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

FORM 10-Q

(Mark One)

þ
     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) 
  OF THE SECURITIES EXCHANGE ACT OF 1934

For the
quarterly period ended September 30, 2005

OR

o
     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                                                                   |  | 33-0326866                                          
|-------------------------------------------------------------------------- |  | ----------------------------------------------------
|(State or other
      jurisdiction of
      incorporation or organization) |  | (I.R.S. Employer
      
      Identification Number)
|                                                                           |  |                                                     
|Two Connell Drive
      
      Berkeley Heights, NJ                        |  | 07922                                               
|(Address of principal
      executive offices)                             |  | (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 þ | No o
|----- | ----

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

|Yes
      þ | No o
|----------- | ----

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
      o | No þ
|----------- | ----

As of October 31, 2005, the registrant had 114,417,093 shares of common stock outstanding.

---

---



Genta
IncorporatedINDEX TO FORM 10-Q

|PART
      I.  | FINANCIAL
      INFORMATION                                           |  |  |    |    | 
|-------------- | --------------------------------------------------------------------- |  |  | -- | -- | 
|               |                                                                       |  | 
|Item
      1.  | Financial
      Statements (unaudited):                               |  | 
|               |                                                                       |  | 
|               | Consolidated
      Balance Sheets at September 30, 2005               |  | 
|               | and
      December 31, 2004                                           |  |  |    | 3  | 
|               |                                                                       |  | 
|               | Consolidated
      Statements of Operations for the Three             |  | 
|               | and
      Nine Months Ended September 30, 2005                        |  | 
|               | and 2004                                                              |  |  |    | 4  | 
|               |                                                                       |  | 
|               | Consolidated  Statements of Cash Flows for the
                  Nine |  | 
|               | Months  Ended  September  30,  2005  and
                  2004       |  |  |    | 5  | 
|               |                                                                       |  |  |    |    | 
|               | Notes to Consolidated Financial Statements                            |  |  |    | 6  | 
|               |                                                                       |  | 
|Item
      2.  | Managements
      Discussion and Analysis of Financial Condition     |  | 
|               | and
      Results of Operations                                       |  |  |    | 16 | 
|               |                                                                       |  |  |    |    | 
|Item
      3.  | Quantitative
      and Qualitative Disclosures about Market Risk      |  |  |    | 26 | 
|               |                                                                       |  |  |    |    | 
|Item
      4.  | Controls
      and Procedures                                         |  |  |    | 26 | 
|               |                                                                       |  | 
|PART
      II. | OTHER
      INFORMATION                                               |  | 
|               |                                                                       |  |  |    |    | 
|Item
      1.  | Legal
      Proceedings                                               |  |  |    | 27 | 
|               |                                                                       |  |  |    |    | 
|Item
      6.  | Exhibits                                                              |  |  |    | 27 | 
|               |                                                                       |  |  |    |    | 
|SIGNATURES     |                                                                       |  |  | 28 |   

---



Table
  of Contents

|PART
      I.  | FINANCIAL
      INFORMATION                                                                                                                                  
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                              
|Item
      1.  | Financial
      Statements:                                                                                                                                  
|               |                                                                                                                                                              
|               | Consolidated
      Balance Sheets at September 30, 2005                                                                                                      
|               | and
      December 31, 2004                                                                                                                                  
|               |                                                                                                                                                              
|               | Consolidated
      Statements of Operations for the Three                                                                                                    
|               | and
      Nine Months Ended September 30, 2005                                                                                                               
|               | and
      2004                                                                                                                                               
|               |                                                                                                                                                              
|               | Consolidated
      Statements of Cash Flows for the Nine                                                                                                     
|               | Months
      Ended September 30, 2005 and 2004                                                                                                               
|               |                                                                                                                                                              
|               | Notes
      to Consolidated Financial Statements                                                                                                             
|               |                                                                                                                                                              
|Item
      2.  | Managements
      Discussion and Analysis of Financial Condition                                                                                            
|               | and
      Results of Operations                                                                                                                              
|               |                                                                                                                                                              
|Item 3.        | Quantitative
      and Qualitative Disclosures about Market Risk                                                                                             
|               |                                                                                                                                                              
|Item 4.        | Controls
      and Procedures                                                                                                                                
|               |                                                                                                                                                              
|PART
      II. | OTHER
      INFORMATION                                                                                                                                      
|               |                                                                                                                                                              
|Item 1.        | Legal
      Proceedings                                                                                                                                      
|               |                                                                                                                                                              
|Item 6.        | Exhibits                                                                                                                                                     
|               |                                                                                                                                                              
|SIGNATURES    
|               |                                                                                                                                                              
|CERTIFICATIONS
|              
|31.1           | Certification
      by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002                                               
|31.2           | Certification
      by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002                                               
|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
|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

---



GENTA
INCORPORATED CONSOLIDATED BALANCE SHEETS (unaudited)

|(In thousands,
      except par value data)                                  |  |  |                                |          |                               |  
|---------------------------------------------------------------------------- |  |  | ------------------------------ | -------- | ----------------------------- | -
|ASSETS                                                                       |  |  | September
      30,
      2005 |          | December
      31,
      2004 |  
|                                                                             |  |  |                                |          |                               |  
|Current
      assets:                                                        |  |  |                                |          |                               |  
|Cash
      and cash equivalents                                              |  |  | $                              | 12,905   |                               | $
|Marketable
      securities (Note 3)                                         |  |  |                                | 15,909   |                               |  
|Accounts
      receivable                                                    |  |  |                                | 44       |                               |  
|Inventory
      (Note 4)                                                     |  |  |                                | 319      |                               |  
|Prepaid
      expenses and other current assets                              |  |  |                                | 630      |                               |  
|                                                                             |  |  |                                |          |                               |  
|Total
      current assets                                                   |  |  |                                | 29,807   |                               |  
|Property
      and equipment, net (Note 5)                                   |  |  |                                | 1,428    |                               |  
|Intangibles,
      net                                                       |  |  |                                | --       |                               |  
|Prepaid
      royalties                                                      |  |  |                                | 1,268    |                               |  
|Other
      assets                                                           |  |  |                                | 1,635    |                               |  
|                                                                             |  |  |                                |          |                               |  
|Total
      assets                                                           |  |  | $                              | 34,138   |                               | $
|                                                                             |  |  |                                |          |                               |  
|LIABILITIES
      AND STOCKHOLDERS' EQUITY                                   |  | 
|                                                                             |  | 
|Current
      liabilities:                                                   |  | 
|Accounts
      payable and accrued expenses                                  |  |  | $                              | 7,810    |                               | $
|Deferred
      revenues, current portion                                     |  |  |                                | --       |                               |  
|Notes
      payable                                                          |  |  |                                | 130      |                               |  
|Short
      term debt (Note 6)                                               |  |  |                                | --       |                               |  
|                                                                             |  |  |                                |          |                               |  
|Total
      current liabilities and total liabilities                        |  |  |                                | 7,940    |                               |  
|                                                                             |  |  |                                |          |                               |  
|Commitments
      and contingencies (Note 11)                                |  | 
|                                                                             |  | 
|Stockholders'
      equity (Note 7):                                         |  | 
|Preferred
      stock, 5,000 shares authorized                               |  | 
|Series
      A convertible preferred stock, $.001 par value;                 |  | 
|10
      shares issued and outstanding, liquidation value of $485 at         |  | 
|September
      30, 2005 and December 31, 2004, respectively                 |  |  |                                | --       |                               |  
|Series
      G participating cumulative preferred stock, $.001 par           |  | 
|value,
      0 shares issued and outstanding at September 30, 2005           |  | 
|and
      December 31, 2004, respectively                                    |  | 
|Common
      stock, $.001 par value; 150,000 shares authorized,              |  | 
|114,417
      and 95,358 shares issued and outstanding at September 30, 2005 |  | 
|and
      December 31, 2004, respectively                                    |  |  |                                | 114      |                               |  
|Additional
      paid-in capital                                             |  |  |                                | 373,993  |                               |  
|Accumulated
      deficit                                                    |  |  |                                | (347,943 | )                             |  
|Deferred
      compensation                                                  |  |  |                                | (8       | )                             |  
|Accumulated
      other comprehensive income/(loss)                          |  |  |                                | 42       |                               |  
|                                                                             |  |  |                                |          |                               |  
|Total
      stockholders' equity                                             |  |  |                                | 26,198   |                               |  
|                                                                             |  |  |                                |          |                               |  
|Total
      liabilities and stockholders' equity                             |  |  | $                              | 34,138   |                               | $
|                                                                             |  |  |                                |          |                               |  

See
accompanying notes to consolidated financial statements.

3

---



GENTA
INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                               |  |  | Three Months Ended
September 30, |         | Nine Months Ended
September 30, |  
|-------------------------------------------------------------- |  |  | -------------------------------- | ------- | ------------------------------- | -
|                                                               |  |  |                                  |         |                                 |  
|(In thousands, except per share data)                          |  |  | 2005                             |         | 2004                            |  
|                                                               |  |  |                                  |         |                                 |  
|                                                               |  |  | (Unaudited)                      |         | (Unaudited)                     |  
|Revenues:                                                      |  |  |                                  |         |                                 |  
|License fees and royalties                                     |  |  | $                                | --      |                                 | $
|Development funding                                            |  |  |                                  | --      |                                 |  
|Product sales - net                                            |  |  |                                  | 86      |                                 |  
|                                                               |  |  |                                  |         |                                 |  
|Total revenues                                                 |  |  |                                  | 86      |                                 |  
|Cost of goods sold                                             |  |  |                                  | 22      |                                 |  
|Provision for excess inventory                                 |  |  |                                  | --      |                                 |  
|                                                               |  |  |                                  |         |                                 |  
|Total cost of goods sold                                       |  |  |                                  | 22      |                                 |  
|                                                               |  |  |                                  |         |                                 |  
|Gross margin                                                   |  |  |                                  | 64      |                                 |  
|                                                               |  | 
|Costs and expenses:                                            |  | 
|Research and development (including non-cash compensation      |  | 
|expense related to certain stock options issued in 1999        |  | 
|and 2000 of $53 for the three months and $158 for the          |  | 
|nine months ended September 30, 2004)                          |  |  |                                  | 4,619   |                                 |  
|                                                               |  | 
|Selling, general and administrative (including non-cash        |  | 
|compensation expense related to certain stock options          |  | 
|issued in 1999 and 2000 of  $11 for the three months  ended    |  | 
|September 30, 2005 and September 30, 2004, and $34 and $50     |  | 
|for the nine months ended September 30, 2005 and September 30, |  | 
|2004 respectively)                                             |  |  |                                  | 3,495   |                                 |  
|Loss on disposition of property and equipment                  |  |  |                                  | 1       |                                 |  
|                                                               |  |  |                                  |         |                                 |  
|Total costs and expenses - gross                               |  |  |                                  | 8,115   |                                 |  
|Aventis reimbursement                                          |  |  |                                  | --      |                                 |  
|                                                               |  |  |                                  |         |                                 |  
|Total costs and expenses - net                                 |  |  |                                  | 8,115   |                                 |  
|                                                               |  |  |                                  |         |                                 |  
|Gain on forgiveness of debt                                    |  |  |                                  | --      |                                 |  
|Other income/(expense)                                         |  |  |                                  | 147     |                                 |  
|                                                               |  |  |                                  |         |                                 |  
|Net income/(loss)                                              |  |  |                                  | (7,904  | )                               |  
|                                                               |  |  |                                  |         |                                 |  
|Net income/(loss) per basic and diluted share (Note 9)         |  |  | $                                | (0.07   | )                               | $
|                                                               |  |  |                                  |         |                                 |  
|Shares used in computing net income/(loss) per basic share     |  |  |                                  | 105,629 |                                 |  
|                                                               |  |  |                                  |         |                                 |  
|Shares used in computing net income/(loss) per diluted share   |  |  |                                  | 105,629 |                                 |  
|                                                               |  |  |                                  |         |                                 |  

See
accompanying notes to consolidated financial statements.

4

---



GENTA
INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                              |  |  | Nine Months Ended September 30, |        
|----------------------------------------------------------------------------- |  |  | ------------------------------- | -------
|                                                                              |  |  |                                 |        
|(In thousands)                                                                |  |  | 2005                            |        
|                                                                              |  |  |                                 |        
|                                                                              |  |  | (Unaudited)                     |        
|Operating
      activities:                                                   |  |  |                                 |        
|Net income/(loss)                                                             |  |  | $                               | 8,041  
|Items reflected in net income/(loss) not requiring cash:                      |  | 
|Depreciation and amortization                                                 |  |  |                                 | 1,723  
|Loss on disposition of property and equipment                                 |  |  |                                 | 4      
|Non-cash reimbursement of research & development expense                      |  |  |                                 | (6,090 
|Provision for excess inventory                                                |  |  |                                 | (21    
|Gain on forgiveness of debt                                                   |  |  |                                 | (1,297 
|Amortization of deferred revenues                                             |  |  |                                 | (26,228
|Compensation expense related to certain stock options issued in 1999 and 2000 |  |  |                                 | 34     
|Changes in operating assets and liabilities:                                  |  | 
|Accounts receivable                                                           |  |  |                                 | (44    
|Inventory                                                                     |  |  |                                 | 55     
|Notes receivable                                                              |  |  |                                 | --     
|Prepaid expenses and other current assets                                     |  |  |                                 | 1,280  
|Accounts payable and accrued expenses                                         |  |  |                                 | (6,538 
|Other assets                                                                  |  |  |                                 | (15    
|                                                                              |  |  |                                 |        
|Net cash used in operating activities                                         |  |  |                                 | (29,096
|                                                                              |  |  |                                 |        
|Investing
      activities:                                                   |  | 
|Purchase of marketable securities                                             |  |  |                                 | (21,839
|Maturities and sales of marketable securities                                 |  |  |                                 | 11,763 
|Deposit to restricted cash account                                            |  |  |                                 | --     
|Redemption of restricted cash account                                         |  |  |                                 | --     
|Purchase of property and equipment                                            |  |  |                                 | (56    
|Proceeds from sale of property and equipment                                  |  |  |                                 | 34     
|                                                                              |  |  |                                 |        
|Net cash (used in)/provided by investing activities                           |  |  |                                 | (10,098
|                                                                              |  |  |                                 |        
|Financing
      activities:                                                   |  | 
|Issuance of common stock, net                                                 |  |  |                                 | 16,297 
|Borrowings under note payable                                                 |  |  |                                 | --     
|Repayments of note payable                                                    |  |  |                                 | (687   
|Deferred financing costs                                                      |  |  |                                 | --     
|Issuance of common stock upon exercise of warrants and options                |  |  |                                 | --     
|                                                                              |  |  |                                 |        
|Net cash provided by/(used in) financing activities                           |  |  |                                 | 15,610 
|                                                                              |  |  |                                 |        
|(Decrease)/increase in cash and cash equivalents                              |  |  |                                 | (23,584
|Cash and cash equivalents at beginning of period                              |  |  |                                 | 36,489 
|                                                                              |  |  |                                 |        
|Cash and cash equivalents at end of period                                    |  |  | $                               | 12,905 
|                                                                              |  |  |                                 |        

See
accompanying notes to consolidated financial statements.

5

---



GENTA
INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2005 (Unaudited)

1.
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  from  the  U.S.  Food  and  Drug  Administration  (FDA)  for
commercial  sale in one or more  indications.  Achievement  of  profitability  for the
Company is  dependent  on the timing of  Genasense® regulatory
approvals  in the U.S. and outside the  U.S.

The
Company  has  $28.8  million  of  cash  and  cash  equivalents  and  marketable
securities  on hand at September  30, 2005.  On August 11,  2005,  the Company sold 19.1
million  shares of its  common  stock at a price of $0.92 per share for  gross  proceeds
of $17.5  million,  before fees and  expenses.  After  deducting  fees and expenses  the
Company  received net  proceeds  of  $16.3  million.  With  the  completion  of  this
financing,  although  no  assurances  can  be  expressed,  management  believes  that at
the  current  rate of  spending,  the  Company  should  have  sufficient  cash funds to
maintain  its present operations into the middle of 2006.

During
the second quarter of 2005,  the Company  commenced  discussions  with other  companies
on a partnership  regarding  the development  and  commercialization  of Genasense®.
Those  discussions are ongoing.

Additional
alternatives  available  to  the  Company  to  subsequently  sustain  its  operations
include  other  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. The Company  will need  substantial
additional  funds before it can expect  to realize significant product revenue.

Genta
has  completed  and announced the results of Phase 3  trials of Genasense® in
combination  with  chemotherapy in the  treatment  of  malignant  melanoma,  chronic
lymphocytic  leukemia  (CLL)  and  multiple  myeloma.  In addition to the
three  Phase 3 trials,  the Company is  conducting  (under its  own  sponsorship  or in
conjunction  with various  cooperative  groups)  randomized  trials  in  non-small  cell
lung  cancer  (NSCLC),  small cell lung  cancer  (SCLC),  acute
myeloid  leukemia  (AML)  and  hormone  refractory  prostate  cancer  (HRPC).
Genta is also conducting a number of non-randomized  clinical  trials in  patients  with
various  types of cancer,  either  under its own  sponsorship  or in  collaboration  with
the National Cancer Institute (NCI).

6

---



On
June  30,  2005,  the  Company  announced  that it had  initiated  submission of a New
Drug  Application  (NDA) with  the FDA  seeking  marketing  approval of
Genasense®.  The NDA  seeks  accelerated  approval
for  the  use of  Genasense® in  combination  with
fludarabine  plus  cyclophosphamide  for the  treatment of patients  with CLL who have
previously  received  fludarabine.  Genasense® has
received Fast Track  designation  by the FDA in CLL,  meaning that the indication
represents an  unmet medical need.  Upon  agreement  with the FDA, Fast Track
designation  enables  the  Company  to  submit  the  NDA  on a  rolling basis
as specific sections are completed.  Genta has  submitted  the initial  section  and the
Company  anticipates  that  the NDA  will  be  completed  by the  end of the  fourth
quarter of 2005.  Genasense® has also received
designation as  an  Orphan  Drug  in  CLL,  which  provides  for a  period  of  marketing
exclusivity  if the  product is  approved,  certain  tax  benefits and  exemption  from
certain fees at the time of  NDA submission.  If accelerated  approval is granted, it
would  require  the  Company  to  conduct  a  confirmatory  study and  Genta  plans to
discuss  the  design of that  study  with the  FDA.  Although  Fast  Track  designation,
orphan  drug  designation  and  accelerated  approval  provisions  are  beneficial,
there  can be no  assurance  that the NDA will be  reviewed faster by the FDA or that the
NDA will be approved.

Also
on June 30, 2005,  the Company  announced that it had  filed a formal  Letter of Intent
with the  European  Medicines  Agency  (EMEA)  as the  initial  step  for
submission  of a  Marketing  Authorization  Application  (MAA) for Genasense®.
In the  submission,  the Company will seek approval for use of  Genasense® plus
dacarbazine  for the  treatment  of patients  with  metastatic  melanoma  who have not
previously  received  chemotherapy.  The  letter,  which  is  required  under
centralized  registration  procedures  when  marketing  authorization  is  requested
concurrently  in all  EU  member  states,  initiates a six-month  process  that
concludes  with  filing the  completed  application.  The  Company  anticipates  that the
MAA will be  filed by the end of the  fourth  quarter  of 2005.  Subsequent  to  filing
the  letter of  intent,  the  Company  was  notified  that the EMEA has  assigned  Spain
and  France as  Rapporteur  and  Co-Rapporteur,  respectively,  for  review of the
melanoma MAA.

Genta
markets  Ganite® (gallium  nitrate  injection)  for
the treatment of  cancer-related  hypercalcemia.  In May 2004,  the  Company  eliminated
its sales  force  and  significantly  reduced its marketing support for Ganite®.

A
significant  source of funds  during  the last  several  years  has  been  from  the
Companys  collaboration  with  Aventis,  a member of the  sanofi-aventis  Group  (Aventis),
regarding  the  development  and  commercialization  of  Genasense®.
On November 8, 2004,  the Company  received  from  Aventis  notice  of  termination  of
the  agreements  between  Genta  and  Aventis.  Pursuant  to those  agreements,  Aventis
continued  to support  the  development  of  Genasense® for
a  six-month  period.  On May 10,  2005,  the  Company  announced  that Genta and
Aventis  had signed an  agreement  to finalize  the  termination of their  development
and  commercialization  collaboration  for  Genasense®.
The  termination  agreement  provided for no future financial obligations by either party.

7

---



2.
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 have been  considered in preparing the  consolidated  financial
statements.  Such financial  statements include the  accounts of the Company and all
majority-owned  subsidiaries.  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.  Certain
reclassifications  have  been  made  to  prior-year  amounts  to  conform  to  the
current-year  presentation.  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, 2004.  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

In
April 2002, the Company entered into a development and commercialization agreement (Collaborative
Agreement) with Aventis. On November 8, 2004 Aventis gave notice to Genta
that it was terminating its Collaborative Agreement with the Company. Under the terms
of the agreement, Aventis continued to fund ongoing development activities for a
six-month period. The Company follows the provisions of the Securities and Exchange
Commissions Staff Accounting Bulletin (SAB) No. 104, Revenue
Recognition and Emerging Issues Task Force (EITF) No. 00-21,  Accounting
for Revenue Arrangements with Multiple Deliverables.

In
accordance  with EITF No.  00-21 the Company  analyzes  its multiple  element
arrangements  to determine  whether the  elements can be separated and accounted  for
individually  as  separate units of accounting.  The Company  recognizes license
payments as revenue if the license has  stand-alone  value and  the fair  value of the
undelivered  items can be  determined.  If the license is  considered  to have
stand-alone  value but  the  fair  value on any of the  undelivered  items  cannot  be
determined,  the license  payments are  recognized  as revenue  over the period of
performance for such  undelivered  items or  services.  The  Companys  estimate  of
the  period  of  performance  involves  management  judgment.  Amounts received  for
milestones  are  recognized  upon  achievement  of  the  milestone,  as  long  as  the
milestone  is  deemed  to  be  substantive  and  the  Company  has  no  other
performance  obligations.

The
Company  determined  that,  due to the  nature of the  ongoing  development  work
related  to  its  Collaborative  Agreement with Aventis,  the end of the development
phase and  the  fair  value  of  the  undelivered  elements  were  not  determinable.
Accordingly,  the Company deferred  recognition  of  the  initial  licensing  fee  and
up-front  development  funding  received from Aventis and  recognized  these payments  on
a straight-line  basis over the original  estimated  useful  life of the related
first-to-expire  patent of 115 months. As  a result of the notice of  termination  of the
agreement  with  Aventis,  the Company  determined that the remaining  deferred  revenue
should be recognized  over the six-month  termination  notice period from November 2004
to May 2005.

8

---



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.  In December 2004, a wholesaler  contacted  the Company to return a
significant  portion of its inventory  of Ganite®.
The Company  agreed to the return of this product  and  recorded  a  provision  for
sales  returns,  as  well as  provided  for  potential  returns from other  wholesalers.
In  January  2005,  the  wholesaler  returned  $0.5  million  of  Ganite®.
At  September  30,  2005,  the  Companys  remaining  provision for sales returns
was $0.8 million.

Research and
Development

Research
and  development  costs are expensed as incurred,  including  raw  material  costs
required  to  manufacture  products for clinical  trials.  Reimbursements  for applicable
Genasense®-related  costs, under the Collaborative
Agreement,  have  been  recorded  as  a  reduction  to  expenses  in  the  Consolidated
Statements of Operations.

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  marketable  securities.  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
current offices are being amortized over the remaining life of the leases. 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. Based on the evaluation, no impairment was indicated in
accordance with Statement of Financial Accounting Standards ("SFAS") No.
144,  Accounting for the Impairment or Disposal of Long-Lived Assets.

Inventories

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

9

---



Stock Options

The
Company has two stock-based compensation plans. The Company accounts for
stock-based compensation arrangements in accordance with provisions of Accounting
Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued
to Employees and complies with the disclosure provisions of SFAS No. 123,Accounting for Stock-Based Compensation. Under APB Opinion No. 25, compensation
expense is based on the difference, if any, on the date of grant, between the fair
value of the Company's stock and the exercise price. The Company accounts for
stock options issued to non-employees in accordance with the provisions of SFAS
No. 123 and EITF Issue No. 96-18, Accounting for Equity Instruments That Are Issued
to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or
Services. The Company is amortizing deferred stock compensation using the graded
vesting method, in accordance with Financial Accounting Standards Board
Interpretation (FIN) No. 28, over the vesting period of each respective
option, which is generally four years.

The
following  table  illustrates  the  effect  on  net  income/(loss)  and net
income/(loss) per share if the Company  had  applied  the fair value  recognition
provisions  of SFAS  No. 123 to stock-based employee compensation:

|                                                   |  |  | Three Months Ended
September 30, |        | Nine Months Ended
September 30, |  
|-------------------------------------------------- |  |  | -------------------------------- | ------ | ------------------------------- | -
|                                                   |  |  |                                  |        |                                 |  
|($ thousands, except per share data)               |  |  | 2005                             |        | 2004                            |  
|                                                   |  |  |                                  |        |                                 |  
|Net income/(loss) applicable to common shares,     |  |  |                                  |        |                                 |  
|as reported                                        |  |  | $                                | (7,904 | )                               | $
|Add: Equity related employee compensation expense  |  | 
|included in reported net income, net of related    |  | 
|tax effects                                        |  |  |                                  | 11     |                                 |  
|Deduct: Total stock-based employee compensation    |  | 
|expense determined under fair- value based method  |  | 
|for all awards, net of related tax effects         |  | 
|                                                   |  |  |                                  | (1,291 | )                               |  
|                                                   |  |  |                                  |        |                                 |  
|Pro forma net income/(loss)                        |  |  | $                                | (9,184 | )                               | $
|                                                   |  |  |                                  |        |                                 |  
|Net income/(loss) per share attributable to common |  | 
|shareholders:                                      |  | 
|As reported: Basic and diluted                     |  |  | $                                | (0.07  | )                               | $
|Pro forma: Basic and diluted                       |  |  | $                                | (0.09  | )                               | $

The
Company  estimated  the fair value of options at the  date of each grant  during the
three  months  ended  September  30,  2005  and  2004,  respectively,  using  a
Black-Scholes  option valuation model with the following assumptions:

|                        |  |  |  | Three Months Ended
September 30, |  
|----------------------- |  |  |  | -------------------------------- | -
|                        |  |  |  |                                  |  
|                        |  |  |  | 2005                             |  
|                        |  |  |  |                                  |  
|Risk-free interest rate |  |  |  | 4.1                              | %
|Dividend yield          |  |  |  | --                               |  
|Expected life (years)   |  |  |  | 6.2                              |  
|Expected volatility     |  |  |  | 118                              | %

10

---



In
December 2004, the FASB issued SFAS No. 123(R)  Share-Based Payment that will
require compensation costs related to share-based payment transactions to be
recognized in the financial statements. With limited exceptions, the amount of
compensation cost will be measured based on the grant-date fair value of the equity
or liability instruments issued. In addition, liability awards will be remeasured
each reporting period. Compensation cost will be recognized over the period that
an employee provides service in exchange for the award. SFAS No. 123(R) replaces
SFAS No. 123 and supersedes APB Opinion No. 25. In April 2005, the Securities and
Exchange Commission announced the adoption of a rule that defers the required date
of SFAS No 123(R). The Company will adopt the provisions of SFAS No. 123(R) in
2006. The Company is evaluating the impact that the adoption of this standard will
have on its results of operations, financial position or cash flows.

3.
Marketable Securities

The
carrying  amounts  of  the  Companys  marketable  securities,  which  are
primarily  government  securities,  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):

|                        |  |  | September 30,
2005 |        | December 31,
2004 |  
|----------------------- |  |  | ------------------ | ------ | ----------------- | -
|                        |  |  |                    |        |                   |  
|Cost                    |  |  | $                  | 15,867 |                   | $
|Gross unrealized gains  |  |  |                    | 42     |                   |  
|Gross unrealized losses |  |  |                    | --     |                   |  
|                        |  |  |                    |        |                   |  
|Fair value              |  |  | $                  | 15,909 |                   | $
|                        |  |  |                    |        |                   |  

The
estimated fair value of each  marketable  security has  been  compared  with its cost,
and  therefore,  an unrealized  gain of  approximately  $42 thousand and a net unrealized
loss  of  approximately  $32  thousand  have  been  recognized  in  Accumulated  other
comprehensive  income/(loss)  at September  30, 2005 and December 31, 2004, respectively.

4.
Inventory

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

|                |  |  | September 30,
2005 |     | December 31,
2004 |  
|--------------- |  |  | ------------------ | --- | ----------------- | -
|                |  |  |                    |     |                   |  
|Raw materials   |  |  | $                  | 308 |                   | $
|Work in process |  |  |                    | --  |                   |  
|Finished goods  |  |  |                    | 11  |                   |  
|                |  |  |                    |     |                   |  
|                |  |  | $                  | 319 |                   | $
|                |  |  |                    |     |                   |  

On
May 10,  2005,  the  Company  announced  that Genta and  Aventis had signed an agreement
to finalize  the  termination  of their development and  commercialization  collaboration
for  Genasense®.  The termination  agreement
provided for no future  financial  obligations  by either  party and Aventis  returned
its  current  inventory  of  Genasense® drug supply
to Genta.  With this  returned drug supply,  the Company has  substantial  quantities  of
Genasense® which are  recorded  at zero cost.  Such
inventory  would be available for the  commercial  launch  of this product, should
Genasense® be approved.

11

---



5.
Property and Equipment

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

|                                  |  |  |  | Estimated 
    Useful Lives |  | September 30,
2005 |        | December 31,
2004 |  
|--------------------------------- |  |  |  | --------------------------- |  | ------------------ | ------ | ----------------- | -
|                                  |  |  |  |                             |  |                    |        |                   |  
|Computer equipment                |  |  |  | 3                           |  | $                  | 2,871  |                   | $
|Software                          |  |  |  | 3                           |  |                    | 3,349  |                   |  
|Furniture and fixtures            |  |  |  | 5                           |  |                    | 936    |                   |  
|Leasehold improvements            |  |  |  | Life of lease               |  |                    | 410    |                   |  
|Equipment                         |  |  |  | 5                           |  |                    | 182    |                   |  
|                                  |  |  |  |                             |  |                    |        |                   |  
|                                  |  |  |  |                             |  |                    | 7,748  |                   |  
|Less accumulated depreciation and |  | 
|amortization                      |  |  |  |                             |  |                    | (6,320 | )                 |  
|                                  |  |  |  |                             |  |                    |        |                   |  
|                                  |  |  |  |                             |  | $                  | 1,428  |                   | $
|                                  |  |  |  |                             |  |                    |        |                   |  

6.
Short Term Debt

Revolving
debt  was  issued  in  connection  with  an  amendment,  dated  March  14,  2003,  to
the  Aventis  Collaboration  Agreement  that  established  a line of  credit  related  to
the  development,  manufacturing  and  commercialization  of Genasense® (Line
of Credit).  The Line  of Credit  was  considered  an advance  against  both past
and  future  costs  and  the  borrowing  base  was  adjusted  on  a  monthly basis.  With
the Aventis notice of termination,  Genta  could not borrow  additional  funds and the
Line of Credit had  to be  repaid  at  the  end  of the  termination  period.  All
payments  otherwise  due to Genta  were  applied  against  the  balance  on the Line of
Credit  until  the Line of Credit  was  repaid.  On May 10,  2005,  the Company
announced  that Genta  and Aventis had finalized a termination  agreement,  providing
for no future  financial  obligations  by either party and the  remaining  balance  on
the  Line  of  Credit  was  forgiven,  resulting in a gain on forgiveness of debt of $1.3
million.

7.
Stockholders Equity

Common
Stock

In
March  2004,  the  Board  of  Directors  approved  an  amendment  to increase  the
authorized  common stock to 150.0  million  shares  from  120.0  million  shares.  In
June  2004,  shareholders  approved  this  amendment at the Annual  Meeting  of
Stockholders.

In
December  2004, the Company issued 15.0 million shares  of its  common  stock  through  a
direct  placement  with two  institutions  and  received  net  proceeds  of
approximately  $21.6 million.

In
August 2005,  the Company  issued 19.1 million  shares  of  its  common  stock  and
received  net  proceeds  of  approximately $16.3 million.

In
September  2005,  the  Board of  Directors  adopted a  Stockholder  Rights  Plan  and
declared  a  dividend  of  one  preferred  stock  purchase  right  (a  Right)
for  each  outstanding  share of common stock of the Company,  payable to  holders  of
record as of the close of  business  on  September  27, 2005.  Generally,  the rights
become  exercisable upon the  earlier of the close of  business  on the tenth  business
day  following  the first  public  announcement  that any person or  group  has  become
a  beneficial  owner of 15% or more of the  Companys  Common  Stock  and the  close
of  business  on the  tenth  business  day after the date of the  commencement  of a
tender  or  exchange  offer  by any  person  which  would,  if  consummated,  result  in
such  person  becoming  a  beneficial  owner  of 15% or  more of the  Companys
common  stock.  Each  Right shall be  exercisable to purchase,  for $25.00,  subject  to
adjustment,  one  one-hundredth of a newly registered share  of Series G  Participating
Cumulative  Preferred  Stock,  par  value  $0.001  per  share  of  the  Company.  The
terms  and  conditions  of the Rights are set forth in a Rights  Agreement  dated
September  20,  2005  between  the  Company  and Mellon  Investor Services, LLC, as
Rights Agent.

12

---



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 Prefered  Stock by the  conversion  price.  The
conversion  price is  subject to  adjustment  for  antidilution.  As of  September  30,
2005  and  December  31,  2004,  each share of Series A Preferred  Stock was convertible
into 9.8067 and 8.4274 shares of common stock, respectively.

At
September 30, 2005 and December 31, 2004,  the Company  had  9,700  shares  of Series A
Convertible  Preferred  Stock  issued and outstanding.

Series
G Preferred Stock

The
Company  has  authorized  5.0  million  shares  of  preferred  stock  of  which  2.0
million  shares  has  been  designated Series G Participating Cumulative Preferred.

8.
Comprehensive Income/(Loss)

An
analysis of comprehensive income/(loss) is presented  below:

|($ in thousands)                  |  |  | Three Months Ended
September 30, |        | Nine Months Ended
September 30, |  
|--------------------------------- |  |  | -------------------------------- | ------ | ------------------------------- | -
|                                  |  |  |                                  |        |                                 |  
|                                  |  |  | 2005                             |        | 2004                            |  
|                                  |  |  |                                  |        |                                 |  
|Net income/(loss)                 |  |  | $                                | (7,904 | )                               | $
|Change in market value on         |  | 
|available-for-sale marketable     |  | 
|securities                        |  |  |                                  | 38     |                                 |  
|                                  |  |  |                                  |        |                                 |  
|Total comprehensive income/(loss) |  |  | $                                | (7,866 | )                               | $
|                                  |  |  |                                  |        |                                 |  

9.
Net Income/(Loss) per Share

The
information required to compute basic and diluted  net income/(loss) per share is as
follows:

|($ in thousands, except per share amounts) |  |  | Three Months Ended
September 30, |         | Nine Months Ended
September 30, |  
|------------------------------------------ |  |  | -------------------------------- | ------- | ------------------------------- | -
|                                           |  |  |                                  |         |                                 |  
|                                           |  |  | 2005                             |         | 2004                            |  
|                                           |  |  |                                  |         |                                 |  
|Numerator:                                 |  |  |                                  |         |                                 |  
|Net income/(loss)                          |  |  | $                                | (7,904  | )                               | $
|Denominator:                               |  | 
|Weighted average shares outstanding:       |  | 
|Basic                                      |  |  |                                  | 105,629 |                                 |  
|Effect of dilutive stock options, warrants |  | 
|and convertible preferred stock            |  |  |                                  | --      |                                 |  
|                                           |  |  |                                  |         |                                 |  
|Diluted                                    |  |  |                                  | 105,629 |                                 |  
|                                           |  |  |                                  |         |                                 |  
|Net income/(loss) per share:               |  | 
|Basic                                      |  |  | $                                | (0.07   | )                               | $
|Diluted                                    |  |  | $                                | (0.07   | )                               | $

13

---



10.
Supplemental Disclosure of Cash Flows Information and Non-cash Investing and Financing
Activities

As
a result  of the  Aventis  notice of  termination,  all  payments  otherwise  due to
Genta were  contractually  applied  against  the  balance of the Line of Credit  until
the Line of  Credit was  repaid.  During the nine  months  ended  September  30,  2005,
$6.0  million  of  reimbursement  due to Genta was  applied to the  balance of the Line
of  Credit.  In  addition,  the  Company  recorded  a gain on the  forgiveness  of debt
of  $1.3 million.

No
interest or income  taxes were paid for the nine months  ended September 30, 2005 and
2004, respectively.

11.
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 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  have been  consolidated
into a single  action and  allege  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 our  securities.  The  shareholder  class  action  complaint in the
various  actions  seeks  monetary  damages  in an  unspecified  amount  and  recovery  of
plaintiffs costs  and  attorneys fees.  On September  30, 2005,  the court
granted in part and  denied  in  part  the  Companys  motion  to  dismiss  the
plaintiffs complaint.  The court dismissed plaintiffs claim  that  the
defendants  engaged  in a  scheme  or  artifice  to  defraud  plaintiffs,  but  allowed
plaintiffs claims  to  proceed  with  respect to their  allegations  that
defendants  issued  false  and  misleading  public  statements  about  Genasense®.
On October  17, 2005  defendants  filed an answer  to the complaint and will soon
commence pre-trial discovery.

In
addition,  two separate shareholder  derivative actions  have been filed  against the
directors  and certain  officers  of Genta in New  Jersey  State and  Federal  courts.
Based on  facts  substantially  similar  to  those  asserted  in  the  shareholder  class
actions,  the derivative  plaintiffs  claim  that defendants  have breached their
fiduciary  duties to the  shareholders and other violations of New Jersey law.

The
Company  believes these  litigations are without merit  and will  continue to vigorously
defend  against these suits.  Management  does not believe that this  litigation will
have a  material  adverse  impact on the Companys  financial  results  or liquidity.

12.
Recent Accounting Pronouncements

In
May 2005, the Financial Accounting Standards Board (FASB) issued
Statement (SFAS) No. 154,  Accounting Changes and Error Corrections,
effective for accounting changes and corrections of errors made in fiscal
years beginning after December 15, 2005. SFAS 154 requires voluntary changes in
accounting principle be retrospectively applied to financial statements from previous
periods unless such application is impracticable. Under the newly issued standard
changes in depreciation, amortization, or depletion for long-lived, non-financial
assets should be accounted for as a change in accounting estimate that is effected
by a change in accounting principle. The Company believes that the adoption of
this standard will not have a material impact on the Companys results of
operations, financial position or cash flow.

In
December 2004, the FASB issued SFAS No. 153,  Exchanges of Non-monetary Assets, an
amendment of APB Opinion No. 29. The adoption of this statement, effective June 2005,
did not have any impact on the Companys results of operations, financial
position or cash flows.

14

---



In
November 2004, the FASB issued SFAS No. 151,  Inventory Costs, to clarify the
accounting for abnormal amounts of idle facility expense, freight, handling costs
and wasted material. As the Company uses third-party manufacturers and does not
manufacture its own products, the adoption of this statement, effective June 2005,
did not have a material impact on the Companys results of operations,
financial position or cash flows.

15

---



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.  The  Company  intends  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 the
Companys 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  ability  to
obtain  necessary  regulatory  approval for  Genasense® 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;
- the other risks  described  under
Certain  Risks and  Uncertainties  Related to the  Companys  Business in the
Companys  Annual report on Form 10-K for the fiscal year  ended December 31, 2004.

The
Company  does  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.

Overview

Genta
Incorporated  is  a  biopharmaceutical  company  engaged  in  pharmaceutical  research
and  development.  The  Company is dedicated to the  identification,  development  and
commercialization  of novel drugs for the  treatment of cancer  and  related  diseases.
Genta  has  had  recurring  annual  operating  losses  since its  inception  and  expects
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  establishment  of  a  sales  and
marketing  organization.  We  have  experienced  significant  quarterly  fluctuations  in
operating  results  and we expect  that  these  fluctuations  in  revenues,  expenses
and losses  will continue.

16

---



During
the nine months ended  September  30,  2005,  Genta  reported  total  revenues  of $26.5
million and net income of  $8.0  million  or $0.08  per  share.  Net  income  was  driven
largely by the  accelerated  recognition  of deferred  revenue  related to the
sanofi-aventis  notice of  termination  of the  2002 collaboration  agreements  related
to Genasense®.  On May  10,  2005,  the Company
announced  that Genta and Aventis had  signed an  agreement  to  finalize  the
termination  of their  development  and  commercialization  collaboration  for  Genasense®.
The termination  agreement provided for no future  financial  obligations  by  either
party.  There  will  be no  further  revenues  recognized  associated  with this
agreement  subsequent  to May 8, 2005.  As of  September  30,  2005,  the  Company had
cash, cash  equivalents and marketable  securities  totaling  $28.8  million.  Management
continues to anticipate  that total  average  monthly  cash outflow will be in the $3.0
million  to $4.0  million  range.  On  August  11,  2005,  the  Company  sold 19.1
million  shares of its  common  stock at a  price  of  $0.92  per  share  for  gross
proceeds  of  $17.5  million,  before fees and expenses.  After  deducting fees and
expenses the Company received net proceeds of $16.3 million.

Genta
has  completed  and announced the results of Phase 3  trials of Genasense® in
combination  with  chemotherapy in the  treatment  of  malignant  melanoma,  chronic
lymphocytic  leukemia (CLL) and multiple myeloma.

In
late  2003,  we  filed a New Drug  Application  (NDA)  for  Genasense® to
be used in  combination  with  dacarbazine  for  the  treatment  of  patients  with
advanced  malignant  melanoma.  The FDA Oncology  Drugs  Advisory  Committee  voted  not
to recommend  Genasense® for marketing  approval.
In May  2004,  the  Company  withdrew  its  NDA  from  further  consideration.  At the
same  time,  we  initiated  a series of  steps that were  designed to  conserve  cash in
order to focus  on  Genasense®.  The  Company  has
continued  long-term  follow-up  of  patients  who were  enrolled  in the  malignant
melanoma  trial.  In May 2005, we announced  that updated data  from extended  follow-up
for a minimum of 24 months  continued  to  show  statistical  significance  for  overall
response,  complete  response and progression free survival.  Statistical  significance
was  achieved  for durable  response,  (P=0.02).  However,  overall  survival  by intent
to treat  analysis  did  not  show  a  statistically  significant  improvement  for
patients treated with Genasense®, (P=0.077).

On
June  30,  2005,  the  Company  announced  that it had  filed a formal  Letter of Intent
with the  European  Medicines  Agency  (EMEA)  as the  initial  step  for
submission  of a  Marketing  Authorization  Application  (MAA) for Genasense®.
In  the  submission,  we  will  seek  approval  for  use  of  Genasense® plus
dacarbazine  for the  treatment  of patients  with  metastatic  melanoma  who have not
previously  received  chemotherapy.  The  letter,  which  is  required  under
centralized  registration  procedures  when  marketing  authorization  is requested
concurrently in all member states  of the  European  Union,  initiates a six-month
process  that  concludes  with  filing  the  completed  application.  The  marketing
application  for  Genasense® is  supported  by
extended  follow-up  of  patients  from a  Phase  3  trial  of  dacarbazine  with  or
without  Genasense® in  previously  untreated
patients  with  metastatic  melanoma.  The  study  included  771  patients  at 139 sites
in nine  countries.  The  MAA will include  data from 24 months of minimum  follow-up on
all patients.  Subsequent to filing the Letter of Intent,  the  Company  was  notified
that the EMEA has  assigned  Spain and  France as  Rapporteur  and  Co-Rapporteur,
respectively,  for  review of the melanoma MAA.

17

---



In
November  2004,  the Company  reported  results  from a  randomized  Phase 3 clinical
trial of  Genasense® in patients  with  relapsed  or
refractory  chronic  lymphocytic  leukemia  (CLL).  Two hundred  forty-one
patients were  randomized to  receive  standard  chemotherapy  with  fludarabine  and
cyclophosphamide  with  or  without  Genasense®.
The  primary  objective  of the study was to evaluate  whether the  addition  of Genasense® would
increase the  proportion of patients who  attained  major  objective  responses  (defined
as  complete  remission (CR) or a nodular partial remission  (nPR)),
as  determined  by  review  of  clinical  data  and  bone  marrow  biopsies  using
experts  who  were  blinded  as to  treatment  assignment.  Analysis  of  study  results
showed  that  the  addition of Genasense® to
chemotherapy  was associated with a  statistically  significant  increase  in the  major
objective  response  rate  compared  with the rate  observed  in patients  who were
treated  with  chemotherapy  alone.  No  significant  difference  was  observed  in
overall  response  rate,  time-to-disease  progression,  or  overall  survival.  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®.  Treatment-emergent
adverse events  (irrespective  of  relation  to  study  drugs)  during  treatment  or
within  thirty  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.

On
September  19,  2005,  the  Company  announced  the  presentation  of results from
extended  follow-up of patients  enrolled in the Phase 3 randomized  trial of  Genasense® plus
chemotherapy  for patients with  relapsed or  refractory  CLL.  In  the  Phase  3  trial,
241  patients  with  relapsed  or  refractory CLL were randomly  assigned to receive
fludarabine  plus  cyclophosphamide  (Flu/Cy)  chemotherapy with or without  Genasense®.
The trial  achieved its primary  endpoint,  which  was a  statistically  significant
increase in the  proportion  of  patients  who  achieved  a  complete  or  nodular
partial  response  (CR/nPR)  (17% vs. 7%,  respectively;  P=0.025).  To  date,  six of
the eight  patients  (75%) who  achieved  CR/nPR  with  chemotherapy  alone have relapsed
compared with five of  twenty patients (25%) in the Genasense® treatment
group. The  median  duration  of  CR/nPR  was  22  months  in  the  chemotherapy-alone
group;  the median has not been reached in  the  Genasense® group
(P=0.03).  All CR/nPR  responses  have  been durable (i.e., exceeding six
months duration).

On
June  30,  2005,  the  Company  announced  that it had  initiated  submission  of  an
NDA  with  the  FDA  seeking  marketing  approval of Genasense®.
The NDA seeks  accelerated  approval  for  the  use  of  Genasense® in
combination  with  fludarabine  plus  cyclophosphamide  for  the  treatment  of  patients
with chronic  lymphocytic  leukemia  (CLL) who have  previously  received
fludarabine.  Genasense® has  received  Fast Track
designation  by the FDA in CLL,  meaning  that the  indication  represents an unmet
medical need.  Upon  agreement  with the FDA,  Fast Track  designation  enables the
Company to  submit the NDA on a "rolling"  basis as specific  sections are
completed.  Genta has  submitted  the initial  section and the  Company  anticipates
that  the NDA will be  completed  by the  end of  the  fourth  quarter  of  2005.
Genasense® has  also  received  designation  as  an
Orphan  Drug  in  CLL,  which  provides  for  a  period  of  marketing  exclusivity  if
the  product is approved,  certain tax benefits and exemption  from  certain  fees at the
time of NDA  submission.  If  accelerated  approval  is  granted,  it  would  require  us
to  conduct  a  confirmatory  study and we plan to discuss  the design of that  study
with the FDA.  Although Fast Track  designation,  orphan  drug  designation  and
accelerated  approval  provisions  are  beneficial,  there  can be no  assurance  that
the NDA will be  reviewed  faster by the FDA or that the NDA will be  approved.  The
Company has  requested a meeting  with the FDA to discuss  plans for a confirmatory
post-approval study.

18

---



In
November  2004,  Genta  reported  that  the  Company's  randomized  Phase 3 clinical
trial of  Genasense® in patients  with multiple
myeloma did not meet its primary  endpoint.  The  trial had been  designed to evaluate
whether the  addition of  Genasense® to standard
therapy with  high-dose  dexamethasone  could  increase  the  time  to  development  of
progressive  disease in  patients  who had  previously  received  extensive  therapy.
Based  on the  results  of the  Phase 3  trial,  the  Company  has no plans to  submit
regulatory  applications  in  this  indication at the current time.  The Company has not
yet  determined what  additional  clinical  trials,  if any, may be  undertaken in
patients with multiple myeloma.

In
addition  to the three  Phase 3 trials,  the Company is  conducting  (under its own
sponsorship or in conjunction  with  various  cooperative  groups)  randomized  trials in
non-small  cell lung cancer  (NSCLC),  small cell lung cancer (SCLC),
acute  myeloid  leukemia  (AML)  and  hormone  refractory  prostate cancer  (HRPC).
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 (NCI).

In
April  2002,  we  entered  into a series of  agreements  with Aventis  regarding the
development and  commercialization  of  Genasense®.
On  November 8, 2004,  the  Company  received  from Aventis notice of  termination of the
agreements  between  Genta and  Aventis.  On May 10,  2005,  the Company  announced  that
Genta and  Aventis  had signed an  agreement  to finalize  the  termination of their
development  and  commercialization  collaboration  for  Genasense®.
The  termination  agreement  provided for no future  financial  obligations by either
party  and the  retirement  of the  Line  of  Credit  established  by  Aventis to Genta.
Aventis  returned its current  inventory of  Genasense® drug
supply to Genta.  In addition,  Genta assumed  responsibility  for  the  randomized
clinical  trial  of  Genasense® in  combination
with  docetaxel  (Taxotere®;  sanofi-aventis) in
patients with  hormone-refractory  prostate  cancer,  which is  currently  ongoing in
Europe.  Among  other  provisions,  the  Standstill  and  Voting  Agreement  and
Registration  Rights Agreement that were established  pursuant  to the Aventis
investment  in Genta common stock in 2002 were  not terminated at that time.

Results of
Operations  for the Three Months  Ended  September  30, 2005 and 2004

|                                                                |  |  | Summary
      Operating Results
      For the three months ended September 30, |       
|--------------------------------------------------------------- |  |  | ------------------------------------------------------------------------------ | ------
|                                                                |  |  |                                                                                |       
|($
      in thousands)                                          |  |  |                                                                                |       
|                                                                |  |  |                                                                                |       
|                                                                |  |  | 2005                                                                           |       
|                                                                |  |  |                                                                                |       
|Revenues:                                                       |  |  |                                                                                |       
|License
      fees and royalties                                |  |  | $                                                                              | -     
|Development
      funding                                       |  |  |                                                                                | --    
|Product
      sales - net                                       |  |  |                                                                                | 86    
|                                                                |  |  |                                                                                |       
|Total
      revenues                                            |  |  |                                                                                | 86    
|                                                                |  |  |                                                                                |       
|Cost
      of goods sold                                        |  |  |                                                                                | 22    
|Provision
      for excess inventory                            |  |  |                                                                                | --    
|                                                                |  |  |                                                                                |       
|Total
      cost of goods sold                                  |  |  |                                                                                | 22    
|                                                                |  |  |                                                                                |       
|Gross
      margin                                              |  |  |                                                                                | 64    
|                                                                |  | 
|Costs
      and expenses:                                       |  | 
|Research
      and development (including non-cash compensation |  | 
|expense of $53 for the three months ended September 30,         |  | 
|2004)                                                           |  |  |                                                                                | 4,619 
|Selling,
      general and administrative (including            |  | 
|non-cash
      compensation expense of $11 for the three        |  | 
|months
      ended September 30, 2005 and September 30, 2004)   |  |  |                                                                                | 3,495 
|Loss
      on disposition of property and equipment             |  |  |                                                                                | 1     
|                                                                |  |  |                                                                                |       
|Total
      costs and expenses - gross                          |  |  |                                                                                | 8,115 
|Less:
      Aventis reimbursement                               |  |  |                                                                                | --    
|                                                                |  |  |                                                                                |       
|Total
      costs and expenses - net                            |  |  |                                                                                | 8,115 
|                                                                |  |  |                                                                                |       
|Other
      income/(expense)                                    |  |  |                                                                                | 147   
|                                                                |  |  |                                                                                |       
|Net loss                                                        |  |  | $                                                                              | (7,904
|                                                                |  |  |                                                                                |       

19

---



Total Revenues

Total
revenues  were $0.1  million  for the three  months  ended  September  30, 2005  compared
with $1.4 million for the  three  months  ended  September  30,  2004.  License  fees and
development  funding  revenues  of $1.3  million for the three  months  ended  September
30,  2004  were  generated  by  the  recognition  of the initial  $10.0  million
licensing fee and  $40.0  million  development  funding  received from Aventis in  2002
under the Collaborative  Agreement.  On November 8, 2004,  Aventis  gave  six-months
notice  to  Genta  that  it  was  terminating  its  Collaborative  Agreement  with  the
Company  regarding  the  development  and  commercialization  of  Genasense®.
The Company had previously  determined  that, due  to the nature of the ongoing
development  work related to the  Collaborative  Agreement,  the  end of the  development
phase  and  the  fair-value  of the  undelivered  elements  were  not  determinable.
Accordingly,  we  deferred  recognition  of the  initial  licensing  fee  and  up-front
development  funding  received  from  Aventis  and  recognized  these  payments on a
straight-line  basis over the original  estimated  useful life  of the  related
first-to-expire  patent of 115  months.  As a  result  of the  notice  of  termination
of the  Collaborative  Agreement,  we determined that the remaining  deferred revenue
should  be  recognized  over  the  termination  period.  On  November  9,  2004,  we
began  to  recognize  the  remaining  deferred  revenue  over the  six-month  period,
ended  May 8,  2005.

Product
sales-net  are  generated  from sales of Ganite®,
the  Companys  commercial  product  for  the  treatment  of  cancer-related
hypercalcemia.  Product  sales-net  for  the  three  months  ended  September  30,  2005
were  virtually  unchanged compared with the prior-year period.

Cost of Goods
Sold

Cost
of goods sold for the prior-year  period  includes a  provision  for excess  inventory
of Ganite® of $0.7  million.  Excluding the
provision  for excess  inventory,  cost of goods  sold for the  three  months  ended
September  30,  2005  were  virtually  unchanged  from the prior-year  period,
consistent  with product sales.

Research and
Development Expenses

Research
and  development  expenses  before  reimbursement  were $4.6  million for the three
months  ended  September  30,  2005  compared  with $20.6  million for the three months
ended  September  30, 2004.  During the three months ended  September  30,  2005,
approximately  $4.3 million or 93% of research and  development  expenses  were  incurred
on  the  Genasense® project.  In the prior-year
period,  research and development  expenses  before  reimbursement  incurred  on  the
Genasense® project  of  approximately  $20.1
million  included  $13.3  million  related  to  purchases  of  Genasense® bulk
drug  substance.

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  not  reasonably  estimable.
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  reviewing  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.

Selling,
General and Administrative Expenses

Selling,
general and  administrative  expenses were $3.5  million  for  the  three  months  ended
September  30,  2005  compared  with  $4.7  million  for  the  three  months  ended
September  30,  2004.  The decline is  primarily  due to lower  headcount  and  resultant
payroll  expenses in 2005  combined  with  lower  depreciation  expense  resulting  from
limited  purchases of equipment since mid-2004.

20

---



Aventis
Reimbursement

A
breakdown  of the  various  third-party,  drug  supply  costs  and  internal  costs  of
scientific  and  technical  personnel,  (Full-Time  Equivalents or FTEs)
that Aventis  was required to reimburse  under our  Collaborative  Agreement  with
Aventis,  for the three months ended  September 30, 2004,  follows:

|($
      in thousands)           |  |  |   | Three
      months ended 
      September 30, 2004 |  
|-------------------------------- |  |  | - | -------------------------------------------------- | -
|                                 |  |  |   |                                                    |  
|Reimbursement
      to Genta     |  |  |   |                                                    |  
|Third-party
      costs          |  |  | $ | 3,982                                              |  
|Drug
      supply costs          |  |  |   | 15,620                                             |  
|FTEs                            |  |  |   | 1,333                                              |  
|                                 |  |  |   |                                                    |  
|Amount
      due to Genta        |  |  |   | 20,935                                             |  
|Reimbursement
      to Aventis   |  |  |   | (446                                               | )
|                                 |  |  |   |                                                    |  
|Net reimbursement
      to Genta |  |  | $ | 20,489                                             |  
|                                 |  |  |   |                                                    |  

In
September 2004, the Company  transferred  $15.5 million  of vialed  Genasense® drug
product and  Genasense® bulk drug  substance  to
Aventis.  This amount is included in Drug supply  costs in the above table.

On
May 10,  2005,  the  Company  announced  that Genta and  Aventis had finalized a
termination  agreement,  providing for  no  future  financial  obligations  by  either
party.  Consequently,  none of the research and  development  expenses  incurred by the
Company  during the  three-month  period ended  September 30, 2005 were reimbursable.

Loss on
disposition of property and equipment

In
August  2004,  the Company  completed  the closure of  its  research  facility  in Salt
Lake City,  sold all  related  equipment  and  assigned  its lease on the facility to
another  company.  Additionally,  the  Company  disposed  of  excess  equipment  at  its
corporate  headquarters.  As a  result  of  these actions,  the Company  recorded a loss
on disposition of  property and equipment of  approximately  $1.3 million for the  three
months ended September 30, 2004.

Net Loss

The
Company recorded a net loss of $7.9 million,  or $0.07  per share,  for the three  months
ended  September  30, 2005,  compared  with a net  loss  of  $5.6  million,  or  $0.07
per  share,  for the three months  ended  September  30,  2004.  As  described  above,
the prior-year  period included  revenues of  $1.3 million  from the  continued
recognition  of the license  fee and  development  funding  received in 2002 from
Aventis,  expenses of $13.3  million  related to purchases of Genasense® bulk
drug  substance  and a loss of  $1.3  million  from  the  disposition  of property  and
equipment;  more than offset by  $20.5 million of  reimbursement  from  Aventis,
including the  transfer of $15.5  million of vialed  Genasense® drug
product  and bulk drug  substance  to  Aventis.  The  absence  of these  items in this
years  three-month  period was primarily offset  by lower  research and
development  and selling,  general and  administrative expenses.

21

---



Results of
Operations  for the Nine  Months  Ended  September  30, 2005 and 2004

|                                                             |  |  | Summary
      Operating Results
      For the nine months ended September 30, |       
|------------------------------------------------------------ |  |  | ----------------------------------------------------------------------------- | ------
|                                                             |  |  |                                                                               |       
|($
      in thousands)                                       |  |  |                                                                               |       
|                                                             |  |  |                                                                               |       
|                                                             |  |  | 2005                                                                          |       
|                                                             |  |  |                                                                               |       
|Revenues:                                                    |  |  |                                                                               |       
|License
      fees and royalties                             |  |  | $                                                                             | 5,241 
|Development
      funding                                    |  |  |                                                                               | 20,988
|Product
      sales - net                                    |  |  |                                                                               | 259   
|                                                             |  |  |                                                                               |       
|Total
      revenues                                         |  |  |                                                                               | 26,488
|                                                             |  |  |                                                                               |       
|Cost
      of goods sold                                     |  |  |                                                                               | 56    
|Provision
      for excess inventory                         |  |  |                                                                               | (21   
|                                                             |  |  |                                                                               |       
|Total
      cost of goods sold                               |  |  |                                                                               | 35    
|                                                             |  |  |                                                                               |       
|Gross
      margin                                           |  |  |                                                                               | 26,453
|                                                             |  | 
|Costs
      and expenses:                                    |  | 
|Research
      and development (including non-cash           |  | 
|compensation
      expense of $158 for the nine months ended |  | 
|September
      30, 2004)                                    |  |  |                                                                               | 14,040
|Selling,
      general and administrative (including         |  | 
|non-cash
      compensation expense of $34 and $50 for       |  | 
|the
      nine months ended September 30, 2005 and September |  | 
|30,
      2004, respectively)                                |  |  |                                                                               | 12,116
|Loss
      on disposition of property and equipment          |  |  |                                                                               | 4     
|                                                             |  |  |                                                                               |       
|Total
      costs and expenses - gross                       |  |  |                                                                               | 26,160
|Less:
      Aventis reimbursement                            |  |  |                                                                               | (6,090
|                                                             |  |  |                                                                               |       
|Total
      costs and expenses - net                         |  |  |                                                                               | 20,070
|                                                             |  |  |                                                                               |       
|Gain
      on forgiveness of debt                            |  |  |                                                                               | 1,297 
|Other
      income/(expense)                                 |  |  |                                                                               | 361   
|                                                             |  |  |                                                                               |       
|Net income/(loss)                                            |  |  | $                                                                             | 8,041 
|                                                             |  |  |                                                                               |       

Total Revenues

Total
revenues,  consisting of license fees and royalties,  development  funding and net
product  sales were $26.5 million  for the nine months ended  September  30, 2005
compared  with  $4.6  million for the nine months  ended  September  30, 2004.  License
fees and  development  funding  revenues are generated  by the  recognition  of the
initial  $10.0  million  licensing  fee  and  $40.0  million  development  funding
received  from  Aventis in 2002 under the Collaborative Agreement.

On
November 8, 2004,  Aventis gave notice to Genta that it  was terminating its
Collaborative  Agreement with the Company  regarding  the  development  and
commercialization  of  Genasense®.  On November 9,
2004,  we began to  recognize  the  remaining  deferred  revenue  over the  six-month
termination  notice  period;  resulting  in  increased  revenue  of  $22.3  million  for
the  nine  months  ended  September  30,  2005  compared with the nine months ended
September 30, 2004.

Product
sales of  Ganite® during the nine  months  ended
September  30, 2005 are below the  prior-year  period.  In May  2004,  the  Company
eliminated  its  sales  force  and  significantly reduced its marketing support for Ganite®.

Cost of Goods
Sold

Cost
of goods sold for the  prior-year  period  includes a  provision  for excess  inventory
of Ganite® of $0.7  million.  Excluding the
provision  for excess  inventory,  cost of goods  sold for the three months ended
September 30, 2005  decreased  from the  prior-year  period,  consistent  with the
decline in  product sales.

22

---



Research and
Development Expenses

Research
and  development  expenses  before  reimbursement  were $14.0  million for the nine
months  ended  September  30,  2005  compared  with $61.9  million for the nine months
ended  September  30, 2004.  During the nine months  ended  September  30, 2005,
approximately  $13.3 million or 95% of research and  development  expenses  before
reimbursement  were incurred on  the  Genasense® project.
In the prior year  period  research  and  development  expenses  before  reimbursement
incurred on  the  Genasense® project  of
approximately  $58.0  million  included  $32.2  million  related to the  expensing  of
vialed  Genasense® drug product and Genasense® bulk
drug  substance.  Research and  development  expenses in 2005 also decreased due  to our
decision  in May 2004 to reduce  staff and reduce most  non-Genasense® related
programs.  Of the  $14.0  million  in  research  and  development  expenses for the nine
months ended  September 30, 2005,  $6.1 million were  reimbursable  pursuant  to  our
Collaborative  Agreement  with  Aventis.  With  the  Aventis  notice  of  termination,
payments  of  $6.0  million  otherwise  due to Genta were  applied  against  the balance
of  the Line of Credit  until it was  repaid in May 2005 (see Note  6 to our Financial
Statements).

Selling,
General and Administrative Expenses

Selling,
general and administrative  expenses were $12.1  million  for  the  nine  months  ended
September  30,  2005  compared  with  $24.2  million  for  the  nine  months  ended
September  30,  2004.  Expenses in 2005  reflect the impact of  the May 2004  elimination
of the sales  force,  reduction  of  other  administrative  positions and substantial
reduction of  marketing  support  for  Ganite®.  In
addition,  in the  2004  period,  we recorded  $1.0 million of legal  expenses  related
to  certain  class  action  lawsuits  (see  Note  11  to  our  Financial Statements).

Aventis
Reimbursement

A
breakdown  of the  various  third-party,  drug  supply  costs  and  internal  costs  of
scientific  and  technical  personnel,  (Full-Time  Equivalents or FTEs)
that Aventis  was required to reimburse  under our  Collaborative  agreement  with
Aventis, follows:

|($
      in thousands)           |  |  | Nine
      months ended
      September 30, |      
|-------------------------------- |  |  | ------------------------------------------- | -----
|Reimbursement
      to Genta     |  |  | 2005                                        |      
|                                 |  |  |                                             |      
|Third-party
      costs          |  |  | $                                           | 2,917
|Drug
      supply costs          |  |  |                                             | 1,807
|FTEs                            |  |  |                                             | 1,513
|                                 |  |  |                                             |      
|Amount
      due to Genta        |  |  |                                             | 6,237
|                                 |  |  |                                             |      
|Reimbursement
      to Aventis   |  |  |                                             | (147 
|                                 |  |  |                                             |      
|Net reimbursement
      to Genta |  |  | $                                           | 6,090
|                                 |  |  |                                             |      

Net
expense  reimbursement  from  Aventis of $6.1  million  for the nine months ended
September  30, 2005  declined  from  $36.5  million for the nine months  ended  September
30, 2004  due to the termination of the  Collaborative  Agreement in May  2005 and lower
expenses  incurred on the  Genasense® project.  In
addition,  in  September  2004,  the  Company  transferred  $15.5  million  of  vialed
Genasense® drug  product  and  Genasense® bulk
drug  substance  to  Aventis.  This amount is  included in Drug supply costs in the above
table.

Once
Aventis  provided  notice  of  termination  of  the  Collaborative  Agreement,  all
payments  otherwise  due  from  Aventis  were  applied  against  the  balance  on the
Line of  Credit  until  the Line of  Credit  was  repaid  in May  2005.  Reimbursement
of $6.0  million  due to Genta was  applied  to  the balance of the Line of Credit.

23

---



Gain on
forgiveness of debt

On
May 10, 2005,  the Company  announced that Aventis and  Genta  had  finalized  the
termination  of the  Collaborative  Agreement.  Pursuant  to  the  terms  of  the
Collaborative  Agreement,  $2.8  million of  reimbursable  costs  accrued and  owed to
the Company by Aventis were  applied  against the Line  of Credit  with  Aventis  and the
remaining  balance  of $1.3  million was forgiven.

Other
Income/(Expense)

Net
other income for the nine months ended  September 30,  2005  of  $0.4  million  favorably
compared  with  net  other  expense of $0.1  million for the prior year  period.  This
was  the  result  of  lower  interest  expense,  due  to  lower  borrowings  from
Aventis,  partially  offset by lower interest  income, resulting from lower investment
balances.

Net
Income/(Loss)

The
Company  recorded  net  income of $8.0  million,  or  $0.08 per  share,  for the nine
months  ended  September  30,  2005,  compared  with a net  loss of $42.3  million,  or
$0.60  per share,  for the nine months ended  September 30, 2004. The  increase  in  net
income  and  net  income  per  share  was  primarily due to accelerated  recognition
through May 2005 of  the initial  licensing  fee and up-front  development  funding
previously  received  from  Aventis,  lower  research  and  development  expenses,  lower
selling,  general  and  administrative  expenses,  along with a gain on forgiveness of
debt.

Liquidity and
Capital Resources

At
September  30,  2005,  the  Company  had  cash,  cash  equivalents and marketable
securities  totaling $28.8 million  compared  with $42.2  million at December 31, 2004.
Cash used  in  operating  activities  was  $29.1  million  for  the  nine  months ended
September  30, 2005  compared with $44.4 million  for the nine months ended  September
30,  2004.  This decline  reflects  our smaller  organization  and focus on  Genasense®.
Management  continues  to  anticipate  that  total  average  monthly  cash  outflow  will
be in the  $3.0  million  to $4.0  million  range.  At  September  30,  2005,  Genta  had
no  outstanding  short-term  debt  compared  with the  outstanding  balance  of $7.3
million on the Line of Credit  with  Aventis  as of December 31, 2004.

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  from the  U.S.  Food  and Drug  Administration  (FDA)
for  commercial  sale  in  one  or  more  indications.  Achievement  of  profitability
for the Company is  dependent  on the timing of  Genasense® regulatory
approvals  in the U.S. and outside the  U.S.

The
Company  has  $28.8  million  of  cash  and  cash  equivalents  and  marketable
securities  on hand at September  30, 2005.  On August 11,  2005,  the Company sold 19.1
million  shares of its  common  stock at a price of $0.92 per share for  gross  proceeds
of $17.5  million,  before fees and  expenses.  After  deducting fees and expenses,  the
Company  received net  proceeds  of  $16.3  million.  With  the  completion  of  this
financing,  although  no  assurances  can  be  expressed,  management  believes  that at
the  current  rate of  spending,  the  Company  should  have  sufficient  cash funds to
maintain  its present operations into the middle of 2006.

During
the second quarter of 2005,  the Company  commenced  discussions  with other  companies
on a partnership  regarding  the development  and  commercialization  of Genasense®.
Those  discussions are ongoing.

Additional
alternatives  available  to  the  Company  to  subsequently  sustain  its  operations
include  other  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. The Company  will need  substantial
additional  funds before it can expect  to realize significant product revenue.

24

---



Our
principal  expenditures  relate to our  research  and  development  activities,
primarily  focused  on  Genasense®,  which  include
our  ongoing and future  clinical  trials.  We  expect these  expenditures  to continue.
The Company may seek  collaborative  agreements  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.  The Company will  need  substantial
additional  funds  before it can  expect to  realize significant product revenue.

If
we obtain NDA  approval of  Genasense® for one or
more  applications,  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
May 2005, the Financial Accounting Standards Board (FASB) issued
Statement (SFAS) No. 154,  Accounting Changes and Error Corrections,
effective for accounting changes and corrections of errors made in fiscal
years beginning after December 15, 2005. SFAS 154 requires voluntary changes in
accounting principle be retrospectively applied to financial statements from previous
periods unless such application is impracticable. Under the newly issued standard
changes in depreciation, amortization, or depletion for long-lived, non-financial
assets should be accounted for as a change in accounting estimate that is effected
by a change in accounting principle. We believe that the adoption of this standard
will not have a material impact on the Companys results of operations,
financial position or cash flow.

In
December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment that will
require compensation costs related to share-based payment transactions to be
recognized in the financial statements. With limited exceptions, the amount of
compensation cost will be measured based on the grant-date fair value of the equity
or liability instruments issued. In addition, liability awards will be remeasured
each reporting period. Compensation cost will be recognized over the period that
an employee provides service in exchange for the award. SFAS No. 123(R) replaces
SFAS No. 123 Accounting for Stock-Based Compensation, and supersedes Accounting
Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees. In April 2005, the Securities and Exchange Commission announced the
adoption of a rule that defers the required date of SFAS No 123(R). The Company
will adopt the provisions of SFAS No. 123(R) in 2006. The Company is evaluating
the impact that the adoption of this standard will have on its results of
operations, financial position or cash flows.

In
December 2004, the FASB issued SFAS No. 153,  Exchanges of Non-monetary Assets, an
amendment of APB Opinion No. 29. The adoption of this statement, effective June 2005,
did not have any impact on the Companys results of operations, financial
position or cash flows.

In
November 2004, the FASB issued SFAS No. 151,  Inventory Costs, to clarify the
accounting for abnormal amounts of idle facility expense, freight, handling costs,
and wasted material. As the Company uses third-party manufacturers and does not
manufacture its own products, the adoption of this statement, effective June 2005,
did not have a material impact on the Companys results of operations,
financial position or cash flows.

25

---



Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our
carrying  values  of  cash,  marketable  securities,  accounts  payable,  accrued
expenses and debt 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 2 to
our  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.

Gentas
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 September
30, 2005.

Item 4. Controls and Procedures

Conclusion
Regarding the Effectiveness of Disclosure Controls and Procedures

As
required by Rule 13a-15(b),  Genta  Incorporated  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 operating
effectively  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

---



PART II
OTHER INFORMATION

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 our  principal  officers  on
behalf of  purported  classes  of  our  shareholders  who  purchased  our  securities
during several class periods.  The complaints have  been  consolidated  into a single
action and  allege  that we  and certain of our  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  our  securities.  The  shareholder  class  action  complaint  in the various
actions  seeks monetary  damages in an unspecified  amount and recovery  of  plaintiffs costs
and  attorneys fees. On September 30,  2005,  the  court  granted  in part  and
denied  in part  our  motion  to  dismiss  the  plaintiffs complaint.  The  court
dismissed  plaintiffs claim that the defendants  engaged in a  scheme  or  artifice
to  defraud  plaintiffs,  but  allowed  plaintiffs claims  to  proceed  with
respect  to  their  allegations  that  defendants  issued  false  and  misleading  public
statements  about  Genasense®.  On  October  17,
2005  defendants  filed an  answer  to the  complaint  and will soon  commence pre-trial
discovery.

In
addition,  two separate shareholder  derivative actions  have been filed  against the
directors  and certain  officers  of Genta in New  Jersey  State and  Federal  courts.
Based on  facts  substantially  similar  to  those  asserted  in  the  shareholder  class
actions,  the derivative  plaintiffs  claim  that defendants  have breached their
fiduciary  duties to the  shareholders and other violations of New Jersey law.

The
Company  believes these  litigations are without merit  and will  continue to vigorously
defend  against these suits.  Management  does not believe that this  litigation will
have a  material  adverse  impact on the Companys  financial  results  or liquidity.

Item 6. Exhibits.

(a)
Exhibits

|Exhibit Number |  | Description
      of Document
|-------------- |  | -----------------------------

|3.1.a |  | Restated
Certificate  of  Incorporation  of the Company  (incorporated  by  reference to Exhibit
3(i).1 to the  Companys  Annual  Report on Form 10-K for the year ended  December
31,  1995,  Commission File No. 0-19635)
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.b |  | Certificate
of Designations of Series D Convertible  Preferred Stock of the Company (incorporated  by
reference to Exhibit 3(i) to the  Companys  Current  Report on Form 8-K filed on
February  28, 1997, Commission File No. 0-19635)
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.c |  | Certificate
of Amendment of Restated  Certificate of Incorporation  of the Company  (incorporated  by
reference to Exhibit 3(i).3 to the Companys  Annual Report on Form 10-K for the
year ended  December 31, 1999, Commission File No. 0-19635)
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.d |  | Amended
Certificate  of  Designations  of Series D  Convertible  Preferred  Stock of the Company
(incorporated  by reference to Exhibit 3(i).4 to the Companys  Annual Report on
Form 10-K for  the year ended December 31, 1999, Commission File No. 0-19635)
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.e |  | Certificate
of Increase of Series D Convertible  Preferred Stock of the Company  (incorporated by
reference to Exhibit  3(i).5 to the  Companys  Annual  Report on Form 10-K for the
year ended  December 31, 1999, Commission File No. 0-19635)
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.f |  | Certificate
of Amendment of Restated  Certificate of Incorporation  of the Company  (incorporated  by
reference to Exhibit 3(i).4 to the Companys  Annual Report on Form 10-K for the
year ended  December 31, 1998, Commission File No. 0-19635)
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.g |  | Certificate
of Amendment of Restated  Certificate of Incorporation  of the Company  (incorporated  by
reference to Exhibit 3(i).3 to the Companys  Annual Report on Form 10-K for the
year ended  December 31, 1998, Commission File No. 0-19635)
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

27

---



|Exhibit Number |  | Description
      of Document
|-------------- |  | -----------------------------

|3.1.h |  | Certificate
of Amendment of Restated  Certificate of Incorporation  of the Company  (incorporated  by
reference to Exhibit 3(i).8 to the Companys  Annual Report on Form 10-K for the
year ended  December 31, 1999, Commission File No. 0-19635)
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.i |  | Certificate
of Amendment of Restated  Certificate of Incorporation  of the Company  (incorporated  by
reference to Exhibit 3.1.i to the Companys  Registration Statement on Form S-1,
Commission  File No. 333-110238)
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.j |  | Certificate
of Amendment of Restated  Certificate of Incorporation  of the Company  (incorporated  by
reference to Exhibit 3.1.j to the Companys  Registration Statement on Form S-1,
Commission  File No. 333-110238)
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 |  | Amended
and Restated Bylaws of the Company  (incorporated  by reference to Exhibit 3(ii).1 to the
Companys  Annual Report on Form 10-K for the year ended  December 31, 1998,
Commission  File  No. 0-19635)
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|31.1 |  | Certification
by Chief Executive  Officer pursuant to Section 302 of the  Sarbanes-Oxley  Act of  2002
|---- |  | ------------------------------------------------------------------------------------------------------

|31.2 |  | Certification
by Chief Financial  Officer pursuant to Section 302 of the  Sarbanes-Oxley  Act of  2002
|---- |  | ------------------------------------------------------------------------------------------------------

|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
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------

|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
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------

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
                                                                                   Incorporated                                                                                                                                                                                                                                                                                                                                                                  
|----- | ---------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Date: | November 7, 2005 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |                  | /s/ RAYMOND
                                                              P.
                                                              WARRELL,
                                                              R., M.D.                                                                                                                                                                                                                                             
|      |                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |                  | Raymond
                                                                        P.
                                                                        Warrell,
                                                                        Jr.,
                                                                        M.D.                                                                                                                                          
|      |                  | Chairman
                                                                        and
                                                                        Chief
                                                                        Executive
                                                                        Officer                                                                                                                                   
|      |                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Date: | November 7, 2005 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |                  | /s/ RICHARD J. MORAN                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|      |                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|      |                  | Richard J. Moran                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|      |                  | Senior
                                                                        Vice
                                                                        President,
                                                                        Chief
                                                                        Financial
                                                                        
      Officer
      and
      Corporate
      Secretary

28

---



Exhibit Index

|Exhibit Number |  | Description
      of Document
|-------------- |  | -----------------------------

|3.1.a |  | Restated
Certificate  of  Incorporation  of the Company  (incorporated  by  reference to Exhibit
3(i).1 to the Companys  Annual Report on Form 10-K  for the year ended December 31,
1995, Commission File No. 0-19635)
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.b |  | Certificate
of Designations of Series D Convertible  Preferred Stock of the  Company  (incorporated
by reference  to Exhibit  3(i) to the  Companys  Current Report on Form 8-K filed
on February 28, 1997,  Commission  File  No. 0-19635)
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.c |  | Certificate
of Amendment of Restated  Certificate of  Incorporation  of the  Company  (incorporated
by reference to Exhibit  3(i).3 to the Companys  Annual  Report  on Form  10-K  for
the year  ended  December  31,  1999,  Commission File No. 0-19635)
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.d |  | Amended
Certificate  of  Designations  of Series D  Convertible  Preferred  Stock of the Company
(incorporated  by reference  to Exhibit  3(i).4 to  the  Companys  Annual  Report
on Form 10-K for the year ended  December  31, 1999, Commission File No. 0-19635)
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.e |  | Certificate
of Increase  of Series D  Convertible  Preferred  Stock of the  Company  (incorporated
by reference to Exhibit  3(i).5 to the Companys  Annual  Report  on Form  10-K  for
the year  ended  December  31,  1999,  Commission File No. 0-19635)
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.f |  | Certificate
of Amendment of Restated  Certificate of  Incorporation  of the  Company  (incorporated
by reference to Exhibit  3(i).4 to the Companys  Annual  Report  on Form  10-K  for
the year  ended  December  31,  1998,  Commission File No. 0-19635)
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.g |  | Certificate
of Amendment of Restated  Certificate of  Incorporation  of the  Company  (incorporated
by reference to Exhibit  3(i).3 to the Companys  Annual  Report  on Form  10-K  for
the year  ended  December  31,  1998,  Commission File No. 0-19635)
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.h |  | Certificate
of Amendment of Restated  Certificate of  Incorporation  of the  Company  (incorporated
by reference to Exhibit  3(i).8 to the Companys  Annual  Report  on Form  10-K  for
the year  ended  December  31,  1999,  Commission File No. 0-19635)
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.i |  | Certificate
of Amendment of Restated  Certificate of  Incorporation  of the  Company  (incorporated
by reference to Exhibit  3.1.i to the  Companys  Registration Statement on Form
S-1, Commission File No. 333-110238)
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1.j |  | Certificate
of Amendment of Restated  Certificate of  Incorporation  of the  Company  (incorporated
by reference to Exhibit  3.1.j to the  Companys  Registration Statement on Form
S-1, Commission File No. 333-110238)
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 |  | Amended
and Restated  Bylaws of the Company  (incorporated  by reference to  Exhibit  3(ii).1  to
the  Companys  Annual  Report on Form 10-K for the  year ended December 31, 1998,
Commission File No. 0-19635)
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|31.1 |  | Certification
by Chief  Executive  Officer  pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002
|---- |  | ------------------------------------------------------------------------------------------------------

|31.2 |  | Certification
by Chief  Financial  Officer  pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002
|---- |  | ------------------------------------------------------------------------------------------------------

|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
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|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
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

29

---