Management  expects the level of gross profit to improve  in  the
future  as  a  percentage of sales, with expected   increases  in
production efficiency received from the Joint Venture with Tate &
Lyle   offsetting  pricing  competition,  but  can   provide   no
assurances  in  that  regard to future  increased  production  or
future increased margin.

     No cost  of sales for the quarter ended September  30,  2003
were  recorded as compared with cost of sales of $1,136,670,  for
the quarter ended September 30, 2002.

Marketing and selling expenses

     For  the  quarters ended September 30, 2003 and 2002,  Igene
recorded Marketing Expense in the amount of $57,265 and $133,635,
respectively, a decrease of $76,370 or 57%. For the  nine  months
ended  September  30,  2003  and 2002, Igene  recorded  Marketing
Expense  in the amount of $277,120 and $405,052, respectively,  a
decrease  of $185,197 or 46%.  As a result of the disposition  of
ProBio,  Igene  has reduced selling costs that were  incurred  as
part  of  the  combination, such as increased  sales  force.   In
addition, the reduction of salable product currently available to
Igene  from  its current manufacturer has caused a  corresponding
reduction in Marketing and Selling expense.  As a result  of  the
Joint  Venture with Tate and Lyle, Igene is expecting an increase
in  salable product with a corresponding increase in sales  costs
at  the  point  the  new facility is in production.   However, no
assurances  can  be made in regards to increased production  from
the new facility nor the corresponding increase in selling costs.







                              -17-

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

Research, development and pilot plant expenses

     For  the  quarters ended September 30, 2003 and 2002,  Igene
recorded research and development costs in the amount of $198,195
and  $162,540, respectively, an increase of $35,655 or  22%.  For
the nine months ended September 30, 2003 and 2002, Igene recorded
Research  and  development costs in the amount  of  $576,596  and
$484,557,   respectively,  an  increase  of   $92,039   or   19%.
Additionally  costs  increased  in  support  of  increasing   the
efficiency  of  the manufacturing process through experimentation
in  the Company's pilot plant, developing higher yielding strains
of  yeast  and  other  improvements  in the Company's  AstaXin(R)
technology.   Igene is hoping this will lead to  an  increase  in
salable product at a reduced cost to Igene and the Joint Venture.
However  no assurances can be made that regard.  These costs  are
currently funded through reimbursement from the Joint Venture.

Operating expenses

     General and  administrative expenses for the quarters  ended
September   30,  2003  and  2002  were  $172,804  and   $540,674,
respectively, a decrease of $367,870 or 68%.  For the nine months
ended  September  30, 2003 and 2002, Igene recorded  General  and
administrative expenses in the amount of $557,131  and  $928,669,
respectively, an increase of $371,538 or 40%.   This decrease  is
due   mainly  to  a  one  time  charge  for  shares   issued   as
compensation.   The  Board of Directors, in further  attempts  to
ascertain  a manufacturing partner, had authorized retention  for
the  services  of  Mr. Martin Gerson.  In compensation  for  this
service, Mr. Gerson was awarded 12,000,000 shares of Igene common
stock.   As there is only an expectation for term of service  but
no  requirement, the total estimated compensation of $300,000 was
expensed  during  the  third  quarter.   In  addition,  as   with
Marketing  and  Research, the disposition of ProBio  has  reduced
general  and administrative costs that were incurred as  part  of
the combination, such as increased management expenses.

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 $75,610 of
litigation expenses for nine months ended September 30, 2003.

Expenses reimbursement by Joint Venture

     As  part  of the Joint Venture agreement, costs incurred  by
Igene related to production, research and development, as well as
those  related  to  the  marketing of AstaXin(R), are  considered
costs  of the joint venture and therefore are reimbursed  by  the
Joint  Venture.  For the quarter ended September 30, 2003,  costs
reimbursed by the Joint Venture totaled $327,310.  For  the  nine
months  ended  September 30, 2003, the Joint  Venture  reimbursed
expenses totaling $891,691.

Interest expense

     Interest  expense for the quarters ended September 30,  2003
and  2002 was $233,539 and $300,520, respectively, a decrease  of
$66,981  or  22%.     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.







                              -18-

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

Equity in earnings of unconsolidated subsidiary

     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,
2003,  Igene's  portion of the Joint Venture loss  was  $222,000.
The  loss was a result of a 50% interest in the following:  Gross
profit  for  the  quarter was $50,000 on sales of $495,000,  less
manufacturing  cost  of  $445,000.   Selling  and   general   and
administrative expenses for the period were $497,000 and interest
income  was $3,000.  The resulting loss before tax was  $444,000.
For the quarter ended September 30, 2003, Igene's 50% portion  of
the Joint Venture loss was $222,000.

     For  the nine-month period ended September 30, 2003, Igene's
portion of the Joint Venture loss was $569,000.  The loss  was  a
result of a 50% interest in the following:  Gross profit for  the
nine  months  ended September 30, 2003 was $61,000  on  sales  of
$597,000,  less  manufacturing cost  of  $536,000.   Selling  and
general   and   administrative  expenses  for  the  period   were
$1,213,000  and interest income was $14,000.  The resulting  loss
before  tax  was  $1,138,000.  For the  nine-month  period  ended
September 30, 2003, Igene's 50% portion of the Joint Venture loss
was $569,000.

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.   Mr. Ulve resigned as CEO and director of Igene and  Mr.
Benjaminsen  no  longer  acts  as our  chief  marketing  officer,
effective   December  31,  2002,  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  a  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 as 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. Provided Mr. Benjaminsen  remains
employed by Igene through 2003, 1,000,000 of the escrowed  shares
of common stock will be delivered to Fermtech. 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.






                              -19-

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

Net loss and basic and diluted net loss per common share

     As a  result  of  the  foregoing, the Company  reported  net
losses of $632,103 and $1,241,389, respectively, for the quarters
ended  September 30, 2003 and 2002, a decrease  in  the  loss  of
$609,286  or 49%.  This represents a loss of $.01 per  basic  and
diluted common share in each of the quarters ended September  30,
2003  and 2002.  The weighted average number of shares of  common
stock  outstanding of 88,030,623 and 81,879,107, for the quarters
ended September 30, 2003 and 2002, respectively, has increased by
6,151,516  shares.  This resulted from the  issuance  of  194,400
shares  of common stock in exercise of warrant, 12,000,000 shares
issued  to  Mr.  Gerson as manufacturing agent, 2,262,488  shares
issued  to  the manufacturer as part of the agreement,  1,600,000
shares issued to Mr. Hiu and Mr. Monahan in lieu of compensation,
reduced by the retirement of 7,000,000 shares retired as part  of
the disposition of ProBio.

Financial Position

     During  the nine-month periods ended September 30, 2003  and
2002, in addition to the joint venture previously discussed,  the
following   actions  also  materially  affected   the   Company's
financial position:

   -  Igene  sold  or transferred all of its inventory during the
      nine months ended September 30, 2003.   The  result  was an
      increase in cash of $374,000.
   -  In  addition,  accounts  receivable  and prepaid assets are
      being transferred to the Joint Venture, which has increased
      cash by $125,033 from the reductions in accounts receivable
      and $264,478 from the reductions of prepaid assets.
   -  Increased  cash flow has allowed for uses of operating cash
      to reduce accounts payable and accrued expenses by $199,703.
   -  The  carrying  value  of  redeemable  preferred  stock  was
      increased   and   paid-in   capital  available   to  common
      shareholders  was  decreased  by  $12,674 in 2003 and 2002,
      reflecting   cumulative   unpaid  dividends  on  redeemable
      preferred stock.
   -  During  the  nine months ended September 30, 2003, $250,000
      cash was used for the repayment of borrowings.

     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, 2003, total dividends in arrears  on
Igene's preferred stock total $251,088 ($9.60 per share) and  are
included in the carrying value of the redeemable preferred stock.

Liquidity and Capital Resources

     Historically, Igene  has  been funded  primarily  by  equity
contributions  and loans from stockholders. As of  September  30,
2003,  Igene had working capital of $450,042, and cash  and  cash
equivalents of $26,849.

     Cash used  by  operating activities  during  the  nine-month
period ended September 30, 2003 and 2002 amounted to $228,056 and
$1,446,330, respectively, a decrease in cash used of $1,218,274.

     Cash of $7,194 was provided by investing activities on asset
sales  for the nine months ended September 30, 2003, rather  than
the  $204,074 used for the nine-month period ended September  30,
2002.

     Cash was used by financing activities in repayment of  loans
in  the  amount  of  $250,000  for the  nine-month  period  ended
September  30,  2003  as  opposed to the $1,298,267  provided  by
financing  activities for the nine-month period  ended  September
30,  2002.  Financing activities consisted principally  of  notes
from directors.



                              -20-

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

Liquidity and Capital Resources - continued

     Over the  next twelve months, Igene believes  it  will  need
additional  working capital. Igene hopes to achieve profits  from
sales of  AstaXin(R) through the joint venture.  This funding  is
expected  to be received from the new venture with Tate  &  Lyle.
However,  there  can be no assurance that projected  profits,  if
any,  from  sales, or additional funding from the  joint  venture
will be sufficient for Igene to fund its continued operations.

     The  Company  does  not believe that  inflation  has  had  a
significant  impact  on  its  operations  during  the  nine-month
periods ended September 30, 2003 and 2002.


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.

                              -21-

                    IGENE Biotechnology, Inc.
                             PART II
                        OTHER INFORMATION

Item 1.  Legal Proceedings

Previously reported litigation (original lawsuit filed  July  21,
1997,  in the 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.   ADM  had
requested  injunctive relief as well as an unspecified amount  of
damages,   and   Igene  had  filed  a  $300,450,000  counterclaim
concerning the theft of trade secrets.  Resolution of the dispute
between ADM and Igene did not result in an unfavorable outcome to
Igene.    Accordingly, no liability is recorded  in  the  balance
sheet.  Under the terms of the settlement, Igene is permitted  to
continue to make and sell its product, AstaXin(R).

Item 2.  Changes in Securities and Use of Proceeds.

Limitation on Payment of Dividends
__________________________________

Dividends on Common Stock are currently prohibited because of the
preferential rights of holders of Preferred Stock.   The  Company
has  paid  no cash dividends on its Common Stock in the past  and
does  not  intend to declare or pay any dividends on  its  Common
stock in the foreseeable future.

Item 3.  Defaults Upon Senior Securities.

In  December 1988, as part of an overall effort to contain  costs
and  conserve working capital, the Company suspended  payment  of
the quarterly dividend on its preferred stock.  Resumption of the
dividend  will  require significant improvements  in  cash  flow.
Unpaid  dividends cumulate for future payment or addition to  the
liquidation  preference  or redemption  value  of  the  preferred
stock.   As of September 30, 2003, total dividends in arrears  on
the  Company's preferred stock total $251,088 ($9.60  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 13, 2003, the
following matters were submitted to stockholders' vote  and  were
approved  by  the requisite number of votes: (1) the election  of
six  directors of the Company: Stephen F. Hiu, Thomas L. Kempner,
Michael  G.  Kimelman, Sidney R. Knafel, and Patrick F.  Monahan;
and  (2) the ratification of the appointment of Stegman & Company
as  the Company's independent auditors for the fiscal year ending
December 31, 2003.

Results of the voting were as follows:
<TABLE>
<CAPTION>
                                          Votes                  Broker
                              Votes       Against or  Votes      Non-
                              For         Withheld    Abstained  Votes
                              __________  __________  _________  _________
<S>                           <C>         <C>         <C>        <C>
(1) Election of Directors
      Stephen F. Hiu          59,875,824  178,650     ---        ---
      Thomas L. Kempner       59,875,824  178,650     ---        ---
      Michael G. Kimelman     59,875,824  178,650     ---        ---
      Sidney R. Knafel        59,875,824  178,650     ---        ---
      Patrick F. Monahan      59,875,824  178,650     ---        ---

(2) Ratification of Auditors  59,952,074   91,400     11,000     ---

</TABLE>

Item 5.  Other Information

None.




                              -22-

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


Item 6.  Exhibits and Reports on Form 8-K

 (a) Exhibits

     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.

 (b) Reports on Form 8-K

     On  May  6,  2003 Igene filed a Current Report on  Form  8-K
     disclosing the terms for the Joint Venture Agreement entered
     into  as  of March 18, 2003 between Tate & Lyle Fermentation
     Products  Ltd., a subsidiary of Tate & Lyle  PLC  and  Igene
     Biotechnology, Inc.

     On  October 1, 2003 Igene filed a Current Report on Form 8-K
     announcing  the  resolution of the dispute between  ADM  and
     Igene.

                              -23-

                           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   November 13, 2003      By   /s/ STEPHEN F. HIU
                                   ____________________________
                                       STEPHEN F. HIU
                                       President




Date   November 13, 2003      By  /s/ EDWARD J. WEISBERGER
                                  _____________________________
                                      EDWARD J. WEISBERGER
                                      Chief Financial Officer


                              -24-


                          EXHIBIT INDEX


     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.


                              -25-