SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                         COMMISSION FILE NO. 333-134987

                        TETRAGENEX PHARMACEUTICALS, INC.
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

          DELAWARE                          0-2834                  22-3781895
-------------------------------    ---------------------------   ---------------
(State or other jurisdiction of   (Primary Standard Industrial  (I.R.S. Employer
 incorporation or organization)    Classification Code Number)       I.D No.)


                            1 MAYNARD DRIVE SUITE 105
                          PARK RIDGE, NEW JERSEY 07656
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (201) 505-1300
                           (ISSUER'S TELEPHONE NUMBER)

Check  whether  the  issuer:  1) filed all  reports  required  to be filed under
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter  period that the Issuer was required to file such  reports);  and 2) has
been subject to such filing requirements for the past 90 days. [X] Yes [ ] No

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule  12b-2 of the  Exchange  Act).  [ ] Yes [X] No

APPLICABLE  ONLY TO  ISSUERS  INVOLVED  IN  BANKRUPTCY  PROCEEDINGS  DURING  THE
PRECEDING FIVE YEARS:

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes [X] No [ ]

Number of shares  outstanding  of  Issuer's  common  stock,  $0.001  par  value,
outstanding on September 30, 2007: 15,926,126.

Documents Incorporated by Reference: NONE

Transitional Small Business Disclosure Format (Check one): Yes [ ]; No [X]



<PAGE>


                                TABLE OF CONTENTS


PART I: FINANCIAL INFORMATION..................................................1

       ITEM 1.     FINANCIAL STATEMENTS........................................1
       ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND PLAN OF OPERATIONS..................2
       ITEM 3(a)T  CONTROLS AND PROCEDURES.....................................5

PART II: OTHER INFORMATION.....................................................7

       ITEM 1.     LEGAL PROCEEDINGS...........................................7
       ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES
                   AND USE OF PROCEEDS.........................................7
       ITEM 3.     DEFAULTS ON SENIOR SECURITIES...............................7
       ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.........7
       ITEM 5.     OTHER INFORMATION...........................................7
       ITEM 6.     EXHIBITS....................................................7

SIGNATURES.....................................................................8

                                       i


<PAGE>



                          PART I: FINANCIAL INFORMATION



ITEM 1.  FINANCIAL STATEMENTS



                          INDEX TO FINANCIAL STATEMENTS
                                                                            Page
                                                                            ----
Unaudited Condensed Balance Sheet as of September 30, 2007...................F-1

Unaudited Condensed Statement of Operations for the Six Month Periods
   Ended September 30, 2007 and 2006.........................................F-2

Unaudited Condensed Statement of Cash Flows for the Six Month Periods
   Ended September 30, 2007 and 2006.........................................F-3

Notes to Unaudited Condensed Financial Statements............................F-4



                                       1


<PAGE>



                        UNAUDITED CONDENSED BALANCE SHEET
                          AS OF SEPTEMBER 30, 2007 AND
                              AUDITED BALANCE SHEET
                             AS OF DECEMBER 31, 2006


<TABLE>
<CAPTION>
                                                                                  DECEMBER 31,     SEPTEMBER 30,
                                                                                      2006              2007
                                                                               -------------------------------------
                                                                                                    (UNAUDITED)
<S>                                                                                     <C>                <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents                                                         $1,965,960          $870,607
  Prepaid insurance and other current assets                                            18,169            24,307
                                                                                     1,984,129           894,914

Property and equipment, net                                                              9,647             5,552
Security Deposit                                                                        18,958            18,958
Patents, net                                                                           399,595           435,475
                                                                               -------------------------------------
                                                                                    $2,412,329        $1,354,899
                                                                               =====================================

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses                                                  873,206         1,099,421
Accrued interest                                                                       120,955           164,231
                                                                               -------------------------------------
  Total current liabilities                                                            994,161         1,263,652

LONG TERM LIABILITY
Notes payable                                                                        1,882,362         1,882,362
                                                                               -------------------------------------

  TOTAL LIABILITIES                                                                  2,876,523         3,146,014
                                                                               -------------------------------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
Class A preferred stock - $.01 par value - 5,000,000 shares authorized; 0
  shares outstanding                                                                         -                 -
Common stock - $.001 par value - 50,000,000 shares authorized 15,926,126
  shares issued and outstanding                                                         15,901            15,926
Additional paid-in capital                                                          98,932,619       101,766,004
Accumulated deficit                                                                (99,412,714)     (103,573,045)
                                                                               -------------------------------------

    Total stockholders' equity                                                        (464,194)       (1,791,115)
                                                                               -------------------------------------
                                                                                    $2,412,329        $1,354,899
                                                                               =====================================

</TABLE>

     THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS

                                       F-1


<PAGE>



                   UNAUDITED CONDENSED STATEMENT OF OPERATIONS
                      FOR THE THREE MONTH PERIODS ENDED AND
                  NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006

<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED              NINE MONTHS ENDED
                                                            SEPTEMBER 30,                   SEPTEMBER 30,
                                                         2007            2006            2007            2006
                                                   -----------------------------------------------------------------
                                                     (UNAUDITED)                     (UNAUDITED)
<S>                                                       <C>             <C>            <C>              <C>
REVENUE
Contract revenue                                                -               -               -               -
                                                   -----------------------------------------------------------------
                                                                -               -               -               -
                                                   -----------------------------------------------------------------

OPERATING EXPENSES
Research and development                                  $11,223          $1,630         $15,692         $38,338
Compensation expense                                      997,484       1,207,951       1,416,821       1,658,694
Travel                                                     26,884          28,776          68,051          60,317
General and administrative                              1,215,362          72,769       1,328,133         200,737
Professional fees                                          19,565          50,891         100,756         142,987
Payroll taxes and employee benefits                        20,590          16,573          66,926          65,475
Consulting fees                                           180,615          57,077       1,057,205         209,358
Rent and occupancy                                         20,806          27,371          70,879          80,057
Depreciation and amortization                              11,680          11,292          33,119          32,103
                                                   -----------------------------------------------------------------
  LOSS BEFORE OTHER INCOME(EXPENSE) AND TAX            (2,504,209)     (1,474,330)     (4,157,582)     (2,488,066)
    BENEFIT

OTHER INCOME (EXPENSE)
Interest income and other                                   9,359          25,058          40,527          66,675
Interest expense                                          (14,597)        (14,596)        (43,276)        (43,275)
                                                   -----------------------------------------------------------------
  LOSS BEFORE TAX BENEFIT                              (2,509,447)     (1,463,868)     (4,160,331)     (2,464,666)
                                                   -----------------------------------------------------------------

NET LOSS                                              $(2,509,447)    $(1,463,868)    $(4,160,331)    $(2,464,666)
                                                   =================================================================

Basic and diluted net loss per share                       $(0.16)         $(0.10)         $(0.26)         $(0.16)
                                                   =================================================================

Weighted average common shares outstanding             15,926,126      14,758,771      15,926,126      15,421,756
                                                   =================================================================
</TABLE>

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS

                                       F-2



<PAGE>



                   UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
          FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2007 AND 2006

<TABLE>
<CAPTION>
                                                                                        NINE MONTHS ENDED
                                                                                         SEPTEMBER 30,
                                                                               -------------------------------------
                                                                                      2007              2006
                                                                               -------------------------------------
                                                                                  (UNAUDITED)
<S>                                                                                    <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                                                         $(4,160,331)      $(2,464,666)
  ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES
    Depreciation and amortization                                                       33,119            32,103
    Stock, option and warrant compensation                                           2,833,410           996,119
  CHANGES IN OPERATING ASSETS AND LIABILITIES
    Prepaid insurance and other current assets                                          (6,138)           56,627
    Accounts payable and accrued expenses                                              226,215            66,058
    Accrued interest payable                                                            43,276            43,275
                                                                               -------------------------------------
      Net cash used in operating activities                                         (1,030,449)       (1,270,484)
                                                                               -------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Cash paid for patents                                                                (64,904)          (55,783)
                                                                               -------------------------------------
      Net cash used in investing activities                                            (64,904)          (55,783)
                                                                               -------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of common stock                                                     -         1,327,127
                                                                               -------------------------------------
      Net cash provided by financing activities                                              -         1,327,127
                                                                               -------------------------------------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                (1,095,353)              860

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                         1,965,960         2,273,702
                                                                               -------------------------------------

CASH AND CASH EQUIVALENTS, END OF YEAR                                                $870,607        $2,274,562
                                                                               =====================================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  Cash paid for taxes
  Cash paid for interest                                                                     -                 -
                                                                               =====================================

NON CASH TRANSACTIONS
  Stock, options, and warants issued for compensation                                2,833,410           996,119

</TABLE>

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS

                                       F-3

<PAGE>


                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS


THE COMPANY

Tetragenex   Pharmaceuticals,   Inc.   ("Tetragenex"   or  the   "Company")  was
incorporated on November 9, 2000 in the State of Delaware  ("Tetragenex"  or the
"Company"),  and Innapharma,  Inc., the Company's  predecessor was  incorporated
July 5,  1989  also in the  State  of  Delaware  ("Innapharma").  The  Company's
corporate  headquarters  are in Park Ridge,  New Jersey.  On November  23, 2004,
Innapharma, Inc. merged into its wholly owned subsidiary, Tetragenex. As part of
the merger,  all existing  shares,  options and  warrants  were  converted  into
securities of Tetragenex on a one-for-four basis. All numbers relating to shares
of the Company have been restated to reflect the one-for-four conversion ratio.

Tetragenex  is a  biopharmaceutical  company  working to  discover,  develop and
commercialize  proprietary  pharmaceutical  products that treat serious diseases
for which current therapies are inadequate.  Tetragenex developed and patented a
novel platform of  pharmaceutical  "small chain" peptides that treat depression,
anxiety and other central nervous system disorders. Today, the Company's leading
product candidate, the antidepressant compound Nemifitide, is currently in human
clinical trials.

Tetragenex  has also  discovered,  synthesized  and is  currently  developing  a
platform of new and unique chemically modified tetracycline molecules to be used
in the treatment of certain types of cancer and  treatment  resistant  bacterial
infections.  These  tetracycline-based  product  candidates are currently in the
pre-clinical development stage.

On January 26, 2007 the Securities and Exchange  Commission  (the  "Commission")
declared our registration statement on Form SB-2 effective.  On October 19, 2007
the  Commission  declared  our  second  registration   statement  on  Form  SB-2
effective.  The company is current on all of its  filings.  On June 14, 2007 the
NASD  approved  Tetragenex  Pharmaceuticals,  Inc.  to be quoted  on the  NASDAQ
Bulletin Board under the symbol TTRX. On September 12, 2007, the Company filed a
registration  statement  on Form  SB-2,  pursuant  to  which  it  registered  an
aggregate of  9,963,128,  of which  5,000,000  shares of common stock were to be
sold by the Company on a best efforts  basis at a fixed price  between $0.50 and
$0.75.  In  addition  the  Company  registered  options  previously  granted  to
officers,  directors,  employees,  and  consultants  of the  Company  as well as
current  shareholders'  shares and warrants that had not been  registered in the
Company's  first  registration  statement.  On October 19, 2007,  the Commission
declared the Company's registration statement effective.


RECENTLY ISSUED ACCOUNTING STANDARDS

The Financial  Accounting  Standards Board (the "FASB") has recently announced a
new  interpretation,  FASB Interpretation No. 48, "Accounting for Uncertainty in
Income  Taxes" ("FIN 48"),  which will be effective  for fiscal years  beginning
after  December 15, 2006,  FIN 48 clarifies the  accounting  for  uncertainty in
income taxes  recognized in an enterprise's  financial  statements in accordance
with FASB statement No. 109,  "Accounting for Income Taxes." FIN 48 prescribes a
recognition  threshold and  measurement  attribute  for the financial  statement
recognition and measurement of a tax position taken or expected to be taken in a
tax return.  FIN 48 also provides  guidance on  de-recognition,  classification,
interest  and  penalties,   accounting  in  interim   periods,   disclosure  and
transition.  The Company does not believe the adoption of FIN 48 will impact its
consolidated financial statements.

In February 2007, the FASB issued SFAS 159, "The Fair Value Option for Financial
Assets  and  Financial  Liabilities".  SFAS 159  permits  entities  to choose to
measure financial instruments and certain other items at fair value that are not
currently  required to be measured at fair value. The decision to elect the fair

                                      F-4

<PAGE>

           NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (CONT'D)

value option may be applied  instrument by instrument,  is  irrevocable,  and is
applied to the entire instrument and not only to specified risks,  specific cash
flows or portions of that  instrument.  An entity is  restricted in choosing the
dates to elect the fair value option for an eligible item. Adoption of SFAS 159
is effective for the Company on January 1, 2008. Early adoption is permitted,
provided the entity also elects to apply the provisions of SFAS 157, "Fair Value
Measurements". Management of the Company is currently evaluating the potential
impact of SFAS 159 on the Company's financial condition, results of operations,
and liquidity.


INTERIM FINANCIAL STATEMENTS

Financial  statements  as of September  30, 2007 and for the nine month  periods
ended  September 30, 2007 and 2006,  have been prepared on the same basis as the
annual  financial  statements  and,  in the opinion of  management,  reflect all
adjustments,  which  include  only normal  recurring  adjustments,  necessary to
present fairly the Company's financial position,  results of operations and cash
flows for the periods shown.  The results of operations for such periods are not
necessarily indicative of the results expected for a full year or for any future
period. The interim condensed financial statements should be read in conjunction
with the audited financial  statements for the years ended December 31, 2006 and
2005 as appearing in the company's annual report on Form 10-KSB,  for the fiscal
year ended December 31, 2006, as filed with the Commission on March 30, 2007.


NOTES PAYABLE

The Company has an aggregate of $1,882,362  notes payable,  plus 3% interest due
on April 23, 2009 (the "Notes"). The Notes are convertible into common shares at
$5.00 per share at the  discretion  of the  holders of the Notes.  The Notes are
secured by the patents of the Company.



STOCKHOLDERS' EQUITY


STOCK OPTIONS
-------------

On September 30, 2007 there were a total of 11,758,253 options outstanding,  all
exercisable  at $1 per share,  and expiring  between 2017 and 2020.  On July 26,
2007 the Company's  Board of Directors  (the "Board")  unanimously  approved the
granting of 3,700,000 options to the Company's  officers,  directors,  employees
and consultants  outside of the Company's 2007 Stock Option Plan (the "Plan") in
the event the Plan is not approved by the Company's  stockholders for unforeseen
reasons. The Company's  stockholders  approved the grant of 3,700,000 options on
May 29, 2007. A current  report on Form 8-K was filed with the Commission on May
29, 2007 describing this transaction. Each officer and director filed an Initial
Statement  of  Beneficial  Ownership  on Form 3 or a  Statement  of  Changes  in
Beneficial  Ownership on Form 4 as needed.  All options are exercisable at $1.00
per share and expire ten years from issuance.  The options were valued using the
Black  Sholes  method  and total  charges  of  $2,001,999  were  applied  to the
Company's appropriate accounts.

WARRANTS
--------

At  September  30,  2007,  the Company had  outstanding  warrants to purchase an
aggregate of 12,018,514  shares of the Company's common stock at exercise prices
of $1.00,  $1.30,  $1.65 and $6.00 per share. The

                                       F-5

<PAGE>

           NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (CONT'D)

Warrants  expire on of November  30, 2009,  March 30,  2012,  April 30, 2009 and
November 30, 2011  respectively.  An aggregate of 155,000  warrants  were issued
during the third quarter to several financial  consultants and to members of the
Company's  scientific  advisory board.  The warrants were valued using the Black
Sholes  method  and total  charges of $58,893  were  applied to the  appropriate
accounts.

The following table presents,  for each of the following  classes of warrants as
determined  by range of  exercise  price,  the  information  regarding  warrants
outstanding and weighted-average exercise price as of September 30, 2007.



                             WARRANTS OUTSTANDING
                    --------------------------------------
                                             WEIGHTED
RANGE OF EXERCISE        NUMBER OF           AVERAGE
      PRICE              WARRANTS         EXERCISE PRICE
-------------------   ----------------   -----------------
      $1.00                 7,058,796          $1.00
      $1.30                 1,030,000          $1.30
      $1.65                   645,322          $1.65
      $6.00                 3,284,396          $6.00
-------------------   ----------------   -----------------



COMMON STOCK TRANSACTIONS
-------------------------

During  the third  quarter,  25,000  shares of common  stock  were  issued to an
existing  shareholder  for stock  purchased  in the past and not recorded in the
Company's  stock  records due to a clerical  error.  On September 30, 2007 there
were 15,926,126 common shares outstanding.


COMMITMENTS AND CONTINGENCIES


EMPLOYMENT AGREEMENTS
---------------------

On December 15, 1999, the Company entered into a three-year employment agreement
with Martin Schacker,  its co-Chief Executive Officer ("co-CEO") and co-Chairman
of the Board.  The  agreement  provided  for an annual base salary of  $160,000,
subject to a minimum ten percent annual  increase.  On February 6, 2001, in view
of the  executive's  efforts on behalf of the Company and his  performance,  the
Company's Board of Directors (i) increased his annual salary to $250,000 with no
automatic annual  increases,  and extended the term of his employment  agreement
for an additional two years; and (ii) granted the executive a ten-year option to
acquire 125,000 shares of the Company's common stock at an exercise price of $17
per share, one third of which vested  immediately,  one third of which vested on
February 6, 2002,  and the final third  vested on February 6, 2003.  On December
11, 2001, in  consideration  of services  provided to the Company,  the Board of
Directors  (i) further  increased  his annual  salary to $300,000,  (ii) further
extended the term of the agreement by one year,  through and including  December
15, 2005 and (iii)  granted the  executive  an  additional,  immediately  vested
five-year  option to acquire 125,000 shares of the Company's  common stock at an
exercise price of $17 per share.  On April 6, 2003, as a result of the Company's
cost  reduction,  the executive  agreed to defer one-half of his $300,000 annual
salary.  In  December  2005,  the  executive  agreed to convert  $177,000 of his
deferred salary into 177,000 options to purchase shares of the Company's  common
stock at $1 per share  expiring  December 20, 2020. On September  30, 2007,  the
executive had deferred compensation totaling $301,707. The executive was


                                       F-6
<PAGE>

           NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (CONT'D)

granted an  aggregate of 1,420,000  options  exercisable  at $1.00 per share and
expiring in 2020  during 2005 and another  115,000 in 2006 under the same terms.
In the third  quarter of 2007 he was  issued an  aggregate  of  850,000  options
exercisable  at $1.00 per share  expiring 10 years from issuance for services to
the company as Co-CEO and Chairman.  The co-CEO is the nephew of the David Abel,
the Company's other co-CEO.

On April 15,  2003,  as a result of negative  results in a dog study  Innapharma
conducted and the difficult financial market conditions at the time,  Innapharma
filed for protection under Chapter 11 of the United States Bankruptcy Court (the
"Bankruptcy").  All officers,  directors  and  employees of  Innapharma  and the
Company at the time of the Bankruptcy  agreed to defer a portion or all of their
compensation.  On September 30, 2007, there was $866,857  deferred from officers
and employees and $156,250 from Directors.  During 2006, additional salaries and
compensation in the amounts of $341,124 was accrued from officers and employees,
and $50,000 from Directors.

It is anticipated  that the majority of accrued  payments will be converted into
warrants of the Company on a one-for-one basis.


LITIGATION
----------

At September 30, 2007 the Company was not involved in any ongoing litigation.


RISKS AND UNCERTAINTIES
-----------------------

The Company is subject to risks  common to  companies  in the  biopharmaceutical
industry,   including,   but  not  limited  to,   risks   associated   with  the
commercialization  of product candidates,  protection of proprietary  technology
and compliance with Food and Drug Administration ("FDA") regulations.

As reflected in the accompanying consolidated financial statements,  the Company
has incurred significant recurring losses from operations and negative operating
cash flows,  which have been financed  primarily by proceeds from stock and debt
issuances.  As a result, the Company had an accumulated  deficit of $103,573,046
and $98,913,379 at September 30, 2007 and 2006, respectively.

Management  plans to provide for  additional  working  capital and funds for the
continued  development of the Company's products through private or public sales
of the Company's common stock. The Company's ability to obtain such financing is
contingent  upon  continued  progress  in its drug  development  efforts and its
ability to access capital resources. Management is also attempting to enter into
an  agreement   with  a  major   pharmaceutical   company  to   co-develop   its
antidepressant  drug, which may generate significant cash flows for the Company.
No  assurance  can be given that the Company  will be able to enter into such an
agreement,  successfully complete a public sale of its common stock, or complete
future private placements.



LEASE OBLIGATIONS
-----------------

On March 12, 2003, the Company entered into an operating lease for its current
office space in Park Ridge, New Jersey. The lease commenced on March 31, 2003,
and expires on March 31, 2007, and required monthly base rental payments of
$10,200 plus certain annual escalation. In December 2006, the

                                      F-7
<PAGE>

           NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (CONT'D)

Company  entered into a 5-year  operating  lease to rent different  space in the
same  building as it  currently  leases  office  space for  monthly  base rental
payments of $6,300 expiring in December 2011.

The  approximate  aggregate  minimum  rental  commitments on these leases are as
follows:

YEAR ENDING
DECEMBER 31,
------------------------------------------------------

2007                                           87,300
2008                                           75,600
2009                                           75,600
2010                                           75,600
2011                                           75,600
                                      ----------------
Total minimum lease payments              $   389,700
                                      ================

The  Company's  rental  expense was  $124,039  and  $133,504 for the years ended
December 31, 2006 and 2005, respectively.


401(k) PROFIT SHARING PLAN
--------------------------

In December 1993, the Company  adopted a 401(k) Profit Sharing Plan (the "401(k)
Plan"),  effective as of January 1, 1994.  All employees of the Company who have
attained the age of 21 are eligible to participate in the 401(k) Plan.  Eligible
employees can make voluntary  contributions  to the 401(k) Plan up to the dollar
limit  set  by  law.  The  Company  may,  but  does  not  currently,  contribute
discretionary matching contributions in any amount to be determined on an annual
basis by the Company's Board. Each eligible participant's share of the Company's
contribution  vests over a seven-year  period beginning with the first full year
of  service  at the rate of 15% per  year.  The  Company  is in the  process  of
terminating its 401k Plan.


SUBSEQUENT EVENTS

On September 12, 2007, the Company filed a registration  statement on Form SB-2,
pursuant to which it registered an aggregate of  9,963,128,  of which  5,000,000
shares of common stock were offered by the Company on a best efforts  basis at a
fixed  price  between  $0.50 and $0.75.  On October  19,  2007,  the  Commission
declared the Company's registration statement effective.

                                       F-8

<PAGE>


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


PLAN OF OPERATIONS

The Company is currently  developing  an  antidepressant  compound,  Nemifitide,
which is in late  Phase 2 human  clinical  trials.  During  Phase  Two  clinical
development,  the Company's flagship antidepressant compound was put on clinical
hold by the FDA, as a result of some toxicity  issues in a Beagle dog study that
was completed in 2003.  The FDA asked the Company to repeat the animal study and
generate some additional preclinical data with regard to the toxicity issue. The
Company  completed  a  subsequent  dog study and a primate  study to address the
concerns of the FDA.  After the final reports from these studies were  submitted
to the FDA, the FDA confirmed that this was a complete  response to the clinical
hold and lifted the  clinical  hold on March 29,  2006.  The Company  intends to
simultaneously  pursue two strategies.  First,  the Company plans to license out
Nemifitide for the final stage of  development.  Second,  the Company intends to
raise additional  capital and continue to Phase Three development of Nemifitide.
The Company believes that upon a successful licensing  agreement,  there will be
significant  milestone  payments,  as  well as  permanent  royalty  against  the
revenues of the drug.  During the third  quarter of 2007,  the Company hired Dr.
Stephen Stahl,  who is world renowned and is considered an opinion leader in the
Central Nervous System ("CNS") field, to serve as the Company's chief scientific
consultant and chair of its Scientific  Advisory  Board.  Dr. Stahl is currently
restructuring  the  Scientific  Advisory  Board to  include  several  additional
opinion  leaders in the CNS field.] Dr.  Murray  Rosenthal  and Darius  Shayegan
agreed to assist in the licensing  process as well. Dr.  Rosenthal has extensive
experience  seeing patients that have been  administered  Nemifitide as his site
was part of our Phase Two trials.

Nemifitide  is  a  five-chain   peptide,   part  of  a  significant  library  of
patent-protected  compounds.  The Company, in its preclinical development plans,
will  evaluate the  potential  of other  patented  neuropeptides  to treat other
disorders,  such as anorexia,  bulimia,  panic disorder,  anxiety  disorders and
post-traumatic   stress   disorder.   The  Company   currently  has  three  Good
Manufacturing Practices ("GMP") manufacturers  synthesizing its compound, all of
whom  are  located  in  Europe.  The  Company  believes  that it has  sufficient
Nemifitide bulk to meet its requirements for the foreseeable future.

Tetracyclines  belong to a family of naturally  occurring  antibiotics that have
been demonstrated to be potent inhibitors of matrix metalloproteinases  (enzymes
which  are key in the  promotion  of  many  human  disorders).  The  Company  is
currently   developing  a  platform  of  new  and  unique  chemically   modified
tetracycline  molecules to be used in the  treatment of certain  types of cancer
(prostate and breast) and antibiotic-resistant bacterial infections.

Our  tetracycline-based  drugs are in the  preclinical  development  stage.  Our
in-vitro studies have identified a series of chemically modified  tetracyclines,
which we believe can be used in the treatment of cancer and antibiotic-resistant
infections.   To  date,  we  have  prepared  and  developed   approximately  100
tetracycline-based  derivatives.  We filed a patent  application  on  October 5,
2002,  covering  our  tetracycline  product  candidates.  We intend to  complete
additional  in-vivo and in-vitro studies,  prepare an  Investigational  New Drug
Application ("IND") and attempt to license both the anti-cancer compound and the
treatment resistant bacteria compound out for development.

In addition to the in-house development program, the Company intends to research
and acquire existing  compounds and re-platform them for other therapeutic uses,
and pursue a licensing agreement with the original inventor.

                                       2

<PAGE>


During the past 24 months we completed two private offerings raising  $4,087,047
of equity  capital.  Our core burn rate is  approximately  $85,000 a month.  The
Company  has  approximately  $850,000  of cash on hand which  gives the  Company
approximately  eight to ten months of operating capital.  The company intends to
hire appropriate  scientific  personnel to strengthen its licensing  acquisition
program and to assist in the  preparation  and filing of IND submissions for the
tetracycline compounds.

The Company  believes it has very good patent  protection in all the significant
worldwide markets.


MANAGEMENT'S DISCUSSION AND ANALYSIS

The following  discussion  should be read in conjunction  with the  consolidated
historical  financial  statements  of the  Company  and  related  notes  thereto
included elsewhere in this quarterly report on Form 10-QSB and the annual report
on Form  10-KSB  for the  year  ended  December  31,  2006,  as  filed  with the
Commission  on  March  30,  2007.  This  discussion   contains   forward-looking
statements regarding the business and industry of the Company within the meaning
of the Private  Securities  Litigation  Reform Act of 1995. These statements are
based on the current plans and expectations of the Company and involve risks and
uncertainties   that  could  cause  actual  future  activities  and  results  of
operations   to  be   materially   different   from   those  set  forth  in  the
forward-looking statements.

The  information  set  forth  and  discussed  below  for the nine  months  ended
September  30, 2007 and  September  30, 2006,  is derived from the  consolidated
financial  statements  included elsewhere herein. The financial  information set
forth and  discussed  below is  un-audited  but, in the  opinion of  management,
reflects all adjustments  (consisting of normal recurring adjustments) necessary
for a fair  presentation of such  information.  The results of operations of the
Company for the fiscal  quarter ended  September 30, 2007, may not be indicative
of results expected for the entire fiscal year ending December 31, 2007.


LIQUIDITY AND CAPITAL RESOURCES

The Company currently has approximately $850,000 cash on hand and a monthly core
burn rate of  approximately  $85,000.  These  funds are used  primarily  for the
Company's  operating  expenses.  Additional funds will be needed to fund further
studies required by the FDA to bring our lead compound,  Nemifide, to market. We
currently  have  several  protocols  in place  for  future  studies  as  funding
dictates. Future funds will be derived from additional sales of our common stock
in  the  public  or  private  markets  and/or  a  licensing   agreement  with  a
pharmaceutical company. We seek to begin a multi-centered pivotal human clinical
trial while we are working on securing a licensing agreement for Nemifitide. Our
only  long-term  debt  consists of an aggregate of $1,800,000  convertible  note
payable to the former  holders of our  Series D  Preferred  securities  in April
2009.


RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Innapharma  successfully emerged from bankruptcy and merged with its subsidiary,
Tetragenex,  in November  2004.  The Company  raised over  $4,000,000  in equity
throughout  the Bankruptcy  process and had  significant  expenses  directly and
indirectly  relating  to the  Bankruptcy  from April 2003 to  November  2004.  A
significant  portion of the proceeds  from the  Company's  private  placement of
securities  which  closed on  November  23,  2004 was  committed  to general and
administrative  overhead and completing the preclinical studies requested by the
FDA.

For the past  four  years,  the  Company  has sold a portion  of its tax  losses
through the New Jersey Development Program sponsored by the State of New Jersey.
The program  generated a net check to the Company in 2003 in excess of $200,000,
it  generated a check of over  $400,000 in December of 2004,  and

                                       3

<PAGE>


an additional  $315,000 in December  2005. In 2006,  due to the  elimination  of
Innapharma and thus the loss of its tax credits, we only received $5,000 as part
of the program.  The company filed its  application to sell the Company's  state
tax losses in June and was denied by the state.  Additionally,  the  Company was
unsuccessful  in its  appeal of the  state's  decision.  We plan to apply to the
program again next year.

As of the date hereof, the Company has approximately  $850,000 cash on hand. The
Company  believes  this  amount is  sufficient  to last us between  eight to ten
months from the date of this  quarterly  report.  Our current  core burn rate is
approximately  $85,000 per month.  Operating  expenses,  including  employee and
consultant  salaries  are the major  components  of our burn rate.  Our  current
payroll  is  approximately  $32,000  per  month.  Additionally,  our  scientific
consultants  receive  approximately  $10,000  per month and work on a  part-time
basis.  Our rent  expense is  currently  $6,300 per month.  Director and officer
insurance and product liability insurance cost approximately  $12,000 per month.
This cost has increased by approximately $5,000 per month since we began trading
on the OTC Bulleting  Board.  Also included in the burn rate are car allowances,
telephone and internet access, general corporate expenses, outsourced accounting
and legal fees, and office supplies.

Future  funds will be derived from  additional  sales of our common stock in the
public or private  markets and/or a licensing  agreement  with a  pharmaceutical
company  as well as  potentially  the  continuing  sales of our state tax losses
through the New Jersey  Development  Plan. We have a successful  track record in
raising funds,  having completed 13 private financings since 1994, through which
we raised over $75,000,000.

Our only debt consists of an aggregate of $1,800,000  convertible  notes payable
to the former holders of our Series D Preferred securities in April 2009.

In August 2007 we signed an agreement with Equity Source Partners LLC,  engaging
them to aid us in its fund raising  efforts by introducing  us to  institutional
investors, funds, and wealthy individuals. The Company did not pay Equity Source
Partners LLC any upfront  fees.  Equity  Source  Partners LLC is located on Long
Island  and has a long and  successful  track  record  of  raising  capital  for
companies of comparable size.


THE NINE MONTHS ENDING SEPTEMBER 30, 2007 AS COMPARED TO THE PERIOD OF THE NINE
MONTHS ENDED SEPTMEMBER 30, 2006
--------------------------------------------------------------------------------

REVENUE - The Company had no revenue from any source for the nine months  ending
September 30, 2007 and 2006.

RESEARCH AND DEVELOPMENT - Research and development costs decreased from $38,338
to $15,692 for the nine months ending September 30, 2007 as compared to the same
nine months of 2006. No studies have been performed  during 2007 thus there have
only been incidental expenses.

COMPENSATION   EXPENSE  -  Compensation  expense  decreased  to  1,416,821  from
1,658,694 in 2007, as compared to 2006. This was a result of more options having
been granted in 2006.

TRAVEL EXPENSE - Travel expense  remained  approximately  the same for the first
nine months ending September 30, 2007, as compared to the same period in 2006.

PROFESSIONAL  FEES - Professional fees decreased to $100,756 for the nine months
ending  September 30, 2007, as compared to $142,987 for the same period of 2006.
This was mainly  attributed to a decrease in legal and accounting  fees once the
Company's  registration  statement on Form SB-2 , filed with the

                                       4

<PAGE>


Commission  on June 13, 2006,  became  effective as well as the  increased  work
performed by in house staff.

INSURANCE  EXPENSE - Insurance costs decreased from $102,113 for the nine months
ending  September 30, 2006 to $71,716 for the nine months  ending  September 30,
2007, due to a decrease in the Company's  product  liability  costs.  Because no
human  beings  received  Nemifitide  during 2006 the product  liability  premium
decreased substantially for 2007.

CONSULTING  FEES -  Consulting  expenses  increased to  $1,057,205  for the nine
months ending  September 30, 2007 as compared to $209,358 for the same period of
2006.  This increase was a result of warrants  issued to several new consultants
which the  Company  retained  as well as the  issuance  of options  to  existing
consultants in the third quarter of 2007. Warrants and options were valued using
the Black Scholes method.

GENERAL AND ADMINISTRATIVE  FEES -General and administrative  expenses increased
to  $1,328,133  for the nine months  ending  September  30, 2007, as compared to
$200,737 for the same period in 2006.  This was the result of the option  grants
in August 2007 to all officers, directors  and  employees  of the  Company. Each
director was granted 225,000 options exercisable at $1.00 per share, expiring 10
years from  issuance for their  services on the Company's  Board.  These options
were  valued  using  the  Black  Scholes  method.  In  addition,   printing  and
reproduction costs increased  substantially as a result of our being required to
submit edgarized reports to the Commission.

RENT AND  OCCUPANCY - Rent and occupancy  expenses  decreased to $70,879 for the
nine months ended September 30, 2007, as compared to $80,057 for the same period
of 2006.  This was the result of the decreased  rent upon the company moving its
primary  offices into new space in its previous  building.  The company will now
save approximately $4,000 per month vs. the previous rent.


DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

THIS QUARTERLY  REPORT ON FORM 8-K INCLUDES  FORWARD  LOOKING  STATEMENTS  WHICH
INVOLVE RISKS AND UNCERTAINTIES. SUCH STATEMENTS CAN BE IDENTIFIED BY THE USE OF
FORWARD-LOOKING LANGUAGE SUCH AS "WILL LIKELY RESULT", "MAY", "ARE EXPECTED TO",
"IS ANTICIPATED",  "ESTIMATE",  "BELIEVES",  "PROJECTED",  OR SIMILAR WORDS. ALL
STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACT INCLUDED IN THIS SECTION ARE
FORWARD-LOOKING STATEMENTS.  ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS
REFLECTED IN SUCH  FORWARD-LOOKING  STATEMENTS  ARE  REASONABLE,  IT CAN GIVE NO
ASSURANCE THAT SUCH EXPECTATIONS WILL PROVE TO HAVE BEEN CORRECT.  THE COMPANY'S
ACTUAL  RESULTS  COULD  DIFFER  MATERIALLY  FROM THOSE  ANTICIPATED  IN ANY SUCH
FORWARD-LOOKING  STATEMENTS  AS A RESULT OF VARIOUS  RISKS,  INCLUDING,  WITHOUT
LIMITATION,  THE  DEPENDENCE ON A SINGLE LINE OF BUSINESS;  THE FAILURE TO CLOSE
PROPOSED FINANCING;  RAPID TECHNOLOGICAL CHANGE; INABILITY TO ATTRACT AND RETAIN
KEY PERSONNEL;  THE POTENTIAL FOR SIGNIFICANT FLUCTUATIONS IN OPERATING RESULTS;
THE LOSS OF A MAJOR  CUSTOMER;  AND THE  POTENTIAL  VOLATILITY  OF THE COMPANY'S
COMMON STOCK.


ITEM 3(a)T  CONTROLS AND PROCEDURES

As of the end of the period  covered by this  quarterly  report on Form 8-K,  we
carried out an evaluation,  under the supervision and with the  participation of
our  Chief  Executive   Officer  and  our  Chief  Financial  Officer  ,  of  the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures.  Based on this  evaluation,  our Chief  Executive  Officer and Chief
Financial  Officer  concluded  that  information  required  to be  disclosed  is
recorded.  The Company  maintains  disclosure  controls and procedures  that are
designed to ensure that  information  required to be disclosed in the  Company's
Securities  Exchange  Act of

                                       5

<PAGE>


1933 (the  "Exchange  Act")  reports  is  recorded,  processed,  summarized  and
reported within the time periods specified in the Commission's  rules and forms,
and that such  information  is  accumulated  and  communicated  to the Company's
management,  including the Chief Executive Officer and Chief Financial  Officer,
as appropriate,  to allow for timely  decisions  regarding  required  disclosure
based  closely on the  definition of  "disclosure  controls and  procedures"  in
Exchange Act Rule 13a-15(e). In designing and evaluating the disclosure controls
and  procedures,  management  recognized  that any controls and  procedures,  no
matter how well designed and operated,  can provide only reasonable assurance of
achieving  the  desired  control  objectives,  and  management  necessarily  was
required to apply its judgment in evaluating the  cost-benefit  relationship  of
possible controls and procedures.  The Company carried out an evaluation,  under
the  supervision  and  with  the  participation  of  the  Company's  management,
including  the co-Chief  Executive  Officer and Chief  Financial  Officer of the
effectiveness of the design and operation of the Company's  disclosure  controls
and procedures as of the end of the period covered by this report.  Based on the
foregoing,  the co-Chief Executive Officer and Chief Financial Officer concluded
that our  disclosure  controls and  procedures  were effective at the reasonable
assurance level.

There have been no changes in our internal  controls  over  financial  reporting
during the Company's most recent fiscal quarter that have  materially  affected,
or is reasonably  likely to materially  affect,  the Company's  internal control
over financial reports.

                                       6

<PAGE>


                           PART II: OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

In the  normal  course of  business,  there may be  various  legal  actions  and
proceedings  pending which seek damages against the Company. As of September 30,
2007, there were no claims asserted or threatened against the Company.


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

None.


ITEM 3.  DEFAULTS ON SENIOR SECURITIES

None.


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

No matters were submitted to a vote of security holders during the quarter ended
September 30, 2007.



ITEM 5.  OTHER INFORMATION

None.


ITEM 6.  EXHIBITS

EXHIBITS


31.1     Certification of Co-Chief Operating Officer Pursuant to Section 302 of
         the Sarbanes-Oxley Act of 2002

31.2     Certification of Chief Financial Officer Pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002

32.1     Certification of the Co-Chief  Executive  Officer Pursuant to 18 U.S.C.
         Section 1350,  Section 906 of the Sarbanes-Oxley Act of 2002

32.2     Certification of  the Chief  Financial  Officer Pursuant to  18  U.S.C.
         Section 1350,  Section 906 of the Sarbanes-Oxley Act of 2002

                                       7

<PAGE>


                                   SIGNATURES

Pursuant  to the  requirements  of  Section  13(a) and  15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                             TETRAGENEX PHARMACEUTICALS, INC.

November 14, 2007                            /s/ Martin Schacker
                                             -----------------------------------
                                             Martin Schacker
                                             Co-Chief Executive Officer


November 14, 2007                            /s/ Neil Martucci
                                             -----------------------------------
                                             Neil Martucci
                                             Chief Financial Officer

                                       8