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, 2001

[   ]     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:
62,805,580 shares as of November 1, 2001.

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...........  11-14

     Management's Discussion and Analysis of Financial
     Condition and Results of Operations  ................  15-19

PART II  -    OTHER INFORMATION ..........................  20-21

SIGNATURES ...............................................  22

<PAGE>
                    IGENE BIOTECHNOLOGY, INC.

           QUARTERLY REPORT UNDER SECTION 13 OR 15(D)

             OF THE SECURITIES EXCHANGE ACT OF 1934

<PAGE>
                             PART I

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

                                              September 30,    December 31,
                                                      2001            2000
                                              _____________   _____________
                                               (Unaudited)
<S>                                           <C>             <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents                   $    185,549    $    143,572
  Accounts receivable, net                       1,411,728         316,663
  Inventory                                        603,108         762,432
  Prepaid expenses and other current assets        268,676         186,002
  Deferred costs, current portion                   74,160          74,160
                                              _____________   _____________

                                                 2,543,221       1,482,829

OTHER ASSETS
  Property and equipment, net                      165,808         104,150
  Deferred costs, net of current portion           333,396         420,781
  Other assets                                       6,015           5,861
                                              _____________   _____________

     TOTAL ASSETS                             $  3,048,440    $  2,013,621
                                              =============   =============
</TABLE>

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

<PAGE>
<TABLE>
                    IGENE Biotechnology, Inc. and Subsidiary
                           Consolidated Balance Sheets
                                   (continued)

<CAPTION>
                                              September 30,    December 31,
                                                      2001            2000
                                              _____________   _____________
                                                (Unaudited)
<S>                                           <C>             <C>
LIABILITIES, REDEEMABLE PREFERED STOCK
  AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
  Accounts payable and accrued expenses       $  1,242,299    $    304,432
  Notes payable                                        ---         600,000
                                              _____________   _____________

     TOTAL CURRENT LIABILITIES                   1,242,299         904,432
                                              _____________   _____________

LONG-TERM DEBT
  Notes payable                                  6,057,959       6,077,300
  Convertible debentures                         2,114,212             ---
  Variable rate subordinated debenture           1,500,000       1,500,000
  Lease payable                                      3,435             ---
  Accrued interest                               1,768,644       1,337,063
                                              _____________   _____________

     TOTAL LIABILITIES                          12,686,549       9,818,795
                                              _____________   _____________

COMMITMENTS AND CONTINGENCIES

REDEEMABLE PREFERRED STOCK
  Carrying amount of redeemable preferred
     stock, 8% cumulative, convertible,
     voting, series A, $.01 par value per
     share. Redemption value $16.32
     and $15.84, respectively.  Authorized
     1,312,500 shares, issued 26,405 shares        430,930         418,255
                                              _____________   _____________

STOCKHOLDERS' DEFICIT
  Common stock, $.01 par value per share.
     Authorized, 750,000,000 and
     250,000,000 shares, respectively;
     issued and outstanding 62,765,581
     and 62,249,005 shares, respectively.          627,656         622,490
  Additional paid-in capital                    21,516,179      21,411,645
  Deficit                                      (32,212,874)    (30,257,564)
                                              _____________   _____________

     TOTAL STOCKHOLDERS' DEFICIT               (10,069,039)     (8,223,429)
                                              _____________   _____________

     TOTAL LIABILITIES AND
       STOCKHOLDERS' DEFICIT                  $  3,048,440    $  2,013,621
                                              =============   =============

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

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

                                                     Three months ended                Nine months ended
                                               September 30,   September 30,     September 30,   September 30,
                                                       2001            2000              2001            2000
                                               _____________   _____________     _____________   _____________
<S>                                            <C>             <C>               <C>             <C>
Sales                                          $  1,473,068    $    129,575      $  3,014,611    $    388,742
Cost of sales                                     1,332,906         198,702         2,659,467         471,359
                                               _____________   _____________     _____________   _____________

  Gross profit (loss)                               140,162         (69,127)          355,144         (82,617)
                                               _____________   _____________     _____________   _____________

Selling, general & administrative expenses:
  Marketing and selling                             435,031         197,586           900,115         456,184
  Research, development and pilot plant             164,265          89,629           389,877         267,205
  General and administrative                        169,856         127,194           425,433         337,296
  Litigation expenses                                   ---           1,352               ---          13,248
                                               _____________   _____________     _____________   _____________

     Total operating expenses                       769,152         415,761         1,715,425       1,073,933
                                               _____________   _____________     _____________   _____________

     Operating loss                                (628,990)       (484,888)       (1,360,281)     (1,156,550)
                                               _____________   _____________     _____________   _____________

Other income (expense)
  Interest expense, net of
     interest income of $1,700, $91,
     $8,408 and $3,737, respectively               (173,182)       (169,298)         (601,029)       (512,301)
  Other income                                          ---           2,000             6,000           4,150
                                               _____________   _____________     _____________   _____________

     Net loss                                  $   (802,172)   $   (652,186)     $ (1,955,310)   $ (1,664,701)
                                               =============   =============     =============   =============
     Basic and diluted
     net loss per common share                 $      (0.01)   $      (0.01)     $      (0.03)   $      (0.03)
                                               =============   =============     =============   =============
</TABLE>
    The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
                    IGENE Biotechnology, Inc. and Subsidiary
                Consolidated Statements of Stockholders' Deficit
                                   (Unaudited)

<CAPTION>

                                               Redeemable Preferred Stock
                                                   (shares/amount)
                                             ______________________________
<S>                                          <C>                <C>
Balance at December 31, 1999                     26,467         $  402,298

Cumulative undeclared dividends
  on redeemable preferred stock                     ---             12,705

Exercise of employee stock options                  ---                ---

Exercise of warrants                                ---                ---

Net loss for the nine months ended
  September 30, 2000                                ---                ---
                                             ___________        ___________

Balance at September 30, 2000                    26,467         $  415,003
                                             ===========        ===========

Balance at December 31, 2000                     26,405         $  418,255

Cumulative undeclared dividends
  on redeemable preferred stock                     ---             12,675

Exercise of employee stock options                  ---                ---

Exercise of warrants                                ---                ---

Net loss for the nine months ended
  September 30, 2001                                ---                ---
                                             ___________        ___________

Balance at September 30, 2001                    26,405         $  430,930
                                             ===========        ===========
</TABLE>

    The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
                    IGENE Biotechnology, Inc. and Subsidiary
                Consolidated Statements of Stockholders' Deficit
                             (Unaudited - Continued)
<CAPTION>
                                                                    Additional                      Total
                                                Common Stock          Paid-in                    Stockholders'
                                               (shares/amount)        Capital        Deficit       Deficit
                                             ____________________  _____________  _____________  _____________
<S>                                          <C>         <C>       <C>            <C>            <C>
Balance at December 31, 1999                 47,598,758  $475,988  $ 20,238,904   $(28,002,249)  $ (7,287,357)

Cumulative undeclared dividends
  on redeemable preferred stock                     ---       ---       (12,705)           ---        (12,705)

Exercise of employee stock options            1,500,000    15,000       135,000            ---        150,000

Exercise of warrants                          3,070,123    30,701       (25,501)           ---          5,200

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

Issuance of common stock
  pursuant to direct purchases
  by certain directors                       10,000,000   100,000       900,000            ---      1,000,000

Net loss for the nine months ended
  September 30, 2000                                ---       ---           ---     (1,664,701)    (1,664,701)
                                             __________  ________  _____________  _____________  _____________

Balance at September 30, 2000                62,208,881  $622,089  $ 21,325,298   $(29,666,950)  $ (7,719,563)
                                             ==========  ========  =============  =============  =============

Balance at December 31, 2000                 62,249,005  $622,490  $ 21,411,645   $(30,257,564)  $ (8,223,429)

Cumulative undeclared dividends
  on redeemable preferred stock                     ---       ---       (12,675)           ---        (12,675)

Exercise of employee stock options              305,666     3,057        12,227            ---         15,284

Exercise of warrants                            170,910     1,709        15,382            ---         17,091

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

Net loss for the nine months ended
  September 30, 2001                                ---       ---           ---     (1,955,310)    (1,955,310)
                                             __________  ________  _____________  _____________  _____________

Balance at September 30, 2001                62,765,581  $627,656  $ 21,516,179   $(32,212,874)  $(10,069,039)
                                             ==========  ========  =============  =============  =============

</TABLE>
    The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
                    IGENE Biotechnology, Inc. and Subsidiary
                      Consolidated Statements of Cash Flows
                                   (Unaudited)

<CAPTION>
                                                       Nine months ended
                                                  September 30,   September 30,
                                                          2001            2000
                                                  _____________   _____________
<S>                                               <C>             <C>
Cash flows from operating activities:
   Net loss                                       $ (1,955,310)   $ (1,664,701)
   Adjustments to reconcile net loss
   to net cash used by operating activities:
     Depreciation                                       17,715          14,436
     Amortization                                       87,385          60,357
     Interest on debenture paid in
     shares of common stock                             90,000          90,000
     Decrease (increase) in:
       Accounts receivable                          (1,095,065)       (113,801)
       Inventory                                       159,324        (107,582)
       Prepaid expenses and other current assets       (82,858)        (58,989)
     Increase in:
       Accounts payable and accrued interest         1,369,448         724,870
                                                  _____________   _____________

       Net cash used in operating activities        (1,409,361)     (1,055,410)
                                                  _____________   _____________

Cash flows from investing activities:
   Capital expenditures                                (58,872)         (5,358)
                                                  _____________   _____________

       Net cash used in investing activities           (58,872)         (5,358)
                                                  _____________   _____________

Cash flows from financing activities:
   Proceeds from borrowing                           1,500,000             ---
   Repayment of long-term debt                          (2,290)            ---
   Proceeds from exercise of
     employee stock options                             12,500             ---
   Proceeds from issuance of common stock                  ---       1,150,000
                                                  _____________   _____________

       Net cash provided by financing activities     1,510,210       1,150,000
                                                  _____________   _____________

       Net increase (decrease) in cash
         and cash equivalents                           41,977          89,232

       Cash and cash equivalents
         at beginning of period                        143,572         216,297
                                                  _____________   _____________
       Cash and cash equivalents
          at end of period                        $    185,549    $    305,529
                                                  =============   =============

Supplementary disclosure and cash flow information:
   Cash paid for:
     Interest                                     $        440    $        -0-
     Income taxes                                           -0-            -0-

</TABLE>

            The accompanying notes are an integral part of the
                   consolidated financial statements.
<PAGE>
            IGENE Biotechnology, Inc. and Subsidiary
                  Notes to Financial Statements


(1)  Unaudited consolidated financial statements

     The  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  and
     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.   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, 2000.

(2)  Noncash investing and financing activities

     During  the nine months ended September 30, 2001  and  2000,
     the  Company recorded dividends in arrears on 8%  redeemable
     preferred  stock at $.48 per share aggregating  $12,675  and
     $12,705,  respectively, which has been removed from  paid-in
     capital and included in the carrying value of the redeemable
     preferred stock.

     During the nine months ended September 30, 2001, the Company
     capitalized leased equipment by recording a lease obligation
     payable of $20,500 under a capital lease.

     During the nine months ended September 30, 2001, the Company
     satisfied  its  obligations under demand  notes  payable  of
     1,000,000 and related accrued interest of $14,211 by issuing
     new  8%  convertible  debentures in the aggregate  principal
     amount of $1,014,211.

     During the nine months ended September 30, 2001 and 2000 the
     Company issued 40,000 shares of common stock in each  period
     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 in  each  period.
     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,  in  each
     period.

     During  the  nine months ended September 30, 2001  employees
     exercised  55,666  stock options using $2,250  of  8%  notes
     payable  plus  accrued  interest of $533.30  in  a  cashless
     exercise.   55,666  new shares of common stock  were  issued
     pursuant  to  these exercises of options and  $2,250  of  8%
     notes were cancelled.

     During  the  nine  months ended September 30,  2001  170,910
     warrants were exercised using $17,091 of 8% notes payable in
     a  cashless  exercise.  170,910 new shares of  common  stock
     were  issued  pursuant  to these exercises  of  options  and
     $17,091 of 8% notes were cancelled.

     During the nine months ended September 30, 2000, holders  of
     3,994,500 warrants issued in the March 1998 Rights  Offering
     exercised  those warrants using $5,200 of 8%  notes  payable
     and   utilizing  924,377  warrants  in  cashless  exercises.
     3,070,123 new shares of common stock were issued pursuant to
     these  exercises  of warrants and $5,200 of  8%  notes  were
     cancelled.

     During  the  nine  months ended September  30,  2000,  Igene
     agreed  to  forgive $206,780 in loans receivable and  assign
     equipment  to our contract manufacturer having  a  net  book
     value  of  $226,011 as part of a reduction in  manufacturing
     fees  under  a  new  contract with  the  Company's  contract
     manufacturer of AstaXin(R) provided  the  contract  term  is
     completed.   The  book  value of  the  loan  receivable  and
     equipment,  totaling  $432,791,  has  been  recorded  as   a
     deferred  cost,  which is being amortized  as  manufacturing
     occurs  over the six-year term of this contract, which  will
     expire May 2006.

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


 (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's foreign subsidiary 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.    The  aggregate  transaction   loss  included   in
     determining  net income for the nine months ended  September
     30,  2001  is $180,379 and is included in the Marketing  and
     selling   expenses   in   the  Consolidated   Statement   of
     Operations.  These losses occurred primarily as a result  of
     the  effect of substantial de-valuation of the Chilean  Peso
     during the months of April through September 2001 on Igene's
     accounts  receivables,  which  are  mostly  denominated   in
     Chilean  Pesos  as of September 30, 2001 and  for  the  nine
     months  then  ended.   The effect of exchange  rate  changes
     occurring subsequent to September 30, 2001 is immaterial.

(4)  Inventories

     Inventory, stated at lower of cost, on a first-in  first-out
     basis,  or  market value, represents AstaXin(R) manufactured
     and held for sale, as follows:

<TABLE>
<CAPTION>
                           September 30,           December 31,
                                   2001                   2000
                           _____________           ____________
     <S>                   <C>                     <C>
     Raw materials         $        ---            $       ---
     Work-in-process             26,520                  4,080
     Finished goods             576,588                758,352
                           _____________           ____________

          Total inventory  $    603,108            $   762,432
                           =============           ============
</TABLE>

(5)  Stockholders' Equity (Deficit)

     At  September 30, 2001 and 2000, 52,810 shares of authorized
     but  unissued  common  stock were reserved  for  issue  upon
     conversion of the Company's outstanding preferred stock.

     As of September 30, 2001 and 2000, 74,604,500 and 19,910,166
     shares of authorized but unissued common stock were reserved
     for exercise pursuant to the Company's Employee Stock Option
     Plans.

     As  of  September  30,  2001 and 2000, 120,000  and  200,000
     shares,  respectively,  of authorized  but  unissued  common
     stock were reserved for issuance for payment of interest  on
     the  variable rate subordinated debenture and 375,000 shares
     of  authorized but unissued common stock were  reserved  for
     issuance  upon conversion of the variable rate  subordinated
     debenture.

     As  of  September  30, 2001 and 2000, 13,174,478  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, 2001, 26,427,650 shares of  authorized
     but  unissued common stock were reserved for the  conversion
     of  outstanding  convertible  debentures  in  the  aggregate
     amount of $2,114,212 held by directors of the Company.   The
     convertible  debentures were issued pursuant to  commitments
     dated  March 1 and March 27, 2001 for a total of $2,514,212.
     The  market  price on those dates was $.08  per  share.   In
     return for these commitments, these directors also received,
     on  March  1  and  March  27,  2001,  warrants  to  purchase
     31,427,650  shares  of  common  stock  at  $.08  per  share,
     expiring in 10 years.

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


(5)  Stockholders' Equity (Deficit) - continued

     As   of  September  30,  2001  and  2000,  168,516,085   and
     131,759,345 shares, respectively, of authorized but unissued
     common  stock were reserved for the exercise of  outstanding
     warrants,  inclusive of the 31,427,650 mentioned  above  for
     the September 30, 2001 time period.

     As  of  September 30, 2001, 20,000,000 shares 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, 2001 5,000,000 shares of authorized but
     unissued  common  stock  were  reserved  for  issuance  upon
     receipt  of  $400,000 in funding for operations pursuant  to
     the  commitment of March 27, 2001 of $1,500,000  by  certain
     directors of the Company.

     During the nine months ended September 30, 2000, the Company
     issued  to certain directors 10,000,000 new shares of common
     stock at $.10 per share, or $1,000,000.  The Company did not
     use the services of any agent or underwriter in distributing
     these   shares.   The  sale  of  shares  was   exempt   from
     registration pursuant to Section 4(2) of the Securities  Act
     of   1933,  as  amended,  and  Rule  506  of  Regulation   D
     promulgated  under the Securities Act of 1933,  as  amended.
     The Company relied on information provided by the purchasers
     of  the  shares, indicating that they were directors of  the
     Company,   in   claiming  exemption  from  the  registration
     obligations of the Securities Act of 1933, as amended.  This
     stock was issued pursuant to a commitment dated February  8,
     2000  for a total of $1,000,000.  The market price  on  that
     date  was  $.10  per share.  In return for this  commitment,
     these directors also received, on February 8, 2000, warrants
     to  purchase 10,000,000 shares of common stock at $0.10  per
     share, expiring in 10 years.

     During  the nine months ended September 30, 2001  and  2000,
     the  Company  issued 305,666 and 1,500,00, respectively,  of
     new  shares of common stock at $.05 and $.10 per  share,  or
     $15,283 and $150,000, respectively, pursuant to the exercise
     of employee stock options.

     During  the  nine  months ended September 30,  2001  170,910
     warrants were exercised using $17,091 of 8% notes payable in
     a  cashless  exercise.  170,910 new shares of  common  stock
     were  issued  pursuant  to these exercises  of  options  and
     $17,091 of 8% notes were cancelled.

(6)  Basic and diluted net loss per common share

     Basic  and  diluted net loss per common share for  the  nine
     months  ended  September  30, 2001  and  2000  is  based  on
     62,461,597 and 59,170,838, 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.  No adjustment has been made for any common
     stock equivalents outstanding because their effects would be
     antidilutive.

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

(7)  Contingency - Litigation

     Archer   Daniels  Midland,  Inc.  ("ADM")  has  sued  Igene,
     alleging   patent  infringement  and  requesting  injunctive
     relief  as  well as an unspecified amount of  damages  (suit
     filed  July  21, 1997, U.S. District Court, Baltimore,  MD).
     Igene  has filed a $300,450,000 counterclaim concerning  the
     theft of trade secrets (counter claim filed August 4, 1997).
     The  court  denied ADM's request for preliminary  injunctive
     relief.   Mediation efforts during 1999 did not resolve this
     dispute, which has been returned to the court for a judicial
     disposition. Presently, a stay on all discovery  remains  in
     effect  while  a court-appointed expert analyzes  the  yeast
     products  of both parties.  Igene believes that  it  is  not
     probable  that  this dispute will result in  an  unfavorable
     outcome  to  Igene.   Accordingly,  no  liability  has  been
     reflected   in   the  September  30,  2001  balance   sheet.
     Nonetheless, should ADM prevail, Igene could be  liable  for
     damages,  and  Igene  could also lose the  right  to  use  a
     particular  strain  of yeast.  However, Igene  expects  that
     this  will not affect Igene's ability to make and  sell  its
     product, AstaXin(R).  The Company had expenses of  $-0-  and
     $13,248,  respectively, in the nine months  ended  September
     30, 2001 and 2000 relating to this on-going litigation.

<PAGE>
            IGENE Biotechnology, Inc. and Subsidiary
             Management's Discussion and Analysis of
          Financial Condition and Results of Operations


CAUTIONARY STATEMENTS FOR PURPOSES OF "SAFE HARBOR PROVISIONS" OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:

EXCEPT  FOR  HISTORICAL  FACTS, ALL  MATTERS  DISCUSSED  IN  THIS
REPORT, WHICH ARE FORWARD LOOKING, INVOLVE A HIGH DEGREE OF 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, FLUCTUATIONS IN CURRENCY EXCHANGE
RATES, 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, AVAILABILITY OF PRODUCT CAPACITY, GOVERNMENT ACTION,
WEATHER CONDITIONS, AND OTHER FACTORS.

Results of Operations
_____________________

Sales and other revenue
    Sales of  AstaXin(R) for the quarter ended September 30, 2001
and  2000, were $1,473,068 and $129,575, respectively an increase
of  $1,343,493  or  1036%.   Sales  for  the  nine  months  ended
September  30,  2001 and 2000 were $3,014,611  and  $388,742,  an
increase  of $2,625,869 or 675%.   Sales for subsequent  quarters
are expected to continue to increase throughout the remainder  of
2001  and  into 2002, but will be limited by presently  available
production  capacity.  However, there can be  no  assurance  that
these, or any increases in sales will occur, or that they will be
material.  In June 2001, the Company signed an agreement  with  a
leading  feed producer of aquaculture in Chile to sell $2 million
of AstaXin(R) over the next twelve months.

    To  better  illustrate  recent trends  in  sales  growth  for
AstaXin(R), the following table shows Sales for each of the  past
six quarters:

    Period                               Sales
    __________________________________   _________________

    Quarter ended September 30, 2001       1,473,068
    Quarter ended June 30, 2001            1,096,525
    Quarter ended March 31, 2001             445,018
    Quarter ended December 31, 2000          313,791
    Quarter ended September 30, 2000         129,575
    Quarter ended June 30, 2000              180,631

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


Cost of sales and gross profit (loss)
     Gross Profit on  sales of AstaXin(R) was  $140,162  for  the
quarter  ended  September  30, 2001.   This  is  an  increase  of
$209,289 over the loss of $(69,127) for the same quarter  in  the
preceding year.  Gross Profit on sales of AstaXin(R) was $355,144
for  the  nine  months  ended September 30,  2001,  which  is  an
increase  of  $437,761 over the loss of $(82,617)  for  the  nine
months ended September 30, 2000.  Gross profits were 10% and  12%
of  sales  for  the quarter and nine months ended  September  30,
2001,  respectively.  The Company expects that the level of gross
profit  as  a  percentage  of sales will increase  as  production
efficiency  increases,  but can provide  no  assurances  in  that
regard.  The Company plans to continue to increase production  of
AstaXin(R),  as  needed, to  meet  expected  increased  sales  of
AstaXin(R).   Demand is increasing both due to seasonal increases
in  customer  usage  and increases in our market share. If demand
for AstaXin(R) continues to increase, as the Company expects that
it will, 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.  To avoid this
limitation,   the   Company  is  presently  investigating   other
additional  sources  of available production capacity.   However,
there  can be no assurance that the Company will be able to  find
and  subsequently be able to utilize other additional sources  of
production capacity as quickly as they are needed, and sales  and
gross  profit growth may be limited unless augmented by increases
in  production  efficiency resulting from  process  research  and
development.   Presently available capacity  with  the  Company's
current  contract  manufacturer  is  expected  to  allow  for  an
approximate  increase  of 115% over capacity  being  used  as  of
September 30, 2001.

    The  preceding  resulted in cost of  sales  for  the  quarter
ended  September 30, 2001 and 2000 of  $1,332,906  and  $198,702,
respectively, an increase of  $1,134,204 or  571%.  Cost of sales
for  the  nine  months  ended September 30,  2001  and  2000  was
$2,659,467  and $471,359, respectively, an increase of $2,188,108
or 464%.

Marketing and selling expenses
    Marketing expenses for AstaXin(R) are expected to continue to
increase,  since to achieve continuing and increasing sales,  and
to enter other markets for AstaXin(R),  the Company will  need to
make additional marketing efforts both on its own behalf and with
the help of its worldwide marketing agent, ProBio Nutraceuticals.
In  addition,  the  Marketing and selling expense  for  the  nine
months  ended  September 30, 2001 includes $180,379  of  currency
exchange  loss  in  doing  business in Chile.   These  additional
expenses are expected to be funded by gross profits from  product
sales,  however, there can be no assurance that these sales  will
occur,  that  they  will be material or that gross  profits  will
result.   Marketing  and selling expenses for the  quarter  ended
September  30,  2001 were $435,031, an increase of  $237,445,  or
120% over the marketing and selling expenses of $197,586 for  the
quarter ended September 30, 2000. Marketing  and selling expenses
for  the  nine months ended September 30, 2001 were $900,115,  an
increase  of  $443,931,  or 97% over the  marketing  and  selling
expenses  of  $456,184 for the nine months  ended  September  30,
2000.

Research, development and pilot plant expenses
     Research, development and pilot plant expenses are  expected
to  continue to increase at a moderate rate in the near  term  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. For the quarters ended September
30,  2001  and  2000, these expenses were $164,265  and  $89,629,
respectively, an increase of $74,636 or 83%. For the nine  months
ended  September 30, 2001 and 2000, these expenses were  $389,877
and  $267,205,  respectively, an increase  of  $122,672  or  46%.
These  expenses  are  expected to be  funded  through  additional
funding  from  stockholders,  and by  profitable  operations,  if
profitable operations occur.

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


General and administrative expenses
    General  and  administrative expenses for the quarters  ended
September   30,  2001  and  2000  were  $169,856  and   $127,194,
respectively,  an  increase  of  $42,662  or  34%.   General  and
administrative expenses for the nine months ended  September  30,
2001  and  2000  were  $425,433 and  $337,296,  respectively,  an
increase  of  $88,137 or 26%.  This increase, and expectation  of
moderate  future  increases  in  the  near  term,  resulted  from
increases in cost of insurance coverage, increased legal fees and
administrative  expenses  due to the expansion  of  the  Company.
These  expenses  are expected to be funded by additional  funding
from  stockholders, and by profitable operations,  if  profitable
operations occur.

Litigation expenses
    Management  expects  to  ultimately recover,  through  damage
awards,  some portion of litigation expenses previously incurred,
in  connection with the suit filed against the Company by ADM and
the   Company's  counterclaim,  and  expects  to   preserve   its
commercial product rights associated with  AstaXin(R).   However,
there  can  be no assurance that the Company will receive  damage
awards or that its rights will be preserved.  There have been  no
litigation  expenses during the nine months ended  September  30,
2001.  Litigation expenses for the quarter ended September 30  of
2000   and  the nine months ended September 30, 2000 were  $1,352
and $13,248, respectively. Expenses associated with this on-going
litigation  decreased, as compared to the prior  year,   since  a
stay  on  all  discovery has remained in  effect  while  a  court
appointed  expert analyzes the yeast product of both  parties  to
the  suit.  Costs of litigation may be incurred in the future  at
levels  based  on  management's  continuing  assessments  of  the
potential costs and benefits of various litigation strategies and
alternatives.  These  expenses  are  expected  to  be  funded  by
additional  funding  from stockholders.   A range  of  reasonably
possible losses from the litigation cannot be estimated  at  this
time,  and  accordingly, no liability has been reflected  in  the
September 30, 2001 financial statements.

Interest expense (net of interest income)
    Interest  expense (net of interest income)  for  the  quarter
ended  September  30,  2001 and 2000 was $173,182  and  $169,298,
respectively, an increase of $3,884 or 2%. Interest expense  (net
of  interest income) for the nine months ended September 30, 2001
and 2000 was $601,029 and $512,031, respectively, an increase  of
$88,728  or 17%.   This interest expense (net of interest income)
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 and convertible debentures
and has increased due to increased financing from directors.

Net loss and basic and diluted net loss per common share
    As  a  result  of  the  foregoing, the Company  reported  net
losses  of $802,172 and $652,186, respectively, for the  quarters
ended  June  30, 2001 and 2000, an increased loss of $149,986  or
23%.   The   Company  reported  net  losses  of  $1,955,310   and
$1,664,701, respectively, for the nine months ended September 30,
2001  and  2000, an increased loss of $290,609,  or  18%.    This
represents a loss of $.01 per basic and diluted common  share  in
each  of the quarters ended September 30, 2001 and 2000, and $.03
per  basic  and diluted common share in each of the  nine  months
ended  September 30, 2001 and 2000.  The weighted average  number
of   shares  of  common  stock  outstanding  of  62,628,979   and
59,170,841,  respectively, for the quarters ended  September  30,
2001  and 2000 have increased by 3,458,138 shares.  This resulted
from the issuance of 80,000 shares in lieu of interest payment on
a  subordinated  debenture, the issuance  of  305,666  shares  of
common  stock pursuant to the exercise of employee stock options,
the  issuance of 170,910 shares of common stock pursuant  to  the
exercise  of warrants, and weighting of the issuance of 2,500,000
shares  of  stock  to  directors and other  investors  in  direct
purchases on September 26, 2000 that had only a reduced effect on
the September 30, 2000 average.

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


Financial Position
__________________

During  the  nine months ended September 30, 2001 and  2000,  the
following   actions  also  materially  affected   the   Company's
financial position:

  o   During  the  nine months ended September 30, 2001  accounts
      receivable  increased  by  approximately  $1,095,000 due to
      increased sales of AstaXin(R),  of the balance, 50% was due
      from one customer, and has since been paid.

  o   During  the  nine months ended September 30, 2001  accounts
      payable  increased  by  approximately  $1,369,000  due   to
      increased costs in the production of AstaXin(R).

  o   During the  nine months ended September 30, 2001  inventory
      decreased by approximately $159,000 due to increased demand
      and sales of AstaXin(R).

     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, 2001, total dividends in arrears on
the Company's preferred stock totaled $219,690 ($8.32  per share)
and  are  included  in  the  carrying  value  of  the  redeemable
preferred stock.

Liquidity and Capital Resources
_______________________________

    Historically,  the  Company  has  been  funded  primarily  by
equity contributions and loans from stockholders. As of September
30,  2001  the  Company  had  working  capital  of  approximately
$1,300,922 and cash and cash equivalents of $185,549.

    Cash  used  by  operating activities during the  nine  months
ended  September  30, 2001 and 2000 amounted  to  $1,409,361  and
$1,055,410, respectively, an increase of $353,951.

    Cash  used by investing activities increased by $53,514, from
$5,358  for  the nine months ended September 30, 2000 to  $58,872
for  the  nine  month ended September 30, 2001.  This  was  as  a
result of increased capital expenditures.

    Cash  provided by financing activities increased by  $360,210
from  $1,150,000 for the nine months ended September 30, 2000  to
$1,510,210  for  the  nine  months  ended  September  30,   2001.
Financing  activities  consisted  principally  of  $1,500,000  in
proceeds  from  the  issuance  of 8%  convertible  debentures  to
certain  directors  during the nine months  ended  September  30,
2001.

    Over  the  next twelve months, the Company believes  it  will
need additional working capital to fund expected expansion.   The
Company  hopes  to  achieve  this  from  profits  from  sales  of
AstaXin(R)  and   additional  stockholder  funding through direct
purchases  of  stock  and  issuance  of  convertible  securities.
However,  there  can be  no  assurance that profits, if any, from
sales, or additional  funding  will  be  available to the Company
to fund its  continued operations.

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


    The  Company  does  not  believe that  inflation  has  had  a
significant impact on its operations during the nine months ended
September 30, 2001 and 2000.

    The  Company  has  significant  sales  operations  in  Chile.
During the nine months ended September 30, 2001, the Company  has
losses  due  to change in currency exchange rates on its  Chilean
operations of approximately $180,000.  These losses may  continue
to  occur and will fluctuate depending on the economic conditions
in Chile and worldwide.  The Company has been researching methods
to  mitigate  the effect of the currency exchange and  reduce  or
eliminate the losses in future periods.

<PAGE>
                    IGENE Biotechnology, Inc.
                             PART II
                        OTHER INFORMATION

Item 1.  Legal Proceedings

     Archer   Daniels  Midland,  Inc.  ("ADM")  has  sued  Igene,
     alleging   patent  infringement  and  requesting  injunctive
     relief  as  well as an unspecified amount of  damages  (suit
     filed  July  21, 1997, U.S. District Court, Baltimore,  MD).
     Igene  has filed a $300,450,000 counterclaim concerning  the
     theft of trade secrets (counter claim filed August 4, 1997).
     The  court  denied ADM's request for preliminary  injunctive
     relief.   Mediation efforts during 1999 did not resolve this
     dispute, which has been returned to the court for a judicial
     disposition. Presently, a stay on all discovery  remains  in
     effect  while  a court-appointed expert analyzes  the  yeast
     products  of both parties.  Igene believes that  it  is  not
     probable  that  this dispute will result in  an  unfavorable
     outcome  to  Igene.   Accordingly,  no  liability  has  been
     reflected   in   the  September  30,  2001  balance   sheet.
     Nonetheless, should ADM prevail, Igene could be  liable  for
     damages,  and  Igene  could also lose the  right  to  use  a
     particular  strain  of yeast.  However, Igene  expects  that
     this  will not affect Igene's ability to make and  sell  its
     product, AstaXin(R).  The Company had  expenses  of  $0  and
     $1,352,  respectively, in the three months  ended  September
     30,  2001 and 2000 and $0 and $13,248, respectively for  the
     nine  months  ended September 30, 2001 and 2000 relating  to
     this on-going litigation.

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.

     Sales of Unregistered Securities
     ________________________________

          As  previously  reported, on March  27,  2001,  certain
          directors  of  the  Company committed  to  purchase  an
          aggregate  of $1,500,000 in 8% convertible  debentures.
          The  Company  issued $450,000 of these  8%  convertible
          debentures  on  July 31, 2001.   These  8%  convertible
          debentures  are  convertible  into  shares  of  Igene's
          common  stock  at $.08 per share.  In consideration  of
          the  commitment  to  purchase  $1,500,000  of  the   8%
          convertible  debentures, these directors also  received
          an  aggregate of 18,750,000 warrants to purchase common
          stock on March 27, 2001 at $.08 per share. The warrants
          expire March 26, 2011.

          The   above  sales  of  securities  were  exempt   from
          registration pursuant to Section 4(2) of the Securities
          Act  of 1933, as amended, and Rule 506 of Regulation  D
          promulgated  under  the  Securities  Act  of  1933,  as
          amended.  The Company relied on information provided by
          the purchasers of the securities, who are directors  of
          the   Company,   in   claiming   exemption   from   the
          registration obligation of the Securities Act of  1933,
          as amended.

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 Series A redeemable
     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  November,  2001,  total  dividends  in  arrears  on  the
     Company's Series A redeemable preferred stock total $222,507
     ($8.43 per share) and are included in the carrying value  of
     the Series A redeemable preferred stock.

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

Item 5.  Other Information

     None

Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits

          None

     (b)  Reports on Form 8-K

          No  Reports  on  Form 8-K have been  filed  during  the
          quarter ended September 30, 2001.
<PAGE>
                           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 9, 2001         By: /s/Stephen F. Hiu
                                     ____________________________
                                     Stephen F. Hiu
                                     President and Treasurer
                                     (On behalf of the Registrant
                                     and as Principal
                                     Financial Officer)