**FORM      10-QSB**

**[X]**
**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**

| Commission file number |  333-110240  |
|------------------------|------------------------|

**Modigene      Inc.**

|  Nevada                                                                                      |   |   20-0854033                                                  |
|---------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------|
| (State                or other jurisdiction ofincorporation                or organization)  |   |  (I.R.S.                EmployerIdentification                No.) |

| Yes   x      | No                             |   |
|------------------------------------------------------|--------------------------------------------------------------------------------------------|--------|

| Yes        | No   x                           |   |
|-----------------------------------------------|-----------------------------------------------------------------------------------------|--------|

| Yes  N/A   | No                           |   |
|--------------------------------|-------------------------------------------------------------------------------------|--------|

| Yes  N/A  | No           |   |
|--------------------------|----------------------------------------------------------------|--------|

| Yes        | No    x       |   |
|-----------------------------------------------|-----------------------------------------------------------------|--------|

----

**MODIGENE      INC.**

| Part I               |                                                                                      |           |
|----------------------|-------------------------------------------------------------------------------------------|----------------|
|                 |                                                                                      |           |
| Item 1.              | Financial                Statements                                                       |  1        |
|                 |                                                                                           |           |
| Item 2.         | Management's Discussion and Analysis                or Plan                of Operation   |  9        |
|                 |                                                                                      |           |
| Item 3.              | Controls                and Procedures                                                    | 17             |
|                 |                                                                                      |           |
| Part II              |                                                                                      |           |
|                 |                                                                                      |           |
| Item 1.         | Legal Proceedings                                                                         | 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.**

----

**MODIGENE        INC. AND SUBSIDIARY **

**(A        development stage company)**

**CONDENSED        CONSOLIDATED BALANCE SHEET**

**(Unaudited)**

|                                                                                                                                                                       |   |   | September                30,2007  |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------|--------|
|                                                                                                                                                                       |   |   |                                   |   |
| **ASSETS**                                                                                                                                                                 |   |   |                                   |   |
| **Current                Assets:**                                                                                                                                         |   |   |                                   |   |
| Cash                and cash equivalents                                                                                                                                   |   | $      | 12,163,617                             |   |
| Accounts                receivable and prepaid expenses                                                                                                                    |   |   | 116,411                                |   |
| Restricted                cash                                                                                                                                             |   |   | 54,822                                 |   |
| **Total                current assets**                                                                                                                                    |   |   | 12,334,850                             |   |
| **Property                and equipment, net**                                                                                                                             |   |   | 184,477                                |   |
| **Severance                pay fund**                                                                                                                                      |   |   | 26,292                                 |   |
| **Total                assets**                                                                                                                                            |   | $      | 12,545,619                             |   |
|                                                                                                                                                                       |   |   |                                   |   |
|                                                                                                                                                                       |   |   |                                   |   |
|                                                                                                                                                                       |   |   |                                   |   |
|                                                                                                                                                                       |   |   |                                   |   |
| **LIABILITIES                AND SHAREHOLDERS' EQUITY**                                                                                                                    |   |   |                                   |   |
| **Current                Liabilities:**                                                                                                                                    |   |   |                                   |   |
| Short-term                bank credit                                                                                                                                      |   | $      | 48,501                                 |   |
| Trade                payables                                                                                                                                              |   |   | 158,877                                |   |
| Accrued                expenses and other liabilities                                                                                                                      |   |   | 203,655                                |   |
| **Total                current liabilities**                                                                                                                               |   |   | 411,033                                |   |
| **Accrued                severance pay**                                                                                                                                   |   |   | 30,242                                 |   |
| **Commitments                and contingent liabilities**                                                                                                                  |   |   |                                   |   |
| **Shareholders'                equity:**                                                                                                                                   |   |   |                                   |   |
| Stock                capital -                                                                                                                                             |   |   |                                   |   |
| Preferred                stock of $ 0.00001 par value -10,000,000                shares of preferred stock authorized, none issued or                outstanding           |   |   | -                                      |   |
| Common                shares of $ 0.00001 par value - 300,000,000                shares of common stock authorized 35,253,777                shares issued and outstanding |   |   | 353                                    |   |
| Additional                paid-in capital                                                                                                                                  |   |   | 35,206,197                             |   |
| (Deficit)                accumulated during the development stage                                                                                                          |   |   | (23,102,206                            | )      |
| **Total                shareholders' equity**                                                                                                                              |   |   | 12,104,344                             |   |
| **Total                liabilities and shareholders' equity**                                                                                                              |   | $      | 12,545,619                             |   |

----

**MODIGENE        INC. AND SUBSIDIARY **

**(A        development stage company)**

**CONDENSED      CONSOLIDATED STATEMENTS OF OPERATIONS**

**(Unaudited)**

|                                                                             |   |   | For                the nine months ended September                  30,  |   |   | For                the three months endedSeptember                30,   |   |   | Period                fromMay                31, 2005(date                of inception)to                September 30,   |   |
|----------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                             |   |   | 2007                                                           |   |   | 2006                                                                    |   |   | 2007                                                                                                                     |   |   | 2006   |   |   | 2007   |   |
| **Revenues**                                                                     |   |   |                                                                          |   |   |                                                                              |   |   |                                                                                                                               |   |   |   |   |   |   |   |
| **Operating                expenses:**                                           |   | $      | -                                                                             |   | $      | -                                                                                 |   | $      | -                                                                                                                                  |   | $ | - |   | $ | - |   |
|                                                                             |   |   |                                                                          |   |   |                                                                              |   |   |                                                                                                                               |   |   |   |   |   |   |   |
| In-process                research and development                write-off      |   |   | 11,000,009                                                                    |   |   | -                                                                                 |   |   |                                                                                                                               |   |   | - |   |   | 14,218,785 |   |
| Research                and development,                net                      |   |   | 1,619,232                                                                     |   |   | 441,624                                                                           |   |   | 978,445                                                                                                                            |   |   | 149,995 |   |   | 2,414,843 |   |
| General                and administrative                                        |   |   | 1,450,324                                                                     |   |   | 1,032,688                                                                         |   |   | 628,004                                                                                                                            |   |   | 365,289 |   |   | 6,663,873 |   |
|                                                                             |   |   | 14,069,565                                                                    |   |   | 1,474,312                                                                         |   |   | 1,606,449                                                                                                                          |   |   | 515,279 |   |   | 23,297,501 |   |
|                                                                             |   |   |                                                                          |   |   |                                                                              |   |   |                                                                                                                               |   |   |   |   |   |   |   |
| Operating                (loss)                                                  |   |   | (14,069,565                                                                   | )      |   | (1,474,312                                                                        | )      |   | (1,606,449                                                                                                                         | )      |   | (1,419,789 | ) |   | (23,297,501 | ) |
|                                                                             |   |   |                                                                          |   |   |                                                                              |   |   |                                                                                                                               |   |   |   |   |   |   |   |
| Financial                income                                                  |   |   | 178,455                                                                       |   |   | 22,858                                                                            |   |   | 113,832                                                                                                                            |   |   | 22,532 |   |   | 216,455 |   |
| Financial                (expenses)                                              |   |   | (                4,969                                                        | )      |   | (                876                                                              | )      |   | -                                                                                                                                  |   |   | - |   |   | (8,398 | ) |
|                                                                             |   |   |                                                                          |   |   |                                                                              |   |   |                                                                                                                               |   |   |   |   |   |   |   |
| (Loss)                before income taxes                                        |   |   | (13,896,079                                                                   | )      |   | (1,452,330                                                                        | )      |   | (1,492,617                                                                                                                         | )      |   | (1,397,257 | ) |   | (23,089,444 | ) |
|                                                                             |   |   |                                                                          |   |   |                                                                              |   |   |                                                                                                                               |   |   |   |   |   |   |   |
| Income                taxes                                                      |   |   | 12,762                                                                        |   |   | -                                                                                 |   |   | 12,762                                                                                                                             |   |   | - |   |   | 12,762 |   |
| Net                (Loss)                                                        |   | $      | (13,908,841                                                                   | )      | $      | (1,452,330                                                                        | )      | $      | (1,505,379                                                                                                                         | )      | $ | (1,397,257 | ) | $ | (23,102,206 | ) |
|                                                                             |   |   |                                                                          |   |   |                                                                              |   |   |                                                                                                                               |   |   |   |   |   |   |   |
| (Loss)                per share                (basic & diluted)             |   | $      | (                0.56                                                         | )      | $      | (                0.11                                                             | )      | $      | (                0.43                                                                                                              | )      | $ | (                0.10 | ) | $ | (                1.25 | ) |
|                                                                             |   |   |                                                                          |   |   |                                                                              |   |   |                                                                                                                               |   |   |   |   |   |   |   |
|                                                                             |   |   |                                                                          |   |   |                                                                              |   |   |                                                                                                                               |   |   |   |   |   |   |   |
|                                                                             |   |   |                                                                          |   |   |                                                                              |   |   |                                                                                                                               |   |   |   |   |   |   |   |
|                                                                             |   |   |                                                                          |   |   |                                                                              |   |   |                                                                                                                               |   |   |   |   |   |   |   |
| Weighted                average number                of shares outstanding |   |   | 25,016,363                                                                    |   |   | 13,588,555                                                                        |   |   | 35,253,777                                                                                                                         |   |   | 13,588,555 |   |   | 17,250,282 |   |

----

**MODIGENE        INC. AND SUBSIDIARY **

**(A        development stage company)**

**CONDENSED**
**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**(Unaudited)**

|                                                                                                 |   |   | For                the nine months endedSeptember                30, |   |   | Period                fromMay                31, 2005                  (date                  of inception) to                    September 30, |   |
|------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                 |   |   | 2007                                                            |   |   | 2006                                                                                                                                                 |   |   | 2007  |   |
|                                                                                                 |   |   |                                                                 |   |   |                                                                                                                                                      |   |   |   |   |
| **Cash                flows from operating activities**                                              |   |   |                                                                 |   |   |                                                                                                                                                      |   |   |   |   |
| Net                cash (used in) operating activities                                               |   | $      | (2,002,250                                                           | )      | $      | (                998,628                                                                                                                                  | )      | $ | (3,460,220 | ) |
|                                                                                                 |   |   |                                                                 |   |   |                                                                                                                                                      |   |   |   |   |
| **Cash                flows from investing activities**                                              |   |   |                                                                 |   |   |                                                                                                                                                      |   |   |   |   |
| Purchase                of property and equipment                                                    |   |   | (                65,651                                              | )      |   | (                132,913                                                                                                                                  | )      |   | (                212,633 | ) |
| Payment                for the acquisition of ModigeneTech                Ltd.                       |   |   | -                                                                    |   |   | -                                                                                                                                                         |   |   | (                356,979 | ) |
| Loan                granted by the Company to ModigeneTech Ltd.                                      |   |   | -                                                                    |   |   | -                                                                                                                                                         |   |   | (                497,575 | ) |
| Cash                received in acquisition of ModigeneTech                Ltd.                      |   |   | -                                                                    |   |   | -                                                                                                                                                         |   |   | 379,717 |   |
| Long                term deposit                                                                     |   |   | 1,740                                                                |   |   | -                                                                                                                                                         |   |   | - |   |
| Restricted                deposit                                                                    |   |   | (                2,728                                               | )      |   | -                                                                                                                                                         |   |   | (                54,822 | ) |
| Net                cash (used in) investing activities                                               |   |   | (                66,639                                              | )      |   | (                132,913                                                                                                                                  | )      |   | (                742,292 | ) |
|                                                                                                 |   |   |                                                                 |   |   |                                                                                                                                                      |   |   |   |   |
| **Cash                flows from financing activities**                                              |   |   |                                                                 |   |   |                                                                                                                                                      |   |   |   |   |
| Short                term bank credit                                                                |   |   | 32,227                                                               |   |   | -                                                                                                                                                         |   |   | 48,502 |   |
| Proceeds                from loans                                                                   |   |   | -                                                                    |   |   | -                                                                                                                                                         |   |   | 173,000 |   |
| Principal                payment of loans                                                            |   |   | -                                                                    |   |   | (                2,495                                                                                                                                    | )      |   | (                173,000 | ) |
| Proceeds                from issuance of redeemable convertible preferred shares,                net |   |   | -                                                                    |   |   | -                                                                                                                                                         |   |   | 2,896,605 |   |
| Proceeds                from issuance of shares and option exercise                                  |   |   | 13,415,114                                                           |   |   | -                                                                                                                                                         |   |   | 13,421,022 |   |
| Net                cash provided by (used in) financing activities                                   |   |   | 13,447,341                                                           |   |   | (                2,495                                                                                                                                    | )      |   | 16,366,129 |   |
| **(Decrease)                increase in cash and cash equivalents**                                  |   |   | 11,378,452                                                           |   |   | (1,134,036                                                                                                                                                | )      |   | 12,163,617 |   |
| **Cash                and cash equivalents at the beginning of the                period**           |   |   | 785,165                                                              |   |   | 2,368,024                                                                                                                                                 |   |   | - |   |
| **Cash                and cash equivalents at the end of the period**                                |   | $      | 12,163,617                                                           |   | $      | 1,233,988                                                                                                                                                 |   | $ | 12,163,617 |   |
|                                                                                                 |   |   |                                                                 |   |   |                                                                                                                                                      |   |   |   |   |
|                                                                                                 |   |   |                                                                 |   |   |                                                                                                                                                      |   |   |   |   |
|                                                                                                 |   |   |                                                                 |   |   |                                                                                                                                                      |   |   |   |   |
|                                                                                                 |   |   |                                                                 |   |   |                                                                                                                                                      |   |   |   |   |
| Cash                paid for income taxes                                                            |   | $      | 12,762                                                               |   | $      | -                                                                                                                                                         |   | $ | 12,762 |   |
|                                                                                                 |   |   |                                                                 |   |   |                                                                                                                                                      |   |   |   |   |
| Cash                paid for interest expenses                                                       |   | $      | 4,969                                                                |   | $      | -                                                                                                                                                         |   | $ | 8,398 |   |

----

**MODIGENE        INC. AND SUBSIDIARY**

**(A        development stage company)**

**NOTES        TO CONDENSED**
** **
**CONSOLIDATED        FINANCIAL STATEMENTS**

**SEPTEMBER        30, 2007**

**(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 $23,102,206                  through September 30, 2007. There is no assurance that profitable                  operations, if ever achieved, could be sustained on a continuing                  basis.                  The Company raised approximately $11.6 million in a private placement,                  see                  note C. below. According to the Company's forecasted cash flows,                  the funds                  raised enable the continuance of the Company's activities for the                  next two                  years with no need of additional fundraising,                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | **b.** | **Reverse                  Acquisition of Modigene inc., a Delaware corporation**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | On                  May 9, 2007, Modigene Inc., a Delaware corporation (“Modigene Delaware”),                  Modigene Acquisition Corp., a wholly-owned subsidiary of the Company                  (the                  “Acquisition Subsidiary”) and the Company (Modigene Inc., formerly called                  LDG, Inc.), entered into an Agreement and Plan of Merger and Reorganization                  (the “Merger Agreement”). Pursuant to the Merger Agreement, the                  Acquisition Subsidiary merged (the “Merger”) with and into Modigene                  Delaware, with Modigene Delaware remaining as the surviving entity                  and a                  wholly-owned subsidiary of the Company. The Company acquired the                  business                  of Modigene Delaware pursuant to the Merger and is continuing the                  existing                  business operations of Modigene Delaware as a publicly-traded company                  under the name Modigene Inc. In the Merger, the stockholders of                  Modigene                  Delaware received common stock of the Company in exchange for their                  shares                  of common stock of Modigene Delaware. Pursuant to the Merger Agreement                  the                  Company became the holding company of Modigene Delaware and ModigeneTech. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | Contemporaneously                  with the closing of the Merger and the the privet placement, the                  Company                  split off (the “Split-Off”) its                  wholly-owned subsidiary, Liaison Design Group, LLC., through the                  sale of                  all of the membership interests of the subsidiary, upon the terms                  and                  conditions of a split-off agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | The                  Merger was treated as a recapitalization of the Company for accounting                  purposes. The historical financial statements of Modigene Inc.                  before the                  Merger are replaced with the historical financial statements                  of Modigene                  Delaware before the Merger. The Merger is being accounted for as                  a reverse                  acquisition. Modigene Delaware is the acquirer for accounting purposes.                  No                  goodwill or other intangible assets were recorded.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   | Effective                  May 9, 2007, the Company issued 13,588,552 shares of its common                  stock to                  the shareholders of Modigene Delaware,                  in exchange for all of the issued and outstanding common stock                  and Series                  A preferred stock of Modigene Delaware pursuant to the Merger Agreement.                  The fair value of the common stock issued for the acquisition was                  $11,000,009. The know-how purchased in the amount of $11,000,009                  has not                  yet reached technological feasibility and has no alternative future                  use                  other than the technological indications for which it was in development.                  Accordingly, the entire amount representing the know-how was recorded                  as                  in-process research and development and accordingly was immediately                  expensed in the consolidated statement of operations on the acquisition                  date.                                                                                                                                                                                                                                                                                                                                                                              |

----

**MODIGENE          INC. AND SUBSIDIARY**

**(A          development stage company)**

**NOTES          TO CONDENSED**
** **
**CONSOLIDATED          FINANCIAL STATEMENTS**

**SEPTEMBER          30, 2007**

**(Unaudited)**

| **NOTE                  1:-** |                         (continued) |   |
|-------------------------------|-------------------------------------------------------------------|--------|

|                                            |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|-------------------------------------------------|----------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                            | **c.**                                             | **Private                placement**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                            |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                            |                                               | Simultaneously                  with the closing of the Merger, the Company completed the first                  phase of a                  private placement (the “Offering”) of 6,418,814 units of its securities at                  a purchase price of $1.50 per unit, with each unit consisting of                  one share                  of the Company's common stock and a five year warrant to purchase                  one-quarter of one share of the Company’s common stock for an exercise                  price of $2.50 per whole share. The Company raised total cash                  consideration of $9,628,212 before expenses. Upon the completion                  of the                  first phase of the Offering the Company issued warrants to purchase                  up to                  an aggregate of 242,324 shares of the Company's common stock to                  broker/dealers who assisted in the Offering.                                    |
|                                            |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                            |                                               | Contemporaneously                  with the closing of the Merger and the first phase of the Offering,                  the                  Company completed a sale (the “Private Sale”) of 5,377,660 shares of its                  common stock, and warrants to purchase 333,333 shares of common                  stock, to                  strategic investors, for total consideration of $2,000,000. The                  strategic                  investors were entitled to additional shares on a pro rata basis                  if                  additional units were sold in connection with the                  Offering.                                                                                                                                                                                                                                                                                                                                                            |
|                                            |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                            |                                               | Pursuant                  to the terms of the Offering, the Company could sell additional                  units up                  to an aggregate of 8,666,672 units and $13,000,008 (including those                  sold                  in the initial closing of the Offering). On                  May 21, 2007, the Company completed a second phase of the offering                  and                  closed on the sale of an additional 2,247,858 units, for total                  cash                  proceeds of $3,371,766. Upon the completion of the second closing                  of the                  offering, the Company issued 51,885 warrants to purchase up to                  an                  aggregate of 51,885 shares of common stock to the broker/dealers                  who                  assisted in the Offering and additional 155,673 shares of common                  stock                  (for no additional consideration) to the strategic investors. |
|                                            |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                            | **d.**                                             | **Acquisition                  of ModigeneTech Ltd.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                            |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                            |                                               | In                  December                  2005, Modigene Delaware acquired all of the outstanding shares                  of                  ModigeneTech in consideration for shares of common stock of Modigene                  Delaware. In addition, all of the options of ModigeneTech were                  exchanged                  for options to purchase shares of the Modigene Delaware's common                  stock.                  The fair value of the common stock issued and the options granted                  for the                  acquisition was $2,625,587.                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                            |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                            |                                               | In                  conjunction with the transaction, Modigene Delaware also issued                  shares of                  common stock, valued at $3,514,426, to the Company’s founders for their                  services as the agents in the transaction (finders’ fee).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                            |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                            |                                               | Issuance                  expenses paid in cash in the amount of $356,979 were also recorded                  as                  acquisition costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                            |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                            |                                               | ModigeneTech was formed in April 2001                under                the laws of Israel and ceased its operations during year 2004 due                to lack                of financing resources.                The acquisition was                accounted for as acquisition of group of assets that does not constitute                a                business and no goodwill was recognized                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                            |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                            |                                               | The                  know-how purchased in the amount of $3,218,776 has not yet reached                  technological feasibility and has no alternative future use other                  than the                  technological indications for which it was in development. Accordingly,                  the entire amount representing the know-how was recorded as in-process                  research and development and accordingly was immediately expensed                  in the                  consolidated statement of operations on the acquisition                  date.                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                            |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                            |                                               | Following                  the acquisition of ModigeneTech, ModigeneTech became a wholly-owned                  subsidiary of the Modigene Delaware. The financial statements of                  ModigenTech were consolidated with the accounts of Modigene Delaware,                  commencing December 14, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                            |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| **NOTE                  2:-   ** | **SIGNIFICANT                ACCOUNTING POLICIES** |
|                                            |                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                            | **a.**                                             | **Basis of                presentation:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                            |                                               |

**                             **

----

**MODIGENE        INC. AND SUBSIDIARY**

**(A          development stage company)**

**NOTES          TO CONDENSED**
** **
**CONSOLIDATED          FINANCIAL STATEMENTS**

**SEPTEMBER          30, 2007**

**(Unaudited)**

|   |   | The                  interim consolidated financial statements included herein have                  been                  prepared by the Company, without audit, pursuant to the rules and                  regulations of the Securities and Exchange Commission ("SEC") pursuant                  to                  item 310 of 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,                  2006                  financial statements and the notes thereto included in the Company's                  Current Report on Form 8-K filed May 14, 2007. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | **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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

**                                **

|               |                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------------------|-----------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **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 company's Board of Directors ("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:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|               |                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|               |                                    | None                  of the shares **as**                  of                  the date of the financial statements are designated or outstanding.                  The                  Board is vested with authority to divide the shares of preferred                  stock                  into series and to fix and determine the relative rights and preferences                  of the shares of any such series. Once authorized, the dividend                  or                  interest rates, conversion rates, voting rights, redemption prices,                  maturity dates and similar characteristics of preferred stock will                  be                  determined by the Board, without the necessity of obtaining approval                  of                  the Company's stockholders.                                                                                                                                                                                                                                 |
|               |                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|               | **c.**                                  | **Option                  plan:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|               |                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|               |                                    | The                  Company issued stock options to purchase 2,996,804 shares of                  common stock, of which options to purchase 2,376,804 shares were                  granted                  under the 2005 Plan and options to purchase 620,000 shares were                  granted                  under the 2007 Plan. As of September 30, 2007 2,864,923 options                  are                  outstanding due to the exercise of 131,881 options granted under                  the 2005                  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 options is estimated based upon grant                  date fair                  value using the Black-Scholes option-pricing model with the following                  weighted average assumptions used: (i) annual dividends of $0.00,                  (ii)                  expected volatility of 85%, (iii) risk-free interest rate of 4.67%,                  and                  (iv) expected average option lives of 6.36 years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

----

** **
|               |                                                    |                                                                                                                      |
|--------------------|---------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|
| **NOTE 3:- ** | **SHAREHOLDERS'                    EQUITY (continued)** |
|               |                                                    |                                                                                                                      |
|               | **c.**                                                  | **Option                    plan (continued):**                                                                           |
|               |                                                    |                                                                                                                      |
|               |                                                    | A                    summary of the stock options granted under the 2005 and 2007                    Plans is as follows: |

|                                                            |   |   | Numberof                Options  |   |   | Weighted                average Exercise Price  |   |
|-----------------------------------------------------------------|--------|--------|---------------------------------------|--------|--------|------------------------------------------------------|--------|
|                                                            |   |   |                                  |   |   |                                                 |   |
| Outstanding                at the beginning of the period       |   |   | 451,604                               |   | $      | 1.16                                                 |   |
| Issued                upon the acquisition of Modigene Delaware |   |   | 1,925,200                             |   | $      | 1.16                                                 |   |
| Exercised                                                       |   |   | (                131,881              | )      | $      | 0.001                                                |   |
| Issued                in the private placement                  |   |   | 500,000                               |   | $      | 2.00                                                 |   |
| Granted                                                         |   |   | 120,000                               |   | $      | 2.50                                                 |   |
| Outstanding                at the end of the period             |   |   | 2,864,923                             |   | $      | 1.35                                                 |   |
|                                                            |   |   |                                  |   |   |                                                 |   |
| Options                exercisable                              |   |   | 2,294,923                             |   | $      | 1.25                                                 |   |
|                                                            |   |   |                                  |   |   |                                                 |   |

|   | Exercise                Price   |   |   | Options                Outstanding   |   |   | Remaining Weighted                average contractuallife (years)   |   |   | Options                Exercisable   |   |
|--------|-------------------------------------------|--------|--------|------------------------------------------------|--------|--------|------------------------------------------------------------------------------------|--------|--------|------------------------------------------------|--------|
| $      | -                                         |   |   | 113,762                                        |   |   | 8.21                                                                               |   |   | 113,762                                        |   |
| $      | 0.001                                     |   |   | 281,308                                        |   |   | 0.21                                                                               |   |   | 281,308                                        |   |
| $      | 0.004                                     |   |   | 60,497                                         |   |   | 0.21                                                                               |   |   | 60,497                                         |   |
| $      | 0.879                                     |   |   | 375,418                                        |   |   | 9.16                                                                               |   |   | 375,418                                        |   |
| $      | 1.50                                      |   |   | 1,021,453                                      |   |   | 6.25                                                                               |   |   | 1,021,453                                      |   |
| $      | 2.00                                      |   |   | 500,000                                        |   |   | 9.61                                                                               |   |   | -                                              |   |
| $      | 2.25                                      |   |   | 392,485                                        |   |   | 5.10                                                                               |   |   | 392,485                                        |   |
| $      | 2.50                                      |   |   | 120,000                                        |   |   | 5.45                                                                               |   |   | 50,000                                         |   |
|   |                                      |   |   | 2,864,923                                      |   |   | 6.38                                                                               |   |   | 2,294,923                                      |   |

** **

|   | **d.** | **Warrants:** |
|--------|--------|---------------|

|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | The                  Company issued Warrants to purchase 2,166,667 shares of Common                  Stock held                  by investors**who**purchased                  Units in the Offering.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   | The                  Company issued strategic investors options to purchase 333,333                  shares of                  Common Stock as a part of the Private Sale.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   | In                  addition, the Company issued warrants to purchase 1,066,526                  shares of Common Stock to broker/dealers who assisted with the                  Offering.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   | Of                  these warrants, warrants to purchase up to an aggregate of 701,204                  shares                  (the "Replacement Warrants") were issued in the Merger in exchange                  for                  warrants to purchase up to 410,973 shares of Series A preferred                  stock of                  Modigene Delaware, which were originally issued by Modigene Delaware                  to                  broker/dealers who assisted Modigene Delaware with a privet placement                  of                  its Series A preferred stock in December 2005.** **                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   | These                  Replacement Warrants have an exercise price of $0.88 per                  whole share, and are exercisable in whole or in part until the                  earlier of                  (i)                  December 14, 2015 and (ii)                  the third anniversary of the closing of a public offering of equity                  securities of the Company under the securities Act of 1933, as                  amended (or                  any similar or successor act) at a per share price of at least                  $4.40 and                  in which the Company receives gross proceeds of at least $20,000,000.                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   | The                  terms of the warrants, other than the Replacement Warrants,                  provide for the purchase of shares of Common Stock for five years                  at an                  exercise price of $2.50 per whole share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   | All                  the Warrants, at the option of the holder, may be exercised by                  cash                  payment of the exercise price or by “cashless exercise.” A “cashless                  exercise” means that in lieu of paying the aggregate purchase price for                  the shares being purchased upon exercise of the warrants in cash,                  the                  holder will forfeit a number of shares underlying the Warrants                  with a                  “fair market value” equal to such aggregate exercise price. The Company                  will not receive additional proceeds to the extent that Warrants                  are                  exercised by cashless exercise.  |

----

**MODIGENE        INC. AND SUBSIDIARY**

**(A        development stage company)**

**NOTES        TO CONDENSED**
** **
**CONSOLIDATED        FINANCIAL STATEMENTS**

**SEPTEMBER        30, 2007**

**ITEM      2. **
**Management’s      Discussion and Analysis or Plan of Operation.**

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

**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***

----

***Revenues***

***Research      and Development Expenses***

      increase      resulted primarily from significant development expenses related to salaries      and      related consulting and materials associated with the development of EPO-CTP,      hGH-CTP and IFN-Beta-CTP. The increase for the nine months ending September      30,      2007 was partially offset by $92,964 in grant funds received by the Company      from      the OCS.

***General      and Administrative Expenses***

* *

***Financial      Expenses and Income***

**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. **
**Controls      and Procedures.**

----

**PART      II - OTHER INFORMATION**

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

**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-B                  (Filed herewith).  |
|--------|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |             |                                                                                                                                                         |
|   | 31.2   | Certification                  of Chief Financial Officer pursuant to Item 601(b)(31) of Regulation                  S-B                  (Filed herewith).  |
|   |             |                                                                                                                                                         |
|   | 32.1             | Certification                  of Chief Executive Officer pursuant to Item 601(b)(32) of Regulation                  S-B.                  (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              13,              2007  |   |   |                  /s/ Abraham Havron  |
| Date                                              |   |   | Abraham HavronChief Executive Officer                         |

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