**UNITED        STATES **

**SECURITIES        AND EXCHANGE COMMISSION**
** **
**Washington,        D.C. 20549**

**FORM        10-Q**

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

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

*   *
**000-51610**

**MODIGENE        INC.**

| **           ****Nevada****           ** |   | **   ****20-0854033   **                 |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------|
| (State                  or other jurisdiction of incorporation                  or organization)                                                  |   | (I.R.S.                  Employer Identification                  No.) |
|                                                                                                                                                   |   |                                                                   |
| **3                  Sapir Street, Weizmann Science Park**                                                                                             |   |                                                                   |
| **Nes-Ziona,                  Israel**                                                                                                                 |   | ** **** 74140 **** **                              |
| (Address                  of principal executive offices)                                                                                              |   | (Zip                  Code)                                            |

**(866)        644-7811**

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

*** ***

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**MODIGENE        INC.**

|                      |                                                                                                                    | Page   |
|---------------------------|-------------------------------------------------------------------------------------------------------------------------|--------|
|                      |                                                                                                                    |   |
| Part                  I   |                                                                                                                    |   |
|                      |                                                                                                                    |   |
| Item                  1.  | Financial                  Statements                                                                                   | 3      |
|                      |                                                                                                                    |   |
| Item                  2.  | Management's                  Discussion and Analysis of Financial Condition and Results of                  Operations | 10     |
|                      |                                                                                                                    |   |
| Item                  3.  | Quantitative                  and Qualitative Disclosures About Market Risk                                             | 17     |
|                      |                                                                                                                    |   |
| Item                  4.  | Controls                  and Procedures                                                                                | 17     |
|                      |                                                                                                                    |   |
|                      |                                                                                                                    |   |
| Part                  II  |                                                                                                                    |   |
|                      |                                                                                                                    |   |
| Item                  1.  | Legal                  Proceedings                                                                                      | 18     |
|                      |                                                                                                                    |   |
| Item                  1A. | Risk                  Factors                                                                                           | 18     |
|                      |                                                                                                                    |   |
| Item                  2.  | Unregistered                  Sales of Equity Securities and Use of Proceeds                                            | 18     |
|                      |                                                                                                                    |   |
| Item                  3.  | Defaults                  upon Senior Securities                                                                        | 18     |
|                      |                                                                                                                    |   |
| Item                  4.  | Submission                  of Matter to a Vote of Security Holders                                                     | 18     |
|                      |                                                                                                                    |   |
| Item                  5.  | Other                  Information                                                                                      | 18     |
|                      |                                                                                                                    |   |
| Item                  6.  | Exhibits                                                                                                                | 18     |
|                      |                                                                                                                    |   |
| Signatures                | 19                                                                                                                      |
|                      |                                                                                                                    |
| Certifications            | 20                                                                                                                      |

----

**PART        I –FINANCIAL INFORMATION**

**ITEM        1.**
**Financial        Statements.**

**CONSOLIDATED        BALANCE SHEET**

**(Unaudited)**

|                                                                                                                                                                                                                                        |   | March 31,2008 |        | December 31,2007 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-------------|-----------------------|--------|
| **Current                  Assets:**                                                                                                                                                                                                        |   |               |        |                  |   |   |   |
| Cash                  and cash equivalents                                                                                                                                                                                                  |   | $                  | 12,830,017  |                  | $      | 11,455,807 |   |
| Accounts                  receivable and prepaid expenses                                                                                                                                                                                   |   |               | 108,897     |                  |   | 506,144 |   |
| Restricted                  cash                                                                                                                                                                                                            |   |               | 93,618      |                  |   | 61,838 |   |
| **Total                  current assets**                                                                                                                                                                                                   |   |               | 13,032,532  |                  |   | 12,023,789 |   |
| **Property                  and equipment, net**                                                                                                                                                                                            |   |               | 232,871     |                  |   | 175,428 |   |
| **Long-term                  Assets:**                                                                                                                                                                                                      |   |               |        |                  |   |   |   |
| Severance                  pay fund                                                                                                                                                                                                         |   |               | 58,695      |                  |   | 33,685 |   |
| Long                  term deposit                                                                                                                                                                                                          |   |               | 2,951       |                  |   | 2,951 |   |
| **Total                  long term assets**                                                                                                                                                                                                 |   |               | 61,646      |                  |   | 36,636 |   |
| **Total                  assets**                                                                                                                                                                                                           |   | $                  | 13,327,049  |                  | $      | 12,235,853 |   |
|                                                                                                                                                                                                                                        |   |               |        |                  |   |   |   |
| **LIABILITIES                  AND SHAREHOLDERS' EQUITY**                                                                                                                                                                                   |   |               |        |                  |   |   |   |
| **Current                  Liabilities:**                                                                                                                                                                                                   |   |               |        |                  |   |   |   |
| Short-term                  bank credit                                                                                                                                                                                                     |   | $                  | —     |                  | $      | 1,886 |   |
| Trade                  payables                                                                                                                                                                                                             |   |               | 83,981      |                  |   | 142,462 |   |
| Related                  party payables                                                                                                                                                                                                     |   |               | 25,938      |                  |   | 19,365 |   |
| Accrued                  expenses and other liabilities                                                                                                                                                                                     |   |               | 168,173     |                  |   | 167,218 |   |
| **Total                  current liabilities**                                                                                                                                                                                              |   |               | 278,092     |                  |   | 330,931 |   |
| **Accrued                  severance pay**                                                                                                                                                                                                  |   |               | 65,293      |                  |   | 42,552 |   |
| **Commitments                  and contingent liabilities**                                                                                                                                                                                 |   |               |        |                  |   |   |   |
| **Shareholders'                  equity:**                                                                                                                                                                                                  |   |               |        |                  |   |   |   |
| Stock                  capital -                                                                                                                                                                                                            |   |               |        |                  |   |   |   |
| Preferred                    stock of $ 0.00001 par value - 10,000,000 shares of preferred stock                    authorized, 800,000 issued and outstanding                                                                              |   |               | 8           |                  |   | — |   |
| Common                  stock of $ 0.00001 par value -                                                                                                                                                                                      |   |               |        |                  |   |   |   |
| 300,000,000                    shares of common stock authorized 35,549,028 and 35,435,266 shares                    issued and outstanding, as of March 31, 2008 and December 31,                    2007,                    respectively |   |               | 355         |                  |   | 354 |   |
| Additional                  paid-in capital                                                                                                                                                                                                 |   |               | 37,604,112  |                  |   | 35,368,596 |   |
| (Deficit)                  accumulated during the development stage                                                                                                                                                                         |   |               | (24,620,811 | )                     |   | (23,506,580 | ) |
| **Total                  shareholders' equity**                                                                                                                                                                                             |   |               | 12,983,664  |                  |   | 11,862,370 |   |
| **Total                  liabilities and shareholders' equity**                                                                                                                                                                             |   | $                  | 13,327,049  |                  | $      | 12,235,853 |   |

----

**CONSOLIDATED        STATEMENTS OF OPERATIONS**

**(Unaudited)**

|                                                                     |   |                                           |       | Period from              |   |
|--------------------------------------------------------------------------|--------|------------------------------------------------|------------|-------------------------------|--------|
|                                                                     |   |                                           |       | May 31, 2005        |   |
|                                                                     |   | For the three months ended |       | (date of inception) |   |
|                                                                     |   | March 31,                                 |       | to March 31,        |   |
|                                                                     |   | 2008                                           |       | 2007                          |   | 2008 |   |
|                                                                     |   |                                           |       |                          |   |   |   |
| **Revenues**                                                             |   | $                                              | -          |                          | $      | - |   | $ | - |   |
|                                                                     |   |                                           |       |                          |   |   |   |   |   |   |
| **Operating                  expenses:**                                 |   |                                           |       |                          |   |   |   |   |   |   |
|                                                                     |   |                                           |       |                          |   |   |   |   |   |   |
| In-process                  research and development write-off           |   |                                           | -          |                          |   | - |   |   | 14,222,840 |   |
| Research                  and development, net                           |   |                                           | 740,510    |                          |   | 228,394 |   |   | 3,504,856 |   |
| General                  and administrative                              |   |                                           | 608,802    |                          |   | 234,261 |   |   | 7,516,361 |   |
|                                                                     |   |                                           | 1,349,312  |                          |   | 462,655 |   |   | 25,244,057 |   |
|                                                                     |   |                                           |       |                          |   |   |   |   |   |   |
| Operating                  (loss)                                        |   |                                           | (1,349,312 | )                             |   | (462,655 | ) |   | (25,244,057 | ) |
|                                                                     |   |                                           |       |                          |   |   |   |   |   |   |
| Financial                  income                                        |   |                                           | 235,659    |                          |   | 3,072 |   |   | 638,997 |   |
| Financial                  (expenses)                                    |   |                                           | (578       | )                             |   | (26,898 | ) |   | (15,751 | ) |
| Net                  (Loss)                                              |   | $                                              | (1,114,231 | )                             | $      | (486,481 | ) | $ | (24,620,811 | ) |
|                                                                     |   |                                           |       |                          |   |   |   |   |   |   |
| (Loss)                  per share                  (basic & diluted) |   | $                                              | (0.03      | )                             | $      | (0.04 | ) | $ | (1.20 | ) |
|                                                                     |   |                                           |       |                          |   |   |   |   |   |   |
| Weighted                  average number of shares outstanding           |   |                                           | 35,473,187 |                          |   | 13,588,552 |   |   | 20,468,444 |   |

----

**CONSOLIDATED        STATEMENTS OF CASH FLOWS**

**(Unaudited)**

|                                                                                           |   |                                           |       | Period from              |   |
|------------------------------------------------------------------------------------------------|--------|------------------------------------------------|------------|-------------------------------|--------|
|                                                                                           |   |                                           |       | May 31, 2005        |   |
|                                                                                           |   | For the three months ended |       | (date of inception) |   |
|                                                                                           |   | March 31,                                 |       | to March 31,        |   |
|                                                                                           |   | 2008                                           |       | 2007                          |   | 2008 |   |
|                                                                                           |   |                                           |       |                          |   |   |   |
| **Cash                  flows from operating activities**                                      |   |                                           |       |                          |   |   |   |   |   |   |
| Net                  cash (used in) operating activities                                       |   | $                                              | (522,404   | )                             | $      | (522,336 | ) | $ | (4,621,070 | ) |
|                                                                                           |   |                                           |       |                          |   |   |   |   |   |   |
| **Cash                  flows from investing activities**                                      |   |                                           |       |                          |   |   |   |   |   |   |
| Purchase                  of property and equipment                                            |   |                                           | (69,720    | )                             |   | (4,345 | ) |   | (286,524 | ) |
| Payment                  for the acquisition of ModigeneTech                  Ltd.             |   |                                           | -          |                          |   | - |   |   | (474,837 | ) |
| Long                  term deposit                                                             |   |                                           | -          |                          |   | - |   |   | (2,951 | ) |
| Restricted                  deposit                                                            |   |                                           | (31,780    | )                             |   | (2,929 | ) |   | (93,618 | ) |
| Net                  cash (used in) investing activities                                       |   |                                           | (101,500   | )                             |   | (7,274 | ) |   | (857,930 | ) |
|                                                                                           |   |                                           |       |                          |   |   |   |   |   |   |
| **Cash                  flows from financing activities**                                      |   |                                           |       |                          |   |   |   |   |   |   |
| Short                  term bank credit                                                        |   |                                           | (1,886     | )                             |   | 17,402 |   |   | (2,842 | ) |
| Proceeds                  from loans                                                           |   |                                           | -          |                          |   | - |   |   | 173,000 |   |
| Principal                  payment of loans                                                    |   |                                           | -          |                          |   | - |   |   | (173,000 | ) |
| Proceeds                  from issuance of shares                                              |   |                                           | 2,000,000  |                          |   |   |   |   | 18,311,859 |   |
| Net                  cash provided by (used in) financing activities                           |   |                                           | 1,998,114  |                          |   | 17,402 |   |   | 18,309,017 |   |
| **(Decrease)                  increase in cash and cash equivalents**                          |   |                                           | 1,374,210  |                          |   | (512,208 | ) |   | 12,830,017 |   |
| **Cash                  and cash equivalents at the beginning of the                  period** |   |                                           | 11,455,807 |                          |   | 785,165 |   |   | - |   |
| **Cash                  and cash equivalents at the end of the period**                        |   | $                                              | 12,830,017 |                          | $      | 272,957 |   | $ | 12,830,017 |   |
|                                                                                           |   |                                           |       |                          |   |   |   |   |   |   |
| Cash                  paid for income taxes                                                    |   | $                                              | -          |                          | $      | - |   | $ | - |   |
|                                                                                           |   |                                           |       |                          |   |   |   |   |   |   |
| Cash                  paid for interest expenses                                               |   | $                                              | 578        |                          | $      | 2,937 |   | $ | 15,751 |   |

----

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**MARCH        31, 2008**

**(Unaudited)**

| **NOTE                  1:-** | **GENERAL** |
|-------------------------------|-------------|
|                          |        |
|                          | **a.**      | **General:** |
|                          |        | Modigene                  Inc. (the “Company”) was formed on August 22, 2003 under the laws of the                  state of Nevada. The Company is engaged in the development of therapeutic                  proteins with extended half-lifes, through its subsidiary, ModigeneTech                  Ltd. (“ModigeneTech”). |
|                          |        |   |
|                          |        | The                  Company is devoting substantially all of its efforts toward conducting                  research and development activities. The Company’s activities also include                  raising capital, recruiting personnel and building infrastructure.                  In the                  course of such activities, the Company has sustained operating                  losses and                  expects such losses to continue for the foreseeable future. The                  Company                  has not generated any revenues or product sales and has not achieved                  profitable operations or positive cash flow from operations. The                  Company’s                  deficit accumulated during the development stage aggregated $24,620,811                  through March 31, 2008. There is no assurance that profitable operations,                  if ever achieved, could be sustained on a continuing basis. The                  Company                  raised $2 million in a private placement, see note b. below. The                  Company                  believes that its current cash sources will enable the continuance                  of the                  Company's activities for at least a year with no need of additional                  fundraising, |
|                          |        |   |
|                          | **b.**      | On                  March 25, 2008, the Company entered into a Securities Purchase                  Agreement                  (the “Purchase Agreement”) with a group of related parties (the                  "Investors"). The Purchase Agreement provides that the Company will                  sell to the Investors, and the Investors will purchase from the                  Company,                  800,000 shares of non registered Series A preferred stock, $0.00001                  par                  value per share (the “Series A Preferred Stock”), at $2.50 per share, for                  an aggregate purchase price of $2,000,000. The Series A Preferred                  Stock is                  convertible during the period beginning March 1, 2009 though March                  25,                  2012, without payment of any additional consideration, into non                  registered                  Common Stock based on a conversion ratio equal to one share of                  Common                  Stock per share of Series A Preferred Stock. In the event that                  the market                  capitalization of the Company equals or exceeds $150,000,000 during                  any                  forty-five days within a consecutive ninety day period, the conversion                  ratio will adjust to five shares of Common Stock per share of Series                  A                  Preferred Stock. The conversion ratio in effect will be proportionately                  adjusted for subdivisions, combinations, consolidations and similar                  corporate events. If not previously converted, the Series A Preferred                  Stock will automatically be converted into Common Stock, at the                  applicable                  exchange ratio, on March 25,                  2012. |

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| **NOTE                  1:-** | **GENERAL**                  (continued)             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-------------------------------|------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                          |                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                          | **c.**                                               | On                  March 25, 2008, simultaneously with the closing of the transaction                  under                  the Securities Purchase Agreement, the Company entered into a Credit                  Agreement with the Investors. Under this line of credit, the Company                  may,                  at its discretion, borrow up to $10,000,000, which proceeds may                  be used                  for working capital or general corporate purposes of the Company,                  as                  approved by our board of directors (the “Board”). The maturity date for                  the line of credit is March 25, 2009, unless (i) the Company has                  borrowed                  any funds under the line of credit prior to March 25, 2009, or                  (ii) the                  Company elects to extend the line of credit. In either of such                  events the                  maturity date will be extended until March 25, 2013. Upon the maturity                  date, as the same may be extended, the Company is obligated to                  repay all                  outstanding borrowings, together with any accrued interest, and                  the line                  of credit will terminate.  The                  Company is obligated to pay interest on outstanding borrowings                  under the                  line of credit at a 10% annual rate. In the event the Company determines                  to draw on the line of credit, or the Company elects to extend                  the                  maturity date until March 25, 2013, the Company will issue the                  Investors                  5-year warrants to purchase 1,500,000 shares of the Company’s                  non-registered Common Stock, having an exercise price of $0.99                  per                  share. |
|                          |                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **NOTE                  2:-** | **SIGNIFICANT                  ACCOUNTING POLICIES** |
|                          |                                                 |
|                          | **a.**                                               | **Basis                  of presentation:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                          |                                                 | The                  accompanying unaudited financial statements of the Company are                  presented                  in accordance with the requirements for Form 10-QSB and Article                  10 of                  Regulation S-X and Regulation S-B. Certain information and footnote                  disclosures normally included in financial statements prepared                  in                  accordance with accounting principles generally accepted in the                  United                  States of America (“US GAAP”) have been condensed or omitted pursuant to                  such SEC rules and regulations. In the opinion of management, all                  adjustments (consisting of normal recurring adjustments) considered                  necessary for a fair presentation have been made. The results for                  these                  interim periods are not necessarily indicative of the results for                  the                  entire year. The accompanying financial statements should be read                  in                  conjunction with the December 31, 2007 financial statements and                  the notes                  thereto included in the Company's Report on Form 10-KSB filed March                  31,                  2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                          |                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                          | **b.**                                               | **Principles                  of consolidation:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                          |                                                 | The                  consolidated financial statements include the accounts of the Company                  and                  its wholly-owned subsidiaries Modigene Delaware and ModigeneTech.                  Intercompany transactions and balances have been eliminated upon                  consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                          |                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                          | **c.**                                               | **Loss                  per share:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                          |                                                 | Basic                  and diluted losses per share are presented in accordance with FASB                  issued                  SFAS no. 128 "Earnings per share" ("SFAS 128"). Outstanding share                  options                  and warrants have been excluded from the calculation of the diluted                  loss                  per share because all such securities are antidilutive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

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| **NOTE                  3:-** | **SHAREHOLDERS'                  EQUITY** |
|-------------------------------|-------------------------------------------|
|                          |                                      |
|                          | **a.**                                    | **Rights                  of common stock:** |
|                          |                                      |   |
|                          |                                      | The                  holders of Common Stock are entitled to one vote per share on all                  matters                  submitted to a vote of the stockholders, including the election                  of                  directors. Subject to any preferential rights of any outstanding                  series of                  preferred stock created by the Board from time to time, the common                  stockholders will be entitled to such cash dividends as may be                  declared                  from time to time by the Board from funds available. Subject to                  any                  preferential rights of any outstanding series of preferred stock,                  upon                  liquidation, dissolution or winding up of the Company, the common                  stockholders will be entitled to receive pro rata all assets available                  for                  distribution to such holders. |
|                          |                                      |   |
|                          | **b.**                                    | **Rights                  of preferred stock:** |
|                          |                                      |   |
|                          |                                      | The                  Company has approved the designation of 800,000 shares of its preferred                  stock as the Series A Preferred Stock. Each holder of shares of                  Series A                  Preferred Stock shall be entitled, at the option of such holder,                  to                  convert all, but not less than all, of the shares of Series A Preferred                  Stock then held by such holder, at any time and from time to time                  beginning on March 1, 2009 and ending on March 25, 2012 (the “Conversion                  Deadline”), without the payment of any additional consideration, into                  Common Stock at the applicable conversion price discussed in note                  1b. If                  any holder of shares of Series A Preferred Stock has not exercised                  his,                  her or its right to convert the shares of Series A Preferred Stock                  then                  held by such holder on or prior to the Conversion Deadline, then                  at the                  Conversion Deadline all such shares of Series A Preferred Stock                  will                  automatically convert, without the payment of any additional                  consideration, into Common Stock at the applicable conversion price                  discussed above. The holders of Series A Preferred Stock (and the                  holders                  of any other class or series of preferred stock that may have similar                  voting rights) will vote on an as-if-converted basis with the holders                  of                  Common Stock and any other class or series of preferred stock or                  Common                  Stock that by its terms, votes on an as-if-converted basis with                  the                  holders of Common Stock on all matters to be voted on by stockholders                  of                  the Company. Dividends will be payable only if, when and as declared                  by                  the Board, and, if declared, any such dividends will be non-cumulative.                  Such dividends, if any, will be paid out of, and to the extent                  of, any                  assets legally available therefore. No dividends will be declared                  or paid                  on the Common Stock, unless a dividend, payable in the same consideration                  or manner, is simultaneously declared or paid, as the case may                  be, on each                  share of Series A Preferred Stock. In the event of liquidation                  of the                  Company, the entire remaining assets and funds of the Company legally                  available for distribution, if any, shall be distributed pro rata                  among the holders of the Series A Preferred Stock, the Common Stock                  and                  any other classes entitled to participate with Common Stock in                  proportion                  to the shares of Common Stock then held by them and the shares                  of Common                  Stock which they then have the right to acquire upon conversion                  of the                  capital stock held by them as of the date of such                  Liquidation. |

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| **NOTE                  3:-** | **SHAREHOLDERS'                  EQUITY** (continued) |
|-------------------------------|-------------------------------------------------------|
|                          |                                                  |
|                          | **c.**                                                | **Option                  plan:** |
|                          |                                                  |   |
|                          |                                                  | The                  Company issued stock options to purchase shares of Common Stock                  under its                  2005 Stock Incentive Plan (the “2005 Plan”) and under its 2007 Equity                  Incentive Plan (the “2007 Plan”). The Company accounts for stock based                  compensation using the fair value recognition provisions of SFAS                  No. 123R                  (revised 2004), “Share Based Payment”. The                  fair value of each stock option is estimated based upon grant date                  fair                  value using the Black-Scholes option-pricing model. The following                  weighted                  average assumptions used for the options granted during the year                  2008 are                  as follows: (i) annual dividends of $0.00, (ii) expected volatility                  of                  79.3%, (iii) risk-free interest rate of 2.98% , and (iv) expected                  average                  option lives of 10 years. |
|                          |                                                  |   |
|                          |                                                  | A                  summary of the stock options granted under the 2005 and 2007 Plans                  is as                  follows: |

|                                                        |   | March 31, 2008 |      |
|-------------------------------------------------------------|--------|--------------------------|-----------|
|                                                        |   | Numberof Options    |      | Weighted average Exercise Price |   |
|                                                        |   |                     |      |   |   |
| Outstanding                  at the beginning of the period |   |                     | 2,437,795 |   | $ | 1.23 |   |
| Exercised                                                   |   |                     | 113,762   |   | $ | 0.00 |   |
| Issued                  under the 2007 Plan                 |   |                     | 1,975,000 |   | $ | 0.90 |   |
| Lapsed                                                      |   |                     | 388,988   |   | $ | 1.10 |   |
| Outstanding                  at the end of the period       |   |                     | 3,910,045 |   | $ | 1.11 |   |
|                                                        |   |                     |      |   |   |   |   |
| Options                  exercisable                        |   |                     | 1,440,045 |   | $ | 1.07 |   |

|   |   | The                  options outstanding as of March 31, 2008, have been separated into                  exercise prices, as follows: |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|                     |   |                     |      | Remaining Weighted average contractual life |   |                     |   |
|--------------------------|--------|--------------------------|-----------|-----------------------------------------------------------------|--------|--------------------------|--------|
| Exercise Price      |   | Options Outstanding |      | (years)                                                         |   | Options Exercisable |   |
|                     |   |                     |      |                                                            |   |                     |   |
| $                  0.879 |   |                     | 954,899   |                                                            |   | 8.06                     |   |   | 954,899 |   |
| $                  0.90  |   |                     | 1,950,000 |                                                            |   | 9.92                     |   |   | - |   |
| $                  0.93  |   |                     | 25,000    |                                                            |   | 9.93                     |   |   | - |   |
| $                  1.32  |   |                     | 435,146   |                                                            |   | 4.92                     |   |   | 435,146 |   |
| $                  2.00  |   |                     | 425,000   |                                                            |   | 9.11                     |   |   | - |   |
| $                  2.50  |   |                     | 120,000   |                                                            |   | 4.95                     |   |   | 50,000 |   |
|                     |   |                     | 3,910,045 |                                                            |   | 3.77                     |   |   | 1,440,045 |   |

|   |   | Weighted                  average fair values and average exercise prices of options at date                  of                  grant are as follows: |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | Weighted                  average** **exercise                  price $ 1.07                                                                       |
|   |   | Weighted                  average fair value on date of grant                  $0.92                                                                    |

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| **NOTE                  3:-** | **SHAREHOLDERS'                  EQUITY (continued)** |
|-------------------------------|-------------------------------------------------------|
|                          |                                                  |   |
|                          |                                                  | Stock                  based compensation expense for the three months ended March 31,                  2008 and                  2007 were $235,524 and $88,623, respectively. Stock based compensation                  for                  the period from May 31, 2005 (date of inception) through March                  31, 2008                  include stock based payment in the acquisition of a subsidiary,                  deferred                  compensation on restricted shares and stock based compensation                  on options                  in the amount of $5,663,940. |

**ITEM        2. **
**Management’s        Discussion and Analysis of Financial Condition and Results of        Operations.**

**Note        Regarding Forward-Looking Statements**

*Our        disclosure and analysis in this Quarterly Report on Form 10-Q *
*contains        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. You can identify such forward-looking statements by the words “expects,”“intends,” “plans,” “projects,” “believes,” “estimates,” “likely,” “goal,”“assumes,” “targets” and similar expressions and/or the use of future tense or        conditional constructions (such as “will,” “may,” “could,” “should” and the        like). In the normal course of business, Modigene Inc. (“Modigene” or the“Company”), in an effort to help keep its stockholders and the public informed        about the Company may, from time to time, issue such forward-looking statements,        either orally or in writing. Generally, these statements relate to business        plans strategies or opportunities, and/or projected or anticipated benefits        or        other consequences of such plans, strategies, or opportunities, including        anticipated revenues or earnings. Modigene bases the forward-looking statements        on its current expectations, estimates and projections. Modigene cautions        you        that these statements are not guarantees of future performance and involve        risks, uncertainties and assumptions that Modigene cannot predict. In addition,        Modigene has based many of these forward-looking statements on assumptions        about        future events that may prove to be inaccurate. Therefore, the actual results        of        future events described in such forward-looking statements in this Management’s        Discussion and Analysis, or elsewhere, could differ materially from those        stated        in such forward-looking statements. *

**Management's        Discussion and Analysis of Financial Condition and Results of        Operations**

**Historical        Note**

----

**Results        of Operation**

***Critical        Accounting Policies***

*Use        of Estimates:*

*Financial        Statements in United States Dollars:*
** **

*Principles        of Consolidation:*

*Cash        Equivalents:*

*Property        and Equipment:*

|                                                |   | %      |   |
|-----------------------------------------------------|--------|--------|--------|
|                                                |   |   |   |
| Office                  furniture and equipment     |   |   | 6      |   |
|                                                |   |   |        |   |
| Laboratory                  equipment               |   |   | 15     |   |
|                                                |   |   |        |   |
| Computers                  and electronic equipment |   |   | 33     |   |
|                                                |   |   |        |   |
| Leasehold                  improvements             |   |   | 25     |   |

** **

----

*Research        and Development Costs and Participation:*

*Severance        Pay:*

*Income        Taxes:*

*Concentrations        of Credit Risk:*

*Fair        Value of Financial Instruments:*

*Royalty-bearing        Grants:*

***Revenue***

----

***Research        and Development Expense***

|   | · | internal                  costs associated with research and development                  activities;                                                                                                       |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                        |
|   | · | payments                  made to third party contract research organizations, contract                  manufacturers, investigative sites, and consultants;                                               |
|   |   |                                                                                                                                                                                                        |
|   | · | manufacturing                  development costs;                                                                                                                                                           |
|   |   |                                                                                                                                                                                                        |
|   | · | personnel-related                  expenses, including salaries, benefits, travel, and related costs                  for the                  personnel involved in the research and development;          |
|   |   |                                                                                                                                                                                                        |
|   | · | activities                  relating to the advancement of product candidates through preclinical                  studies and clinical trials; and                                                         |
|   |   |                                                                                                                                                                                                        |
|   | · | facilities                  and other expenses, which include expenses for rent and maintenance                  of                  facilities, as well as laboratory and other                  supplies. |

These        costs and expenses are partially funded by grants received by the Company        from        the OCS. There can be no assurance that the Company will continue to receive        grants from the OCS in amounts sufficient for its operations, if at        all.

|   | · | completion                  of such preclinical and clinical trials;                                |
|--------|--------|-----------------------------------------------------------------------------------------------------|
|   |   |                                                                                                |
|   | · | receipt                  of necessary regulatory approvals;                                         |
|   |   |                                                                                                |
|   | · | the                  number of clinical sites included in the trials;                               |
|   |   |                                                                                                |
|   | · | the                  length of time required to enroll suitable patients;                           |
|   |   |                                                                                                |
|   | · | the                  number of patients that ultimately participate in the                  trials; |
|   |   |                                                                                                |
|   | · | adverse                  medical events or side effects in treated                  patients;       |

----

|   | · | Lack                  of comparability with complementary technologies;                                                               |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                  |
|   | · | obtaining                  capital necessary to fund operations, including the research and                  development efforts; and |
|   |   |                                                                                                                                  |
|   | · | the                  results of clinical trials.                                                                                      |

***General        and Administrative Expense***

***Financial        Expense and Income***

|   | · | interest                  earned on the Company’s cash and cash equivalents;                                                                                                                                                                                                                             |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                           |
|   | · | interest                  expense on short term bank credit and loan; and                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                           |
|   | · | expense                  or income resulting from fluctuations of the New Israeli Shekel,                  which a                  portion of the Company’s assets and liabilities are denominated in,                  against the United States Dollar and other foreign                  currencies. |

***Stock-based        Compensation***

----

**Cash        Flows**

**Funding        Requirements**

----

        candidates, we are unable to estimate the amounts of increased capital outlays        and operating expenditures associated with our current and anticipated clinical        trials. Our future capital requirements will depend on many factors, including        the progress and results of our clinical trials, the duration and cost of        discovery and preclinical development, and laboratory testing and clinical        trials for our product candidates, the timing and outcome of regulatory review        of our product candidates, the number and development requirements of other        product candidates that we pursue, and the costs of commercialization        activities, including product marketing, sales, and distribution. We do not        anticipate that we will generate product revenues for at least the next several        years. In the absence of additional funding, we expect continuing operating        losses to result in increases in our cash used in operations over the next        several years. To the extent that our capital resources are insufficient        to meet        our future capital requirements, we will need to finance our future cash        needs        through public or private equity offerings, debt financings, or corporate        collaboration and licensing arrangements. We currently do not have any        commitments for future external funding. We may need to raise additional        funds        more quickly if one or more of our assumptions proves to be incorrect or        if we        choose to expand our product development efforts more rapidly than we presently        anticipate, and we may decide to raise additional funds even before we need        them        if the conditions for raising capital are favorable. We may seek to sell        additional equity or debt securities or obtain a bank credit facility. The        sale        of additional equity or debt securities may result in dilution to our        shareholders. The incurrence of indebtedness would result in increased fixed        obligations and could also result in covenants that would restrict our        operations. Additional equity or debt financing, grants, or corporate        collaboration and licensing arrangements may not be available on acceptable        terms, if at all. If adequate funds are not available, we may be required        to        delay, reduce the scope of or eliminate our research and development programs,        reduce our planned commercialization efforts or obtain funds through        arrangements with collaborators or others that may require us to relinquish        rights to certain product candidates that we might otherwise seek to develop        or        commercialize independently.

**Effects        of Inflation and Currency Fluctuations**

**Arrangements**

**Recently        Issued Accounting Pronouncements**

----

**ITEM        3.**
**Quantitative        and Qualitative Disclosures About Market Risk**

**ITEM        4. **
**Controls        and Procedures.**

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**PART        II - OTHER INFORMATION**

**ITEM        1. **
**Legal        Proceedings.**

**ITEM        1A.**
**Risk        Factors.**

**ITEM        2. **
**Unregistered        Sales of Equity Securities and Use of Proceeds.**

**ITEM        3.**
**Defaults        Upon Senior Securities.**

**ITEM        4.**
**Submission        of Matters to a Vote of Security Holders.**

**ITEM        5.**
**Other        Information.**

**ITEM        6.**
**Exhibits.**

| 31.1    | Certification                  of Chief Executive Officer pursuant to Item 601(b)(31) of Regulation                  S-K                  (Filed herewith). |
|------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.2                   | Certification                  of Chief Financial Officer pursuant to Item 601(b)(31) of Regulation                  S-K                  (Filed herewith). |
| 32.1                   | Certification                  of Chief Executive Officer pursuant to Item 601(b)(32) of Regulation                  S-K                  (Filed herewith). |
| 32.2                   | Certification                  of Principal Financial Officer pursuant to Item 601(b)(32) of Regulation                  S-B (Filed herewith).              |

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**SIGNATURES**

|                          | MODIGENE                  INC.           |
|-------------------------------|------------------------------------------|
|                          |                                     |
| May                  12, 2008 | /s/                  Abraham Havron      |
| Date                          | Abraham                  Havron          |
|                          | Chief                  Executive Officer |

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