**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-Q**





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





For
      the
      quarterly period ended June
      30, 2008





 ̈
            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 0-28674





CADUS
      CORPORATION


(Exact
        Name of Registrant as Specified on its Charter)





Delaware
            
            13-3660391(State
                of Other Jurisdiction of Incorporation or
              Organization)
            
            (I.R.S.
                Employer Identification No.)767
                Fifth Avenue, New York, New York
            
            10153(Address
                of Principal Executive Offices)
            
            (Zip
                Code)Registrant’s
                Telephone Number, Including Area Code
            
            (212)
                702-4315





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.




Yes x No  ̈





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


Large
                  accelerated filer ̈
              Accelerated
                  filer ̈Non-accelerated
                  filer ̈
              Smaller
                  reporting companyx(Do
                  not check if a smaller reporting company)







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




Yes  ̈ No x





The
      number of shares of registrant’s common stock, $0.01 par value, outstanding as
      of July 31, 2008 was 13,144,040.




2


**CADUS
      CORPORATION**





**INDEX**




Page
                No.SPECIAL
                NOTE REGARDING FORWARD LOOKING STATEMENTS
            4PART
                I - CONDENSED CONSOLIDATED FINANCIAL INFORMATIONItem
                1.Condensed
                Consolidated Financial StatementsCondensed
                Consolidated Balance Sheets – June 30, 2008 (unaudited) and December 31,
                2007 (audited)
            5Condensed
                Consolidated Statements of Operations – Three Months Ended June 30, 2008
                and 2007 (unaudited)
            6Condensed
                Consolidated Statements of Operations - Six Months Ended June 30,
                2008 and
                2007 (unaudited)
            7Condensed
                Consolidated Statements of Cash Flows - Six Months Ended June 30,
                2008 and
                2007 (unaudited)
            8Notes
                to Condensed Consolidated Financial Statements (unaudited)
            9 –
                11Item
                2.Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            12
                – 13Item
                3.Quantitative
                and Qualitative Disclosures About Market Risk
            13Item
                4.Controls
                and Procedures
            14PART
                II - OTHER INFORMATIONItem
                1.Legal
                Proceedings
            14Item
                1A. Risk Factors
            14Item
                2.Unregistered
                Sales of Equity Securities and Use of Proceeds
            14Item
                3.Defaults
                Upon Senior Securities
            14Item
                4.Submission
                of Matters to a Vote of Security Holders
            14
                - 15Item
                5.Other
                Information
            15Item
                6.Exhibits
            15SIGNATURES
            16EXHIBIT
                INDEX
            17





3




**SPECIAL
      NOTE REGARDING FORWARD LOOKING STATEMENTS**





Certain
      statements in this Quarterly Report on Form 10-Q constitute “forward-looking
      statements” within the meaning of Section 27A of the Securities Act of 1933 and
      Section 21E of the Securities Exchange Act of 1934, as amended. All statements
      other than statements of historical fact are “forward-looking statements” for
      purposes of federal and state securities laws, including any projections or
      expectations of earnings, revenue, financial performance, liquidity and capital
      resources or other financial items; any statement of our plans, strategies
      and
      objectives for our future operations; any statements regarding future economic
      conditions or performance; any statements of belief; and any statements of
      assumption underlying any of the foregoing. Forward-looking statements may
      include the words “may,” “will,” “should,” “could,” “would,” “predicts,”
“potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,”
“believes,” “estimates” and other similar words. Although the Company believes
      that the expectations reflected in our forward-looking statements are
      reasonable, such forward-looking statements involve known and unknown risks,
      uncertainties, and other factors which may cause the actual results,
      performance, or achievements of the Company to be materially different from
      any
      future results, performance or achievements expressed or implied by such
      forward-looking statements. Factors that could cause or contribute to such
      differences include, but are not limited to, risks and uncertainties relating
      to
      the Company's ability to license its technologies to third parties, the
      Company's inability to acquire and operate other companies, the Company's
      capital needs and uncertainty of future funding, the Company's history of
      operating losses, the unpredictability of patent protection, risk of
      obsolescence of the Company's technologies, as well as other risks and
      uncertainties discussed in the Company’s annual report on Form 10-K for the year
      ended December 31, 2007. The forward-looking statements made in this Quarterly
      Report on Form 10-Q are made only as of the date hereof and the Company does
      not
      have or undertake any obligation to publicly update any forward-looking
      statements to reflect subsequent events or circumstances unless otherwise
      required by law.





4


ITEM 1.
            CONDENSED
                CONSOLIDATED FINANCIAL STATEMENTS





**CADUS
      CORPORATION**


**Condensed
      Consolidated Balance Sheets**





June 30,
              2008
            
            December 31,
              2007(Unaudited)
            
            (Audited)**ASSETS**Current
                assets:Cash
                and cash equivalents
            
            $
            13,536,436
            
            $
            2,444,376Short
                term investments
            
            
            11,791,197
            
            
            22,960,545Interest
                receivable
            
            
            31,394
            
            
            102,518Prepaid
                and other current assets
            
            
            34,192
            
            
            1,150Total
                current assets
            
            
            25,393,219
            
            
            25,508,589Investment
                in other ventures
            
            
            190,868
            
            
            186,790Patents,
                net
            
            
            507,617
            
            
            550,834Total
                assets
            
            $
            26,091,704
            
            $
            26,246,213**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**Current
                liabilities:Accrued
                expenses and other current liabilities
            
            $
            23,044
            
            $
            22,352Total
                current liabilities
            
            
            23,044
            
            
            22,352CommitmentsStockholders’
                equity:Common
                stock
            
            
            132,857
            
            
            132,857Additional
                paid-in capital
            
            
            59,847,149
            
            
            59,847,149Accumulated
                deficit
            
            
            (33,611,271
            )
            
            (33,456,070
            )Treasury
                stock
            
            
            (300,075
            )
            
            (300,075
            )Total
                stockholders’ equity
            
            
            26,068,660
            
            
            26,223,861Total
                liabilities and stockholder’s equity
            
            $
            26,091,704
            
            $
            26,246,213




See
      accompanying notes to condensed consolidated financial statements.





5


**CADUS
      CORPORATION**


**Condensed
      Consolidated Statements of Operations**





Three Months Ended
              June 30,2008
            
            2007(Unaudited)
            
            (Unaudited)License
                and maintenance fees
            
            $
            —
            
            $
            —Total
                revenues
            
            $
            —
            
            $
            —Costs
                and expenses:General
                and administrative expenses
            
            
            100,877
            
            
            90,507Amortization
                of patent costs
            
            
            21,609
            
            
            21,609(Income)
                from equity in other ventures
            
            
            (1,802
            )
            
            (2,849
            )Total
                costs and expenses
            
            
            120,684
            
            
            109,267Operating
                loss
            
            
            (120,684
            )
            
            (109,267
            )Other
                income:Interest
                income
            
            
            172,012
            
            
            328,995Gain
                on sale of securities
            
            
            3,125
            
            
            —Income
                before provision for income taxes
            
            
            54,453
            
            
            219,728Provision
                for income taxes
            
            
            1,658
            
            
            768Net
                income
            
            $
            52,795
            
            $
            218,960Basic
                and diluted income per weighted average share of common stock
                outstanding
            
            $
            —
            
            $
            0.02Weighted
                average shares of common stock outstanding – basic and
                diluted
            
            
            13,144,040
            
            
            13,144,040





See
      accompanying notes to condensed consolidated financial statements.





6





**CADUS
      CORPORATION**


**Condensed
      Consolidated Statements of Operations**





Six Months Ended
              June 30,2008
            
            2007(Unaudited)
            
            (Unaudited)License
                and maintenance fees
            
            $
            100,000
            
            $
            100,000Total
                revenues
            
            
            100,000
            
            
            100,000Costs
                and expenses:General
                and administrative expenses
            
            
            346,153
            
            
            382,991Amortization
                of patent costs
            
            
            43,217
            
            
            43,216(Income)
                from equity in other ventures
            
            
            (4,078
            )
            
            (6,070
            )Total
                costs and expenses
            
            
            385,292
            
            
            420,137Operating
                loss
            
            
            (285,292
            )
            
            (320,137
            )Other
                income:Interest
                income
            
            
            408,530
            
            
            649,642Gain
                on sale of securities
            
            
            3,125
            
            
            —Loss
                on write down of marketable securities
            
            
            —
            
            
            (668,246
            )Investment
                reduction to net asset value
            
            
            (279,906
            )
            
            —Loss
                before provision for income taxes
            
            
            (153,543
            )
            
            (338,741
            )Provision
                for income taxes
            
            
            1,658
            
            
            768Net
                loss
            
            $
            (155,201
            )
            $
            (339,509
            )Basic
                and diluted loss per weighted average share of common stock
                outstanding
            
            $
            (0.01
            )
            $
            (0.03
            )Weighted
                average shares of common stock outstanding – basic and
                diluted
            
            
            13,144,040
            
            
            13,144,040





See
      accompanying notes to condensed consolidated financial statements.




7





**CADUS
      CORPORATION**


**Condensed
      Consolidated Statements of Cash Flows**




Six Months Ended
                June 30,2008
              
              2007(Unaudited)
              
              (Unaudited)Cash
                  flows from operating activities:Net
                  (loss)
              
              $
              (155,201
              )
              $
              (339,509
              )Adjustments
                  to reconcile net (loss) to net cash provided by operating
                  activities:Amortization
                  of patent costs
              
              
              43,217
              
              
              43,216(Income)
                  from equity in other ventures
              
              
              (4,078
              )
              
              (6,070
              )Loss
                  on write down of marketable securities
              
              
              —
              
              
              668,246Gain
                  on sale of securities
              
              
              (3,125
              )
              
              —Investment
                  reduction to net asset value
              
              
              279,906
              
              
              —Changes
                  in assets and liabilities:(Increase)
                  decrease in prepaid and other current assets
              
              
              38,082
              
              
              (28,149
              )Increase
                  in accrued expenses and other current liabilities
              
              
              692
              
              
              8,726Net
                  cash provided by operating activities
              
              
              199,493
              
              
              346,460Cash
                  flows provided by investing activities:Proceeds
                  from redemption of investment
              
              
              10,892,567
              
              
              468,132Net
                  cash provided by investing activities
              
              
              10,892,567
              
              
              468,132Net
                  increase in cash and cash equivalents
              
              
              11,092,060
              
              
              814,592Cash
                  and cash equivalents – beginning of period
              
              
              2,444,376
              
              
              24,602,202Cash
                  and cash equivalents – end of period
              
              $
              13,536,436
              
              $
              25,416,794





See
      accompanying notes to condensed consolidated financial statements.




8


**CADUS
      CORPORATION**


**Notes
      to Condensed Consolidated Financial Statements**





Note – 1
            **Organization
                and Basis of Preparation**





The
      information presented as of June 30, 2008 and for the three and six month
      periods then ended, is unaudited, but includes all adjustments (consisting
      only
      of normal recurring accruals) that the Company's management believes to be
      necessary for the fair presentation of results for the periods presented.
      Certain information and footnote disclosures normally included in financial
      statements prepared in accordance with accounting principles generally accepted
      in the United States of America have been omitted pursuant to the requirements
      of the Securities and Exchange Commission, although the Company believes that
      the disclosures included in these financial statements are adequate to make
      the
      information not misleading. The December 31, 2007 condensed consolidated balance
      sheet was derived from audited consolidated financial statements. These
      financial statements should be read in conjunction with the Company's annual
      report on Form 10-K for the year ended December 31, 2007.





The
      consolidated financial statements include the accounts of the Company and its
      wholly owned subsidiary, Cadus Technologies, Inc. All intercompany balances
      and
      transactions have been eliminated in consolidation.




The
      results of operations for the three and six month periods ended June 30, 2008
      are not necessarily indicative of the results to be expected for the year ending
      December 31, 2008.





Note - 2
            **Net
                (Loss) Per Share**




For
      the
      three and six month periods ended June 30, 2008 and 2007 basic net (loss) per
      share is computed by dividing the net (loss) by the weighted average number
      of
      common shares outstanding. Diluted earnings per share for the three and six
      month periods ended June 30, 2008 and 2007 was the same as basic earnings per
      share as all of the Company’s outstanding options’ and warrants’ exercise prices
      were greater than the average market price of the common shares. For this
      reason, for the three and six month periods ended June 30, 2008 and 2007,
      respectively, 0 and 2,500 options and warrants were excluded from the
      calculation of diluted earnings per share.





Note - 3
            **Licensing
                Agreements**





In
      February 2000, Cadus licensed to OSI Pharmaceuticals, Inc. (“OSI”), on a
      non-exclusive basis, its yeast-based drug discovery technologies, including
      various reagents and its library of over 30,000 yeast strains, and its
      bioinformatics software. OSI paid to Cadus a license fee of $100,000 and an
      access fee of $600,000 and in December 2000 a supplemental license fee of
      $250,000. OSI is also obligated to pay an annual maintenance fee of $100,000
      until the earlier of 2010 or the termination of the license. OSI may terminate
      the license at any time on 30 days prior written notice. During the six month
      periods ended June 30, 2008 and 2007, the Company recognized $100,000 of license
      revenue related to this agreement.




9


**CADUS
      CORPORATION**


**Notes
      to Condensed Consolidated Financial Statements**





Note – 4
            **Accounting
                for Impairment of Long-Lived
                Assets**





Statement
      of Financial Accounting Standards No. 144, “ *Accounting
      for the Impairment or Disposal of Long-Lived Assets* ”
(“SFAS
      144"), addresses financial accounting and reporting for the impairment or
      disposal of long-lived assets. The Company’s long-lived assets (principally
      capitalized patent costs) are required to be measured at the lower of carrying
      amount or fair value, less cost to sell, whether reported in continuing
      operations or discontinued operations. Intangibles with determinable lives
      and
      other long-lived assets are reviewed for impairment whenever events or changes
      in circumstances indicate that the carrying value of an asset may not be
      recoverable. The Company’s judgments regarding the existence of impairment
      indicators are based on historical and projected future operating results,
      changes in the Company’s overall business strategy, and market and economic
      trends. In the future, events could cause the Company to conclude that
      impairment indicators exist and that certain intangibles with determinable
      lives
      and other long-lived assets are impaired which may result in an adverse impact
      on the Company’s financial condition and results of operations. The provisions
      of SFAS No. 144 did not have an impact on the Company’s financial statements as
      of and for the three and six months ended June 30, 2008.





Note - 5
            **Short
                Term Investments**





The
      company invested its excess cash with Bank of America in its Columbia Strategic
      Cash Portfolio (the “Fund”), which maintained a stable unit price of $1.00 per
      unit. The units were redeemable in cash on the same day requested and were
      classified by the Company as cash equivalents.





On
      December 10, 2007, the Fund notified the Company that conditions in the short
      term credit markets had created a broad based perception of risk in non-sub
      prime asset-backed securities causing illiquidity across the market which led
      to
      extreme pricing pressure in those securities. The Fund also notified the Company
      that it is primarily invested in such securities, that it will begin an orderly
      liquidation of such securities, that unit holders would no longer be able to
      redeem their units in the Fund and that the Fund would redeem its units as
      it
      liquidated its investments. The Fund also began to value its securities based
      on
      market value rather than amortized value for the purposes of determining net
      asset value per unit. The Fund has continued to pay interest monthly. From
      January 1, 2008 through June 30, 2008, the Fund redeemed 11,098,919 units in
      the
      Fund for $10,892,567, which redemption was $206,352 in the aggregate less than
      the original $11,098,919 cost of such units. At the close of business on June
      30, 2008 the Company still owned 12,154,621 units in the Fund which had an
      aggregate value at such time of $11,791,197. The Fund has advised the Company
      that it anticipates that the balance, or most of the balance, of the Company’s
      investment in the Fund will be redeemed by December 31, 2008. However, there
      can
      be no assurance as to when further redemptions will take place or as to the
      net
      asset value at which the balance of the Company’s investment in the Fund will be
      redeemed.





Note – 6
            **Recently
                Issued Accounting
                Pronouncements**





In
      September 2006, the FASB issued SFAS No. 157, “ *Fair
      Value Measures* ”,
      which
      defines fair value, establishes a framework for measuring fair value under
      generally accepted accounting principles, and expands disclosures about fair
      value measures. This Statement applies under other accounting pronouncements
      that require or permit fair value measurements; it does not require any new
      fair
      value measures. SFAS No. 157 became effective for the Company on January 1,
      2008
      and did not have a significant impact on the Company’s financial position or
      results of operations.




10


**CADUS
      CORPORATION**


**Notes
      to Condensed Consolidated Financial Statements**





In
      February 2007, the FASB issued SFAS No. 159, *“The
      Fair Value Option for Financial Assets and Financial Liabilities”* (“SFAS
      159”), which permits certain financial assets and financial liabilities to be
      measured at fair value, using an instrument-by-instrument election. The initial
      effect of adopting SFAS 159 must be accounted for as a cumulative-effect
      adjustment to opening retained earnings for the fiscal year in which we apply
      SFAS 159. Retrospective application of SFAS 159 to fiscal years preceding the
      effective date is not permitted. SFAS 159 has no effect on the Company’s
      financial statements.





In
      December 2007, the FASB issued SFAS No. 141(R), *“Business
      Combinations”* (“SFAS
      141(R)”). SFAS 141(R) expands the definition of transactions and events that
      qualify as business combinations; requires that the acquired assets and
      liabilities, including contingencies, be recorded at the fair value determined
      on the acquisition date and changes thereafter reflected in revenue, not
      goodwill; changes the recognition timing for restructuring costs; and requires
      acquisition costs to be expensed as incurred. Adoption of SFAS 141(R) is
      required for combinations after December 15, 2008. Early adoption and
      retroactive application of SFAS 141(R) to fiscal years preceding the effective
      date are not permitted. The adoption of SFAS 141(R) may have an effect on the
      Company's financial statements if an acquisition is completed.





In
      December 2007, the FASB issued SFAS No. 160 *,
      “Noncontrolling Interest in Consolidated Financial Statements”* (“SFAS
      160”). SFAS 160 re-characterizes minority interests in consolidated subsidiaries
      as non-controlling interests and requires the classification of minority
      interests as a component of equity. Under SFAS 160, a change in control will
      be
      measured at fair value, with any gain or loss recognized in earnings. The
      effective date for SFAS 160 is for annual periods beginning on or after December
      15, 2008. Early adoption and retroactive application of SFAS 160 is for annual
      periods beginning on or after December 15, 2008. Early adoption and retroactive
      application of SFAS 160 to fiscal years preceding the effective date are not
      permitted. We are evaluating the impact of adoption on our consolidated
      financial statements.





11


ITEM
                2.
            **MANAGEMENT'S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                OPERATIONS**





**Overview**





The
      Company was incorporated in 1992 and until July 30, 1999, devoted substantially
      all of its resources to the development and application of novel yeast-based
      and
      other drug discovery technologies. On July 30, 1999, the Company sold its drug
      discovery assets and ceased its internal drug discovery operations and research
      efforts for collaborative partners.





At
      June
      30, 2008, the Company had an accumulated deficit of approximately $33.6 million.
      The Company’s losses have resulted principally from costs incurred in connection
      with its research and development activities and from general and administrative
      costs associated with the Company’s operations. These costs have exceeded the
      Company’s revenues and interest income. As a result of the sale of its drug
      discovery assets and the cessation of its internal drug discovery operations
      and
      research efforts for collaborative partners, the Company ceased to have research
      funding revenues and substantially reduced its operating expenses. The Company
      expects to generate revenues in the future only if it is able to license its
      technologies.





**Results
      of Operations**





*Three
      Month Ended June 30, 2008 and June 30, 2007*





*Revenues*





There
      were no revenues for the three months ended June 30, 2008 and 2007.





*Costs
      and Expenses*





General
      and administrative expenses increased to $100,877 for the three months ended
      June 30, 2008 from $90,507 for the same period in 2007. Patent costs decreased
      by $8,051, accounting and legal expenses increased by $17,519, and consulting
      costs decreased by $9,000. There were net other increases of
      $9,902.





For
      the
      three months ended June 30, 2008 the Company recognized income of $1,802 in
      its
      investment in Laurel Partners Limited Partnership. The income for the same
      period in 2007 was $2,849.





*Interest
      Income*





Interest
      income for the three months ended June 30, 2008 was $172,012 compared to
      interest income of $328,995 for the same period in 2007. This decrease is
      attributable primarily to lower interest rates earned on invested
      funds.





*Net
      Income*





Net
      income for the three months ended June 30, 2008 was $52,795 compared to a net
      income of $218,960 for the same period in 2007. The decrease in net income
      can
      be attributed to an increase in general and administrative expenses of $10,370
      and decreases in interest income and income from equity in other ventures of
      $156,983 and $1,047, respectively.




12




*Six
      Months Ended June 30, 2008 and June 30, 2007*





*Revenues*





Revenue
      for the six months ended June 30, 2008 and 2007 were $100,000, which is the
      annual maintenance fee from OSI.





*Costs
      and Expenses*





General
      and administrative expenses decreased to $346,153 for the six months ended
      June
      30, 2008 from $382,991 for the same period in 2007. Patent costs decreased
      by
      $40,909. There were net increases in other expenses of $4,071.





For
      the
      six months ended June 30, 2008 the Company recognized income of $4,078 in its
      investment in Laurel Partners Limited Partnership. The income for the same
      period in 2007 was $6,070.





*Interest
      Income*





Interest
      income for the six months ended June 30, 2008 was $408,530 compared to interest
      income of $649,642 for the same period in 2007. This decrease is attributable
      primarily to lower interest rates earned on invested funds.





*Net
      (Loss)*





Net
      loss
      for the six months ended June 30, 2008 was $155,201 compared to a net loss
      of
      $339,509 for the same period in 2007. The decrease in the net loss is
      attributable to a 2007 write down of $668,246 on marketable securities (that
      were subsequently sold in 2007) and, in 2008, a $3,125 gain on the sale of
      other
      securities, a $241,112 decrease in interest income, a reduction of $279,906
      in
      the value of certain assets,and a decrease in expenses of
      $30,830.





*Liquidity
      and Capital Resources*





At
      June
      30, 2008 the Company held cash and cash equivalents of $13.5 million and
      short-term investments of $11.8 million. The Company's working capital at June
      30, 2008 was $25.4 million.





The
      Company believes that its existing capital resources, together with interest
      income, will be sufficient to support its operations through the end of 2009.
      This forecast of the period of time through which the Company's financial
      resources will be adequate to support its operations is a forward-looking
      statement that may not prove accurate and, as such, actual results may vary.
      The
      Company's capital requirements may vary as a result of a number of factors,
      including the transactions, if any, arising from the Company's efforts to
      acquire or invest in companies and income-producing assets and the expenses
      of
      pursuing such transactions.





Item
                3.
            **QUANTITATIVE
                AND QUALITATIVE DISCLOSURES ABOUT MARKET
                RISK**





The
      Company's earnings and cash flows are subject to fluctuations due to changes
      in
      interest rates primarily from its investment of available cash balances in
      money
      market funds with portfolios of investment grade corporate and U.S. government
      securities. The Company does not believe it is materially exposed to changes
      in
      interest rates. Under its current policies the Company does not use interest
      rate derivative instruments to manage exposure to interest rate
      changes.





13





Item 4.
            **CONTROLS
                AND PROCEDURES**





Based
      on
      the evaluation of the Company’s disclosure controls and procedures conducted as
      of the end of the period covered by this report on Form 10-Q, the Company’s
      President and Chief Executive Officer, who also performs the functions of a
      principal financial officer, concluded that the Company’s disclosure controls
      and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under
      the Securities Exchange Act of 1934) are effective. In addition, there has
      been
      no change in the Company’s internal control over financial reporting (as defined
      in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934)
      that
      occurred during the period covered by this report on Form 10-Q that has
      materially affected, or is reasonably likely to materially affect, the Company’s
      internal control over financial reporting. It should be noted that any system
      of
      controls, however well designed and operated, can provide only reasonable
      assurance, and not absolute assurance, that the objectives of the system are
      met. In addition, the design of any control system is based in part upon certain
      assumptions about the likelihood of future events. Because of these and other
      inherent limitations of control systems, there can be no assurance that any
      design will succeed in achieving its stated goals under all potential future
      conditions, regardless of how remote.





**PART
      II - OTHER INFORMATION**





ITEM 1.
            LEGAL
                PROCEEDINGS.





None.





ITEM 1A.
            RISK
                FACTORS.





There
      were no material changes from the risk factors previously disclosed in our
      Annual Report on Form 10-K for the period ended December 31, 2007 as filed
      with
      the Securities and Exchange Commission on March 31, 2008.





ITEM 2.
            UNREGISTERED
                SALES OF EQUITY SECURITIES AND USE OF
                PROCEEDS.





None.





ITEM 3.
            DEFAULTS
                UPON SENIOR SECURITIES.





None.





ITEM 4.
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS.





On
      June
      19, 2008, the Company held its annual meeting of stockholders in New York,
      New
      York. The holders of 11,645,293 shares of Common Stock were present or
      represented by proxy and, accordingly, a quorum was present. The following
      matter was voted upon and received the votes set forth below:





All
      of
      the following persons nominated were elected to serve as directors and received
      the number of votes set opposite their respective names:





14





Votes
                For
            
            Votes WithheldJames
                R. Broach
            
            
            11,201,696
            
            
            443,597Russell
                D. Glass
            
            
            11,194,814
            
            
            450,479Carl
                C. Icahn
            
            
            11,164,863
            
            
            480,430Peter
                S. Liebert
            
            
            11,459,014
            
            
            186,279Jack
                G. Wasserman
            
            
            11,458,914
            
            
            186,379





ITEM 5.
            OTHER
                INFORMATION.





None.





ITEM 6.
            EXHIBITS.





The
      Exhibits listed in the Exhibit Index are included in this quarterly report
      on
      Form 10-Q.




15





**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.





**CADUS
                CORPORATION****(Registrant)**Dated:
                August 14, 2008
            By:
            /s/
                David BlitzDavid
                BlitzPresident
                and Chief Executive Officer (Authorized
              Officer
                and Principal Financial Officer)





16


**EXHIBIT
      INDEX**





The
      following exhibits are filed as part of this Quarterly Report on Form
      10-Q:





Exhibit
                No.
            
            Description31
            
            Certifications32
            
            Certification
                Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002





17