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UNITED STATES

SECURITIES AND EXCHANGE
		COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION
		13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF
		1934

For the quarterly period ended June 30,
		2007

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 0-19635

GENTA INCORPORATED

(Exact name of Registrant as specified in
		its charter)

| | Delaware(State or other jurisdiction ofincorporation or organization) |  | 33-0326866(I.R.S. EmployerIdentification Number) | 
| | --------------------------------------------------------------------- |  | ------------------------------------------------ | 

| |                                                                                   |  |                     | 
| | --------------------------------------------------------------------------------- |  | ------------------- | 
| | 200 Connell DriveBerkeley Heights, NJ(Address of principal executive
			 offices) |  | 07922(Zip
			 Code) | 

(908) 286-9800

(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

Indicate by check mark whether the
		registrant is a large accelerated filer, an accelerated filer, or a
		non-accelerated filer. See definition of accelerated filer and large
		accelerated filer in Rule 12b-2 of the Exchange Act. (Check
		one):

Large accelerated
				  filero
			 Accelerated filerx
			 Non-accelerated
				  filero


Indicate by check mark whether the
		registrant is a shell company (as defined in Rule 12b-2 of the Securities
		Exchange Act of 1934).



Yes            No  X

As of August 2, 2007, the registrant had
		30,620,558 shares of common stock outstanding.




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Genta Incorporated

INDEX TO FORM 10-Q



PagePART I.
			 
			 FINANCIAL INFORMATIONItem 1.
			 
			 Consolidated Financial Statements
				  (unaudited):Consolidated Balance Sheets at June
				  30, 2007 and December 31, 2006
			 
			 3Consolidated Statements of
				  Operations for the Three and Six Months Ended June 30, 2007 and 2006
			 
			 4Consolidated Statements of Cash
				  Flows for the Six Months Ended June 30, 2007 and 2006
			 
			 5Notes to Consolidated Financial
				  Statements
			 
			 6Item 2.
			 
			 Managements Discussion and
				  Analysis of Financial Condition and Results of Operations
			 
			 17Item 3.
			 
			 Quantitative and Qualitative
				  Disclosures about Market Risk
			 
			 25Item 4.
			 
			 Controls and Procedures
			 
			 26PART II.
			 
			 OTHER INFORMATIONItem 1.
			 
			 Legal Proceedings
			 
			 27Item 1A.
			 
			 Risk Factors
			 
			 28Item 2.
			 
			 Unregistered Sales of Equity
				  Securities and Use of Proceeds
			 
			 41Item 3.
			 
			 Defaults Upon Senior
				  Securities
			 
			 41Item 4.
			 
			 Submission of Matters to a Vote of
				  Security Holders
			 
			 41Item 5.
			 
			 Other Information
			 
			 42Item 6.
			 
			 Exhibits
			 
			 43SIGNATURES
			 
			 44CERTIFICATIONS






2



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GENTA INCORPORATED

CONSOLIDATED BALANCE SHEETS

(Unaudited)



(In thousands, except par value
				  data)ASSETS
			 
			 June 30,2007
			 
			 December 31,2006Current assets:Cash and cash equivalents
			 
			 $
			 4,524
			 
			 $
			 9,554Marketable securities (Note
				  4)
			 
			 
			 17,922
			 
			 
			 19,942Accounts receivable – net of
				  allowances of $40 at June 30, 2007 and $42 at December 31, 2006,
				  respectively
			 
			 
			 5
			 
			 
			 17Inventory (Note 6)
			 
			 
			 259
			 
			 
			 308Prepaid expenses and other current
				  assets (Note 7)
			 
			 
			 19,239
			 
			 
			 19,997Total current assets
			 
			 
			 41,949
			 
			 
			 49,818Property and equipment, net (Note 8)
			 
			 
			 188
			 
			 
			 271Other assets
			 
			 
			 1,710
			 
			 
			 1,689Total assets
			 
			 $
			 43,847
			 
			 $
			 51,778LIABILITIES AND STOCKHOLDERS
				  EQUITYCurrent liabilities:Accounts payable and accrued
				  expenses (Note 7)
			 
			 $
			 31,754
			 
			 $
			 36,494Notes payable (Note 9)
			 
			 
			 236
			 
			 
			 642Total current liabilities
			 
			 
			 31,990
			 
			 
			 37,136Commitments and contingencies (Note
				  14)Stockholders equity (Note
				  10):Preferred stock, 5,000 shares
				  authorized:Series A convertible preferred
				  stock, $.001 par value; 8 shares issued and outstanding, liquidation value
				  of $385 at June 30, 2007 and December 31, 2006, respectively
			 
			 
			 
			 
			 
			 Series G participating cumulative
				  preferred stock, $.001 par value; 0 shares issued and outstanding at June
				  30, 2007 and December 31, 2006, respectively
			 
			 
			 
			 
			 
			 Common stock, $.001 par value;
				  250,000 shares authorized, 30,621 and 25,621 shares issued and outstanding at
				  June 30, 2007 and December 31, 2006, respectively
			 
			 
			 31
			 
			 
			 26Additional paid-in capital
			 
			 
			 440,413
			 
			 
			 429,425Accumulated deficit
			 
			 
			 (428,654)
			 
			 
			 (414,840)Accumulated other comprehensive
				  income
			 
			 
			 67
			 
			 
			 31Total stockholders equity
			 
			 
			 11,857
			 
			 
			 14,642Total liabilities and
				  stockholders equity
			 
			 $
			 43,847
			 
			 $
			 51,778


See accompanying notes to consolidated
		financial statements.





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GENTA INCORPORATED

CONSOLIDATED STATEMENTS OF
		OPERATIONS

(Unaudited)



Three Months Ended June
				  30,
			 
			 Six Months Ended June
				  30,(In thousands, except per share
				  data)
			 
			 2007
			 
			 2006
			 
			 2007
			 
			 2006Product sales – net
			 
			 $
			 105
			 
			 $
			 379
			 
			 $
			 199
			 
			 $
			 446Cost of goods sold
			 
			 
			 26
			 
			 
			 22
			 
			 
			 48
			 
			 
			 38Gross margin
			 
			 
			 79
			 
			 
			 357
			 
			 
			 151
			 
			 
			 408Operating expenses:Research and development
			 
			 
			 4,099
			 
			 
			 8,637
			 
			 
			 7,481
			 
			 
			 13,387Selling, general and
				  administrative
			 
			 
			 4,735
			 
			 
			 6,716
			 
			 
			 8,787
			 
			 
			 12,173Reduction in liability for
				  settlement of litigation, net (Note 7)
			 
			 
			 (240)
			 
			 
			 
			 
			 
			 (1,800)
			 
			 
			 Total operating expenses
			 
			 
			 8,594
			 
			 
			 15,353
			 
			 
			 14,468
			 
			 
			 25,560Other income/(expense):Gain on maturity of marketable
				  securities
			 
			 
			 36
			 
			 
			 28
			 
			 
			 44
			 
			 
			 121Interest income and other income,
				  net
			 
			 
			 269
			 
			 
			 343
			 
			 
			 543
			 
			 
			 526Interest expense
			 
			 
			 (25)
			 
			 
			 (17)
			 
			 
			 (109)
			 
			 
			 (33)Total other income
			 
			 
			 280
			 
			 
			 354
			 
			 
			 478
			 
			 
			 614Net loss
			 
			 $
			 (8,235)
			 
			 $
			 (14,642)
			 
			 $
			 (13,839)
			 
			 $
			 (24,538)Net loss per basic and diluted share
				  (Note 10)
			 
			 $
			 (0.27)
			 
			 $
			 (0.66)
			 
			 $
			 (0.48)
			 
			 $
			 (1.17)Shares used in computing net loss
				  per basic and diluted share
			 
			 
			 30,621
			 
			 
			 22,278
			 
			 
			 28,604
			 
			 
			 20,995


See accompanying notes to consolidated
		financial statements.





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GENTA INCORPORATED

CONSOLIDATED STATEMENTS OF CASH
		FLOWS

(Unaudited)



Six Months Ended June
				  30,(In thousands)
			 
			 2007
			 
			 2006Operating activities:Net loss
			 
			 $
			 (13,839)
			 
			 $
			 (24,538)Adjustments to reconcile net loss to
				  net cash used in operating activities:Depreciation and amortization
			 
			 
			 93
			 
			 
			 694Share-based compensation (Note
				  11)
			 
			 
			 928
			 
			 
			 1,443Provision for sales returns
			 
			 
			 
			 
			 
			 (300)Gain on maturity of marketable
				  securities
			 
			 
			 (44)
			 
			 
			 (121)Reduction in liability for
				  settlement of litigation, net (Note 7)
			 
			 
			 (1,800)
			 
			 
			 Changes in operating assets and
				  liabilities:Accounts receivable
			 
			 
			 12
			 
			 
			 (6)Inventory
			 
			 
			 49
			 
			 
			 38Prepaid expenses and other current
				  assets
			 
			 
			 558
			 
			 
			 380Accounts payable and accrued
				  expenses
			 
			 
			 (2,740)
			 
			 
			 (548)Other assets
			 
			 
			 (21)
			 
			 
			 (13)Net cash used in operating
				  activities
			 
			 
			 (16,804)
			 
			 
			 (22,971)Investing activities:Purchase of marketable
				  securities
			 
			 
			 (13,900)
			 
			 
			 (34,880)Maturities of marketable securities
			 
			 
			 16,000
			 
			 
			 20,401Purchase of property and
				  equipment
			 
			 
			 (10)
			 
			 
			 (22)Net cash provided by (used in)
				  investing activities
			 
			 
			 2,090
			 
			 
			 (14,501)Financing activities:Repayments of note payable
			 
			 
			 (642)
			 
			 
			 (454)Issuance of note payable
			 
			 
			 236
			 
			 
			 Issuance of common stock, net (Note
				  10)
			 
			 
			 10,090
			 
			 
			 37,725Issuance of common stock upon
				  exercise of warrants and options
			 
			 
			 
			 
			 
			 98Net cash provided by financing
				  activities
			 
			 
			 9,684
			 
			 
			 37,369Decrease in cash and cash
				  equivalents
			 
			 
			 (5,030)
			 
			 
			 (103)Cash and cash equivalents at
				  beginning of period
			 
			 
			 9,554
			 
			 
			 9,314Cash and cash equivalents at end of
				  period
			 
			 $
			 4,524
			 
			 $
			 9,211


See accompanying notes to consolidated
		financial statements.





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GENTA INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL
		STATEMENTS

June 30, 2007

(Unaudited)

1.
			 Reverse Stock Split


At the Annual Meeting of Genta Incorporated
		(Genta or the Company) on July 11, 2007, the
		Companys shareholders authorized its Board of Directors to effect a
		reverse stock split of all outstanding shares of common stock, and the Board of
		Directors subsequently approved the implementation of a reverse stock split at
		a ratio of one for six shares. On July 12, 2007, the Company filed a
		Certificate of Amendment to the Companys Restated Certificate of
		Incorporation, as amended, with the Delaware Secretary of State to effect the
		reverse stock split. As of July 12, 2007, the effective date of the reverse
		stock split; every six shares of old common stock were converted
		into one new share of common stock. Upon the open of trading on
		July 13, 2007, the new shares of common stock began trading on the
		NASDAQ Global Market on a split-adjusted basis. All share and per share data in
		these consolidated financial statements and related notes hereto have been
		retroactively adjusted to account for the effect of the reverse stock split for
		all periods presented.

2.
			 Organization and Business


Genta Incorporated (Genta or the
		Company) is a biopharmaceutical company engaged in pharmaceutical
		(drug) research and development, its sole reportable segment. The Company is
		dedicated to the identification, development and commercialization of novel
		drugs for the treatment of cancer and related diseases.

The Company has had recurring annual
		operating losses since its inception. Management expects that such losses will
		continue at least until its lead product, Genasense® (oblimersen
		sodium) Injection, receives approval for commercial sale in one or more
		indications. Achievement of profitability for the Company is currently
		dependent on the timing of Genasense® regulatory approval. Any
		adverse events with respect to approvalsby the
		U.S. Food and Drug Administration (FDA) and/or European
		Medicines Agency (EMEA) could negatively impact the
		Companys ability to obtain additional funding or identify potential
		partners.

The Company had $22.4 million of cash, cash
		equivalents and marketable securities on hand at June 30, 2007. On March 14,
		2007, the Company sold 5.0 million shares of its common stock at a price of
		$2.16 per share, raising net proceeds of $10.1 million. Net cash used in
		operating activities during the six months ended June 30, 2007 was $16.8
		million.

On December 15, 2006, the Company received a
		non-approvable notice from the FDA for its New Drug Application
		(NDA) for the use of Genasense® plus chemotherapy in
		patients with chronic lymphocytic leukemia (CLL). The Company
		believes that its application met the regulatory requirements for approval and
		on April 4, 2007, announced that it had filed a formal appeal of this
		non-approvable notice. The appeal was filed pursuant to the FDAs Formal
		Dispute Resolution process that exists within FDAs Center for Drug
		Evaluation and Research (CDER). On June 18, 2007, the Company
		announced that the initial appeal was denied and that it would further appeal
		the decision to the next level within CDER. The Company expects to file this
		appeal in the third quarter of 2007. Responses for CDER appeals are typically
		made within 30 to 60 days.

The Company also submitted a Marketing
		Authorization Application (MAA) to the European
		Medicines Agency (EMEA) for the use of
		Genasense® plus chemotherapy for treatment of patients with
		advanced melanoma. On April 27, 2007, the Company announced that it had been
		informed that the Committee for Medicinal Products for Human Use
		(CHMP) of the EMEA had issued a negative opinion on the MAA and the
		Company indicated that it would seek re-examination of the MAA. On July 19,
		2007 the Company announced that it had received notice from the EMEA that the
		requested re-examination reaffirmed the negative opinion for approval of the
		Companys MAA for Genasense®. No further action on the MAA
		is contemplated by the Company. The Company has announced that it plans to
		conduct at least one additional clinical trial with Genasense®
		in melanoma, and if positive, the Company intends to submit a new MAA in this
		indication.





6



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On April 27, 2007, the Company announced
		that it would file a formal complaint and request for correction of information
		with the FDA under the Federal Data Quality Act. As submitted, the complaint
		challenges as erroneous a key statistical analysis of the Companys data
		on Genasense® for melanoma used by FDA at the Oncology Drug
		Advisory Committee (ODAC) meeting on May 3, 2004. That analysis
		sought to discredit the finding that Genasense® yielded a
		statistically significant increase in progression-free survival
		(PFS). At that meeting, ODAC voted unanimously that PFS was an
		endpoint that would support full approval in the absence of a survival
		improvement in patients with advanced melanoma. The Company seeks a formal
		public acknowledgement of the error, removal of the analysis from the FDA
		website (with a note that the previous analysis was in error), and revision of
		the transcript.

Irrespective of whether the pending NDA for
		Genasense®is approved, the Company will require additional cash
		in order to maximize this commercial opportunity and to continue its clinical
		development opportunities. The Company has had discussions with other companies
		regarding partnerships for the further development and global commercialization
		of Genasense®. Additional alternatives available to the Company
		to subsequently sustain its operations include financing arrangements with
		potential corporate partners, debt financing, asset-based loans, royalty-based
		financings, equity financing, profits from named-patient sales, asset sales and
		other potential sources of financing. However, there can be no assurance that
		any such collaborative agreements or other sources of funding will be available
		to us on favorable terms, if at all. The Company will need substantial
		additional funds before it can expect to realize significant product
		revenue.

If the Company is unable to raise additional
		funds, it will need to do one or more of the following:


			 delay, scale back or eliminate some
				  or all of the Companys research and product development programs and
				  sales and marketing activity;



			 license third parties to develop and
				  commercialize products or technologies that the Company would otherwise seek to
				  develop and commercialize themselves;



			 attempt to sell the Company;



			 cease operations; or



			 declare bankruptcy.


The Company will maintain an appropriate
		level of spending over the upcoming fiscal year, given the uncertainties
		inherent in its business and its current liquidity position. Earlier in the
		year, Management projected that a smaller workforce and concentrated effort on
		the development of Genasense® would result in the Company having
		sufficient funds to maintain its operations into the second quarter of 2008.
		Presently, without taking into account any further financings, Management
		projects that the Company should have sufficient cash funds to maintain its
		present operations into the first quarter of 2008. The current projection is
		primarily based on additional months of actual expenditures and no reduction to
		its workforce.

In March 2007, the Company announced that it
		had entered into a Supply and Distribution Agreement with IDIS Limited (a
		privately owned company based in the United Kingdom), (the
		Agreement), whereby IDIS will distribute Ganite® and
		Genasense® on a named patient basis. The
		global agreement covers territories outside the United States.
		Named patient distribution refers to the distribution
		or sale of a product to a specific healthcare professional for the treatment of
		an individual patient. IDIS will manage the named patient programs for the
		Company. No sales under the Agreement have been recognized in the three and
		six-month periods ended June 30, 2007.







7



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The Agreement provides that the Company will
		supply the two products to IDIS on a consignment basis. The Company will be
		paid after sales are made by IDIS, which payment shall be based off of a
		monthly sales report received from IDIS. The Company will invoice IDIS based
		upon this monthly report, which invoice shall be calculated based upon a price
		minus a fee credited to IDIS. The agreement also provides for distribution by
		IDIS of a limited amount of drug product free of charge to indigent patients.
		The Company intends that a percentage of proceeds from the named patient
		program will be used to support the compassionate use program. The Company will
		pay IDIS a termination fee in the event it terminates either or both products
		within the first three years of the Agreement.

3.
			 Summary of Significant Accounting
				  Policies


Basis of Presentation

The consolidated financial statements are
		presented on the basis of accounting principles generally accepted in the
		United States of America. All professional accounting standards that are
		effective as of June 30, 2007 have been considered in preparing the
		consolidated financial statements. Such financial statements include the
		accounts of the Company and all majority-owned subsidiaries. The accompanying
		consolidated financial statements included herein have been prepared pursuant
		to the rules and regulations of the Securities and Exchange Commission
		(SEC). Certain information and footnote disclosures normally
		included in financial statements have been condensed or omitted from this
		report, as is permitted by such rules and regulations; however, the Company
		believes that the disclosures are adequate to make the information presented
		not misleading. The preparation of financial statements in conformity with
		generally accepted accounting principles requires management to make certain
		estimates and assumptions that affect reported earnings, financial position and
		various disclosures. Actual results could differ from those estimates. The
		unaudited consolidated financial statements and related disclosures have been
		prepared with the presumption that users of the interim financial information
		have read or have access to the audited financial statements for the preceding
		fiscal year. Accordingly, these financial statements should be read in
		conjunction with the audited consolidated financial statements and the related
		notes thereto included in the Companys Annual Report on Form 10-K for the
		fiscal year ended December 31, 2006. Results for interim periods are not
		necessarily indicative of results for the full year. The Company has
		experienced significant quarterly fluctuations in operating results and it
		expects those fluctuations will continue.

Revenue Recognition

Genta recognizes revenue from product sales
		when title to product and associated risk of loss has passed to the customer
		and the Company is reasonably assured of collecting payment for the sale. All
		revenue from product sales are recorded net of applicable allowances for
		returns, rebates and other applicable discounts and allowances. The Company
		allows return of its product for up to twelve months after product expiration.

Under the Companys Supply and
		Distribution Agreement with IDIS Limited, the Company will supply
		Ganite® and Genasense® to IDIS on a consignment
		basis. The Company will recognize revenue when IDIS reports that it has
		delivered product to customers, which is the point in time that title to the
		product and risk of loss has passed. No sales under this agreement have been
		recognized in the three and six-month periods ended June 30, 2007.

Research and Development

Research and development costs are expensed
		as incurred, including raw material costs required to manufacture products for
		clinical trials.

On March 23, 2006, the Company entered into
		an exclusive, worldwide licensing agreement with Emisphere Technologies, Inc.,
		(Emisphere) to develop an oral formulation of a gallium-containing
		compound. Under the terms of the agreement, Genta will pay Emisphere a monthly
		fee for continuing research, and potentially up to $24.0 million, but only upon
		the achievement of certain milestones during the course of product development
		plus royalties based upon sales. To date, no milestone or royalty payments have
		been made.







8



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Cash, Cash Equivalents and Marketable
		Securities

The carrying amounts of cash, cash
		equivalents and marketable securities approximate fair value due to the
		short-term nature of these instruments. Marketable securities primarily consist
		of government securities, all of which are classified as available-for-sale.
		Management determines the appropriate classification of securities at the time
		of purchase and reassesses the classification at each reporting date.

Property and Equipment

Property and equipment is stated at cost and
		depreciated using the straight-line method over the estimated useful lives of
		the assets, ranging from three to five years. Leasehold improvements incurred
		in the renovation of the Companys corporate offices are being amortized
		over the shorter of the remaining life of the leases or the life of the assets.
		The Companys policy is to evaluate the appropriateness of the carrying
		value of the undepreciated value of long-lived assets. If such evaluation were
		to indicate an impairment of assets, such impairment would be recognized by a
		write-down of the applicable assets.

Inventories

Inventories are stated at the lower of cost
		or market with cost being determined using the first-in, first-out (FIFO)
		method.

Income Taxes

The Company uses the liability method of
		accounting for income taxes. Deferred income taxes are determined based on the
		estimated future tax effects of differences between the financial statement and
		tax bases of assets and liabilities given the provisions of the enacted tax
		laws. Management records valuation allowances against net deferred tax assets,
		if based upon the available evidence, it is more likely than not that some or
		all of the deferred tax assets will not be realized. The Company generated
		additional net operating losses during the six months ended June 30, 2007 and
		continues to maintain a full valuation allowance against its net deferred tax
		assets.

In July 2006, the Financial Accounting
		Standards Board (FASB) issued FASB Interpretation No. 48,
		Accounting for Uncertainty in Income Taxes-an interpretation of FASB
		Statement No. 109 (FIN 48), which clarifies the accounting
		and disclosure for uncertainty in tax positions, as defined. FIN 48 seeks to
		reduce the diversity in practice associated with certain aspects of the
		recognition and measurement related to accounting for income taxes. The Company
		is subject to the provisions of FIN 48 as of January 1, 2007 and has analyzed
		filing positions in all of the federal and state jurisdictions where it is
		required to file income tax returns, as well as all open tax years in these
		jurisdictions. The Companys federal tax returns have never been audited.
		In January 2006, the State of New Jersey concluded its fieldwork with respect
		to a tax audit for the years 2000 through 2004. The State of New Jersey took
		the position that amounts reimbursed to Genta by Aventis Pharmaceutical Inc.
		for co-development expenditures during the audit period were subject to
		Alternative Minimum Tax (AMA), resulting in a liability at that time of
		approximately $533 thousand. Although the Company and its outside tax advisors
		believe the State of New Jerseys position on the AMA liability is
		unjustified, there is little, if any, case law on the matter and it is probable
		that the Company will be required to pay the liability. In March 2007, the
		Company received a formal assessment from the State of New Jersey for $712
		thousand.As of June
		30, 2007, the Company had accrued a tax liability of $533 thousand, penalties
		of $27 thousand and interest of $176 thousand related to this assessment. The
		Company is in the process of appealing this assessment.

The Company believes that its other income
		tax filing positions and deductions will be sustained on audit and does not
		anticipate any adjustments that will result in a material change to its
		financial position. Therefore, no reserves for uncertain income tax positions
		have been recorded pursuant to FIN 48. In addition, the Company did not record
		a cumulative effect adjustment related to the adoption of FIN 48. If such
		adjustment were recorded, it would have been fully offset by a change in a
		valuation allowance.

The Companys policy for recording
		interest and penalties associated with audits is that penalties and interest
		expense are recorded in Interest expense in the Consolidated statements of
		operations. The Company recorded $108 thousand and $32 thousand in interest
		expense related to the State of New Jersey assessment during the six months
		ended June 30, 2007 and 2006, respectively.







9



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Stock Options

Effective January 1, 2006, Genta
		adopted the fair value recognition provisions of Statement of Financial
		Accounting Standards No. 123 (revised 2004),Share-Based Payment, (SFAS 123R), using the
		modified prospective transition method and therefore did not restate results
		for prior periods. Under SFAS 123R, all share-based payments including grants
		of employee stock options are recognized in the Consolidated Statement of
		Operations based on their fair values, as pro-forma disclosure is no longer an
		alternative. The amount of compensation cost is measured based on the
		grant-date fair value of the equity instrument issued. The Company utilizes a
		Black-Scholes option-pricing model to measure the fair value of stock options
		granted to employees. See Note 11 and Note 12 to our Consolidated Financial
		Statements for a further discussion on share-based compensation.

Net Loss Per Common Share

Net loss per common share for the three and
		six months ended June 30, 2007 and 2006, respectively, are based on the
		weighted average number of shares of common stock outstanding during the
		periods. Basic and diluted loss per share are identical for all periods
		presented as potentially dilutive securities have been excluded from the
		calculation of the diluted net loss per common share because the inclusion of
		such securities would be antidilutive. The potentially dilutive securities
		include 2.1 million shares on June 30, 2007 and 2006, respectively, reserved
		for the conversion of convertible preferred stock and the exercise of
		outstanding options and warrants.

Recent Accounting
		Pronouncements

In June 2007, the FASB issued EITF Issue No.
		07-3, Accounting for Nonrefundable Advance Payments for Goods or Services
		Received for Use in Future Research and Development Activities, which is
		effective for calendar year companies on January 1, 2008. The Task Force
		concluded that nonrefundable advance payments for goods or services that will
		be used or rendered for future research and development activities should be
		deferred and capitalized. Such amounts should be recognized as an expense as
		the related goods are delivered or the services are performed, or when the
		goods or services are no longer expected to be provided. The Company is
		currently assessing the potential impacts of implementing this standard.

In February 2007, the FASB issued SFAS No.
		159,The Fair Value Option for Financial
		Assets and Financial Liabilities.SFAS
		No. 159 permits all entities to choose to elect, at specified election dates,
		to measure eligible financial instruments at fair value. An entity shall report
		unrealized gains and losses on items for which the fair value option has been
		elected in earnings at each subsequent reporting date and recognize upfront
		costs and fees related to those items in earnings as incurred and not deferred.
		SFAS No. 159 applies to fiscal years beginning after November 15, 2007, with
		early adoption permitted for an entity that has also elected to apply the
		provisions of SFAS No. 157,Fair Value
		Measurements. The Company is currently
		evaluating the impact, if any, the adoption of SFAS No. 159 may have on its
		financial statements.

In September 2006, the FASB issued
		SFAS No. 157,Fair Value
		Measurements. SFAS No. 157
		defines fair value, establishes a framework for measuring fair value in
		accordance with accounting principles generally accepted in the United States
		of America and expands disclosures about fair value measurements. SFAS No. 157
		applies under other accounting pronouncements that require or permit fair value
		measurements. Accordingly, this pronouncement does not require any new fair
		value measurements. The Company is required to adopt SFAS No. 157
		beginning January 1, 2008. The Company is currently evaluating the impact, if
		any, the adoption of SFAS No. 157 may have on its financial
		statements.







10



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4.
			 Marketable Securities


The carrying amounts of the Companys
		marketable securities, which are primarily securities of government-backed
		agencies, approximate fair value due to the short-term nature of these
		instruments. The fair value of available-for-sale marketable securities is as
		follows ($ thousands):



June 30,2007
			 
			 December 31,2006Cost
			 
			 $
			 17,855
			 
			 
			 
			 $
			 19,911Gross unrealized gains
			 
			 
			 67
			 
			 
			 
			 
			 31Gross unrealized losses
			 
			 
			 
			 
			 
			 
			 
			 Fair value
			 
			 $
			 17,922
			 
			 
			 
			 $
			 19,942




The fair value of each marketable security
		has been compared to its cost and therefore, an unrealized gain of $67 thousand
		and $31 thousand has been recognized in Accumulated other comprehensive income
		at June 30, 2007 and December 31, 2006, respectively.

5.
			 Workforce reduction


In December 2006, due to the FDAs
		non-approval of the Companys NDA for CLL, the Company initiated a series
		of steps that were designed to conserve cash. At that time, the Company reduced
		its workforce by 34 positions, or approximately 35%, including the elimination
		of 18 positions classified as research and development, 9 in sales and
		marketing and 7 in administration. Severance costs of $0.7 million were
		recognized in operating expenses for the year ended December 31, 2006,
		including $0.3 million in research and development expenses and $0.4 million in
		selling, general and administrative expenses in the Companys Consolidated
		Statements of Operations. Payment of the severance began in January 2007 and
		was completed by June 30, 2007.

6.
			 Inventory


Inventories are stated at the lower of cost
		or market with cost being determined using the first-in, first-out (FIFO)
		method. Inventories consisted of the following ($ thousands):



June 30,2007
			 
			 December 31,2006Raw materials
			 
			 
			 $
			 24
			 
			 
			 
			 $
			 24Work in process
			 
			 
			 
			 93
			 
			 
			 
			 
			 94Finished goods
			 
			 
			 
			 142
			 
			 
			 
			 
			 190$
			 259
			 
			 
			 
			 $
			 308




The Company has substantial quantities of
		Genasense®drug supply which are recorded at zero cost. Such
		inventory would be available for the commercial launch of this product, should
		Genasense® be approved.







11



---



7.
			 Reduction in Liability for Legal
				  Settlement


The Company has reached an agreement to
		settle a class action litigation in consideration for issuance of 2.0 million
		shares of common stock of the Company, (adjusted for any subsequent event that
		results in a change in the number of shares outstanding as of January 31, 2007)
		and $18.0 million in cash for the benefit of plaintiffs and the shareholder
		class, (see Note 14 to our consolidated financial statements). The cash portion
		of the proposed settlement will be covered by the Companys insurance
		carriers. Effective June 25, 2007, the Company and plaintiffs executed a
		written Stipulation and Agreement of Settlement, which will be filed with the
		United States District Court for the District of New Jersey, or the Court,
		seeking preliminary approval. The Company has also entered into release and
		settlement agreements with its insurance carriers, pursuant to which insurance
		will cover the settlement fee and various costs incurred in connection with the
		action. Under FASB Statement No. 5, Accounting for Contingencies and FASB Interpretation No. 14,
		Reasonable Estimation of the
		Amount of a Loss, an interpretation of FASB Statement No. 5, the Company recorded an expense of $5.3 million,
		comprised of 2.0 million shares of the Companys common stock valued at a
		market price of $2.64 on December 31, 2006. At June 30, 2007, the revised
		estimated value of the common shares portion of the litigation settlement is
		$3.5 million, based on a closing price of Gentas common stock of $1.74
		per share as of June 30, 2007, resulting in a reduction in the provision of
		$1.8 million recognized in the six months ended June 30, 2007. The amount of
		the liability will continue to be adjusted based on the market price of the
		Companys stock until final approval by the Court of the settlement, at
		which time the value of the shares to be issued will be fixed. The liability
		for the settlement of litigation, originally recorded at $23.2 million at
		December 31, 2006, is measured at $21.5 million at June 30, 2007 and is
		included in Accounts payable and accrued expenses. An insurance receivable of
		$18.0 million is included in Prepaid expenses and other current assets.

8.
			 Property and Equipment,
				  Net


Property and equipment is comprised of the
		following ($ thousands):



EstimatedUseful Lives
			 
			 June 30,2007
			 
			 December 31,2006Computer equipment
			 
			 
			 3
			 
			 
			 
			 $
			 2,763
			 
			 
			 
			 $
			 2,950Software
			 
			 
			 3
			 
			 
			 
			 
			 3,090
			 
			 
			 
			 
			 3,406Furniture and fixtures
			 
			 
			 5
			 
			 
			 
			 
			 936
			 
			 
			 
			 
			 936Leasehold improvements
			 
			 
			 3-7
			 
			 
			 
			 
			 420
			 
			 
			 
			 
			 410Equipment
			 
			 
			 5
			 
			 
			 
			 
			 182
			 
			 
			 
			 
			 1827,391
			 
			 
			 
			 
			 7,884Less accumulated depreciation and
				  amortization
			 
			 
			 
			 
			 
			 
			 
			 (7,203
			 )
			 
			 
			 
			 (7,613
			 )Property and equipment, net
			 
			 
			 
			 
			 
			 
			 $
			 188
			 
			 
			 
			 $
			 271




9.
			 Notes Payable


The Company issued notes payable to finance
		premiums for its corporate insurance policies during the six months ended June
		30, 2007 of $0.2 million at an interest rate of 5.9%, during fiscal 2006 of
		$1.2 million at interest rates running from 5.4% to 5.6% and during fiscal 2005
		of $1.3 million at interest rates running from 4.6% to 5.7%. Payments were
		scheduled over ten monthly installments for the notes initiated in 2007, seven
		equal monthly installments for the notes initiated in 2006 and for seven or
		eight equal monthly installments for the notes initiated in 2005.

10.
			 Stockholders
				  Equity


Common Stock

In March 2007, the Company sold 5.0 million
		shares of the Companys common stock at a price of $2.16 per share,
		raising $10.1 million, net of fees and expenses.







12



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Series A Preferred Stock

Each share of Series A Preferred Stock is
		immediately convertible into shares of the Companys common stock, at a
		rate determined by dividing the aggregate liquidation preference of the Series
		A Preferred Stock by the conversion price. The conversion price is subject to
		adjustment for antidilution. As of June 30, 2007 and December 31, 2006, each
		share of Series A Preferred Stock was convertible into 2.3469 and 1.9969 shares
		of common stock, respectively. At June 30, 2007 and December 31, 2006, the
		Company had 7,700 shares of Series A Convertible Preferred Stock issued and
		outstanding.

Common Stock Reserved

At June 30, 2007, the Company had 30.6
		million shares of common stock outstanding, 2.1 million additional shares
		reserved for the conversion of convertible preferred stock and the exercise of
		outstanding options and warrants and 0.9 million additional shares of common
		stock authorized for issuance and remaining to be granted under the
		Companys stock option plans.

11.
			 Share-Based
				  Compensation


Effective January 1, 2006, the Company
		adopted SFAS 123R, which requires the Company to measure the cost of employee
		services received in exchange for all equity awards granted based on the fair
		value of the award as of the grant date. The Company adopted SFAS 123R using
		the modified prospective transition method, which required the Company to
		record compensation cost related to unvested stock awards as of
		December 31, 2005 by recognizing the unamortized grant date fair value of
		these awards over the remaining requisite service periods of those awards, with
		no change in historical reported earnings. Awards granted after
		December 31, 2005 are valued at fair value in accordance with the
		provisions of SFAS 123R and are recognized on a straight-line basis over the
		requisite service periods of each award. The standard also requires the Company
		to estimate forfeiture rates for all unvested awards, which it does based on
		its historical experience.

The Company estimates the fair value of each
		option award on the date of the grant using the Black-Scholes option valuation
		model. Expected volatilities are based on the historical volatility of the
		Companys common stock over a period commensurate with the options
		expected term. The expected term represents the period of time that options
		granted are expected to be outstanding and is calculated in accordance with the
		SEC guidance provided in the SECs Staff Accounting Bulletin 107,
		(SAB 107), using a simplified method. The risk-free
		interest rate assumption is based upon observed interest rates appropriate for
		the expected term of the Companys stock options. The following table
		summarizes the weighted-average assumptions used in the Black-Scholes model for
		options granted during the six months ended June 30, 2007 and 2006,
		respectively:



Six Months Ended June 30,2007
			 
			 2006Expected volatility
			 
			 102
			 %
			 
			 97
			 %Expected dividends
			 
			 
			 
			 
			 Expected term (in years)
			 
			 6.25
			 
			 
			 6.25Risk-free rate
			 
			 4.6
			 %
			 
			 4.6
			 %


The share-based compensation expense
		recognized for the three and six months ended June 30, 2007 and 2006,
		respectively, was comprised as follows:



Three months endedJune 30
			 
			 Six months endedJune 30($ thousands, except per share
				  data)
			 
			 2007
			 
			 2006
			 
			 2007
			 
			 2006Research and development expenses
			 
			 
			 $
			 144
			 
			 
			 
			 $
			 191
			 
			 
			 
			 $
			 351
			 
			 
			 
			 $
			 398Selling, general and administrative
			 
			 
			 
			 214
			 
			 
			 
			 
			 655
			 
			 
			 
			 
			 577
			 
			 
			 
			 
			 1,045Total share-based compensation
				  expense
			 
			 
			 $
			 358
			 
			 
			 
			 $
			 846
			 
			 
			 
			 $
			 928
			 
			 
			 
			 $
			 1,443Share-based compensation expense,
				  per basic and diluted common share
			 
			 
			 $
			 0.01
			 
			 
			 
			 $
			 0.04
			 
			 
			 
			 $
			 0.03
			 
			 
			 
			 $
			 0.07








13



---



12.
			 Stock Option Plans


As of June 30, 2007, the Company has two
		share-based compensation plans, which are described below:

1998 Stock Incentive Plan

Pursuant to the Companys 1998 Stock
		Incentive Plan, as amended, (the 1998 Plan), 3.4 million shares
		have been provided for the grant of stock options to employees, directors,
		consultants and advisors of the Company. Option awards must be granted with an
		exercise price at not less than the fair market price of the Companys
		common stock on the date of the grant; those option awards generally vest over
		a four-year period in equal increments of 25%, beginning on the first
		anniversary of the date of the grant. All options granted have contractual
		terms of ten years from the date of the grant.

The following table summarizes the stock
		option activity under the 1998 Plan as of June 30, 2007 and changes during the
		six months then ended:



Stock Options
			 
			 Number ofShares(in
				  thousands)
			 
			 WeightedAverageExercisePrice
			 
			 WeightedAverageRemainingContractualTerm(in
				  years)
			 
			 AggregateIntrinsicValue(in
				  thousands)Outstanding at January 1, 2007
			 
			 
			 
			 1,936
			 
			 
			 
			 $
			 26.22Granted
			 
			 
			 
			 101
			 
			 
			 
			 
			 2.71Exercised
			 
			 
			 
			 
			 
			 
			 
			 
			 Forfeited or expired
			 
			 
			 
			 71
			 
			 
			 
			 
			 12.35Outstanding at June 30, 2007
			 
			 
			 
			 1,966
			 
			 
			 
			 $
			 25.55
			 
			 
			 
			 5.1
			 
			 
			 
			 $
			 Vested and expected to vest at June
				  30, 2007
			 
			 
			 
			 1,180
			 
			 
			 
			 $
			 25.55
			 
			 
			 
			 5.1
			 
			 
			 
			 $
			 Exercisable at June 30, 2007
			 
			 
			 
			 1,295
			 
			 
			 
			 $
			 24.63
			 
			 
			 
			 3.7
			 
			 
			 
			 $
			 


There is no intrinsic value to outstanding
		stock options as the exercise prices of all outstanding options are above the
		market price of the Companys stock at June 30, 2007. The amount of
		aggregate intrinsic value will change based on the market value of the
		Companys stock. The weighted-average grant-date fair value of options
		granted during the six months ended June 30, 2007 was $2.27.

As of June 30, 2007, there was approximately
		$1.2 million of total unrecognized compensation cost related to non-vested
		share-based compensation granted under the 1998 Plan, which is expected to be
		recognized over a weighted-average period of 1.4 years.

1998 Non-Employee Directors
		Plan

Pursuant to the Companys 1998
		Non-Employee Directors Plan as amended (the Directors
		Plan), 0.6 million shares have been provided for the grant of
		non-qualified stock options to the Companys non-employee members of the
		Board of Directors. Option awards must be granted with an exercise price at not
		less than the fair market price of the Companys common stock on the date
		of the grant. Initial option grants vest over a three-year period in equal
		increments, beginning on the first anniversary of the date of the grant.
		Subsequent grants, generally vest on the date of the grant. All options granted
		have contractual terms of ten years from the date of the grant.

The fair value of each option award is
		estimated on the date using the same valuation model used for options granted
		under the 1998 Plan.







14



---













The following table summarizes the stock
		option activity under the Directors Plan as of June 30, 2007 and changes
		during the six months then ended:



Stock Options
			 
			 Number ofShares(in
				  thousands)
			 
			 WeightedAverageExercisePrice
			 
			 WeightedAverageRemainingContractualTerm(in
				  years)
			 
			 AggregateIntrinsicValue(in
				  thousands)Outstanding at January 1, 2007
			 
			 
			 100
			 
			 
			 
			 $
			 37.02Granted
			 
			 
			 
			 
			 
			 
			 
			 Exercised
			 
			 
			 
			 
			 
			 
			 
			 Forfeited or expired
			 
			 
			 7
			 
			 
			 
			 
			 40.08Outstanding at June 30, 2007
			 
			 
			 93
			 
			 
			 
			 $
			 36.78
			 
			 
			 
			 6.2
			 
			 
			 
			 $
			 Vested and expected to vest at June
				  30, 2007
			 
			 
			 56
			 
			 
			 
			 $
			 36.78
			 
			 
			 
			 6.2
			 
			 
			 
			 $
			 Exercisable at June 30, 2007
			 
			 
			 88
			 
			 
			 
			 $
			 38.56
			 
			 
			 
			 6.1
			 
			 
			 
			 $
			 


There is no intrinsic value to outstanding
		stock options as the exercise prices of all outstanding options are above the
		market price of the Companys stock at June 30, 2007. The amount of
		aggregate intrinsic value will change based on the market value of the
		Companys stock.

13.
			 Comprehensive Loss


An analysis of comprehensive loss is
		presented below:





($ in thousands)
			 
			 Three months endedJune 30,
			 
			 Six months endedJune 30,2007
			 
			 2006
			 
			 2007
			 
			 2006Net loss
			 
			 
			 $
			 (8,235
			 )
			 
			 
			 $
			 (14,642
			 )
			 
			 
			 $
			 (13,839
			 )
			 
			 
			 $
			 (24,538
			 )Change in market value of
				  available-for-sale marketable securities
			 
			 
			 
			 43
			 
			 
			 
			 
			 89
			 
			 
			 
			 
			 76
			 
			 
			 
			 
			 29Less: reclassification adjustment
				  for realized gains included in net loss
			 
			 
			 
			 (33
			 )
			 
			 
			 
			 
			 
			 
			 
			 
			 (40
			 )
			 
			 
			 
			 Total comprehensive loss
			 
			 
			 $
			 (8,225
			 )
			 
			 
			 $
			 (14,553
			 )
			 
			 
			 $
			 (13,803
			 )
			 
			 
			 $
			 (24,509
			 )


14.
			 Commitments and
				  Contingencies


Litigation and Potential
		Claims

In 2004, numerous complaints were filed in
		the United States District Court for the District of New Jersey, or the Court,
		against Genta and certain of its principal officers on behalf of purported
		classes of the Companys shareholders who purchased its securities during
		several class periods. The complaints were consolidated into a single action
		and alleged that the Company and certain of its principal officers violated the
		federal securities laws by issuing materially false and misleading statements
		regarding Genasense® for the treatment of malignant melanoma
		that had the effect of artificially inflating the market price of the
		Companys securities. The shareholder class action complaint sought
		monetary damages in an unspecified amount and recovery of plaintiffs
		costs and attorneys fees. The Company has reached an agreement in
		principle with plaintiffs to settle the class action litigation in
		consideration for the issuance of 2.0 million shares of common stock of the
		Company, (adjusted for any subsequent event that results in a change in the
		number of shares outstanding as of January 31, 2007) and $18.0 million in cash
		for the benefit of plaintiffs and the shareholder class. The cash portion of
		the proposed settlement will be covered by the Companys insurance
		carriers. Effective June 25, 2007, the Company and plaintiffs executed a
		written Stipulation and Agreement of Settlement, which will be filed with the
		Court seeking preliminary approval.





15



---



In addition, two separate shareholder
		derivative actions were filed against the directors and certain officers of
		Genta in New Jersey State and Federal courts. The Federal shareholder
		derivative action was consolidated with the securities action.

Genta reached a final agreement with the
		Federal shareholder derivative plaintiffs to settle the Federal shareholder
		derivative action. On October 10, 2006, the United States District Court for
		the District of New Jersey gave preliminary approval to the parties
		settlement agreement. On May 7, 2007, the proposed settlement received final
		approval from the Court. On October 31, 2006, Genta and the defendants entered
		into a Release and Settlement Agreement with the Companys insurance
		carrier, pursuant to which the Companys insurance covered the $200
		thousand payment for plaintiffs attorney fees, the costs of notice to
		shareholders required by the courts preliminary approval order and
		defense costs incurred in connection with the action and this amount was paid
		by the Companys insurance carrier during the three months ended June 30,
		2007.

The Company has continued to deny all of the
		allegations in all of these proceedings, and settlement and potential
		settlement do not constitute an admission of guilt or liability.

Based on facts substantially similar to
		those asserted in the shareholder class actions, the State derivative
		plaintiffs claimed that defendants had breached their fiduciary duties to the
		shareholders and committed other violations of New Jersey law. On February 9,
		2006, the Superior Court of New Jersey dismissed the plaintiffs
		derivative complaint in the New Jersey State case based in part
		on plaintiffs failure to make a pre-suit demand on Gentas Board of
		Directors and in part based on plaintiffs failure to state a cause of
		action. Plaintiffs motion for reconsideration was denied and they filed a
		notice of appeal. On December 11, 2006, plaintiffs filed their appellate brief
		and on January 18, 2007, the Company filed its response. In view of the
		settlement of the Federal derivative action, on June 4, 2007, the Company filed
		a motion to dismiss plaintiffs appeal. That motion was granted on June
		25, 2007.

In February 2007, a complaint against the
		Companywas filed in the Superior Court of
		New Jersey by Howard H. Fingert, M.D., a former employee of the Company. The
		complaint alleges, among other things, breach of contract as to the
		Companys stock option plan and as to a consulting agreement allegedly
		entered into by the Company and Dr. Fingert subsequent to termination of
		Dr. Fingerts employment with the Company, breach of implied covenant
		of good faith and fair dealing with respect to the Companys stock option
		plan and the alleged consulting agreement, promissory estoppel with respect to
		the exercise of stock options and provision of consulting services after
		termination of employment, and fraud and negligent misrepresentation with
		respect to exercise of stock options and provision of consulting services after
		termination of employment. The complaint seeks monetary damages, including
		punitive and consequential damages. The Company filed an answer to the
		complaint on May 29, 2007, and is proceeding with preparation and filing of a
		request for production of documents. The Companydenies the allegations in the complaint andintends to vigorously defend this lawsuit.

15.
			 Supplemental Disclosure of Cash
				  Flows Information and Non-cash Investing and Financing Activities


No interest expense or income taxes were
		paid for the six months ended June 30, 2007 and 2006, respectively.





16



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Item 2.Managements Discussion and Analysis of Financial
		Condition and Results of Operations

Certain Factors Affecting Forward-Looking
		Statements  Safe Harbor Statement

The statements contained in this Quarterly
		Report on Form 10-Q that are not historical are forward-looking statements
		within the meaning of Section 27A of the Securities Act of 1933, as amended,
		and Section 21E of the Securities Exchange Act of 1934, as amended, including
		statements regarding the expectations, beliefs, intentions or strategies
		regarding the future. We intend that all forward-looking statements be subject
		to the safe harbor provisions of the Private Securities Litigation Reform Act
		of 1995. These forward-looking statements reflect our views as of the date they
		are made with respect to future events and financial performance, but are
		subject to many risks and uncertainties, which could cause actual results to
		differ materially from any future results expressed or implied by such
		forward-looking statements. Forward-looking statements include, without
		limitation, statements about:



| |  | the Companys
			 financial projections;                                                                                                                                                               
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the Companys
			 projected cash flow requirements and estimated timing of sufficient cash
			 flow;                                                                                                   
| |  | the Companys
			 current and future license agreements, collaboration agreements, and other
			 strategic alliances;                                                                                  
| |  | the Companys
			 ability to obtain necessary regulatory approval for Genasense®(oblimersen sodium) Injection from the U.S. Food and Drug Administration
			 (FDA) or European Medicines Agency (EMEA);
| |  | the safety and efficacy
			 of the Companys products;                                                                                                                                                 
| |  | the commencement and
			 completion of clinical trials;                                                                                                                                                
| |  | the Companys
			 ability to develop, manufacture and sell its products;                                                                                                                               
| |  | the adequacy of the
			 Companys capital resources and the Companys ability to obtain
			 sufficient financing to maintain the Companys planned operations;                                         
| |  | the adequacy of the
			 Companys patents and proprietary rights;                                                                                                                                      
| |  | the impact of litigation
			 that has been brought against the Company and its officers and directors and
			 any proposed settlement of such litigation;                                              
| |  | the Companys
			 ability to meet the conditions for continued listing on the NASDAQ Global
			 Market; and                                                                                            
| |  | the other risks
			 described under Risk Factors in the Companys Annual Report on Form 10-K
			 for the fiscal year ended December 31, 2006 and in this Form 10-Q.                                    

We do not undertake to update any
		forward-looking statements.

We make available free of charge on our
		Internet website (http://www.genta.com) our Annual Report on Form 10-K, Quarterly Reports on
		Form 10-Q, current reports on Form 8-K and amendments to these reports filed or
		furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
		1934 as soon as reasonably practicable after we electronically file such
		material with, or furnish it to, the Securities and Exchange Commission. The
		content on the Companys website is available for informational purposes
		only. It should not be relied upon for investment purposes, nor is it
		incorporated by reference into this Form 10-Q.

Reverse Stock Split

At our Annual Meeting of Stockholders held
		on July 11, 2007, shareholders authorized our Board of Directors to effect a
		reverse stock split of all outstanding shares of common stock, and our Board of
		Directors subsequently approved the implementation of a reverse stock split at
		a ratio of one for six shares. On July 12, 2007, we filed a Certificate of
		Amendment to our Restated Certificate of Incorporation, as amended, with the
		Delaware Secretary of State to effect the reverse stock split. As of July 12,
		2007, the effective date of the reverse stock split; every six shares of
		old common stock were converted into one new share of
		common stock. Upon the open of trading on July 13, 2007, the new
		shares of common stock began trading on the NASDAQ Global Market on a
		split-adjusted basis. All share and per share data in this Form 10-Q have been
		retroactively adjusted to account for the effect of the reverse stock split for
		all periods presented.





17



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Overview

Genta Incorporated is a biopharmaceutical
		company engaged in pharmaceutical research and development. We are dedicated to
		the identification, development and commercialization of novel drugs for the
		treatment of cancer and related diseases. We have had recurring annual
		operating losses since inception and we expect to incur substantial operating
		losses due to continued requirements for ongoing and planned research and
		development activities, pre-clinical and clinical testing, manufacturing
		activities, regulatory activities and the eventual establishment of a sales and
		marketing organization. From our inception to June 30, 2007, we have incurred a
		cumulative net deficit of $428.7 million. We expect that such losses will
		continue at least until our lead product, Genasense®, receives
		approval from the FDA or EMEA for commercial sale in one or more indications.
		Achievement of profitability is currently dependent on the timing of
		Genasense® regulatory approvals. We have experienced significant
		quarterly fluctuations in operating results and we expect that these
		fluctuations in revenues, expenses and losses will continue.

We had $22.4 million of cash, cash
		equivalents and marketable securities on hand at June 30, 2007. In March 2007,
		we sold 5.0 million shares of our common stock at a price of $2.16 per share,
		raising net proceeds of $10.1 million. Net cash used in operating activities
		during the first six months of 2007 was $16.8 million.

Irrespective of whether a New Drug
		Application (NDA) or Marketing Authorization Application (MAA) for
		Genasense®are approved, we anticipate that we will require
		additional cash in order to maximize the commercial opportunity and continue
		its clinical development opportunities. Alternatives available to us to sustain
		our operations include collaborative agreements, equity financing and other
		financing arrangements with potential corporate partners and other sources.
		However, there can be no assurance that any such collaborative agreements or
		other sources of funding will be available on favorable terms, if at all. We
		will need substantial additional funds before we can expect to realize
		significant product revenue.

We will maintain an appropriate level of
		spending over the upcoming fiscal year, given the uncertainties inherent in our
		business and our current liquidity position. Earlier in the year, we projected
		that a smaller workforce and concentrated effort on the development of
		Genasense® would result in us having sufficient funds to
		maintain our operations into the second quarter of 2008. Presently, without
		taking into account any further financings, we project that we should have
		sufficient cash funds to maintain our present operations into the first quarter
		of 2008. The current projection is primarily based on additional months of
		actual expenditures and no reduction to our workforce.

In March 2007, we announced that we had
		entered into a Supply and Distribution Agreement with IDIS Limited (a privately
		owned company based in the United Kingdom) whereby IDIS will distribute
		Ganite® and Genasense® on a named
		patient basis. The global agreement covers territories outside the
		United States. Named patient distribution refers to the
		distribution or sale of a product to a specific healthcare professional for the
		treatment of an individual patient. IDIS will manage the named patient programs
		for us.

The IDIS agreement provides that we will
		supply the two products to IDIS on a consignment basis. We will be paid after
		sales are made by IDIS, which payment shall be based off of a monthly sales
		report received from IDIS. We will invoice IDIS based upon this monthly report,
		which invoice shall be calculated based upon a price minus a fee credited to
		IDIS. The agreement also provides for distribution by IDIS of a limited amount
		of drug product free of charge to indigent patients. We intend that a
		percentage of proceeds from the named patient program will be used to support
		the compassionate use program. We have agreed to pay IDIS a termination fee in
		the event we terminate either or both products within the first three years of
		the agreement. No sales under this agreement have been recognized in the three
		and six-month periods ended June 30, 2007.

Our financial results in 2007 have been and
		will continue to be significantly affected by FDA and EMEA actions with respect
		to Genasense®.





18



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In melanoma, we submitted a NDA to the FDA
		in 2003 for the use of Genasense® plus chemotherapy in patients
		with advanced melanoma. In May 2004, a majority of the Oncologic Drugs Advisory
		Committee (ODAC) failed to recommend approval of our NDA. As a consequence, we
		withdrew the NDA, which allows us to potentially resubmit the application. In
		2005, we presented updated data from this trial, which show statistically
		significant increases in overall response, complete response, durable response
		and progression-free survival. An independent review of the X-rays confirmed
		the previously reported major responses with high concordance. An increase in
		overall survival by intent-to-treat analysis, which was the studys
		primary endpoint, approached but did not reach statistical significance
		(P=0.077). Our analysis identified a statistically significant treatment
		interaction for blood levels of an enzyme known as LDH, which was a
		prospectively specified component of stratification. When this effect was
		analyzed by treatment arm, survival was shown to be significantly superior for
		patients with a non-elevated LDH who received Genasense®
		(P=0.018; n=508). Safety and efficacy data from this trial were published in a
		scientific journal in October 2006.

On April 27, 2007, we announced that we
		would file a formal complaint and request for correction of information with
		the FDA under the Federal Data Quality Act. As submitted, the complaint
		challenges as erroneous a key statistical analysis of our data on
		Genasense® for melanoma used by FDA at the ODAC meeting on May
		3, 2004. That analysis sought to discredit the finding that
		Genasense® yielded a statistically significant increase in
		progression-free survival (PFS). At that meeting, ODAC voted
		unanimously that PFS was an endpoint that would support full approval in the
		absence of a survival improvement in patients with advanced melanoma. We seek a
		formal public acknowledgement of the error, removal of the analysis from the
		FDA website (with a note that the previous analysis was in error), and revision
		of the transcript.

On January 3, 2006, we announced that we had
		completed a MAA to the EMEA, which seeks approval for use of
		Genasense® plus dacarbazine for the treatment of patients with
		advanced melanoma who have not previously received chemotherapy. On April 27,
		2007, we announced that we had been informed that the Committee for Medicinal
		Products for Human Use (CHMP) of the EMEA had issued a negative
		opinion on the MAA and we indicated that we would seek re-examination of the
		MAA. On July 19, 2007 we announced that we had received notice from the EMEA
		that the requested re-examination reaffirmed the negative opinion for approval
		of our MAA for Genasense®. No further action on the MAA is
		contemplated by us. We have announced that we plan to conduct at least one
		additional clinical trial with Genasense® in melanoma, and if
		positive, we intend to submit a new MAA in this indication.

On April 18, 2007, we announced that we will
		conduct a new randomized controlled Phase 3 trial of Genasense®
		in patients with advanced melanoma. We are actively recruiting experienced
		investigative sites in Europe, Australia, and North and South America and
		expect to initiate patient enrollment during the summer of 2007.

The trial is designed to expand evidence for
		the safety and efficacy of Genasense® combined with dacarbazine
		for patients who have not previously been treated with chemotherapy. The study
		will prospectively target patients using a biomarker that identified patients
		who derived maximal benefit in a preceding trial of Genasense®,
		including significant increases in overall and progression-free survival. We
		expect to enroll approximately 300 subjects in this trial.
		Genasense® in melanoma has been designated an Orphan Drug in
		Australia and the United States, and the drug has Fast Track designation in the
		United States.

In chronic lymphocytic leukemia (CLL), we
		conducted a Phase 3 trial in 241 patients with relapsed or refractory disease
		who were treated with fludarabine and cyclophosphamide (Flu/Cy) with or without
		Genasense®.The trial achieved its primary endpoint:
		a statistically significant increase in the proportion of patients who achieved
		a complete or nodular partial response (CR/nPR), (17% vs. 7%; P=0.025).
		Patients who achieved this level of response experienced disappearance of
		predefined disease symptoms, including fever, night sweats, fatigue, abdominal
		discomfort due to an enlarged spleen and impaired mobility due to swollen lymph
		nodes. A key secondary endpoint, duration of CR/nPR, was also significantly
		longer for patients treated with Genasense®, (median not reached
		but exceeding 36+ months in the Genasense® group, versus 22
		months in the chemotherapy-only group).





19



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Several secondary endpoints were not
		improved by the addition of Genasense® including overall
		response rate (i.e., the percentage of patients who achieved CR/nPR plus
		partial response), time-to-disease progression or overall survival. Adverse
		events (irrespective of relation to study drugs) during treatment or within 30
		days from last dose of treatment that resulted in death occurred in nine
		patients treated with Genasense®plus chemotherapy compared with
		five patients treated with chemotherapy alone. The percentage of patients who
		experienced serious adverse events was increased in the
		Genasense® arm; however, the percentages of patients who
		discontinued treatment due to adverse events were equal in the treatment arms.
		The incidence of certain serious adverse reactions, including but not limited
		to nausea, fever and catheter-related complications, was increased in patients
		treated with Genasense®.

On December 28, 2005, we completed
		submission of an NDA to the FDA that sought accelerated approval for the use of
		Genasense® in combination with fludarabine plus cyclophosphamide
		for the treatment of patients with relapsed or refractory CLL who had
		previously received fludarabine. Genasense® had previously
		received Fast Track designation in CLL, meaning that the indication represented
		an unmet medical need, as well as designation as an Orphan Drug, by the FDA.

On September 6, 2006, the ODAC voted seven
		to three not to recommend approval of Genasense® and on December
		15, 2006, we received a non-approvable notice from the FDA. The Company
		believes that its application met the regulatory requirements for approval and
		on April 4, 2007, announced that it had filed a formal appeal of this
		non-approvable notice. The appeal was filed pursuant to the FDAs Formal
		Dispute Resolution process that exists within FDAs Center for Drug
		Evaluation and Research (CDER). On June 18, 2007, we announced that
		the initial appeal was denied and that we would further appeal the decision to
		the next level within CDER. We expect to file this appeal in the third quarter
		of 2007. Responses for CDER appeals are typically made within 30 to 60
		days.

In November 2004, we reported that our
		randomized Phase 3 clinical trial of Genasense® in patients with
		multiple myeloma did not meet its primary endpoint. On December 8, 2006, we
		announced that preliminary results from a randomized Phase 3 trial of
		chemotherapy with or without Genasense® in patients with acute
		myeloid leukemia (AML), suggested the study was unlikely to meet its primary
		endpoint. On February 23, 2007, we announced that preliminary results from a
		randomized Phase 2 study of Genasense® plus chemotherapy in
		patients with advanced prostate cancer showed no between-group difference in
		prostate-specific antigen. While follow-up and analyses of the AML and prostate
		trials are continuing, we do not believe any of these trials will support
		regulatory approval of Genasense® in these indications.

We have completed accrual into a randomized
		Phase 2 trial of chemotherapy with or without Genasense® in
		previously treated patients with non-small cell lung cancer. We expect that the
		data from this trial will be available in 2007. We are also conducting a number
		of non-randomized clinical trials in patients with various types of cancer,
		either under our own sponsorship or in collaboration with the National Cancer
		Institute.

On October 13, 2006, we announced the
		initiation of a Phase 1 clinical trial using a new anticancer drug derived from
		our DNA/RNA Medicines program. The new compound (G4460) uses antisense
		technology to target a proto-oncogene known asc-mybthat
		regulates key functions in cancer cells. Using an accelerated dosing schedule,
		this study will evaluate dosing regimens, safety, biologic activity, and
		down-regulation ofc-mybin patients with advanced hematologic cancers. The
		clinical trial is being conducted at the University of Pennsylvania. G4460 has
		been granted Orphan Drug Designation by the FDA for treatment of patients with
		chronic myelocytic leukemia (CML).





20



---



Results of Operations for the Three
		Months Ended June 30, 2007 and June 30, 2006



Summary Operating
				  Results**($ thousands)**
			 
			 
			 
			 
			 
			 Increase (Decrease)2007
			 
			 2006
			 
			 $
			 
			 %Product sales – net
			 
			 
			 $
			 105
			 
			 
			 
			 $
			 379
			 
			 
			 
			 $
			 (274
			 )
			 
			 
			 
			 
			 (72
			 %)Cost of goods sold
			 
			 
			 
			 26
			 
			 
			 
			 
			 22
			 
			 
			 
			 
			 4
			 
			 
			 
			 
			 
			 18
			 %Gross margin
			 
			 
			 
			 79
			 
			 
			 
			 
			 357
			 
			 
			 
			 
			 (278
			 )
			 
			 
			 
			 
			 (78
			 %)Operating expenses:Research and development
			 
			 
			 
			 4,099
			 
			 
			 
			 
			 8,637
			 
			 
			 
			 
			 (4,538
			 )
			 
			 
			 
			 
			 (53
			 %)Selling, general and administrative
			 
			 
			 
			 4,735
			 
			 
			 
			 
			 6,716
			 
			 
			 
			 
			 (1,981
			 )
			 
			 
			 
			 
			 (29
			 %)Reduction in liability for
				  settlement of litigation, net
			 
			 
			 
			 (240
			 )
			 
			 
			 
			 
			 
			 
			 
			 
			 (240
			 )
			 
			 
			 
			 
			 (100
			 %)Total operating expenses
			 
			 
			 
			 8,594
			 
			 
			 
			 
			 15,353
			 
			 
			 
			 
			 (6,759
			 )
			 
			 
			 
			 
			 (44
			 %)Other income, net
			 
			 
			 
			 280
			 
			 
			 
			 
			 354
			 
			 
			 
			 
			 (74
			 )
			 
			 
			 
			 
			 (21
			 %)Net loss
			 
			 
			 $
			 (8,235
			 )
			 
			 
			 $
			 (14,642
			 )
			 
			 
			 
			 6,407
			 
			 
			 
			 
			 
			 44
			 %


Product sales -net

Product sales-net of Ganite®
		were $0.1 million for the three months ended June 30, 2007, compared to $0.4
		million for the three months ended June 30, 2006. The prior-year three-month
		period included a favorable adjustment of $0.3 million to our provision for
		returns of Ganite®. In the second quarter of 2006, we revised
		our forecast of expected Ganite® returns based on actual
		experience to date, product expiration dates and data obtained from
		wholesalers. As a result, we reduced our sales provision by $0.3 million to
		reflect this change in estimate. Excluding the adjustment, sales slightly
		increased in the 2007 quarter.

Cost of goods sold

There was a higher cost of goods sold in the
		three months ended June 30, 2007 than in the three months ended June 30, 2006
		as a result of higher product sales.

Research and development
		expenses

Research and development expenses were $4.1
		million for the three months ended June 30, 2007, compared to $8.6 million for
		the three months ended June 30, 2006. The prior-year period included higher
		manufacturing and other expenses incurred in preparation for the possible
		commercial launch of Genasense®and expenses related to
		regulatory review. The decline in expenses in 2007 reflects the comparison to
		this higher level of expenses in 2006, as well as the impact of a staff
		reduction in December 2006, which was implemented after the FDAs
		non-approval of our NDA for Genasense® in CLL.

Research and development expenses incurred
		on the Genasense® project during the three months ended June 30,
		2007 were approximately $3.7 million, representing 89% of research and
		development expenses.

Due to the significant risks and
		uncertainties inherent in the clinical development and regulatory approval
		processes, the nature, timing and costs of the efforts necessary to complete
		projects in development are subject to wide variability. Results from clinical
		trials may not be favorable. Data from clinical trials are subject to varying
		interpretation and may be deemed insufficient by the regulatory bodies that
		review applications for marketing approvals. As such, clinical development and
		regulatory programs are subject to risks and changes that may significantly
		impact cost projections and timelines.





21



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Selling, general and administrative
		expenses

Selling, general and administrative expenses
		were $4.7 million for the three months ended June 30, 2007, compared to $6.7
		million for the three months ended June 30, 2006. The prior-year period
		included a buildup of sales and marketing expenses incurred in preparation for
		a possible commercial launch of Genasense®. The decline in
		expenses in 2007 primarily reflects the comparison to this higher level of
		expenses in 2006, as well as the impact of our December 2006 staff reduction.
		In addition, share-based compensation declined by $0.4 million, (see Note 11 to
		our Consolidated Financial Statements), and depreciation expense declined by
		$0.3 million.

Reduction in liability for settlement of
		litigation, net

In the fourth quarter of 2006, we recorded
		an expense of $5.3 million that provides for the issuance of 2.0 million shares
		of Genta common stock, for a settlement in principle of class action
		litigation. The expense is net of insurance recovery of $18.0
		million.At March 31, 2007, the revised estimated value of the
		common shares portion of the litigation settlement was $3.7 million. At June
		30, 2007, the revised estimated value of the common shares portion of the
		litigation settlement is $3.5 million based on a closing price of Gentas
		common stock of $1.74 per share, resulting in a reduction in the provision of
		$0.2 million during the three months ended June 30, 2007.

Other income, net

Other income, net of $0.3 million for the
		three months ended June 30, 2007 declined from $0.4 million for the prior-year
		period, primarily due to lower interest income, resulting from lower investment
		balances during the period.

Net loss

Genta incurred a net loss of $8.2 million,
		or $0.27 per share for the three months ended June 30, 2007 and $14.6 million,
		or $0.66 per share, for the three months ended June 30, 2006.

The lower net loss in 2007 is primarily due
		to a comparison with a prior-year period that reflected a buildup of sales,
		marketing and manufacturing expenses incurred in anticipation of a possible
		commercial launch of Genasense®. In addition, the lower loss in
		2007 reflects our staff reduction in December 2006, lower share-based
		compensation expense, lower depreciation expense and includes a benefit of $0.2
		million due to a reduction in the provision for settlement of litigation.

Results of Operations for the Six Months
		Ended June 30, 2007 and June 30, 2006



Summary Operating
				  Results**($ thousands)**
			 
			 
			 
			 
			 
			 Increase (Decrease)2007
			 
			 2006
			 
			 $
			 
			 %Product sales – net
			 
			 
			 $
			 199
			 
			 
			 
			 $
			 446
			 
			 
			 
			 $
			 (247
			 )
			 
			 
			 
			 
			 (55
			 %)Cost of goods sold
			 
			 
			 
			 48
			 
			 
			 
			 
			 38
			 
			 
			 
			 
			 10
			 
			 
			 
			 
			 
			 26
			 %Gross margin
			 
			 
			 
			 151
			 
			 
			 
			 
			 408
			 
			 
			 
			 
			 (257
			 )
			 
			 
			 
			 
			 (63
			 %)Operating expenses:Research and development
			 
			 
			 
			 7,481
			 
			 
			 
			 
			 13,387
			 
			 
			 
			 
			 (5,906
			 )
			 
			 
			 
			 
			 (44
			 %)Selling, general and administrative
			 
			 
			 
			 8,787
			 
			 
			 
			 
			 12,173
			 
			 
			 
			 
			 (3,386
			 )
			 
			 
			 
			 
			 (28
			 %)Reduction in liability for
				  settlement of litigation, net
			 
			 
			 
			 (1,800
			 )
			 
			 
			 
			 
			 
			 
			 
			 
			 (1,800
			 )
			 
			 
			 
			 
			 (100
			 %)Total operating expenses
			 
			 
			 
			 14,468
			 
			 
			 
			 
			 25,560
			 
			 
			 
			 
			 (11,092
			 )
			 
			 
			 
			 
			 (43
			 %)Other income, net
			 
			 
			 
			 478
			 
			 
			 
			 
			 614
			 
			 
			 
			 
			 (136
			 )
			 
			 
			 
			 
			 (22
			 %)Net loss
			 
			 
			 $
			 (13,839
			 )
			 
			 
			 $
			 (24,538
			 )
			 
			 
			 
			 10,699
			 
			 
			 
			 
			 
			 44
			 %






22



---



Product sales – net

Product sales-net of Ganite®
		were $0.2 million for the six months ended June 30, 2007, compared to $0.5
		million for the six monthsendedJune 30, 2006.
		The prior-year six-month period included a $0.3 million favorable adjustment to
		the provision for returns of Ganite®. Excluding the adjustment,
		sales slightly increased in the 2007 period.

Cost of goods sold

There was a higher cost of goods sold in the
		six months ended June 30, 2007 than in the six months ended June 30, 2006 as a
		result of higher product sales.

Research and development
		expenses

Research and development expenses were $7.5
		million for the six months ended June 30, 2007, compared to $13.4 million for
		the six months ended June 30, 2006. The prior-year period included higher
		manufacturing and other expenses incurred in preparation for the possible
		commercial launch of Genasense®and expenses related to
		regulatory review. The decline in expenses in 2007 reflects the comparison to
		this higher level of expenses in 2006, as well as the impact of our staff
		reduction in December 2006.

Research and development expenses incurred
		on the Genasense® project during the six months ended June 30,
		2007 were approximately $6.5 million, representing 87% of research and
		development expenses.

Selling, general and administrative
		expenses

Selling, general and administrative expenses
		were $8.8 million for the six months ended June 30, 2007, compared to $12.2
		million for the six months ended June 30, 2006. The prior-year period included
		a buildup of sales and marketing expenses incurred in preparation for a
		possible commercial launch of Genasense®. The decline in
		expenses in 2007 reflects the comparison to this higher level of expenses in
		2006 as well as the impact of our December 2006 staff reduction. In addition,
		depreciation expense declined by $0.6 million and share-based compensation
		declined by $0.5 million, (see Note 11 to our Consolidated Financial
		Statements).

Reduction in liability for settlement of
		litigation, net

At June 30, 2007, the revised estimated
		value of the common shares portion of the litigation settlement is $3.5 million
		based on a closing price of Gentas common stock of $1.74 per share,
		resulting in a reduction in the provision of $1.8 million for the six months
		ended June 30, 2007.

Other income, net

Other income, net of $0.5 million for the
		six months ended June 30, 2007 declined from $0.6 million for the prior-year
		period, due to a combination of lower interest income, resulting from lower
		investment balances, as well as higher interest expense.

Net loss

Genta incurred a net loss of $13.8 million,
		or $0.48 per share for the six months ended June 30, 2007 and $24.5 million, or
		$1.17 per share, for the six months ended June 30, 2006.

The lower net loss in 2007 is primarily due
		to a comparison with a prior-year period that reflected a buildup of sales,
		marketing and manufacturing expenses incurred in anticipation of a possible
		commercial launch of Genasense®. In addition, the lower loss in
		2007 reflects our staff reduction in December 2006, lower share-based
		compensation expense, lower depreciation expense and includes a benefit of $1.8
		million due to a reduction in the provision for settlement of
		litigation.





23



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Liquidity and Capital
		Resources

At June 30, 2007, we had cash, cash
		equivalents and marketable securities totaling $22.4 million compared with
		$29.5 million at December 31, 2006. During the first six months of 2007, cash
		used in operating activities was $16.8 million compared with $23.0 million for
		the same period in 2006. The prior period reflects higher spending in
		anticipation of a potential commercial launch of Genasense®.

In March 2007, we sold 5.0 million shares of
		our common stock at a price of $2.16 per share, raising net proceeds of $10.1
		million.

We issued notes payable to finance premiums
		for our corporate insurance policies during the six months ended June 30, 2007
		of $0.2 million at an interest rate of 5.9%, during fiscal 2006 of $1.2 million
		at interest rates running from 5.4% to 5.6% and during fiscal 2005 of $1.3
		million at interest rates running from 4.6% to 5.7%. Payments were scheduled
		over ten monthly installments for the notes initiated in 2007, seven equal
		monthly installments for the notes initiated in 2006 and for seven or eight
		equal monthly installments for the notes initiated in 2005. We will attempt to
		finance our remaining insurance premiums in fiscal 2007.

Irrespective of whether an NDA or MAA for
		Genasense® are approved, we will require additional cash in
		order to maximize this commercial opportunity and to continue its clinical
		development opportunities. We have had discussions with other companies
		regarding partnerships for the further development and global commercialization
		of Genasense®. Additional alternatives available to us to
		sustain our operations include financing arrangements with potential corporate
		partners, debt financing, asset-based loans, royalty-based financing, equity
		financing, profits from named-patient sales, asset sales and other potential
		sources of financing. However, there can be no assurance that any such
		collaborative agreements or other sources of funding will be available to us on
		favorable terms, if at all.

We will maintain an appropriate level of
		spending over the upcoming fiscal year, given the uncertainties inherent in our
		business and our current liquidity position. Earlier in the year, we projected
		that a smaller workforce and concentrated effort on the development of
		Genasense® would result in us having sufficient funds to
		maintain our operations into the second quarter of 2008. Presently, without
		taking into account any further financings, we project that we should have
		sufficient cash funds to maintain our present operations into the first quarter
		of 2008. The current projection is primarily based on additional months of
		actual expenditures and no reduction to our workforce.

We anticipate seeking additional product
		development opportunities through potential acquisitions or investments. Such
		acquisitions or investments may consume cash reserves or require additional
		cash or equity. Our working capital and additional funding requirements will
		depend upon numerous factors, including: (i) the progress of our research and
		development programs; (ii) the timing and results of pre-clinical testing and
		clinical trials; (iii) the level of resources that we devote to sales and
		marketing capabilities; (iv) technological advances; (v) the activities of
		competitors; (vi) our ability to establish and maintain collaborative
		arrangements with others to fund certain research and development efforts, to
		conduct clinical trials, to obtain regulatory approvals and, if such approvals
		are obtained, to manufacture and market products and (vii) legal costs and the
		outcome of outstanding legal proceedings.

Recent Accounting
		Pronouncements

In June 2007, the Financial Accounting
		Standards Board (FASB) issued EITF Issue No. 07-3, Accounting for
		Nonrefundable Advance Payments for Goods or Services Received for Use in Future
		Research and Development Activities, which is effective for calendar year
		companies on January 1, 2008. The Task Force concluded that nonrefundable
		advance payments for goods or services that will be used or rendered for future
		research and development activities should be deferred and capitalized. Such
		amounts should be recognized as an expense as the related goods are delivered
		or the services are performed, or when the goods or services are no longer
		expected to be provided. We are currently assessing the potential impacts of
		implementing this standard.





24



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In February 2007, the FASB issued SFAS No.
		159,The Fair Value Option for Financial
		Assets and Financial Liabilities.SFAS
		No. 159 permits all entities to choose to elect, at specified election dates,
		to measure eligible financial instruments at fair value. An entity shall report
		unrealized gains and losses on items for which the fair value option has been
		elected in earnings at each subsequent reporting date and recognize upfront
		costs and fees related to those items in earnings as incurred and not deferred.
		SFAS No. 159 applies to fiscal years beginning after November 15, 2007, with
		early adoption permitted for an entity that has also elected to apply the
		provisions of SFAS No. 157,Fair Value
		Measurements. We are currently
		evaluating the impact, if any, the adoption of SFAS No. 159 may have on our
		consolidated financial statements.

In September 2006, the FASB issued
		SFAS No. 157,Fair Value
		Measurements. SFAS No. 157
		defines fair value, establishes a framework for measuring fair value in
		accordance with accounting principles generally accepted in the United States
		of America and expands disclosures about fair value measurements. SFAS No. 157
		applies under other accounting pronouncements that require or permit fair value
		measurements. Accordingly, this pronouncement does not require any new fair
		value measurements. We are required to adopt SFAS No. 157 beginning
		January 1, 2008. We are currently evaluating the impact, if any, the adoption
		of SFAS No. 157 may have on our consolidated financial
		statements.

Critical Accounting Policies

Our significant accounting policies are more
		fully described in Note 3 to our consolidated financial statements. In
		preparing our financial statements in accordance with accounting principles
		generally accepted in the United States of America, management is required to
		make estimates and assumptions that, among other things, affect the reported
		amounts of assets and liabilities and reported amounts of revenues and
		expenses. These estimates are most significant in connection with our critical
		accounting policies, namely those of our accounting policies that are most
		important to the portrayal of our financial condition and results and require
		managements most difficult, subjective or complex judgments. These
		judgments often result from the need to make estimates about the effects of
		matters that are inherently uncertain. Actual results may differ from those
		estimates under different assumptions or conditions. We believe that the
		following represents our critical accounting policies:


			 Revenue recognition.We recognize revenue from product sales
				  when title to product and associated risk of loss has passed to the customer
				  and we are reasonably assured of collecting payment for the sale. All revenue
				  from product sales are recorded net of applicable allowances for returns,
				  rebates and other applicable discounts and allowances. We allow return of our
				  product for up to twelve months after product expiration.


| |  | Under our Supply and Distribution
				Agreement with IDIS Limited, we will supply Ganite® and
				Genasense® to IDIS on a consignment basis. We will recognize
				revenue when IDIS reports that it has delivered product to customers, which is
				the point in time that title to the product and risk of loss has passed. No
				sales under this agreement have been recognized in the three and six-month
				periods ended June 30, 2007.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


			 Research and development
				  costs. All such costs are expensed as
				  incurred, including raw material costs required to manufacture drugs for
				  clinical trials.


Item 3.Quantitative and Qualitative Disclosures about Market
		Risk

Our carrying values of cash, cash
		equivalents, marketable securities, accounts payable, accrued expenses and
		notes payable are a reasonable approximation of their fair value. The estimated
		fair values of financial instruments have been determined by us using available
		market information and appropriate valuation methodologies, (see Note 3 to our
		consolidated financial statements). We have not entered into and do not expect
		to enter into, financial instruments for trading or hedging purposes. We do not
		currently anticipate entering into interest rate swaps and/or similar
		instruments.

Our primary market risk exposure with regard
		to financial instruments is to changes in interest rates, which would impact
		interest income earned on such instruments. We have no material currency
		exchange or interest rate risk exposure as of June 30, 2007. Therefore, there
		will be no ongoing exposure to a potential material adverse effect on our
		business, financial condition or results of operation for sensitivity to
		changes in interest rates or to changes in currency exchange rates.





25



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Item 4.Controls and Procedures

Conclusion Regarding the Effectiveness
		of Disclosure Controls and Procedures

As required by Rule 13a-15(b), Gentas
		Chief Executive Officer and Chief Financial Officer conducted an evaluation as
		of the end of the period covered by this report of the effectiveness of the
		Companys disclosure controls and procedures (as
		defined in Exchange Act Rule 13a-15(e)). Based on that evaluation, the Chief
		Executive Officer and Chief Financial Officer concluded that the Companys
		disclosure controls and procedures were effective as of the end of the period
		covered by this report.

Changes in Internal Control Over
		Financial Reporting

There were no changes in our internal
		control over financial reporting identified in connection with the evaluation
		required by paragraph (d) of Exchange Act Rule 13a-15 that occurred during the
		period covered by this report that have materially affected, or are reasonably
		likely to materially affect, our internal control over financial
		reporting.





26



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PART II

Item 1.Legal Proceedings

In 2004, numerous complaints were filed in
		the United States District Court for the District of New Jersey against Genta
		and certain of its principal officers on behalf of purported classes of the
		Companys shareholders who purchased its securities during several class
		periods. The complaints were consolidated into a single action and alleged that
		the Company and certain of its principal officers violated the federal
		securities laws by issuing materially false and misleading statements regarding
		Genasense® for the treatment of malignant melanoma that had the
		effect of artificially inflating the market price of the Companys
		securities. The shareholder class action complaint seeks monetary damages in an
		unspecified amount and recovery of plaintiffs costs and attorneys
		fees. The Company has reached an agreement in principle with plaintiffs to
		settle the class action litigation in consideration for the issuance of 2.0
		million shares of common stock of the Company, (adjusted for any subsequent
		event that results in a change in the number of shares outstanding as of
		January 31, 2007) and $18.0 million in cash for the benefit of plaintiffs and
		the shareholder class. The cash portion of the proposed settlement will be
		covered by the Companys insurance carriers. Effective June 25, 2007, the
		Company and plaintiffs executed a written Stipulation and Agreement of
		Settlement, which will be filed with the Court seeking preliminary approval.

In addition, two separate shareholder
		derivative actions were filed against the directors and certain officers of
		Genta in New Jersey State and Federal courts. The Federal shareholder
		derivative action was consolidated with the securities action.

Genta reached a final agreement with the
		Federal shareholder derivative plaintiffs to settle the Federal shareholder
		derivative action. On October 10, 2006, the United States District Court for
		the District of New Jersey gave preliminary approval to the parties
		settlement agreement. On May 7, 2007, the proposed settlement received final
		approval from the Court. On October 31, 2006, Genta and the defendants entered
		into a Release and Settlement Agreement with the Companys insurance
		carrier, pursuant to which the Companys insurance covered the $200
		thousand payment for plaintiffs attorney fees, the costs of notice to
		shareholders required by the courts preliminary approval order and
		defense costs incurred in connection with the action and this amount was paid
		by the Companys insurance carrier during the three months ended June 30,
		2007.

The Company has continued to deny all of the
		allegations in all of these proceedings, and settlement and potential
		settlement do not constitute an admission of guilt or liability.







27



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Based on facts substantially similar to
		those asserted in the shareholder class actions, the State derivative
		plaintiffs claimed that defendants had breached their fiduciary duties to the
		shareholders and committed other violations of New Jersey law. On February 9,
		2006, the Superior Court of New Jersey dismissed the plaintiffs
		derivative complaint in the New Jersey State case based in part
		on plaintiffs failure to make a pre-suit demand on Gentas Board of
		Directors and in part based on plaintiffs failure to state a cause of
		action. Plaintiffs motion for reconsideration was denied and they filed a
		notice of appeal. On December 11, 2006, plaintiffs filed their appellate brief
		and on January 18, 2007, the Company filed its response. In view of the
		settlement of the Federal derivative action, on June 4, 2007, the Company filed
		a motion to dismiss plaintiffs appeal. That motion was granted on June
		25, 2007.

In February 2007, a complaint against the
		Companywas filed in the Superior Court of
		New Jersey by Howard H. Fingert, M.D., a former employee of the Company. The
		complaint alleges, among other things, breach of contract as to the
		Companys stock option plan and as to a consulting agreement allegedly
		entered into by the Company and Dr. Fingert subsequent to termination of
		Dr. Fingerts employment with the Company, breach of implied covenant
		of good faith and fair dealing with respect to the Companys stock option
		plan and the alleged consulting agreement, promissory estoppel with respect to
		the exercise of stock options and provision of consulting services after
		termination of employment, and fraud and negligent misrepresentation with
		respect to exercise of stock options and provision of consulting services after
		termination of employment. The complaint seeks monetary damages, including
		punitive and consequential damages. The Company filed an answer to the
		complaint on May 29, 2007, and is proceeding with preparation and filing of a
		request for production of documents. The Companydenies the allegations in the complaint andintends to vigorously defend this lawsuit.

Item 1A.Risk Factors

You should carefully consider the
		following risks and all of the other information set forth in this Form 10-Q
		and the Form 10-K for the year ended December 31, 2006 before deciding to
		invest in shares of our common stock. The risks described below are not the
		only ones facing our Company. Additional risks not presently known to us or
		that we currently deem immaterial may also impair our business
		operations.

Risks Related to Our Business

We may be unsuccessful in our efforts
		to obtain approval from the FDA or EMEA and commercialize
		Genasense® or our other pharmaceutical products.

The commercialization of our pharmaceutical
		products involves a number of significant challenges. In particular, our
		ability to commercialize products, such as Ganite® and
		Genasense®, depends, in large part, on the success of our
		clinical development programs, our efforts to obtain regulatory approvals and
		our sales and marketing efforts directed at physicians, patients and
		third-party payors. A number of factors could affect these efforts,
		including:


			 our ability to demonstrate
				  clinically that our products are useful and safe in particular
				  indications;



			 delays or refusals by regulatory
				  authorities in granting marketing approvals;



			 our limited financial resources and
				  sales and marketing experience relative to our competitors;



			 actual and perceived differences
				  between our products and those of our competitors;



			 the availability and level of
				  reimbursement for our products by third-party payors;



			 incidents of adverse reactions to
				  our products;



			 side effects or misuse of our
				  products and the unfavorable publicity that could result; and



			 the occurrence of manufacturing,
				  supply or distribution disruptions.


We cannot assure you that
		Genasense® will receive FDA or EMEA approval. Our financial
		condition and results of operations have been and will continue to be
		significantly affected by FDA and EMEA action with respect to
		Genasense®. Any adverse events with respect to FDA and/or EMEA
		approvalscould negatively impact our ability to obtain
		additional funding or identify potential partners.







28



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For example, on September 6, 2006, ODAC
		voted seven to three not to recommend approval of Genasense® for
		the treatment of patients with relapsed or refractory CLL and on December 15,
		2006, we received a non-approvable notice from the FDA. The Company believes
		that its application met the regulatory requirements for approval and on April
		4, 2007, announced that it had filed a formal appeal of this non-approvable
		notice. The appeal was filed pursuant to the FDAs Formal Dispute
		Resolution process that exists within FDAs Center for Drug Evaluation and
		Research (CDER). On June 18, 2007, we announced that the initial
		appeal was denied and that we would further appeal the decision to the next
		level within CDER. We expect to file this appeal in the third quarter of 2007.
		Responses for CDER appeals are typically made within 30 to 60 days.

On January 3, 2006, we announced that we had
		completed a MAA to the EMEA that seeks approval for use of
		Genasense® plus dacarbazine for the treatment of patients with
		advanced melanoma who have not previously received chemotherapy. On April 27,
		2007, we announced that we had been informed that the Committee for Medicinal
		Products for Human Use (CHMP) of the EMEA had issued a negative
		opinion on the MAA and we indicated that we would seek re-examination of the
		MAA. On July 19, 2007, we announced that we had received notice from the EMEA
		that the requested re-examination reaffirmed the negative opinion for approval
		of our MAA for Genasense®. No further action on the MAA is
		contemplated by us. We have announced that we plan to conduct at least one
		additional clinical trial with Genasense® in melanoma, and if
		positive, we intend to submit a new MAA in this indication.

On April 27, 2007, we announced that we
		would file a formal complaint and request for correction of information with
		the FDA under the Federal Data Quality Act. As submitted, the complaint
		challenges as erroneous a key statistical analysis of our data on
		Genasense® for melanoma used by FDA at the ODAC meeting on May
		3, 2004. That analysis sought to discredit the finding that
		Genasense® yielded a statistically significant increase in
		progression-free survival (PFS). At that meeting, ODAC voted
		unanimously that PFS was an endpoint that would support full approval in the
		absence of a survival improvement in patients with advanced melanoma. We seek a
		formal public acknowledgement of the error, removal of the analysis from the
		FDA website (with a note that the previous analysis was in error), and revision
		of the transcript.

Ultimately, our efforts may not prove to be
		as effective as those of our competitors. In the United States and elsewhere,
		our products will face significant competition. The principal conditions on
		which our product development efforts are focused and some of the other
		disorders for which we are conducting additional studies, are currently treated
		with several drugs, many of which have been available for a number of years or
		are available in inexpensive generic forms. Thus, even if we obtain regulatory
		approvals, we will need to demonstrate to physicians, patients and third-party
		payors that the cost of our products is reasonable and appropriate in light of
		their safety and efficacy, the price of competing products and the relative
		health care benefits to the patient. If we are unable to demonstrate that the
		costs of our products are reasonable and appropriate in light of these factors,
		we will likely be unsuccessful in commercializing our products.

Our business will suffer if we fail to
		obtain timely funding.

Our operations to date have required
		significant cash expenditures. Our future capital requirements will depend on
		the results of our research and development activities, preclinical studies and
		clinical trials, competitive and technological advances, and regulatory
		activities of the FDA and other regulatory authorities. In order to
		commercialize our products, seek new product candidates and continue our
		research and development programs, we will need to raise additional funds. In
		March 2007, we sold 5.0 million shares of the Companys common stock at a
		price of $2.16 per share, raising $10.1 million, net of fees and expenses. Cash
		used in operating activities during the six months ended June 30, 2007 was
		$16.8 million.

We will need to obtain more funding in the
		future through collaborations or other arrangements with research institutions
		and corporate partners or public and private offerings of our securities,
		including debt or equity financing. We may not be able to obtain adequate funds
		for our operations from these sources when needed or on acceptable terms.
		Future collaborations or similar arrangements may require us to license
		valuable intellectual property to, or to share substantial economic benefits
		with, our collaborators. If we raise additional capital by issuing additional
		equity or securities convertible into equity, our stockholders may experience
		dilution and our share price may decline. Any debt financing may result in
		restrictions on our spending.







29



---



If we are unable to raise additional funds,
		we will need to do one or more of the following:


			 delay, scale back or eliminate some
				  or all of our research and product development programs;



			 license third parties to develop and
				  commercialize products or technologies that we would otherwise seek to develop
				  and commercialize ourselves;



			 attempt to sell our company;



			 cease operations; or



			 declare bankruptcy.


We will maintain an appropriate level of
		spending over the upcoming fiscal year, given the uncertainties inherent in our
		business and our current liquidity position. Earlier in the year, we projected
		that a smaller workforce and concentrated effort on the development of
		Genasense® would result in us having sufficient funds to
		maintain our operations into the second quarter of 2008. Presently, without
		taking into account any further financings, we project that we should have
		sufficient cash funds to maintain our present operations into the first quarter
		of 2008. The current projection is primarily based on additional months of
		actual expenditures and no reduction to our workforce.

We have relied on and continue to rely
		on our contractual collaborative arrangements with research institutions and
		corporate partners for development and commercialization of our products. Our
		business could suffer if we are not able to enter into suitable arrangements,
		maintain existing relationships, or if our collaborative arrangements are not
		successful in developing and commercializing products.

We have entered into collaborative
		relationships relating to the conduct of clinical research and other research
		activities in order to augment our internal research capabilities and to obtain
		access to specialized knowledge and expertise. Our business strategy depends in
		part on our continued ability to develop and maintain relationships with
		leading academic and research institutions and with independent researchers.
		The competition for these relationships is intense, and we can give no
		assurances that we will be able to develop and maintain these relationships on
		acceptable terms.

We also seek strategic alliances with
		corporate partners, primarily pharmaceutical and biotechnology companies, to
		help us develop and commercialize drugs. Various problems can arise in
		strategic alliances. A partner responsible for conducting clinical trials and
		obtaining regulatory approval may fail to develop a marketable drug. A partner
		may decide to pursue an alternative strategy or focus its efforts on alliances
		or other arrangements with third parties. A partner that has been granted
		marketing rights for a certain drug within a geographic area may fail to market
		the drug successfully. Consequently, strategic alliances that we may enter into
		may not be scientifically or commercially successful.

We cannot control the resources that any
		collaborator may devote to our products. Any of our present or future
		collaborators may not perform their obligations as expected. These
		collaborators may breach or terminate their agreements with us, for instance
		upon changes in control or management of the collaborator, or they may
		otherwise fail to conduct their collaborative activities successfully and in a
		timely manner.

In addition, our collaborators may elect not
		to develop products arising out of our collaborative arrangements or to devote
		sufficient resources to the development, regulatory approval, manufacture,
		marketing or sale of these products. If any of these events occur, we may not
		be able to develop our products or commercialize our products.







30



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An important part of our strategy involves
		conducting multiple product development programs. We may pursue opportunities
		in fields that conflict with those of our collaborators. In addition,
		disagreements with our collaborators could develop over rights to our
		intellectual property. The resolution of such conflicts and disagreements may
		require us to relinquish rights to our intellectual property that we believe we
		are entitled to. In addition, any disagreement or conflict with our
		collaborators could reduce our ability to obtain future collaboration
		agreements and negatively impact our relationship with existing collaborators.
		Such a conflict or disagreement could also lead to delays in collaborative
		research, development, regulatory approval or commercialization of various
		products or could require or result in litigation or arbitration, which would
		be time consuming and expensive, divert the attention of our management and
		could have a significant negative impact on our business, financial condition
		and results of operations.

We anticipate that we will incur
		additional losses and we may never be profitable.

We have never been profitable. We have
		incurred substantial annual operating losses associated with ongoing research
		and development activities, preclinical testing, clinical trials, regulatory
		submissions and manufacturing activities. From the period since our inception
		to June 30, 2007, we have incurred a cumulative net deficit of $428.7 million.
		We may never achieve revenue sufficient for us to attain profitability.
		Achieving profitability is unlikely unless Genasense® receives
		approval from the FDA or EMEA for commercial sale in one or more
		indications.

Our business depends heavily on a
		small number of products.

We currently market and sell one product,
		Ganite® and the principal patent covering its use for the
		approved indication expired in April 2005. Genasense® has not
		yet been approved, and if approved continues to be significantly delayed, or if
		in the event of approval the product is commercially unsuccessful, we do not
		expect significant sales of other products to offset this loss of potential
		revenue.

To diversify our product line in the long
		term, it will be important for us to identify suitable technologies and
		products for acquisition or licensing and development. If we are unable to
		identify suitable technologies and products, or if we are unable to acquire or
		license products we identify, we may be unable to diversify our product line
		and to generate long-term growth.

We may be unable to obtain or enforce
		patents, other proprietary rights and licenses to protect our business; we
		could become involved in litigation relating to our patents or licenses that
		could cause us to incur additional costs and delay or prevent our introduction
		of new drugs to market.

Our success will depend to a large extent on
		our ability to:


			 obtain U.S. and foreign patent or
				  other proprietary protection for our technologies, products and
				  processes;



			 preserve trade secrets; and



			 operate without infringing the
				  patent and other proprietary rights of third parties.


Legal standards relating to the validity of
		patents covering pharmaceutical and biotechnological inventions and the scope
		of claims made under these types of patents are still developing, and they
		involve complex legal and factual questions. As a result, our ability to obtain
		and enforce patents that protect our drugs is highly uncertain. If we are
		unable to obtain and enforce patents and licenses to protect our drugs, our
		business, results of operations and financial condition could be adversely
		affected.

We hold numerous U.S., foreign and
		international patents covering various aspects of our technology, which include
		novel compositions of matter, methods of large-scale synthesis and methods of
		controlling gene expression and methods of treating disease. In the future,
		however, we may not be successful in obtaining additional patents despite
		pending or future applications. Moreover, our current and future patents may
		not be sufficient to protect us against competitors who use similar technology.
		Additionally, our patents, the patents of our business partners and the patents
		for which we have obtained licensing rights may be challenged, narrowed,
		invalidated or circumvented. Furthermore, rights granted under our patents may
		not be broad enough to cover commercially valuable drugs or processes and
		therefore may not provide us with sufficient competitive advantage with respect
		thereto.







31



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The pharmaceutical and biotechnology
		industries have been greatly affected by time-consuming and expensive
		litigation regarding patents and other intellectual property rights. We may be
		required to commence, or may be made a party to, litigation relating to the
		scope and validity of our intellectual property rights or the intellectual
		property rights of others. Such litigation could result in adverse decisions
		regarding the patentability of our inventions and products, the enforceability,
		validity or scope of protection offered by our patents or our infringement of
		patents held by others. Such decisions could make us liable for substantial
		money damages, or could bar us from the manufacture, sale or use of certain
		products. Moreover, an adverse decision may also compel us to seek a license
		from a third party. The costs of any license may be prohibitive and we may not
		be able to enter into any required licensing arrangement on terms acceptable to
		us.

The cost to us of any litigation or
		proceeding relating to patent or license rights, even if resolved in our favor,
		could be substantial. Some of our competitors may be able to sustain the costs
		of complex patent or licensing litigation more effectively than we can because
		of their substantially greater resources. Uncertainties resulting from the
		initiation and continuation of any patent or related litigation could have a
		material adverse effect on our ability to compete in the marketplace.

We also may be required to participate in
		interference proceedings declared by the U.S. Patent and Trademark Office in
		opposition or similar proceedings before foreign patent offices and in
		International Trade Commission proceedings aimed at preventing the importation
		of drugs that would compete unfairly with our drugs. These types of proceedings
		could cause us to incur considerable costs.

The principal patent covering the use of
		Ganite® for its approved indication, including Hatch-Waxman
		extensions, expired in April 2005.

We have licensed a portfolio of U.S. patents
		and applications from the University of Pennsylvania and the NIH relating to
		Genasense® and its backbone chemistry that expire between 2008
		and 2015. Corresponding patent applications have been filed in Canada, Europe
		and Japan. The claims of these patents cover our proprietary antisense
		oligonucleotide molecules which target the Bcl-2 mRNA and methods employing
		them. We also hold several U.S. patent applications relating to methods of
		using Genasense® that expire in 2020, with approximately 45
		corresponding foreign patent applications.

Most of our products are in an early
		stage of development, and we may never receive regulatory approval for these
		products.

Most of our resources have been dedicated to
		the research and development of potential antisense pharmaceutical products
		such as Genasense®, based upon oligonucleotide technology. While
		we have demonstrated the activity of antisense oligonucleotide technology in
		model systems in vitro and in animals, Genasense® is our only
		antisense product to have been tested in humans. Several of our other
		technologies that serve as a possible basis for pharmaceutical products are
		only in preclinical testing. Results obtained in preclinical studies or early
		clinical investigations are not necessarily indicative of results that will be
		obtained in extended human clinical trials. Our products may prove to have
		undesirable and unintended side effects or other characteristics that may
		prevent our obtaining FDA or foreign regulatory approval for any indication. In
		addition, it is possible that research and discoveries by others will render
		our oligonucleotide technology obsolete or noncompetitive.

We will not be able to commercialize
		our product candidates if our preclinical studies do not produce successful
		results or if our clinical trials do not demonstrate safety and efficacy in
		humans.

Our success will depend on the success of
		our currently ongoing clinical trials and subsequent clinical trials that have
		not yet begun. It may take several years to complete the clinical trials of a
		product, and a failure of one or more of our clinical trials can occur at any
		stage of testing. We believe that the development of each of our product
		candidates involves significant risks at each stage of testing. If clinical
		trial difficulties and failures arise, our product candidates may never be
		approved for sale or become commercially viable. We do not believe that any of
		our product candidates have alternative uses if our current development
		activities are unsuccessful.







32



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There are a number of difficulties and risks
		associated with clinical trials. These difficulties and risks may result in the
		failure to receive regulatory approval to sell our product candidates or the
		inability to commercialize any of our product candidates. The possibility
		exists that:


			 we may discover that a product
				  candidate does not exhibit the expected therapeutic results in humans, may
				  cause harmful side effects or have other unexpected characteristics that may
				  delay or preclude regulatory approval or limit commercial use if
				  approved;



			 the results from early clinical
				  trials may not be statistically significant or predictive of results that will
				  be obtained from expanded, advanced clinical trials;



			 institutional review boards or
				  regulators, including the FDA, may hold, suspend or terminate our clinical
				  research or the clinical trials of our product candidates for various reasons,
				  including noncompliance with regulatory requirements or if, in their opinion,
				  the participating subjects are being exposed to unacceptable health
				  risks;



			 subjects may drop out of our
				  clinical trials;



			 our preclinical studies or clinical
				  trials may produce negative, inconsistent or inconclusive results, and we may
				  decide, or regulators may require us, to conduct additional preclinical studies
				  or clinical trials; and



			 the cost of our clinical trials may
				  be greater than we currently anticipate.


For example, in November 2004, we reported
		that our randomized Phase 3 clinical trial of Genasense® in
		patients with multiple myeloma did not meet its primary endpoint. On December
		8, 2006, we announced that preliminary results from a randomized Phase 3 trial
		of chemotherapy with or without Genasense® in patients with AML
		suggested the study was unlikely to meet its primary endpoint. On February 23,
		2007, we announced that preliminary results from a randomized Phase 2 study of
		Genasense® plus chemotherapy in patients with advanced prostate
		cancer showed no between-group difference in prostate-specific antigen. While
		follow-up and analyses of the AML and prostate trials are continuing, we do not
		believe any of these trials will support regulatory approval of
		Genasense® in these indications.

We cannot assure you that our ongoing
		preclinical studies and clinical trials will produce successful results in
		order to support regulatory approval of Genasense® in any
		territory or for any indication. Failure to obtain approval, or a substantial
		delay in approval of Genasense® for these or any other
		indications would have a material adverse effect on our results of operations
		and financial condition.

Clinical trials are costly and time
		consuming and are subject to delays; our business would suffer if the
		development process relating to our products were subject to meaningful
		delays.

Clinical trials are very costly and
		time-consuming. The length of time required to complete a clinical study
		depends upon many factors, including but not limited to the size of the patient
		population, the ability of patients to get to the site of the clinical study,
		the criteria for determining which patients are eligible to join the study and
		other issues. Delays in patient enrollment and other unforeseen developments
		could delay completion of a clinical study and increase its costs, which could
		also delay any eventual commercial sale of the drug that is the subject of the
		clinical trial.

Our commencement and rate of completion of
		clinical trials also may be delayed by many other factors, including the
		following:


			 inability to obtain sufficient
				  quantities of materials for use in clinical trials;



			 inability to adequately monitor
				  patient progress after treatment;



			 unforeseen safety issues;



			 the failure of the products to
				  perform well during clinical trials and
			 government or regulatory
				  delays.








33



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If we fail to obtain the necessary
		regulatory approvals, we cannot market and sell our products in the United
		States.

The FDA imposes substantial pre-market
		approval requirements on the introduction of pharmaceutical products. These
		requirements involve lengthy and detailed preclinical and clinical testing and
		other costly and time-consuming procedures. Satisfaction of these requirements
		typically takes several years or more depending upon the type, complexity and
		novelty of the product. We cannot apply for FDA approval to market any of our
		products under development until preclinical and clinical trials on the product
		are successfully completed. Several factors could prevent successful completion
		or cause significant delays of these trials, including an inability to enroll
		the required number of patients or failure to demonstrate adequately that the
		product is safe and effective for use in humans. If safety concerns develop,
		the FDA could stop our trials before completion. We may not market or sell any
		product for which we have not obtained regulatory approval. For example, on
		December 15, 2006, we received a non-approvable notice from the FDA of an NDA
		that sought accelerated approval for the use of Genasense®in combination with fludarabine plus cyclophosphamide
		for the treatment of patients with relapsed or refractory CLL who had
		previously received fludarabine.

We cannot assure you that the FDA will ever
		approve the use of our products that are under development. If the patient
		populations for which our products are approved are not sufficiently broad, or
		if approval is accompanied by unanticipated labeling restrictions, the
		commercial success of our products could be limited and our business, results
		of operations and financial condition could consequently be materially
		adversely affected.

If the third party manufacturers upon
		which we rely fail to produce our products in the volumes that we require on a
		timely basis, or to comply with stringent regulations applicable to
		pharmaceutical drug manufacturers, we may face delays in the commercialization
		of, or be unable to meet demand for, our products and may lose potential
		revenues.

We do not manufacture any of our products or
		product candidates and we do not plan to develop any capacity to do so. We have
		contracted with third-party manufacturers to manufacture Ganite®
		and Genasense®. The manufacture of pharmaceutical products
		requires significant expertise and capital investment, including the
		development of advanced manufacturing techniques and process controls.
		Manufacturers of pharmaceutical products often encounter difficulties in
		production, especially in scaling up initial production. These problems include
		difficulties with production costs and yields, quality control and assurance
		and shortages of qualified personnel, as well as compliance with strictly
		enforced federal, state and foreign regulations. Our third-party manufacturers
		may not perform as agreed or may terminate their agreements with us.

In addition to product approval, any
		facility in which Genasense® is manufactured or tested for its
		ability to meet required specifications must be approved by the FDA and/or the
		EMEA before it can manufacture Genasense®. Failure of the
		facility to be approved could delay the approval of
		Genasense®.

We do not currently have alternate
		manufacturing plans in place. The number of third-party manufacturers with the
		expertise, required regulatory approvals and facilities to manufacture bulk
		drug substance on a commercial scale is limited, and it would take a
		significant amount of time to arrange for alternative manufacturers. If we need
		to change to other commercial manufacturers, the FDA and comparable foreign
		regulators must approve these manufacturers facilities and processes
		prior to our use, which would require new testing and compliance inspections,
		and the new manufacturers would have to be educated in or independently develop
		the processes necessary for the production of our products.

Any of these factors could cause us to delay
		or suspend clinical trials, regulatory submissions, required approvals or
		commercialization of our products or product candidates, entail higher costs
		and result in our being unable to effectively commercialize our products.
		Furthermore, if our third-party manufacturers fail to deliver the required
		commercial quantities of bulk drug substance or finished product on a timely
		basis and at commercially reasonable prices, and we were unable to promptly
		find one or more replacement manufacturers capable of production at a
		substantially equivalent cost, in substantially equivalent volume and on a
		timely basis, we would likely be unable to meet demand for our products and we
		would lose potential revenues.







34



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Even if we obtain regulatory approval,
		we will be subject to ongoing regulation, and any failure by us or our
		manufacturers to comply with such regulation could suspend or eliminate our
		ability to sell our products.

Ganite®,
		Genasense®, if it obtains regulatory approval, and any other
		product we may develop will be subject to ongoing regulatory oversight,
		primarily by the FDA. Failure to comply with post-marketing requirements, such
		as maintenance by us or by the manufacturers of our products of current Good
		Manufacturing Practices as required by the FDA, or safety surveillance of such
		products or lack of compliance with other regulations could result in
		suspension or limitation of approvals or other enforcement actions. Current
		Good Manufacturing Practices are FDA regulations that define the minimum
		standards that must be met by companies that manufacture pharmaceuticals and
		apply to all drugs for human use including those to be used in clinical trials
		as well as those produced for general sale after approval of an application by
		the FDA. These regulations define requirements for personnel, buildings and
		facilities, equipment, control of raw materials and packaging components,
		production and process controls, packaging and label controls, handling and
		distribution, laboratory controls and recordkeeping. Furthermore, the terms of
		any product candidate approval, including the labeling content and advertising
		restrictions, may be so restrictive that they could adversely affect the
		marketability of our product candidates. Any such failure to comply or the
		application of such restrictions could limit our ability to market our product
		candidates and may have a material adverse effect on our business, results of
		operations and financial condition. Such failures or restrictions may also
		prompt regulatory recalls of one or more of our products, which could have
		material and adverse effects on our business.

The raw materials for our products are
		produced by a limited number of suppliers, and our business could suffer if we
		cannot obtain needed quantities at acceptable prices and
		qualities.

The raw materials that we require to
		manufacture our drugs, particularly oligonucleotides, are available from only a
		few suppliers. If these suppliers cease to provide us with the necessary raw
		materials or fail to provide us with an adequate supply of materials at an
		acceptable price and quality, we could be materially adversely affected.

If third-party payors do not provide
		coverage and reimbursement for use of our products, we may not be able to
		successfully commercialize our products.

Our ability to commercialize drugs
		successfully will depend in part on the extent to which various third-party
		payors are willing to reimburse patients for the costs of our drugs and related
		treatments. These third-party payors include government authorities, private
		health insurers and other organizations, such as health maintenance
		organizations. Third-party payors often challenge the prices charged for
		medical products and services. Accordingly, if less costly drugs are available,
		third-party payors may not authorize or may limit reimbursement for our drugs,
		even if they are safer or more effective than the alternatives. In addition,
		the federal government and private insurers have changed and continue to
		consider ways to change the manner in which health care products and services
		are provided and paid for in the United States. In particular, these
		third-party payors are increasingly attempting to contain health care costs by
		limiting both coverage and the level of reimbursement for new therapeutic
		products. In the future, it is possible that the government may institute price
		controls and further limits on Medicare and Medicaid spending. These controls
		and limits could affect the payments we collect from sales of our products.
		Internationally, medical reimbursement systems vary significantly, with some
		countries requiring application for, and approval of, government or third-party
		reimbursement. In addition, some medical centers in foreign countries have
		fixed budgets, regardless of levels of patient care. Even if we succeed in
		bringing therapeutic products to market, uncertainties regarding future health
		care policy, legislation and regulation, as well as private market practices,
		could affect our ability to sell our products in quantities, or at prices, that
		will enable us to achieve profitability.







35



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Our business exposes us to potential
		product liability that may have a negative effect on our financial performance
		and our business generally.

The administration of drugs to humans,
		whether in clinical trials or commercially, exposes us to potential product and
		professional liability risks, which are inherent in the testing, production,
		marketing and sale of human therapeutic products. Product liability claims can
		be expensive to defend and may result in large judgments or settlements against
		us, which could have a negative effect on our financial performance and
		materially and adversely affect our business. We maintain product liability
		insurance (subject to various deductibles), but our insurance coverage may not
		be sufficient to cover claims. Furthermore, we cannot be certain that we will
		always be able to maintain or increase our insurance coverage at an affordable
		price. Even if a product liability claim is not successful, the adverse
		publicity and time and expense of defending such a claim may interfere with or
		adversely affect our business and financial performance.

We may incur a variety of costs to
		engage in future acquisitions of companies, products or technologies, and the
		anticipated benefits of those acquisitions may never be
		realized.

As a part of our business strategy, we may
		make acquisitions of, or significant investments in, complementary companies,
		products or technologies, although no significant acquisition or investments
		are currently pending. Any future acquisitions would be accompanied by risks
		such as:


			 difficulties in assimilating the
				  operations and personnel of acquired companies;



			 diversion of our managements
				  attention from ongoing business concerns;



			 our potential inability to maximize
				  our financial and strategic position through the successful incorporation of
				  acquired technology and rights into our products and services;



			 additional expense associated with
				  amortization of acquired assets;



			 maintenance of uniform standards,
				  controls, procedures and policies; and



			 impairment of existing relationships
				  with employees, suppliers and customers as a result of the integration of new
				  management personnel.


We cannot guarantee that we will be able to
		successfully integrate any business, products, technologies or personnel that
		we might acquire in the future, and our failure to do so could harm our
		business.

We face substantial competition from
		other companies and research institutions that are developing similar products,
		and we may not be able to compete successfully.

In many cases, our products under
		development will be competing with existing therapies for market share. In
		addition, a number of companies are pursuing the development of antisense
		technology and controlled-release formulation technology and the development of
		pharmaceuticals utilizing such technologies. We compete with fully integrated
		pharmaceutical companies that have more substantial experience, financial and
		other resources and superior expertise in research and development,
		manufacturing, testing, obtaining regulatory approvals, marketing and
		distribution. Smaller companies may also prove to be significant competitors,
		particularly through their collaborative arrangements with large pharmaceutical
		companies or academic institutions. Furthermore, academic institutions,
		governmental agencies and other public and private research organizations have
		conducted and will continue to conduct research, seek patent protection and
		establish arrangements for commercializing products. Such products may compete
		directly with any products that may be offered by us.







36



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Our competition will be determined in part
		by the potential indications for which our products are developed and
		ultimately approved by regulatory authorities. For certain of our potential
		products, an important factor in competition may be the timing of market
		introduction of our or our competitors products. Accordingly, the
		relative speed with which we can develop products, complete the clinical trials
		and approval processes and supply commercial quantities of the products to the
		market are expected to be important competitive factors. We expect that
		competition among products approved for sale will be based, among other things,
		on product efficacy, safety, reliability, availability, price, patent position
		and sales, marketing and distribution capabilities. The development by others
		of new treatment methods could render our products under development
		non-competitive or obsolete.

Our competitive position also depends upon
		our ability to attract and retain qualified personnel, obtain patent protection
		or otherwise develop proprietary products or processes and secure sufficient
		capital resources for the often-substantial period between technological
		conception and commercial sales. We cannot assure you that we will be
		successful in this regard.

We are dependent on our key executives
		and scientists, and the loss of key personnel or the failure to attract
		additional qualified personnel could harm our business.

Our business is highly dependent on our key
		executives and scientific staff. The loss of key personnel or the failure to
		recruit necessary additional or replacement personnel will likely impede the
		achievement of our development objectives. There is intense competition for
		qualified personnel in the pharmaceutical and biotechnology industries, and
		there can be no assurances that we will be able to attract and retain the
		qualified personnel necessary for the development of our business.

Risks Related to Outstanding
		Litigation

The outcome of and costs relating to
		pending shareholder class action and shareholder derivative actions are
		uncertain.

In 2004, numerous complaints were filed in
		the United States District Court for the District of New Jersey, or the Court,
		against Genta and certain of its principal officers on behalf of purported
		classes of the Companys shareholders who purchased its securities during
		several class periods. The complaints were consolidated into a single action
		and alleged that the Company and certain of its principal officers violated the
		federal securities laws by issuing materially false and misleading statements
		regarding Genasense® for the treatment of malignant melanoma
		that had the effect of artificially inflating the market price of the
		Companys securities. The shareholder class action complaint sought
		monetary damages in an unspecified amount and recovery of plaintiffs
		costs and attorneys fees. The Company has reached an agreement in
		principle with plaintiffs to settle the class action litigation in
		consideration for the issuance of 2.0 million shares of common stock of the
		Company, (adjusted for any subsequent event that results in a change in the
		number of shares outstanding as of January 31, 2007) and $18.0 million in cash
		for the benefit of plaintiffs and the shareholder class. The cash portion of
		the proposed settlement will be covered by the Companys insurance
		carriers. Effective June 25, 2007, the Company and plaintiffs executed a
		written Stipulation and Agreement of Settlement, which will be filed with the
		Court seeking preliminary approval.

In addition, two separate shareholder
		derivative actions were filed against the directors and certain officers of
		Genta in New Jersey State and Federal courts. The Federal shareholder
		derivative action was consolidated with the securities action.

Genta reached a final agreement with the
		Federal shareholder derivative plaintiffs to settle the Federal shareholder
		derivative action. On October 10, 2006, the United States District Court for
		the District of New Jersey gave preliminary approval to the parties
		settlement agreement. On May 7, 2007, the proposed settlement received final
		approval from the Court. On October 31, 2006, Genta and the defendants entered
		into a Release and Settlement Agreement with the Companys insurance
		carrier, pursuant to which the Companys insurance covered the $200
		thousand payment for plaintiffs attorney fees, the costs of notice to
		shareholders required by the courts preliminary approval order and
		defense costs incurred in connection with the action and this amount was paid
		by the Companys insurance carrier during the three months ended June 30,
		2007.

The Company has continued to deny all of the
		allegations in all of these proceedings, and settlement and potential
		settlement do not constitute an admission of guilt or liability.







37



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Based on facts substantially similar to
		those asserted in the shareholder class actions, the State derivative
		plaintiffs claimed that defendants had breached their fiduciary duties to the
		shareholders and committed other violations of New Jersey law. On February 9,
		2006, the Superior Court of New Jersey dismissed the plaintiffs
		derivative complaint in the New Jersey State case based in part
		on plaintiffs failure to make a pre-suit demand on Gentas Board of
		Directors and in part based on plaintiffs failure to state a cause of
		action. Plaintiffs motion for reconsideration was denied and they filed a
		notice of appeal. On December 11, 2006, plaintiffs filed their appellate brief
		and on January 18, 2007, the Company filed its response. In view of the
		settlement of the Federal derivative action, on June 4, 2007, the Company filed
		a motion to dismiss plaintiffs appeal. That motion was granted on June
		25, 2007.

In February 2007, a complaint against the
		Companywas filed in the Superior Court of
		New Jersey by Howard H. Fingert, M.D., a former employee of the Company. The
		complaint alleges, among other things, breach of contract as to the
		Companys stock option plan and as to a consulting agreement allegedly
		entered into by the Company and Dr. Fingert subsequent to termination of
		Dr. Fingerts employment with the Company, breach of implied covenant
		of good faith and fair dealing with respect to the Companys stock option
		plan and the alleged consulting agreement, promissory estoppel with respect to
		the exercise of stock options and provision of consulting services after
		termination of employment, and fraud and negligent misrepresentation with
		respect to exercise of stock options and provision of consulting services after
		termination of employment. The complaint seeks monetary damages, including
		punitive and consequential damages. The Company filed an answer to the
		complaint on May 29, 2007, and is proceeding with preparation and filing of a
		request for production of documents. The Companydenies the allegations in the complaint andintends to vigorously defend this lawsuit.

Risks Related to Our Common
		Stock

Provisions in our restated certificate
		of incorporation and bylaws and Delaware law may discourage a takeover and
		prevent our stockholders from receiving a premium for their
		shares.

Provisions in our restated certificate of
		incorporation and bylaws may discourage third parties from seeking to obtain
		control of us and, therefore, could prevent our stockholders from receiving a
		premium for their shares. Our restated certificate of incorporation gives our
		board of directors the power to issue shares of preferred stock without
		approval of the holders of common stock. Any preferred stock that is issued in
		the future could have voting rights, including voting rights that could be
		superior to that of our common stock. The affirmative vote of 66 2/3% of our
		voting stock is required to approve certain transactions and to take certain
		stockholder actions, including the amendment of certain provisions of our
		certificate of incorporation. Our bylaws contain provisions that regulate how
		stockholders may present proposals or nominate directors for election at annual
		meetings of stockholders.

In addition, we are subject to Section 203
		of the Delaware General Corporation Law, which contains restrictions on
		stockholder action to acquire control of us.

On September 16, 2005, we announced that our
		Board of Directors approved a Stockholder Rights Plan and declared a dividend
		of one preferred stock purchase right, which we refer to as a Right, for each
		share of our common stock held of record as of the close of business on
		September 27, 2005. In addition, Rights shall be issued in respect of all
		shares of common stock issued after such date, including the shares issued
		hereunder, pursuant to the Plan. The Rights contain provisions to protect
		stockholders in the event of an unsolicited attempt to acquire us, including an
		accumulation of shares in the open market, a partial or two-tier tender offer
		that does not treat all stockholders equally and other activities that the
		Board believes are not in the best interests of stockholders. The Rights may
		discourage a takeover and prevent our stockholders from receiving a premium for
		their shares.

We have not paid, and do not expect to
		pay in the future, cash dividends on our common stock.

We have never paid cash dividends on our
		common stock and do not anticipate paying any such dividends in the foreseeable
		future. We currently intend to retain our earnings, if any, for the development
		of our business.







38



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Our stock price is
		volatile.

The market price of our common stock, like
		that of the common stock of many other biopharmaceutical companies, has been
		and likely will continue to be highly volatile. Factors that could have a
		significant impact on the future price of our common stock include but are not
		limited to:


			 the results of preclinical studies
				  and clinical trials by us or our competitors;



			 announcements of technological
				  innovations or new therapeutic products by us or our competitors;



			 government regulation;



			 developments in patent or other
				  proprietary rights by us or our respective competitors, including litigation;



			 fluctuations in our operating
				  results; and



			 market conditions for
				  biopharmaceutical stocks in general.


At June 30, 2007 we had 30.6 million shares
		of common stock outstanding, 2.1 million additional shares reserved for the
		conversion of convertible preferred stock and the exercise of outstanding
		options and warrants and 0.9 million additional shares of common stock
		authorized for issuance and remaining to be granted under our stock option
		plans. Future sales of shares of our common stock by existing stockholders,
		holders of preferred stock who might convert such preferred stock into common
		stock and option and warrant holders who may exercise their options and
		warrants to purchase common stock also could adversely affect the market price
		of our common stock. Moreover, the perception that sales of substantial amounts
		of our common stock might occur could adversely affect the market price of our
		common stock.

At our Annual Meeting of Shareholders held
		on July 11, 2007, our shareholders authorized our Board of Directors to effect
		a reverse stock split of all outstanding shares of common stock, and the Board
		of Directors subsequently approved the implementation of a reverse stock split
		at a ratio of one for six shares. On July 12, 2007, we filed a Certificate of
		Amendment to our Restated Certificate of Incorporation, as amended, with the
		Delaware Secretary of State to effect the reverse stock split. As of July 12,
		2007, the effective date of the reverse stock split; every six shares of
		old common stock were converted into one new share of
		common stock. Upon the open of trading on July 13, 2007, the new
		shares of common stock began trading on the NASDAQ Global Market on a
		split-adjusted basis. As a result of the 1-for-6 reverse stock split, shares of
		our common stock outstanding were reduced from 183.7 million shares on a
		pre-split basis to 30.6 million shares on a post-split basis, or 83%. The
		resulting decrease in the number of shares of our common stock outstanding
		could potentially adversely affect the liquidity of our common stock,
		especially in the case of larger block trades.

Our common stock may be delisted from
		the NASDAQ Global Market, or NASDAQ.

We recently underwent a reverse stock split
		in order to increase the price of our stock over the required threshold of
		$1.00 per share. If the bid price of our common stock falls below $1.00 for an
		extended period, or we are unable to continue to meet NASDAQs listing
		maintenance standards for any other reason, our common stock could be delisted
		from NASDAQ.

On November 2, 2006, we received a
		notification from the NASDAQ Listing Qualifications Department providing
		notification that, for the last thirty consecutive business days, the bid price
		of our common stock had closed below the minimum $1.00 per share requirement
		for continued inclusion under NASDAQ Marketplace Rule 4450(a)(5), or the Rule.
		We, in accordance with NASDAQ Marketplace Rule 4450(e)(2), were provided 180
		calendar days, or until May 1, 2007, to regain compliance. To regain
		compliance, the bid price of our common stock had to close at $1.00 per share
		or more for a minimum of ten consecutive business days at any time before May
		1, 2007.







39



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On May 2, 2007, we announced that we had
		received a notice of delisting from the NASDAQ Global Market because the
		closing bid price of our common stock is not in compliance with the $1.00
		minimum closing bid price requirement, as set forth in Marketplace Rule
		4450(a)(5). At our Annual Meeting held on July 11, 2007, our shareholders
		authorized our Board of Directors to effect a reverse stock split of all
		outstanding shares of Common Stock, and the Board of Directors subsequently
		approved the implementation of a reverse stock split at a ratio of one for six
		shares. On July 12, 2007, we filed a Certificate of Amendment to our Restated
		Certificate of Incorporation, as amended, with the Delaware Secretary of State
		to effect the reverse stock split. As of July 12, 2007, the effective date of
		the reverse stock split; every six shares of old common stock were
		converted into one new share of common stock. Upon the open of
		trading on July 13, 2007, the new shares of common stock began
		trading on the NASDAQ Global Market on a split-adjusted basis. On July 30, 2007
		we announced that we had been formally notified by NASDAQ that we had
		demonstrated compliance with all NASDAQ Marketplace Rules. As a consequence,
		the NASDAQ Listing Qualifications Panel determined that our common stock will
		continue to be listed on the NASDAQ Global Market.

We believe that the listing of our common
		stock on a recognized national trading market, such as NASDAQ, is an important
		part of our business and strategy. Such a listing helps our stockholders by
		providing a readily available trading market with current quotations. Without
		that, stockholders may have a difficult time getting a quote for the sale or
		purchase of our stock, the sale or purchase of our stock would likely be made
		more difficult and the trading volume and liquidity of our stock would likely
		decline. The absence of such a listing may adversely affect the acceptance of
		our common stock as currency or the value accorded it by other parties. In that
		regard, the absence of a listing on a recognized national trading market will
		also affect our ability to benefit from the use of our operations and expansion
		plans, including for use in licensing agreements, joint ventures, the
		development of strategic relationships and acquisitions, which are critical to
		our business and strategy and none of which is currently the subject of any
		agreement, arrangement or understanding, with respect to any future financing
		or strategic relationship it may undertake. The delisting from NASDAQ would
		result in negative publicity and would negatively impact our ability to raise
		capital in the future.







40



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Item 2.
			 Unregistered Sales of Equity
				  Securities and Use of Proceeds


None.

Item 3.
			 Defaults Upon Senior
				  Securities


None.

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


(a)
			 We held our Annual Meeting of
				  Stockholders, herein after referred to as the Annual Meeting, on July 11,
				  2007.


(b)
			 Proxies for the meeting were
				  solicited pursuant to Regulation 14A of the Exchange Act. There was no
				  solicitation in opposition to the Board of Directors nominees for
				  directors listed in our definitive proxy statement dated as of May 14, 2007.
				  All of the Board of Directors nominees were elected.








41



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(c)
			 At the Annual Meeting, stockholders
				  voted to approve all resolutions that were proposed in the proxy statement.
				  Briefly described below is each resolution voted upon at the Annual Meeting and
				  the corresponding results.


(i) Election of seven directors. The result
		of the voting, on a pre-split basis, was as follows:



Directors
			 Votes For
			 WithheldRaymond P. Warrell, Jr., M.D.
			 130,710,548
			 22,144,431Martin J. Driscoll
			 130,752,722
			 22,102,257Betsy McCaughey, Ph.D.
			 131,062,218
			 21,792,761Christopher P. Parios
			 130,783,120
			 22,071,859Daniel D. Von Hoff, M.D.
			 124,660,087
			 28,194,892Douglas G. Watson
			 130,708,011
			 22,146,968


(ii) Approval of a proposal to authorize the
		Board of Directors to effect a reverse stock split of all outstanding shares of
		our Common Stock, at a ratio of either 1-for-2, 1-for-3, 1-for-4, 1-for-5 or
		1-for-6. The result of the voting, on a pre-split basis, was as follows:



For:
			 
			 131,723,810 votesAgainst:
			 
			 20,797,107 votesAbstain:
			 
			 334,062 votes


(iii) Ratification of the selection of
		Deloitte & Touche LLP as the Companys independent registered public
		accounting firm for the fiscal year ending December 31, 2007. The result of the
		voting, on a pre-split basis, was as follows:



For:
			 
			 134,009,153 votesAgainst:
			 
			 10,814,564 votesAbstain:
			 
			 8,031,262 votes


Item
				  5.
			 Other
				  Information


None.









42



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Item 6.Exhibits.

(a) Exhibits



Exhibit Number
			 
			 Description of
				  Document3.1
			 
			 Certificate of Amendment of Restated
				  Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the
				  Companys Current Report on Form 8-K, filed on July 13, 2007, incorporated
				  by reference herein)31.1
			 
			 Certification by Chief Executive
				  Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed
				  herewith)31.2
			 
			 Certification by Chief Financial
				  Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed
				  herewith)32.1
			 
			 Certification by Chief Executive
				  Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
				  of the Sarbanes-Oxley Act of 2002 (furnished herewith)32.2
			 
			 Certification by Chief Financial
				  Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
				  of the Sarbanes-Oxley Act of 2002 (furnished herewith)








43



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SIGNATURES

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





Genta IncorporatedDate:August 7, 2007/s/ RAYMOND P. WARRELL, JR.,
				  M.D.Raymond P. Warrell, Jr.,
				  M.D.Chairman and Chief Executive
				  Officer(principal executive
				  officer)




Date:August 7, 2007/s/ RICHARD J.
				  MORANRichard J. MoranSenior Vice President, Chief Financial Officer and
				  Corporate Secretary(principal
				  financial and accounting officer)








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Exhibit Index



Exhibit Number
			 
			 Description of
				  Document3.1
			 
			 Certificate of Amendment of Restated
				  Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the
				  Companys Current Report on Form 8-K, filed on July 13, 2007, incorporated
				  by reference herein)31.1
			 
			 Certification by Chief Executive
				  Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed
				  herewith)31.2
			 
			 Certification by Chief Financial
				  Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed
				  herewith)32.1
			 
			 Certification by Chief Executive
				  Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
				  of the Sarbanes-Oxley Act of 2002 (furnished herewith)32.2
			 
			 Certification by Chief Financial
				  Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
				  of the Sarbanes-Oxley Act of 2002 (furnished herewith)








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