UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-Q/SB

[x]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

      For the quarter ended March 31, 2005

                                          or

[ ]  Transition  Report  Pursuant  to Section  13 or 15(d) of the  Securities
     Exchange Act of 1934

       For the transition period from ___________ to ________________

       Commission File Number:   0-10379


                            INTERFERON SCIENCES, INC.
             (Exact Name of Registrant as Specified in its Charter)


Delaware                                                           22-2313648
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                            Identification No.)


1812 Front Street, Scotch Plains, New Jersey                           07076
(Address of principal executive offices)                           (Zip code)


(908) 663-2150
(Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 [ ]


Number of shares outstanding of each of issuer's classes of common stock as of
May 1, 2005.

                   Common Stock               37,339,286 shares



<PAGE>






                    INTERFERON SCIENCES, INC. AND SUBSIDIARY

                                TABLE OF CONTENTS




                                                                            Page

Part I.  Financial Information:

   Consolidated Condensed Balance Sheets--
     March 31, 2005 and December 31, 2004. . . . . . . . . . . . . . . . . . .1

   Consolidated Condensed Statements of Operations--
     Three Months Ended March 31, 2005 and 2004. . . . . . . . . . . . . . . .2

   Consolidated Condensed Statement of Stockholders' Equity--- Three Months
     Ended March 31, 2005 . . . . . . . . . . . . . . . . . . . .3

   Consolidated Condensed Statements of Cash Flows--
     Three Months Ended March 31, 2005 and 2004. . . . . . . . . . . . . . . .4

   Notes to Consolidated Condensed Financial Statements. . . . . . . . . . 5-10

   Management's Discussion and Analysis of Financial
     Condition and Results of Operations . . . . . . . . . . . . . . . . .11-12

Part II.  Other Information . . . . . . . . . . . . . . . . . . . . . . . . .13

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Certifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15-16

<PAGE>

<TABLE>
<CAPTION>


                    INTERFERON SCIENCES, INC. AND SUBSIDIARY
                          PART I. FINANCIAL INFORMATION

                      CONSOLIDATED CONDENSED BALANCE SHEETS

                                                      March 31,        December 31,
                                                        2005               2004
                                                     (Unaudited)
ASSETS                                              ------------------------------

<S>                                                 <C>             <C>
Current assets
  Cash and cash equivalents                         $  1,508,485    $   1,888,386
  Other receivables                                       53,664              -
  Prepaid expenses and other current assets               38,996           12,531
                                                   -------------    -------------
Total current assets                                   1,601,145        1,900,917


Other assets                                               1,884           16,134
                                                   -------------    -------------
Total assets                                       $   1,603,029    $   1,917,051
                                                   =============    =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses                    553,457          580,337
Convertible notes payable -past due                      225,000          225,000
Income tax payable                                            -            47,000
                                                   -------------    -------------
Total current liabilities                                778,457          852,337
                                                   -------------    -------------
Commitments and contingencies

Stockholders' Equity
Preferred stock, par value $.01 per share;
 authorized-5,000,000 shares; none issued
 and outstanding
Common stock, par value $.01 per share;
 authorized-55,000,000 shares; issued
 and outstanding-37,339,286 shares                       373,393          373,393
Capital in excess of par value                       136,970,283      136,970,283
Accumulated deficit                                 (136,519,104)    (136,278,962)
                                                   -------------     ------------
Total stockholders' equity                               824,572        1,064,714
                                                   -------------     ------------
Total liabilities and stockholders' equity         $   1,603,029    $   1,917,051
                                                   =============    =============

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

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                    INTERFERON SCIENCES, INC. AND SUBSIDIARY
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                      Three Months Ended
                                                           March 31,
                                                  -----------------------------
                                                       2005           2004
                                                  -------------   -------------
<S>                                                <C>            <C>
Revenue
  Royalty income                                   $     16,000   $     14,740
                                                  -------------   -------------
Total revenue                                            16,000         14,740
                                                  -------------   -------------
Costs and expenses
  General and administrative                            256,678         273,394
                                                  -------------   -------------
Total costs and expenses                                256,678         273,394
                                                  -------------   -------------
Loss from operations before
  other income (expense)                               (240,678)       (258,654)

Interest income (expense), net                              536           6,890
Gain on sale of assets                                      -         2,875,282
                                                  -------------   -------------
Income (loss) before taxes                             (240,142)      2,623,518
 Provision for income taxes                                 -            52,470
                                                  -------------   -------------
Net(loss) Income                                     $    (240,142) $ 2,571,048
                                                  =============   =============

Basic net (loss) income per share                 $        (.01)    $       .07
                                                  =============   =============

Diluted net (loss) income per share (potential
 common shares limited to authorized shares
 available)
                                                  $       (.01)    $        .05
                                                  =============   =============

As adjusted, diluted net (loss) income per share
 (potential common shares not limited to
 authorized shares available)                      $       (.01)    $       .03
                                                  =============   =============
Weighted average number of shares
  outstanding - basic                                37,339,286      37,339,286
                                                  =============   ==============
Weighted average number of shares outstanding -
  diluted (potential common shares limited to
  authorized shares available)                       37,339,286      55,000,000
                                                  ==============  ==============
As adjusted, weighted average number of
  shares outstanding - diluted (potential
  common shares not limited to authorized
  shares available)                                  37,339,286      90,398,286
                                                  =============   =============


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

</TABLE>

<PAGE>

<TABLE>
<CAPTION>


                    INTERFERON SCIENCES, INC. AND SUBSIDIARY
                        CONSOLIDATED CONDENSED STATEMENT
                             OF STOCKHOLDERS' EQUITY
                        THREE MONTHS ENDED MARCH 31, 2005
                                   (Unaudited)



                                                    Capital                           Total
                        Common Stock         in excess       Accumulated       Stockholders'
                      Shares      Amount    of par value      deficit            Equity
                      ------------------    ------------    -------------      -------------
<S>                <C>          <C>         <C>             <C>                 <C>
Balance at
  Dec. 31, 2004    37,339,286   $373,393    $136,970,283    $(136,278,962)      $   1,064,714

 Net loss                                                        (240,142)           (240,142)

                ------------------------------------------------------------------------------
 Balance at
  March 31, 2005   37,339,286   $373,393    $136,970,283    $(136,519,104)      $     824,572
                ==============================================================================

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

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                    INTERFERON SCIENCES, INC. AND SUBSIDIARY
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                             Three Months Ended
                                                                March 31,
                                                         --------------------------
                                                          2005            2004
                                                          ----            ----

<S>                                                      <C>            <C>
Cash flows from operating activities:
  Net (loss) income                                      $  (240,142)   $  2,571,048
  Adjustments to reconcile net (loss) income
    to net cash used for operating activities:
    Write off of ACT warrant                                  14,250
    Gain on sale of assets                                                (2,875,282)
    Depreciation and amortization                                             87,156
    Amortization of interest income                                           (3,937)
    Change in operating assets and liabilities:
     Other receivables                                       (53,664)          6,425
     Prepaid expenses and other current assets               (26,465)         (7,793)
     Accounts payable and accrued expenses                   (73,880)         88,831
                                                         ------------    ------------
    Net cash used in operating activities                   (379,901)       (133,552)
                                                         ------------    ------------
Net cash investing activities                                  -               -
                                                         ------------    ------------
Net cash financing activities                                  -               -

                                                         ------------    ------------
Net decrease in cash and cash equivalents                   (379,901)       (133,552)

Cash and cash equivalents at beginning of period           1,888,386         848,573
                                                         ------------  --------------
Cash and cash equivalents at end of period               $ 1,508,485   $     715,021
                                                         ============  ==============

Supplemental disclosure:
Income taxes paid                                        $    94,750            -

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

</TABLE>

<PAGE>


                    INTERFERON SCIENCES, INC. AND SUBSIDIARY
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1.  Basis of Presentation

     The financial  information included herein is unaudited.  Such information,
however,  reflects  all  adjustments  (consisting  solely  of  normal  recurring
adjustments)  that are,  in the  opinion  of  management,  necessary  for a fair
presentation  of the financial  position and  operating  results for the interim
periods.   The  operating  results  for  interim  periods  are  not  necessarily
indicative of operating results to be expected for the year.

Note 2. Plan of Operations

     On March 11, 2003, the Company sold all its inventory  related to ALFERON N
Injection  and  granted a license to sell the product to  Hemispherx  Biopharma,
Inc.  ("HEB").  In exchange for the inventory and license,  the Company received
424,528  shares of HEB common  stock with a  guaranteed  value of  $675,000,  an
additional  62,500  shares of HEB common stock without a guaranteed  value,  and
future  royalties  equal to 6% of the net sales of ALFERON N  Injection.  During
2003,  the Company sold all 487,028  shares of HEB common stock and realized net
proceeds of $ 1,207,000.  In addition, HEB assumed approximately $408,000 of the
Company's payables and various other commitments. On March 11, 2003, the Company
and HEB entered into another agreement, which was consummated on March 17, 2004,
pursuant to which the Company sold to HEB, the Company's  real estate  property,
plant, equipment,  furniture and fixtures, rights to ALFERON N Injection and all
of its  patents,  trademarks  and other  intellectual  property  related  to its
natural alpha  interferon  business.  In exchange,  the Company received 424,528
shares of HEB common stock with a guaranteed  value of $675,000,  an  additional
62,500  shares of HEB  common  stock  without  a  guaranteed  value  and  future
royalties equal to 6% of the net sales of all products sold  containing  natural
alpha interferon. During 2004, the Company sold all 487,028 shares of HEB common
stock and realized net proceeds of $1,936,000.  In addition,  approximately $2.5
million of the Company's  indebtedness which encumbered its assets was repaid by
HEB. Prior to the completion of this  transaction,  HEB funded certain operating
costs of the Company's facility such as insurance, heat, light, air conditioning
and equipment maintenance (See Note 7).

       Currently, ISI's sole activity is completing the acquisition of Amphioxus
Cell Technologies ("ACT"). ACT and ISI have entered into a non-binding Letter of
Intent, which is described in Note 8.


     At March 31, 2005,  the Company had  approximately  $ 1,508,000 of cash and
cash  equivalents,  with which to support  future  operating  activities  and to
satisfy its financial obligations as they become payable.

     The  Company  has  experienced   significant  operating  losses  since  its
inception.  As of March 31,  2005,  the  Company had an  accumulated  deficit of
approximately  $136.5  million.  For the three months ended March 31, 2005,  the
Company  incurred a net loss of $0.2 million.  For the years ended  December 31,
2004 and 2003,  the  Company had net income of  approximately  $ 1.7 million and
$2.3 million, respectively,  from the sale of its assets. Based on the Company's
current  cash  position,  estimates  of  revenues,  expenses,  and the timing of
repayment of  creditors,  management  believes  that the Company has  sufficient
resources to enable it to continue  activities through March 31, 2006.  However,
actual results may differ materially from such estimate, and no assurance can be
given that additional  funding will not be required  sooner than  anticipated or
that such  additional  funding,  whether  from  financial  markets or from other
sources,  will be available  when needed or on terms  acceptable to the Company.
Insufficient  funds  will  require  the  Company to  curtail  or  terminate  its
activities.




Note 3.  Earnings (Loss) Per Share

     Basic  earnings  (loss) per share  have been  computed  using the  weighted
average  number of shares of common  stock of the Company  outstanding  for each
period presented. For the three months ended March 31, 2004, the dilutive effect
of  stock  options  and  other  common  stock  equivalents  is  included  in the
calculation of diluted  earnings per share using the treasury stock method.  For
the three months ended March 31, 2005, common stock equivalents are not included
in the calculation of loss per share as the effect would be antidilutive.


Note 4. Agreement with GP Strategies Corporation

     Pursuant to an agreement  dated March 25, 1999, GP  Strategies  Corporation
("GP  Strategies")  loaned the Company $500,000 (the "GP Strategies  Debt").  In
return,  the Company granted GP Strategies (i) a first mortgage on the Company's
real  estate,  (ii) a  two-year  option  (which has  expired)  to  purchase  the
Company's  real estate,  provided that the Company has terminated its operations
and a certain  liability  to the  American  Red Cross (the "Red Cross") has been
repaid,  and (iii) a two-year  right of first refusal (which has expired) in the
event the Company  desires to sell its real  estate.  In  addition,  the Company
issued GP  Strategies  500,000  shares  (the "GP  Shares")  of common  stock and
five-year  warrant (the "GP Warrant") to purchase 500,000 shares of common stock
at a price of $1 per share. Pursuant to the agreement,  the Company has issued a
note to GP  Strategies  representing  the GP  Strategies  Debt,  which  note was
originally  due on September  30, 1999 (but  extended to June 30, 2001) and bore
interest, payable at maturity, at the rate of 6% per annum. In addition, at that
time,  the  Company  negotiated  a  subordination  agreement  with the Red Cross
pursuant  to which  the Red Cross  agreed  that its lien on the  Company's  real
estate is subordinate to GP Strategies' lien. On March 27, 2000, the Company and
GP Strategies  entered into an agreement pursuant to which (i) the GP Strategies
Debt was extended until June 30, 2001 and (ii) the Management  Agreement between
the Company and GP  Strategies  was  terminated  and all  intercompany  accounts
between the Company and GP Strategies (other than the GP Strategies Debt) in the
amount of approximately  $130,000 were discharged which was recorded as a credit
to capital  in excess of par  value.  On August 23,  2001,  the  Company  and GP
Strategies  entered into an agreement  pursuant to which the GP Strategies  Debt
was extended to March 15,  2002.  During  2001,  the Company paid GP  Strategies
$100,000 to reduce the GP  Strategies  Debt. In addition,  in January 2002,  the
Company paid GP Strategies $100,000 to further reduce the GP Strategies Debt. In
connection with the Asset Sale Transactions (as hereafter defined,  see Note 7),
the Company,  HEB and GP Strategies  entered into an agreement pursuant to which
GP Strategies  agreed to forbear from  exercising  its rights until May 31, 2003
and GP Strategies  agreed to accept HEB common stock with a guaranteed  value of
$425,000 in full  settlement of all the Company's  obligations to GP Strategies.
On June 2,  2003,  HEB  delivered  the HEB  common  stock  to GP  Strategies  in
accordance with HEB's obligation  under the terms of the forbearance  agreement.
However the forbearance  agreement  provided that in addition to the issuance by
HEB of the HEB common stock to GP Strategies,  HEB was obligated to register the
HEB  common  stock for  resale  and any  shares  of HEB  shares  received  by GP
Strategies  which remain  unsold after  November 30, 2004 may be put to HEB at a
price of $ 1.59 per share.

     The GP Strategies  obligations were legally  extinguished by HEB on June 2,
2003.  The Asset  Sale  Transaction  with HEB closed on March 17,  2004.  If the
transaction  had not  closed,  HEB would  have had a claim  against  ISI for the
satisfaction of the GP Strategies  obligations.  For accounting purposes,  these
transactions  were treated as integral parts of the Asset Sale  Transactions and
accordingly,  the obligations remained on the balance sheet until the closing of
the transaction on March 17, 2004, at which time the amount of such  obligations
were recognized as extinguished for accounting purposes.

Note 5.  Agreement with the Red Cross

     The Company  obtained  human white blood cells used in the  manufacture  of
ALFERON N Injection from several sources,  including the Red Cross pursuant to a
supply  agreement dated April 1, 1997 (the "Supply  Agreement").  As of November
23,  1998,  the Company  owed the Red Cross  approximately  $1.46  million  plus
interest at the rate of 6% per annum accruing from April 1, 1998 (the "Red Cross
Liability") for white blood cells purchased pursuant to the Supply Agreement.

     Pursuant to an agreement  dated November 23, 1998, the Company  granted the
Red  Cross a  security  interest  in  certain  assets  to  secure  the Red Cross
Liability,  issued to the Red Cross 300,000 shares of common stock and agreed to
issue  additional  shares at some future date as  requested  by the Red Cross to
satisfy any remaining  amount of the Red Cross  Liability.  The Red Cross agreed
that any net  proceeds  received by it upon sale of such shares would be applied
against the Red Cross  Liability.  In January 1999, the Company  granted the Red
Cross a security interest (the "Security  Interest") in, among other things, the
Company's  real estate,  equipment  inventory,  receivables,  and New Jersey net
operating loss carryovers to secure  repayment of the Red Cross  Liability,  and
the Red Cross  agreed to forbear  from  exercising  its rights  under the Supply
Agreement,  including with respect to collecting the Red Cross  Liability  until
June 30, 1999 (which was  subsequently  extended  until  December 31, 1999).  On
December 29, 1999,  the Company,  the Red Cross and GP Strategies  entered in an
agreement  pursuant to which the Red Cross agreed that until  September 30, 2000
it would  forbear from  exercising  its rights  under (i) the Supply  Agreement,
including  with  respect to  collecting  the Red Cross  Liability,  and (ii) the
Security Interest.  In connection with the Asset Sale Transactions (see Note 7),
the Company,  HEB and the Red Cross entered into an agreement  pursuant to which
the Red Cross  agreed to forbear from  exercising  its rights until May 31, 2003
and the Red Cross agreed to accept HEB common  stock with a guaranteed  value of
$500,000  in full  settlement  of all of the  Company's  obligations  to the Red
Cross.  On June 2, 2003,  HEB delivered the HEB common stock to the Red Cross in
accordance with HEB's obligation  under the terms of the forbearance  agreement.
However the forbearance  agreement  provided that in addition to the issuance by
HEB of the HEB common stock to the Red Cross,  HEB was obligated to register the
HEB common  stock for resale  and any shares of HEB shares  received  by the Red
Cross which  remain  unsold after May 31, 2004 may be put to HEB at a price of $
1.59 per share.

     The Red Cross  Liability was legally  extinguished  by HEB on June 2, 2003.
The Asset Sale Transaction with HEB closed on March 17, 2004. If the transaction
had not closed,  HEB would have had a claim against ISI for the  satisfaction of
the Red Cross  Liability.  For  accounting  purposes,  these  transactions  were
treated as integral parts of the Asset Sale  Transactions and  accordingly,  the
obligations  remained on the balance sheet until the closing of the  transaction
on March 17, 2004, at which time the amount of such  obligations were recognized
as extinguished for accounting purposes.


Note 6.           Recently Issued Accounting Standards


     In December 2004, the Financial  Accounting  Standards  Board (FASB) issued
Statement  of Financial  Accounting  Standards  (SFAS) No. 123  (revised  2004),
"Share-Based  Payment" (SFAS 123R), which replaces SFAS No. 123, "Accounting for
Stock-Based  Compensation,"  (SFAS  123) and  supercedes  APB  Opinion  No.  25,
"Accounting  for Stock Issued to Employees."  SFAS 123R requires all share-based
payments  to  employees,  including  grants of  employee  stock  options,  to be
recognized in the financial statements based on their fair values beginning with
the first  interim or annual  period  after June 15, 2005,  with early  adoption
encouraged.  The pro forma  disclosures  previously  permitted under SFAS 123 no
longer will be an alternative to financial statement recognition. The Company is
required to adopt SFAS 123R beginning July 1, 2005. Under SFAS 123R, the Company
must  determine  the  appropriate  fair  value  model  to be  used  for  valuing
share-based  payments,  the amortization  method for  compensation  cost and the
transition method to be used at date of adoption. The transition methods include
prospective and retroactive adoption options. The Company has begun, but has not
completed,  evaluating the impact of the adoption of SFAS 123R on its results of
operations.  In connection  with evaluating the impact of SFAS 123R, the Company
is considering the potential  implementation  of different  valuation methods to
determine the fair value of share-based  compensation.  The Company believes the
adoption of SFAS 123R will have a material  impact on its results of operations,
regardless of the valuation  method used.  Currently,  the Company does not have
any employee stock options outstanding.


Note 7.    Agreement with Hemispherx Biopharma, Inc. ("HEB")

     On March 11, 2003,  the Company  executed two  agreements  with HEB to sell
certain assets of the Company (the two asset sale  transactions  are hereinafter
jointly referred to as the "Asset Sale  Transactions" and individually  referred
to as the "First Asset Sale" and the "Second  Asset Sale") and  consummated  the
First Asset Sale.

     In the first  agreement  with HEB (the "First Asset Sale  Agreement"),  the
Company  sold all of its  inventory  related  to  ALFERON  N  Injection(R)  (the
"Product")  and granted a three-year  license for the  production,  manufacture,
use, marketing and sale of the Product in the United States.

         For these assets, the Company:

     (i)  received  424,528  shares of HEB common stock (the "HEB Common Stock")
          which had a  Guaranteed  Value (as  defined  in the First  Asset  Sale
          Agreement) of $675,000;

     (ii) received an  additional  62,500  shares of HEB Common Stock  without a
          Guaranteed Value; and

     (iii) will receive a royalty equal to 6% of the net sales of the Product.

     In  addition,  HEB assumed  $408,000  of ISI  payables  and  certain  other
obligations  related to the Product.  The  consummation  of the First Asset Sale
Agreement  resulted  in  a  gain  of  $1,149,112,   which  is  included  in  the
consolidated statement of operations for the year ended December 31, 2003.

     ISI  received a service fee until  October 31, 2003 for  providing  certain
transitional services. Such service fee was $560,101 for the year ended December
31, 2003.  As of December 31, 2003,  the Company sold all 487,028  shares of HEB
Common Stock and realized net proceeds of  $1,207,000,  resulting in a gain of $
447,337,  which is included in the consolidated  statement of operations for the
year ended December 31, 2003.

     In  the  second   agreement  with  the  Company  (the  "Second  Asset  Sale
Agreement"),  which was  consummated  on March 17, 2004, the Company sold to HEB
all of its rights to the Product and other assets  related to the natural  alpha
interferon  business including,  but not limited to, real estate,  machinery and
equipment. For these assets, the Company:

     (i)  received  424,528  shares of HEB Common  Stock which has a  Guaranteed
          Value (as defined in the Second Asset Sale Agreement) of $675,000;

     (ii) received an  additional  62,500  shares of HEB Common Stock  without a
          Guaranteed Value; and

     (iii)will  receive a royalty  equal to 6% of the net sales of any  products
          containing  natural  alpha  interferon  sold  by HEB  (or a  Marketing
          Partner, as defined in the Second Asset Sale Agreement).


     In addition,  HEB satisfied the Company's  obligations  to (i) the American
Red Cross in the amount of $1,435,000, (ii) GP Strategies Corp. in the amount of
$423,000, and (iii) MD Sass in the amount of $644,000 (for unpaid local property
taxes and water and sewer  charges).  The  consummation of the Second Asset Sale
Agreement  resulted  in  a  gain  of  $2,875,282,   which  is  included  in  the
consolidated  condensed  statement of operations for the quarter ended March 31,
2004.  Through  March 31, 2004,  no shares  received  from the Second Asset Sale
Agreement were sold. As of December 31, 2004, the Company sold all of the shares
of HEB common stock and realized net proceeds of $1,935,683, resulting in a gain
on the sale of the HEB common stock of $270,048.

Note 8. Note  Receivable - Agreement  with  Amphioxus  Cell  Technologies,  Inc.
     ("Amphioxus")

     On  March  20,  2003,  the  Company  entered  into a  collaterialized  note
agreement,  as amended (the  "Note")  with  Amphioxus to advance up to $500,000.
Pursuant to the Note, the Company advanced  $375,000 as of December 31, 2003. In
October 2004, the Company  advanced an additional  $100,000.  The Note is due on
June  30,  2005,   bears   interest  at  the  rate  of  10%  per  annum  and  is
collaterialized  by all of the assets of  Amphioxus.  In  addition,  the Company
received a warrant,  exercisable until March 2008, to purchase for $100,000,  an
aggregate of 20% of the common stock of Amphioxus on a fully diluted basis.  The
warrant is valued at $15,000,  and such value is prorated based on the amount of
monies  advanced and was amortized as interest  income over the original term of
the Note.

     On October 17,  2003,  ISI and ACT  entered  into a  non-binding  letter of
intent pursuant to which ISI (or a wholly owned  subsidiary of ISI) will acquire
ACT.

     The Letter of Intent is subject to the  execution of  definitive  documents
and final due diligence.  There can be no assurance that a definitive  agreement
will be consummated.

     At  December  31,  2004,  the  Company  set  up  a  provision  against  the
collectibility  of the note  and  related  interest  due  from  ACT,  due to the
uncertainty of the  collectibility  of such note and interest and to reflect its
estimated fair value. In addition,  at March 31, 2005, the Company wrote off the
carrying value of the ACT warrant.


Note 9.  Notes Payable

     In August 2002,  the Company  completed a private  placement of $500,000 of
convertible  notes to accredited  investors.  Each note is convertible  into the
Company's  common stock at a price of $.05 per share  (subject to  adjustment to
70%  of  the  market  price  of  the   Company's   common  stock  under  certain
circumstances)  and bears  interest  at the rate of 10% per  annum.  A  $250,000
convertible  note  was due  January  31,  2003  and the  other  $250,000  of the
convertible notes were due December 31, 2003. For each $100,000 principal amount
of notes issued,  the investors received warrants to purchase an additional 10.2
million shares of the Company's common stock  exercisable at $.01 per share. The
warrants were valued at $400,000 and are amortized as interest  expense over the
terms of the respective  notes. The conversion of the convertible  notes and the
exercise of the  warrants  are subject to  approval by the  shareholders  of the
Company of the availability of a sufficient  number of authorized common shares.
The terms of the notes, as amended,  include the Company  obtaining  stockholder
approval by June 30, 2005 to increase its  authorized  shares so that the number
of  authorized  but  unissued  common  shares is at least  200% of the number of
common shares  issuable on conversion of the notes and exercise of the warrants.
Failure to obtain stockholder approval for the increase in the authorized number
of shares and to file with the  Delaware  Secretary of State an amendment to the
Company's  Certificate of Incorporation,  on or before June 30, 2005 to increase
its authorized  shares,  would require the Company to make cash payments to each
warrant  holder,  for each 30-day  period such  approval has not been  obtained,
equal to the difference  between the exercise price and volume weighted  average
market price (for that 30-day period) for all warrants not  exercisable  because
of  the  failure  to  obtain  the  approval.   Further  the  note  holders  have
registration  rights whereby,  for the period  commencing  April 30, 2004 but no
later than August 7, 2005, upon written request from at least 50% of the holders
of the shares issuable upon the exercise of the warrants, the Company is to file
a registration  statement  within 30 days and have such  registration  statement
declared effective 90 days thereafter,  to register the common shares underlying
the convertible notes and warrants. The Company's failure to file a registration
statement or have one declared  effective by the required  dates would result in
the Company paying  liquidated  damages to each of the above  note-holders in an
amount equal to 2% of the outstanding  principal amount of the convertible notes
per month for each 30 day period or part thereof,  a registration  statement was
not filed.  In  addition,  these notes are  convertible  into common  stock at a
beneficial  rate. The beneficial  conversion  feature was valued at $100,000 and
accounted for as debt discount and was amortized over the term of the notes. The
$250,000  note due on January  31,  2003 was repaid in full  (including  accrued
interest) in November  2003.  Of the $250,000  notes which were due December 31,
2003, $ 25,000 was repaid  (including  accrued  interest)  in May,  2004 and the
remaining $ 225,000 are still unpaid.




<PAGE>


                    INTERFERON SCIENCES, INC. AND SUBSIDIARY

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


     ISI  was  incorporated  in  1980  and  until  March  11,  2003,  ISI  was a
biopharmaceutical  company  which  studied,  manufactured,  and sold  ALFERON  N
Injection(R), a highly purified, multi-species,  natural-source alpha interferon
product  (the  "Product").  ALFERON N  Injection  is approved by the FDA for the
treatment  of  certain  types of  genital  warts  and has been  studied  for its
potential  use  in  the  treatment  of  human  immunodeficiency  virus  ("HIV"),
hepatitis C virus ("HCV"),  and certain other  indications.  ISI has experienced
significant operating losses since its inception.

     On March 11, 2003,  ISI executed  two  agreements  with HEB to sell certain
assets of ISI. In the First Asset Sale Agreement,  ISI sold all of its inventory
related  to ALFERON N  Injection(R),  ISI's  natural  alpha  interferon  product
approved for the treatment of certain  types of genital  warts (the  "Product"),
and granted a limited license for the production,  manufacture,  use,  marketing
and  sale  of the  Product  in the  United  States.  In the  Second  Asset  Sale
Agreement,  which was  consummated on March 17, 2004, ISI sold to HEB all of its
rights to the Product and other assets related to the Product including, but not
limited to, real estate, machinery and equipment.

     On October 17, 2003,  ISI and Amphioxus  Cell  Technologies,  Inc.  ("ACT")
entered into a non-binding  letter of intent  pursuant to which ISI (or a wholly
owned  subsidiary of ISI) will acquire ACT. ACT is a biotechnology  company that
applies  liver  biology  solutions  to  problems  in drug  discovery  and  human
therapeutics.  The letter of intent is subject to the  execution  of  definitive
documents and final due diligence. (See Note 8).

Liquidity and Capital Resources

     For  the  assets  transferred  to HEB  pursuant  to the  First  Asset  Sale
Agreement,  ISI received  487,028 shares of HEB common stock and a royalty equal
to 6% of the net sales of the Product.  As of December  31,  2003,  ISI sold all
487,028 shares of HEB common stock and realized net proceeds of  $1,207,000.  In
addition,  until  October 31,  2003,  ISI  received a service fee for  providing
certain  transitional  services to HEB and HEB assumed  $408,000 of ISI payables
and certain other obligations related to the Product.

     For the  assets  transferred  to HEB  pursuant  to the  Second  Asset  Sale
Agreement,  which was  consummated on March 17, 2004, ISI received an additional
487,028 shares of HEB Common Stock. As of December 31, 2004, ISI sold all of the
487,028 shares of HEB common stock and realized net proceeds of  approximately $
1,936,000.  In addition,  HEB satisfied certain obligations relating to the real
estate,   machinery  and  equipment  of  ISI  which   aggregated   approximately
$2,500,000.

     At March 31, 2005,  the Company had  approximately  $ 1,508,000 in cash and
cash  equivalents.  Until  utilized,  such cash and cash  equivalents  are being
invested principally in short-term interest-bearing investments.

     Based on the Company's estimates of revenues,  expenses,  and the timing of
repayment of creditors,  management  believes that the cash presently  available
will be  sufficient  to enable the Company to continue  its  activities  through
March  31,  2006.  However,  actual  results  may  differ  materially  from such
estimate,  and no  assurance  can be given that  additional  funding will not be
required  sooner  than  anticipated  or that  such  additional  funding  will be
available when needed or on terms acceptable to the Company.  Insufficient funds
will require the Company to curtail or terminate its activities.

     The  Company's  Common Stock is traded in the  over-the-counter  market and
quoted on the Pink  Sheets,  which  may have a  material  adverse  effect on the
liquidity of its Common Stock and on its ability to obtain additional financing.

Results of Operations

Three Months Ended March 31, 2005 Versus Three Months Ended March 31, 2004

     For the three  months ended March 31, 2005 and 2004,  the Company  recorded
royalty income from HEB of $16,000 and $14,740, respectively.

     General and  administrative  expenses  for the three months ended March 31,
2005 were  $256,678 as compared  to  $273,394  for the same period in 2004.  The
decrease of $16,716 was due principally to decreases in depreciation expense and
property taxes partially offset by increases in certain other operating expenses
and the write off of the carrying value of the ACT warrant.

     Interest income  (expense),  net, for the three months ended March 31, 2005
was income of $536 as  compared to $6,890 for the three  months  ended March 31,
2004.

     For the three months ended March 31, 2004,  the Company  recorded a gain on
the sale of assets to HEB of $2,875,282.

     For the three months ended March 31, 2004, the Company recorded $ 52,470 of
income tax  expense  based upon the  alternative  minimum  tax for  federal  tax
purposes.

     As a result of the foregoing,  the Company  incurred a net loss of $240,142
and earned net income of  $2,571,048  for the three  months ended March 31, 2005
and 2004, respectively.

Forward-Looking Statements

     This  report  contains  certain   forward-looking   statements   reflecting
management's   current  views  with  respect  to  future  events  and  financial
performance.  These forward-looking  statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those in
the forward-looking statements, including, but not limited to, the risk that the
Company will run out of cash and the uncertainty of obtaining additional funding
for the  Company,  all of which are  difficult  to predict and many of which are
beyond the control of the Company.


<PAGE>


                    INTERFERON SCIENCES, INC. AND SUBSIDIARY

                           PART II. OTHER INFORMATION



Item 6.    Exhibits and Reports on Form 8-K

          (b)  Reports on Form 8-K

               Therewere no  reports of Form 8-K filed  during the three  months
                    ended March 31, 2005.




                            INTERFERON SCIENCES, INC.

                                 March 31, 2005




                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.



                                               INTERFERON SCIENCES, INC.




DATE:  May 20, 2005                          By:  /s/ Lawrence M. Gordon
                                                      Lawrence M. Gordon
                                                      Chief Executive Officer




DATE:  May 20, 2005                          By:  /s/ Donald W. Anderson
                                                      Donald W. Anderson
                                                      Controller


<PAGE>


CERTIFICATIONS

I, Lawrence M. Gordon, certify that:

1.   I have  reviewed  this  quarterly  report  on Form  10-Q/SB  of  Interferon
     Sciences, Inc.;

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

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

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: May 20, 2005

/s/ Lawrence M. Gordon
----------------------
    Lawrence M. Gordon
    Chief Executive Officer


<PAGE>


CERTIFICATIONS

I, Donald W. Anderson, certify that:

1.   I have  reviewed  this  quarterly  report  on Form  10-Q/SB  of  Interferon
     Sciences, Inc.;

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

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

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: May 20, 2005

/s/ Donald W. Anderson
----------------------
    Donald W. Anderson
    Controller