**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**

*   *
**000-52691**

**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**

| Large                  accelerated filer  | o                                                                                       |   | Accelerated                  Filer  | o |
|------------------------------------------------|-----------------------------------------------------------------------------------------|--------|-------------------------------------|---|
| Non-accelerated                  filer    | o (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 |   | 11     |
|                     |                                                                                                                          |   |   |
| Item                  3. | Quantitative                  and Qualitative Disclosures About Market Risk                                                   |   | 18     |
|                     |                                                                                                                          |   |   |
| Item 4T.                 | Controls                  and Procedures                                                                                      |   | 19     |
|                     |                                                                                                                          |   |   |
| Part                  II |                                                                                                                          |   |   |
|                     |                                                                                                                          |   |   |
| Item                  1. | Legal                  Proceedings                                                                                            |   | 20     |
|                     |                                                                                                                          |   |   |
| Item 1A.                 | Risk                  Factors                                                                                                 |   | 20     |
|                     |                                                                                                                          |   |   |
| Item                  2. | Unregistered                  Sales of Equity Securities and Use of Proceeds                                                  |   | 20     |
|                     |                                                                                                                          |   |   |
| Item                  3. | Defaults                  upon Senior Securities                                                                              |   | 20     |
|                     |                                                                                                                          |   |   |
| Item                  4. | Submission                  of Matter to a Vote of Security Holders                                                           |   | 20     |
|                     |                                                                                                                          |   |   |
| Item                  5. | Other                  Information                                                                                            |   | 20     |
|                     |                                                                                                                          |   |   |
| Item                  6. | Exhibits                                                                                                                      |   | 21     |
|                     |                                                                                                                          |   |   |
| Signatures               |                                                                                                                          | 22     |
|                     |                                                                                                                          |   |   |
| Certifications           |                                                                                                                          | 23     |

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**PART        I - FINANCIAL INFORMATION**

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

**MODIGENE      INC. AND SUBSIDIARY **

**(A      development stage company)**

**CONSOLIDATED      BALANCE SHEETS**

|                                                                                                                                                                                                                                                                                        |   | September                  30, |        |  December                  31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|-------------|-------------------------------------|--------|
|                                                                                                                                                                                                                                                                                        |   | 2008                           |        |  2007                          |   |
|                                                                                                                                                                                                                                                                                        |   | (Unaudited)                    |        |  (Restated)                    |   |
| **ASSETS**                                                                                                                                                                                                                                                                                  |   |                           |        |                                |   |   |   |
| **Current                  Assets:**                                                                                                                                                                                                                                                        |   |                           |        |                                |   |   |   |
| Cash                  and cash equivalents                                                                                                                                                                                                                                                  |   | $                              | 9,714,871   |                                | $      | 11,455,807 |   |
| Accounts                  receivable and prepaid expenses                                                                                                                                                                                                                                   |   |                           | 107,063     |                                |   | 506,144 |   |
| Restricted                  cash                                                                                                                                                                                                                                                            |   |                           | 101,697     |                                |   | 61,838 |   |
| **Total                  current assets**                                                                                                                                                                                                                                                   |   |                           | 9,923,631   |                                |   | 12,023,789 |   |
| **Property                  and equipment, net**                                                                                                                                                                                                                                            |   |                           | 317,295     |                                |   | 175,428 |   |
| **Long-term                  Assets:**                                                                                                                                                                                                                                                      |   |                           |        |                                |   |   |   |
| Severance                  pay fund                                                                                                                                                                                                                                                         |   |                           | 44,001      |                                |   | 33,685 |   |
| Long                  term deposit                                                                                                                                                                                                                                                          |   |                           | 2,951       |                                |   | 2,951 |   |
| **Total                  long term assets**                                                                                                                                                                                                                                                 |   |                           | 46,592      |                                |   | 36,636 |   |
| **Total                  assets**                                                                                                                                                                                                                                                           |   | $                              | 10,287,878  |                                | $      | 12,235,853 |   |
|                                                                                                                                                                                                                                                                                        |   |                           |        |                                |   |   |   |
|                                                                                                                                                                                                                                                                                        |   |                           |        |                                |   |   |   |
| **LIABILITIES                  AND SHAREHOLDERS’ EQUITY**                                                                                                                                                                                                                             |   |                           |        |                                |   |   |   |
| **Current                  Liabilities:**                                                                                                                                                                                                                                                   |   |                           |        |                                |   |   |   |
| Short-term                  bank credit                                                                                                                                                                                                                                                     |   | $                              | -           |                                | $      | 1,886 |   |
| Trade                  payables                                                                                                                                                                                                                                                             |   |                           | 171,572     |                                |   | 142,462 |   |
| Related                  party payables                                                                                                                                                                                                                                                     |   |                           | 55,397      |                                |   | 19,365 |   |
| Accrued                  expenses and other liabilities                                                                                                                                                                                                                                     |   |                           | 99,816      |                                |   | 167,218 |   |
| **Total                  current liabilities**                                                                                                                                                                                                                                              |   |                           | 326,785     |                                |   | 330,931 |   |
| **Accrued                  severance pay**                                                                                                                                                                                                                                                  |   |                           | 84,843      |                                |   | 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 authorized35,549,028                  and 35,435,266 shares issued and outstanding as of September 30,                  2008 and                  December 31, 2007, respectively |   |                           | 355         |                                |   | 354 |   |
| Additional                  paid-in capital                                                                                                                                                                                                                                                 |   |                           | 27,197,398  |                                |   | 24,368,587 |   |
| (Deficit)                  accumulated during the development stage                                                                                                                                                                                                                         |   |                           | (17,321,511 | )                                   |   | (12,506,571 | ) |
| **Total                  shareholders’ equity**                                                                                                                                                                                                                                       |   |                           | 9,876,250   |                                |   | 11,862,370 |   |
| **Total                  liabilities and shareholders’ equity**                                                                                                                                                                                                                       |   | $                              | 10,287,878  |                                | $      | 12,235,853 |   |

----

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

**(Unaudited)**

|                                                           |   |                                          |                         |                                           |   | Period from              |   |
|----------------------------------------------------------------|--------|-----------------------------------------------|------------------------------|------------------------------------------------|--------|-------------------------------|--------|
|                                                           |   |                                          |                         |                                           |   | May 31, 2005        |   |
|                                                           |   | For the nine months ended |                         | For the three months ended |   | (date of inception) |   |
|                                                           |   | September 30,                            |                         | September 30,                             |   | to September 30,    |   |
|                                                           |   | 2008                                          |                         | 2007                                           |   | 2008                          |   | 2007 |   | 2008 |   |
|                                                           |   |                                          |                         | (Restated)                                     |   |                          |   | (Restated) |   |   |   |
|                                                           |   |                                          |                         |                                           |   |                          |   |   |   |   |   |
| **Revenues**                                                   |   | $                                             | -                            |                                           | $      | -                             |   | $ | - |   | $ | - |   | $ | - |   |
|                                                           |   |                                          |                         |                                           |   |                          |   |   |   |   |   |   |   |   |   |   |
| **Operating                  expenses:**                       |   |                                          |                         |                                           |   |                          |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                                          |                         |                                           |   |                          |   |   |   |   |   |   |   |   |   |   |
| In-process                  research and development write-off |   |                                          | -                            |                                           |   | -                             |   |   | - |   |   | - |   |   | (                  3,222,831 | ) |
| Research                  and development, net                 |   |                                          | (                  3,271,560 | )                                              |   | (                  1,619,232  | )      |   | (                  1,175,602 | ) |   | (                  978,444 | ) |   | (                  6,035,905 | ) |
| General                  and administrative                    |   |                                          | (                  1,762,217 | )                                              |   | (                  1,450,324  | )      |   | (                  540,786 | ) |   | (                  628,005 | ) |   | (                  8,669,777 | ) |
|                                                           |   |                                          | (                  5,033,777 | )                                              |   | (                  3,069,556  | )      |   | (                  1,716,388 | ) |   | (                  1,606,449 | ) |   | (17,928,513 | ) |
|                                                           |   |                                          |                         |                                           |   |                          |   |   |   |   |   |   |   |   |   |   |
| Operating                  (loss)                              |   |                                          | (                  5,033,777 | )                                              |   | (                  3,069,556  | )      |   | (                  1,716,388 | ) |   | (                  1,606,449 | ) |   | (17,928,513 | ) |
|                                                           |   |                                          |                         |                                           |   |                          |   |   |   |   |   |   |   |   |   |   |
| Financial                  income (expense)                    |   |                                          | 218,837                      |                                           |   | 173,486                       |   |   | (                  136,648 | ) |   | 113,832 |   |   | 607,002 |   |
|                                                           |   |                                          |                         |                                           |   |                          |   |   |   |   |   |   |   |   |   |   |
| (Loss)                  before income taxes                    |   |                                          | (                  4,814,940 | )                                              |   | (                  2,896,070  | )      |   | (                  1,853,036 | ) |   | (                  1,492,617 | ) |   | (17,321,511 | ) |
|                                                           |   |                                          |                         |                                           |   |                          |   |   |   |   |   |   |   |   |   |   |
| Income                  taxes                                  |   |                                          | -                            |                                           |   | (                  12,762     | )      |   | - |   |   | (                  12,762 | ) |   | - |   |
| Net                  (loss)                                    |   | $                                             | (                  4,814,940 | )                                              | $      | (                  2,908,832  | )      | $ | (                  1,853,036 | ) | $ | (                  1,505,379 | ) | $ | (17,321,511 | ) |
|                                                           |   |                                          |                         |                                           |   |                          |   |   |   |   |   |   |   |   |   |   |
| (Loss)                  per share (basic & diluted)        |   | $                                             | (0.14                        | )                                              | $      | (0.11                         | )      | $ | (0.05 | ) | $ | (0.04 | ) | $ | (0.76 | ) |
|                                                           |   |                                          |                         |                                           |   |                          |   |   |   |   |   |   |   |   |   |   |
| Weighted                  average number of shares outstanding |   |                                          | 35,523,748                   |                                           |   | 25,571,686                    |   |   | 35,549,028 |   |   | 35,314,273 |   |   | 22,733,711 |   |

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**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**(Unaudited)**

|                                                                                           |   |                                          |                         | Period from              |   |
|------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|------------------------------|-------------------------------|--------|
|                                                                                           |   |                                          |                         | May 31, 2005        |   |
|                                                                                           |   | For the nine months ended |                         | (date of inception) |   |
|                                                                                           |   | September 30,                       |                         | to September 30,    |   |
|                                                                                           |   | 2008                                          |                         | 2007                          |   | 2008 |   |
|                                                                                           |   |                                          |                         |                          |   |   |   |
| **Cash                  flows from operating activities**                                      |   |                                          |                         |                          |   |   |   |   |   |   |
| Net                  cash (used in) operating activities                                       |   | $                                             | (                  3,514,403 | )                             | $      | (                  2,002,250 | ) | $ | (                  7,613,070 | ) |
|                                                                                           |   |                                          |                         |                          |   |   |   |   |   |   |
| **Cash                  flows from investing activities**                                      |   |                                          |                         |                          |   |   |   |   |   |   |
| Purchase                  of property and equipment                                            |   |                                          | (                  184,788   | )                             |   | (                  65,651 | ) |   | (                  401,592 | ) |
| Payment                  for the acquisition of ModigeneTech                  Ltd.             |   |                                          | -                            |                          |   | - |   |   | (                  474,837 | ) |
| Long                  term deposit                                                             |   |                                          | -                            |                          |   | - |   |   | (                  2,951 | ) |
| Restricted                  cash                                                               |   |                                          | (                  39,859    | )                             |   | (                  988 | ) |   | (                  101,697 | ) |
| Net                  cash (used in) investing activities                                       |   |                                          | (                  224,647   | )                             |   | (                  66,639 | ) |   | (                  981,077 | ) |
|                                                                                           |   |                                          |                         |                          |   |   |   |   |   |   |
| **Cash                  flows from financing activities**                                      |   |                                          |                         |                          |   |   |   |   |   |   |
| Short                  term bank credit                                                        |   |                                          | (                  1,866     | )                             |   | 32,227 |   |   | (                  2,841 | ) |
| Proceeds                  from loans                                                           |   |                                          | -                            |                          |   | - |   |   | 173,000 |   |
| Principal                  payment of loans                                                    |   |                                          | -                            |                          |   | - |   |   | (                  173,000 | ) |
| Proceeds                  from issuance of shares                                              |   |                                          | 2,000,000                    |                          |   | 13,415,114 |   |   | 18,311,859 |   |
| Net                  cash provided by financing activities                                     |   |                                          | 1,998,114                    |                          |   | (13,447,341 | ) |   | 18,309,018 |   |
| **(Decrease)                  increase in cash and cash equivalents**                          |   |                                          | (                  1,740,936 | )                             |   | 11,378,452 |   |   | 9,714,871 |   |
| **Cash                  and cash equivalents at the beginning of the                  period** |   |                                          | 11,445,807                   |                          |   | 785,165 |   |   | - |   |
| **Cash                  and cash equivalents at the end of the period**                        |   | $                                             | 9,714,871                    |                          | $      | 12,163,617 |   | $ | 9,714,871 |   |
|                                                                                           |   |                                          |                         |                          |   |   |   |   |   |   |
| Cash                  paid for income taxes                                                    |   | $                                             | -                            |                          | $      | - |   | $ | - |   |
| Cash                  paid for interest expense                                                |   | $                                             | 830                          |                          | $      | 4,969 |   | $ | 16,003 |   |

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**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER      30, 2008**

| **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 devotes substantially all of its efforts toward conducting                research and development activities. 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 $17,321,511 through September 30, 2008.                There                is no assurance that profitable operations, if ever achieved, could                be                sustained on a continuing basis. During the nine-month period ended                September 30, 2008, 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 financing. |
|                        |        |   |
|                        | **b.**      | On                March 25, 2008, the Company entered into a Securities Purchase Agreement                (the “Purchase Agreement”) with a group of related parties (the                “Investors”), pursuant to which it sold to the Investors 800,000 shares of                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 through March 25, 2012, without payment of                any                additional consideration, into 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. |
|                        |        |
|                        | **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. |

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|                        |                                               | 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-Q and Article 10                of                Regulation S-X. 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                condensed or omitted pursuant to such United States Securities and                Exchange Commission (“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 Amendment No. 2 to the Company’s Annual Report                on Form 10-KSB for the year ended December 31, 2007 (“Amendment No. 2”)                filed October 2, 2008. |
|                        | **b.**                                             | **Principles                of consolidation:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                        |                                               | The                consolidated financial statements include the accounts of the Company                and                its wholly-owned subsidiaries Modigene Inc., a Delaware corporation                (“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.                Securities excluded from the calculation for the nine month periods                ended                September 30, 2008 and 2007 were 7,493,100 and 3,690,189, respectively.                Securities excluded from the calculation for the three month periods                ended                September 30, 2008 and 2007 and for the period from May 31, 2005                (date of                inception) to September 30, 2008 were 7,971,668, 4,669,805, and 3,908,376,                respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

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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.**                                        | On                February 29, 2008, Mr. Havron Abraham, the Company’s Chief Executive                Officer, exercised 113,762 employee stock options into 113,762 shares                of                Common Stock, $0.00001 par value per share. The options were granted                in                connection with the merger of Modigene Delaware with a wholly-owned                subsidiary of the Company, in exchange for employee stock options                to                acquire 66,666 shares of Modigene Delaware common stock at $0.0001                per                share. The total value of the shares issued was                $102,386. |
|                        | **c.**                                        | **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                shares of 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 shares of 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                our 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. |
|                        | **d.**                                        | **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”. |

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|   |   | 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%-90%, (iii) risk-free interest rate of 2.04%-2.98% and (iv)                expected                average option lives of 9.93 years. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | A                summary of the stock options granted under the 2005 and 2007 Plans                is as                follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |

|                                                      |   | September 30, 2008 |                     |
|-----------------------------------------------------------|--------|------------------------------|--------------------------|
|                                                      |   | Numberof Options        |                     | Weighted averageExercise Price |   |
|                                                      |   |                         |                     |   |   |
| Outstanding                at the beginning of the period |   |                         | 2,435,235                |   | $ | 1.23 |   |
| Exercised                                                 |   |                         | (                113,762 | ) | $ | 0.0006 |   |
| Issued                under the 2007 Plan                 |   |                         | 2,135,819                |   | $ | 0.96 |   |
| Forfeited                                                 |   |                         | (                25,000  | ) | $ | 2.00 |   |
| Outstanding                at the end of the period       |   |                         | 4,432,292                |   | $ | 1.04 |   |
|                                                      |   |                         |                     |   |   |   |   |
| Options                exercisable                        |   |                         | 2,045,792                |   | $ | 1.19 |   |

|   |   | The                options outstanding as of September 30, 2008, have been separated                into                exercise prices, as follows: |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                |   |   |                     |   |   | Remaining Weightedaverage contractual life |   |   |                     |   |
|--------|---------------------|--------|--------|--------------------------|--------|--------|-----------------------------------------------------------|--------|--------|--------------------------|--------|
|   | Exercise Price |   |   | Options Outstanding |   |   | (years)                                                   |   |   | Options Exercisable |   |
|   |                |   |   |                     |   |   |                                                      |   |   |                     |   |
| $      | 0.879               |   |   | 1,266,327                |   |   | 5.88                                                      |   |   | 1,266,327                |   |
| $      | 0.90                |   |   | 1,950,000                |   |   | 9.67                                                      |   |   | -                        |   |
| $      | 0.93                |   |   | 25,000                   |   |   | 9.68                                                      |   |   | -                        |   |
| $      | 1.32                |   |   | 435,146                  |   |   | 4.67                                                      |   |   | 435,146                  |   |
| $      | 1.50                |   |   | 131,500                  |   |   | 9.82                                                      |   |   | -                        |   |
| $      | 2.00                |   |   | 475,000                  |   |   | 8.86                                                      |   |   | 208,333                  |   |
| $      | 2.50                |   |   | 149,319                  |   |   | 4.78                                                      |   |   | 135,986                  |   |
|   |                |   |   | 4,432,292                |   |   | 7.56                                                      |   |   | 2,045,792                |   |

|   | Weighted                average fair values and average exercise prices of options at date                of                grant are as follows: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Weighted                average** **exercise                price $ 1.19                                                                     |
|   | Weighted                average fair value on date of grant $0.91                                                                                 |
|   |                                                                                                                                              |

|   | Stock                based compensation expenses for the nine month periods ended September                30,                2008 and 2007 were $828,810 and $1,049,274, respectively. Expenses                for the                three month periods ended September 30, 2008 and 2007 were $277,099                and                $506,290, respectively. Expenses for the period from May 31, 2005                (date of                inception) to September 30, 2008 were $6,254,272. Stock based compensation                for the period from May 31, 2005 (date of inception) through September                30,                2008 includes stock based payment in the acquisition of a subsidiary                and                deferred compensation on restricted shares in the amount of                $3,876,960. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| **NOTE                4:-** | **RESTATED                FINANCIAL STATEMENTS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                        | On                June 13, 2008, the Company received a comment letter from the SEC                regarding principally the accounting treatment of the May 2007 merger                of                Modigene Delaware into a wholly-owned subsidiary of the Company,                as                described in Amendment No. 2. As part of the Company’s response to the                comment letter, Amendment No. 2 was filed to amend the accounting                treatment of the merger to a recapitalization in the year 2007. In                accordance with Statement of Financial Accounting Standards No. 141,                the                Company has restated the 2007 financial statements to record the                merger as                a reverse acquisition. The following financial statements line items                were                effected by the restatement: |

|                                                              |   | **Originally reported** |        | **Restated** |   | **Differences** |   |
|-------------------------------------------------------------------|--------|------------------------------|-------------|--------------|--------|-----------------|--------|
| **Balance                Sheets at December 31, 2007:**           |   |                         |        |         |   |            |   |   |   |   |
| Additional                paid-in capital                         |   | $                            | 35,368,596  |         | $      | 24,368,587      |   | $ | 11,000,009 |   |
| (Deficit)                accumulated during the development stage |   | $                            | (23,506,580 | )            | $      | (12,506,571     | )      | $ | (11,000,009 | ) |

| **Statements                of Operations:**                         |   |   |                  |   |   |                       |   |
|----------------------------------------------------------------------|--------|--------|-----------------------|--------|--------|----------------------------|--------|
| For                the nine months ended September 30, 2007:         |   |   |                  |   |   |                       |   |   |   |   |
| In-process                research and development write-off         |   | $      | (11,000,009           | )      | $      | (                -         | )      | $ | (11,000,009 | ) |
| Operating                (loss)                                      |   | $      | (14,069,565           | )      | $      | (                3,069,556 | )      | $ | (11,000,009 | ) |
| Net                (loss)                                            |   | $      | (13,908,841           | )      | $      | (                2,908,832 | )      | $ | (11,000,009 | ) |
| (Loss)                per share                (basic & diluted) |   | $      | (                0.56 | )      | $      | (                0.11      | )      | $ | (                0.45 | ) |
|                                                                 |   |   |                  |   |   |                       |   |   |   |   |

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**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**

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**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:*

*Loss      per Share:*

***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. |
|--|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | **·** | 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**

----

----

**Effects      of Inflation and Currency Fluctuations**

**Arrangements**

**Recently      Issued Accounting Pronouncements**

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

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

----

**PART      II - OTHER INFORMATION**

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

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

*Recent      disruptions in the financial markets and economic conditions could affect our      ability to raise capital and could disrupt or delay the performance of our      third-party contractors and suppliers.*

**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.**

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

| 10.1 | Amendment                  to Consulting Agreement between the Company and Avri Havron (Incorporated                  by reference to Exhibit 10.1 to the Current Report on Form 8-K                  filed with                  the SEC on July 18, 2008).                           |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.2 | Amendment                  to Employment Agreement between the Company and Shai Novik (Incorporated                  by reference to Exhibit 10.2 to the Current Report on Form 8-K                  filed with                  the SEC on July 18, 2008).                            |
| 10.3 | Amendment                  to Consulting Agreement between the ModigeneTech Ltd. and Fuad                  Fares                  (Incorporated by reference to Exhibit 10.3 to the Current Report                  on Form                  8-K filed with the SEC on July 18, 2008). |
| 10.4 | Amendment                  to Employment Agreement between the ModigeneTech Ltd. and Eyal                  Fima                  (Incorporated by reference to Exhibit 10.4 to the Current Report                  on Form                  8-K filed with the SEC on July 18, 2008).  |
| 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).                                                                                                                                         |

----

**SIGNATURES**

|                             |   | MODIGENE                INC.               |   |
|----------------------------------|--------|--------------------------------------------|--------|
|                             |   |                                       |   |
|                             |   |                                       |   |
| November                14, 2008 |   | /s/                Abraham Havron          |   |
| Date                             |   | Abraham                Havron              |   |
|                             |   | Chief Executive              Officer  |   |

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