10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the Fiscal Year Ended December 31, 2007

OR

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

Commission File Number 000-19635

GENTA INCORPORATED

(Exact name of Registrant as specified in its certificate of incorporation)

Delaware	33-0326866
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)
200 Connell Drive Berkeley Heights, New Jersey	07922
(Address of principal executive offices)	(Zip Code)

(908) 286-9800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Name of each exchange on which registered:
Common Stock, $.001 par value	NASDAQ Stock Market, LLC

Series G Participating Cumulative Preferred Stock Purchase Rights

Securities registered pursuant to Section 12(g) of the Act:

NONE

Indicate by check mark if a registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

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

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

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

The approximate aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was $53,279,771 as of June 30, 2007 (the last business day of the registrant’s most recently completed second fiscal quarter).

As of March 7, 2008, the registrant had 36,740,558 shares of Common Stock outstanding.

Genta Incorporated

Table of Contents

Part I
Item 1.	Business	4
Item 1A.	Risk Factors	15
Item 1B.	Unresolved Staff Comments	29
Item 2.	Properties	29
Item 3.	Legal Proceedings	29
Item 4.	Submission of Matters to a Vote of Security Holders	30
Part II
Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	31
Item 6.	Selected Consolidated Financial Data	33
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 7A.	Quantitative and Qualitative Disclosure about Market Risk	43
Item 8.	Financial Statements and Supplementary Data	44
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	70
Item 9A.	Controls and Procedures	70
Item 9B.	Other Information	72
Part III
Item 10.	Directors and Executive Officers of the Registrant and Corporate Governance	72
Item 11.	Executive Compensation	72
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	72
Item 13.	Certain Relationships and Related Transactions and Director Independence	72
Item 14.	Principal Accounting Fees and Services	72
Part IV
Item 15.	Exhibits and Financial Statement Schedules	73
Signatures		77
Certifications

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The statements contained in this Annual Report on Form 10-K that are not historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the expectations, beliefs, intentions or strategies regarding the future. We intend that all forward-looking statements be subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our views as of the date they are made with respect to future events and financial performance, but are subject to many risks and uncertainties, which could cause actual results to differ materially from any future results expressed or implied by such forward-looking statements. Forward-looking statements include, without limitation, statements about:

• our financial projections;

• our projected cash flow requirements and estimated timing of sufficient cash flow;

• our current and future license agreements, collaboration agreements, and other strategic alliances;

• our ability to obtain necessary regulatory approval for Genasense^® from the U.S. Food and Drug Administration (FDA) or European Medicines Agency (EMEA);

• the safety and efficacy of our products;

• the commencement and completion of clinical trials;

• our ability to develop, manufacture and sell our products;

• the adequacy of our capital resources and our ability to obtain sufficient financing to maintain our planned operations;

• the adequacy of our patents and proprietary rights;

• the impact of litigation that has been brought against us and our officers and directors and any proposed settlement of such litigation;

• our ability to regain compliance with NASDAQ’s listing qualifications; and

• the other risks described under Certain Risks and Uncertainties Related to the Company’s Business.

We do not undertake to update any forward-looking statements.

We make available free of charge on our internet website (http://www.genta.com) our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission. The content on our website is available for informational purposes only. It should not be relied upon for investment purposes, nor is it incorporated by reference into this Form 10-K.

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PART I

Item 1. Business

Overview

Genta Incorporated also referred to herein as “us”, “we”, “our”, “Genta” or “the Company”, was incorporated in Delaware on February 4, 1988. Genta is a biopharmaceutical company engaged in pharmaceutical (drug) research and development, its sole reportable segment. We are dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases. Our research portfolio consists of two major programs: “DNA/RNA Medicines” and “Small Molecules”.

The DNA/RNA Medicines program includes drugs that are based on using modifications of either DNA or RNA as drugs that can be used to treat disease. These technologies include antisense, decoys, and small interfering or micro RNAs. Our lead drug from this program is an investigational antisense compound known as Genasense^® (oblimersen sodium injection). Genasense^® is designed to block the production of a protein known as Bcl-2. Current science suggests that Bcl-2 is a fundamental (although not sole) cause of the inherent resistance of cancer cells to anticancer treatments, such as chemotherapy, radiation, and monoclonal antibodies. While Genasense^® has displayed some anticancer activity when used by itself, we are developing the drug primarily as a means of amplifying the cytotoxic effects of other anticancer treatments.

Genasense^® has been studied in combination with a wide variety of anticancer drugs in a number of different cancer indications. We have reported results from randomized Phase 3 trials of Genasense^® in seven different diseases: melanoma; chronic lymphocytic leukemia (CLL); multiple myeloma; acute myeloid leukemia (AML); non small cell lung cancer; small cell lung cancer; and prostate cancer. Under our own sponsorship or in collaboration with the U.S. National Cancer Institute (NCI), we are currently conducting additional clinical trials.

In 2003, we submitted a New Drug Application (NDA) to the FDA for the use of Genasense^® plus chemotherapy in patients with advanced melanoma. In May 2004, a majority of the Oncologic Drugs Advisory Committee (ODAC) failed to recommend approval of our NDA. As a consequence, we withdrew the NDA, which allows us to potentially resubmit the application. In October 2006, data from this trial was published in a peer-reviewed journal, which reported statistically significant increases in overall response, complete response, durable response and progression-free survival (PFS). An independent review of the X-rays confirmed the major responses with high concordance. An increase in overall survival by intent-to-treat analysis, which was the study’s primary endpoint, approached but did not reach statistical significance (P=0.077). Our analysis identified a statistically significant treatment interaction for blood levels of an enzyme known as LDH, which was a prospectively specified component of stratification. When this effect was analyzed by treatment arm, survival was shown to be significantly superior for patients with a non-elevated LDH who received Genasense^® (P=0.018; n=508).

In January 2006, we completed a Marketing Authorization Application (MAA) to the European Medicines Agency (EMEA), which sought approval for use of Genasense^® plus dacarbazine for the treatment of patients with advanced melanoma who had not previously received chemotherapy. In April 2007, we were informed that the Committee for Medicinal Products for Human Use (CHMP) of the EMEA had issued a negative opinion on the MAA and we indicated that we would seek re-examination of the MAA by a Scientific Advisory Group. In July 2007, we received notice from the EMEA that the requested re-examination reaffirmed the negative opinion for approval of our MAA for Genasense^®. We contemplate no further action on the MAA.

In 2007, we filed a complaint and request for correction of information with the FDA under the Federal Data Quality Act. The complaint challenged a key statistical analysis of our data regarding PFS that was used by the FDA at the ODAC meeting in May 2004. At that meeting, ODAC voted unanimously that PFS was an endpoint that would support full approval in the absence of a survival improvement in patients with advanced melanoma. In February 2008, the FDA informed us that they did not agree with our opinion that their assessment was flawed. We have not yet decided whether to pursue this matter further with the FDA.

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In August 2007, we announced that the first patients had been enrolled in a confirmatory Phase 3 trial of Genasense^® plus chemotherapy in advanced melanoma. The trial, known as AGENDA, is a randomized, double-blind, placebo-controlled study in which patients are randomly assigned to receive Genasense^® plus dacarbazine (DTIC) or DTIC alone. The study targets patients using LDH as a biomarker to identify patients who may be most likely to respond based on data obtained from our preceding trial in melanoma. We expect that AGENDA will accrue approximately 300 patients and will be conducted at 75 to 100 sites worldwide. Accrual is expected to take approximately 18 months, with initial data on PFS expected shortly thereafter.

In CLL, we conducted a randomized Phase 3 trial in 241 patients with relapsed or refractory disease who were treated with fludarabine and cyclophosphamide (Flu/Cy) with or without Genasense^®. The trial achieved its primary endpoint: a statistically significant increase (17% vs. 7%; P=0.025) in the proportion of patients who achieved a complete response (CR), defined as a complete or nodular partial response. Patients who achieved this level of response experienced disappearance of predefined disease symptoms, including fever, night sweats, fatigue, abdominal discomfort due to an enlarged spleen and impaired mobility due to swollen lymph nodes. A key secondary endpoint, duration of CR, was also significantly longer for patients treated with Genasense^® (median not reached but exceeding 36+ months in the Genasense^® group, versus 22 months in the chemotherapy-only group).

Several secondary endpoints were not improved by the addition of Genasense^®, including overall response rate (i.e., the percentage of patients who achieved CR plus partial response), time-to-disease progression, or overall survival. Adverse events (irrespective of relation to study drugs) during treatment or within 30 days from last dose of treatment that resulted in death occurred in nine patients treated with Genasense^® plus chemotherapy compared with five patients treated with chemotherapy alone. The percentage of patients who experienced serious adverse events was increased in the Genasense^® arm; however, the percentages of patients who discontinued treatment due to adverse events were equal in the treatment arms. The incidence of certain serious adverse reactions, including but not limited to nausea, fever and catheter-related complications, was increased in patients treated with Genasense^®.

In December 2005, we completed submission of an NDA to the FDA that sought accelerated approval for the use of Genasense^® in combination with fludarabine plus cyclophosphamide for the treatment of patients with relapsed or refractory CLL who had previously received fludarabine.

In September 2006, an ODAC meeting voted not to recommend approval of Genasense^® in CLL and in December 2006, we received a “non-approvable” notice from the FDA. We believe that our application met the regulatory requirements for approval and in April 2007, we filed an appeal of this non-approvable notice pursuant to the FDA’s Formal Dispute Resolution process that exists within the FDA’s Center for Drug Evaluation and Research (CDER). In June 2007, we announced that the initial appeal was denied and that we would further appeal the decision to the next level within CDER. On October 25, 2007, we announced that we had completed the filing of our next-level appeal to CDER. On March 17, 2008, we announced that CDER decided that available data are not adequate to support approval of Genasense^® for treatment of patients with CLL. CDER acknowledged that compl ete response, which was the primary endpoint in the pivotal trial, was an appropriate endpoint for assessing efficacy. FDA also agreed that this endpoint was achieved, and that those results supported the efficacy of the drug. However, CDER concluded that at present there was insufficient confirmatory evidence in the NDA to approve the drug. CDER recommended two alternatives for exploring the efficacy of Genasense^® that could provide such confirmatory evidence. One option is to conduct an additional clinical trial. The other option is to collect additional information regarding the clinical course and progression of disease in patients from the previous pivotal trial in order to ascertain whether those data contain sufficient confirmatory evidence. We currently plan to pursue both of these options.

In November 2004, we reported that our randomized Phase 3 clinical trial of Genasense^® in patients with multiple myeloma did not meet its primary endpoint. In December 2006, we were notified that preliminary analysis from a randomized Phase 3 trial of chemotherapy with or without Genasense^® in patients with AML suggested the study was unlikely to meet its primary endpoint. In February 2007, we announced that preliminary results from a randomized Phase 2 study of Genasense^® plus chemotherapy in patients with advanced prostate cancer showed no between-group difference in prostate-specific antigen. While follow-up and analyses of the AML and prostate trials are continuing, we do not believe any of these trials will support regulatory approval of Genasense^® in these indications. Similarly negative results were reported in 2007 from randomized Phase 2 trials that were conducted in patients with advanced non small cell lung cancer and also in patients with small cell lung cancer.

5

The Small Molecules program currently includes drugs that are based on gallium-containing compounds. The lead drug from this program is Ganite^® (gallium nitrate injection), which was approved by the FDA in October 2003 for the treatment of patients with symptomatic cancer-related hypercalcemia that is resistant to hydration. In Phase 2 studies, Ganite^® has demonstrated direct anticancer activity at somewhat higher doses than are used for hypercalcemia treatment, particularly in patients with malignant lymphoma and bladder cancer. Following the adverse outcome of the ODAC meeting in May 2004 for the Genasense^® NDA in melanoma, we markedly reduced spending on the development, sale and marketing of Ganite^®, which has resulted in significantly lower sales of Ganite^®. In addition, key patents related to the approved use of Ganite^® have now expired. We do not currently plan to invest substantial additional funds into the commercialization of Ganite^® in the U.S.

We have also been engaged in developing new formulations of gallium-containing compounds that may be orally absorbed. In collaboration with Emisphere Technologies, Inc., we have developed a novel oral formulation of a gallium-containing compound. In the third quarter of 2007, we filed an Investigational New Drug (IND) Exemption with the FDA, and we have completed a single-dose Phase 1 study of this new compound (now known as G4544). The results of this study will be presented at a scientific meeting in the second quarter of 2008. We plan to file new data with the FDA and then to meet with the FDA to discuss the regulatory strategy for approval of G4544 in the U.S. in the second quarter of 2008. We currently intend that G4544 would be approved for cancer-related hypercalcemia, but we also believe that this drug may be useful for treatment of other diseases associated with accelerated bone loss, such as bone metastases, Paget’s disease and osteoporosis. We intend to seek a co-development and commercialization partner for G4544.

On March 7, 2008, we entered into a License Agreement (the Agreement) with Daiichi Sankyo Company, Limited, a Japanese corporation based in Tokyo, Japan, whereby we obtained the exclusive license for tesetaxel. Tesetaxel has been placed on “clinical hold” by the FDA. We plan to develop and implement a response to the FDA that may lift the clinical hold and enable clinical testing to resume. However, there is no guarantee that the FDA will accept this plan, and thus no assurance can be provided that the clinical tests that would be required to secure regulatory approval for marketing can be undertaken.

Pursuant to the agreement, we will pay Daiichi Sankyo $250,000 within 30 days from signing the agreement. We will also pay four equal installments of $562,000 per quarter beginning at the end of the second quarter 2008, and also at the end of each subsequent calendar quarter, until the end of the first quarter 2009, for a total of $2.25 million. The agreement also provides for payments by us upon achievement of certain clinical and regulatory milestones and royalties on net product sales. We will purchase Daiichi’s current inventory of tesetaxel and will be responsible for all future development, commercialization, and manufacturing of the drug.

We maintain an active Business Development program and are seeking to acquire additional drugs in these two programs, and possibly other areas, that will enhance the value of our pipeline to our shareholders.

Summary of Business and Research and Development Programs

Our goal is to establish Genta as a biopharmaceutical leader and preferred partner in the oncology market and eventually, as direct marketers of our products in the United States. Our key strategies in this regard are:

Build on our core competitive strength of oncology development expertise to establish a leadership position in providing biopharmaceutical products for the treatment of cancer.

Expand our pipeline of products in two therapeutic categories, DNA/RNA Medicines and Small Molecules, through internal development, licensing and acquisitions.

Establish our lead antisense compound, Genasense^®, as the preferred chemosensitizing drug for use in combination with other cancer therapies in a variety of human cancer types; and

Establish a sales and marketing presence in the U.S. oncology market.

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Research and Development Programs

DNA/RNA Medicines

A number of technologies have been developed using modifications of DNA or RNA. These agents have been used as scientific tools for laboratory use to identify gene function, as diagnostic probes to evaluate diseases, and – more recently – as potential drugs to treat human diseases. Collectively, these technologies include methods known as antisense, RNA interference, decoys and gene therapy. Founded in 1988, Genta was one of the first companies established to exploit these new technologies for use as potential drugs and we remain broadly committed to research and development of these compounds with a specific focus on cancer medicine (oncology). Our most advanced drugs in our DNA/RNA Medicines program involve the use of antisense technology.

Antisense Technology

Most cellular functions, including whether cells live or die, are carried out by proteins. The genetic code for a protein is contained in DNA, which is made up of bases known as nucleotides that are arranged in a specific sequence. The specificity of the sequence accounts for the production of a specific protein. In order for DNA to produce a protein, an intermediate step is required. In this step, DNA is transcribed into messenger RNA (mRNA). The sequence of mRNA that encodes a protein is oriented in only one direction, which is known as the “sense” orientation.

Antisense drugs are short sequences of chemically modified DNA bases that are called oligonucleotides, or oligos. The oligos are engineered in a sequence that is exactly opposite (hence “anti”) to the “sense” coding orientation of mRNA. Because antisense drugs bind only short regions of the mRNA (rather than the whole message itself), they contain far fewer nucleotides than the whole gene. Moreover, since they are engineered to bind only to the matching sequence on a specific mRNA, antisense drugs have both high selectivity and specificity, which can be used to attack production of a single, disease-causing protein. Genasense^® is an antisense oligo that is designed to block the production of Bcl-2.

We have devoted significant resources towards the development of antisense oligos that contain a phosphorothioate backbone, which is the nucleotide chain comprised of ribose and phosphate groups. However, we also have patents and technologies covering later generation technologies that involve mixed backbone structures, as well as sterically fixed chemical bonds, that may further enhance the molecule’s ability to bind to the intended target. Moreover, we have developed certain formulations that can be used to more efficiently increase the uptake of oligos into cells. Some of these advanced technologies may be incorporated into future products from our DNA/RNA Medicines program.

Genasense^® as a Regulator of Apoptosis (“Programmed Cell Death”)

The programmed death of cells, also known as apoptosis, is necessary to accommodate the billions of new cells that are produced daily and also to eliminate aged or damaged cells. However, abnormal regulation of the apoptotic process can result in disease.

Cancer is commonly associated with the over- or under-production of many types of proteins. These proteins may be directly cancer-causing (i.e., “oncogenic”) or they may contribute to the malignant nature of cancer (for instance, by increasing the longevity of cancer cells or making them more likely to spread throughout the body). The ability to selectively halt the production of certain proteins may make the treatment of certain diseases more effective. Apoptosis is regulated by a large number of proteins, particularly members of the Bcl-2 protein family. In an effort to make existing cancer therapy more effective, we are developing Genasense^® to target and block the production of Bcl-2, a protein that is central to the process of apoptosis.

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Bcl-2 as an Inhibitor of Programmed Cell Death

Normally, when a cancer cell is exposed to treatment, such as with chemotherapy, radiation or immunotherapy, a “death signal” is sent to an organelle within the cell called the mitochondrion. The mitochondrion then releases a factor known as cytochrome C that activates a series of enzymes called caspases. These enzymes cause widespread fragmentation of cellular proteins and DNA, which ultimately causes cell death.

Bcl-2 is normally found in the mitochondrial membrane where it regulates the release of cytochrome C. High levels of Bcl-2 are associated with most types of human cancer, including major hematologic cancers such as lymphomas, myeloma, and leukemia, and solid tumors such as melanoma and cancers of the lung, colon, breast and prostate. In these diseases, Bcl-2 inhibits the release of cytochrome C that would ordinarily be triggered by cancer therapy. Thus, Bcl-2 appears to be a major contributor to both inherent and acquired resistance to cancer treatments. Overcoming resistance to chemotherapy poses a major challenge for cancer treatment.

In cancer cells, Bcl-2 inhibits the process of programmed cell death, thereby allowing cells to survive for much longer than normal cells. Genasense^® has been developed as a chemosensitizing drug to block production of Bcl-2, thereby dramatically increasing the sensitivity of cancer cells to standard cancer treatment.

Genasense^®

Genasense^® has been designed to block the production of Bcl-2. Current science suggests that Bcl-2 is a fundamental – although not sole – cause of the inherent resistance of cancer cells to most types of existing anticancer treatments, such as chemotherapy, radiation or monoclonal antibodies. Blocking Bcl-2, therefore, may enable cancer treatments to be more effective. While Genasense^® has displayed some anticancer activity when used by itself, we believe the drug can be optimally used as a means of amplifying the effectiveness of other cancer therapies, most of which function by triggering apoptosis, which as noted is relatively blocked in cancer cells due to over-production of Bcl-2.

Overview of Preclinical and Clinical studies of Genasense^®

Preclinical Studies

A number of preclinical studies in cell lines and in animals have shown enhancement of tumor cell killing when Bcl-2 antisense was used in combination with standard cancer therapies, including anti-metabolites, alkylating agents, corticosteroids, other cytotoxic chemotherapy, radiation and monoclonal antibodies. Several studies have demonstrated enhanced antitumor activity and durable tumor regression in animals engrafted with human cancers that were treated with Bcl-2 antisense followed by antitumor agents that induce programmed cell death. These studies include human lymphoma, melanoma, breast cancer and prostate cancers, which were treated with Genasense^® in combination with cyclophosphamide, dacarbazine, docetaxel and paclitaxel, respectively.

Clinical Studies

Genasense^® has been in clinical trials since 1995. We currently have efficacy and safety data on over 2,000 patients in Phase 1, Phase 2 and Phase 3 clinical trials that have been conducted in the U.S., Europe, South America and Australia. These studies have included patients with a wide variety of tumor types, including advanced melanoma, several types of acute and chronic leukemia, non-Hodgkin’s lymphoma (NHL), multiple myeloma and cancers of the prostate, colon, lung, breast and other tumor types. Since 2001, Genta and the NCI have jointly approved the initiation of approximately twenty clinical trials. In addition to making Genasense^® available to more physicians and patients, these trials enable the evaluation of Genasense^® in certain diseases (and in combination with other chemotherapy drugs) that would otherwise be outside our initial development priorities. The overall results of clinical trials performed to date suggest that Genasense^® can be administered to cancer patients with acceptable side-effects and that such treatment may reduce the level of Bcl-2 protein in cancer cells. The results of most of these trials have been publicly presented at scientific meetings and published in peer-reviewed scientific journals.

8

In 2007, the results of several randomized trials of Genasense were presented at scientific meetings. In the first quarter of 2007, we announced preliminary results from a study sponsored by the European Organization for the Research and Treatment of Cancer (EORTC) in 118 patients with hormone-refractory prostate cancer who had not previously received chemotherapy. In this study, patients received standard chemotherapy with docetaxel and were randomly assigned to receive Genasense^® or no other treatment. The primary endpoint of this study was to compare response rates, as measured by a decrease of prostate specific antigen (PSA). The preliminary analysis conducted by the EORTC showed that the trial was unlikely to meet its primary endpoint. In the second quarter of 2007, results of a randomized trial sponsored by a large U.S. cooperative oncology group, the Cancer and Leukemia Group B (CALGB), were reported for patients with previously untreated acute myelocytic leukemia. In this trial, 503 patients received standard chemotherapy with daunorubicin and cytosine arabinoside and were randomly assigned to receive Genasense^® or no additional therapy. Results of this trial showed no significant difference in overall survival or in the incidence of complete remission. In the third quarter of 2007, results from a randomized Phase 2 trial of Genasense^® plus docetaxel in 298 patients with non-small cell lung cancer failed to show that Genasense^® increased overall survival, which was the primary endpoint of the trial. In 2007, the CALGB submitted for publication the results of a randomized Phase 2 trial of Genasense^® in patients with extensive small cell lung cancer who had not previously received chemotherapy. The trial included approximately 65 patients who were randomly assigned to receive Genasense^® plus chemotherapy with carboplatin and etoposide or chemotherapy alone. The primary endpoint of the trial was to determine the proportion of patients who survived at least twelve months from the date of randomization. The results from this trial indicated that the addition of Genasense^® did not increase survival at 12 months.

Based on work accomplished to date, we have focused on three indications for Genasense^®: melanoma; CLL; and non-Hodgkin’s lymphoma. In addition, we have sought to develop treatment methods for Genasense^® that do not involve the use of continuous intravenous (IV) infusions.

In August 2007, we announced that the first patients had been enrolled in a confirmatory Phase 3 trial of Genasense^® plus chemotherapy in advanced melanoma. The trial, known as AGENDA, is a randomized, double-blind, placebo-controlled study in which patients are randomly assigned to receive Genasense^® plus dacarbazine (DTIC) or DTIC alone. The study targets patients using LDH as a biomarker to identify patients who may be most likely to respond, based on data obtained from our preceding trial in melanoma. We expect that AGENDA will accrue approximately 300 patients and will be conducted at 75 to 100 sites worldwide. Accrual is expected to take approximately 18 months, with initial data on PFS expected shortly thereafter. In the fourth quarter of 2007, we reported initial results from a non-randomized trial using Genasense^® combined with temozolomide (Temodar®) plus Abraxane® (albumen bound paclitaxel).

While our appeal in CLL has been pending with FDA, we have deferred making a decision on the conduct of future trials in this indication. Finally, although several non-randomized trials have shown activity of Genasense^® in patients with advanced non-Hodgkin’s lymphoma, we have not initiated any registration-quality trials in this indication due to funding constraints.

In the first quarter of 2007, we completed a trial using a concentrated solution of Genasense^® administered by bolus subcutaneous (SC) injection. This trial showed that a total dose of 225 mg could be administered as a single SC injection, which is approximately equivalent to the daily dose used in the Phase 3 trial of Genasense^® in CLL. The limiting reaction in this study was a localized and reversible skin rash. In 2007, we began a new Phase 1 trial of Genasense^® administered as an IV infusion over 2 hours. This trial showed that the maximally tolerable dose was 900 mg, and we have now advanced that study into a trial at that dose administered twice per week. We have also continued to escalate the single dose of Genasense^® up to a total of 1200 mg over 2 hours preceded by a dose of corticosteroids, which appears to ameliorate early infusion reactions. The maximally tolerable dose of Genasense^® with corticosteroids has not yet been established in this ongoing study. We are collecting pharmacokinetic and pharmacodynamic data from these trials in an effort to evaluate whether the prior requirement for treatment by continuous IV infusion can ultimately be eliminated by these more convenient dosing regimens.

For additional background information on the drug application process and clinical trials, see “Government Regulation.”

9

Ganite^®

Ganite^® as a Treatment for Cancer-Related Hypercalcemia

On October 6, 2003, we began marketing Ganite^® for the treatment of cancer-related hypercalcemia. Ganite^® is our first drug to receive marketing approval. The principal patent covering the use of Ganite^® for its approved indication, including potential extensions under Hatch-Waxman provisions in the U.S., expired in April 2005.

Hypercalcemia is a life-threatening condition caused by excessive buildup of calcium in the bloodstream, which may occur in up to 20% of cancer patients. Gallium nitrate was originally studied by the NCI as a new type of cancer chemotherapy. More than 1,000 patients were treated in Phase 1 and Phase 2 trials, and the drug showed promising antitumor activity against NHL, bladder cancer and other diseases. In the course of these studies, gallium nitrate was also shown to strongly inhibit bone resorption. Gallium nitrate underwent additional clinical testing and was approved by the FDA in 1991 as a treatment for cancer-related hypercalcemia. Lower doses of Ganite^® were also tested in patients with less severe bone loss, including bone metastases, a cancer that has spread to bone, Paget’s disease, an affliction of older patients that causes pain and disability, and osteoporosis.

Side effects of Ganite^® include nausea, diarrhea and kidney damage. (A complete listing of Ganite^®’s side effects is contained in the product’s Package Insert that has been reviewed and approved by the FDA.)

In May 2004, we eliminated our sales force and significantly reduced our marketing support for Ganite^®. Since then, we have continued only minimal marketing support of the product. On March 2, 2006, we announced publication of a randomized, double blind, Phase 2 trial that showed Ganite^® was highly effective when compared with Aredia^® (pamidronate disodium; Novartis, Inc.) in hospitalized patients with cancer-related hypercalcemia.

Ganite^® as a Treatment for Non-Hodgkin’s Lymphoma and Other Cancer Types

Based on previously published data, we believe that Ganite^® may also be a useful treatment for patients with certain types of cancer, particularly NHL. Approximately 54,000 new cases of NHL are diagnosed in the United States each year. We have been granted an investigational new drug exemption, or IND, and we have commenced clinical trials of Ganite^® for the treatment of patients with relapsed NHL. In December 2004, we announced the results of a Phase 2 clinical trial in patients with NHL. The results showed that Ganite^® displayed antitumor activity in patients with various types of advanced NHL who had failed to respond or had relapsed from other types of treatment. However, the use of Ganite^® for these indications entailed the use of higher doses than were used in the hypercalcemia trials and as a result, an increased number of serious adverse events were recorded in this trial. In particular, several patients experienced optic neuritis and optic atrophy associated with visual loss, along with other side effects. As a result of the cost savings actions announced in May 2004, spending on the clinical development of Ganite^® as a chemotherapy agent was also reduced. We do not plan further investments in clinical trials for Ganite^® as an anticancer drug, beyond provision of the drug free of charge to investigators.

Other Pipeline Products and Technology Platforms

Oral Gallium

For several years, we have been attempting to develop novel formulations of gallium-containing compounds that can be taken orally. Such formulations might be useful for diseases in which long-term low-dose therapy is deemed desirable, such as bone metastases, Paget’s disease and osteoporosis. Such patients are commonly afflicted by bone pain and susceptibility to fractures. On March 23, 2006, Genta and Emisphere Technologies, Inc. (Emisphere) announced that the two companies had entered into an exclusive worldwide licensing agreement to develop an oral formulation of a gallium-containing compound. A number of candidate formulations have been developed in this collaboration. On August 1, 2007, we announced that, together with Emisphere we submitted an Investigational New Drug Application (IND) to the Endocrinologic and Metabolic Drugs Division of the FDA for a new drug known as G4544. G4544 is a new tablet formulation that enables oral absorption of the active ingredient contained in Ganite^®. The IND was allowed by the FDA in September 2007 and initial dosing of normal volunteers with G4544 began in the third quarter of 2007. The results of this trial will be presented at a scientific meeting in the second quarter of 2008. We believe that G4544 may be useful for treatment of many diseases that are associated with accelerated bone loss, including hypercalcemia, bone metastases, Paget’s disease and osteoporosis.

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Decoys

In addition to antisense compounds from the DNA/RNA Medicines program, we have explored the development of compounds known as “decoys” that are short strands of DNA or RNA which bind proteins known as transcription factors.

In December 2000, Genta licensed patents and technology from the National Institutes of Health (NIH) relating to decoys that target a transcription factor known as the cyclic adenosine monophosphate response element binding protein, or CRE-BP. Due to financial constraints, we have terminated all further work on this compound and canceled the NIH license.

c-myb Antisense

On October 13, 2006, we announced the initiation of a Phase 1 clinical trial using a new anticancer drug derived from our DNA/RNA Medicines program. The new compound (G4460) uses antisense technology to target a proto-oncogene known as c-myb that regulates key functions in cancer cells. Using an accelerated dosing schedule, this study will evaluate dosing regimens, safety, biologic activity, and down-regulation of c-myb in patients with advanced hematologic cancers. The clinical trial is being conducted at the University of Pennsylvania. G4460 has been granted Orphan Drug Designation by the FDA for treatment of patients with chronic myelocytic leukemia (CML). This trial is being sponsored by the University of Pennsylvania, and we have no control over the design or pace of patient accrual into this trial.

Antisense and RNAi Research and Discovery

We have had several other oligonucleotide-based discovery programs and collaborations devoted to the identification of both antisense- and RNAi-based inhibitors of oncology gene targets. However, spending on these research programs was sharply reduced due to financial constraints. We have no current agents that we consider “lead compounds” that would justify advancement into late-stage preclinical testing.

We intend to continue to evaluate novel nucleic acid chemistries, through sponsored research and collaborative agreements, depending upon the availability of resources.

Patents and Proprietary Technology

It is our policy to protect our technology by filing patent applications with respect to technologies important to our business development. To maintain our competitive position, we also rely upon trade secrets, unpatented know-how, continuing technological innovation, licensing opportunities and certain regulatory approvals (such as orphan drug designations).

We own or have licensed several patents and applications to numerous aspects of oligonucleotide technology, including novel compositions of matter, methods of large-scale synthesis, methods of controlling gene expression and methods of treating disease. Genta’s patent portfolio includes approximately 65 granted patents and 66 pending applications in the U.S. and foreign countries. We endeavor to seek appropriate U.S. and foreign patent protection on our oligonucleotide technology.

We have licensed ten U.S. patents relating to Genasense^® and its backbone chemistry that expire between 2008 and 2015. Corresponding patent applications have been filed in three foreign countries. We also own five U.S. patent applications relating to methods of using Genasense^® expected to expire in 2020 and 2026, with approximately 50 corresponding foreign patent applications and granted patents.

Included among Genta’s intellectual property rights are certain rights licensed from the NIH covering phosphorothioate oligonucleotides. We also acquired from the University of Pennsylvania exclusive rights to antisense oligonucleotides directed against the Bcl-2 mRNA, as well as methods of their use for the treatment of cancer. The claims of the University of Pennsylvania patents cover our proprietary antisense oligonucleotide molecules, which target the Bcl-2 mRNA, including Genasense^® and methods employing them. Other related U.S. and corresponding foreign patent applications are still pending.

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The principal patent covering the use of Ganite^® for its approved indication, including extensions under Hatch-Waxman provisions, expired in April 2005.

The patent positions of biopharmaceutical and biotechnology firms, including Genta, can be uncertain and can involve complex legal and factual questions. Consequently, even though we are currently pursuing our patent applications with the United States and foreign patent offices, we do not know whether any of our applications will result in the issuance of any patents, or if any issued patents will provide significant proprietary protection, or even if successful that these patents will not be circumvented or invalidated. Even if issued, patents may be circumvented or challenged and invalidated in the courts. Because some applications in the United States are kept in secrecy until an actual patent is issued, we cannot be certain that others have not filed patent applications directed at inventions covered by our pending patent applications, or that we were the first to file patent applications for such inventions. Thus, we may become involved in interference proceedings declared by the U.S. Patent and Trademark Office (or comparable foreign office or process) in connection with one or more of our patents or patent applications to determine priority of invention, which could result in substantial costs to us, as well as an adverse decision as to priority of invention of the patent or patent application involved.

Competitors or potential competitors may have filed applications for, or have received patents and may obtain additional patents and proprietary rights relating to, compounds or processes competitive with those of ours. Accordingly, there can be no assurances that our patent applications will result in issued patents or that, if issued, the patents will afford protection against competitors with similar technology. We cannot provide assurance that any patents issued to Genta will not be infringed or circumvented by others, nor can there be any assurance that we will obtain necessary patents or technologies or the rights to use such technologies.

In addition, there may be patents which are unknown to us and which may block our ability to make, use or sell our product. We may be forced to defend ourselves against charges of infringement or we may need to obtain expensive licenses to continue our business. See the Risk Factor entitled “We may be unable to obtain or enforce patents, other proprietary rights and licenses to protect our business; we could become involved in litigation relating to our patents or licenses that could cause us to incur additional costs and delay or prevent our introduction of new drugs to market” on page 19.

We also rely upon unpatented trade secrets. No assurances can be given as to whether third parties will independently develop substantially equivalent proprietary information and techniques, or gain access to our trade secrets, or disclose such technologies to the public, or that we can meaningfully maintain and protect unpatented trade secrets.

We require our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors to execute confidentiality agreements with us. These agreements generally provide that all confidential information developed or made known to an individual during the course of the individual’s relationship with Genta shall be kept confidential and shall not be disclosed to third parties except in specific circumstances. In the case of employees, the agreement generally provides that all inventions conceived by the individual shall be assigned to, and made the exclusive property of Genta. There can be no assurance, however, that these agreements will provide meaningful protection to our trade secrets, or guarantee adequate remedies in the event of unauthorized use or disclosure of confidential proprietary information or in the event of an employee’s refusal to assign any patents to Genta in spite of his/her contractual obligation.

Research and Development

In addition to our current focus in the areas described above, we continually evaluate our programs in light of the latest market information and conditions, the availability of third party funding, technological advances, financial liquidity and other factors. As a result of such evaluations, we change our product development plans from time to time and anticipate that we will continue to do so. We recorded research and development expenses before reimbursement of $13.5 million, $28.1 million and $20.9 million during the years ended December 31, 2007, 2006 and 2005, respectively.

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Sales and Marketing

Currently we do not have a sales force. Personnel who had been hired into our sales teams were terminated following workforce reductions that took place in 2004 and 2006, owing to adverse regulatory decisions. W. Lloyd Sanders, who is presently Senior Vice-President, Commercial Operations, was hired in January 2006 to run our sales and marketing programs.

At the present time, we do not contemplate rebuilding a sales and marketing infrastructure in the United States absent favorable regulatory actions on Genasense^®. For international product sales, we may distribute our products through collaborations with third parties.

Manufacturing and Raw Materials

Our ability to conduct clinical trials on a timely basis, to obtain regulatory approvals and to commercialize our products will depend in part upon our ability to manufacture our products, either directly or through third parties, at a competitive cost and in accordance with applicable FDA and other regulatory requirements, including current Good Manufacturing Practice regulations.

We currently rely on third parties to manufacture our products. We have a manufacturing and supply agreement with Avecia Biotechnology, Inc., or Avecia, a leading multinational manufacturer of pharmaceutical products, to supply quantities of Genasense^®.This agreement renews automatically at the end of each year, unless either party gives one-year notice. We are not obligated to purchase further drug substance from Avecia prior to approval of Genasense^®.We believe this agreement is sufficient for our production needs with respect to Genasense^®.

We have a manufacturing and supply agreement with Johnson Matthey Inc. that renews automatically at the end of each year, unless either party gives one-year notice. Under the agreement, we will purchase a minimum of 80% of our requirements for quantities of Ganite^®; however, there are no minimum purchase requirements.

The raw materials that we require to manufacture our drugs are available only from a few suppliers. Under the terms of our manufacturing and supply agreement, Avecia is responsible for procuring the raw materials needed to manufacture Genasense^®. We believe that we have adequately addressed our needs for suppliers of raw materials to manufacture Genasense^® and Ganite^® and meet future customer demand.

Human Resources

As of December 31, 2007, we had 47 employees, 14 of whom hold doctoral degrees. As of that date, there were 28 employees engaged in research, development and other technical activities, 3 in sales and marketing and 16 in administration. None of our employees are represented by a union. Most of our management and professional employees have had prior experience and positions with pharmaceutical and biotechnology companies. We believe we maintain satisfactory relations with our employees and have not experienced interruptions of operations due to employee relations issues.

Government Regulation

Regulation by governmental authorities in the United States and foreign countries is a significant factor in our ongoing research and product development activities and in the manufacture and marketing of our proposed products. All of our therapeutic products will require regulatory approval by governmental agencies prior to commercialization. In particular, human therapeutic products are subject to rigorous preclinical and clinical testing and pre-market approval procedures by the FDA and similar authorities in foreign countries. Various federal, and in some cases, state statutes and regulations, also govern or affect the development, testing, manufacturing, safety, labeling, storage, recordkeeping and marketing of such products. The lengthy process of seeking these approvals, and the subsequent compliance with applicable federal and, in some cases, state statutes and regulations, require substantial expenditures. Any failure by us, our collaborators or our licensees to obtain, or any delay in obtaining, regulatory approvals could adversely affect the marketing of our products and our ability to receive products or royalty revenue.

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The activities required before a new pharmaceutical agent may be marketed in the United States begin with preclinical testing. Preclinical tests include laboratory evaluation of product chemistry and animal studies to assess the potential safety and efficacy of the product and its formulations. The results of these studies must be submitted to the FDA as part of an IND. An IND becomes effective within 30 days of filing with the FDA unless the FDA imposes a clinical hold on the IND. In addition, the FDA may, at any time, impose a clinical hold on ongoing clinical trials. If the FDA imposes a clinical hold, clinical trials cannot commence or recommence, as the case may be, without prior FDA authorization, and then only under terms authorized by the FDA.

Clinical trials are generally categorized into four phases.

Phase 1 trials are initial safety trials on a new medicine in which investigators attempt to establish the dose range tolerated by a small group of patients using single or multiple doses, and to determine the pattern of drug distribution and metabolism.

Phase 2 trials are clinical trials to evaluate efficacy and safety in patients afflicted with a specific disease. Typically, Phase 2 trials in oncology comprise 14 to 50 patients. Objectives may focus on dose-response, type of patient, frequency of dosing or any of a number of other issues involved in safety and efficacy.

In the case of products for life-threatening diseases, the initial human testing is generally done in patients rather than in healthy volunteers. Since these patients are already afflicted with the target disease, it is possible that such studies may provide results traditionally obtained in Phase 2 trials.

Phase 3 trials are usually multi-center, comparative studies that involve larger populations. These trials are generally intended to be pivotal in importance for the approval of a new drug. In oncology, Phase 3 trials typically involve 100 to 1,000 patients for whom the medicine is eventually intended. Trials are also conducted in special groups of patients or under special conditions dictated by the nature of the particular medicine and/or disease. Phase 3 trials often provide much of the information needed for the package insert and labeling of the medicine. A trial is fully enrolled when it has a sufficient number of patients to provide enough data for the statistical proof of efficacy and safety required by the FDA and others. After a sufficient period of follow-up has elapsed to satisfactorily evaluate safety and efficacy, the trials’ results can then be analyzed. Those results are then commonly reported at a scientific meeting, in a medical journal and to the public.

Depending upon the nature of the trial results, a company may then elect to discuss the results with regulatory authorities such as the FDA. If the company believes the data may warrant consideration for marketing approval of the drug, the results of the preclinical and clinical testing, together with chemistry, manufacturing and control information, are then submitted to the FDA for a pharmaceutical product in the form of an NDA. In responding to an NDA, biologics license application or premarket approval application, the FDA may grant marketing approval, request additional information or deny the application if it determines that the application does not satisfy its regulatory approval criteria. There can be no assurance that the approvals that are being sought or may be sought by us in the future will be granted on a timely basis, if at all, or if granted will cover all the clinical indications for which we are seeking approval or will not contain significant limitations in the form of warnings, precautions or contraindications with respect to conditions of use. Phase 3b trials are conducted after submission of a NDA, but before the product’s approval for market launch. Phase 3b trials may supplement or complete earlier trials, or they may seek different kinds of information, such as quality of life or marketing. Phase 3b is the period between submission for approval and receipt of marketing authorization.

After a medicine is marketed, Phase 4 trials provide additional details about the product’s safety and efficacy.

In circumstances where a company intends to develop and introduce a novel formulation of an active drug ingredient already approved by the FDA, clinical and preclinical testing requirements may not be as extensive. Limited additional data about the safety and/or effectiveness of the proposed new drug formulation, along with chemistry and manufacturing information and public information about the active ingredient, may be satisfactory for product approval. Consequently, the new product formulation may receive marketing approval more rapidly than a traditional full new drug application; although no assurance can be given that a product will be granted such treatment by the FDA.

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Under European Union regulatory systems, we may submit requests for marketing authorizations either under a centralized or decentralized procedure. The centralized procedure provides for the grant of a single marketing authorization that is valid for all European Union member states. The decentralized procedure provides for mutual recognition of national approval decisions. Under this procedure, the holder of a national marketing authorization may submit an application to the remaining member states. Within 90 days of receiving the applications and assessment report, each member state must decide whether to recognize approval.

We and our third-party manufacturers are also subject to various foreign, federal, state and local laws and regulations relating to health and safety, laboratory and manufacturing practices, the experimental use of animals and the use, manufacture, storage, handling and disposal of hazardous or potentially hazardous substances, including radioactive compounds and infectious disease agents, used in connection with our research and development work and manufacturing processes. We currently incur costs to comply with laws and regulations and these costs may become more significant.

Competition

In many cases, our products under development will be competing with existing therapies for market share. In addition, a number of companies are pursuing the development of antisense technology and controlled-release formulation technology and the development of pharmaceuticals utilizing such technologies. We compete with fully integrated pharmaceutical companies that have substantially more experience, financial and other resources and superior expertise in research and development, manufacturing, testing, obtaining regulatory approvals, marketing and distribution. Smaller companies may also prove to be significant competitors, particularly through their collaborative arrangements with large pharmaceutical companies or academic institutions. Furthermore, academic institutions, governmental agencies and other public and private research organizations have conducted and will continue to conduct research, seek patent protection and establish arrangements for commercializing products. Such products may compete directly with any products that may be offered by us.

Our competition will be determined in part by the potential indications for which our products are developed and ultimately approved by regulatory authorities. For certain of our potential products, an important factor in competition may be the timing of market introduction of our or our competitors’ products. Accordingly, the relative speed with which we can develop products, complete the clinical trials and approval processes and supply commercial quantities of the products to the market are expected to be important competitive factors. We expect that competition among products approved for sale will be based, among other things, on product efficacy, safety, reliability, availability, price, patent position and sales, marketing and distribution capabilities. The development by others of new treatment methods could render our products under development non-competitive or obsolete.

Our competitive position also depends upon our ability to attract and retain qualified personnel, obtain patent protection or otherwise develop proprietary products or processes and secure sufficient capital resources for the often-substantial period between technological conception and commercial sales.

Item 1A. Risk Factors

You should carefully consider the following risks and all of the other information set forth in this Form 10-K before deciding to invest in shares of our common stock. The risks described below are not the only ones facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations.

If any of the following risks actually occurs, our business, financial condition or results of operations would likely suffer. In such case, the market price of our common stock would likely decline due to the occurrence of any of these risks, and you may lose all or part of your investment.

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Risks Related to Our Business

We may be unsuccessful in our efforts to obtain approval from the FDA or EMEA and commercialize Genasense^® or our other pharmaceutical products.

The commercialization of our pharmaceutical products involves a number of significant challenges. In particular, our ability to commercialize products, such as Ganite^® and Genasense^®, depends, in large part, on the success of our clinical development programs, our efforts to obtain regulatory approvals and our sales and marketing efforts directed at physicians, patients and third-party payors. A number of factors could affect these efforts, including:

• our ability to demonstrate clinically that our products are useful and safe in particular indications;

• delays or refusals by regulatory authorities in granting marketing approvals;

• our limited financial resources and sales and marketing experience relative to our competitors;

• actual and perceived differences between our products and those of our competitors;

• the availability and level of reimbursement for our products by third-party payors;

• incidents of adverse reactions to our products;

• side effects or misuse of our products and the unfavorable publicity that could result; and

• the occurrence of manufacturing, supply or distribution disruptions.

We cannot assure you that Genasense^® will receive FDA or EMEA approval. Our financial condition and results of operations have been and will continue to be significantly affected by FDA and EMEA action with respect to Genasense^®. Any adverse events with respect to FDA and/or EMEA approvals could negatively impact our ability to obtain additional funding or identify potential partners.

For example, in September 2006, an ODAC meeting voted not to recommend approval of Genasense^® in CLL and in December 2006, we received a “non-approvable” notice from the FDA. We believe that our application met the regulatory requirements for approval and in April 2007, we filed a formal appeal of this non-approvable notice pursuant to the FDA’s Formal Dispute Resolution process that exists within the FDA’s Center for Drug Evaluation and Research (CDER). In June 2007, we announced that the initial appeal was denied and that we would further appeal the decision to the next level within CDER. On October 25, 2007, we announced that we had completed the filing of our next-level appeal to CDER. On March 17, 2008, we announced that CDER decided that available data are not adequate to support approval of Genasense^® for treatment of patients with CLL. CDER ackn owledged that complete response, which was the primary endpoint in the pivotal trial, was an appropriate endpoint for assessing efficacy. FDA also agreed that this endpoint was achieved, and that those results supported the efficacy of the drug. However, CDER concluded that at present there was insufficient confirmatory evidence in the NDA to approve the drug. CDER recommended two alternatives for exploring the efficacy of Genasense^® that could provide such confirmatory evidence. One option is to conduct an additional clinical trial. The other option is to collect additional information regarding the clinical course and progression of disease in patients from the previous pivotal trial in order to ascertain whether those data contain sufficient confirmatory evidence. We currently plan to pursue both of these options.

In January 2006, we completed a MAA to the EMEA, which sought approval for use of Genasense^® plus dacarbazine for the treatment of patients with advanced melanoma who had not previously received chemotherapy. In April 2007, we were informed that the Committee for Medicinal Products for Human Use (CHMP) of the EMEA had issued a negative opinion on the MAA and we indicated that we would seek re-examination of the MAA by a Scientific Advisory Group. In July 2007, we received notice from the EMEA that the requested re-examination reaffirmed the negative opinion for approval of our MAA for Genasense^®. We contemplate no further action on the MAA.

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Ultimately, our efforts may not prove to be as effective as those of our competitors. In the United States and elsewhere, our products will face significant competition. The principal conditions on which our product development efforts are focused and some of the other disorders for which we are conducting additional studies, are currently treated with several drugs, many of which have been available for a number of years or are available in inexpensive generic forms. Thus, even if we obtain regulatory approvals, we will need to demonstrate to physicians, patients and third-party payors that the cost of our products is reasonable and appropriate in light of their safety and efficacy, the price of competing products and the relative health care benefits to the patient. If we are unable to demonstrate that the costs of our products are reasonable and appropriate in light of these factors, we will likely be unsuccessful in commercializing our products.

Recurring losses and negative cash flows from operations raise substantial doubt about our ability to continue as a going concern and we may not be able to continue as a going concern.

Our recurring losses from operations and negative cash flows from operations raise substantial doubt about our ability to continue as a going concern and as a result, our independent registered public accounting firm included an explanatory paragraph in its report on our consolidated financial statement for the year ended December 31, 2007 with respect to this uncertainty. Substantial doubt about our ability to continue as a going concern may create negative reactions to the price of the common shares of our stock and we may have a more difficult time obtaining financing.

We have prepared our financial statements on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might be necessary should we be unable to continue in existence.

Our business will suffer if we fail to obtain timely funding.

Our operations to date have required significant cash expenditures. Our future capital requirements will depend on the results of our research and development activities, preclinical studies and clinical trials, competitive and technological advances, and regulatory activities of the FDA and other regulatory authorities. In order to commercialize our products, seek new product candidates and continue our research and development programs, we will need to raise additional funds. In March 2007, we sold 5.0 million shares of the Company’s common stock at a price of $2.16 per share, raising $10.2 million, net of fees and expenses. Cash used in operating activities during 2007 was $31.7 million and at December 31, 2007, we had cash, cash equivalents and marketable securities of $7.8 million. In February 2008, we sold 6.1 million shares of our common stock at a price of $0.50 per share, raising approximately $3.1 million, net of estimated fees and expenses.

We will need to obtain more funding in the future through collaborations or other arrangements with research institutions and corporate partners or public and private offerings of our securities, including debt or equity financing. We may not be able to obtain adequate funds for our operations from these sources when needed or on acceptable terms. Future collaborations or similar arrangements may require us to license valuable intellectual property to, or to share substantial economic benefits with, our collaborators. If we raise additional capital by issuing additional equity or securities convertible into equity, our stockholders may experience dilution and our share price may decline. Any debt financing may result in restrictions on our spending.

If we are unable to raise additional funds, we will need to do one or more of the following:

• delay, scale back or eliminate some or all of our research and product development programs;

• license third parties to develop and commercialize products or technologies that we would otherwise seek to develop and commercialize ourselves;

• attempt to sell our company;

• cease operations; or

• declare bankruptcy.

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We will maintain an appropriate level of spending over the upcoming fiscal year, given the uncertainties inherent in our business and our current liquidity position. Presently, with no further financing, we will run out of funds in the second quarter of 2008. We currently do not have any additional financing in place. If we are unable to raise additional financing, we could be required to reduce our spending plans, reduce our workforce, license to others products or technologies we would otherwise seek to commercialize ourselves and sell certain assets. There can be no assurance that we can obtain financing, if at all, on terms acceptable to us.

We have relied on and continue to rely on our contractual collaborative arrangements with research institutions and corporate partners for development and commercialization of our products. Our business could suffer if we are not able to enter into suitable arrangements, maintain existing relationships, or if our collaborative arrangements are not successful in developing and commercializing products.

We have entered into collaborative relationships relating to the conduct of clinical research and other research activities in order to augment our internal research capabilities and to obtain access to specialized knowledge and expertise. Our business strategy depends in part on our continued ability to develop and maintain relationships with leading academic and research institutions and with independent researchers. The competition for these relationships is intense, and we can give no assurances that we will be able to develop and maintain these relationships on acceptable terms.

We also seek strategic alliances with corporate partners, primarily pharmaceutical and biotechnology companies, to help us develop and commercialize drugs. Various problems can arise in strategic alliances. A partner responsible for conducting clinical trials and obtaining regulatory approval may fail to develop a marketable drug. A partner may decide to pursue an alternative strategy or focus its efforts on alliances or other arrangements with third parties. A partner that has been granted marketing rights for a certain drug within a geographic area may fail to market the drug successfully. Consequently, strategic alliances that we may enter into may not be scientifically or commercially successful. In this regard, in April 2002, we entered into a series of agreements relating to the development and commercialization of Genasense^® with Aventis and its affiliates. In November 2004, we received from Aventis a notice of termination of the Collaborative Agreement. In May 2005, we announced that we and Aventis had signed an agreement to terminate our development and commercialization collaboration for Genasense^®.

We cannot control the resources that any collaborator may devote to our products. Any of our present or future collaborators may not perform their obligations as expected. These collaborators may breach or terminate their agreements with us, for instance upon changes in control or management of the collaborator, or they may otherwise fail to conduct their collaborative activities successfully and in a timely manner.

In addition, our collaborators may elect not to develop products arising out of our collaborative arrangements or to devote sufficient resources to the development, regulatory approval, manufacture, marketing or sale of these products. If any of these events occur, we may not be able to develop our products or commercialize our products.

An important part of our strategy involves conducting multiple product development programs. We may pursue opportunities in fields that conflict with those of our collaborators. In addition, disagreements with our collaborators could develop over rights to our intellectual property. The resolution of such conflicts and disagreements may require us to relinquish rights to our intellectual property that we believe we are entitled to. In addition, any disagreement or conflict with our collaborators could reduce our ability to obtain future collaboration agreements and negatively impact our relationship with existing collaborators. Such a conflict or disagreement could also lead to delays in collaborative research, development, regulatory approval or commercialization of various products or could require or result in litigation or arbitration, which would be time consuming and expensive, divert the attention of our management and could have a significant negative impact on our business, financial condition and results of operations.

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We anticipate that we will incur additional losses and we may never be profitable.

We have never been profitable. We have incurred substantial annual operating losses associated with ongoing research and development activities, preclinical testing, clinical trials, regulatory submissions and manufacturing activities. From the period since our inception to December 31, 2007, we have incurred a cumulative net deficit of $438.3 million. We may never achieve revenue sufficient for us to attain profitability. Achieving profitability is unlikely unless Genasense^® receives approval from the FDA or EMEA for commercial sale in one or more indications.

Our business depends heavily on a small number of products.

We currently market and sell one product, Ganite^® and the principal patent covering its use for the approved indication expired in April 2005. If Genasense^® is not approved, if approval is significantly delayed, or if in the event of approval the product is commercially unsuccessful, we do not expect significant sales of other products to offset this loss of potential revenue.

To diversify our product line in the long term, it will be important for us to identify suitable technologies and products for acquisition or licensing and development. If we are unable to identify suitable technologies and products, or if we are unable to acquire or license products we identify, we may be unable to diversify our product line and to generate long-term growth.

We may be unable to obtain or enforce patents, other proprietary rights and licenses to protect our business; we could become involved in litigation relating to our patents or licenses that could cause us to incur additional costs and delay or prevent our introduction of new drugs to market.

Our success will depend to a large extent on our ability to:

• obtain U.S. and foreign patent or other proprietary protection for our technologies, products and processes;

• preserve trade secrets; and

• operate without infringing the patent and other proprietary rights of third parties.

Legal standards relating to the validity of patents covering pharmaceutical and biotechnological inventions and the scope of claims made under these types of patents are still developing, and they involve complex legal and factual questions. As a result, our ability to obtain and enforce patents that protect our drugs is highly uncertain. If we are unable to obtain and enforce patents and licenses to protect our drugs, our business, results of operations and financial condition could be adversely affected.

We hold numerous U.S., foreign and international patents covering various aspects of our technology, which include novel compositions of matter, methods of large-scale synthesis and methods of controlling gene expression and methods of treating disease. In the future, however, we may not be successful in obtaining additional patents despite pending or future applications. Moreover, our current and future patents may not be sufficient to protect us against competitors who use similar technology. Additionally, our patents, the patents of our business partners and the patents for which we have obtained licensing rights may be challenged, narrowed, invalidated or circumvented. Furthermore, rights granted under our patents may not be broad enough to cover commercially valuable drugs or processes, and therefore, may not provide us with sufficient competitive advantage with respect thereto.

The pharmaceutical and biotechnology industries have been greatly affected by time-consuming and expensive litigation regarding patents and other intellectual property rights. We may be required to commence, or may be made a party to, litigation relating to the scope and validity of our intellectual property rights or the intellectual property rights of others. Such litigation could result in adverse decisions regarding the patentability of our inventions and products, the enforceability, validity or scope of protection offered by our patents or our infringement of patents held by others. Such decisions could make us liable for substantial money damages, or could bar us from the manufacture, sale or use of certain products. Moreover, an adverse decision may also compel us to seek a license from a third party. The costs of any license may be prohibitive and we may not be able to enter into any required licensing arrangement on terms acceptable to us.

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The cost to us of any litigation or proceeding relating to patent or license rights, even if resolved in our favor, could be substantial. Some of our competitors may be able to sustain the costs of complex patent or licensing litigation more effectively than we can because of their substantially greater resources. Uncertainties resulting from the initiation and continuation of any patent or related litigation could have a material adverse effect on our ability to compete in the marketplace.

We also may be required to participate in interference proceedings declared by the U.S. Patent and Trademark Office in opposition or similar proceedings before foreign patent offices and in International Trade Commission proceedings aimed at preventing the importation of drugs that would compete unfairly with our drugs. These types of proceedings could cause us to incur considerable costs.

The principal patent covering the use of Ganite^® for its approved indication, including Hatch-Waxman extensions, expired in April 2005.

Genta’s patent portfolio includes approximately 65 granted patents and 66 pending applications in the U.S. and foreign countries. We endeavor to seek appropriate U.S. and foreign patent protection on our oligonucleotide technology.

We have licensed ten U.S. patents relating to Genasense^® and its backbone chemistry that expire between 2008 and 2015. Corresponding patent applications have been filed in three foreign countries. We also own five U.S. patent applications relating to methods of using Genasense^® expected to expire in 2020 and 2026, with approximately 50 corresponding foreign patent applications and granted patents.

Most of our products are in an early stage of development, and we may never receive regulatory approval for these products.

Most of our resources have been dedicated to the research and development of potential antisense pharmaceutical products such as Genasense^®, based upon oligonucleotide technology. While we have demonstrated the activity of antisense oligonucleotide technology in model systems in vitro and in animals, Genasense^® is our only antisense product to have been tested in humans. Several of our other technologies that serve as a possible basis for pharmaceutical products are only in preclinical testing. Results obtained in preclinical studies or early clinical investigations are not necessarily indicative of results that will be obtained in extended human clinical trials. Our products may prove to have undesirable and unintended side effects or other characteristics that may prevent our obtaining FDA or foreign regulatory approval for any indication. In addition, it is possible that research and discoveries by others will render our oligonucleotide technology obsolete or noncompetitive.

We will not be able to commercialize our product candidates if our preclinical studies do not produce successful results or if our clinical trials do not demonstrate safety and efficacy in humans.

Our success will depend on the success of our currently ongoing clinical trials and subsequent clinical trials that have not yet begun. It may take several years to complete the clinical trials of a product, and a failure of one or more of our clinical trials can occur at any stage of testing. We believe that the development of each of our product candidates involves significant risks at each stage of testing. If clinical trial difficulties and failures arise, our product candidates may never be approved for sale or become commercially viable. We do not believe that any of our product candidates have alternative uses if our current development activities are unsuccessful.

There are a number of difficulties and risks associated with clinical trials. These difficulties and risks may result in the failure to receive regulatory approval to sell our product candidates or the inability to commercialize any of our product candidates. The possibility exists that:

• we may discover that a product candidate does not exhibit the expected therapeutic results in humans, may cause harmful side effects or have other unexpected characteristics that may delay or preclude regulatory approval or limit commercial use if approved;

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• the results from early clinical trials may not be statistically significant or predictive of results that will be obtained from expanded, advanced clinical trials;

• institutional review boards or regulators, including the FDA, may hold, suspend or terminate our clinical research or the clinical trials of our product candidates for various reasons, including noncompliance with regulatory requirements or if, in their opinion, the participating subjects are being exposed to unacceptable health risks;

• subjects may drop out of our clinical trials;

• our preclinical studies or clinical trials may produce negative, inconsistent or inconclusive results, and we may decide, or regulators may require us, to conduct additional preclinical studies or clinical trials; and

• the cost of our clinical trials may be greater than we currently anticipate.

For example, in November 2004, we reported that our randomized Phase 3 clinical trial of Genasense^® in patients with multiple myeloma did not meet its primary endpoint. In December 2006, we announced that we had been notified that preliminary results from a randomized Phase 3 trial of chemotherapy with or without Genasense^® in patients with AML suggested the study was unlikely to meet its primary endpoint. In February 2007, we announced that preliminary results from a randomized Phase 2 study of Genasense^® plus chemotherapy in patients with advanced prostate cancer showed no between-group difference in prostate-specific antigen. While follow-up and analyses of the AML and prostate trials are continuing, we do not believe any of these trials will support regulatory approval of Genasense^® in these indications. Similarly negative results were reported in 2007 from randomized Phase 2 trials that were conducted in patients with advanced non small cell lung cancer and also in patients with small cell lung cancer.

We cannot assure you that our ongoing preclinical studies and clinical trials will produce successful results in order to support regulatory approval of Genasense^® in any territory or for any indication. Failure to obtain approval, or a substantial delay in approval of Genasense^® for these or any other indications would have a material adverse effect on our results of operations and financial condition.

Clinical trials are costly and time consuming and are subject to delays; our business would suffer if the development process relating to our products were subject to meaningful delays.

Clinical trials are very costly and time-consuming. The length of time required to complete a clinical study depends upon many factors, including but not limited to the size of the patient population, the ability of patients to get to the site of the clinical study, the criteria for determining which patients are eligible to join the study and other issues. Delays in patient enrollment and other unforeseen developments could delay completion of a clinical study and increase its costs, which could also delay any eventual commercial sale of the drug that is the subject of the clinical trial.

Our commencement and rate of completion of clinical trials also may be delayed by many other factors, including the following:

• inability to obtain sufficient quantities of materials for use in clinical trials;

• inability to adequately monitor patient progress after treatment;

• unforeseen safety issues;

• the failure of the products to perform well during clinical trials; and

• government or regulatory delays.

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If we fail to obtain the necessary regulatory approvals, we cannot market and sell our products in the United States.

The FDA imposes substantial pre-market approval requirements on the introduction of pharmaceutical products. These requirements involve lengthy and detailed preclinical and clinical testing and other costly and time-consuming procedures. Satisfaction of these requirements typically takes several years or more depending upon the type, complexity and novelty of the product. We cannot apply for FDA approval to market any of our products under development until preclinical and clinical trials on the product are successfully completed. Several factors could prevent successful completion or cause significant delays of these trials, including an inability to enroll the required number of patients or failure to demonstrate adequately that the product is safe and effective for use in humans. If safety concerns develop, the FDA could stop our trials before completion. We may not market or sell any product for which we have not obtained regulatory approval. For example, in December 2006, we received a “non-approvable” notice from the FDA of an NDA that sought accelerated approval for the use of Genasense^® in combination with fludarabine plus cyclophosphamide for the treatment of patients with relapsed or refractory CLL who had previously received fludarabine.

We cannot assure you that the FDA will ever approve the use of our products that are under development. If the patient populations for which our products are approved are not sufficiently broad, or if approval is accompanied by unanticipated labeling restrictions, the commercial success of our products could be limited and our business, results of operations and financial condition could consequently be materially adversely affected.

If the third party manufacturers upon which we rely fail to produce our products in the volumes that we require on a timely basis, or to comply with stringent regulations applicable to pharmaceutical drug manufacturers, we may face delays in the commercialization of, or be unable to meet demand for, our products and may lose potential revenues.

We do not manufacture any of our products or product candidates and we do not plan to develop any capacity to do so. We have contracted with third-party manufacturers to manufacture Ganite^® and Genasense^®. The manufacture of pharmaceutical products requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Manufacturers of pharmaceutical products often encounter difficulties in production, especially in scaling up initial production. These problems include difficulties with production costs and yields, quality control and assurance and shortages of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations. Our third-party manufacturers may not perform as agreed or may terminate their agreements with us.

In addition to product approval, any facility in which Genasense^® is manufactured or tested for its ability to meet required specifications must be approved by the FDA and/or the EMEA before it can manufacture Genasense^®. Failure of the facility to be approved could delay the approval of Genasense^®.

We do not currently have alternate manufacturing plans in place. The number of third-party manufacturers with the expertise, required regulatory approvals and facilities to manufacture bulk drug substance on a commercial scale is limited, and it would take a significant amount of time to arrange for alternative manufacturers. If we need to change to other commercial manufacturers, the FDA and comparable foreign regulators must approve these manufacturers’ facilities and processes prior to our use, which would require new testing and compliance inspections, and the new manufacturers would have to be educated in or independently develop the processes necessary for the production of our products.

Any of these factors could cause us to delay or suspend clinical trials, regulatory submissions, required approvals or commercialization of our products or product candidates, entail higher costs and result in our being unable to effectively commercialize our products. Furthermore, if our third-party manufacturers fail to deliver the required commercial quantities of bulk drug substance or finished product on a timely basis and at commercially reasonable prices, and we were unable to promptly find one or more replacement manufacturers capable of production at a substantially equivalent cost, in substantially equivalent volume and on a timely basis, we would likely be unable to meet demand for our products and we would lose potential revenues.

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Even if we obtain regulatory approval, we will be subject to ongoing regulation, and any failure by us or our manufacturers to comply with such regulation could suspend or eliminate our ability to sell our products.

Ganite^®, Genasense^® (if it obtains regulatory approval), and any other product we may develop will be subject to ongoing regulatory oversight, primarily by the FDA. Failure to comply with post-marketing requirements, such as maintenance by us or by the manufacturers of our products of current Good Manufacturing Practices as required by the FDA, or safety surveillance of such products or lack of compliance with other regulations could result in suspension or limitation of approvals or other enforcement actions. Current Good Manufacturing Practices are FDA regulations that define the minimum standards that must be met by companies that manufacture pharmaceuticals and apply to all drugs for human use, including those to be used in clinical trials, as well as those produced for general sale after approval of an application by the FDA. These regulations define requirements for personnel, buildings and facilities, equipment, control of raw materials and packaging components, production and process controls, packaging and label controls, handling and distribution, laboratory controls and recordkeeping. Furthermore, the terms of any product candidate approval, including the labeling content and advertising restrictions, may be so restrictive that they could adversely affect the marketability of our product candidates. Any such failure to comply or the application of such restrictions could limit our ability to market our product candidates and may have a material adverse effect on our business, results of operations and financial condition. Such failures or restrictions may also prompt regulatory recalls of one or more of our products, which could have material and adverse effects on our business.

The raw materials for our products are produced by a limited number of suppliers, and our business could suffer if we cannot obtain needed quantities at acceptable prices and qualities.

The raw materials that we require to manufacture our drugs, particularly oligonucleotides, are available from only a few suppliers. If these suppliers cease to provide us with the necessary raw materials or fail to provide us with an adequate supply of materials at an acceptable price and quality, we could be materially adversely affected.

If third-party payors do not provide coverage and reimbursement for use of our products, we may not be able to successfully commercialize our products.

Our ability to commercialize drugs successfully will depend in part on the extent to which various third-party payors are willing to reimburse patients for the costs of our drugs and related treatments. These third-party payors include government authorities, private health insurers and other organizations, such as health maintenance organizations. Third-party payors often challenge the prices charged for medical products and services. Accordingly, if less costly drugs are available, third-party payors may not authorize or may limit reimbursement for our drugs, even if they are safer or more effective than the alternatives. In addition, the federal government and private insurers have changed and continue to consider ways to change the manner in which health care products and services are provided and paid for in the United States. In particular, these third-party payors are increasingly attempting to contain health care costs by limiting both coverage and the level of reimbursement for new therapeutic products. In the future, it is possible that the government may institute price controls and further limits on Medicare and Medicaid spending. These controls and limits could affect the payments we collect from sales of our products. Internationally, medical reimbursement systems vary significantly, with some countries requiring application for, and approval of, government or third-party reimbursement. In addition, some medical centers in foreign countries have fixed budgets, regardless of levels of patient care. Even if we succeed in bringing therapeutic products to market, uncertainties regarding future health care policy, legislation and regulation, as well as private market practices, could affect our ability to sell our products in quantities, or at prices, that will enable us to achieve profitability.

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Our business exposes us to potential product liability that may have a negative effect on our financial performance and our business generally.

The administration of drugs to humans, whether in clinical trials or commercially, exposes us to potential product and professional liability risks, which are inherent in the testing, production, marketing and sale of human therapeutic products. Product liability claims can be expensive to defend and may result in large judgments or settlements against us, which could have a negative effect on our financial performance and materially and adversely affect our business. We maintain product liability insurance (subject to various deductibles), but our insurance coverage may not be sufficient to cover claims. Furthermore, we cannot be certain that we will always be able to maintain or increase our insurance coverage at an affordable price. Even if a product liability claim is not successful, the adverse publicity and time and expense of defending such a claim may interfere with or adversely affect our business and financial performance.

We may incur a variety of costs to engage in future acquisitions of companies, products or technologies, and the anticipated benefits of those acquisitions may never be realized.

As a part of our business strategy, we may make acquisitions of, or significant investments in, complementary companies, products or technologies, although no significant acquisition or investments are currently pending. Any future acquisitions would be accompanied by risks such as:

• difficulties in assimilating the operations and personnel of acquired companies;

• diversion of our management’s attention from ongoing business concerns;

• our potential inability to maximize our financial and strategic position through the successful incorporation of acquired technology and rights into our products and services;

• additional expense associated with amortization of acquired assets;

• maintenance of uniform standards, controls, procedures and policies; and

• impairment of existing relationships with employees, suppliers and customers as a result of the integration of new management personnel.

We cannot guarantee that we will be able to successfully integrate any business, products, technologies or personnel that we might acquire in the future, and our failure to do so could harm our business.

We face substantial competition from other companies and research institutions that are developing similar products, and we may not be able to compete successfully.

In many cases, our products under development will be competing with existing therapies for market share. In addition, a number of companies are pursuing the development of antisense technology and controlled-release formulation technology and the development of pharmaceuticals utilizing such technologies. We compete with fully integrated pharmaceutical companies that have more substantial experience, financial and other resources and superior expertise in research and development, manufacturing, testing, obtaining regulatory approvals, marketing and distribution. Smaller companies may also prove to be significant competitors, particularly through their collaborative arrangements with large pharmaceutical companies or academic institutions. Furthermore, academic institutions, governmental agencies and other public and private research organizations have conducted and will continue to conduct research, seek patent protection and establish arrangements for commercializing products. Such products may compete directly with any products that may be offered by us.

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Our competition will be determined in part by the potential indications for which our products are developed and ultimately approved by regulatory authorities. For certain of our potential products, an important factor in competition may be the timing of market introduction of our or our competitors’ products. Accordingly, the relative speed with which we can develop products, complete the clinical trials and approval processes and supply commercial quantities of the products to the market are expected to be important competitive factors. We expect that competition among products approved for sale will be based, among other things, on product efficacy, safety, reliability, availability, price, patent position and sales, marketing and distribution capabilities. The development by others of new treatment methods could render our products under development non-competitive or obsolete.

Our competitive position also depends upon our ability to attract and retain qualified personnel, obtain patent protection or otherwise develop proprietary products or processes and secure sufficient capital resources for the often-substantial period between technological conception and commercial sales. We cannot assure you that we will be successful in this regard.

We are dependent on our key executives and scientists, and the loss of key personnel or the failure to attract additional qualified personnel could harm our business.

Our business is highly dependent on our key executives and scientific staff. The loss of key personnel or the failure to recruit necessary additional or replacement personnel will likely impede the achievement of our development objectives. There is intense competition for qualified personnel in the pharmaceutical and biotechnology industries, and there can be no assurances that we will be able to attract and retain the qualified personnel necessary for the development of our business.

Risks Related to Outstanding Litigation

The outcome of and costs relating to the pending shareholder class action and shareholder derivative actions are uncertain.

In 2004, numerous complaints were filed in the United States District Court for the District of New Jersey, or the Court, against us and certain of our principal officers on behalf of purported classes of the Company’s shareholders who purchased its securities during several class periods. The complaints were consolidated into a single action and alleged that the Company and certain of its principal officers violated the federal securities laws by issuing materially false and misleading statements regarding Genasense^® for the treatment of malignant melanoma that had the effect of artificially inflating the market price of the Company’s securities. The shareholder class action complaint sought monetary damages in an unspecified amount and recovery of plaintiffs’ costs and attorneys’ fees. We reached an agreement with plaintiffs to settle the class action litigation in consideration for the issuance of 2.0 million shares of common stock of the Company (adjusted for any subsequent event that results in a change in the number of shares outstanding as of January 31, 2007) and $18.0 million in cash for the benefit of plaintiffs and the shareholder class. The cash portion of the proposed settlement will be covered by our insurance carriers. Effective June 25, 2007, we and the plaintiffs executed a written Stipulation and Agreement of Settlement which was filed with the Court on August 31, 2007, seeking preliminary approval. The unopposed Motion for Preliminary Approval of Settlement was granted on October 30, 2007, and the Court issued final approval of the Settlement at the Settlement Fairness Hearing on March 3, 2008.

In addition, two separate shareholder derivative actions were filed against the directors and certain officers of Genta in New Jersey State and Federal courts. The Federal shareholder derivative action was consolidated with the securities action.

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We reached a final agreement with the Federal shareholder derivative plaintiffs to settle the Federal shareholder derivative action. On October 10, 2006, the United States District Court for the District of New Jersey gave preliminary approval to the parties’ settlement agreement. On May 7, 2007, the proposed settlement received final approval from the Court. On October 31, 2006, we and the defendants entered into a Release and Settlement Agreement with our insurance carrier, pursuant to which our insurance covered the $200,000 payment for plaintiffs’ attorney fees, the costs of notice to shareholders required by the Court’s preliminary approval order and defense costs incurred in connection with the action and this amount was paid by our insurance carrier during the three months ended June 30, 2007.

We have continued to deny all of the allegations in all of these proceedings, and settlement and potential settlement do not constitute an admission of guilt or liability.

Based on facts substantially similar to those asserted in the shareholder class actions, the State derivative plaintiffs claimed that defendants had breached their fiduciary duties to the shareholders and committed other violations of New Jersey law. On February 9, 2006, the Superior Court of New Jersey dismissed the plaintiffs’ derivative complaint in the New Jersey State case based in part on plaintiffs’ failure to make a pre-suit demand on Genta’s Board of Directors and in part based on plaintiffs’ failure to state a cause of action. Plaintiffs’ motion for reconsideration was denied and they filed a notice of appeal. On December 11, 2006, plaintiffs filed their appellate brief and on January 18, 2007, we filed our response. In view of the settlement of the Federal derivative action, on June 4, 2007, we filed a motion to dismiss plaintiffs’ appeal. That motion was granted on June 25, 2007.

In February 2007, a complaint against us was filed in the Superior Court of New Jersey by Howard H. Fingert, M.D., a former employee of Genta. The complaint alleges, among other things, breach of contract as to our stock option plan and as to a consulting agreement allegedly entered into by us and Dr. Fingert subsequent to termination of Dr. Fingert’s employment with us, breach of implied covenant of good faith and fair dealing with respect to our stock option plan and the alleged consulting agreement, promissory estoppel with respect to the exercise of stock options and provision of consulting services after termination of employment, and fraud and negligent misrepresentation with respect to exercise of stock options and provision of consulting services after termination of employment. The complaint seeks monetary damages, including punitive and consequential damages. We filed an answer to the complaint on May 29, 2007, and on August 8, 2007, filed a request for production of documents. On January 4, 2008, the Court dismissed the complaint without prejudice due to Dr. Fingert’s failure to produce the requested discovery. Dr. Fingert has 90 days in which to move to vacate the order. We deny the allegations in the complaint and intend to vigorously defend this lawsuit.

In November 2007, a complaint against us was filed in the United States District Court for the District of New Jersey by Ridge Clearing & Outsourcing Solutions, Inc. The complaint alleges, among other things, that we caused or contributed to losses suffered by one of our shareholders which have been incurred by Ridge. Our Answer and Affirmative Defenses were filed on February 27, 2008 to respond to the complaint. We deny the allegations in the complaint and intend to vigorously defend this lawsuit.

Risks Related to Our Common Stock

Provisions in our restated certificate of incorporation and bylaws and Delaware law may discourage a takeover and prevent our stockholders from receiving a premium for their shares.

Provisions in our restated certificate of incorporation and bylaws may discourage third parties from seeking to obtain control of us and, therefore, could prevent our stockholders from receiving a premium for their shares. Our restated certificate of incorporation gives our Board of Directors the power to issue shares of preferred stock without approval of the holders of common stock. Any preferred stock that is issued in the future could have voting rights, including voting rights that could be superior to that of our common stock. The affirmative vote of 66 2/3% of our voting stock is required to approve certain transactions and to take certain stockholder actions, including the amendment of certain provisions of our certificate of incorporation. Our bylaws contain provisions that regulate how stockholders may present proposals or nominate directors for election at annual meetings of stockholders.

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In addition, we are subject to Section 203 of the Delaware General Corporation Law, which contains restrictions on stockholder action to acquire control of us.

On September 16, 2005, we announced that our Board of Directors approved a Stockholder Rights Plan and declared a dividend of one preferred stock purchase right, which we refer to as a Right, for each share of our common stock held of record as of the close of business on September 27, 2005. In addition, Rights shall be issued in respect of all shares of common stock issued after such date. The Rights contain provisions to protect stockholders in the event of an unsolicited attempt to acquire us, including an accumulation of shares in the open market, a partial or two-tier tender offer that does not treat all stockholders equally and other activities that the Board believes are not in the best interests of stockholders. The Rights may discourage a takeover and prevent our stockholders from receiving a premium for their shares.

We have not paid, and do not expect to pay in the future, cash dividends on our common stock.

We have never paid cash dividends on our common stock and do not anticipate paying any such dividends in the foreseeable future. We currently intend to retain our earnings, if any, for the development of our business.

Our stock price is volatile.

The market price of our common stock, like that of the common stock of many other biopharmaceutical companies, has been and likely will continue to be highly volatile. Factors that could have a significant impact on the future price of our common stock include but are not limited to:

• the results of preclinical studies and clinical trials by us or our competitors;

• announcements of technological innovations or new therapeutic products by us or our competitors;

• government regulation;

• developments in patent or other proprietary rights by us or our respective competitors, including litigation;

• fluctuations in our operating results; and

• market conditions for biopharmaceutical stocks in general.

At December 31, 2007, we had 30.6 million shares of common stock outstanding, 2.3 million additional shares reserved for the conversion of convertible preferred stock and the exercise of outstanding options and warrants and 0.6 million additional shares of common stock authorized for issuance and remaining to be granted under our stock option plans. Future sales of shares of our common stock by existing stockholders, holders of preferred stock who might convert such preferred stock into common stock and option and warrant holders who may exercise their options and warrants to purchase common stock also could adversely affect the market price of our common stock. Moreover, the perception that sales of substantial amounts of our common stock might occur could adversely affect the market price of our common stock.

At our Annual Meeting of Shareholders held on July 11, 2007, our shareholders authorized our Board of Directors to effect a reverse stock split of all outstanding shares of common stock, and the Board of Directors subsequently approved the implementation of a reverse stock split at a ratio of one for six shares. On July 12, 2007, we filed a Certificate of Amendment to our Restated Certificate of Incorporation, as amended, with the Delaware Secretary of State to effect the reverse stock split. As of July 12, 2007, the effective date of the reverse stock split, every six shares of “old” common stock were converted into one “new” share of common stock. Upon the open of trading on July 13, 2007, the “new” shares of common stock began trading on the NASDAQ Global Market on a split-adjusted basis. As a result of the 1-for-6 reverse stock split, shares of our common stock outstanding were reduced from 183.7 million shares on a pre-split basis to 30.6 million shares on a post-split basis, or 83%. The resulting decrease in the number of shares of our common stock outstanding could potentially adversely affect the liquidity of our common stock, especially in the case of larger block trades.

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Our common stock may be delisted from the NASDAQ Global Market, or NASDAQ.

On November 2, 2006, we received a notification from the NASDAQ Listing Qualifications Department providing notification that, for the last 30 consecutive business days, the bid price of our common stock had closed below the minimum $1.00 per share requirement for continued inclusion under NASDAQ Marketplace Rule 4450(a)(5), or the Rule. We, in accordance with NASDAQ Marketplace Rule 4450(e)(2), were provided 180 calendar days, or until May 1, 2007, to regain compliance. To regain compliance, the bid price of our common stock had to close at $1.00 per share or more for a minimum of 10 consecutive business days at any time before May 1, 2007.

On May 2, 2007, we announced that we had received a notice of delisting from the NASDAQ Global Market because the closing bid price of our common stock was not in compliance with the $1.00 minimum closing bid price requirement, as set forth in Marketplace Rule 4450(a)(5). At our Annual Meeting held on July 11, 2007, our shareholders authorized our Board of Directors to effect a reverse stock split of all outstanding shares of Common Stock, and the Board of Directors subsequently approved the implementation of a reverse stock split at a ratio of one for six shares. On July 12, 2007, we filed a Certificate of Amendment to our Restated Certificate of Incorporation, as amended, with the Delaware Secretary of State to effect the reverse stock split. As of July 12, 2007, the effective date of the reverse stock split, every six shares of “old” common stock were converted into one “new” share of common stock. Upon the open of trading on July 13, 2007, the “new” shares of common stock began trading on the NASDAQ Global Market on a split-adjusted basis. On July 30, 2007, we announced that we had been formally notified by NASDAQ that we had demonstrated compliance with all NASDAQ Marketplace Rules. As a consequence, the NASDAQ Listing Qualifications Panel determined that our common stock will continue to be listed on the NASDAQ Global Market.

On December 24, 2007, we announced that we received a notification from the NASDAQ Listing Qualifications Department providing notification that, for the last 30 consecutive business days, the bid price of our common stock had closed below the minimum $1.00 per share requirement for continued inclusion under NASDAQ Marketplace Rule 4450(a)(5), or the Rule. We, in accordance with NASDAQ Marketplace Rule 4450(e)(2), were provided 180 calendar days, or until June 16, 2008, to regain compliance.

On January 7, 2008, we received a staff determination letter from The NASDAQ Stock Market (“NASDAQ”) stating that we were not in compliance with the minimum $10,000,000 stockholders’ equity requirement for continued listing set forth in NASDAQ Marketplace Rule 4450(a)(3). The staff determination letter further states that our common stock would be delisted on January 16, 2008, unless we requested a hearing to appeal the determination to delist our common stock to a NASDAQ Listing Qualifications Panel (the “Panel”). We requested such a hearing with the Panel, which automatically stayed the delisting until the Panel reaches a decision. We met with the Panel on February 21, 2008 and it may take up to 30 days after the hearing for the Panel to make a decision on the appeal.

At the hearing, we presented a plan for our continued listing on the NASDAQ Global Market. There can be no assurance that the Panel will grant our request for continued listing on the NASDAQ Global Market. If the Panel determines not to continue to list the Company’s common stock on the NASDAQ Global Market, we may request that the Panel permit us to transfer our common stock to the NASDAQ Capital Market. If transferred to the NASDAQ Capital Market, the Company cannot provide assurance that in the future it will continue to meet the initial listing requirements of the NASDAQ Capital Market.

We cannot provide assurance that the Panel will permit us to transfer our common stock to the NASDAQ Capital Market. If the Panel does not permit us to transfer to the NASDAQ Capital Market and determines to delist us, our common stock may trade on the National Association of Securities Dealers’ OTC Bulletin Board. However, our common stock would not be immediately eligible to trade on the OTC Bulletin Board unless an independent market-maker (not the Company) makes an application to register in and quote the common stock in accordance with the Securities and Exchange Commission’s rules and such application is cleared. In the event of a delisting, we intend to request that a market-maker make an application to register in and quote our common stock on the OTC Bulletin Board, but there can be no assurance that a market–maker will make such application or that such application will be approved.

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We believe that the listing of our common stock on a recognized national trading market, such as NASDAQ, is an important part of our business and strategy. Such a listing helps our stockholders by providing a readily available trading market with current quotations. Without that, stockholders may have a difficult time getting a quote for the sale or purchase of our stock, the sale or purchase of our stock would likely be made more difficult and the trading volume and liquidity of our stock would likely decline. The absence of such a listing may adversely affect the acceptance of our common stock as currency or the value accorded it by other parties. In that regard, the absence of a listing on a recognized national trading market will also affect our ability to benefit from the use of our operations and expansion plans, including for use in licensing agreements, joint ventures, the development of strategic relationships and acquisitions, which are critical to our business and strategy and none of which is currently the subject of any agreement, arrangement or understanding, with respect to any future financing or strategic relationship it may undertake. The delisting from NASDAQ would result in negative publicity and would negatively impact our ability to raise capital in the future.

Item 1B. Unresolved Staff Comments

None

Item 2. Properties

We lease approximately 93,000 square feet of office space in Berkeley Heights, New Jersey. Our annual rental costs for this space are approximately $2.5 million. Our lease on this space terminates in 2010.

Item 3. Legal Proceedings

In 2004, numerous complaints were filed in the United States District Court for the District of New Jersey, or the Court, against Genta and certain of our principal officers on behalf of purported classes of our shareholders who purchased our securities during several class periods. The complaints were consolidated into a single action and alleged that Genta and certain of our principal officers violated the federal securities laws by issuing materially false and misleading statements regarding Genasense^® for the treatment of malignant melanoma that had the effect of artificially inflating the market price of our securities. The shareholder class action complaint sought monetary damages in an unspecified amount and recovery of plaintiffs’ costs and attorneys’ fees. We reached an agreement with plaintiffs to settle the class action litigation in consideration for the issuance of 2.0 million shares of our common stock (adjusted for any subsequent event that results in a change in the number of shares outstanding as of January 31, 2007) and $18.0 million in cash for the benefit of plaintiffs and the shareholder class. The cash portion of the proposed settlement will be covered by our insurance carriers. Effective June 25, 2007, we and the plaintiffs executed a written Stipulation and Agreement of Settlement which was filed with the Court on August 13, 2007, seeking preliminary approval. The unopposed Motion for Preliminary Approval of Settlement was granted on October 30, 2007, and the Court issued final approval of the Settlement at the Settlement Fairness Hearing on March 3, 2008.

We have continued to deny all of the allegations in all of these proceedings, and settlement and potential settlement do not constitute an admission of guilt or liability.

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In February 2007, a complaint against us was filed in the Superior Court of New Jersey by Howard H. Fingert, M.D., a former employee of Genta. The complaint alleges, among other things, breach of contract as to our stock option plan and as to a consulting agreement allegedly entered into by us and Dr. Fingert subsequent to termination of Dr. Fingert’s employment with us, breach of implied covenant of good faith and fair dealing with respect to our stock option plan and the alleged consulting agreement, promissory estoppel with respect to the exercise of stock options and provision of consulting services after termination of employment, and fraud and negligent misrepresentation with respect to exercise of stock options and provision of consulting services after termination of employment. The complaint seeks monetary damages, including punitive and consequential damages. We filed an answer to the complaint on May 29, 2007, and on August 8, 2007, filed a request for production of documents. On January 4, 2008, the Court dismissed the complaint without prejudice due to Dr. Fingert’s failure to produce the requested discovery. Dr. Fingert has 90 days in which to move to vacate the order. We deny the allegations in the complaint and intend to vigorously defend this lawsuit.

In November 2007, a complaint against us was filed in the United States District Court for the District of New Jersey by Ridge Clearing & Outsourcing Solutions, Inc. The complaint alleges, among other things, that we caused or contributed to losses suffered by one of our shareholders which have been incurred by Ridge. Our Answer and Affirmative Defenses were filed on February 27, 2008 to respond to the complaint. We deny the allegations in thecomplaint and intend to vigorously defend this lawsuit.

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders in the quarter ended December 31, 2007.

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PART II

Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock is traded on the NASDAQ National Market under the symbol “GNTA.” The following table sets forth, for the periods indicated, the high and low closing sales prices for the common stock as reported by NASDAQ, adjusted for our 1-for-6 reverse stock split in July 2007.

	High		Low
2007
First Quarter	$	3.36	$	1.86
Second Quarter		2.46		1.68
Third Quarter		1.80		0.80
Fourth Quarter		1.31		0.52
2006
First Quarter	$	20.16	$	8.58
Second Quarter		12.84		7.98
Third Quarter		10.80		2.94
Fourth Quarter		5.28		2.64

Holders

There were 590 holders of record of our common stock as of March 9, 2008. We estimate that there are approximately 22,000 beneficial owners of our common stock.

Dividends

We have never paid cash dividends on our common stock and do not anticipate paying any such dividends in the foreseeable future. We currently intend to retain our earnings, if any, for the development of our business.

Equity Compensation Plan Information

The following table summarizes the number of outstanding options granted to employees and directors, as well as the number of securities remaining available for future issuance, under our equity compensation plans as of December 31, 2007.

Plan category	Number of securities to be issued upon exercise of outstanding options	Weighted-average exercise price of outstanding options		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column)
Equity compensation plans approved by security holders	2,268,272	$	23.43	597,623
Equity compensation plans not approved by security holders	5,413,000		1.39	3,087,000
Total	7,681,272	$	7.89	3,684,623

31

Performance Graph

The following Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing.

The following table compares total Shareholder returns for Genta over the last five years to the NASDAQ Composite Index and the NASDAQ Biotechnology Index assuming a $100 investment made on December 31, 2002. The stock performance shown on the graph below is not necessarily indicative of future price performance.

	12/02	12/03	12/04	12/05	12/06	12/07
Genta Incorporated	100.00	135.63	22.89	18.99	5.75	1.13
NASDAQ Composite	100.00	149.75	164.64	168.60	187.83	205.22
NASDAQ Biotechnology	100.00	146.95	164.05	185.29	183.09	186.22

Use of proceeds

In March 2007, we sold 5.0 million shares of our common stock at a price of $2.16 per share, raising net proceeds of $10.2 million. In September 2006, the Company sold 3.3 million shares of its common stock at a price of $4.74 per share, raising net proceeds of $14.9 million. In March 2006, the Company sold 3.2 million shares of its common stock at a price of $12.90 per share, raising net proceeds of $37.7 million. The net proceeds from the sale of the common stock were used for research and development, the establishment of the AGENDA Phase 3 trial, commercialization expenses, and for general corporate purposes.

Purchases of equity securities by the issuer and affiliated purchasers

None

32

Item 6. Selected Consolidated Financial Data

	Years Ended December 31,
(In thousands, except share data)	2007			2006			2005			2004			2003
Consolidated Statements of Operations Data:
Revenues:
License fees and royalties	$	—		$	—		$	5,241		$	3,022		$	1,045
Development funding		—			—			20,988			12,105			4,194
Product sales – net		580			708			356			(512	)		1,420
Total revenues		580			708			26,585			14,615			6,659
Cost of goods sold		90			108			52			170			404
Provision for excess inventory		—			—			—			1,350			—
Total cost of goods sold		90			108			52			1,520			404
Operating expenses:
Research and development		13,491			28,064			20,902			71,494			83,084
Selling, general and administrative		16,865			25,152			16,100			28,576			29,831
Provision for settlement of litigation, net		(4,240	)		5,280			—			—			—
Write-off of prepaid royalty		—			1,268			—			—			—
Loss on disposition of property and equipment		—			—			4			1,254			3
Total operating expenses – gross		26,116			59,764			37,006			101,324			112,918
sanofi-aventis reimbursement		—			—			(6,090	)		(43,292	)		(55,891	)
Total operating expenses – net		26,116			59,764			30,916			58,032			57,027
Gain on forgiveness of debt		—			—			1,297			11,495			—
Other income/(expense) – net		836			1,454			502			(147	)		669
Loss before income taxes		(24,790	)		(57,710	)		(2,584	)		(33,589	)		(50,103	)
Income tax benefit/(expense)		1,470			929			381			904			(6	)
Net loss	$	(23,320	)	$	(56,781	)	$	(2,203	)	$	(32,685	)	$	(50,109	)
Net loss per basic and diluted share	$	(0.79	)	$	(2.52	)	$	(0.13	)	$	(2.46	)	$	(4.00	)
Shares used in computing net loss per basic and diluted share		29,621			22,553			17,147			13,300			12,516

	As of December 31,
	2007		2006		2005		2004			2003
Consolidated Balance Sheet Data:
Cash, cash equivalents and marketable securities	$	7,813	$	29,496	$	21,282	$	42,247		$	82,929
Working capital		877		12,682		11,703		(4,269	)		81,252
Total assets		29,293		51,778		27,386		50,532			114,675
Total stockholders’ equity		2,931		14,642		15,697		1,752			12,254

33

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Genta Incorporated is a biopharmaceutical company engaged in pharmaceutical research and development. We are dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases. The Company has had recurring annual operating losses since its inception and we expect to incur substantial operating losses due to continued requirements for ongoing and planned research and development activities, pre-clinical and clinical testing, manufacturing activities, regulatory activities and establishment of a sales and marketing organization. From our inception to December 31, 2007, we have incurred a cumulative net deficit of $438.3 million. Our recurring losses from operations and our negative cash flow from operation raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. We expect that such losses will continue at least until our lead product, Genasense^®, receives approval from the FDA or EMEA for commercial sale in one or more indications. Achievement of profitability is currently dependent on the timing of Genasense^® regulatory approvals. We have experienced significant quarterly fluctuations in operating results and we expect that these fluctuations in revenues, expenses and losses will continue.

We had $7.8 million of cash, cash equivalents and marketable securities on hand at December 31, 2007. In March 2007, we sold 5.0 million shares of our common stock at a price of $2.16 per share, raising net proceeds of $10.2 million. Cash used in operating activities during the year ended December 31, 2007, was $31.7 million. On February 13, 2008, we sold 6.1 million shares of our common stock at a price of $0.50 per share, raising approximately $3.1 million, net of estimated fees and expenses.

Irrespective of whether a NDA or MAA for Genasense^® are approved, we anticipate that we will require additional cash in order to maximize the commercial opportunity and continue its clinical development opportunities. Alternatives available to us to sustain our operations include collaborative agreements, equity financing and other financing arrangements with potential corporate partners and other sources. However, there can be no assurance that any such collaborative agreements or other sources of funding will be available on favorable terms, if at all. We will need substantial additional funds before we can expect to realize significant product revenue.

We will maintain an appropriate level of spending over the upcoming fiscal year, given the uncertainties inherent in our business and our current liquidity position. Presently, with no further financing, we will run out of funds in the second quarter of 2008. We currently do not have any additional financing in place. If we are unable to raise additional financing, we could be required to reduce our spending plans, reduce our workforce, license to others products or technologies we would otherwise seek to commercialize ourselves and sell certain assets. There can be no assurance that we can obtain financing, if at all, on terms acceptable to us.

In March 2007, we announced that we had entered into a Supply and Distribution Agreement with IDIS Limited (a privately owned company based in the United Kingdom) whereby IDIS will distribute Ganite^® and Genasense^® on a ‘‘named patient’’ basis. The global agreement covers territories outside the United States. ‘‘Named patient’’ distribution refers to the distribution or sale of a product to a specific healthcare professional for the treatment of an individual patient. IDIS will manage the named patient programs for us.

The IDIS agreement provides that we will supply the two products to IDIS on a consignment basis. We will be paid after sales are made by IDIS, which payment shall be based off of a monthly sales report received from IDIS. We will invoice IDIS based upon this monthly report, which invoice shall be calculated based upon a price minus a fee credited to IDIS. The agreement also provides for distribution by IDIS of a limited amount of drug product free of charge to indigent patients. We intend that a percentage of proceeds from the named patient program will be used to support the compassionate use program. We have agreed to pay IDIS a termination fee in the event we terminate either or both products within the first three years of the agreement. The first sale under this program occurred in 2007.

Our financial results have been and will continue to be significantly affected by FDA and EMEA actions with respect to Genasense^®.

34

In 2003, we submitted a NDA to the FDA in 2003 for the use of Genasense^® plus chemotherapy in patients with advanced melanoma. In May 2004, a majority of the ODAC failed to recommend approval of our NDA. As a consequence, we withdrew the NDA, which allows us to potentially resubmit the application. In October 2006, data from this trial was published in a peer-reviewed journal, which reported statistically significant increases in overall response, complete response, durable response and progression-free survival (PFS). An independent review of the X-rays confirmed the major responses with high concordance. An increase in overall survival by intent-to-treat analysis, which was the study’s primary endpoint, approached but did not reach statistical significance (P=0.077). Our analysis identified a statistically significant treatment interaction for blood levels of an enzyme known as LDH, which was a prospectively specified component of stratification. When this effect was analyzed by treatment arm, survival was shown to be significantly superior for patients with a non-elevated LDH who received Genasense^® (P=0.018; n=508).

In January 2006, we completed a Marketing Authorization Application (MAA) to the European Medicines Agency (EMEA), which sought approval for use of Genasense^® plus dacarbazine for the treatment of patients with advanced melanoma who had not previously received chemotherapy. In April 2007, we were informed that the Committee for Medicinal Products for Human Use (“CHMP”) of the EMEA had issued a negative opinion on the MAA and we indicated that we would seek re-examination of the MAA by a Scientific Advisory Group. In July 2007, we received notice from the EMEA that the requested re-examination reaffirmed the negative opinion for approval of our MAA for Genasense^®. We contemplate no further action on the MAA.

In April 2007, we filed a formal complaint and request for correction of information with the FDA under the Federal Data Quality Act. The complaint challenged a key statistical analysis of our data regarding PFS that was used by FDA at the ODAC meeting in May 2004. At that meeting, ODAC voted unanimously that PFS was an endpoint that would support full approval in the absence of a survival improvement in patients with advanced melanoma. In February 2008, FDA informed us that they did not agree with our opinion that their assessment was flawed. We have not decided whether to pursue this matter further with the FDA.

In August 2007, we announced that the first patients had been enrolled in a confirmatory Phase 3 trial of Genasense^® plus chemotherapy in advanced melanoma. The trial, known as AGENDA, is a randomized, double-blind, placebo-controlled study in which patients are randomly assigned to receive Genasense^® plus dacarbazine (DTIC) or DTIC alone. The study targets patients using LDH as a biomarker to identify patients who may be most likely to respond, based on data obtained from our preceding trial in melanoma. We expect that AGENDA will accrue approximately 300 patients and will be conducted at 75 to 100 sites worldwide. Accrual is expected to take approximately 18 months, with initial data on PFS expected shortly thereafter.

In CLL, we conducted a randomized Phase 3 trial in 241 patients with relapsed or refractory disease who were treated with fludarabine and cyclophosphamide (Flu/Cy) with or without Genasense^®. The trial achieved its primary endpoint: a statistically significant increase (17% vs. 7%; P=0.025) in the proportion of patients who achieved a complete response (CR), defined as a complete or nodular partial response. Patients who achieved this level of response experienced disappearance of predefined disease symptoms, including fever, night sweats, fatigue, abdominal discomfort due to an enlarged spleen and impaired mobility due to swollen lymph nodes. A key secondary endpoint, duration of CR, was also significantly longer for patients treated with Genasense^®, (median not reached but exceeding 36+ months in the Genasense^® group, versus 22 months in the chemotherapy-only group).

Several secondary endpoints were not improved by the addition of Genasense^® including overall response rate (i.e., the percentage of patients who achieved CR plus partial response), time-to-disease progression, or overall survival. Adverse events (irrespective of relation to study drugs) during treatment or within 30 days from last dose of treatment that resulted in death occurred in nine patients treated with Genasense^® plus chemotherapy compared with five patients treated with chemotherapy alone. The percentage of patients who experienced serious adverse events was increased in the Genasense^® arm; however, the percentages of patients who discontinued treatment due to adverse events were equal in the treatment arms. The incidence of certain serious adverse reactions, including but not limited to nausea, fever and catheter-related complications, was increased in patients treated with Genasense^®.

In December 2005, we completed submission of an NDA to the FDA that sought accelerated approval for the use of Genasense^® in combination with fludarabine plus cyclophosphamide for the treatment of patients with relapsed or refractory CLL who had previously received fludarabine.

35

In September 2006, an ODAC meeting voted not to recommend approval of Genasense^® in CLL, and in December 2006, we received a “non-approvable” notice from the FDA. We believe that our application met the regulatory requirements for approval, and in April 2007, we filed an appeal of this non-approvable notice pursuant to the FDA’s Formal Dispute Resolution process that exists within the FDA’s Center for Drug Evaluation and Research (CDER). In June 2007, we announced that the initial appeal was denied and that we would further appeal the decision to the next level within CDER. On October 25, 2007, we announced that we had completed the filing of our next-level formal appeal to CDER. On March 17, 2008, we announced that CDER decided that available data are not adequate to support approval of Genasense^® for treatment of patients with CLL. CDER acknowledged t hat complete response, which was the primary endpoint in the pivotal trial, was an appropriate endpoint for assessing efficacy. FDA also agreed that this endpoint was achieved, and that those results supported the efficacy of the drug. However, CDER concluded that at present there was insufficient confirmatory evidence in the NDA to approve the drug. CDER recommended two alternatives for exploring the efficacy of Genasense^® that could provide such confirmatory evidence. One option is to conduct an additional clinical trial. The other option is to collect additional information regarding the clinical course and progression of disease in patients from the previous pivotal trial in order to ascertain whether those data contain sufficient confirmatory evidence. We currently plan to pursue both of these options.

In December 2006, due to FDA’s non-approval of our NDA for CLL, we initiated a series of steps designed to conserve cash in order to focus on our oncology development operations. We reduced our workforce by 34 positions, or approximately 35%, including the elimination of 18 positions classified as research and development, 9 in sales and marketing and 7 in administration. Severance costs of $0.7 million were recognized in our operating expenses, including $0.3 million in research and development expenses and $0.4 million in selling, general and administrative expenses in the Company’s Consolidated Statements of Operations. Payment of the severance began in January 2007.

In November 2004, we reported that our randomized Phase 3 clinical trial of Genasense^® in patients with multiple myeloma did not meet its primary endpoint. In December 2006, we were notified that preliminary analysis from a randomized Phase 3 trial of chemotherapy with or without Genasense^® in patients with acute myeloid leukemia, (AML), suggested the study was unlikely to meet its primary endpoint. In February 2007, we announced that preliminary results from a randomized Phase 2 study of Genasense^® plus chemotherapy in patients with advanced prostate cancer showed no between-group difference in prostate-specific antigen. While follow-up and analyses of the AML and prostate trials are continuing, we do not believe any of these trials will support regulatory approval of Genasense^® in these indications. Similarly negative results were reported in 2007 from randomized Phase 2 trials that were conducted in patients with advanced non small cell lung cancer and also in patients with small cell lung cancer.

Results of Operations

	Summary Operating Results For the years ended December 31,
										$ Change
($ thousands)	2007			2006			2005			’07 vs. ‘06			’06 vs. ‘05
Revenues:
License fees and royalties	$	—		$	—		$	5,241		$	—		$	(5,241	)
Development funding		—			—			20,988			—			(20,988	)
Product sales – net		580			708			356			(128	)		352
Total revenues		580			708			26,585			(128	)		(25,877	)
Cost of goods sold		90			108			52			(18	)		56
Operating expenses:
Research and development		13,491			28,064			20,902			(14,573	)		7,162
Selling, general and administrative		16,865			25,152			16,100			(8,287	)		9,052
Provision for settlement of litigation, net		(4,240	)		5,280			—			(9,520	)		5,280
Write-off of prepaid royalty		—			1,268			—			(1,268	)		1,268
Loss on disposition of equipment		—			—			4			—			(4	)
Total operating expenses – gross		26,116			59,764			37,006			(33,648	)		22,758
Less: sanofi-aventis reimbursement		—			—			(6,090	)		—			6,090
Total operating expenses – net		26,116			59,764			30,916			(33,648	)		28,848
Gain on forgiveness of debt		—			—			1,297			—			(1,297	)
Other income/(expense), net		836			1,454			502			(618	)		952
Loss before income taxes		(24,790	)		(57,710	)		(2,584	)		32,920			(55,126	)
Income tax benefit		1,470			929			381			541			548
Net loss	$	(23,320	)	$	(56,781	)	$	(2,203	)	$	33,461		$	(54,578	)

36

Total revenues

Total revenues were $0.6 million in 2007 and $0.7 million in 2006 compared with $26.6 million in 2005. License fees and development funding revenues of $26.2 million in 2005 were generated by the accelerated recognition of the initial $10.0 million licensing fee and $40.0 million development funding received from Aventis, a member of the sanofi-aventis Group (Aventis), in 2002, under the Collaborative Agreement between Aventis and us regarding the development and commercialization of Genasense^®. In November 2004, we received from Aventis a notice of termination of the Collaborative Agreement. Under the terms of the Collaborative Agreement, Aventis continued to fund ongoing development activities through May 2005. We had previously determined that, due to the nature of the ongoing development work related to the Collaborative Agreement, the end of the development phase and the fair-value of the undelivered elements were not determinable. Accordingly, we deferred recognition of the initial licensing fee and up-front development funding received from Aventis and recognized these payments on a straight-line basis over the original estimated useful life of the related first-to-expire patent of 115 months. As a result of the notice of termination of the Collaborative Agreement, we determined that the period over which the remaining deferred revenue should be recognized was through May 2005. In May 2005, we announced that we had signed an agreement with Aventis to finalize the termination of our development and commercialization collaboration for Genasense^®.

Product sales-net of Ganite^® were $0.6 million in 2007 compared with $0.7 million in 2006. Product sales-net for 2007 also include sales of $60 thousand of Genasense^® through the “named-patient” program managed for us by IDIS. Product sales-net in 2007 and 2006 included favorable adjustments to a reserve for returns of Ganite^® of $0.1 million and $0.3 million, respectively. Product sales-net of Ganite^® during 2005 were $0.4 million.

Cost of goods sold

Lower cost of goods sold in 2007 than in 2006 is the result of lower sales of Ganite^®, as well as sales of Genasense^® which have no associated inventory cost. Higher cost of goods sold in 2006 than in 2005 is the result of higher product sales of Ganite^®.

Research and development expenses

Research and development expenses were $13.5 million in 2007 compared with $28.1 million in 2006. The prior year included higher manufacturing and other expenses incurred in preparation for the possible commercial launch of Genasense^® and expenses related to regulatory review. The decline in expenses in 2007 reflects the comparison to this higher level of expenses in 2006, as well as the impact of our staff reduction in December 2006. In addition, share-based compensation declined by $0.5 million, (see Note 16 to our Consolidated Financial Statements). Research and development expenses incurred on the Genasense^® project in 2007 were approximately $10.3 million, representing 76% of research and development expenses.

During the fourth quarter of 2007, we revised our estimate of certain accrued expenses in the amount of $4.7 million, since such amount is no longer deemed probable.

Research and development expenses before reimbursement were $28.1 million in 2006, compared with $20.9 million in 2005. This increase is primarily due to expenses incurred in preparation for the production of Genasense^® and expenses related to regulatory review. In addition, expenses in 2006 include the recognition of $1.0 million of share-based compensation expense, resulting from the adoption of SFAS 123R, Share-Based Payment, on January 1, 2006 and $0.3 million of severance expenses as a result of our staff reduction in December 2006 due to the FDA’s non-approval of our NDA for CLL. Research and development expenses incurred on the Genasense^® project in 2006 were approximately $25.5 million, representing 91% of research and development expenses. In 2005, approximately $19.5 million or 93% of research and development expenses before reimbursement were incurred on the Genasense^® project.

Due to the significant risks and uncertainties inherent in the clinical development and regulatory approval processes, the nature, timing and costs of the efforts necessary to complete projects in development are subject to wide variability. Results from clinical trials may not be favorable. Data from clinical trials are subject to varying interpretation and may be deemed insufficient by the regulatory bodies that review applications for marketing approvals. As such, clinical development and regulatory programs are subject to risks and changes that may significantly impact cost projections and timelines.

37

Selling, general and administrative expenses

Selling, general and administrative expenses were $16.9 million in 2007, compared with $25.2 million in 2006. The prior year included a buildup of sales and marketing expenses incurred in preparation for a possible commercial launch of Genasense^®. The decline in expenses in 2007 reflects the comparison to this higher level of expenses in 2006, as well as the impact of our December 2006 staff reduction. In addition, depreciation expense declined by $0.8 million and share-based compensation declined by $1.1 million, (see Note 16 to our Consolidated Financial Statement).

Selling, general and administrative expenses were $25.2 million in 2006 compared to $16.1 million in 2005. This increase is primarily due to sales and marketing expenses incurred in preparation for the anticipated commercial launch of Genasense^® and higher payroll expense resulted from the hiring of an experienced sales and marketing management team throughout 2006. Selling, general and administrative expenses in 2006 also include the recognition of $2.0 million of share-based compensation expense, resulting from the adoption of SFAS 123R and $0.4 million of severance expense as a result of our staff reduction in December 2006.

Provision for settlement of litigation, net

In 2004, numerous legal complaints were filed against Genta and certain of our officers on behalf of certain classes of our shareholders who purchased our securities during several class periods. The complaints were consolidated into a single action against us. We have reached an agreement in principle with plaintiffs to settle the class action litigation in consideration for issuance of 2.0 million shares of our common stock and $18.0 million in cash for the benefit of plaintiffs and the shareholder class. The cash portion of the proposed settlement will be covered by our insurance carriers. Effective June 25, 2007, we and the plaintiffs executed a written Stipulation and Agreement of Settlement which was filed with the Court on August 13, 2007, seeking preliminary approval. The unopposed Motion for Preliminary Approval of Settlement was granted on October 30, 2007, and the Court issued final approval of the Settlement at the Settlement Fairness Hearing on March 3, 2008. In 2006, we recorded an expense of $5.3 million, which was composed of the 2.0 million shares of our common stock valued at a market price of $2.64 on December 31, 2006, (the shares and market price have been adjusted for our one-for-six reverse split in July 2007). This amount will continue to be adjusted based on the market price of our stock until final Court approval of the settlement, at which time, the number of shares to be issued will be fixed and the dollar amount of those shares will be determinable. We also recorded a liability for the settlement of litigation of $23.2 million, which was recorded in accounts payable and accrued expenses and an insurance receivable of $18.0 million, which was recorded in prepaid expenses and other current assets (see Note 20 to our Financial Statements). At December 31, 2007, the 2.0 million shares were valued at a market price of $0.52, resulting in a reduction in the liability for the settlement of litigation of $4.2 million and a lowering of the liability for the settlement of litigation to $19.0 million.

Write-off of prepaid royalty

In December 2000, we recorded $1.3 million as the fair value for our commitment to issue 27,056 shares of common stock to a major university as consideration for an amendment to a license agreement initially executed on August 1, 1991 related to antisense technology licensed from the university. The amendment provided for a reduction in the royalty percentage rate to be paid to the university based on the volume of sales of our products containing the antisense technology licensed from such university. These shares were issued in 2001. On December 15, 2006, we received a non-approvable notice from the FDA for our NDA for the use of Genasense^® plus chemotherapy in patients with CLL. As a result, we accounted for the impairment of these prepaid royalties and recorded a write-off of this asset, (see Note 10 to our Financial Statements).

sanofi-aventis reimbursement

In May 2005, we announced that Genta and Aventis had finalized a termination agreement, providing for no future financial obligations by either party. Consequently, none of the research and development expenses incurred by us after 2005 were reimbursable.

38

Gain on forgiveness of debt

 Gain on forgiveness of debt of $1.3 million in 2005 is the result of the termination of the Collaborative Agreement with Aventis. In 2005, pursuant to the terms of the Collaborative Agreement, $2.8 million of reimbursable costs accrued and owed to us by Aventis were applied against the Line of Credit with Aventis and the remaining balance of $1.3 million was forgiven.

Other income/(expense), net

Other income/(expense), net of $0.8 million in 2007 declined from $1.5 million for the prior year, primarily due to lower interest income, resulting from lower investment balances, along with higher interest expense. Other income/(expense), net of $1.5 million in 2006 favorably compared to other income/(expense), net of $0.5 million in 2005, primarily due to higher interest income, resulting from higher investment balances and realized gains on the maturity of marketable securities.

Income tax benefit

New Jersey has enacted legislation permitting certain corporations located in the state to sell state tax loss carryforwards and state research and development credits. We sold portions of our New Jersey net operating losses and received a payment of $1.5 million in 2007 and $0.9 million in both 2006 and 2005 that is recognized as income tax benefit. In 2005, the benefit was partially offset by $0.5 million of an accrued income tax expense that arose from a State of New Jersey tax audit for the years 2000 through 2004. The State has taken the position that amounts reimbursed to us by Aventis for co-development expenditures during the audit period are subject to New Jersey’s Alternative Minimum Assessment. We appealed this decision to the State, and on February 13, 2008, the State notified us that our appeal had not been granted. We believe the State’s position is unjustified and are considering the option of taking this matter before the Tax Court.

If still available under New Jersey law, we will attempt to sell our remaining tax losses in 2008. The amount of tax losses that we may be able to sell will increase as we incur additional tax losses during 2008. We can not be assured that the New Jersey program will continue next year, nor can we estimate what percentage of our saleable tax benefits New Jersey will permit us to sell, how much money will be received in connection with the sale, if we will be able to find a buyer for our tax benefits or if such funds will be available in a timely manner.

Net loss

Genta incurred a net loss of $23.3 million or $0.79 per share, for 2007, $56.8 million, or $2.52 per share, for 2006, and $2.2 million, or $0.13 per share, for 2005.

The lower net loss in 2007 is primarily due to a comparison with a prior year that reflected a buildup of sales, marketing and manufacturing expenses incurred in anticipation of a possible commercial launch of Genasense^®. In addition, the lower loss in 2007 reflects our staff reduction in December 2006, lower share-based compensation expense, lower depreciation expense and includes a benefit of $4.2 million due to a reduction in the provision for settlement of litigation.

The higher loss in 2006 is primarily due to a comparison with a prior year that included revenues of $26.2 million from the accelerated recognition of the license fee and development funding and $6.1 million from the reimbursement for research and development expenses. In addition, 2006 results reflected higher operating expenses, including spending in anticipation of approval and commercial launch of Genasense^®, $5.3 million for the provision for settlement of litigation, $1.3 million for the write-off of a prepaid royalty and $3.0 million from the implementation of SFAS 123R.

39

Recent Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 141(R), “Business Combinations” (SFAS 141(R)), which replaces FAS 141. SFAS 141(R) establishes principles and requirements for how an acquirer in a business combination recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any controlling interest; recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141(R) is to be applied prospectively to business combinations for which the acquisition date is on or after an entity’s fiscal year that begins after December 15, 2008. We will assess the impact of SFAS 141(R) if and when a future acquisition occurs.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51” (SFAS 160). SFAS 160 establishes new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. Specifically, this statement requires the recognition of a noncontrolling interest (minority interest) as equity in the consolidated financial statements and separate from the parent’s equity. The amount of net income attributable to the noncontrolling interest will be included in consolidated net income on the face of the income statement. SFAS 160 clarifies that changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation are equity transactions if the parent retains its controlling financial interest. In addition, this statement requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. SFAS 160 also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. We do not expect that adoption of this standard will have a material impact on our financial statements.

In December 2007, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin 110 (SAB 110), which permits entities, under certain circumstances, to continue to use the “simplified” method of estimating the expected term of plain options as discussed in SAB No. 107 and in accordance with SFAS 123R. The guidance in this release is effective January 1, 2008. The impact of this standard on the consolidated financial statements is not expected to be material.

In December 2007, the FASB issued EITF Issue No. 07-1, “Accounting for Collaborative Arrangements,” which is effective for calendar year companies on January 1, 2009. The Task Force clarified the manner in which costs, revenues and sharing payments made to, or received by a partner in a collaborative arrangement should be presented in the income statement and set forth certain disclosures that should be required in the partners’ financial statements. We are currently assessing the potential impacts of implementing this standard.

In June 2007, the FASB issued EITF Issue No. 07-3, “Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities,” which is effective for calendar year companies on January 1, 2008. The Task Force concluded that nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities should be deferred and capitalized. Such amounts should be recognized as an expense as the related goods are delivered or the services are performed, or when the goods or services are no longer expected to be provided. We are currently assessing the potential impacts of implementing this standard.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS 159). SFAS 159 permits all entities to choose to elect, at specified election dates, to measure eligible financial instruments at fair value. An entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date and recognize upfront costs and fees related to those items in earnings as incurred and not deferred. SFAS 159 applies to fiscal years beginning after November 15, 2007, with early adoption permitted for an entity that has also elected to apply the provisions of SFAS No. 157, “Fair Value Measurements” (SFAS 160). We do not expect that adoption of this standard will have a material impact on our financial statements.

40

In September 2006, the FASB issued SFAS 157, “Fair Value Measurements” (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States of America and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements. Accordingly, this pronouncement does not require any new fair value measurements. We are required to adopt SFAS 157 beginning January 1, 2008. We do not expect that adoption of this standard will have a material impact on its financial statements.

Critical Accounting Policies

Our significant accounting policies are more fully described in Note 2 to our consolidated financial statements. In preparing our financial statements in accordance with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that, among other things, affect the reported amounts of assets and liabilities and reported amounts of revenues and expenses. These estimates are most significant in connection with our critical accounting policies, namely those of our accounting policies that are most important to the portrayal of our financial condition and results and require management’s most difficult, subjective or complex judgments. These judgments often result from the need to make estimates about the effects of matters that are inherently uncertain. Actual results may differ from those estimates under different assumptions or conditions. We believe that the following represents our critical accounting policies:

• Revenue recognition. Our policy is to recognize revenues under license arrangements when delivery has occurred or services have been rendered, persuasive evidence of an arrangement exists, the fee is fixed and determinable and collectibility is reasonably assured. Royalties are recognized when earned. Consistent with Staff Accounting Bulletin No. 104, “Revenue Recognition”, initial funding of ongoing development received from Aventis, after the achievement of certain research and development milestones were being recognized on a straight-line basis over the original estimated useful life of the related first-to-expire patent of 115 months. On November 8, 2004, we received from Aventis notice of termination of the agreements between Genta and Aventis, with an effective termination date of May 8, 2005. Accordingly, we started recognizing the remaining balance of the initial funding on a straight-line basis over the time period from November 9, 2004 through May 8, 2005 (see Note 5 to our financial statements).

We recognize revenue from product sales when title to product and associated risk of loss has passed to the customer and we are reasonably assured of collecting payment for the sale. All revenue from product sales are recorded net of applicable allowances for returns, rebates and other applicable discounts and allowances. We allow return of our product for up to twelve months after product expiration.

Under our Supply and Distribution Agreement with IDIS Limited, we will supply Ganite^® and Genasense^® to IDIS on a consignment basis. We recognize revenue when IDIS reports that it has delivered product to customers, which is the point in time that title to the product and risk of loss has passed. The first sales under this program occurred during 2007.

• Research and development costs. All such costs are expensed as incurred, including raw material costs required to manufacture drugs for clinical trials. Reimbursements for applicable Genasense^® related costs under the Collaborative Agreement, which terminated in May 2005, were recorded as a reduction to expense in the Consolidated Statements of Operations (see Note 5 to our financial statements).

Liquidity and Capital Resources

At December 31, 2007, we had cash, cash equivalents and marketable securities totaling $7.8 million compared with $29.5 million at December 31, 2006. During 2007, cash used in operating activities was $31.7 million compared with $44.7 million in 2006, reflecting additional spending in the prior year in anticipation of potential commercial approval and product launch of Genasense^®.

On February 13, 2008, the Company sold 6.1 million shares of the Company’s common stock at a price of $0.50 per share, raising approximately $3.1 million, net of estimated fees and expenses.

41

In March 2007, we sold 5.0 million shares of our common stock at a price of $2.16 per share, raising net proceeds of $10.2 million.

At December 31, 2006, cash, cash equivalents and marketable securities of $29.5 million increased from $21.3 million at December 31, 2005, reflecting increased stock issuance during 2006. During 2006, cash flow used in operating activities was $44.7 million compared with $37.0 million in 2005, due to additional spending in 2006 in anticipation of commercial approval and product launch of Genasense^®.

In September 2006, the Company sold 3.3 million shares of its common stock at a price of $4.74 per share, raising $14.9 million, net of fees and expenses.

In March 2006, the Company sold 3.2 million shares of its common stock at a price of $12.90 per share, raising $37.7 million, net of fees and expenses.

In March 2006, the Board of Directors approved an amendment to increase the number of shares of authorized common stock to 250.0 million shares from 150.0 million shares. In June 2006, the Company’s stockholders approved this amendment at the Company’s Annual Meeting of Stockholders.

During 2007, the Company issued notes payable to finance premiums for its corporate insurance policies of $1.1 million at interest rates running from 5.2% to 5.9% and during 2006, $1.2 million at 5.4% to 5.6%. Payments were scheduled for seven or ten equal monthly installments for the notes initiated in 2007 and over seven equal monthly installments for the notes initiated in 2006. The remaining balance on the notes payable was $0.5 million at December 31, 2007 and $0.6 million at December 31, 2006. We will attempt to finance our insurance premiums in 2008.

We will maintain an appropriate level of spending over the upcoming fiscal year, given the uncertainties inherent in our business and our current liquidity position. Presently, with no further financing, we will run out of funds in the second quarter of 2008. We currently do not have any additional financing in place. If we are unable to raise additional financing, we could be required to reduce our spending plans, reduce our workforce, license to others products or technologies we would otherwise seek to commercialize ourselves and sell certain assets. There can be no assurance that we can obtain financing, if at all, on terms acceptable to us.

Irrespective of whether an NDA or MAA for Genasense^® are approved, we will require additional cash in order to maximize this commercial opportunity and continue its clinical development opportunities. We have had discussions with other companies regarding partnerships for the further development and global commercialization of Genasense^®. Additional alternatives available to us to sustain our operations include financing arrangements with potential corporate partners, debt financing, asset-based loans, royalty-based financing, equity financing and other sources. However, there can be no assurance that any such collaborative agreements or other sources of funding will be available on favorable terms, if at all.

We anticipate seeking additional product development opportunities through potential acquisitions or investments. Such acquisitions or investments may consume cash reserves or require additional cash or equity. Our working capital and additional funding requirements will depend upon numerous factors, including: (i) the progress of our research and development programs; (ii) the timing and results of pre-clinical testing and clinical trials; (iii) the level of resources that we devote to sales and marketing capabilities; (iv) technological advances; (v) the activities of competitors; (vi) our ability to establish and maintain collaborative arrangements with others to fund certain research and development efforts, to conduct clinical trials, to obtain regulatory approvals and, if such approvals are obtained, to manufacture and market products and (vii) legal costs and the outcome of outstanding legal proceedings.

42

Contractual Obligations

Future contractual obligations at December 31, 2007 are as follows ($ thousands):

	Total		Less than 1 year		1 - 3 years		3 - 5 years		More than 5 years
Notes payable	$	512	$	512	$	0	$	0	$	0
Uncertain tax positions*	$	776	$	776	$	0	$	0	$	0
Operating lease obligations	$	5,654	$	2,634	$	3,020	$	0	$	0
Total	$	6,942	$	3,922	$	3,020	$	0	$	0

* see Note 13 to the Consolidated Financial Statements

Virtually all of the operating lease obligations result from our lease of approximately 93 thousand square feet of office space in Berkeley Heights, New Jersey. Our lease on this space terminates in 2010.

Not included in the above table are any Genasense^® bulk drug purchase obligations to Avecia per the terms of the Manufacturing and Supply Agreement entered into between Avecia and Genta in December 2002. The agreement calls for Genta to purchase a percentage of its global Genasense^® bulk drug requirements from Avecia during the term of the agreement. Due to the uncertainties regarding the timing of any Genasense^® approval and sales/volume projections, specific obligation amounts cannot be estimated at this time. Due to past purchases of Genasense^® bulk drug substance, the Company has access to sufficient drug for its current needs. In addition, not included in the above table are potential milestone payments to be made to Emisphere and other suppliers of services, since such payments are contingent on the occurrence of certain events.

On March 7, 2008, we entered into a License Agreement (the Agreement) with Daiichi Sankyo Company, Limited, a Japanese corporation based in Tokyo, Japan, whereby we obtained the exclusive license for tesetaxel. Tesetaxel has been placed on “clinical hold” by the FDA. We plan to develop and implement a response to FDA that may lift the clinical hold and enable clinical testing to resume. However, there is no guarantee that FDA will accept this plan, and thus no assurance can be provided that the clinical tests that would be required to secure regulatory approval for marketing can be undertaken.

Pursuant to the agreement, we will pay Daiichi Sankyo $250,000 within 30 days from signing the agreement. We will also pay four equal installments of $562,000 per quarter beginning at the end of the second quarter 2008, and also at the end of each subsequent calendar quarter, until the end of the first quarter 2009, for a total of $2.25 million. The agreement also provides for payments by us upon achievement of certain clinical and regulatory milestones and royalties on net product sales. We will purchase Daiichi’s current inventory of tesetaxel and will be responsible for all future development, commercialization, and manufacturing of the drug.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Our carrying values of cash, marketable securities, accounts payable, accrued expenses and debt are a reasonable approximation of their fair value. The estimated fair values of financial instruments have been determined by us using available market information and appropriate valuation methodologies (see Note 2 to our consolidated financial statements). We have not entered into and do not expect to enter into, financial instruments for trading or hedging purposes. We do not currently anticipate entering into interest rate swaps and/or similar instruments.

Our primary market risk exposure with regard to financial instruments is to changes in interest rates, which would impact interest income earned on such instruments. We have no material currency exchange or interest rate risk exposure as of December 31, 2007. Therefore there will be no ongoing exposure to a potential material adverse effect on our business, financial condition or results of operation for sensitivity to changes in interest rates or to changes in currency exchange rates.

43

Item 8. Financial Statements and Supplementary Data

Genta Incorporated

Index to Financial Statements

Report of Independent Registered Public Accounting Firm	45
Consolidated Balance Sheets as of December 31, 2007 and 2006	46
Consolidated Statements of Operations for the years ended December 31, 2007, 2006 and 2005	47
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2007, 2006 and 2005	48
Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005	49
Notes to Consolidated Financial Statements	50

44

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Genta Incorporated:

We have audited the accompanying consolidated balance sheets of Genta Incorporated and subsidiaries (the “Company”) as of December 31, 2007 and 2006, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Genta Incorporated and subsidiaries as of December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company’s recurring losses from operations and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 2 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As discussed in Note 3 to the consolidated financial statements, the Company adopted Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment, effective January 1, 2006, and Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109, effective January 1, 2007.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2007, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 17, 2008 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

Parsippany, New Jersey

March 17, 2008

45

GENTA INCORPORATED

CONSOLIDATED BALANCE SHEETS

(In thousands, except par value data)

	December 31, 2007			December 31, 2006
ASSETS
Current assets:
Cash and cash equivalents	$	5,814		$	9,554
Marketable securities (Note 4)		1,999			19,942
Accounts receivable – net of allowances of $38 at December 31, 2007 and $42 at December 31, 2006, respectively		31			17
Inventory (Note 7)		225			308
Prepaid expenses and other current assets (Note 8)		19,170			19,997
Total current assets		27,239			49,818
Property and equipment, net (Note 9)		323			271
Other assets		1,731			1,689
Total assets	$	29,293		$	51,778
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses (Note 8 and Note 11)	$	25,850		$	36,494
Notes payable (Note 12)		512			642
Total current liabilities		26,362			37,136
Commitments and contingencies (Note 14 and Note 20)
Stockholders’ equity (Note 15):
Preferred stock, 5,000 shares authorized:
Series A convertible preferred stock, $.001 par value; 8 shares issued and outstanding, liquidation value of $385 at December 31, 2007 and December 31, 2006, respectively		—			—
Series G participating cumulative preferred stock, $.001 par value; 0 shares issued and outstanding at December 31, 2007 and December 31, 2006, respectively		—			—
Common stock, $.001 par value; 250,000 shares authorized, 30,621 and 25,621 shares issued and outstanding at December 31, 2007 and December 31, 2006, respectively		31			26
Additional paid-in capital		441,159			429,553
Accumulated deficit		(438,288	)		(414,968	)
Accumulated other comprehensive income		29			31
Total stockholders’ equity		2,931			14,642
Total liabilities and stockholders’ equity	$	29,293		$	51,778

See accompanying notes to consolidated financial statements.

46

GENTA INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years Ended December 31,
(In thousands, except per share data)	2007			2006			2005
Revenues:
License fees and royalties (Note 3 and Note 5)	$	—		$	—		$	5,241
Development funding (Note 3 and Note 5)		—			—			20,988
Product sales – net		580			708			356
Total revenues		580			708			26,585
Cost of goods sold		90			108			52
Operating expenses:
Research and development		13,491			28,064			20,902
Selling, general and administrative		16,865			25,152			16,100
Provision for settlement of litigation, net (Note 8 and Note 20)		(4,240	)		5,280			—
Write-off of prepaid royalty (Note 10).		—			1,268			—
Loss on disposition of equipment		—			—			4
Total operating expenses – gross		26,116			59,764			37,006
sanofi-aventis reimbursement (Note 5)		—			—			(6,090	)
Total operating expenses – net		26,116			59,764			30,916
Other income/(expense), net:
Gain on forgiveness of debt (Note 5)		—			—			1,297
Gain on maturity of marketable securities		159			310			63
Interest income, net		837			1,216			591
Interest expense		(160	)		(72	)		(152	)
Total other income, net		836			1,454			1,799
Loss before income taxes		(24,790	)		(57,710	)		(2,584	)
Income tax benefit (Note 13)		1,470			929			381
Net loss	$	(23,320	)	$	(56,781	)	$	(2,203	)
Net loss per basic and diluted share	$	(0.79	)	$	(2.52	)	$	(0.13	)
Shares used in computing net loss per basic and diluted share		29,621			22,553			17,147

See accompanying notes to consolidated financial statements.

47

GENTA INCORPORATED

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Years Ended December 31, 2007, 2006 and 2005

	Convertible Preferred Stock				Common Stock			Additional Paid-in Capital		Accumulated Deficit			Deferred Compensation			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
(In thousands)	Shares		Amount		Shares	Amount
Balance at January 1, 2005	10		$	—	15,893	$	16	$	357,793	$	(355,984	)	$	(41	)	$	(32	)	$	1,752
Net loss	—			—	—		—		—		(2,203	)		—			—			(2,203	)
Net change in value of marketable securities	—			—	—		—		—		—			—			92			92
Issuance of common stock, net of issuance costs of $1,521	—			—	3,177		3		16,012		—			—			—			16,015
Other conversions	—			—	22		—		—		—			—			—			—
Compensation expense related to certain stock options issued in 1999 and 2000	—			—	—		—		—		—			41			—			41
Balance at December 31, 2005	10		$	—	19,092	$	19	$	373,805	$	(358,187	)	$	—		$	60		$	15,697
Net loss	—			—	—		—		—		(56,781	)		—			—			(56,781	)
Net change in value of marketable securities	—			—	—		—		—		—			—			(29	)		(29	)
Issuance of common stock, net of issuance costs of $3,125	—			—	3,167		3		37,722		—			—			—			37,725
Issuance of common stock in connection with conversion of Series A preferred stock	(2	)		—	3		—		—		—			—			—			—
Issuance of common stock, net of issuance costs of $925	—			—	3,333		4		14,871		—			—			—			14,875
Issuance of common stock in connection with exercise of stock options	—			—	26		—		156		—			—			—			156
Stock-based compensation expense	—			—	—		—		2,999		—			—			—			2,999
Balance at December 31, 2006	8		$	—	25,621	$	26	$	429,553	$	(414,968	)	$	—		$	31		$	14,642
Net loss	—			—	—		—		—		(23,320	)		—			—			(23,320	)
Net change in value of marketable securities	—			—	—		—		—		—			—			(2	)		(2	)
Issuance of common stock, net of issuance costs of $562	—			—	5,000		5		10,233		—			—			—			10,238
Stock-based compensation expense	—			—	—		—		1,373		—			—			—			1,373
Balance at December 31, 2007	8		$	—	30,621	$	31	$	441,159	$	(438,288	)	$	—		$	29		$	2,931

48

GENTA INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
(In thousands)	2007			2006			2005
Operating activities:
Net loss	$	(23,320	)	$	(56,781	)	$	(2,203	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		170			942			2,074
Loss on disposition of equipment		—			—			4
Non-cash reimbursement of research & development expense (Note 5)		—			—			(6,090	)
Amortization of deferred revenues (Note 5)		—			—			(26,228	)
Share-based compensation (Note 16)		1,373			2,999			—
Provision for sales returns		(133	)		(300	)		—
Gain on maturity of marketable securities		(159	)		(310	)		(63	)
Provision for settlement of litigation, net (Note 8)		(4,240	)		5,280			—
Write-off of prepaid royalty (Note 10)		—			1,268			—
Provision for excess inventory					—			(21	)
Gain on forgiveness of debt (Note 5)					—			(1,297	)
Compensation expense related to certain stock options issued in 1999 and 2000					—			41
Changes in operating assets and liabilities:
Accounts receivable		(14	)		42			(59	)
Inventory		83			88			(21	)
Prepaid expenses and other current assets		627			(142	)		255
Accounts payable and accrued expenses		(6,071	)		2,264			(3,389	)
Other assets		(42	)		(40	)		(29	)
Net cash used in operating activities		(31,726	)		(44,690	)		(37,026	)
Investing activities:
Purchase of marketable securities (Note 4)		(13,900	)		(56,784	)		(21,839	)
Maturities of marketable securities (Note 4)		32,000			49,091			15,784
Purchase of property and equipment		(222	)		(136	)		(56	)
Proceeds from sale of equipment		—			—			34
Net cash provided by (used in) investing activities		17,878			(7,829	)		(6,077	)
Financing activities:
Issuance of common stock, net (Note 15)		10,238			52,691			16,015
Borrowings under note payable (Note 12)		1,155			1,174			1,233
Repayments of note payable (Note 12)		(1,285	)		(1,261	)		(1,320	)
Issuance of common stock upon exercise of stock options (Note 17)		—			155			—
Net cash provided by financing activities		10,108			52,759			15,928
Increase (decrease) in cash and cash equivalents		(3,740	)		240			(27,175	)
Cash and cash equivalents at beginning of year		9,554			9,314			36,489
Cash and cash equivalents at end of year	$	5,814		$	9,554		$	9,314

See accompanying notes to consolidated financial statements.

49

GENTA INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2007, 2006 and 2005

1. Reverse Stock Split

At the Annual Meeting of Genta Incorporated (“Genta” or the “Company”) on July 11, 2007, the Company’s shareholders authorized its Board of Directors to effect a reverse stock split of all outstanding shares of common stock, and the Board of Directors subsequently approved the implementation of a reverse stock split at a ratio of one for six shares, which became effective on July 13, 2007. All share and per share data in these consolidated financial statements and related notes hereto have been retroactively adjusted to account for the effect of the reverse stock split for all periods presented.

2. Organization and Business

Genta Incorporated (“Genta” or the “Company”) is a biopharmaceutical company engaged in pharmaceutical (drug) research and development, its sole reportable segment. The Company is dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases.

The Company has had recurring annual operating losses since its inception. Management expects that such losses will continue at least until its lead product, Genasense^® (oblimersen sodium) Injection, receives approval for commercial sale in one or more indications. Achievement of profitability for the Company is currently dependent on the timing of Genasense^® regulatory approval. Any adverse events with respect to approvals by the U.S. Food and Drug Administration (‘‘FDA’’) and/or European Medicines Agency (‘‘EMEA’’) could negatively impact the Company’s ability to obtain additional funding or identify potential partners.

The Company had $7.8 million of cash, cash equivalents and marketable securities on hand at December 31, 2007. In March 2007, the Company sold 5.0 million shares of its common stock at a price of $2.16 per share, raising net proceeds of $10.2 million. Net cash used in operating activities during 2007 was $31.7 million, which represents an average monthly outflow of $2.6 million.

The Company has prepared its financial statements under the assumption that it is a going concern. The Company’s recurring losses and negative cash flows from operation raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company will require additional cash in order to maximize its commercial opportunities and continue its clinical development opportunities. The Company has had discussions with other companies regarding partnerships for the further development and global commercialization of Genasense^®. Additional alternatives available to the Company to subsequently sustain its operations include financing arrangements with potential corporate partners, debt financing, asset-based loans, royalty-based financings, equity financing and other sources. However, there can be no assurance that any such collaborative agreements or other sources of funding will be available on favorable terms, if at all.

If the Company is unable to raise additional funds, it will need to do one or more of the following:

• delay, scale back or eliminate some or all of the Company’s research and product development programs and sales and marketing activity;

• license third parties to develop and commercialize products or technologies that the Company would otherwise seek to develop and commercialize themselves;

• attempt to sell the Company;

• cease operations; or

• declare bankruptcy.

50

The Company will continue to maintain an appropriate level of spending over the upcoming fiscal year, given the uncertainties inherent in our business and our current liquidity position. Presently, with no further financing, Management projects that it will run out of funds in the second quarter of 2008. The Company currently does not have any additional financing in place. If the Company is unable to raise additional financing, it could be required to reduce its spending plans, reduce its workforce, license to others products or technologies it would otherwise seek to commercialize itself and sell certain assets. There can be no assurance that the Company can obtain financing, if at all, on terms acceptable to it.

3. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements are presented on the basis of accounting principles generally accepted in the United States of America. Such financial statements include the accounts of the Company and all majority-owned subsidiaries. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that affect reported earnings, financial position and various disclosures. Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue from product sales when title to product and associated risk of loss has passed to the customer and the Company is reasonably assured of collecting payment for the sale. All revenue from product sales are recorded net of applicable allowances for returns, rebates and other applicable discounts and allowances. The Company allows return of its product for up to twelve months after product expiration.

Under the Company’s Supply and Distribution Agreement with IDIS, the Company will supply Ganite^® and Genasense^® to IDIS on a consignment basis. The Company recognizes revenue when IDIS reports that it has delivered product to customers, which is the point in time that title to the product and risk of loss has passed. The first sales under this program of $60 thousand occurred during 2007.

In April 2002, the Company entered into a development and commercialization agreement (‘‘Collaborative Agreement’’) with Aventis, a member of the sanofi-aventis group (‘‘Aventis’’). In November 2004, Aventis gave notice to Genta that it was terminating its Collaborative Agreement with the Company. Under the terms of the agreement, Aventis continued to fund ongoing development activities for a six-month period. The Company follows the provisions of the Securities and Exchange Commission’s Staff Accounting Bulletin (‘‘SAB’’) No. 104, Revenue Recognition and Emerging Issues Task Force (‘‘EITF’’) No. 00-21, Accounting for Revenue Arrangements with Multiple Deliverables.

In accordance with EITF No. 00-21 the Company analyzes its multiple element arrangements to determine whether the elements can be separated and accounted for individually as separate units of accounting. The Company recognizes license payments as revenue if the license has stand-alone value and the fair value of the undelivered items can be determined. If the license is considered to have stand-alone value but the fair value on any of the undelivered items cannot be determined, the license payments are recognized as revenue over the period of performance for such undelivered items or services. The Company’s estimate of the period of performance involves management judgment. Amounts received for milestones are recognized upon achievement of the milestone, as long as the milestone is deemed to be substantive and the Company has no other performance obligations.

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The Company determined that, due to the nature of the ongoing development work related to its Collaborative Agreement with Aventis, the end of the development phase and the fair value of the undelivered elements were not determinable. Accordingly, the Company deferred recognition of the initial licensing fee and up-front development funding received from Aventis and recognized these payments on a straight-line basis over the original estimated useful life of the related first-to-expire patent of 115 months. As a result of the notice of termination of the agreement with Aventis, the remaining deferred revenue was recognized over the six-month termination notice period from November 2004 to May 2005.

Research and Development

Research and development costs are expensed as incurred, including raw material costs required to manufacture products for clinical trials. Reimbursements for applicable Genasense^®-related costs under the Collaborative Agreement, which terminated in May 2005, were recorded as a reduction to expenses in the Consolidated Statements of Operations.

In 2006, the Company entered into an exclusive, worldwide licensing agreement with Emisphere Technologies, Inc., (“Emisphere”), to develop an oral formulation of a gallium-containing compound. Under the terms of the agreement, Genta will pay Emisphere up to $24.0 million only upon the achievement of certain milestones during the course of product development and royalties based upon sales. To date, no milestone payments have been made.

Cash, Cash Equivalents and Marketable Securities

The carrying amounts of cash, cash equivalents and marketable securities approximate fair value due to the short-term nature of these instruments. Marketable securities primarily consist of government securities, all of which are classified as available-for-sale. Management determines the appropriate classification of securities at the time of purchase and reassesses the classification at each reporting date.

Property and Equipment

Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets, ranging from three to five years. Leasehold improvements incurred in the renovation of the Company’s corporate offices are being amortized over the remaining life of the leases. The Company’s policy is to evaluate the appropriateness of the carrying value of the undepreciated value of long-lived assets. If such evaluation were to indicate an impairment of assets, such impairment would be recognized by a write-down of the applicable assets.

Inventories

Inventories are stated at the lower of cost or market with cost being determined using the first-in, first-out (FIFO) method.

Income Taxes

The Company uses the liability method of accounting for income taxes. Deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities given the provisions of the enacted tax laws.

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Management records valuation allowances against net deferred tax assets, if based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and when temporary differences become deductible. The Company considers, among other available information, uncertainties surrounding the recoverability of deferred tax assets, scheduled reversals of deferred tax liabilities, projected future taxable income and other matters in making this assessment. The Company reviewed its deferred tax assets and at both December 31, 2007 and December 31, 2006, recorded a valuation allowance to reduce these assets to zero to reflect that, more likely than not, they will not be realized.

In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109” (“FIN 48”), which clarifies the accounting and disclosure for uncertainty in tax positions, as defined. The Company adopted the provisions of FIN 48 as of January 1, 2007 and has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions.

The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to FIN 48. In addition, the Company did not record a cumulative effect adjustment related to the adoption of FIN 48. If such adjustment was recorded, it would have been fully offset by a change in a valuation allowance.

The Company’s policy for recording interest and penalties associated with audits is that penalties and interest expense are recorded in interest expense in the Company’s Consolidated Statements of Operations.

Stock Options

Effective January 1, 2006, Genta adopted the fair value recognition provisions of Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment, (‘‘SFAS 123R’’), using the modified prospective transition method and therefore has not restated results for prior periods. Under the new standard, all share-based payments including grants of employee stock options are recognized in the Consolidated Statement of Operations based on their fair values, as pro-forma disclosure is no longer an alternative. The amount of compensation cost is measured based on the grant-date fair value of the equity instrument issued. The Company utilizes a Black-Scholes option-pricing model to measure the fair value of stock options granted to employees. See Note 16 to our Consolidated Financial Statements for a further discussion on share-based compensation.

Net Loss Per Common Share

Net loss per common share for the year ended December 31, 2007, 2006 and 2005, respectively, are based on the weighted average number of shares of common stock outstanding during the periods. Basic and diluted loss per share are identical for all periods presented as potentially dilutive securities have been excluded from the calculation of the diluted net loss per common share because the inclusion of such securities would be antidilutive. The potentially dilutive securities include 2.3 million 2.1 million and 1.8 million shares in 2007, 2006 and 2005, respectively, reserved for the conversion of convertible preferred stock and the exercise of outstanding options and warrants.

Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS 141(R), “Business Combinations” (“SFAS 141(R)”), which replaces FAS 141. SFAS 141(R) establishes principles and requirements for how an acquirer in a business combination recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any controlling interest; recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141(R) is to be applied prospectively to business combinations for which the acquisition date is on or after an entity’s fiscal year that begins after December 15, 2008. The Company will assess the impact of SFAS 141(R) if and when a future acquisition occurs.

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In December 2007, the FASB issued SFAS 160, “Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51” (“SFAS 160”). SFAS 160 establishes new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. Specifically, this statement requires the recognition of a noncontrolling interest (minority interest) as equity in the consolidated financial statements and separate from the parent’s equity. The amount of net income attributable to the noncontrolling interest will be included in consolidated net income on the face of the income statement. SFAS 160 clarifies that changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation are equity transactions if the parent retains its controlling financial interest. In addition, this statement requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. SFAS 160 also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company does not expect that adoption of this standard will have a material impact on its financial statements.

In December 2007, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin 110 (“SAB 110’), which permits entities, under certain circumstances, to continue to use the “simplified” method of estimating the expected term of plain options as discussed in SAB No. 107 and in accordance with SFAS 123R The guidance in this release is effective January 1, 2008. The impact of this standard on the consolidated financial statements is not expected to be material.

In December 2007, the FASB issued EITF Issue No. 07-1, “Accounting for Collaborative Arrangements,” which is effective for calendar year companies on January 1, 2009. The Task Force clarified the manner in which costs, revenues and sharing payments made to, or received by a partner in a collaborative arrangement should be presented in the income statement and set forth certain disclosures that should be required in the partners’ financial statements. The Company is currently assessing the potential impacts of implementing this standard.

In June 2007, the FASB issued EITF Issue No. 07-3, “Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities,” which is effective for calendar year companies on January 1, 2008. The Task Force concluded that nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities should be deferred and capitalized. Such amounts should be recognized as an expense as the related goods are delivered or the services are performed, or when the goods or services are no longer expected to be provided. The Company is currently assessing the potential impacts of implementing this standard.

In February 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS 159).SFAS 159 permits all entities to choose to elect, at specified election dates, to measure eligible financial instruments at fair value. An entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date and recognize upfront costs and fees related to those items in earnings as incurred and not deferred. SFAS 159 applies to fiscal years beginning after November 15, 2007, with early adoption permitted for an entity that has also elected to apply the provisions of SFAS 157, “Fair Value Measurements”. The Company does not expect that adoption of this standard will have a material impact on its financial statements.

In September 2006, the FASB issued SFAS 157, “Fair Value Measurements”. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States of America and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements. Accordingly, this pronouncement does not require any new fair value measurements. The Company is required to adopt SFAS 157 beginning January 1, 2008. The Company does not expect that adoption of this standard will have a material impact on its financial statements.

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4. Marketable Securities

The carrying amounts of the Company’s marketable securities, which are primarily securities of government-backed agencies, approximate fair value due to the short-term nature of these instruments. The fair value of available-for-sale marketable securities is as follows ($ thousands):

	December 31,
	2007		2006
Cost	$	1,970	$	19,911
Gross unrealized gains		29		31
Gross unrealized losses		—		—
Fair value	$	1,999	$	19,942

The fair value of each marketable security has been compared to its cost and therefore, unrealized gains of approximately $29 thousand and $31 thousand have been recognized in accumulated other comprehensive income in the Company’s Consolidated Balance Sheets at December 31, 2007 and December 31, 2006, respectively.

5. Collaborative Agreement

In April 2002, we entered into a series of agreements with Aventis regarding the development and commercialization of Genasense^®. In November 2004, the Company received from Aventis notice of termination of the agreements between Genta and Aventis. In May 2005, the Company announced that Genta and Aventis had signed an agreement to finalize the termination of their development and commercialization collaboration for Genasense^®. The termination agreement provided for no future financial obligations by either party and the retirement of the Line of Credit established by Aventis to Genta. Pursuant to the terms of the Collaborative Agreement, $2.8 million of reimbursable costs accrued and owed to the Company by Aventis were applied against the Line of Credit and the remaining balance of $1.3 million was forgiven.

Also, as of December 31, 2004, the Company had recorded $26.2 million, net of amortization, in deferred revenues relating to the initial $10.0 million licensing fee and $40.0 million development funding received from Aventis under the Collaborative Agreement. As a result of the notice of termination of the agreements with Aventis, the Company determined that the period over which the remaining deferred revenue should be recognized was through May 2005.

Aventis returned its current inventory of Genasense^® drug supply to Genta. In addition, Genta assumed responsibility for the randomized clinical trial of Genasense^® in combination with docetaxel (Taxotere^®; sanofi-aventis) in patients with hormone-refractory prostate cancer. Among other provisions, the Standstill and Voting Agreement and Registration Rights Agreement that were established pursuant to the Aventis investment in Genta common stock in 2002 did not terminate at that time.

Under the Collaborative Agreement Aventis paid 75% of the U.S. NDA-directed development costs incurred by either Genta or Aventis and 100% of all other development, marketing, and sales costs incurred within the U.S. and elsewhere through May 10, 2005. An analysis of expenses reimbursed during 2005 under the Collaborative Agreement follows ($ thousands):

	Twelve Months Ended December 31, 2005
Research and development expenses, gross	$	20,902
Less expense reimbursement		(6,090	)
Research and development expenses, net	$	14,812

None of the research and development expenses incurred by the Company after May 10, 2005 were reimbursable.

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6. Workforce reduction

In December 2006, due to FDA’s non-approval of the Company’s NDA for CLL, the Company initiated a series of steps that are designed to conserve cash in order to focus on its oncology development operations. The Company reduced its workforce by 34 positions, or approximately 35%, including the elimination of 18 positions classified as research and development, 9 in sales and marketing and 7 in administration. Severance costs of $0.7 million were recognized in operating expenses in December 2006, including $0.3 million in research and development expenses and $0.4 million in selling, general and administrative expenses in the Company’s Consolidated Statements of Operations. Payment of the severance began in January 2007 and was completed by June 30, 2007.

7. Inventory

Inventories are stated at the lower of cost or market with cost being determined using the first-in, first-out (FIFO) method. Inventories consisted of the following ($ thousands):

	December 31,
	2007		2006
Raw materials	$	24	$	24
Work in process		—		94
Finished goods		201		190
	$	225	$	308

The Company has substantial quantities of Genasense^® drug supply which are recorded at zero cost. Such inventory would be available for the commercial launch of this product, should Genasense^® be approved.

8. Reduction in Liability for Legal Settlement

The Company reached an agreement to settle a class action litigation in consideration for issuance of 2.0 million shares of common stock of the Company (adjusted for any subsequent event that results in a change in the number of shares outstanding as of January 31, 2007) and $18.0 million in cash for the benefit of plaintiffs and the shareholder class, (see Note 20 to the Consolidated Financial Statements). The cash portion of the proposed settlement will be covered by the Company’s insurance carriers. Effective June 25, 2007, the Company and plaintiffs executed a written Stipulation and Agreement of Settlement, which was filed with the Court on August 13, 2007, seeking preliminary approval. The unopposed Motion for Preliminary Approval of Settlement was granted on October 30, 2007, and the Court issued final approval of the Settlement at the Settlement Fairness Hearing on March 3, 2008. The Company has also entered into release and settlement agreements with its insurance carriers, pursuant to which insurance will cover the settlement fee and various costs incurred in connection with the action. Under FASB Statement No. 5, “Accounting for Contingencies” and FASB Interpretation No. 14, “Reasonable Estimation of the Amount of a Loss, an interpretation of FASB Statement No. 5,” the Company recorded an expense of $5.3 million, comprised of 2.0 million shares of the Company’s common stock valued at a market price of $2.64 on December 31, 2006. At December 31, 2007, the revised estimated value of the common shares portion of the litigation settlement is $1.0 million, based on a closing price of Genta’s common stock of $0.52 per share as of December 31, 2007, resulting in a reduction in the provision of $4.2 million recognized in the year ended December 31, 2007. The amount of the liability will continue to be adjusted based on the market price of the Company’s stock until final approval of the settlement by the Court, at which time the value of the shares to be issued will be fixed. The liability for the settlement of litigation, originally recorded at $23.2 million at December 31, 2006, is measured at $19.0 million at December 31, 2007 and is included in accounts payable and accrued expenses in the Company’s Consolidated Balance Sheets. An insurance receivable of $18.0 million is included in prepaid expenses and other current assets in the Company’s Consolidated Balance Sheets.

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9. Property and Equipment, Net

Property and equipment is comprised of the following ($ thousands):

	Estimated Useful Lives	December 31,
		2007			2006
Computer equipment	3	$	2,855		$	2,950
Software	3		3,211			3,406
Furniture and fixtures	5		936			936
Leasehold improvements	Life of lease		420			410
Equipment	5		182			182
			7,604			7,884
Less accumulated depreciation and amortization			(7,281	)		(7,613	)
		$	323		$	271

10. Write-off of Prepaid Royalty

In December 2000, the Company recorded $1.3 million as the fair value for its commitment to issue shares of common stock to a major university as consideration for an amendment to a license agreement initially executed on August 1, 1991 related to antisense technology licensed from the university. The amendment provided for a reduction in the royalty percentage rate to be paid to the university based on the volume of sales of the Company’s products containing the antisense technology licensed from such university. These shares were issued in 2001. The Company planned to amortize the prepaid royalties upon the commercialization of Genasense^®. On December 15, 2006, the Company received a non-approvable notice from the FDA for its NDA for the use of Genasense^® plus chemotherapy in patients with CLL. As a result, in December 2006, the Company accounted for the impairment of these prepaid royalties by recording a write-off of this asset.

11. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses is comprised of the following ($ thousands):

	December 31,
	2007		2006
Accounts payable	$	2,519	$	5,493
Accrued severance		—		747
Accrued compensation		488		2,323
Reserve for settlement of litigation obligation		19,040		23,480
Other accrued expenses		3,803		4,451
	$	25,850	$	36,494

The carrying amount of accounts payable approximates fair value due to the short-term nature of these instruments.

12. Notes Payable

During 2007, the Company issued notes payable to finance premiums for its corporate insurance policies of $1.1 million at interest rates running from 5.2% to 5.9% and during 2006, $1.2 million at 5.4% to 5.6%. Payments were scheduled for seven or ten equal monthly installments for the notes initiated in 2007 and over seven equal monthly installments for the notes initiated in 2006. The notes payable balance at December 31, 2007 and December 31, 2006 was $0.5 million and $0.6 million, respectively. The carrying amount of notes payable approximates fair value due to the short-term nature of these instruments.

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13. Income Taxes

Significant components of the Company’s deferred tax assets as of December 31, 2007 and 2006 and related valuation reserves are presented below ($ thousands):

	December 31,
	2007			2006
Deferred tax assets:
Deferred compensation	$	772		$	772
Net operating loss carryforwards		130,111			122,514
Research and development credit and Orphan Drug credit carryforwards		41,484			38,586
Purchased technology and license fees		4,850			4,850
Depreciation and amortization, net		261			342
Share-based compensation expense		892			648
Provision for settlement of litigation, net		458			2,323
Write-off of prepaid royalties		558			558
New Jersey Alternative Minimum Assessment (AMA) Tax		730			730
New Jersey research and development credits		5,612			5,306
Provision for excess inventory		714			714
Reserve for product returns		2			92
Accrued liabilities		355			2,142
Other, net		323			236
Total deferred tax assets		187,122			179,813
Valuation allowance for deferred tax assets		(187,122	)		(179,813	)
Net deferred tax assets	$	—		$	—
Deferred tax liabilities:
Net deferred tax liabilities	$	—		$	—

A full valuation allowance has been provided at December 31, 2007 and 2006, respectively, to reserve for deferred tax assets, as it appears more likely than not that net deferred tax assets will not be realized.

Effective January 1, 2007 the company adopted FIN 48. As of January 1, 2007 and December 31, 2007, the Company recorded a liability for $712 thousand and $776 thousand, respectively, of unrecognized tax benefits (UTB’s), of which $776 thousand is included in accounts payable and accrued expenses on the Company’s Consolidated Balance Sheets. In addition, as of January 1, 2007 and December 31, 2007, the Company reduced its deferred tax assets by $854 thousand and $1,033 thousand, respectively. However, the Company recorded a full valuation allowance on its net deferred tax assets and reduced its valuation allowance on these respective amounts. The amount of UTB’s that would have an impact on the effective tax rate, if recognized, is $533 thousand.

A reconciliation of the total amount of unrecognized tax benefits (UTB’s) is as follows:

($ in thousands)
Unrecognized tax benefits: January 1, 2007	$	1,388
Gross increases: Tax positions taken in prior periods
Gross decreases: Tax positions taken in prior periods
Gross Increases- Current period tax positions	$	179
Lapse of Statute of Limitations
Unrecognized tax benefits: December 31, 2007	$	1,567

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The Company files corporate tax returns at the federal level and in the State of New Jersey. The open tax years that are subject to examination for these jurisdictions are 2004 through 2007 for federal returns and 2002 through 2007 for tax returns for the State of New Jersey.

New Jersey has enacted legislation permitting certain corporations located in the state to sell state tax loss carryforwards and state research and development credits. The Company sold portions of its New Jersey net operating losses and received a payment of $1.5 million in 2007 and received a payment of $0.9 million in 2006, recognized as income tax benefit.

If still available under New Jersey law, the Company will attempt to sell its tax loss carryforwards in 2008. We cannot be assured that the New Jersey program will continue in 2008, nor can we estimate what percentage of our saleable tax benefits New Jersey will permit us to sell, how much money will be received in connection with the sale, or if the Company will be able to find a buyer for its tax benefits.

The Company’s Federal tax returns have never been audited. In January 2006, the State of New Jersey concluded its fieldwork with respect to a tax audit for the years 2000 through 2004. The State of New Jersey took the position that amounts reimbursed to Genta by Aventis Pharmaceutical Inc. for co-development expenditures during the audit period were subject to Alternative Minimum Assessment (AMA), resulting in a liability at that time of approximately $533 thousand. Although the Company and its outside tax advisors believe the State’s position on the AMA liability is unjustified, there is little case law on the matter and it is probable that the Company will be required to ultimately pay the liability. In March 2007, the Company received a formal assessment from the State of New Jersey for $712 thousand. As of December 31, 2007, the Company had accrued a tax liability of $533 thousand, penalties of $27 thousand and interest of $216 thousand related to this assessment. The Company appealed this decision to the State and on February 13, 2008, the State notified the Company that its appeal had not been granted. The Company believes the State’s position is unjustified and is considering the option of taking this matter before the Tax Court.

The Company recorded $139 thousand, $66 thousand and $11 thousand in interest expense related to the State of New Jersey assessment during 2007, 2006 and 2005, respectively.

At December 31, 2007, the Company has federal and state net operating loss carryforwards of approximately $310.8 million and $234.9 million, respectively. The federal tax loss carryforward began expiring in 2003. The Company also has Research and Development credit and Orphan Drug credit carryforwards totaling $41.8 million, which began expiring in 2003.

14. Operating Leases

At both December 31, 2007 and December 31, 2006, the Company maintained $1.7 million in restricted cash balances with financial institutions related to lease obligations on its corporate facilities. These amounts are included in other assets in the Company’s Consolidated Balance Sheets. Such restricted cash balances collateralize letters of credit issued by the financial institutions in favor of the Company’s landlord with respect to corporate facilities.

Future minimum obligations under operating leases at December 31, 2007 are as follows ($ thousands):

2008	$	2,634
2009		2,591
2010		429
2011		—
2012		—
Thereafter		—
	$	5,654

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Annual rent expense incurred by the Company in 2007, 2006 and 2005 was $2.6 million, $2.5 million and $2.4 million, respectively.

15. Stockholders’ Equity

Common Stock

At the Company’s Annual Meeting of Stockholders on July 11, 2007, the Company’s shareholders authorized its Board of Directors to effect a reverse stock split of all outstanding shares of common stock, and the Board of Directors subsequently approved the implementation of a reverse stock split at a ratio of one for six shares.

In March 2007, the Company sold 5.0 million shares of the Company’s common stock at a price of $2.16 per share, raising $10.2 million, net of fees and expenses.

In September 2006, the Company sold 3.3 million shares of its common stock at a price of $4.74 per share, raising $14.9 million, net of fees and expenses.

In March 2006, the Company issued 3.2 million shares of its common stock at a price of $12.90 per share, raising $37.7 million, net of fees and expenses.

In March 2006, the Board of Directors approved an amendment to increase the number of shares of authorized common stock to 250.0 million shares from 150.0 million shares. In June 2006, the Company’s stockholders approved this amendment at the Company’s Annual Meeting of Stockholders.

Preferred Stock Purchase Right

In 2005 the Board of Directors adopted a Stockholder Rights Plan and declared a dividend of one preferred stock purchase right (a “Right”) for each outstanding share of common stock of the Company, payable to holders of record as of the close of business on September 27, 2005. Generally, the rights become exercisable upon the earlier of the close of business on the tenth business day following the first public announcement that any person or group has become a beneficial owner of 15% or more of the Company’s common stock and the close of business on the tenth business day after the date of the commencement of a tender or exchange offer by any person which would, if consummated, result in such person becoming a beneficial owner of 15% or more of the Company’s common stock. Each Right shall be exercisable to purchase, for $25.00, subject to adjustment, one one-hundredth of a newly registered share of Series G Participating Cumulative Preferred Stock, par value $0.001 per share of the Company.

Series A Preferred Stock

Each share of Series A Preferred Stock is immediately convertible into shares of the Company’s common stock, at a rate determined by dividing the aggregate liquidation preference of the Series A Preferred Stock by the conversion price. The conversion price is subject to adjustment for antidilution. As of December 30, 2007 and December 31, 2006, each share of Series A Preferred Stock was convertible into 2.3469 and 1.9969 shares of common stock, respectively. At December 31, 2007 and December 31, 2006, the Company had 7,700 shares of Series A Convertible Preferred Stock issued and outstanding.

In the event of a liquidation of the Company, the holders of the Series A Preferred Stock are entitled to a liquidation preference equal to $50 per share, or $0.4 million at December 31, 2007.

Series G Preferred Stock

The Company has 5.0 million shares of preferred stock authorized, of which 2.0 million shares has been designated Series G Participating Cumulative Preferred.

Warrants

The Company does not have any outstanding common stock warrants at December 31, 2007.

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Common Stock Reserved

At December 31, 2007, the Company had 30.6 million shares of common stock outstanding, 2.3 million additional shares reserved for the conversion of convertible preferred stock and the exercise of outstanding options and 0.6 million additional shares of common stock authorized for issuance and remaining to be granted under the Company’s Non-Employee Directors’ 1998 Stock Option Plan, as amended and restated and 1998 Stock Incentive Plan, as amended and restated. In addition, the Company has reserved 8.5 million shares and granted 5.4 million options under the 2007 Stock Option Plan, subject to shareholder approval, (see Note 17 to the Consolidated Financial Statements).

16. Share-Based Compensation

Effective January 1, 2006, the Company adopted SFAS 123R, which requires the Company to measure the cost of employee services received in exchange for all equity awards granted based on the fair value of the award as of the grant date. SFAS 123R superseded Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (“SFAS 123”), and Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB 25”). The Company adopted SFAS 123R using the modified prospective transition method, which required the Company to record compensation cost related to unvested stock awards as of December 31, 2005 by recognizing the unamortized grant date fair value of these awards over the remaining requisite service periods of those awards, with no change in historical reported earnings. Awards granted after December 31, 2005 are valued at fair value in accordance with the provisions of SFAS 123R and are recognized on a straight-line basis over the requisite service periods of each award. The standard also requires the Company to estimate forfeiture rates for all unvested awards, which it has done for 2007 based on its historical experience.

The Company estimates the fair value of each option award on the date of the grant using the Black-Scholes option valuation model. Expected volatilities are based on the historical volatility of the Company’s common stock over a period commensurate with the options’ expected term. The expected term represents the period of time that options granted are expected to be outstanding and is calculated in accordance with the Securities and Exchange Commission (“SEC”) guidance provided in the SEC’s Staff Accounting Bulletin 107 (“SAB 107”), using a “simplified” method. The risk-free interest rate assumption is based upon observed interest rates appropriate for the expected term of the Company’s stock options. The following table summarizes the weighted-average assumptions used in the Black-Scholes model for options granted during the years ended December 31 2007, 2006 and 2005, respectively:

	2007		2006		2005
Expected volatility	102	%	97	%	116	%
Expected dividends	—		—		—
Expected term (in years)	6.25		6.25		6.25
Risk-free rate	4.8	%	4.6	%	4.4	%

Prior to 2006, the Company accounted for share-based compensation in accordance with APB 25 using the intrinsic value method, which did not require that compensation cost be recognized for the Company’s stock options, provided the option exercise price was not less than the common stock’s fair market value on the date of the grant. The Company provided pro-forma disclosure amounts in accordance with SFAS No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure, as if the fair value method defined by SFAS No. 123 had been applied to its share-based compensation. The Company’s net loss and net loss per share for the year ended December 31, 2005 would have been increased if compensation cost related to stock options had been recorded in the financial statements based on fair value at the grant dates.

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The following table sets forth the pro-forma net loss as if the fair value method had been applied to all awards:

($ thousands, except per share data)	Year Ended December 31, 2005
Net loss applicable to common shares, as reported	$	(2,203	)
Add: Equity related employee compensation expense related to certain stock options issued in 1999 and 2000 included in reported net loss, net of related tax effects		41
Deduct: Total share-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(6,206	)
Pro forma net loss	$	(8,368	)
Net loss per share attributable to common shareholders:
As reported: Basic and diluted	$	(0.13	)
Pro forma: Basic and diluted	$	(0.49	)

The share-based compensation expense recognized for the years ended December 31, 2007 and December 31, 2006 follows:

	Year Ended December 31
($ thousands, except per share data)	2007		2006
Research and development expenses	$	521	$	997
Selling, general and administrative		852		2,002
Total share-based compensation expense	$	1,373	$	2,999
Share-based compensation expense, per basic and diluted common share	$	0.05	$	0.13

17. Stock Option Plans

As of December 31 2007, the Company has three share-based compensation plans, which are described below:

2007 Stock Incentive Plan

On September 17, 2007, the Company’sBoard of Directors approved the Company’s 2007 Stock Incentive Plan (the “2007 Plan”), pursuant to which 8.5 million shares of the Company’s common stock will be authorized for issuance, subject to approval of the Company’s shareholders. Awards may be made under the plan to officers, employees, directors and consultants in the form of incentive stock options, non-qualified stock options, stock appreciation rights, dividend equivalent rights, restricted stock, restricted stock units and other stock-based awards. Awards granted under the plan prior to shareholder approval of the plan are subject to and conditioned upon receipt of such approval on or before September 17, 2008. Should such shareholder approval not be obtained on or before such date, the plan will terminate and any awards granted pursuant to the plan will terminate and cease to be outstanding.

On September 17, 2007 and September 20, 2007, the Board of Directors approved the issuance of a combined total of 5.4 million options under the 2007 Plan. Most of these awards vest over a three-year period in increments of 50%, 25% and 25%, beginning on the first anniversary of the date of the grant. The Company has not recognized compensation expense for these grants, because a grant date as defined in SFAS 123R has not occurred. This is because the grant of these options is contingent upon shareholder approval, which cannot be assured.

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Acquisition Bonus Program

On September 17, 2007, the Board of Directors approved an Acquisition Bonus Program. Under the program, participants are eligible to share in a portion of the proceeds realized from a change in control of the Company that occurs prior to the earlier of (i) December 31, 2008 or (ii) the approval by the Company’s shareholders of the 2007 Stock Incentive Plan.

Pursuant to the program, participants selected by the Board of Directors will be awarded a number of units with a designated base value. The amount of a participant’s bonus award will be determined by multiplying (i) the difference between the unit value and the base value by (ii) the number of units awarded to such participant. The unit value for each unit will be determined by dividing the change in control proceeds (as defined in the award agreement) by the total number of shares of the Company’s common stock outstanding at the time of the change in control. The units will be subject to a vesting schedule, if any, determined by the Board of Directors at the time the unit award is made. Bonus awards will generally be paid in cash within 30 days after the later of (i) the effective date of the change in control or (ii) the date the change in control proceeds are paid to the Company’s shareholders. The maximum number of units that may be awarded under the Acquisition Bonus Program is 8.5 million units, which equals the number of shares of the Company’s common stock that are authorized for issuance under the 2007 Plan. On September 27, 2007, 5.4 million acquisition bonus units were granted under the Acquisition Bonus Program.

Any stock options granted to a participant under the 2007 Plan will terminate and cease to be outstanding in the event the participant becomes entitled to receive a payment under the Acquisition Bonus Program.

1998 Stock Incentive Plan

Pursuant to the Company’s 1998 Stock Incentive Plan, as amended (the “1998 Plan”), 3.4 million shares have been provided for the grant of stock options to employees, directors, consultants and advisors of the Company. In June 2006, the Company’s stockholders approved an amendment to increase the total number of shares of common stock authorized for issuance under the 1998 Plan from 3.1 million to 3.4 million shares. Option awards must be granted with an exercise price at not less than the fair market price of the Company’s common stock on the date of the grant; those option awards generally vest over a four-year period in equal increments of 25%, beginning on the first anniversary of the date of the grant. All options granted have contractual terms of ten years from the date of the grant.

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The following table summarizes the option activity under the 1998 Plan as of December 31, 2007 and changes during the three years then ended:

Stock Options	Number of Shares (in thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2004	1,666		$	35.94
Granted	247			8.16
Exercised	—			—
Forfeited or expired	(343	)		42.00
Outstanding at December 31, 2005	1,570		$	30.24
Granted	432			11.64
Exercised	—			—
Forfeited or expired	(66	)		25.32
Outstanding at December 31, 2006	1,936		$	26.22
Granted	316			1.40
Exercised	—			—
Forfeited or expired	(97	)		16.38
Outstanding at December 31, 2007	2,155		$	23.05	5.1	$	—
Vested and expected to vest at December 31, 2007	1,293		$	23.05	5.1	$	—
Exercisable at December 31, 2007	1,304		$	24.25	3.3	$	—

There is no intrinsic value to outstanding stock options as the exercise prices of all outstanding options are above the market price of the Company’s stock at December 31, 2007. The weighted-average grant-date fair value of options granted during the year ended December 31, 2007 was $1.16.

As of December 31, 2007, there was approximately $0.9 million of total unrecognized compensation cost related to non-vested share-based compensation granted under the 1998 Plan, which is expected to be recognized over a weighted-average period of 1.4 years.

In September 2007, the Company granted 60,000 Restricted Stock Units (RSUs), which contain performance vesting criteria, to a member of senior management. RSUs entitle the holder to receive at the end of a vesting term, a specified number of shares of Genta common stock and were accounted for at fair value at the date of the grant. This particular grant of 60,000 RSUs consists of three tranches of 20,000 shares each. The first two equal tranches of 20,000 shares each vest upon the completion of one or more financial transactions including, but not limited to, partnerships, asset sales or other transactions that raise working capital for the Company. At December 31, 2007, the performance condition for the 40,000 RSUs had not been met; accordingly, there is no amortization related to these RSUs reflected in the Company’s financial statements. One tranche of 20,000 shares vests on July 1, 2008 upon satisfactory provision of certain other financial and accounting services. The fair value of the grant, $28 thousand, based on a grant date fair value per share of $1.42, is being amortized evenly over the vesting period.

1998 Non-Employee Directors’ Plan

Pursuant to the Company’s 1998 Non-Employee Directors’ Plan as amended (the “Directors’ Plan”), 0.6 million shares have been provided for the grant of non-qualified stock options to the Company’s non-employee members of the Board of Directors. Option awards must be granted with an exercise price at not less than the fair market price of the Company’s common stock on the date of the grant. Initial option grants vest over a three-year period in equal increments, beginning on the first anniversary of the date of the grant. Subsequent grants, generally vest on the date of the grant. All options granted have contractual terms of ten years from the date of the grant.

The fair value of each option award is estimated on the date using the same valuation model used for options granted under the 1998 Plan.

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The following table summarizes the option activity under the Directors’ Plan as of December 31, 2007 and changes during the three years then ended:

Stock Options	Number of Shares (in thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2004	171		$	43.02
Granted	32			6.90
Exercised	—			—
Forfeited or expired	(10	)		31.50
Outstanding at December 31, 2005	193		$	37.56
Granted	23			12.42
Exercised	(26	)		6.00
Forfeited or expired	(90	)		40.98
Outstanding at December 31, 2006	100		$	37.02
Granted	20			1.80
Exercised	—			—
Forfeited or expired	(7	)		40.08
Outstanding at December 31, 2007	113		$	30.61	6.4	$	—
Vested and expected to vest at December 31, 2007	68		$	30.61	6.4	$	—
Exercisable at December 31, 2007	111		$	31.18	6.3	$	—

There is no intrinsic value to outstanding stock options as the exercise prices of all outstanding options are above the market price of the Company’s stock at December 31, 2007. The weighted-average grant-date fair value of options granted during the year ended December 31, 2007 was $1.48.

Stock option grants for a combination of both the 1998 Plan and the 1998 Directors Plan were as follows:

Year	Options Granted (in Thousands)	Weighted Average Grant Date Per Share Fair Value
2007	336	$	1.42
2006	455		11.70
2005	279		7.98

An analysis of all options outstanding as of December 31, 2007 is presented below, (option figures are in thousands):

Range of Prices	Options Outstanding	Weighted Average Remaining Life in Years	Weighted Average Exercise Price		Options Exercisable	Weighted Average Exercise Price of Options Exercisable
$0.67 - $1.98	239	9.9	$	.88	20	$	1.80
$2.73 - $9.54	270	8.3		6.39	81		7.36
$9.66 - $12.96	351	8.0		12.10	132		11.94
$14.58 - $19.02	823	2.0		15.98	823		15.98
$34.38 - $56.10	223	3.9		43.35	224		43.35
$59.28 - $109.50	362	5.2		66.60	135		74.06
	2,268	5.2	$	23.43	1,415	$	24.79

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18. Employee Savings Plan

In 2001, the Company initiated sponsorship of the Genta Incorporated Savings and Retirement Plan, a defined contribution plan under Section 401(k) of the Internal Revenue Code. The Company’s matching contribution to the Plan was $0.3 million, $0.4 million, and $0.4 million for 2007, 2006 and 2005, respectively.

19. Comprehensive Loss

An analysis of comprehensive loss is presented below:

	Years Ended December 31,
($ in thousands)		2007			2006			2005
Net loss	$	(23,320	)	$	(56,781	)	$	(2,203	)
Change in market value on available-for-sale marketable securities		29			31			60
Total comprehensive loss	$	(23,291	)	$	(56,750	)	$	(2,143	)

20. Commitments and Contingencies

Litigation and Potential Claims

In 2004, numerous complaints were filed in the United States District Court for the District of New Jersey, or the Court, against Genta and certain of its principal officers on behalf of purported classes of the Company’s shareholders who purchased its securities during several class periods. The complaints were consolidated into a single action and alleged that the Company and certain of its principal officers violated the federal securities laws by issuing materially false and misleading statements regarding Genasense^® for the treatment of malignant melanoma that had the effect of artificially inflating the market price of the Company’s securities. The shareholder class action complaint sought monetary damages in an unspecified amount and recovery of plaintiffs’ costs and attorneys’ fees. The Company reached an agreement with plaintiffs to settle the class action litigation in consideration for the issuance of 2.0 million shares of common stock of the Company (adjusted for any subsequent event that results in a change in the number of shares outstanding as of January 31, 2007) and $18.0 million in cash for the benefit of plaintiffs and the shareholder class. The cash portion of the proposed settlement will be covered by the Company’s insurance carriers. Effective June 25, 2007, the Company and plaintiffs executed a written Stipulation and Agreement of Settlement which was filed with the Court on August 13, 2007, seeking preliminary approval. The unopposed Motion for Preliminary Approval of Settlement was granted on October 30, 2007, and the Court issued final approval of the Settlement at the Settlement Fairness Hearing on March 3, 2008.

In addition, two separate shareholder derivative actions have been filed against the directors and certain officers of Genta in New Jersey State and Federal courts. The Federal shareholder derivative action was consolidated with the securities action.

Genta reached a final agreement with the Federal shareholder derivative plaintiffs to settle the Federal shareholder derivative action. On October 10, 2006, the United States District Court for the District of New Jersey gave preliminary approval to the parties’ settlement agreement. On May 7, 2007, the proposed settlement received final approval from the court. On October 31, 2006, Genta and the defendants entered into a Release and Settlement Agreement with the Company’s insurance carrier, pursuant to which the Company’s insurance covered the $200 thousand payment for plaintiffs’ attorney fees, the costs of notice to shareholders required by the Court’s preliminary approval order and defense costs incurred in connection with the action, and this amount was paid by the Company’s insurance carrier during the three months ended June 30, 2007.

The Company has continued to deny all of the allegations in all of these proceedings, and settlement and potential settlement do not constitute an admission of guilt or liability.

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Based on facts substantially similar to those asserted in the shareholder class actions, the State derivative plaintiffs claimed that defendants had breached their fiduciary duties to the shareholders and committed other violations of New Jersey law. On February 9, 2006, the Superior Court of New Jersey dismissed the plaintiffs’ derivative complaint in the New Jersey State case based in part on plaintiffs’ failure to make a pre-suit demand on Genta’s Board of Directors and in part based on plaintiffs’ failure to state a cause of action. Plaintiffs’ motion for reconsideration was denied and they filed a notice of appeal. On December 11, 2006, plaintiffs filed their appellate brief and on January 18, 2007, the Company filed its response. In view of the settlement of the Federal derivative action, on June 4, 2007, the Company filed a motion to dismiss plaintiffs’ appeal. That motion was granted on June 25, 2007.

In February 2007, a complaint against the Company was filed in the Superior Court of New Jersey by Howard H. Fingert, M.D., a former employee of the Company. The complaint alleges, among other things, breach of contract as to the Company’s stock option plan and as to a consulting agreement allegedly entered into by the Company and Dr. Fingert subsequent to termination of Dr. Fingert’s employment with the Company, breach of implied covenant of good faith and fair dealing with respect to the Company’s stock option plan and the alleged consulting agreement, promissory estoppel with respect to the exercise of stock options and provision of consulting services after termination of employment, and fraud and negligent misrepresentation with respect to the exercise of stock options and provision of consulting services after termination of employment. The complaint seeks monetary damages, including punitive and consequential damages. The Company filed an answer to the complaint on May 29, 2007, and on August 8, 2007, filed a request for production of documents. On January 4, 2008, the Court dismissed the complaint without prejudice due to Dr. Fingert’s failure to produce the requested discovery. Dr. Fingert has ninety days in which to move to vacate the order. The Company denies the allegations in the complaint and intends to vigorously defend this lawsuit.

In November 2007, a complaint against the Company was filed in the United States District Court for the District of New Jersey by Ridge Clearing & Outsourcing Solutions, Inc. The complaint alleges, among other things, that the Company caused or contributed to losses suffered by a Company shareholder which have been incurred by Ridge. The Company filed its Answer and Affirmative Defenses on February 27, 2008 to respond to the complaint. The Company denies the allegations in the complaint and intends to vigorously defend this lawsuit.

21. Supplemental Disclosure of Cash Flows Information and Non-cash Investing and Financing Activities

As a result of the Aventis notice of termination in 2004, all payments otherwise due to Genta were contractually applied against the balance of the Line of Credit until the Line of Credit was repaid. During 2005, $6.0 million of reimbursement due to Genta was applied to the balance of the Line of Credit. In addition, in 2005, the Company recorded a gain on the forgiveness of debt of $1.3 million.

No interest was paid for the twelve months ended December 31, 2007, 2006, and 2005, respectively.

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22. Selected Quarterly Financial Data (Unaudited)

	Quarter Ended
2007		Mar. 31			Jun. 30			Sep. 30			Dec. 31
($ thousands, except per share data)
Revenues	$	94		$	105		$	115		$	266
Gross margin		72			79			95			244
Operating expenses-net		5,875			8,594			8,046			3,601
Net loss		(5,605	)		(8,235	)		(7,732	)		(1,748	)
Net loss per common share:
Basic and diluted **	$	(0.21	)	$	(0.27	)	$	(0.25	)	$	(0.06	)

	Quarter Ended
2006		Mar. 31			Jun. 30			Sep. 30			Dec. 31
($ thousands, except per share data)
Revenues	$	67		$	379		$	145		$	117
Gross margin		51			357			104			88
Operating expenses – net		10,206			15,353			15,453			18,752
Net loss		(9,895	)		(14,642	)		(14,940	)		(17,304	)
Net loss per common share:
Basic and diluted **	$	(0.50	)	$	(0.66	)	$	(0.66	)	$	(0.68	)

** Net loss per common share is calculated independently for each quarter and the full year based upon respective average shares outstanding. Therefore, the sum of the quarterly amounts may not equal the annual amounts reported.

In December 2006, the Company reached an agreement to settle a class action litigation in consideration for issuance of 2.0 million shares of common stock of the Company (adjusted for any subsequent event that results in a change in the number of shares outstanding as of January 31, 2007) and $18.0 million in cash for the benefit of plaintiffs and the shareholder class, (see Note 20 to the Consolidated Financial Statements). The cash portion of the proposed settlement will be covered by the Company’s insurance carriers. The Company recorded an expense of $5.3 million, comprised of 2.0 million shares of the Company’s common stock valued at a market price of $2.64 on December 31, 2006.

At December 31, 2007, the revised estimated value of the common shares portion of the litigation settlement is $1.0 million, based on a closing price of Genta’s common stock of $0.52 per share as of December 31, 2007, resulting in a reduction in the provision of $4.2 million recognized in the year ended December 31, 2007. The amount of the liability will continue to be adjusted based on the market price of the Company’s stock until final approval of the settlement by the Court, at which time the value of the shares to be issued will be fixed.

The Company has experienced significant quarterly fluctuations in operating results and it expects that these fluctuations will continue.

During the fourth quarter of 2007, the Company revised its estimate of certain accrued expenses in the amount of $4.7 million, since such amount is no longer deemed probable.

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23. Subsequent Events

On February 13, 2008, the Company sold 6.1 million shares of the Company’s common stock at a price of $0.50 per share, raising approximately $3.1 million, net of estimated fees and expenses.

On March 7, 2008, the Company entered into a License Agreement (the Agreement) with Daiichi Sankyo Company, Limited, a Japanese corporation based in Tokyo, Japan, whereby Genta obtained the exclusive license for tesetaxel. Pursuant to the agreement, Genta will pay Daiichi Sankyo $250,000 within 30 days from signing the agreement. The Company will also pay four equal installments of $562,000 per quarter beginning at the end of the second quarter 2008, and also at the end of each subsequent calendar quarter, until the end of the first quarter 2009, for a total of $2.25 million. The agreement also provides for payments by Genta upon achievement of certain clinical and regulatory milestones and royalties on net product sales. The Company will purchase Daiichi’s current inventory of tesetaxel and will be responsible for all future development, commercialization, and manufacturing of the drug.

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

As required by Rule 13a-15(b), Genta’s Chief Executive Officer and Principal Accounting and Finance Officer conducted an evaluation as of the end of the period covered by this report of the effectiveness of our “disclosure controls and procedures” (as defined in Exchange Act Rule 13a-15(e)). Based on that evaluation, our Chief Executive Officer and Principal Accounting and Finance Officer concluded that as of December 31, 2007, our disclosure controls and procedures were (1) effective in that they were designed to ensure that material information relating to us is made known to our Chief Executive Officer and Principal Accounting and Finance Officer by others within this entity, as appropriate to allow timely decisions regarding required disclosures, and (2) effective in that they provide that information required to be disclosed by us in our reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control — Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2007.

Deloitte & Touche LLP, an independent registered public accounting firm, has audited our consolidated financial statements included in this report on Form 10-K and issued its report on the effectiveness of our internal control over financial reporting as of December 31, 2007, which is included herein.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rule 13a-15 that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Genta Incorporated:

We have audited the internal control over financial reporting of Genta Incorporated and subsidiaries (the “Company”) as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on the criteria established in Internal Control— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2007 of the Company and our report dated March 17, 2008 expressed an unqualified opinion on those financial statements and included explanatory paragraphs relating to the Company’s ability to continue as a going concern and the Company’s adoption of Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment, effective January 1, 2006, and Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109, effective January 1, 2007.

/s/ DELOITTE & TOUCHE LLP

Parsippany, New Jersey

March 17, 2008

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Item 9B. Other Information

None.

PART III

Item 10. Directors and Executive Officers of the Registrant and Corporate Governance

The information required in this item is incorporated by reference from the Company’s definitive proxy statement to be filed not later than April 30, 2008 pursuant to Regulation 14A of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (“Regulation 14A”).

Item 11. Executive Compensation

The information required in this item is incorporated by reference from the Company’s definitive proxy statement to be filed not later than April 30, 2008 pursuant to Regulation 14A.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required in this item is incorporated by reference from the Company’s definitive proxy statement to be filed not later than April 30, 2008 pursuant to Regulation 14A.

Item 13. Certain Relationships and Related Transactions and Director Independence

The information required in this item is incorporated by reference from the Company’s definitive proxy statement to be filed not later than April 30, 2008 pursuant to Regulation 14A.

Item 14. Principal Accounting Fees and Services

The information required in this item is incorporated by reference from the Company’s definitive proxy statement to be filed not later than April 30, 2008 pursuant to Regulation 14A.

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PART IV

Item 15. Exhibits and Financial Statement Schedules.

Exhibit Number	Description of Document
1.1	Engagement Letter, dated December 6, 2004 between the Company and Rodman & Renshaw, LLC (incorporated by reference to the Company’s Current Report on 8-K filed December 16, 2004, Commission File No. 0-19635)
3.1.a	Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3(i).1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1995, Commission File No. 0-19635)
3.1.b	Certificate of Designations of Series D Convertible Preferred Stock of the Company (incorporated by reference to Exhibit 3(i) to the Company’s Current Report on Form 8-K filed on February 28, 1997, Commission File No. 0-19635)
3.1.c	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3(i).3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999, Commission File No. 0-19635)
3.1.d	Amended Certificate of Designations of Series D Convertible Preferred Stock of the Company (incorporated by reference to Exhibit 3(i).4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999, Commission File No. 0-19635)
3.1.e	Certificate of Increase of Series D Convertible Preferred Stock of the Company (incorporated by reference to Exhibit 3(i).5 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999, Commission File No. 0-19635)
3.1.f	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3(i).4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1998, Commission File No. 0-19635)
3.1.g	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3(i).3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1998, Commission File No. 0-19635)
3.1.h	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3(i).8 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999, Commission File No. 0-19635)
3.1.i	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1.i to the Company’s Registration Statement on Form S-1, Commission File No. 333-110238)
3.1.j	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1.j to the Company’s Registration Statement on Form S-1, Commission File No. 333-110238)
3.1.k	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1.k to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, Commission File No. 0-19635)
3.1.l	Certificate of Designation of Series G Participating Cumulative Preferred Stock of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on September 21, 2005, Commission File No. 0-19635)
3.1.m	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, Commission File No. 0-19635)
3.1.n	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on July 13, 2007, Commission File No. 0-19635)
3.2	Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, Commission File No. 0-19635)
4.1	Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1, Commission File No. 333-110238)

73

Exhibit Number	Description of Document
4.2	Rights Agreement, dated September 20, 2005, between the Company and Mellon Investor Services LLC, as Rights Agent (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on September 21, 2005, Commission File No. 0-19635)
10.1	Non-Employee Directors’ 1998 Stock Option Plan, as amended and restated (incorporated by reference to Exhibit 99.B to the Company’s Definitive Proxy Statement on Schedule 14A filed on April 30, 2004, Commission File No. 0-19635)
10.2	1998 Stock Incentive Plan, as amended and restated, effective March 19, 2004 (incorporated by reference to Exhibit 99.A to the Company’s Definitive Proxy Statement on Schedule 14A filed on April 30, 2004, Commission File No. 0-19635)
10.3	Form of Indemnification Agreement entered into between the Company and its directors and officers (incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-1, Commission File No. 0-19635)
10.4	Asset Purchase Agreement, dated as of March 19, 1999, among JBL Acquisition Corp., JBL Scientific Incorporated and the Company (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report filed on Form 10-Q for the quarter ended March 31, 1999, Commission File No. 0-19635)
10.5	Stock Option Agreement, dated as of October 28, 1999, between the Company and Raymond P. Warrell, Jr., M.D. (incorporated by reference to Exhibit 10.71 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999, Commission File No. 0-19635)
10.6	Letter Agreement, dated March 4, 1999, from SkyePharma Plc to the Company (incorporated by reference to Exhibit 10.72 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999, Commission File No. 0-19635)
10.7	Subscription Agreement executed in connection with the November 26, 2001 sale of common stock to Franklin Small-Mid Cap Growth Fund, Franklin Biotechnology Discovery Fund, and SF Capital Partners Ltd., and the November 30, 2001 sale of common stock to SF Capital Partners Ltd. (incorporated by reference to Exhibit 10.73 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, Commission File No. 0-19635)
10.8	Agreement of Lease dated June 28, 2000 between The Connell Company and the Company (incorporated by reference to Exhibit 10.76 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, Commission File No. 0-19635)
10.8A	Amendment of Lease, dated June 19, 2002 between The Connell Company and the Company (incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)
10.9*	U.S. Commercialization Agreement dated April 26, 2002, by and between Genta Incorporated and Aventis Pharmaceuticals Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June, 30, 2002, Commission File No. 0-19635)
10.9A*	Amendment No. 1 dated March 14, 2003 to the U.S. Commercialization Agreement between Genta Incorporated and Aventis Pharmaceuticals Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, Commission File No. 0-19635).
10.10*	Ex-U.S. Commercialization Agreement, dated April 26, 2002, by and between Genta Incorporated and Garliston Limited (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June, 30, 2002, Commission File No. 0-19635)
10.11*	Global Supply Agreement, dated April 26, 2002, by and among Genta Incorporated, Aventis Pharmaceuticals Inc. and Garliston Limited (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)
10.12*	Securities Purchase Agreement, dated April 26, 2002, by and between Genta Incorporated and Garliston Limited (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)
10.13	Standstill and Voting Agreement, dated April 26, 2002, by and between Genta Incorporated and Garliston Limited (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)

74

Exhibit Number	Description of Document
10.14	Registration Rights Agreement, dated April 26, 2002, by and between Genta Incorporated and Garliston Limited (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)
10.15	Convertible Note Purchase Agreement, dated April 26, 2002, by and between Genta Incorporated and Garliston Limited (incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)
10.16*	5.63% Convertible Promissory Note, due April 26, 2009 (incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)
10.17*	Subordination Agreement, dated April 26, 2002, by and between Genta Incorporated and Garliston Limited (incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)
10.18*	Manufacture and Supply Agreement, dated December 20, 2002, between Genta Incorporated and Avecia Biotechnology Inc. (incorporated by reference to Exhibit 10.88 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, Commission File No. 0-19635)
10.19*	License Agreement dated August 1, 1991, between Genta Incorporated and the Trustees of the University of Pennsylvania (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on October 28, 2003, Commission File No. 0-19635)
10.19A*	Amendment to License Agreement, dated December 19, 2000, between Genta Incorporated and the Trustees of the University of Pennsylvania (incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K filed on October 28, 2003, Commission File No. 0-19635)
10.19AA*	Second Amendment to License Agreement, dated October 22, 2003, between Genta Incorporated and the Trustees of the University of Pennsylvania (incorporated by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K filed on October 28, 2003, Commission File No. 0-19635)
10.20	Settlement Agreement and Release, dated October 22, 2003, between Genta Incorporated and the Trustees of the University of Pennsylvania (incorporated by reference to Exhibit 99.4 to the Company’s Current Report on Form 8-K filed on October 28, 2003, Commission File No. 0-19635)
10.21	Securities Purchase Agreement, dated December 14, 2004, among the Company, Riverview Group, LLC and Smithfield Fiduciary LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 16, 2004, Commission File No. 0-19635)
10.22	Form of Subscription Agreement, dated August 5, 2005 among the Company and the purchasers of the Shares (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 8, 2005, Commission File No. 0-19635)
10.23	Placement Agency Agreement, dated August 5, 2005 between the Company and Piper Jaffray & Co. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 8, 2005, Commission File No. 0-19635)
10.24	Form of Subscription Agreement, dated March 6, 2006 by and among the Company and the Purchasers (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 7, 2006, Commission File No. 0-19635)
10.25	Form of Placement Agent Agreement, dated March 6, 2006 by and among the Company, Cowen & Co., LLC and Rodman & Renshaw, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 7, 2006, Commission File No. 0-19635)
10.26	Form of Confirmation of Purchase, dated March 10, 2006 by and between the Company and certain Investors (incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, Commission File No. 0-19635)
10.27	Form of Amendment No. 1 to Placement Agent Agreement, dated as of March 10, 2006 by and among the Company, Cowen & Co., LLC and Rodman & Renshaw, LLC (incorporated by reference to Exhibit 10.35 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, Commission File No. 0-19635)

75

Exhibit Number	Description of Document
10.28	Development and License Agreement, dated March 22, 2006 by and between the Company and Emisphere Technologies, Inc. * (incorporated by reference to Exhibit 10.5 to the company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, Commission File No. 0-19635)
10.29	1998 Stock Incentive Plan, as amended and restated, effective April 5, 2006 (incorporated by reference to the company’s Definitive Proxy statement on Schedule 14A filed on April 28, 2006, Commission File No. 0-19635)
10.30	Employment Agreement, dated as of March 28, 2006, between the Company and Loretta M. Itri, M.D. (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, Commission File No. 0-19635)
10.31	Form of Securities Purchase Agreement, dated September 19, 2006, between the Company and each Purchaser (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on September 20, 2006, Commission File No. 0-19635)
10.32	Form of Placement Agent Agreement, dated September 19, 2006, by and between the Company and Rodman & Renshaw LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on September 20, 2006, Commission File No. 0-19635)
10.33	Supply and Distribution Agreement between the Company and IDIS Limited, dated March 6, 2007 (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q, filed on May 8, 2007, Commission File No. 0-19635)
10.34	Form of Purchase Agreement by and among the Company and the Purchasers, dated March 13, 2007 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on March 14, 2007, Commission File No. 0-19635)
10.35	Placement Agent Agreement, by and between the Company and Rodman & Renshaw, LLC, dated February 23, 2007 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on March 14, 2007, Commission File No. 0-19635)
10.36	Form of Acquisition Bonus Program Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on September 21, 2007, Commission File No. 0-19635)
10.37*	Project Contract with ICON Clinical Research, L.P., dated November 19, 2007 (filed herewith)
10.38	Amended and Restated Employment Agreement, dated as of November 30, 2007, between the Company and Raymond P. Warrell, Jr. M.D. (filed herewith)
10.39	Form of Securities Purchase Agreement, dated February 8, 2008, by and between the Company each Purchaser (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on February 11, 2008, Commission File No. 0-19635)
10.40	Placement Agent Agreement, dated February 8, 2008, by and between the Company and Rodman & Renshaw, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on February 11, 2008, Commission File No. 0-19635)
21	Subsidiaries of the Registrant
23.1	Consent of Deloitte & Touche LLP
31.1	Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
31.2	Certification by Vice President, Finance pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32.1	Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.2	Certification by Vice President, Finance pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

______________

* The Company has been granted confidential treatment of certain portions of this exhibit.

76

SIGNATURES

Pursuant to the requirements of Section 13 or 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, on this 17th day of March 2008.

Genta Incorporated

/s/ RAYMOND P. WARRELL, JR., M.D.

Raymond P. Warrell, Jr., M.D.
Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Capacity	Date
/s/ RAYMOND P. WARRELL, JR., M.D.	Chairman and Chief Executive Officer and Director (principal executive officer)	March 17, 2008
Raymond P. Warrell, Jr., M.D.
/s/ GARY SIEGEL	Vice President, Finance (principal financial and accounting officer)	March 17, 2008
Gary Siegel
/s/ MARTIN J. DRISCOLL	Director	March 17, 2008
Martin J. Driscoll
/s/ CHRISTOPHER P. PARIOS	Director	March 17, 2008
Christopher P. Parios
/s/ DANIEL D. VON HOFF, M.D.	Director	March 17, 2008
Daniel D. Von Hoff, M.D.
/s/ DOUGLAS G. WATSON	Director	March 17, 2008
Douglas G. Watson

77

Exhibit Number	Description of Document	Sequentially Numbered Pages
1.1	Engagement Letter, dated December 6, 2004 between the Company and Rodman & Renshaw, LLC (incorporated by reference to the Company’s Current Report on 8-K filed December 16, 2004, Commission File No. 0-19635)
3.1.a	Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3(i).1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1995, Commission File No. 0-19635)
3.1.b	Certificate of Designations of Series D Convertible Preferred Stock of the Company (incorporated by reference to Exhibit 3(i) to the Company’s Current Report on Form 8-K filed on February 28, 1997, Commission File No. 0-19635)
3.1.c	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3(i).3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999, Commission File No. 0-19635)
3.1.d	Amended Certificate of Designations of Series D Convertible Preferred Stock of the Company (incorporated by reference to Exhibit 3(i).4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999, Commission File No. 0-19635)
3.1.e	Certificate of Increase of Series D Convertible Preferred Stock of the Company (incorporated by reference to Exhibit 3(i).5 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999, Commission File No. 0-19635)
3.1.f	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3(i).4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1998, Commission File No. 0-19635)
3.1.g	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3(i).3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1998, Commission File No. 0-19635)
3.1.h	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3(i).8 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999, Commission File No. 0-19635)
3.1.i	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1.i to the Company’s Registration Statement on Form S-1, Commission File No. 333-110238)
3.1.j	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1.j to the Company’s Registration Statement on Form S-1, Commission File No. 333-110238)
3.1.k	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1.k to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, Commission File No. 0-19635)
3.1.l	Certificate of Designation of Series G Participating Cumulative Preferred Stock of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on September 21, 2005, Commission File No. 0-19635)
3.1.m	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, Commission File No. 0-19635)

78

Exhibit Number	Description of Document	Sequentially Numbered Pages
3.1.n	Certificate of Amendment of Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on July 13, 2007, Commission File No. 0-19635)
3.2	Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, Commission File No. 0-19635)
4.1	Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1, Commission File No. 333-110238)
4.2	Rights Agreement, dated September 20, 2005, between the Company and Mellon Investor Services LLC, as Rights Agent (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on September 21, 2005, Commission File No. 0-19635)
10.1	Non-Employee Directors’ 1998 Stock Option Plan, as amended and restated (incorporated by reference to Exhibit 99.B to the Company’s Definitive Proxy Statement on Schedule 14A filed on April 30, 2004, Commission File No. 0-19635)
10.2	1998 Stock Incentive Plan, as amended and restated, effective March 19, 2004 (incorporated by reference to Exhibit 99.A to the Company’s Definitive Proxy Statement on Schedule 14A filed on April 30, 2004, Commission File No. 0-19635)
10.3	Form of Indemnification Agreement entered into between the Company and its directors and officers (incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-1, Commission File No. 0-19635)
10.4	Asset Purchase Agreement, dated as of March 19, 1999, among JBL Acquisition Corp., JBL Scientific Incorporated and the Company (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report filed on Form 10-Q for the quarter ended March 31, 1999, Commission File No. 0-19635)
10.5	Stock Option Agreement, dated as of October 28, 1999, between the Company and Raymond P. Warrell, Jr., M.D. (incorporated by reference to Exhibit 10.71 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999, Commission File No. 0-19635)
10.6	Letter Agreement, dated March 4, 1999, from SkyePharma Plc to the Company (incorporated by reference to Exhibit 10.72 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999, Commission File No. 0-19635)
10.7	Subscription Agreement executed in connection with the November 26, 2001 sale of common stock to Franklin Small-Mid Cap Growth Fund, Franklin Biotechnology Discovery Fund, and SF Capital Partners Ltd., and the November 30, 2001 sale of common stock to SF Capital Partners Ltd. (incorporated by reference to Exhibit 10.73 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, Commission File No. 0-19635)
10.8	Agreement of Lease dated June 28, 2000 between The Connell Company and the Company (incorporated by reference to Exhibit 10.76 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, Commission File No. 0-19635)
10.8A	Amendment of Lease, dated June 19, 2002 between The Connell Company and the Company (incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)

79

Exhibit Number	Description of Document	Sequentially Numbered Pages
10.9*	U.S. Commercialization Agreement dated April 26, 2002, by and between Genta Incorporated and Aventis Pharmaceuticals Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June, 30, 2002, Commission File No. 0-19635)
10.9A*	Amendment No. 1 dated March 14, 2003 to the U.S. Commercialization Agreement between Genta Incorporated and Aventis Pharmaceuticals Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, Commission File No. 0-19635).
10.10*	Ex-U.S. Commercialization Agreement, dated April 26, 2002, by and between Genta Incorporated and Garliston Limited (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)
10.11*	Global Supply Agreement, dated April 26, 2002, by and among Genta Incorporated, Aventis Pharmaceuticals Inc. and Garliston Limited (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)
10.12*	Securities Purchase Agreement, dated April 26, 2002, by and between Genta Incorporated and Garliston Limited (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)
10.13	Standstill and Voting Agreement, dated April 26, 2002, by and between Genta Incorporated and Garliston Limited (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)
10.14	Registration Rights Agreement, dated April 26, 2002, by and between Genta Incorporated and Garliston Limited (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)
10. 15	Convertible Note Purchase Agreement, dated April 26, 2002, by and between Genta Incorporated and Garliston Limited (incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)
10.16*	5.63% Convertible Promissory Note, due April 26, 2009 (incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)
10.17*	Subordination Agreement, dated April 26, 2002, by and between Genta Incorporated and Garliston Limited (incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, Commission File No. 0-19635)
10.18*	Manufacture and Supply Agreement, dated December 20, 2002, between Genta Incorporated and Avecia Biotechnology Inc. (incorporated by reference to Exhibit 10.88 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, Commission File No. 0-19635)
10.19*	License Agreement dated August 1, 1991, between Genta Incorporated and the Trustees of the University of Pennsylvania (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on October 28, 2003, Commission File No. 0-19635)
10.19A*	Amendment to License Agreement, dated December 19, 2000, between Genta Incorporated and the Trustees of the University of Pennsylvania (incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K filed on October 28, 2003, Commission File No. 0-19635)

80

Exhibit Number	Description of Document	Sequentially Numbered Pages
10.19AA*	Second Amendment to License Agreement, dated October 22, 2003, between Genta Incorporated and the Trustees of the University of Pennsylvania (incorporated by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K filed on October 28, 2003, Commission File No. 0-19635)
10.20	Settlement Agreement and Release, dated October 22, 2003, between Genta Incorporated and the Trustees of the University of Pennsylvania (incorporated by reference to Exhibit 99.4 to the Company’s Current Report on Form 8-K filed on October 28, 2003, Commission File No. 0-19635)
10.21	Securities Purchase Agreement, dated December 14, 2004, among the Company, Riverview Group, LLC and Smithfield Fiduciary LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 16, 2004, Commission File No. 0-19635)
10.22	Form of Subscription Agreement, dated August 5, 2005 among the Company and the purchasers of the Shares (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 8, 2005, Commission File No. 0-19635)
10.23	Placement Agency Agreement, dated August 5, 2005 between the Company and Piper Jaffray & Co. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 8, 2005, Commission File No. 0-19635)
10.24	Form of Subscription Agreement, dated March 6, 2006 by and among the Company and the Purchasers (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 7, 2006, Commission File No. 0-19635)
10.25	Form of Placement Agent Agreement, dated March 6, 2006 by and among the Company, Cowen & Co., LLC and Rodman & Renshaw, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 7, 2006, Commission File No. 0-19635)
10.26	Form of Confirmation of Purchase, dated March 10, 2006 by and between the Company and certain Investors (incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, Commission File No. 0-19635)
10.27	Form of Amendment No. 1 to Placement Agent Agreement, dated as of March 10, 2006 by and among the Company, Cowen & Co., LLC and Rodman & Renshaw, LLC (incorporated by reference to Exhibit 10.35 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, Commission File No. 0-19635)
10.28	Development and License Agreement, dated March 22, 2006 by and between the Company and Emisphere Technologies, Inc. * (incorporated by reference to Exhibit 10.5 to the company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, Commission File No. 0-19635)
10.29	1998 Stock Incentive Plan, as amended and restated, effective April 5, 2006 (incorporated by reference to the company’s Definitive Proxy statement on Schedule 14A filed on April 28, 2006, Commission File No. 0-19635)
10.30	Employment Agreement, dated as of March 28, 2006, between the Company and Loretta M. Itri, M.D. (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, Commission File No. 0-19635)

81

Exhibit Number	Description of Document	Sequentially Numbered Pages
10.31	Form of Securities Purchase Agreement, dated September 19, 2006, between the Company and each Purchaser (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on September 20, 2006, Commission File No. 0-19635)
10.32	Form of Placement Agent Agreement, dated September 19, 2006, by and between the Company and Rodman & Renshaw LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on September 20, 2006, Commission File No. 0-19635)
10.33	Supply and Distribution Agreement between the Company and IDIS Limited, dated March 6, 2007 (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q, filed on May 8, 2007, Commission File No. 0-19635)
10.34	Form of Purchase Agreement by and among the Company and the Purchasers, dated March 13, 2007 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on March 14, 2007, Commission File No. 0-19635)
10.35	Placement Agent Agreement, by and between the Company and Rodman & Renshaw, LLC, dated February 23, 2007 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on March 14, 2007, Commission File No. 0-19635)
10.36	Form of Acquisition Bonus Program Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on September 21, 2007, Commission File No. 0-19635)
10.37*	Project Contract with ICON Clinical Research, L.P., dated November 19, 2007 (filed herewith)
10.38	Amended and Restated Employment Agreement, dated as of November 30, 2007, between the Company and Raymond P. Warrell, Jr. M.D. (filed herewith)
10.39	Form of Securities Purchase Agreement, dated February 8, 2008, by and between the Company each Purchaser (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on February 11, 2008, Commission File No. 0-19635)
10.40	Placement Agent Agreement, dated February 8, 2008, by and between the Company and Rodman & Renshaw, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on February 11, 2008, Commission File No. 0-19635)
21	Subsidiaries of the Registrant
23.1	Consent of Deloitte & Touche LLP
31.1	Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
31.2	Certification by Vice President, Finance pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32.1	Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.2	Certification by Vice President, Finance pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

*         The Company has been granted confidential treatment of certain portions of this exhibit.

82

EX-10.37

PROJECT CONTRACT

This Project Contract dated 01 June 2007 (“Effective Date”) is issued pursuant to the Master Agreement dated 12 December 2003 between Genta, Inc. (“GENTA”) and ICON Clinical Research, L.P. (“ICON”). Except as modified by this Project Contract, the terms and conditions of the Agreement are incorporated herein by reference and shall govern the performance of the parties’ duties under this Project Contract. Capitalized terms used herein and not otherwise defined are used as defined in the Master Agreement.

1. Protocol. The Study to be performed is entitled “A Multicenter, Randomized, Double-Blind Study of Dacarbazine With or Without Genasense® in Chemotherapy-Naïve Subjects With Advanced Melanoma and Low LDH, Protocol Number GM307” and is set forth in the Protocol attached as Exhibit A and incorporated herein by reference. For purposes of this Project Contract, the Study Drug for the Study is defined as Genasense®.

2. ICON Proposal. The services to be performed by ICON for the Study (“Services”) and associated costs are set forth in the proposal attached as Exhibit B and incorporated herein by reference.

3. Payment Schedule. In consideration for ICON’s Services under this Project Contract, GENTA agrees to pay ICON in accordance with the payment schedule set forth in the attached Exhibit C and incorporated herein by reference. The total amount payable by GENTA to ICON under this Project Contract for direct labor costs shall in no way exceed * without prior written consent of both parties. All pass-through costs are estimated.

4. Transfer of Obligations. Pursuant to 21 CFR §312.52, GENTA hereby transfers to ICON and ICON hereby assumes all the obligations of GENTA as sponsor of the Study as set forth in Exhibit D attached and incorporated herein by reference and included on Form FDA 1571, Section 13. GENTA shall retain the right to assume any of the duties delegated to ICON at any time and the Services and Exhibit C shall be adjusted accordingly.

5. Key Personnel. ICON agrees to use its best efforts to maintain continuity in ICON Personnel assigned to perform the Services, which key personnel are named in the attached Exhibit E.

6. Term. This Project Contract shall begin as of the Effective Date and shall be completed by March 31, 2011, when all of the Services are fully performed in accordance with Exhibit B, unless terminated earlier pursuant to Paragraph 3.3 of the Master Agreement.

1

7. Notices. Notices relating to this Project Contract shall be delivered in accordance with the Master Agreement and addressed as follows:

If to GENTA:

John Carbine

Director of Finance

Genta Incorporated

200 Connell Drive

Berkeley Heights, NJ 07922

Phone: 908-286-5977

Email: Carbine@genta.com

If to ICON:

Rose Bonner

Contract Analyst

212 Church Road

North Wales, PA 19454

Phone: 215-616-3589

FAX: 215-616-2727

Email: bonnerr@iconus.com

8. Invoices and Payments. All ICON invoices should be forwarded to GENTA as follows:

Genta Accounts Payable

200 Connell Drive

Berkeley Heights, NJ 07922

PHONE: 908-286-5799

FAX: 908-464-9353

All payments should be forwarded to ICON pursuant to Section 4.5 of the Master Agreement as follows. Payments shall be in the form of a check drawn on a U.S. bank, payable to ICON Clinical Research, L.P. and mailed to:

ICON Clinical Research, L.P.

Attn.: Dave Peters, Vice President of Finance

P.O. Box 82-8268

Philadelphia, PA 19182-8268

Tax I.D. Number: 52-2133696

9. Exhibits. The Exhibits attached hereto form an integral part of this Project Contract and are hereby incorporated by reference.

2

10. Entire Agreement. With respect to the Services performed under this Project Contract, this Project Contract, including the attached Exhibits, and the Master Agreement contain the entire agreement of the parties. Any modifications to this Project Contract must be in writing and signed by the parties.

IN WITNESS WHEREOF, the parties hereto have executed this Project Contract as of the dates stated below.

ICON CLINICAL RESEARCH, L.P.	SPONSOR NAME
By:	By:
David Peters	Loretta M. Itri
Vice President, Finance	President, Pharmaceutical Development and Chief Medical Officer
Date:	Date:

3

Exhibit A

Protocol

Study/Protocol Number: GM307

Protocol Title: A Multicenter, Randomized, Double-Blind Study of Dacarbazine With or Without Genasense® in Chemotherapy-Naïve Subjects With Advanced Melanoma and Low LDH

Version Number and Date: version number 3, dated 27 July 2007

The above referenced protocol has previously been provided to ICON, and is incorporated herein.

4

Exhibit C

Payment Schedule

Direct Fees

ICON shall invoice Gentafor direct fees in accordance with the following milestone based schedule.

Milestone	Payment	Percentage	Estimated Month
*	$250,000	*	Jun-07
*	$250,000	*	Jul-07
*	$350,000	*	Aug-07
*	$500,000	*	Sep-07
*	$774,831	*	Oct-07
*	$750,000	*	Oct-07
*	$1,197,070	*	Jan-08
*	*	*	*
*	*	*	*
*	*	*	*
*	*	*	*
*	*	*	*
*	*	*	*
*	*	*	*
*	*	*	*
*	*	*	*
*	*	*	*
*	*	*	*
*	*	*	*
*	*	*	*
*	*	*	*
Total	*	100%

IVRS Fees

If IVRS system development is placed on hold by Genta for * or more, additional costs may be incurred to resume activities.

If enrollment is delayed after system go live, * of the monthly fee may be assessed for telephone and system maintenance.

5

The monthly fee will be assessed until IVRS and/or IWRS is no longer required. A minimum number of months will be billed (* of total number of months proposed) if all patients complete early (Prior to * of months proposed).

Monthly maintenance costs are based on Genta having adequate drug supply to allow the automated drug management system to run with no manual manipulation or interference. The monthly maintenance fee includes up to two manual shipments each month. Each additional manual shipment may be charged on a time & materials basis.

Pass-through Costs

Genta shall provide an upfront payment of * of the budget for all pass-through costs upon execution of this Project Contract. Additionally, each month ICON shall submit to Genta an invoice describing the pass-through costs incurred during a particular month and Genta shall pay all invoiced amounts within * days of receipt of such invoice. At the end of these Services, any excess funds held by ICON shall be returned to Genta.

All pass-through costs are estimated for budgetary purposes. Genta shall be invoiced for actual costs incurred.

6

Exhibit D

Transfer of Obligations

GENTA, as Sponsor of the Protocol / Project Contract, hereby transfers responsibilities for Clinical Trial Management, Medical and Safety Support, Data Management, and IVRS as outlined in Exhibit B, and ICON Clinical Research, L.P. hereby assumes such obligations, in accordance with 21 C.F.R. section 312.52.

7

Exhibit E

Key Personnel

NAME	TITLE	CONTACT DETAILS
ICON Clinical Research, L.P.
Maria Hermon	Global Clinical Project Manager	Phone: 512-295-5443 E-mail: HermonM@iconus.com
Brendan Kromer	EU Clinical Project Manager	Phone: +44(0) 1865-891-108 E-mail: KromerB@iconuk.com
Daniela Zlpp	ROW Clinical Project Manager	Phone: +61-2-9859-3934 E-mail: ZippD@iconger.com
Tom Williams	US Medical Affairs	Phone: 215-618-3250 E-mail: WilliamsT@iconus.com
Zuzana Georgen	EU Medical Affairs	Phone: +49-6103-904-1562 E-mail: GeorgenZ@iconger.com
Luke Chung	ROW Medical Affairs	Phone: +65-6895-8242 E-mail: ChungL@iconsing.com
Michelle O’Connell	Data Management Project Manager	Phone: 302-533-3027 E-mail: OconnellM@iconus.com
Ashley Threinen	IVRS Project Manager	Phone: 281-295-4836 E-mail: ThreinenA@iconus.com
Debra Nichols	Senior Director, Business Development	Phone: 401-667-0465 E-mail: NicholsD@iconus.com
Rose Bonner	Contract Analyst	Phone: 215-616-3589 E-mail: BonnerR@iconus.com
Genta, Inc.
Neilda Baron	Medical Director, Drug Safety & Surveillance/Medical Info	Phone: 908-219-3140 E-mail: baron@genta.com
Sharon Burke	Clinical Data Coordinator	Phone: 908-219-3108 E-mail: Burke@genta.com
John Carbine	Director of Finance	Phone: 908-286-5977 E-mail: Carbine@genta.com
Anila Cornet	Director of Quality Assurance	Phone: 908-286-6488 E-mail: Cornet@genta.com
Thierry Cousin	Clinical Project Physician EU	Phone: E-mail: CousinT@genta.com

8

Wendy Curran	Director of Clinical Operations	Phone: 908-286-3997 E-mail: CurranW@genta.com
Donna Eccleston	Clinical Data Coordinator	Phone: 908-219-3147 E-mail: Eccleston@genta.com
Janet Ehlert	Sr. Director, Medical Writing & Communication	Phone: 908-288-5922 E-mail: Ehlert@genta.com
Raymond Feeks	Pharmacovigilence	Phone: 908-288-5995 E-mail: Feeks@genta.com
Erard Gilles	Sr. Medical Director EU	Phone: 908-288-3974 E-mail: Gilles@genta.com
Robin McCabe	Clinical Trial Manager, Regions EU	Phone: 908-286-6452 E-mail: McCabe@genta.com
Bharat Mehta	VP Manufacturing Operations	Phone: 908-286-5952 E-mail: Mehta@genta.com
Steve Novick	Sr. Medical Director US	Phone: 908-286-5972 E-mail: Novick@genta.com
Bonnie Pappacena	Sr. Director of Quality Assurance	Phone: 908-286-5949 E-mail: Pappacena@genta.com
Jill Powers	Sr. Director of Regulatory Affairs	Phone: 908-286-3986 E-mail: Powers@genta.com
Anila Qureshi	Clinical Trial Manager, Regions US, Canada, Australia	Phone: 908-286-6456 E-mail: Qureshi@genta.com
Deborah Sollod	Pharmacovigilence	Phone: 908-219-3110 E-mail: Sollod@genta.com
Ed Spindler	Director of Project Management & Planning	Phone: 908-219-3122 E-mail: Spindler@genta.com
Christine Szkwarko	Sr. Director, Supply Chain	Phone: 908-286-5958 E-mail: Szkwarko@genta.com
Rafael Varona	Clinical Project Physician EU	Phone: E-mail: VaronaR@genta.com
Jane Wu	Sr. Director of Data Management & Biostatistics	Phone: 908-286-5933 E-mail: Wu@genta.com

9

Exhibit B

A revised Proposal for ICON Services in Support of a

Phase III Study Entitled

A Multicenter, Randomized, Double-Blind Study of Dacarbazine With or
Without Genasense^® in Chemotherapy-Naïve Subjects With Advanced

Melanoma and Low LDH

Protocol: GM307

Prepared for:	John Carbine Director of Finance Genta Incorporated 200 Connell Drive Berkeley Heights, NJ 07922 Tel: 908-286-5977 Email: Carbine@genta.com
Prepared by:	ICON Clinical Research 212 Church Road North Wales, PA 19454 www.iconclinical.com
Questions to:	Debra Nichols Senior Director, Business Development Tel: (401) 667-0465 Email: NicholsD@iconus.com
Date:	24 October 2007 Version 4.0

10

Table of Contents

Cost Summary	12
Country / Site Distribution for a 16.5-Month Recruitment Period	13
Project Team	14
Study Timeline	17
Appendix I – ICON Fees and Expenses	18
Appendix II – Responsibilities – Staff Allocation	25
Appendix III – Responsibilities and Specifications	33
Responsibilities	33
Specifications	38
Appendix IV – Specification Detail	43
Clinical Operations	44
Medical and Safety Monitoring	47
Data Management – Oracle ClinicalTM	49
IVRS	57

11

Cost Summary

A summary of ICON professional fees and pass-through costs is presented below. A detailed cost estimate has been provided in Appendix I. The provided estimate was developed based upon the information provided by Genta as reflected in the Project Specifications section.

Project Cost Category	US	EU	ROW
Clinical Operations	*	*	*
Medical Affairs	*	*	*
Data Management	*
Interactive Voice Response System (IVRS)	*
ICONet	*
Subtotal Total Direct Fees	*	*	*
Estimated Pass-Through Costs*	*	*	*
Total Study Budget	*	*	*

______________

* Investigator fees have not been included in this proposal.

12

Country / Site Distribution for a 16.5-Month Recruitment Period

The following is the site and country distribution as of July 31, 2007:

Table 1: 130 sites enrolling patients over a 16.5 month recruitment period

Country	No. of Sites	Patients screened	Patients Enrolled	Patients Completed
United States	21	105	79	79
UK	7	30	23	23
France	15	80	60	60
Germany	18	90	68	68
Austria	5	25	19	19
Italy	4	20	15	15
Czech Republic	1	5	4	4
Switzerland	1	5	4	4
Sweden	1	5	4	4
Spain	5	25	19	19
Australia	3	15	11	11
Canada	2	10	8	8
Grand Total	83	415	314	314

13

Project Team

ICON’s philosophy is to become an extension of Genta’s study team to facilitate seamless study conduct and communication. To achieve this goal, our proposed project team is based on the parameters supplied in Genta’s RFP as well as our own review. The proposed structure of our project team reflects the elements necessary to ensure a timely conclusion of this project. Curricula vitae (CVs) of proposed ICON project team members are provided below.

Global Therapeutic Advisor

Andreas Dreps, PhD, is ICON’s Global Therapeutic Lead for Oncology and is responsible for overseeing all oncology projects throughout their duration. He is based in ICON’s Langen Germany office and is Director of Oncology Research in Europe. During his 14 years of pharmaceutical industry experience, Dr. Dreps worked on the development of several chemotherapy agents (Taxol®, Taxotere®, and Campto®), several molecular targeting agents such as monoclonal antibodies targeting the EGF-R (Erbitux®, EMD 72.000), an angiogenesis inhibitor (Cilengitide) and tumor vaccines (Theratope®, BLP-25, and BEC-2). Andreas has an excellent understanding of the competitive environment with regard to other ongoing clinical trials targeting a similar patient population. Utilizing his exceptional oncology experience (especially during the site selection process) will be a distinct advantage in identifying the most qualified sites and keeping the timelines as short as possible.

US Project Manager

Maria Hermon is the US Project Manager for this Genta trial. Maria has been with ICON for four years and she has over 15 years of experience working in the clinical research industry. She has successfully managed numerous studies ranging from Phase I to Phase IV. Maria has experience managing studies in multiple therapeutic areas including oncology. Other therapeutic area experience includes cardiovascular, endocrine/ metabolic, gastrointestinal, infectious disease, medical device, musculoskeletal, neurology, ophthalmology, respiratory, skin and soft tissue, transplant and urology. Maria’s oncology experience along with her excellent project management skills will enable her to successfully manage this Genta study.

EU Clinical Project Manager

ICON proposes Brendan Kromer, Ph.D. based in our Marlow, UK office to manage clinical activities in Europe. Brendan brings extensive oncology trial experience, including the monitor, coordination and management of international phase II and III trials in solid and non-solid oncology indications. Brendon has also recently completed the management of a global, cardiovascular morbidity trial extending across 10,873 enrolled patients in 16 countries. In total, Brendon brings over 8 years of clinical research industry experience, including over 6 years of project management. His educational credentials include a Bachelor of Science (Hons) 2.1 in Pharmacology as well as a Ph.D. in Cardiovascular Pharmacology from the Imperial College, London. His career experience and medical expertise will provide assured management of services in Europe.

ROW Project Manager – Australia & New Zealand

Daniela Venusta Zipp is the Australian & New Zealand Project Manager. Daniela has over 5 years of clinical research industry experience. Daniela was recently a Clinical Project Manager on a Breast Cancer study and has Non-Small Cell Lung Cancer monitoring

14

experience. Daniela’s experience in oncology makes her an excellent choice to lead this important Genta trial. Daniela is also fluent in German, English, Italian, and has basic Spanish skills, which will be an asset to this study.

US Medical Monitor

Thomas Williams, MD is the US Medical Monitor for this study. Dr. Williams isthe Senior Director of the OncologyDivision and is based in Austin, Texas.He is board certified in Hematology and Oncology and has been with ICON since 2002. Prior to joining ICON, Dr. Williams was Director of Medical Affairs at ILEX Oncology for seven years. He has more than 37 years of experience in clinical research, with 23 years of experience in academia. He has authored or co-authored 85 publications and 22 presentations. His areas of clinical expertise include cancer, bone marrow transplantation, hemophilia, and sickle cell anemia. Dr. Williams also has 16 years of industry experience and has participated in the clinical development of more than 68 investigational agents and biologics, including NDA submissions for four therapeutic agents for leukemia. He has participated in the development of clofarabine, vincristine, fuanazole, Elliott’s B Solution, methotrexate, thioguanine, mercaptopurine, Piritrexim, daunorubicin, azacitidine, dibromodulcitol, L-asparaginase, Erwinia asparaginase, homoharringtonine, deoxycoformycin, amsacrine, mitoxantrone, adriamycin, cytarabine, trans-retinoic acid, busulfan for injection, cyclophosmade, and CAMPATH-1H. Dr. Williams’ postgraduate training was in Hematology-Oncology at the University of Virginia and in Bone Marrow Transplantation at the Johns Hopkins Medical School. He holds an M.D. degree from the University of Texas Southwestern Medical School. His career has centered on oncology and hematologic disorders, making him the perfect choice to provide the caliber of medical oversight and expertise that this Genta study requires.

EU Medical Monitor

The EU Medical Monitor is Zuzana Goergen, MD, a Clinical Research Physician based in our office in Langen, Germany. Dr. Goergen recently joined ICON and is a board certified Specialist in Dermatology (Germany). She has more than 12 years of medical practice and clinical research experience. Her focus has been in dermatology and she has been actively involved in the surgical and chemotherapeutic treatment of patients with melanoma. Prior to joining ICON, Dr. Goergen served as Medical and Drug Safety Advisor with Premier Research Ltd in Germany, providing support on medical and safety issues in clinical trials. Dr. Goergen’s medical device experience includes three years as Product Manager with Paul Hartmann AG in Germany, where she was responsible for all marketing activities for modern and traditional wound healing products for the Eastern European markets. She also worked as an Investigator for a post-marketing surveillance study. Dr. Goergen holds her MD from the Medical University of Bratislava. She speaks fluent Slovak, Czech, English, German, French and Russian. Her focused skills in dermatology and oncology will serve this project well as she provides medical knowledge and pharmacovigilance expertise for Genta and the European project team.

ROW Medical Monitor – Australia and New Zealand

Luke E. Chung is the Medical Monitor in Singapore. Dr. Chung has over 6 years of experience working in the clinical medicine and 2 years of experience working in the clinical research industry. Prior to his involvement in the clinical research industry, Dr. Chung worked in clinical practice for over 5 years. Dr. Chung’s therapeutic experience includes Cardiovascular, Endocrinology, Nephrology, Neurology, and Smoking Cessation. His medical and business acumen, along with his fluency in English and Korean, will nicely support the GM307 protocol in Singapore.

Data Management Project Manager

ICON proposes Michelle O’Connell, M.S., based out of our Newark, Delaware office to manage data activities for this protocol. Michelle brings over 9 years of management experience, including extensive oncology experience in

15

both solid and non-solid oncological indications. She holds technical expertise in SQL, SAS, and MedDRA, which she will use to maintain a thorough vigilance of all datasets. In addition to her experience in data management, Michelle has also worked at a medical university as a research program manager, where she advised developed, coordinated and supervised research activities of clinical studies conducted by Principal Investigators in the Radiology Department. Michelle’s educational credentials include a Master of Science Degree in Drug Regulatory Affairs and Health Policy. Her extensive knowledge in managing data for intricate therapeutic areas will provide established leadership for the data management portion of this global trial.

16

Study Timeline

Milestone	Target Date
ICON Involvement Begins	01 June 2007
First Patient In (FPI)	*
Last Patient In (LPI)	*
Treatment/Follow-up Ends: Last Patient Out (LPO)	*
Final Database Lock	*
Closeout Visits Completed	*
ICON Involvement Ends	31 March 2011
Total ICON Involvement	46 Months

The timeline shown above is based on the assumption that some sites may have FPI August 21, 2007, with the majority of sites should have FPI occur by October 2007.

17

Appendix I – ICON Fees and Expenses

ICON incorporates an annual increase into its staff charge out rates to account for salary increases, cost of living increases, benefits, and competition for staff within the industry. Therefore, ICON has blended staff charge out rates across the lifetime of the project. The blending of rates has been ‘weighted’ and is in direct correlation to the timelines presented herein. Required modifications to the timelines will impact the rates accordingly.

Detailed Costs – US

Clinical Research Management	Unit type	Number of Units	Unit Price (USD)	Total (USD)
Global Project Manager	Days	611	*	*
Lead CRA	Days	534	*	*
CRA	Days	2,301	*	*
CSA	Days	64	*	*
CR Assistant	Days	480	*	*
Unblinded Lead CRA	Days	118	*	*
Unblinded CRA	Days	482	*	*
Contract Administration	Per site	21	*	*
Payment Administration	Payment	861	*	*
ICOTrack Set-up	Study	1	*	*
ICOTrack Maintenance	Month	46	*	*
CLINICAL RESEARCH MANAGEMENT SUB-TOTAL				*

Medical Management	Unit type	Number of Units	Unit Price (USD)	Total (USD)
Medical Monitor	Days	30	*	*
Safety Monitor	Days	173	*	*
Medical Assistant	Days	41	*	*
MEDICAL MANAGEMENT SUB-TOTAL				*

* Figures in the “Price per unit” column have been rounded, figures in the “Total” column are correct.

18

Estimated pass-through costs	Unit type	Number of Units	Unit Price (USD)	Total (USD)
Visits
Qualification Visits (by phone)	Visits	21	*	*
Initiation Visits	Visits	21	*	*
Interim Monitoring Visits	Visits	214	*	*
Close-out Visits	Visits	21	*	*
Un-Blinded Interim Monitoring Visits	Visits	116	*	*
Un-Blinded Close-out Visits	Visits	21	*	*
Meetings
Kick-off Meeting	Attendee	12	*	*
Sponsor Meetings	Attendee / Meeting	48	*	*
Other
IRB Costs	Site	21	*	*
CRF Printing & Distribution	Printed CRF Pages	54,322	*	*
General Shipping	per site/month	966	*	*
IVRS Pass-throughs	Study	1	*	*
				*

19

Detailed Costs – EU

Clinical Research Management	Units	Number of Units	Unit Price (USD)	Total (USD)
Project Manager	Days	870	*	*
Lead CRA	Days	1534	*	*
Clinical Research Associate	Days	6588	*	*
Clinical Research Assistant	Days	2855	*	*
Clinical Regulatory Compliance Associate	Days	15	*	*
Study Authorization Associate	Days	80	*	*
Study Authorization Assistant	Days	8	*	*
Medical Monitor	Days	77	*	*
Safety Monitor	Days	345	*	*
Medical Assistant	Days	84	*	*
Account Administrator	Days	164	*	*
CLINICAL RESEARCH MANAGEMENT SUB-TOTAL				*

Estimated pass-through costs	Units	Number of Units	Unit Price (USD)	Total (USD)
Travel
Site Visits	Visits	1,426	*	*
Unblinded Monitoring Visits	Audits	0	*	*
Team Meetings	Meetings	15	*	*
Sponsor Meetings	Meetings	8	*	*
Translations
Protocol synopsis (1,000 words)	Language	4	*	*
Protocol (Spain)	Language	1	*	*
Informed consent document	Language	5	*	*
Regulatory documents	Submission	5	*	*
EC documents	Submission	40	*	*

20

Other
Teleconferencing (3 lines)	Meetings	180	*	*
Ethics Committee Fees	Submission	40	*	*
Regulatory Agency Fees	Countries	9	*	*
Courier	per site/month	2622	*	*
Mobile phones	per CRA per month	347	*	*
Legal consultation investigator contracts	Hours	11	*	*
				*

21

Detailed Costs – ROW

Clinical Research Management	Units	Number of Units	Unit Price	Total (USD)
Project Manager	Days	101	*	*
Unblinded CRA	Days	159	*	*
Clinical Research Associate	Days	611	*	*
Clinical Trial Assistant	Days	223	*	*
Clinical Regulatory Compliance Associate	Days	19	*	*
Account Administrator	Days	29	*	*
CLINICAL RESEARCH MANAGEMENT SUB-TOTAL				*
Medical Management	Units	Number of Units	Unit Price	Total (USD)
Medical Monitor	Days	24	*	*
Safety Monitor	Days	44	*	*
Medical Assistant	Days	13	*	*
MEDICAL MANAGEMENT SUB-TOTAL				*
ICON CLINICAL RESEARCH MANAGEMENT FEE				*
Estimated pass-through costs	Units	Number of Units	Unit Price	Total (USD)
Travel
Site Visits	Visits	167	*	*
Team Meetings	Meetings	15	*	*
Sponsor Meetings	Meetings	8	*	*
Translations
Protocol synopsis (1,000 words)	Language	1	*	*
Informed consent document	Language	1	*	*
Other Regulatory Documents	Words	10,000	*	*

22

Other
Teleconferencing (3 lines)	Meetings	56	*	*
Ethics Committee Fees	Sites	5	*	*
Regulatory Agency Fees	Countries	2	*	*
Courier	per site/month	230	*	*
Mobile phones	per CRA per month	41	*	*
Legal consultation investigator contracts	Hour	1.00	*	*
ESTIMATED PASS THROUGH COSTS				*

Data	Unit	Units	Unit	Total
Project	Month	46	*	*
Project	Projec	1	*	*
CRF	CRF	0	*	*
Page	Pages	41786	*	*
Query	Queries	6000	*	*
Coding (and	Terms	6000	*	*
Data Validation &	Pages	41786	*	*
SAE	SAEs	312	*	*
Monthly External Data	Month	46	*	*
Dirty	Transfe	6	*	*
Clean	Transfe	9	*	*
Closeout, Final Transfer,	Projec	1	*	*
Teleconference	Meeting	56	*	*
Kick-off	Meeting	1	*	*
Face-to-Face -	Meeting	4	*	*
Review of CRF	CRF	1	*	*
		Data Management		*
ICONe				*
		Data Management		*

23

IVRS Project Cost
Setup costs
System Development
— Initial Set Up Meeting / User requirements		*
— Functional / Technical Design		*
— System Development and Programming		*
— Testing and Validation		*
— User Acceptance Testing		*
— Initial Data loads		*
— Training / Training manuals		*
— Create Randomization Schedule		*
SubTotal			*
Language Management
— English			*
— Additional languages	1 Language	*	*
Investigators’	2 Meetings	*	*
Estimated Pass-through
— IVR Prompt Recording & translation	1 Language	*	*
— Shipping, Mailing, Courier			*
— Investigator Meeting	2 Meetings	*	*
Total Setup Costs			*
Monthly Maintenance Costs
24-hour user support & technical support		*
Project management		*
SubTotal	40 Months	*	*
Direct Costs
— Telecom	40 Months	*	*
Total Monthly			*
		Total	*

24

Appendix II – Responsibilities – Staff Allocation

It is ICON policy to assign clinical staff based on Full Time Equivalents (FTEs) rather than specific task units. Please see the table below for ICON’s FTE assumptions.

ICON Global Clinical FTE Assumptions

Description	US	EU & ROW
Working Day	8 hours	8 hours
Working Days Per Month	19.58 days	19.00 days
Working Hours Per Month	156.67 hours	152 hours
Working Hours Per Year	1,880 hours	1,824 hours

25

Clinical Staff

Position	Staff	Allocation	From	Through
Global Project Manager	1	100%	01-Jun-07	28-Feb-08
	1	60%	01-Mar-08	31-Mar-11
Project Manager – EU	1	100%	01-Jun-07	30-Jun-07
	1	90%	01-Jul-07	31-Aug-07
	1	100%	01-Sep-07	31-Mar-11
Project Manager – AUS	1	10%	01-Jun-07	31-Dec-10
	1	15%	01-Jan-11	28-Feb-11
	1	10%	01-Mar-11	31-Mar-11
Project Manager – Canada	1	20%	01-Jun-07	31-Aug-07
Unblinded Lead CRA – US	1	15%	01-Oct-07	31-Jan-11
Unblinded Lead CRA – EU	1	25%	01-Oct-07	31-Mar-11
Lead CRA – US	1	100%	01-Jun-07	28-Feb-08
	1	50%	01-Mar-08	15-Mar-11
Lead CRA – EU	1	100%	01-Jun-07	31-Jul-07
	1.75	100%	01-Aug-07	31-Aug-07
	2	100%	01-Sep-07	31-Dec-07
	1.5	100%	01-Jan-08	31-Mar-11

26

Position	Staff	Allocation	From	Through
CRA – US1	1	34%	01-Jun-07	30-Jun-07
	1	82%	01-Jul-07	31-Jul-07
	1	100%	01-Aug-07	31-Aug-07
	1	95.8%	01-Sep-07	28-Feb-08
	3	100%	01-Mar-08	15-Feb-11
	3.15	100%	16-Feb-11	15-Mar-11
CRA – WEU1	1	17%	01-Jun-07	30-Jun-07
	1.2	100%	01-Jul-07	31-Jul-07
	1.27	100%	01-Aug-07	31-Aug-07
	1.6	100%	01-Sep-07	30-Sep-07
	1.45	100%	01-Oct-07	31-Oct-07
	1.31	100%	01-Nov-07	31-Jan-07
	1.52	100%	01-Feb-11	15-Mar-11
CRA – CEU1	2.49	100%	01-Jun-07	30-Jun-07
	3.03	100%	01-Jul-07	31-Jul-07
	3.51	100%	01-Aug-07	31-Aug-07
	5.7	100%	01-Sep-07	30-Sep-07
	5.23	100%	01-Oct-07	31-Oct-07
	4.79	100%	01-Nov-07	31-Jan-11
	5.56	100%	01-Feb-11	15-Mar-11

27

Position	Staff	Allocation	From	Through
CRA – EEU1	1	20%	01-Sep-07	30-Sep-07
	1	15%	01-Oct-07	31-Oct-07
	1	11%	01-Nov-07	31-Jan-11
	1	13%	01-Feb-11	15-Mar-11
CRA – Australia	1	35%	01-Jun-07	30-Sep-07
	1	63%	01-Oct-07	31-Dec-08
	1	47%	01-Jan-09	31-Jan-09
	1	31%	01-Feb-09	31-Dec-10
	1	30%	01-Jan-11	15-Mar-11
CRA – Canada	1	23%	01-Jun-07	30-Sep-07
	1	42%	01-Oct-07	31-Dec-08
	1	31%	01-Jan-09	31-Jan-09
	1	21%	01-Feb-09	31-Dec-10
	1	20%	01-Jan-11	15-Mar-11
Unblinded CRA – US1	1	34%	01-Jul-07	31-Jul-07
	1	20%	01-Aug-07	31-Aug-07
	1	50%	01-Sep-07	15-Jan-11
	1.92	100%	16-Jan-11	15-Mar-11
Unblinded CRA – WEU1	1	23%	01-Oct-07	31-Oct-07
	1	44%	01-Nov-07	31-Dec-09
	1.75	100%	01-Jan-10	15-Feb-10

28

Position	Staff	Allocation	From	Through
Unblinded CRA – CEU1	1	84%	01-Oct-07	31-Oct-07
	1.62	100%	01-Nov-07	31-Dec-09
	6.41	100%	01-Jan-10	15-Feb-10
Unblinded CRA – EEU1	1	2%	01-Oct-07	31-Oct-07
	1	4%	01-Nov-07	31-Dec-09
	1	15%	01-Jan-10	15-Feb-10
Unblinded CRA – Australia1	1	15%	01-Sep-07	31-Oct-07
	1	41%	01-Dec-07	15-Jan-09
	1	15%	01-Dec-10	15-Jan-11
Unblinded CRA – Canada1	1	10%	01-Sep-07	31-Jan-09
	1	10%	01-Dec-10	15-Jan-11
CSA – US	1	38%	15-Jun-07	28-Feb-08
CRC Associate – EU	1	2%	01-Jun-07	31-Mar-11
Study Authorization Associate – EU	1.39	100%	01-Jun-07	31-Aug-07
Study Authorization Assistant – EU	1	14%	01-Jun-07	31-Aug-07
Study Authorization Associate – Australia	1	10%	01-Jun-07	31-Aug-07
	1	.5%	01-Sep-07	31-Dec-10
CSA – Canada	1	10%	01-Jun-07	31-Aug-07
	1	.5%	01-Sep-07	31-Dec-10

29

Position	Staff	Allocation	From	Through
CR Assistant – US	1	100%	01-Jun-07	31-Aug-07
	1	50%	01-Sep-07	31-Mar-11
CR Assistant – WEU	1.53	100%	01-Jun-07	30-Jun-07
	1.64	100%	01-Jul-07	31-Jul-07
	2.03	100%	01-Aug-07	31-Aug-07
	2.32	100%	01-Sep-07	30-Sep-07
	2.34	100%	01-Oct-07	31-Oct-07
	2.35	100%	01-Nov-07	31-Dec-07
	2.10	100%	01-Jan-08	31-Dec-09
	2.36	100%	01-Jan-10	31-Jan-10
	2.19	100%	01-Feb-10	28-Feb-10
	2.01	100%	01-Mar-10	31-Jan-11
	2.05	100%	01-Feb-11	28-Feb-11
	1.9	100%	01-Mar-11	31-Mar-11

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Position	Staff	Allocation	From	Through
CR Assistant – CEU	1	50%	01-Jun-07	30-Jun-07
	1	61%	01-Jul-07	31-Jul-07
	1	70%	01-Aug-07	31-Aug-07
	1.14	100%	01-Sep-07	30-Sep-07
	1.21	100%	01-Oct-07	31-Oct-07
	1.28	100%	01-Nov-07	31-Dec-09
	2.24	100%	01-Jan-10	31-Jan-10
	1.60	100%	01-Feb-10	28-Feb-10
	1	96%	01-Mar-10	31-Jan-11
	1.11	100%	01-Feb-11	15-Mar-11
CR Assistant – EEU	1	4%	01-Sep-07	30-Sep-07
	1	3%	01-Oct-07	31-Dec-09
	1	5%	01-Jan-10	31-Jan-10
	1	4%	01-Feb-10	28-Feb-10
	1	2%	01-Mar-10	31-Jan-11
	1	3%	01-Feb-11	15-Mar-11
CR Assistant – Australia	1	17%	01-Jun-07	30-Sep-07
	1	23%	01-Oct-07	31-Dec-08
	1	19%	01-Jan-09	31-Jan-09
	1	16%	01-Feb-09	31-Dec-10
	1	21%	01-Jan-11	15-Mar-11

31

Position	Staff	Allocation	From	Through
CR Assistant – Canada	1	25%	01-Jun-07	31-Aug-07
	1	5%	01-Sep-07	30-Sep-07
	1	8%	01-Oct-07	31-Dec-08
	1	6%	01-Jan-09	31-Jan-09
	1	4%	01-Feb-09	15-Mar-11

Medical Staff

Position	Staff	Allocation	From	Through
Medical Monitor – US	1	3.5%	01-Jun-07	15-Feb-11
Medical Monitor – EU	1	9%	01-Jun-07	15-Feb-11
Medical Monitor – Singapore (for Australia)	1	3%	01-Jun-07	15-Feb-11
Drug Safety Associate – US	1	19.8%	01-Jun-07	15-Feb-11
Drug Safety Associate – EU	1	41%	01-Jun-07	15-Feb-11
Drug Safety Associate – Singapore (for Australia)	1	5%	01-Jun-07	15-Feb-11
Medical Assistant – US	1	4.7%	01-Jun-07	15-Feb-11
Medical Assistant – EU	1	10%	01-Jun-07	15-Feb-11
Medical Assistant – Singapore (for Australia)	1	2%	01-Jun-07	15-Feb-11

______________

¹ Due to the number of sites being monitored, it is not plausible to dedicate all ICON CRAs 100% to this project as per ICON’s standard policy. Therefore, there will be a mix of dedicated and non-dedicated CRAs. ICON will ensure that no competing projects will be allowed to interfere with the work being performed for Genta’s study by ICON CRAs that are not 100% dedicated to this study.

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Appendix III – Responsibilities and Specifications

Responsibilities

Project Task	Genta	ICON
Study Documents
Write Protocol	√
Ship Protocol		√
Print CRF		√
Ship CRF		√
Prepare CRF Completion Guidelines	√
Write Investigator Drug Brochure	√
Ship Investigator Drug Brochure		√
Prepare Template Informed Consent Form		√
Investigator Recruitment
Identify and Select Investigators	√	√
Issue Letters of Indemnification to Investigators	√
Negotiate Investigator Agreements	√
Administer Investigator Payments	√
Regulatory Documents
Collect Site Regulatory Documents		√

33

Project Task	Genta	ICON
Review Critical Documents		√
Final approval of regulatory/EC packages prior to submission	√
Submission of Regulatory Documents (including IND, annual safety letters, NDA) to FDA	√
Submission of Regulatory Documents to EU and ROW regulatory agencies		√
Assemble and submission of EC documentation to EU and ROW EC as appropriate		√
Assemble and Distribute Study Procedures Manual and Regulatory/Site Binder for Each Site		√
Investigator Meeting and Training
Investigator Meeting Logistics	√
Attend and Participate in Investigator Meeting	√	√
Project Specific Training to Team		√
Prepare the Monitoring Conventions and Train CRAs		√
Monitoring Visits
Conduct Site Qualification Visits		√
Conduct Site Initiation Visits		√
Conduct Interim Monitoring Visits		√
Conduct Site Closeout Visits		√
Conduct Unblinded Visits		√
Study Maintenance
Conduct In-House Site Management		√

34

Project Task	Genta	ICON
Provide Newsletters and/or Tipsheets		√
Data Management
CRF
Design CRF	√
Review of CRF Design		√
Prepare CRF Completion Guidelines	√
Print CRF		√
Ship CRF		√
Project Set-up
Develop Data Management Plan		√
Design Database		√
Develop Edit Check Specifications		√
Program and Validate Edit Checks		√
Develop Data Entry Conventions		√
Develop ICONet (ICON’s Web Portal)		√
Data Processing
CRF and Query Tracking		√
Double Data Entry		√
Obvious Data Corrections		√
Data Validation (Discrepancy Management)		√
Manual Data Listing Review		√

35

Project Task	Genta	ICON
Query Generation and Resolution		√
Coding of Medical History, Concomitant Medications and Adverse Events		√
Receipt and Reconciliation of Third Party Data		√
SAE Reconciliation		√
Project Closeout
100% QC of Database for Safety and Primary Efficacy Parameters		√
Random Sample QC (square root of n+1)		√
Database Lock		√
Final Database Transfer		√
Return of Study Documentation		√
Medical Affairs
Medical management		√
Guide ICON staff and investigative sites on medical and safety protocol-related issues		√
Provide direction to ICON staff and investigative sites on patient eligibility questions		√
Guide the ICON staff and investigative sites on exception granting		√
Provide ongoing training to ICON staff		√
Medical review of coding	√
Review of CRFs for missed SAEs	√
Review of AE Listings	√

36

Project Task	Genta	ICON
Lab and ECG review	√
Data Entry of an Initial and two follow up SAE reports		√
Preparation of the case narratives (by default ICON prepares ‘running narratives’ as part of its case processing)	√
Medical review of SAEs	√
Responsibility for all ultimate SAE causality assessments	√
Generate MedWatch form for each SAE	√
Holding and Maintenance of the safety database	√
Assist DM and Clin Ops with Reconciliation	√	√
Enter, clarify and encode SAEs using MedDRA and WHODRUG	√	√
Preparation of monthly SAE listings	√	√
Determine the reportability of events and notify the FDA and other regulatory agencies of expedited events	√

37

Specifications

Sites	US	EU	ROW
Number of Sites	21	57	5
Patients
Number of Screened Patients	105	285	25
Number of Randomized Patients	79	216	19
Number of Completed Patients	79	216	19
Monitoring1, 2
Number of Qualification Visits	21 Visits 4 Hours on Site 8 Hours of Travel 4 Hours Prep/Report	60 Visits 4 Hours on Site 8 Hours of Travel 4 Hours Prep/Report	5 Visits 4 Hours on Site 8 Hours of Travel 4 Hours Prep/Report
Number of Initiation Visits	21 Visits 8 Hours on Site 8 Hours of Travel 8 Hours Prep/Report	57 Visits 8 Hours on Site 8 Hours of Travel 8 Hours Prep/Report	5 Visits 8 Hours on Site 8 Hours of Travel 8 Hours Prep/Report
Number of Interim Visits – Treatment	214 Total Visits 16 Hours on Site 8 Hours of Travel 8 Hours Prep/Report	523 Total Visits 16 Hours on Site 8 Hours of Travel 8 Hours Prep/Report	59 Visits 16 Hours on Site 8 Hours of Travel 8 Hours Prep/Report

38

Number of Interim Visits – Follow up	176 Total Visits 8 Hours on Site 8 Hours of Travel 8 Hours Prep/Report	369 Total Visits 8 Hours on Site 8 Hours of Travel 8 Hours Prep/Report	48 Visits 8 Hours on Site 8 Hours of Travel 8 Hours Prep/Report
Number of Closeout Visits	21 Visits 16 Hours on Site 8 Hours of Travel 36 Hours Prep/Report	57 Visits 16 Hours on Site 8 Hours of Travel 36 Hours Prep/Report	5 Visits 16 Hours on Site 8 Hours of Travel 36 Hours Prep/Report
Number of Unblinded Initiation Visits	0 Visits 0 Hours on Site 0 Hours of Travel	0 Visits 0 Hours on Site 0 Hours of Travel	0 Visits 0 Hours on Site 0 Hours of Travel
Number of Unblinded Monitoring Visits - Treatment	116 Visits 4 Hours on Site 8 Hours of Travel 4 Hours Prep/Report	303 Visits 4 Hours on Site 8 Hours of Travel 4 Hours Prep/Report	40 Visits 4 Hours on Site 8 Hours of Travel 4 Hours Prep/Report
Number of Unblinded Closeout Visits	21 Visits 8 Hours on Site 8 Hours of Travel 16 Hours Prep/Report	57 Visits 8 Hours on Site 8 Hours of Travel 16 Hours Prep/Report	5 Visits 8 Hours on Site 8 Hours of Travel 16 Hours Prep/Report
Medical Monitoring
Number of SAEs (100% SAE Rate)	87 (79 US and 8 Canada)	216	11 (Australia only)

¹ Should additional visits be needed for PSVs, SIV, SMVs, or SCV, ICON will seek Genta’s approval prior to conducting such additional visits. Should study visits require additional on-site time, ICON will seek Genta’s approval for such additional time on site. Additional visits and additional on-site time will be paid by Genta.

² While meeting Genta’s specifications provided for total monitoring days the following regions have had to adjust their “Site Management per site per month” to the following approximations: US: 4.8 hours, ROW and EU 6.67 hours.

39

Data Management Specifications

Activity	Specification
Number of Status Reports	5
Frequency of Status Reports	Monthly
Meetings
Teleconferences with Genta	56
Kick-off Meeting	1
Investigator Meeting	1
Face-to-Face Meetings	8
Project Setup
Database Setup (Unique Pages)	35
Edit Check Programs	375
Data Review Listings	10
External Data and Review
IVRS Electronic Data Interface	Yes
Number of IVRS Electronic Data Transfers	46
Local Laboratory Data	Yes
Data Processing
Screen Fail Subjects	101
Completed Subjects	314
CRF Pages per Completed Subject	126
Total Pages per Completed Subject	126
Total Pages Tracked / Entered	41,786
Total Pages Validated	41,786
Number of SAEs Reconciled	312
Coding
Coded Items	6,000
Query Processing
Data Queries	6,000
Data Transfers to Genta
Data Transfer(s) (Dirty Data)	6

40

Data Transfer(s) (Clean Data, Interim Analysis)	9
Final Transfer	1
Quality Control Review
100% Review of CRFs (number of patients, Square Root of n+1)	19
Duration of 100% Reviews (minutes per patient)	60
Critical Variable Reviews (number of patients)	314
Duration of Critical Variable Reviews (minutes per patient)	30
Closeout Activities
Study Document Archive Preparation (number of documents)	47,786

41

Meetings

Meeting	Number of Meetings	Duration (Hours)	ICON Team Member Attendees1
Kick-Off	1	8	CPM, LCRA, UCRA, CSA, USMM, USMM backup, USDSA, DMPM, DMSL, Sr. Dir CO, IVRS PM, US Argus Trainer
Face-to-Face	8	6	GPM, LCRA, MM, DSA, DMPM, DMSL
Investigator	1	8	US CPM, LCRA, 2 BCRA, UCRA, ULCRA, CSA, MM, DSA, DMPM, DMSL, IVRS PM
Teleconferences	56	1	As needed

______________

¹ GPM = Global Project Manager, LCRA = Lead Clinical Research Associate, ULCRA = Unblinded Lead Clinical Research Associate, CRA = Clinical Research Associate, BCRA = Blinded Clinical Research Associate, UCRA = Unblinded Clinical Research Associate, MM = Medical Monitor, USMM = United States Medical Monitor, DSA = Drug Safety Associate, DMPM = Data Management Project Manager, DMSL = Data Management Study Lead

41

Appendix IV – Specification Detail

Translations

• Any translations of the protocol, case report form (CRF), informed consent form (ICF), or other documents required will be the responsibility of ICON.

• Translations of site specific ICFs will be performed by a selected vendor and all costs will be charged as a pass-through expense.

Standard Operating Procedures (SOPs)

ICON SOPs and where appropriate, ICON SSOPs (Study Specific Operating Procedures) will be followed.

Legal Representative Pursuant to EU Clinical Trials Directive 2001 / 20 / EC

• Where appropriate and if requested by Genta, ICON can act as legal representative for Genta pursuant to the above directive. This service requires that certain terms and conditions be satisfied prior to ICON acting as such a legal representative. If desired, Genta can discuss such a service in more detail with the ICON BD representative.

Legal Representative and Other Services in Respect of Data Privacy Regulations

• Under data privacy legislation a data controller (normally the sponsor) may be required to have a legal representative within Europe or in certain circumstances within a certain member state. Where appropriate and if requested by Genta, ICON can act as legal representative for Genta (in respect of its data controller position). This service requires that certain terms and conditions be satisfied prior to ICON acting as such a legal representative. Furthermore ICON can carry out ancillary regulatory services in respect of the data protection regulations if requested by Genta and at a cost to be determined. If desired, Genta can discuss such a service in more detail with the ICON BD representative.

43

Clinical Operations

Regulatory Document Collection

• Pre-study regulatory documents for each site will include accurate, signed Form FDA 1572, financial disclosure agreement, curricula vitae from the principal investigator and other relevant site personnel, site-specific informed consent form, IRB approval, etc.

Qualification Visits

• At each site qualification visit the ICON monitor will confirm the suitability of the site for the study, assess investigator interest and qualifications, assess available facilities, and discuss general study information.

Un-Blinded Initiation Visits

• At each un-blinded initiation visit, the ICON monitor will work with the site to determine how to best manage the drug dispensing process.

Initiation Visits

• At each initiation visit the ICON monitor will thoroughly review the protocol, the CRF, proper source documentation, the IDB, investigator obligations, IRB/ regulatory files, informed consent procedures, AE/SAE reporting procedures, and study product accountability/storage procedures with the investigator and other relevant site personnel. Additionally, any necessary study-specific training will be provided at the initiation visit.

Un-Blinded Interim Monitoring Visits

• At each unblinded interim monitoring visit, the ICON monitor will perform drug reconciliation in the pharmacy including the review of drug dispensing records.

44

Interim Monitoring Visits

• At each interim monitoring visit the ICON monitor will confirm site adherence to the protocol, confirm fulfillment of FDA requirements, verify CRFs against source documents, assure proper CRF completion, verify informed consents, ensure proper SAE reporting, record retention, adequacy of study supplies, proper study product storage and accountability.

Closeout Visits (Including Un-Blinded)

• At each site closeout visit the ICON monitor will perform complete study product reconciliation, verify that all CRFs are completed and monitored, and perform a review of investigator responsibilities (including record retention requirements, verification of investigator files for completeness and accuracy, and completion of the site closure form by the investigator).

• After site closeout visit activities have been completed, ICON will send a closeout letter to the site; a record of relevant supplies and all documentation will also be forwarded to Genta or archived in accordance with relevant ICON SOPs.

In-House Site Management

• The ICON monitor will conduct in-house monitoring activities as needed during the study.

• In-house site management activities will include site contact, generation of contact reports, site status tracking, attendance at team meetings, attendance at team training, responding to site questions, maintenance of updated investigator regulatory documents, issue resolution from previous site monitoring visits, responding to data queries, planning next visits (site contact documentation and travel plans), Serious Adverse Event (SAE) reporting and follow up and reconciliation as needed, generation of trip reports, creation of follow up letters documenting trip status, replenishing site supplies (i.e. case report forms, study product), responding to audit findings, assist as needed with mass distribution of information, and maintaining the investigator file. ICON will maintain telephone contact with sites on a regular basis throughout the study.

Project Meetings

• Regular project meetings will be held involving key team members from Genta and ICON in order to monitor study progress and address and resolve any problems that may be identified.

45

Status Reports/Project Tracking

• ICON will submit written project status reports to Genta as defined in the Project Assumptions section of this proposal.

• Costs have been included for ICON’s clinical trial management system. From this system, the clinical project team can generate a variety of reports that track specific study information requested by Genta, including patient visits, regulatory document collection, site monitoring visits, sample shipments to the laboratory, etc. Costs have been provided for system set-up, monthly maintenance, and ICON standard reports. The systems may be reconfigured for Genta-requested reports; however, modification in cost may be required based upon the time needed to reconfigure the system. ICON would be happy to share its standard reports if requested by Genta.

Quality Assurance

• As part of ICON’s quality management system, ICON QA may perform random audits throughout the duration of this project. Random audits may include, but are not limited to, study files, completed CRF audits, and other clinical trial data. These audits are part of ICON’s internal process and written reports of audit findings are not provided to Genta. The quality management system in operation at ICON is based on the requirements of ISO 9001: 2000.

Study Files and Archive

• All study files (including investigator files) will be set-up and maintained by ICON in accordance with ICON SOPs unless otherwise requested by Genta.

Telecommunications

• Costs for any project-dedicated telecommunications equipment including telephones, facsimile machines, toll free lines, T1 line set-up, etc. will be passed-through to Genta as incurred by ICON.

46

Medical and Safety Monitoring

Medical and Safety Monitoring

• The ICON Medical Monitor will provide medical management for the study at ICON and will be available to provide guidance to the ICON staff and investigative sites on medical and safety protocol-related issues, patient eligibility questions.

• An ICON Drug Safety Associate will also be assigned to this study in order to provide safety monitoring.

• ICON’s medical and safety team will provide ongoing training to ICON staff.

• ICON’s medical and safety team will participate in team meetings and teleconferences as required in order to maintain adequate medical and safety oversight of the study.

• ICON is responsible for providing a central patient registration desk

• ICON will be responsible for reviewing laboratory reports at the point of patient registration.

• ICON will be responsible for medical review of CRFs for missed SAEs.

• ICON will be responsible for reviewing central registration desk packet.

SAE Reporting

• Globally, sites will report SAEs to ICON US; ICON US will perform data entry into Genta’s ARGUS safety system within one business day of receipt.

• Genta will be responsible for writing the SAE narratives.

• Should the total number of SAEs occurring exceed that estimated in this proposal; Genta will be billed for each additional SAE at its unit cost.

• Genta will be ultimately responsible for all SAE causality assessments.

47

• Genta will be responsible for submitting SAE reports to the FDA, EU and ROW CA, EC and all sites.

Safety Database

• Genta will maintain the safety database for the study.

• Genta will generate a MedWatch form for each SAE.

• Genta will determine the report ability of events and where appropriate notify the FDA and other regulatory agencies of expedited events.

Data Management Support

• ICON will be responsible for medical review of coding.

• ICON will be responsible for medical review of AE listings.

• ICON Medical Affairs will assist in SAE reconciliation as needed by Data Management and Clinical Operations.

SAE Unit Prices per region

• US: *

• EU: *

• ROW: *

48

Data Management – Oracle Clinical^TM

The following revised assumptions were developed based upon the information provided in documentation from Genta, Inc. at the time of proposal generation. Accordingly, any cost related to a unit-based service has been generated as a result of the number of units estimated from specifications provided by Genta, Inc. Any changes to these units will need to be agreed upon by ICON and Genta, Inc. in order to determine appropriate costs. Any agreed changes to the number of units will result in changes to the associated cost for that service.

Data Management Resource Strategy

• ICON Data Management makes full use of its extensive global data management experience and resources on every project we execute. Our data management systems facilitate seamless processing of information regardless of geographic location, thus allowing ICON to optimize the management of experienced resources, timelines and workflow.

PROJECT MANAGEMENT

• The Data Manager (refers to specific title of either DM Project Manager or DM Project Lead within ICON) assigned to this project will be directly responsible for oversight of all data management activities over the course of the study. This person will be Genta, Inc.’s direct contact for any data management issues. In addition, the following summarizes the scope of responsibilities of the Data Manager:

• Keeping the project on track in terms of timelines, deliverables, and budget

• Providing regular status reports to the project team and Genta, Inc.

• Participating in all project team and sponsor meetings as appropriate

• Mentoring and training of staff on study specific procedures, monitoring processes to ensure that procedures are being followed

• Developing and maintaining project plans, communication plans, and contingency plans

• Keeping ICON senior management up to date on progress, resources, and any issues that may arise

49

Meeting Attendance

• ICON has assumed attendees for the following meetings per Genta, Inc. study specifications:

Meeting	ICON Team Member Attendees
Kick-off Meeting	Data Manager and Study Lead
Face to Face Meetings	Data Manager and Study Lead
Investigator Meeting	Data Manager and Study Lead

Teleconferences

• ICON assumes there will be regular teleconferences to be held with Genta, Inc. during the study. ICON assumes each teleconference will be one hour in duration with an additional 30 minutes preparation/follow-up for the Study Lead.

• ICON assumes that the Data Management Study Lead will attend all teleconferences, and that the Data Manager will attend on a monthly basis to provide management oversight.

Study Reports

• ICON Data Management will provide status reports to Genta, Inc. Standard reports are available from the Opticon (CRF Work Manager) system for CRF and Query tracking.

• Custom report requests will be discussed during project planning stages for the purpose of estimating costs.

• ICON assumes that reports will be sent via ICON’s web portal ICONet to Genta, Inc.

50

PROJECT SETUP

Case Report Form Development

• ICON assumes Genta Inc. will be responsible for CRF design including the development of CRF completion guidelines. ICON will provide one cycle of review of the final draft CRF before it is finalized.

• ICON would like an opportunity to review the CRF to ensure the presence of compatible, identifiable character recognition marks to facilitate ICON’s Opticon imaging process prior to finalization of the CRF.

• ICON would like to receive a final copy of the CRF (same CRF printed and shipped to investigator sites) before the database is released into production. The printed copy of the CRF will be forwarded to the database administrator to facilitate the creation of Opticon templates and will also be utilized by the study team in the testing of the Oracle Clinical™ and Opticon databases.

• ICON assumes responsibility for CRF printing and shipping, and has included costs for these services as pass-through estimates.

Database Design

• Genta, Inc will develop the annotated CRF based on Genta Inc’s database specifications. Once approved, the annotated CRF will serve as the basis for ICON to build the database.

• ICON will design the database in Oracle Clinical™ ICON has not assumed any significant programming, e.g., visit algorithms or derivation programming, to produce the final transfer SAS data sets.

• Any database changes requested by Genta, Inc. following approval of the database structure may incur additional costs.

Edit Check Programming and Validation

• ICON will create the edit check specifications and provide the document for review and approval by Genta, Inc. in advance of beginning programming activities.

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• ICON will program and validate edit checks within the Oracle Clinical™ software. Test Subjects are developed, the data is entered, and the discrepancy management system is run and verified to ensure that each edit check is working properly.

• ICON has assumed that data listings will be programmed in SAS for the purpose of cross CRF manual review, as outlined in the edit check specification, on a regular basis during this study.

Data Management Plan and Associated Study Specific Procedures

• ICON will develop the data management plan and any necessary study specific procedures in accordance with ICON SOPs as appropriate. The data management plan and study specific procedures will address all data processing activities, timelines, contact information, communication plans, and any other information required for this project.

• Genta, Inc. will review the data management plan and related study-specific procedures during preparation and provide consolidated comments to ICON in two review cycles prior to finalization.

Third Party Data Import

• ICON assumes that local laboratory values will be captured as part of the CRF. ICON also assumes that normal ranges and units will be provided in a CRF format for each laboratory and will need to be merged with laboratory value results using SAS. ICON has not included any assumptions for electronic local laboratory data handling.

• CT/MRI scans and IVRS interfaces are included in this costing. ICON assumes that programming and reconciliation of IVRS and CT/MRI scans data will be required. ICON has assumed that all third party data transfers will be cumulative and loaded using SAS.

DATA PROCESSING

Data Entry Conventions

• ICON will develop data entry conventions to be followed during the study and will review these conventions with Genta, Inc.

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CRF Tracking

• CRFs and queries will be scanned into the Opticon (CRF Work Manager) imaging system. Every activity performed on a CRF page or query is automatically tracked as the document is processed in the system. This includes data entry, cleaning and quality review activities for CRFs, and database updates for applicable query responses.

• ICON assumes that only the original CRFs and queries will be received and used for scanning into Opticon. All CRFs and queries are checked against the CRF transmittal form in order to ensure that the transmittal form is correct.

• Once the transmittal form and the CRFs and queries are scanned, the operator will ensure that all pages are properly indexed and have passed into the workflow.

Data Entry

• ICON will perform interactive double data entry of each CRF page retrieved.

Data Review

• ICON assumes that data handling conventions (obvious corrections) will be applied to the database after double data entry is complete.

• ICON will review all database discrepancies in Oracle Clinical™ and via manual review of data listings, and generate queries as necessary.

• Third party data reconciliation will be performed via SAS programming for a limited number of parameters, header information and demography for example. All discrepancies will be reviewed and queries will be generated as necessary.

Medical Coding

• ICON will be responsible for coding medical history, adverse events and concomitant medications. It is assumed that 60% of items will auto encode.

• ICON assumes that standard MedDRA and WHODrug dictionaries will be used for this project. ICON has assumed that one standard version of the dictionary will be used for the duration of the project.

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• ICON assumes that the ATC selections using WHODrug will be assigned to the computer generated default ATC that is alphabetical in all versions of the dictionary from fourth quarter 2006.

• ICON assumes that Genta, Inc. subscribes to and maintains licenses for any coding dictionaries to be used during the course of the project. ICON also assumes that ICON and Genta, Inc.’s version of the dictionaries to be utilized are compatible.

• ICON subscribes to the fourth quarter calendar year WHODrug. If another version of WHODrug is required, additional costs will be incurred.

QUERY PROCESSING

Data Queries

• ICON will generate queries based on programmatic discrepancies and manual review of data listings.

• All query responses will be applied to the database, as applicable. Any issues that are not resolved via query response will be re-queried to clarify further.

• ICON will run edit checks against the data once the query updates have been made to ensure that additional data discrepancies are not present.

• ICON will monitor query management and responses by the sites and communicate issues to the project team and/or the clinical monitors in order to facilitate resolution.

Serious Adverse Events

• ICON assumes that a Clinical Data Coordinator (CDC) will perform reconciliation of individual SAEs from the safety database to the clinical database.

• ICON assumes that electronic data files of the variables to be reconciled for SAEs will be received in a standard data format e.g. Excel, SAS datasets.

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QUALITY CONTROL REVIEW

Quality Control

• ICON will perform a database to CRF comparison on 100% of all critical variables for all randomized Subjects as agreed with Genta, Inc. and defined in the Data Management Plan.

• ICON will audit a random sample (square root of n+1) of all randomized Subjects, comparing 100% of the Subject data in the database against the CRF.

• An acceptable error rate for the random sample audit will be agreed in advance with Genta, Inc., and achieving this error rate will determine whether the database is locked without further review, or if detailed review of certain parameters is needed.

DATA TRANSFERS AND CLOSEOUT ACTIVITIES

Data Transfers

• Upon request, a test database export will be sent to Genta, Inc. in SAS transport file format prior to the first actual data export. ICON assumes that any comments or issues from the test transfer will be communicated by Genta, Inc. in a timely manner.

• Six interim dirty database exports will be sent to Genta, Inc. in SAS transport file format.

• Nine clean transfer exports will be sent to Genta, Inc., in support of DMB, in SAS transport file format.

• A final database export will be sent to Genta, Inc. in SAS transport file format to support the final analysis at study completion.

Return of Study Documentation

• ICON will be responsible for returning CRF and limited study documentation to Genta, Inc. ICON will provide the documents needed within 1-2 months from database lock. The time and costs associated with this can be refined based on further discussion with Genta, Inc.

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• ICON has not included any costs to perform Data Management activities post database lock with the exception of closeout activities (if required). Any additional Data Management time required will need to be agreed on a time and materials basis.

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IVRS

This proposal for IVRS has been prepared based upon the following study design:

Randomized Study of Genasense^® Plus Dacarbazine Versus Dacarbazine Alone in Chemotherapy-naïve Subjects with Advanced Melanoma and Normal Serum Lactate Dehydrogenase.

In order to best support this project, we recommend providing your study team with IVRS based dynamic randomization and medication management for sites / depots. Approximately 314 subjects will be enrolled / randomized in a 1:1 ratio.

Subjects will be recruited from 83 sites from the countries listed in the table below. We understand the recruitment period to be 18 months followed by 24 months of treatment. However, due to the system going live later than FPI, the estimated duration for the IVRS to be live is approximately 40 months which would begin upon activation of the first site.

Site Distribution

Section 1 - Countries and Sites

Albania
Algeria
Argentina
Australia	3
Austria	5
Belarus
Belgium
Belize
Brazil
Bolivia
Bulgaria
Canada	2
Chile
China
Colombia
Costa Rica
Croatia
Czech Republic	1
Denmark
Dom. Republic
Ecuador
Egypt
El Salvador
Estonia
Finland
France	15
Germany	18
Greece
Guatemala
Haiti
Honduras
Hungary
Iceland
India
Indonesia
Ireland
Israel
Italy	4
Japan
Kenya
Latvia
Lithuania
Malaysia
Mexico
Nicaragua
Nigeria
Netherlands
New Zealand
North Korea
Norway
Panama
Peru
Philippines
Poland
Portugal
Romania
Russia
Singapore
Slovakia
Slovenia
Somalia
South Africa
South Korea
Spain	5
Sweden	1
Switzerland	1
Taiwan
Thailand
Turkey
Ukraine
United Kingdom	7
Venezuela
Uganda
United States	21
Uruguay
Vietnam
Zimbabwe
Total	83

Study Details

√ 415 Patients Screened

√ 314 Patients Randomized

√ 1 IVR Language Translation: French Canadian

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Proposed IVR System Modules

√ Site Activation / Deactivation

√ Subject Registration

√ Randomization

- Stratification based on the following:

Strata	Strata Variable 1 (Country)	Strata Variable 2 (Disease Site)
1	U.S. Site	Liver
2	U.S. Site	Visceral other than liver
3	U.S. Site	Soft Tissue Only
4	ROW Site	Liver
5	ROW Site	Visceral other than liver
6	ROW Site	Soft Tissue Only

- 1:1 ratio

- Two treatment arms

• Genasense plus Dacarbazine

√ Treatment Cycle Start Date

√ Emergency Unblinding

√ Discontinuation

√ Drug Order Call Module

√ Confirm Shipment

√ Drug Expiry Management Tool

- It is the sole responsibility of ALMAC and Aptuit to track the overall supply totals and expiry dates at each depot; ICON Interactive Technologies does not actively participate in management of study drug.

- Tools, such as web reports and email alerts, are available to approved persons to aid in study drug tracking

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Drug Management Tracking Tools

√ Un-blinded site pharmacist will order drug supplies via an IVRS Drug Order call module, as needed

√ Drug Orders placed through the IVRS will be routed to the appropriate Depot (e.g. ALMAC for U.S. requests and Aptuit for ROW requests)

Reporting

√ Real time reports are available throughout the life of the trial via a secure web site

- Study at a Glance

- Site Status

- Randomization

- Shipment History

- Site Drug Inventory

- Depot Drug Inventory

- Discontinuation

- Subject Registration

√ Reports will include detail and summary information

√ Reports can be sorted, filtered and modified by the user

√ Reports show counts based on Site, Country, and total study

√ Custom reports are available upon request. Additional charges may apply depending upon the complexity of the required report

√ Reports can be created by defined user types or defined individuals

Additional Services

√ Assumes ICON will generate the randomization scheme

√ Monthly data transfers to designated portal

√ Document delivery – email / fax or courier

√ Moderate User Acceptance Testing - ICON provides detailed, high-level test scripts to serve as a guide for Genta to navigate through the system. ICON will input set-up data as required by the test scripts.

√	Project Manager attends 56 teleconferences (1 hour each)
√	Assumes project manager attends 1 investigator meeting and 1 kick-off meeting

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Project Timeline**

Major Milestones	Target Dates
Project Award Date	*
Project Start Date	*
Final, signed IVRS User Requirements document	*
System “Go Live” Date	*
Investigator Meeting	*
First IVRS Call	*
Last Patient In GM307	*
Last Patient Out GM307	*
System completion - final data transfer	*
Study close-out (IVRS)	*

**These timelines are estimated projections only.

Total IVR Duration: 40 Months.

In order for ICON to commit to the timelines outlined above, we request that this study be awarded on or before 4 June 2007. Should the actual award date fall after 4 June 2007, ICON may need to adjust these timelines to accommodate the delay.

ICOPhone relies on close cooperation with your study team to design, build, and implement each system. The timelines projected above are dependent upon the receipt of appropriate documentation from Genta in a timely manner. System go live date is dependent on final user requirements document.

Project Cost Description

SYSTEM DEVELOPMENT

Initial Meetings / User Requirements (UR). This includes time for a project kick-off meeting, system set-up meetings and requirements gathering. It also includes time to draft the User Requirements based on the protocol, proposal and conversations with the team, as well as time to finalize and sign off on the User Requirements (internal and external review).

Functional / Technical design. This includes time to create a Functional Design Specification (FDS; call flow, reporting specifications, data transfer specifications, drug management specifications, IWR screen flow) and Technical Design Specification (TDS; database structure, table default values) from the User Requirements. These documents are reviewed internally by each team member (design, development, testing, and management), comments are incorporated and then the documents are approved. This also includes time for internal design review.

System Development and Programming. During this time, the Programmer works from the Functional Design Specification and Technical Design Specification to build the system as specified. This also includes time for component testing, code review and associated documentation.

Testing and Validation. This includes time for creation of the validation plan that is provided to Genta after user requirements sign-off, creation of test scripts, functional testing (de-bugging) and the associated documentation, formal testing and the associated documentation, and developing the final validation report.

User Acceptance Testing (UAT). This refers to the time it takes to support Genta’s team during system testing. There are three levels of support that are detailed below.

• Moderate UAT Support. ICON provides detailed, high-level test scripts to serve as a guide for Genta to navigate through the system. ICON will input set-up data as required by the test scripts.

Please note that each of the UAT support categories listed above assumes a certain amount of hours will be required. Upon depletion of those hours, each additional hour in excess of the original amount will be billed to Genta on a time and materials basis.

Initial Data Loads. This includes time for site/user loading into the system, randomization and pack list loading. This also includes time for QC of this data.

Training / Training Manuals. This includes time for creation of the site/user manual, creation of internal and external training materials, creation of study specific procedures and for Help Desk training.

LANGUAGE MANAGEMENT

This includes time for the handling of the vox (voice) files to prepare for translation and recording, managing the process, uploading the files in to the system and QC of the process.

INVESTIGATOR MEETING

This includes 4 hours of meeting preparation time, 12 hours of travel time and 12 hours on-site time for all ICON Interactive Technologies personnel in attendance at the investigator meeting. This does not include travel expenses. Additional time on-site will be billed in hourly increments at the hourly rates of the ICON personnel in attendance. This section includes costs for two meetings, one investigator meeting and one face-to-face kick off meeting.

TRAVEL EXPENSES

This refers to routine travel expenses including; airfare, meals, lodging, transportation, parking, etc. These expenses will be passed through directly with no mark-up.

MONTHLY MAINTENANCE COSTS

Monthly User & System Support.This includes costs for providing Help Desk support 24 hours per day, 7 days per week. This also refers to system maintenance support, which includes data changes, bug fixes, and minor updates to the system.

Project Management.The Project Manager will serve as Genta’s liaison for the duration of the project. This includes time for project oversight, handling of escalated issues, monthly quality management report review and regular client meetings/contacts.

In Scope Monthly Maintenance Items:

• Help Desk support related to technical questions regarding the IVR from site and sponsor personnel

• Manual data changes to correct site/user entry errors.

• Periodic team meetings (monthly/bi-monthly) with protocol specific study teams to discuss/clarify any items related to the IVRS

• Monthly quality management checks to evaluate the performance of the protocol specific system

• Miscellaneous project management support requests; such as providing reports to protocol specific study team, troubleshooting any critical issues related to the IVR, etc.

• Manually sending user packets (instructions, worksheet and UserID/Pin documents) to users

• Up to two manual drug shipments per month. Each additional manual shipment will be charged on a time and materials basis with shipping charges passed through directly with no mark up.

• Other costs associated with maintaining the hardware required and supporting the protocol specific system.

Out of Scope Monthly Maintenance Items:

• Drug shortages that cause the IVR not to automatically generate site orders per the protocol specific algorithm. Thus, creating the need for site orders to be manually generated by IVR project management personnel.

• Site non-compliance in the use of the IVR. Such as not registering visits via the IVR and dispensing drug without using the system. Thus, creating the need for subject data to be manually inserted or edited within the database.

• Data transaction issues in which incomplete or inaccurate data is being passed from the sponsor to ICON. Thus, creating the need for data changes to be manually made to the database to correct or complete the data.

Monthly Maintenance Assumptions:

The following is a list of assumptions figured into the monthly maintenance estimates included in this proposal.

• Adequate drug is available at participating depots to allow the system to manage drug supply to sites per the protocol specific algorithm (without manual intervention).

• System users are adequately trained on the use of the system to minimize user errors and training calls to the Help Desk.

• Manual intervention of system will be limited to extreme circumstances. Examples include:

- Inserting Subject Visits into database via data change forms

- Creating/editing site orders

- User/Site information updates

- Other databases updates needed to correct data transaction issues (incomplete data, incorrect data)

DATA TRANSFERS

For the purpose of this project, data transfers are defined as the following:

• Data will be transferred to Genta by ICON. Data transfers from other Genta vendors to ICON are considered separate, and additional costs for these can be provided upon sponsor request.

• Data is delivered via email from ICON to 1 or more Genta representatives, or Genta retrieves data directly from ICON’s SFTP server.

• Data transfer file types are assumed to be ASCII, comma delimited flat files (CSV files), and cumulative. Data transfers of incremental files are considered separate, and additional costs for these can be provided upon Genta’s request.

• Frequency of data transfers is optional and can be daily, weekly or monthly upon request.

• Frequency of data transfers does not impact cost.

• Acceptable data records include any data collected at a visit with no data manipulation except for field formatting (adding leading zeros; 1-M, 2=F; formatting dates, etc.). Data can include site information, patient information, visit information, randomization information and pack information; assuming all data is stored in ICOPhone.

Any requests for data transfers that fall outside of the scope outlined above will require individual evaluation, and pricing for these can be provided upon Genta’s request.

Telecom. These costs are associated calls to the IVR system. These are direct costs and do not fluctuate during the course of the study.

PASS-THROUGH COSTS

IVR Prompt Recording Translations Services. Translation of voice prompts.

Shipping / Courier. This refers to costs associated with shipping user ID/PIN documents to users, shipping site manuals to sites, and any other shipping requirements for the project. These costs will be passed through as incurred with no mark-up.

ADDITIONAL INFORMATION

21 CFR Part 11 Compliance

Security Controls. ICOPhone uses a combination of usernames and passwords as defined in Subpart C, section 11.300, “to ensure that only authorized individuals can use the system, electronically sign a record, access the operation or computer system input or output device, alter a record, or perform the operation at hand”. It is also a requirement that the “identification code and password issuances are periodically checked, recalled, or revised”. ICOPhone supports the above.

In addition, the actual amount of access to the system is also controlled via a Security Level. A security level is assigned to each user. Users in ICOPhone must have a unique login name. It is also a requirement that each user must provide a password to access the system. ICOPhone is configured to stop the use of duplicates and to force a selection of new passwords after a period of time. Earlier passwords are remembered to prevent recycling of old passwords. The software also prevents simple passwords. This satisfies the requirement to “employ at least two distinct identification components such as an identification code and password” and that “identification code and password issuances are periodically checked, recalled, or revised”.

Audit Trails. ICOPhone provides auditing facilities so that data can be checked and validated as described in Section 11.10 paragraph (b): “The ability to generate accurate and complete copies of records in both human readable and electronic form suitable for inspection, review, and copying by the agency”.

ICOPhone provides system level control for auditing and all auditing should be enabled for 21 CFR Part 11 compliance. Whenever a change is made to the data the software adds to the audit trail. A reason for any change is requested and the previous value, new value, operator and the date/time is recorded.

Identification Components. ICOPhone uses a login id plus a password to identify each user. This information is to comply with section 11.200, “Employ at least two distinct identification components such as an identification code and password.”

(i.) When an individual executes a series of signings during a single, continuous period of controlled system access, the first signing shall be executed using all electronic signature components; subsequent signings shall be executed using at least one electronic signature component that is only executable by, and designed to be used only by, the individual.

(ii.) When an individual executes one or more signings not performed during a single, continuous period of controlled system access, each signing shall be executed using all of the electronic signature components.”

ICOWeb times out after 12 minutes (ICOPhone 1 minute) so that if a user leaves their workstation, they will automatically be logged out and will be required to re-enter their login id and password before they can continue.

Disaster Recovery

Our IVRS/IWRS Disaster Recovery procedure is very well documented. The procedure details system recovery from component and site level failures. Additionally, resynchronization and site migration activities are defined. The procedure also requires annual testing to ensure process integrity. This document is available for review during any on-site audit.

The ICOPhone and ICOWeb products are a 24 X 7 application based on their global nature. Users around the world are accessing this system. The success of this application lies in ensuring that the user’s experience is smooth and always available. Special attention to the redundancy and disaster recovery of the ICOPhone and SQL servers is imperative.

For the ICOPhone application, ICON built a high level of redundancy in North Wales, PA location with Disaster Recovery to Sugar Land, TX. This allows for the dynamic reallocation of the calls that were needed to eliminate downtime on the toll free traffic.

Through AT&T, Alternate Destination Routing is used to build as much redundancy into North Wales, PA as possible, with disaster recovery to Sugar Land, TX. In essence, 100% of the calls traverse to North Wales, PA unless there is an outage. In Disaster Recovery Mode, 100% of the calls would be redirected to Sugar Land, TX.

EX-10.38

GENTA INCORPORATED

200 Connell Drive

Berkeley Heights, NJ 07922

Amended and Restated November 30, 2007

Dr. Raymond P. Warrell, Jr.

Two Connell Drive

Berkeley Heights, NJ 07922

Dear Dr. Warrell:

We are pleased that you are willing to continue to serve as Chief Executive Officer, and Chairman of the Board of Directors (the “Board”), of Genta Incorporated, a Delaware corporation (together with its successors and assigns, the “Company”). Accordingly, we would like to offer you continued employment on the terms set forth in this amended and restated letter agreement dated November 30, 2007 (this “Agreement”), which upon countersignature by you shall become a binding agreement between you and the Company (each, a “Party”).

1. Employment; Duties.

(a) As of January 1, 2006 (the “Effective Date”), the Company hereby engages and employs you, and you hereby accept engagement and employment, as an employee of the Company for the duration of the “Term” (as defined in Section 2 below).

(b) During the Term, you shall serve as Chief Executive Officer of the Company and (subject to re-election to the Board by the shareholders of the Company) as a member of, and Chairman of, the Board; shall have all authorities, duties and responsibilities customarily exercised by an individual serving in those positions at an entity of the size and nature of the Company; shall be assigned no duties or responsibilities that are materially inconsistent with, or that materially impair your ability to discharge, the foregoing duties and responsibilities; and shall, in your capacity as Chief Executive Officer of the Company, report solely and directly to the Board. During the Term, your principal office, and principal place of employment, shall be at the Company’s principal executive offices, but you shall perform your duties hereunder at such places as shall be necessary according to the needs, business and opportunities of the Company; provided that you acknowledge and agree that the performance of your duties hereunder may require significant domestic and international travel by you.

(c) During the Term, you shall devote substantially all of your business time and efforts to the proper discharge of your duties hereunder. You shall not, directly or indirectly, on a full-time, part-time, temporary, consulting or any other basis, work for, or provide services to, any other person, firm, corporation, partnership, joint venture or other business entity that would conflict, either directly or indirectly, with your duties hereunder, without the prior written consent of a representative of the Company specifically authorized by the Board or by the Compensation Committee of the Board (the “Committee”) to give such consent, provided, however, that nothing shall preclude you from (i) serving on the boards of a reasonable number of trade associations and/or charitable organizations, on the boards of any for-profit enterprises

on which you are serving as of the Effective Date, and on the boards of such additional for-profit enterprises as the Board may specifically approve (which approval shall not be unreasonably withheld or delayed), (ii) engaging in charitable activities and community affairs, and (iii) managing your personal investments and affairs; so long as such activities do not, either individually or in the aggregate, interfere with your ability to perform, or otherwise conflict with, your duties hereunder.

2. Term. The Company hereby employs you under this Agreement, and you hereby accept such employment, for the Term. The Term shall commence as of the Effective Date and shall end on December 31, 2010; provided, however, that the Term shall thereafter be automatically and indefinitely extended for additional one-year periods unless, (i) at least six months prior to the then-scheduled date of expiration of the Term (the “Scheduled Expiration Date”), the Company gives notice to you that it is electing not to so extend the Term or you give notice to the Company that you are electing not to so extend the Term, provided that the Company shall be deemed to have timely given you notice of non-extension if it gives you such notice within 45 days after receiving notice from you that the Scheduled Expiration Date is to occur (such notice to be provided by you no earlier than eight months prior to the Scheduled Expiration Date), or (ii) you fail to notify the Company of the Scheduled Expiration Date at least 90 days prior to the Scheduled Expiration Date, in which event the Term shall end on the Scheduled Expiration Date, and shall be deemed for all purposes to have ended pursuant to timely notice of non-extension from you to the Company pursuant to clause (i), unless the Parties agree otherwise in writing. Notwithstanding the foregoing, the Term may be earlier terminated in strict accordance with the provisions of Section 9.

3. Compensation and Benefits.

(a) Base Salary. Commencing as of the Effective Date, you shall receive a base salary (“Base Salary”) of $460,000 perannum during the Term, payable in accordance with the Company’s standard payroll practices but no less frequently than monthly. Notwithstanding the foregoing, your Base Salary for calendar year 2008 shall be $408,000, effective as of January 1, 2008. Your Base Salary shall be reviewed no less frequently than annually during the Term for discretionary increase, effective January 1 of the year of increase, and shall in any event be increased as of January 1, 2009 and as of each subsequent January 1 during the Term by a percentage equal to at least the percentage increase in the CPI (All Urban Consumers) for the calendar year preceding the year of increase. Except as set forth above, your Base Salary shall not be decreased at any time, or for any purpose, during the Term (including, without limitation, for the purpose of determining benefits under Section 10) without your prior written consent.

(b) Annual Bonus. Except as otherwise provided in the final sentence of this Section 3(b), you shall receive a cash bonus (a “Bonus”) with respect to each calendar year that ends during the Term, ranging from 0% to 60% of your Base Salary, to the extent that the Company attains goals and objectives for such year that have been mutually agreed upon by you and the Committee, in accordance with this Section 3(b). You and the Committee shall use your best reasonable efforts to ensure that such goals and objectives are agreed upon prior to March 30 of the calendar year to which a Bonus relates. Except to the extent otherwise agreed by you and the Committee, your potential Bonus shall range from 0% of your annualized Base Salary to

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60% of your annualized Base Salary, with a “target” Bonus of 40% of your annualized Base Salary if agreed-upon goals and objectives are achieved for the calendar year. Except to the extent otherwise agreed by you and the Committee, all goals and objectives will represent significant value creation activities for the Company and “stretch target” goals and objectives will represent extraordinary performance and achievement. “Stretch target” performance against the agreed-upon goals and objectives for such year shall entitle you to a Bonus for such year equal to at least 60% of your annualized Base Salary for such year. Lesser amounts may be awarded for performance below “target”, and intermediate amounts may be awarded for performance between “target” and “stretch target”. The extent to which the agreed-upon goals and objectives are attained shall be determined by the Committee reasonably and in good faith, in consultation with you, as soon as reasonably practicable after the end of the calendar year to which the Bonus at issue relates. The Bonus earned by you for a calendar year shall be paid to you promptly after its amount has been determined, and in no event later than the earlier of (x) the date that other senior executives of the Company receive their annual bonuses for such year and (y) March 15 of the year following such year. Notwithstanding anything contained in this Agreement to the contrary, you shall receive no bonus for calendar year 2007.

(c) Withholding. The Company shall withhold all applicable Federal, state and local taxes, social security and workers’ compensation contributions and other amounts as may be required by law or agreed upon by the Parties with respect to compensation payable to you pursuant to this Agreement.

(d) Option Grant. As of September 20, 2007, and subject to shareholder approval of the Company’s 2007 Stock Incentive Plan (the “2007 Plan”), the Company shall grant you an option to acquire 2,400,000 shares of its Common Stock, at an exercise price equal to $1.39 per share, and otherwise on the terms and conditions set forth in the Stock Option Agreement that is attached hereto as Exhibit A, which Stock Option Agreement shall be fully executed by the Parties promptly upon full execution of this Agreement.

(e) Annual Stock Option Awards. Except as otherwise provided in the last sentence of this Section 3 (e), each calendar year that commences during the Term, you shall be granted, no later than the date that your Bonus (if any) for the prior calendar year is due to be paid pursuant to Section 3(b) and provided that you remain employed hereunder on the date of grant, a stock option award for the purchase of a number of shares of the Company’s Common Stock as computed pursuant to this Section 3(e)(with the number and type of securities equitably adjusted for stock splits, reverse stock splits, stock reclassifications, mergers, recapitalizations, etc., that occur between the Effective Date and the date of grant of the stock option) (“a Section 3(e) Stock Option”). The “target” number of shares subject to a “Section 3(e) Stock Option” to be awarded each calendar year will be 150,000 shares, and the potential number of shares subject to each Section 3(e) Stock Option award for a calendar year shall range from 0 shares to 225,000 shares. The number of shares subject to a Section 3(e) Stock Option to be awarded to you within such range in a calendar year shall be based on your achievement of Company goals and objectives, and will be at the sole discretion of the Board or the Committee. Each Section 3(e) Stock Option shall have a ten-year term; shall have an exercise price per share equal to Fair Market Value (determined as provided in the 2007 Plan) on the date of grant; shall fully vest, and

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become fully exercisable, upon the occurrence of a “Trigger Event” (as such term is defined in Section 2(e) of the Stock Option Agreement that is attached hereto as Exhibit A); and shall be evidenced by a stock option agreement that: (x) provides for treatment as an Incentive Stock Option to the extent you so elect prior to the date of grant and to the extent possible consistent with the terms of this Agreement and of your other then-outstanding stock option grants, (y) otherwise contains terms and provisions no less favorable to you in any respect than those applying to corresponding grants to other senior executives of the Company, and (z) unless the Committee specifically determines otherwise, the terms and provisions of each annual grant shall be identical to those applying to corresponding grants to other senior executives of the Company. All securities delivered on any exercise of any stock option granted pursuant to this Section 3(e) or Section 3(f) below shall be fully registered, and publicly tradable, to the extent that any other securities of the same class are then fully registered and publicly tradable; provided, however, that in no event shall the Company be required to prepare and file a Form S-3 reoffer prospectus with respect to any shares that you receive in connection with your exercise of any stock option granted pursuant to this Section 3(e) or Section 3(f). Notwithstanding anything contained in this Agreement to the contrary, you shall receive no Section 3(e) Stock Option Award for calendar year 2007.

(f) Trigger Event Stock Option Award. In addition, if a Trigger Event occurs during the Term or within 12 months thereafter, you shall be entitled to receive, as promptly as reasonably practicable following the occurrence of such Trigger Event, any Section 3(e) Stock Option that you would have been entitled to receive in respect of the calendar year in which such Trigger Event occurs (assuming continued employment hereunder through the end of such calendar year and attainment of “target” levels of performance on all annual Bonus goals and objectives for such year). Any such stock option shall: (i) have an exercise price per share equal to Fair Market Value on the date of grant; (ii) be fully vested, and fully exercisable, upon grant; (iii) otherwise be on terms and conditions no less favorable to you than the terms and conditions that would have applied if the grant had been made under Section 3(e) above; and (iv) be granted in lieu of the Section 3(e) Stock Option that you would otherwise have been entitled to receive in respect of the calendar year in question.

(g) Restrictions on Sale of Option Stock.

(i) Unless otherwise agreed to in writing by a representative of the Company expressly authorized to act by the Board or the Committee, you agree not to sell on any single day, after the Term, a number of Covered Option Shares that exceeds 3% of the trading volume of the Common Stock of the Company on the immediately preceding trading day as reported by the Nasdaq National Market or on such other exchange or market system which provides the primary trading market for the Common Stock of the Company at the applicable time (a “Public Market”). For purposes of this Agreement, the term “Covered Option Share” shall mean any share of Common Stock of the Company acquired on any exercise of the stock option granted pursuant to Section 3(d) above.

(ii) Except as provided in Section 3(g)(i) above or as otherwise agreed to in writing by a representative of the Company expressly authorized to act by the Board or the Committee, you agree that you will not, either during or after the Term: (x) offer, pledge, sell,

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contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Covered Option Share or any securities convertible into or exercisable or exchangeable for any Covered Option Share or (y) enter into any swap or other arrangement that transfers to another Person (as defined in Section 3(q) below), in whole or in part, any of the economic consequences of ownership of any Covered Option Share, whether any such transaction described in clause (x) or (y) above is to be settled by delivery of Covered Option Shares or such other securities, in cash or otherwise; provided that this Section 3(g)(ii) shall not apply to any pledge of Covered Option Shares in connection with payment of the purchase price of Covered Option Shares pursuant to any exercise of the stock option granted pursuant to Sections 3(d) above, so long as the pledgee agrees that no sale of Covered Option Shares by such pledgee on any day, when added to sales of Covered Option Shares by you on such day, may exceed the aggregate numerical limit imposed by Section 3(g)(i) above.

(iii) All sales of Covered Option Shares by you, and by any pledgee referred to in the proviso to Section 3(g)(ii), shall be executed through Merrill Lynch or such other broker as the Company may from time to time reasonably designate on written notice to you.

(iv) The restrictions contained in Sections 3(g)(i), 3(g)(ii) and 3(g)(iii) shall expire on the earlier of the second anniversary of the “Termination Date” (as defined in Section 10(a)(i) below) and ten trading days prior to the date that Common Stock of the Company ceases to be traded on any Public Market.

(h) Additional Awards. In addition to the minimum cash and equity awards required under Sections 3(b) through 3(f) above, the Company may from time to time grant you additional cash, stock option, equity and/or other long-term incentive awards, in the sole discretion of the Board or the Committee.

(i) Business Expenses. The Company shall reimburse you for all travel, business entertainment and other business expenses reasonably incurred by you in connection with the performance of your duties under this Agreement. Such reimbursement shall be made by the Company promptly upon submission by you of appropriate documentation in accordance with the Company’s standard procedures.

(j) Vacation. You shall be entitled during the Term to four weeks’ vacation per calendar year. You may “carry over” up to four weeks of accrued but unused vacation from year-to-year.

(k) Supplemental Life Insurance. During the Term and in addition to any life insurance coverage provided under Section 3(m) below, the Company shall pay the premiums on a term life insurance policy in your name and on your behalf in a principal amount of not less than $3,250,000 and with the proceeds payable as you direct; provided that such premiums do not exceed $10,000 annually, in which event the Company shall purchase as much coverage for you as it can acquire for $10,000annually.

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(l) Supplemental Disability Insurance. During the Term and in addition to any disability insurance coverage provided under Section 3(m) below, the Company shall provide you with as much disability insurance coverage, acceptable to you, as it can obtain at a cost to the Company (beyond costs incurred by the Company under Section 3(m) below) of $15,000 annually.

(m) Employee Benefits. During the Term, you shall be entitled to participate in any and all medical insurance, dental insurance, group health, disability insurance, life insurance, retirement, pension, savings, income deferral, fringe benefit, and other benefit and perquisite plans, programs and arrangements that are made generally available to senior executives of the Company, in each case on terms and conditions no less favorable to you than those applying to other senior executives of the Company generally. For avoidance of doubt, the Company, in its sole discretion, may at any time amend or terminate any such plan, program or arrangement.

(n) D&O Insurance. A directors’ and officers’ liability insurance policy (or policies) shall be kept in place, during the Term and for six years thereafter, providing coverage that is no less favorable to you in any respect (including, without limitation, with respect to scope, exclusions, amounts and deductibles) than the coverage then being provided to any other present or former officer or director of the Company.

(o) Automobile. During the Term, the Company shall provide you with a car or car allowance in an amount not to exceed $500 per month, which allowance shall be paid in appropriate pro rata amounts at the same time Base Salary is paid unless the Company pays all related expenses directly.

(p) Medical Malpractice Insurance. During the Term, the Company shall pay the premiums on a medical malpractice insurance policy in your name and on your behalf in the principal amount of not less than $1,000,000; provided that such premiums do not exceed $25,000annually, in which event the Company shall provide you with as much medical malpractice insurance coverage, acceptable to you, as it can obtain at a cost to the Company of $25,000 annually.

(q) Indemnification. If you are made a party, are threatened to be made a party, or reasonably anticipate being made a party, to any Proceeding by reason of the fact that you are or were a director, officer, member, employee, agent, manager, trustee, consultant or representative of the Company or any of its Affiliates or are or were serving at the request of the Company or any of its Affiliates, or in connection with your service hereunder, as a director, officer, member, employee, agent, manager, trustee, consultant or representative of another Person, or if any Claim is made, is threatened to be made, or is reasonably anticipated to be made, that arises out of or relates to your service in any of the foregoing capacities, then you shall promptly be indemnified and held harmless to the fullest extent permitted or authorized by the Certificate of Incorporation or Bylaws of the Company, or if greater, by applicable law, against any and all costs, expenses, liabilities and losses (including, without limitation, attorneys’ and other professional fees and charges, judgments, interest, expenses of investigation, penalties, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) incurred or suffered by you in connection therewith or in connection with seeking to enforce your rights

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under this Section 3(q), and such indemnification shall continue even if you have ceased to be a director, officer, member, employee, agent, manager, trustee, consultant or representative of the Company or other Person and shall inure to the benefit of your heirs, executors and administrators. You shall be entitled to prompt advancement of any and all costs and expenses (including, without limitation, attorneys’ and other professional fees and charges) incurred by you in connection with any such Proceeding or Claim, or in connection with seeking to enforce your rights under this Section 3(q), any such advancement to be made within 15 days after you give written notice, supported by reasonable documentation, requesting such advancement. Such notice shall include, to the extent required by applicable law, an undertaking by you to repay the amount advanced if you are ultimately determined not to be entitled to indemnification against such costs and expenses. Nothing in this Agreement shall operate to limit or extinguish any right to indemnification, advancement of expenses, or contribution that you would otherwise have (including, without limitation, by agreement or under applicable law or under the Company’s Certificate of Incorporation). For purposes of this Agreement, the following terms shall have the following meanings: “Affiliate” of a Person shall mean any Person that directly or indirectly controls, is controlled by, or is under common control with, such Person; “Claim” shall mean any claim, demand, request, investigation, dispute, controversy, threat, discovery request, or request for testimony or information; “Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, trust, estate, board, committee, agency, body, employee benefit plan, or other person or entity; and “Proceeding” shall mean any threatened or actual action, suit or proceeding, whether civil, criminal, administrative, investigative, appellate, formal, informal or other.

(r) Golden Parachute Tax.

(i) If the aggregate of all amounts and benefits due to you, under this Agreement or any other plan, program, agreement or arrangement of the Company or any of its Affiliates, which, if received by you in full, would constitute “parachute payments” as such term is defined in and under Section 280G of the Code (collectively, “Change in Control Benefits”), reduced by all Federal, state and local taxes applicable thereto, including the excise tax imposed pursuant to Section 4999 of the Code, is less than the amount you would receive, after taxes, if you received aggregate Change in Control Benefits equal to only three times your “base amount”, as defined in and determined under Section 280G of the Code, less $1.00, then such cash Change in Control Benefits as you shall select shall be reduced or eliminated to the extent necessary so that the Change in Control Benefits received by you will not constitute parachute payments (provided that reduction in such cash Change in Control Benefits can achieve this objective). The determinations with respect to this Section 3(r)(i) shall be made by an independent auditor (the “Auditor”) paid by the Company. The Auditor shall be the Company’s regular independent auditor unless you reasonably object to the use of that firm, in which event the Auditor shall be a nationally-recognized United States public accounting firm chosen by the Company and approved by you (which approval shall not be unreasonably withheld or delayed). For purposes of this Agreement, the term “Code” shall mean the Internal Revenue Code of 1986, as amended, and any reference to a particular section of the Code shall include any provision that modifies, replaces or supersedes such section.

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(ii) It is possible that after the determinations and selections made pursuant to Section 3(r)(i) you will receive Change in Control Benefits that are, in the aggregate, either more or less than the limitations provided in Section 3(r)(i) above (hereafter referred to as an “Excess Payment” or “Underpayment”, respectively). If it is established, pursuant to a final determination of a court or an Internal Revenue Service proceeding that has been finally and conclusively resolved, that an Excess Payment has been made, then you shall refund the Excess Payment to the Company promptly on demand, together with an additional payment in an amount equal to the product obtained by multiplying the Excess Payment times the applicable annual federal rate (as determined in and under Section 1274(d) of the Code) times a fraction whose numerator is the number of days elapsed from the date of your receipt of such Excess Payment through the date of such refund and whose denominator is 365. In the event that it is determined (x) by arbitration under Section 12 below, (y) by a court of competent jurisdiction, or (z) by the Auditor upon request by you or the Company, that an Underpayment has occurred, the Company shall pay an amount equal to the Underpayment to you within 10 days of such determination together with an additional payment in an amount equal to the product obtained by multiplying the Underpayment times the applicable annual federal rate (as determined in and under Section 1274(d) of the Code) times a fraction whose numerator is the number of days elapsed from the date of the Underpayment through the date of such payment and whose denominator is 365.

(s) Attorneys’ Fees. The Company shall promptly pay attorney’s fees reasonably incurred by you in connection with negotiating, documenting and implementing the arrangements set forth in this Agreement in an amount not to exceed $20,000and will treat such payments as a “working condition fringe” as defined in Section 132(d) of the Code.

(t) The payment or reimbursement of any expense pursuant to paragraphs (i), (o), (q) and (s) of this Section 3 in one of your taxable years shall not affect the amount of the payment or reimbursement of any other expense pursuant to such paragraphs in any other of your taxable years. Provided that the Company receives appropriate documentation from you on a reasonably timely basis, respecting reimbursement of expenses due to you under this Section 3, any payment or reimbursement for expenses under this Section 3 shall in any event be made on or before the last day of your taxable year following the taxable year in which the expense was incurred. Any right to payment or reimbursement under this Section 3 may not be liquidated or exchanged for any other benefit.

4. Representations.

(a) The Company’s Representations. The Company represents and warrants that: (i) it is fully authorized by action of the Board and the Committee (and of any other Person whose action is required) to enter into this Agreement and to perform its obligations under it; (ii) the execution, delivery and performance of this Agreement by it does not violate any applicable law, regulation, order, judgment or decree or any agreement, arrangement, plan or corporate governance document to which it is a party or by which it is bound; and (iii) upon the execution and delivery of this Agreement by the Parties, this Agreement shall be a valid and binding obligation of the Company, enforceable against it in accordance with its terms, except to the

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extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.

(b) Your Representations. You represent and warrant that: (i) delivery and performance of this Agreement by you does not violate any applicable law, regulation, order, judgment or decree or any agreement to which you are a party or by which you are bound; and (ii) upon the execution and delivery of this Agreement by the Parties, this Agreement shall be a valid and binding obligation of you, enforceable against you in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.

5. Non-competition and Non-solicitation.

(a) You understand and recognize that your services to the Company are special and unique and you agree that, during the Term, and, except as provided below, for two years thereafter, you shall not, other than in connection with performing services for the Company (or any of its Affiliates) or with the prior written consent of a representative of the Company specifically authorized by the Board or the Committee to give such consent, directly or indirectly on behalf of yourself or any Person, enter into, or engage in, any business that competes, or is actively planning to compete, directly and materially with the Company with respect to any technology or service of, or any product manufactured or distributed by, the Company or in which the Company has intellectual property rights (except as provided below, a “Conflicting Field”), either as an individual for your own account, or as a partner, joint venturer, executive, agent, consultant, salesperson, officer, director or shareholder of such a Person (a “Competitor”); provided, however, that: (i) following any termination of your employment hereunder, “Conflicting Field” shall refer only to the field of using antisense technology as therapy for cancer as its primary business; (ii) subject to the provisions of Section 1(c) above, nothing in this Agreement shall preclude you from accepting employment with, or providing services for, any Person that competes, or is actively planning to compete, with the Company in a Conflicting Field so long as (x) you work solely in a subsidiary, division, or other distinct unit of such Person that carries on a bona fide business that does not compete, and is not actively planning to compete, with the Company in a Conflicting Field or (y) you serve as a member of a board of directors (and not as an employee) and your activities otherwise do not involve competition with the Company in a Conflicting Field, either directly or indirectly; and (iii) nothing in this Agreement shall preclude you from holding five percent (5%) or less of the equity interests of any publicly-traded entity, calculated on a fully diluted basis. For purposes of this Section 5 (otherthan Section 5(c)), the term “Company” shall be deemed to include, where appropriate, all direct and indirect subsidiaries of the Company.

(b) In further consideration of the payments and benefits to be provided to you pursuant to this Agreement (including, without limitation, pursuant to Sections 3 and 10 hereof), you agree that, during the Term and for two years thereafter, but subject to Sections 5(e) and 5(f) below, you shall not, other than in connection with performing services for the Company or any of its Affiliates or with the prior written consent of a representative of the Company specifically authorized by the Board or the Committee to give such consent:

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(i) directly or indirectly take any action, or attempt to take any action, which is intended to, or should reasonably be foreseen by you to, induce a material breach of any material contract or agreement known to you between the Company and any of its licensors, licensees, clients, customers, vendors, suppliers, agents, consultants, employees (whether or not such employees are “at will” employees) or any other Person with whom the Company has an agreement (each, a “Covered Party”);

(ii) directly or indirectly solicit or attempt to solicit any Covered Party to terminate his, her or its relationship with the Company in breach of any material contract or agreement with the Company known to you;

(iii) directly or indirectly solicit or attempt to solicit any individual known by you to be an employee or consultant of the Company to instead become an employee, agent, consultant, representative or advisor of any other Person; or

(iv) directly or indirectly persuade, or seek to persuade, any customer of or supplier to the Company to cease to do business with the Company or to reduce the amount of business which such customer or supplier has done or contemplates doing with the Company, whether or not the relationship between the Company and such customer or supplier was originally established in whole or in part through your efforts.

(c) During the Term and for two years thereafter, you agree that (i) upon becoming employed by a Competitor, or by a subsidiary, division or other business unit of a Competitor, you will promptly provide notice to the Company of such employment; and (ii) upon the earlier of your (x) negotiating with any Competitor concerning the possible employment of you by such Competitor, (y) receiving an offer of employment from any Competitor, and (z) becoming employed by any Competitor, you will promptly provide copies of Sections 5, 6, 7 and 8 of this Agreement to such Competitor. You further agree that the Company may, during such period, provide notice to any Competitor by which you have become employed, or with which you are negotiating to become employed, of your obligations under this Agreement, including (without limitation) your obligations under Sections 5, 6 and 7 hereof.

(d) You understand that the provisions of this Section 5 may limit your ability to earn a livelihood in a business similar to the business of the Company but nevertheless agree and hereby acknowledge that the consideration provided under this Agreement, including any compensation or benefits provided under Sections 3 and 10 hereof, is sufficient to justify the restrictions contained in the provisions of this Section 5. In consideration thereof and in light of your education, skills and abilities, you agree that you will not assert in any forum that such provisions prevent you from earning a living or otherwise are void or unenforceable or should be held void or unenforceable.

(e) Nothing in Section 5(b) above shall preclude any Person with whom you become associated from accepting offers from individuals employed by the Company to be employed by such Person; provided that such offers were not solicited, or otherwise encouraged, by you, either directly or indirectly.

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(f) The provisions of this Section 5 shall be null and void in the event that, after the Term, the Company or any of its Affiliates materially breaches any of their material obligations to you, under Section 10 or otherwise, which breach is not fully cured on fifteen days’ notice from you to the Company requesting cure.

6. Ownership of Proprietary Information.

(a) You confirm and agree that all proprietary information relating to the Company’s business that has been created by, discovered by, developed by, learned by, or made known to, the Company, or assigned, licensed or otherwise conveyed to the Company, from the beginning of time through the end of the Term (including, without limitation, proprietary information relating to the Company’s business created by, discovered by, developed by, learned by, reduced to practice by or made known to the Company, or to you, either alone or jointly with others, during your employment with the Company, and proprietary information relating to the Company’s customers, clients, suppliers, vendors, consultants, licensors and licensees) has been, is and shall be the sole property of the Company, and the Company has been, is and shall be the sole owner of all proprietary designs, ideas, patents, patent applications, copyrights, copyright applications and other rights in connection with such proprietary information, including but not limited to the right to make application for statutory protection of any kind with respect to such proprietary information in any country. All of the aforementioned information is hereinafter called “Proprietary Information” (and shall be deemed Proprietary Information regardless of whether or not the Proprietary Information is patentable or copyrightable) except to the extent otherwise provided in Section 6(c) below. By way of illustration, but not limitation, Proprietary Information includes, to the extent proprietary to the Company and except to the extent otherwise provided in Section 6(c) below, trade secrets, processes, discoveries, structures, works of authorship, copyrightable works, trademarks, copyrights, formulas, data, data structures, know-how, show-how, improvements, information relating to products (both current and under development), services and technologies, product concepts, specifications, techniques, information or statistics contained in, or relating to, promotion or marketing plans and programs, strategies, forecasts, blueprints, sketches, records, notes, devices, drawings, customer lists, continuation applications of any kind, trademark applications and information about the Company’s employees and/or consultants (including, without limitation, the compensation, job responsibilities and job performance of such employees and/or consultants) and confidential business information of the Company or any of its clients, consultants, suppliers, customers, vendors, licensors, licensees and other third parties. For purposes of this Section 6(a), and of Section 6(b) and 6(c) below, the term “Company” shall be deemed to include, as appropriate, all of the Company’s Affiliates.

(b) You agree that the results of all work and tasks performed by you for or on behalf of the Company (“Works”) are owned by the Company and, to the extent permitted by law, shall be “works made for hire” as that term is defined in the United States Copyright Act (17 U.S.C. Section 101). The Company shall therefore be deemed to be the sole owner author and owner of any and all right, title and interest in any Works, including, without limitation, all intellectual property rights therein. You hereby assign to the Company all right, title and interest you may have or acquire in any Works.

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(c) Notwithstanding the foregoing, Proprietary Information shall not include: (i) information in the public domain not as a result of any breach of this Agreement or of any duty owed by you to the Company or any other Person; (ii) information lawfully in your possession prior to the commencement of your employment with the Company and not disclosed to you by the Company; or (iii) information disclosed to you without restriction by a third party who had the right to disclose such information to you.

(d) It is understood that no patent, copyright, trademark, or other proprietary right or license is granted to you under this Agreement. Any disclosure of Proprietary Information, and any materials which may accompany any such disclosure, in the course of your employment under this Agreement shall not result in the grant to you of any proprietary rights, express or implied, of any kind as against the Company.

(e) During the Term and thereafter, you agree that you will, upon reasonable request by the Company, promptly disclose to the Company, or any Person reasonably designated by the Company, all Proprietary Information that you know or possess and that has been developed, created, made, conceived, reduced to practice or learned by the Company, any Affiliate of the Company, or you, either alone or jointly with others, during the Term and is not otherwise known to the Company’s officers and directors.

(f) Any assignment of copyright under this Agreement includes all rights of paternity, integrity, disclosure and withdrawal and other rights relating thereto that may be known as or referred to as “moral rights” (collectively, “Moral Rights”). To the extent such Moral Rights cannot be assigned under applicable law and to the extent the following is allowed by the laws in the various countries where such Moral Rights exist, you hereby waive such Moral Rights and consent to any action of the Company that would violate such Moral Rights in the absence of such consent. You agree to confirm any such waivers and consents from time to time as requested by the Company.

(g) You further agree to assist the Company, upon reasonable request by the Company and both during and after the Term (but at the Company’s sole expense), to obtain, confirm and from time to time enforce patents, copyrights or other rights relating thereto on Works in any and all countries, and to that end you will, upon reasonable request by the Company, execute any documents reasonably necessary: (i) to apply for, obtain and vest in the name of the Company alone (unless the Company otherwise directs) letters patent, copyrights or other analogous protection with respect to Works in any country throughout the world and when so obtained or vested to renew and restore the same on behalf of the Company; and (ii) to defend any opposition proceedings in respect of such applications and any opposition proceedings or petitions or applications for revocation of such letters patent, copyright or other analogous protection.

(h) Your obligation to assist the Company, upon reasonable request by the Company, in obtaining and enforcing patents and copyrights for Works in any and all countries, and in resisting disclosure of Proprietary Information as provided in Section 7(d) below, and in otherwise carrying out your obligations under Sections 6 and 7, shall continue beyond the Term to the extent provided herein, but the Company agrees to compensate you, on an hourly basis

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based on an eight hour day at a daily rateof$1,500, for time actually spent by you after the Term at the Company’s request on such matters. Such compensation shall be paid no later than forty-five (45) days following receipt of an invoice from you.

7. Use and Disclosure of Proprietary Information.

(a) You agree at all times, including after the Term, (x) to keep in strict trust and confidence, and not to disclose or make accessible to any other Person other than with the prior written consent of a representative of the Company specifically authorized by the Board or the Committee to give such consent, Proprietary Information of the Company and its Affiliates, and (y) not to use any such Proprietary Information for yourself or others; provided that the provisions of this Section 7(a) shall not prohibit or restrict use or disclosure in connection with the proper discharge of your services for the Company or any of its Affiliates or as otherwise provided in this Agreement.

(b) You further agree not to disclose or publish at any time, during or after the Term, and in violation of any obligation of confidence owed by you, information relating to any of your former employers.

(c) Upon lawful written notice by the Company to you either during or after the Term, you shall promptly deliver to the Company, or, if requested by the Company, promptly destroy, all written Proprietary Information and any other material containing any Proprietary Information (whether prepared by the Company, you or a third party) that is in physical (including, without limitation, electronic) form and that is in your possession, and will not retain any copies, extracts, summaries or other reproductions in whole or in part of such written Proprietary Information or other material; provided that you shall in all instances be permitted to retain, and use appropriately: (x) your personal correspondence files, rolodex, and the like and (y) documents relating to your benefits, entitlements, compensation, tax obligations, and the like.

(d) If during the Term or thereafter you are required by law, or by order, subpoena or comparable process from an arbitrator, court, agency or other Person, to disclose all or any part of any Proprietary Information, other than as contemplated elsewhere in Sections 6 and 7, you will provide the Company with prompt written notice of such requirement, and of the terms and circumstances surrounding such requirement, so that the Company, or, as applicable, one or more of its Affiliates, may seek an appropriate protective order or waive compliance with the provisions of this Agreement. In such case, the Parties will consult with each other on the advisability of pursuing any such order or other legal action or available steps to resist or narrow such requirement. If, failing the entry of a protective order or the receipt of a waiver hereunder, you are, in the opinion of your counsel, legally compelled to disclose Proprietary Information, you may disclose only that portion of such information which counsel advises you that you are legally compelled to disclose. In any event, you will cooperate reasonably with the Company in obtaining, and will not oppose action by the Company (or, as applicable, one or more of its Affiliates) to obtain, an appropriate protective order or other reliable assurance that confidential treatment will be accorded the disclosure of any Proprietary Information. All expenses reasonably incurred by you in complying with Sections 6 and 7 (including, without limitation, fees and other charges of counsel) will be promptly reimbursed by the Company.

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8. Enforcement. You agree that the remedy at law for any breach or threatened breach by you of any covenant contained in Sections 5, 6 or 7 of this Agreement would be inadequate and cause irreparable damage to the Company. In the event that you breach or threaten to breach any provisions of Sections 5, 6 or 7, in addition to any other rights which the Company may have at law or in equity, the Company shall be entitled, without the posting of a bond or other security, to seek injunctive relief from any court of competent jurisdiction to enforce the restrictions contained in such Sections. In the event that an actual proceeding is brought in equity to enforce any of the provisions of Sections 5, 6 or 7, you shall not assert as a defense that there is an adequate remedy at law, nor shall the Company be prevented from seeking any other remedies that may be available to it (including, without limitation, monetary damages) through arbitration in accordance with Section 12 below. The prevailing party in any contested request for injunctive relief under this Section 8 shall be entitled to prompt reimbursement for such party’s reasonable attorneys’ fees, and for other costs and expenses reasonably incurred by such party, in connection with such request.

9. Termination. Your employment hereunder, and the Term, shall terminate upon the first to occur of the following events:

(a) Death. You die.

(b) Disability. You have been unable, for 120 or more days out of 180 consecutive days, to perform your duties under this Agreement, as a result of physical or mental illness, injury or incapacity, and the Company shall have communicated to you, by written notice, the fact of your termination, which termination shall be effective on the 30th day after receipt of such notice by you, unless you return to full-time performance of your duties hereunder prior to such 30th day.

(c) For Cause. Your employment hereunder may be terminated by the Company for Cause in accordance with this Section 9(c).

(i) No termination of your employment hereunder for Cause shall be effective as a termination for Cause unless the provisions of this Section 9(c)(i) shall first have been complied with. You shall be given written notice by the Board of its intention to terminate you for Cause, such notice (x) to state in detail the particular circumstances that constitute the grounds on which the proposed termination for Cause is based and (y) to be given no later than 90 days after the Board, as a whole, is first made aware of such circumstances. You shall have five business days after receiving such notice in which to request a hearing before the Board, which hearing (if timely requested) shall be held within ten business days of your receiving such notice. If, within 20 business days following such hearing (if timely requested), or within ten business days following your receipt of the original notice (if no hearing is timely requested), the Board gives written notice to you confirming that, in the judgment of at least two thirds of the members of the Board (not including you, if you are then a member of the Board), Cause for terminating your employment on the basis set forth in the original notice exists, your employment hereunder shall thereupon be terminated for Cause, subject to de novo review, at your election, of the question whether Cause existed through arbitration in accordance with Section 12 below. Notwithstanding anything herein to the contrary, the Board may cause you to

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be on administrative leave (with full pay and benefits) during a period, not longer than 20 business days, that begins on the date that the Company gives the original notice provided for in this Section 9(c)(i) and ends on the earlier of (x) the date that your employment hereunder is terminated for Cause and (y) the date that the Board determines that your employment hereunder will not be terminated for Cause.

(ii) For purposes of this Agreement, the term “Cause” shall mean the occurrence of any of the following: (A) any willful and material breach by you of any of the provisions of Sections 5, 6, or 7 above, which breach causes or is likely to cause material harm to the Company; (B) any willful and material breach by you of Section 1(b) or 1(c) above, which breach is not cured by you on 30 days’ written notice thereof from the Company requesting cure; provided, however, that your right to such 30-day cure period shall be conditioned upon your good-faith attempt to cure such breach; (C) any act or omission by you that constitutes misconduct, is intended to harm the Company, and causes or is likely to cause material harm to the Company; (D) any conduct by you that constitutes willful gross misconduct, or willful gross neglect, and that causes or is likely to cause material harm to the Company; (E) the perpetration by you of an intentional and knowing fraud against, or adversely affecting, the Company or any of its Affiliates, which fraud causes or is likely to cause material harm to the Company; or (F) you are convicted of, or plead guilty or nolocontendere to, any felony.

(d) Without Cause. The Company may terminate your employment hereunder at any time, for any reason or no reason, by giving you ten days’ prior written notice of the termination. No such termination of your employment hereunder shall be deemed a breach of this Agreement.

(e) For Good Reason. You may terminate your employment hereunder for “Good Reason” on ten days’ written notice to the Company given within one year following the occurrence of any of the following events without your prior written consentand without full cure on 30 days’ written notice from you to the Company requesting cure (such notice to be given within 90 days after you become aware of such event): (i) you are assigned duties that are inconsistent in any material respect with Section 1(b) above, or your titles, positions, authorities, duties or responsibilities are materially diminished; provided that the Company becoming a subsidiary of another entity, or otherwise ceasing to be a publicly-traded company, shall not in and of itself constitute circumstances described in this clause (i) unless an assignment or diminishment described in this clause (i) occurs in connection therewith; (ii) any failure by the Company to timely comply with its obligations to you under Section 3 above, or with any other material obligation to you; (iii) your failure to be re-elected to the Board or as Chairman of the Board, unless, at the time you are not re-elected, the Company has the right to terminate your employment hereunder for Cause under Section 9(c) above and does so within 45 days of your failure to be re-elected; (iv) any change in your reporting structure so that you are required to report, in your capacity as Chief Executive Officer of the Company, to any Person other than the Board; (v) any relocation of the Company’s headquarters, or of your principal place of employment, to a location that is more than 75 miles from Berkeley Heights, New Jersey; or (vi) any failure by the Company to obtain the assumption in writing of its obligations under this Agreement by any successor to all or substantially all of its business or assets within 10 days

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after any reconstruction, amalgamation, combination, merger, consolidation, sale, liquidation, dissolution or similar transaction; provided, however, that if your failure to be elected as Chairman of the Board is solely on account of the Board determining in good faith, pursuant to written advice from nationally-recognized outside counsel, that the same person should not serve as both Chairman of the Board and Chief Executive Officer of the Company, then such failure shall not constitute Good Reason.

(f) Change of Control Termination. Any termination by you, on 20 days’ written notice from you to the Company, of your employment hereunder during any 60-day period that commences uponthe occurrenceof aChange in Control shall be treated as a termination by you for “Good Reason”. For purposes of this Agreement, “Change in Control” shall mean “Change in Control” as defined in the 2007 Plan.

(g) Without Good Reason. You may terminate your employment hereunder at any time, for any reason or no reason, by giving 30 days’ prior written notice of termination to the Company. No such termination of your employment hereunder shall be deemed a breach of this Agreement.

(h) Expiration of Term. Your employment hereunder shall terminate upon expiration of the Term pursuant to notice of non-extension given by either Party in accordance with Section 2.

10. Benefits Upon Termination of Your Employment Hereunder. In the event that your employment hereunder is terminated, you shall be entitled to the following compensation and benefits:

(a) Any Termination. On any termination of your employment hereunder, you shall be entitled to the following benefits:

(i) prompt payment of any accrued but unpaid Base Salary through the date that your employment hereunder terminates (the “Termination Date”), payable no later than the second regularly scheduled payroll date following the Termination Date;

(ii) prompt payment of any accrued but unpaid expenses required to be reimbursed pursuant to Section 3 above;

(iii) unless the termination is (x) by the Company for Cause in accordance with Section 9(c) above or (y) by you voluntarily without Good Reason and not pursuant to notice of non-extension in accordance with Section 2 above, a prompt lump-sum payment in respect of accrued but unused vacation days at your per-business-day Base Salary rate in effect as of the Termination Date, payable no later than the second regularly scheduled payroll date following the Termination Date;

(iv) prompt payment of any accrued but unpaid Bonus amount, such payment to be due to you at the time your Bonus for such calendar year would have been due if

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you had remained employed hereunder (but in no event later than March 15 of the following calendar year);

(v) unless the termination is (x) by the Company for Cause in accordance with Section 9(c) above or (y) by you voluntarily without Good Reason and not pursuant to notice of non-extension in accordance with Section 2 above, a lump-sum payment equal to the product obtained by multiplying (A) the Bonus to which you would have been entitled for the calendar year of termination if you had remained employed hereunder throughout such calendar year times (B) a fraction whose numerator equals the number of days you were employed hereunder during such calendar year and whose denominator is 365, such payment to be due to you at the time your Bonus for such calendar year would have been due if you had remained employed hereunder (but in no event later than March 15 of the following calendar year);

(vi) other or additional benefits in accordance with applicable plans, programs, agreements and arrangements of the Company and its Affiliates (including, without limitation, Sections 3, 6(h) and 7(d) above and Section 12 below, and applicable stock option agreements, retirement plans, disability/life insurance programs, etc.); and

(vii) payment, promptly when due of all amounts referred to above, such payments to be made by wire transfer of same-day funds to the extent reasonably requested by you.

(b) Termination without Cause or forGood Reason. In the event that your employment hereunder is terminated (x) by the Company (otherthan for death, for disability in accordance with Section 9(b), for Cause in accordance with Section 9(c), or pursuant to a notice of non-extension in accordance with Section 2), or (y) by you in accordance with Section 9(e) or 9(f), you shall receive the following benefits provided, except as set forth in Section 10(b)(i) and 10(b)(v) below, that you execute(within 30 days after such termination of employment), and do not revoke, a mutual release that is in substantially the form attached hereto as Exhibit B:

(i) the benefits described in Section 10(a) (you will receive these benefits regardless of whether you execute a release);

(ii) subject to your not having materially breached the provisions of Section 5, which breach has not been fully cured (if capable of cure) on fifteen days’ notice to you from the Company requesting cure, (A) a prompt lump-sum payment equal to one-quarter of your annualized Base Salary as of the Termination Date and (B) a separate payment equal to one-quarter of your Base Salary (as was in effect as of your Termination Date) on the first day of the fourth month following your Termination Date, (C) a separate lump-sum payment equal to one-quarter of your Base Salary (as was in effect as of your Termination Date) on the first day of the seventh month following your Termination Date, and (D) a separate lump-sum payment equal to one-quarter of your Base Salary (as was in effect as of your Termination Date) on the first day of the tenth month following your Termination Date; provided that, in the event that such termination of your employment is either (x) by the Company in anticipation of a Change in Control or (y) by either Party upon the occurrence of, or within the 60 day period immediately

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following, a Change in Control, then you shall instead receive, instead of the amounts specified in (A) through (D) above, a prompt lump-sum payment equal to two times your annualized Base Salary as of the Termination Date;

(iii) subject to your not having materially breached the provisions of Section 5, which breach has not been fully cured (if capable of cure) on fifteen days’ notice to you from the Company requesting cure, in the event that such termination of your employment is either (x) by the Company in anticipation of a Change in Control or (y) by either Party upon the occurrence of, or within the 60 day period immediately following, a Change in Control, then you shall receive a prompt lump-sum payment equal to two times your target Bonus for the calendar year of termination (i.e., forty percent of your annualized Base Salary as of the Termination Date);

(iv) each of your outstanding stock options shall, to the extent vesting or exercisability depends solely on your continued employment, become fully vested, and fully exercisable, as of the Termination Date (provided that, for avoidance of doubt, the GenasenseTrancheand Capitalization Tranche granted pursuant to Sections2(c) and 2(d) of Exhibit A attached hereto shall, for purposes of this Section 10, be deemed not to vest or become exercisable based solely on your continued employment); and

(v) each of your outstanding stock options shall, to the extent that it is or becomes exercisable as of the Termination Date, remain exercisable in accordance with its terms (you will receive these benefits regardless of whether you execute a release).

(c) Expiration of the Term. In the event that your employment hereunder terminates by expiration of the Term pursuant to notice of non-extension in accordance with Section 2, you shall be entitled to the following benefits provided, except as set forth in Section 10(c)(i) and 10 (c)(iv) below, that you execute, and do not revoke, a mutual release that is in substantially the form attached hereto as Exhibit B.

(i) the benefits described in Section 10(a) (you will receive these benefits regardless of whether you execute a release);

(ii) if the Term expires pursuant to notice of non-extension from you, each of your outstanding stock options whose vesting or exercisability depends solely on your continued employment shall vest, and become fully exercisable, as of the Termination Date to the extent that such stock option was then scheduled to become vested or exercisable within 90 days following the Termination Date had your employment hereunder continued;

(iii) if the Term expires pursuant to notice of non-extension from the Company, each of your outstanding stock options whose vesting or exercisability depends solely on your continued employment shall become fully vested, and fully exercisable, as of the Termination Date; and

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(iv) each of your outstanding stock options shall, to the extent that it is or becomes exercisable as of the Termination Date, remain exercisable in accordance with its terms (you will receive these benefits regardless of whether you execute a release).

(d) No Mitigation; No Offset. In the event of any termination of your employment hereunder, you shall have no obligation to seek other employment or otherwise mitigate the obligations of the Company under this Agreement, and there shall be no offset against amounts or benefits due to you under this Agreement or otherwise on account of (x) any Claim that the Company or any of its Affiliates may have against you or (y) any remuneration or other benefit earned or received by you after such termination. Any amounts due under this Section 10 are considered to be reasonable by the Company and are not in the nature of a penalty.

(e) No Other Benefits or Compensation. Except as may be provided under this Agreement or under the terms of any incentive compensation, employee benefit or fringe benefit plan applicable to you as of the Termination Date, you shall have no right to receive any other compensation, or to participate in any other plan, arrangement or benefit, with respect to any future period after such date.

(f) Section 409A Matters. Notwithstanding anything to the contrary in this Agreement or elsewhere, if you are a “specified employee” as determined pursuant to Section 409A of the Code and its implementing regulations (“Section 409A”) as of the date of your “separation from service” as defined in Treasury Regulation Section 1.409A-1(h) (or any successor regulation) and if any payment or benefit provided for in this Agreement or otherwise both (x) constitutes a “deferral of compensation” within the meaning of Section 409A and (y) cannot be paid or provided in the manner otherwise provided without subjecting you to “additional tax”, interest or penalties under Section 409A, then any such payment or benefit that is payable during the first six months following your “separation from service” shall be paid or provided to you in a cash lump-sum on the first business day of the seventh calendar month following the month in which your “separation from service” occurs. In addition, any payment or benefit due upon a termination of your employment that represents a “deferral of compensation” within the meaning of Section 409A shall only be paid or provided to you upon a “separation from service” as defined in Section 409A. For the purposes of this Agreement, amounts payable under this Section 10 shall be deemed not to be a “deferral of compensation” subject to Section 409A to the extent provided in the exceptions in Treasury Regulation Sections 1.409A-1(b)(4) (“short-term deferrals”) and (b)(9) (“separation pay plans,” including the exception under subparagraph (iii)) and other applicable provisions of Treasury Regulation Section 1.409A-1 through A-6.

11. Notices. Any notice, consent, demand, request, or other communication given to a Person in connection with this Agreement shall be in writing and shall be deemed to have been given to such Person (x) when delivered personally to such Person or (y) provided that a written acknowledgment of receipt is obtained, five days after being sent by prepaid certified or registered mail, or two days after being sent by a nationally recognized overnight courier, to the address (if any) specified below for such Person (or to such other address as such Person shall have specified by ten days’ advance notice given in accordance with this Section 11) or (z), in

19

the case of the Company only, on the first business day after it is sent by facsimile to the facsimile number set forth below (or to such other facsimile number as shall have specified by ten days’ advance notice given in accordance with this Section 11), with a confirmatory copy sent by certified or registered mail or by overnight courier in accordance with this Section 11.

If to the Company:	Genta Incorporated 200 Connell Drive Berkeley Heights, NJ 07922 Attn: General Counsel and Board of Directors Fax #: 908-286-1701
With a copy to:	Fox Rothschild P.O. Box 5231 Princeton, NJ 08543-5231 Attn: Anne Bancroft, Esq. Fax: 609.896.1469
If to you:	The address of your principal residence as it appears in the Company’s records, with a copy to you (during the Term) at your office in Berkeley Heights, New Jersey
With a copy to:	Morrison Cohen LLP 909 Third Avenue New York, NY 10022 Attn: Robert M. Sedgwick, Esq. Fax #: 212-735-8708
If to any of your beneficiaries:	The address most recently specified by you or by such beneficiary.

12. Resolution of Disputes. Any Claim arising out of or relating to this Agreement, any other agreement between you and the Company or any of its Affiliates, your employment with the Company, or any termination thereof (a “Covered Claim”) shall (except to the extent otherwise provided in Section 8 with respect to certain requests for injunctive relief) be resolved by binding confidential arbitration, to be held in the Borough of Manhattan in New York City, in accordance with the Commercial Arbitration Rules (and not the National Rules for Resolution of Employment Disputes) of the American Arbitration Association and this Section 12. Judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. To the extent that it is determined through arbitration that you substantially prevailed in respect of a Covered Claim (and the Parties agree to request the arbitrator(s) appointed pursuant to this Section 12 to determine whether or not you did so), upon receipt of documented expenses the Company shall promptly reimburse all reasonable costs and expenses (including, without limitation, attorneys’ fees and other charges of counsel) incurred by you or your beneficiaries in resolving such Covered Claim (but in any event no less than 60 days after such determination).

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Pending the resolution of any Covered Claim, you (and your beneficiaries) shall continue to receive all payments and benefits that are then due (under this Agreement or otherwise) and that are not the subject of reasonable, good-faith dispute, unless the arbitrator(s) appointed pursuant to this Section 12 determines otherwise.

13. Severability of Provisions. If any provision of this Agreement shall be declared by any court or arbitrator of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent they are valid, legal and enforceable. If any provision of this Agreement, or any part thereof, is held to be invalid or unenforceable because of the scope or duration of or the area covered by such provision, the Parties agree that the court or arbitrator making such determination shall reduce the scope, duration and/or area of such provision (and shall substitute appropriate provisions for any such invalid or unenforceable provisions) in order to make such provision enforceable to the fullest extent permitted by law and/or shall delete specific words and phrases, and such modified provision shall then be enforceable and shall be enforced. The Parties recognize that if, in any Proceeding, a court or arbitrator shall refuse to enforce any of the separate covenants contained in this Agreement, then that invalid or unenforceable covenant contained in this Agreement shall be deemed eliminated from these provisions to the extent necessary to permit the remaining separate covenants to be enforced. In the event that any court or arbitrator determines that the time period or the area, or both, are unreasonable and that any of the covenants is to that extent invalid or unenforceable, the Parties agree that such covenants shall remain in full force and effect, first, for the greatest time period, and second, in the greatest geographical area that would not render them unenforceable.

14. Entire Agreement; Modification; Inconsistencies.

(a) This Agreement contains the entire understanding and agreement between the Parties concerning the specific subject matter hereof and supersedes in its entirety, as of the Effective Date, any prior employment agreement between the Parties; provided, however, that nothing herein shall limit or reduce any right or benefit that shall have accrued to you as of the Effective Date, under any prior employment agreement or otherwise, on account of events occurring prior to the Effective Date, or any right under the second sentence of Section 3(c) of the October 28, 1999 employment agreement between the Parties in respect of stock options granted prior to the Effective Date pursuant to such Section 3(c).

(b) No provision in this Agreement may be amended unless such amendment is set forth in a writing that expressly refers to the provision of this Agreement that is being amended and that is signed by you and by an authorized representative of the Company. No waiver by any Person of any breach of any condition or provision contained in this Agreement shall be deemed a waiver of any similar or dissimilar condition or provision at the same or any prior or subsequent time. To be effective, any waiver must be set forth in a writing signed by the waiving Person and must specifically refer to the condition(s) or provision(s) of this Agreement being waived.

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(c) In the event of any inconsistency between any provision of this Agreement and any provision of any employee handbook, personnel manual, program, policy, arrangement, agreement, plan, or corporate governance document of the Company or any of its Affiliates, the provisions of this Agreement shall control unless you otherwise agree in a writing that expressly refers to the provision of this Agreement whose control you are waiving.

15. Assignability; Binding Nature.

(a) This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, heirs (in your case) and assigns.

(b) No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company except that such rights and obligations may be assigned or transferred pursuant to a merger, consolidation or other combination in which the Company is not the continuing entity, or a sale or liquidation of all or substantially all of the business and assets of the Company; provided that the assignee or transferee is the successor to all or substantially all of the business and assets of the Company and such assignee or transferee expressly assumes the liabilities, obligations and duties of the Company as set forth in this Agreement. In the event of any merger, consolidation, other combination, sale of business and assets, or liquidation as described in the preceding sentence, the Company shall use its best reasonable efforts to cause such assignee or transferee to promptly and expressly assume the liabilities, obligations and duties of the Company hereunder.

(c) None of your rights or obligations under this Agreement may be assigned or transferred by you other than your rights to compensation and benefits, which may be transferred only by will or by operation of law, except that you shall be entitled, to the extent permitted under applicable law, to select and change a beneficiary or beneficiaries to receive any compensation or benefit hereunder following your death by giving written notice thereof to the Company.

16. Miscellaneous.

(a) In the event of your death or a judicial determination of your incompetence, references in this Agreement to you shall be deemed, where appropriate, to refer to your beneficiary, estate or other legal representative.

(b) This Agreement shall be governed, construed and enforced in accordance with its express terms, and otherwise in accordance with the laws of the State of New York without regard to principles of conflict of laws.

(c) Except as otherwise set forth in this Agreement, the respective rights and obligations of the Parties hereunder shall survive any termination of your employment hereunder.

(d) The headings of Sections and subsections of this Agreement are inserted for convenience only and shall not affect any interpretation of this Agreement.

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(e) If this letter agreement meets with your approval and you desire to accept this offer of employment on the terms and conditions set forth herein, please execute the enclosed copy of this letter and return it to me as soon as possible. Signatures delivered by facsimile shall be effective for all purposes.

Sincerely,
GENTA INCORPORATED
By:
Name:	Douglas Watson
Title:	Chairman of the Compensation Committee of the Board
Date:	November ___, 2007

AGREED AND ACCEPTED:

Dr. Raymond P. Warrell, Jr.

Date: November ___, 2007

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EXHIBIT A

FORM OF

STOCK OPTION AGREEMENT

1. Grant of Option. Genta Incorporated, a Delaware corporation (together with its successors and assigns, the “Company”), hereby grants to Dr. Raymond P. Warrell, Jr. (the “Optionee”), effective as of September 20, 2007 (the “Grant Date”), an option (as more fully defined below the “option”) under the Company’s 2007 Stock Incentive Plan, as amended through the Grant Date (the “Plan”),subject to shareholder approval of the Plan, to purchase an aggregate of 2,400,000 shares of the Company’s Common Stock (each such share, a “Share”) at an exercise price of $1.39 per Share (the “Exercise Price”), exercisable as set forth in, and subject to the terms and conditions of, the Plan, this Stock Option Agreement (this “Stock Option Agreement”) and the Amended and Restated letter agreement dated as of November     , 2007, between the Company and the Optionee relating to the Optionee’s employment with the Company (the “Employment Agreement”). All capitalized terms not defined in this Stock Option Agreement shall have the meanings set forth in the Employment Agreement. “Term of Employment” shall mean “Term” as defined in the Employment Agreement, and the terms “Fair Market Value” and “Change in Control” shall mean “Fair Market Value” and “Change in Control” as defined in the Plan.

2. Exercisability of Option.

(a) The option granted hereby to the Optionee shall be divided into three tranches (sometimes referred herein individually as a “Tranche” and collectively as the “Tranches”) that are distinguished as to the terms under which the Shares to which they respectively relate become exercisable as more fully described in this Section 2.

(b) The first Tranche (the “Service Tranche”) relates to an aggregate of 1,440,000 Shares that, subject to the provisions of Sections 2(e) through 2(j), inclusive, will become exercisable (“vest”) over a period of forty (40) months from the Grant Date, by means of (i) an initial amount of 360,000 Shares to be exercisable and vest on the Grant Date, (ii) an additional amount of 1,053,000 Shares to become exercisable and vest in thirty-nine (39) equal monthly increments of 27,000 Shares each, commencing on October 1, 2007 and continuing on the first day of each of the next successive thirty-eight (38) calendar months, and (ii) a final amount of 27,000 Shares to become exercisable and vest on December 31, 2010.

(c) The second Tranche (the “Genasense Tranche”) relates to an aggregate of 480,000 Shares that, subject to the provisions of Sections 2(e) through 2(j), inclusive, will become exercisable and vest on the date that the Genasense product (or its substantial equivalent) that is currently being developed by the Companyreceives regulatory approval for marketing in (i) any first indication in the United States from the Food and Drug Administration or (ii) any first indication in Europe from the Europe Medicines Agency.

(d) The third Tranche (the “Capitalization Tranche”) relates to an aggregate of 480,000 Shares that, subject to the provisions of Section 2(e) through 2(j), inclusive, will become exercisable on the date that the total Fair Market Value of all common stock of the Company

then outstanding first exceeds $395,000,000. The Fair Market Value of all Common Stock of the Company then outstanding as of any specific day shall be determined by multiplying (i) the Fair Market Value per share of the Company’s Common Stock on such day by (ii) the number of shares of Common Stock of the Company that are reflected as outstanding as of the close of business on such day in the books and records of the Company’s then current transfer agent for its Common Stock.

(e) If any of the following events (each, a “Trigger Event”) occurs (x) on or before December 31, 2010 and (y) either during the Term of Employment or, in the event that the Optionee’s employment is terminated by the Company without Cause in anticipation of the occurrence of a Trigger Event, within three months after such termination, then this option, comprised of the Shares in the Service Tranche, the Genasense Tranche and the Capitalization Tranche, shall become fully vested, and fully exercisable, upon the occurrence of a Trigger Event:

(i) a sale or other disposition of the product G3139 or its substantial equivalent; or

(ii) a Change in Control.

(f) In the event that the Optionee’s employment with the Company is terminated other than in a termination (x) by the Company for Cause in accordance with Section 9(c) of the Employment Agreement or (y) by the Optionee voluntarily, other than for Good Reason, then this option shall remain exercisable, subject to Section 2(i) below, to the extent that it either is exercisable as of the date that the Optionee’s employment terminates or becomes exercisable within three months thereafter upon the occurrence of a Trigger Event pursuant to Section 2(e) above, through the second anniversary of the date that the Optionee’s employment terminates, at which time it shall expire to the extent that it has not yet been exercised.

(g) In the event that the Optionee’s employment with the Company is terminated by the Optionee voluntarily, other than for Good Reason, then, subject to Section 2(j) below, this option shall remain exercisable, to the extent that it is exercisable as of the date that the Optionee’s employment terminates, through the first anniversary of the date that the Optionee’s employment terminates, at which time it shall expire to the extent that it has not yet been exercised.

(h) In the event that the Optionee dies on or before the date that this option expires, then, subject to Section 2(j) below, this option shall remain exercisable, to the extent that it is exercisable as of the date of the Optionee’s death through the later of the first anniversary of the date of the Optionee’s death and, in the event that the Optionee’s employment with the Company previously terminated in a termination governed by Section 2(f) above, the expiration date that applies under Section 2(f) above, at which time it shall expire to the extent that it has not yet been exercised.

(i) In the event that the Optionee’s employment with the Company is terminated for Cause in accordance with Section 9(c) of the Employment Agreement, then this option shall expire as of the Termination Date.

(j) Anything elsewhere to the contrary notwithstanding, this option shall, to the extent that it has not yet then expired or been exercised, expire at 11:59 p.m. on the tenth anniversary of the Grant Date.

3. Exercise of Option.

(a) Method of Exercise. Subject to the conditions set forth in this Stock Option Agreement, this option may be exercised from time to time by delivery of written notice of exercise to the Company from the Optionee. Such notice shall specify the total number of Shares to be purchased and shall be accompanied by payment in full (or an arrangement for payment in full) in accordance with Section 3(b) below. Such exercise shall be effective upon delivery to the Company of such written notice together with the required payment (or arrangement for payment). This option may be exercised for less than the full number of Shares for which it is then exercisable, provided that no such exercise may be for any fractional Share.

(b) Method of Payment. Payment of the purchase price for Shares purchased upon an exercise of this option may be made: (i) by delivery to the Company of cash, a wire transfer of available funds, or a check payable to the order of the Company and backed by sufficient funds, in each case in an amount equal to the purchase price of such Shares; (ii) by delivery to the Company of Shares then owned by the Optionee having an aggregate Fair Market Value as of the date of delivery equal to the purchase price of such Shares, provided that payment in this fashion does not result in an accounting charge to the Company’s earnings that is greater than the accounting charge (if any) that would have applied if the payment had been made in cash; (iii) subject to the restrictions contained in Section 3(g) of the Employment Agreement and to the extent then allowed by applicable law, through reasonable cashless exercise procedures that are from time to time established or approved by the Company and that afford the Optionee the opportunity to sell immediately some or all of the Shares underlying the exercised portion of this option in order to generate sufficient cash to pay the option purchase price, provided that the Company shall not unreasonably delay establishing, or approving, such procedures upon reasonable request by the Optionee; (iv) by authorizing the Company to withhold Shares that would otherwise be delivered on such exercise having a Fair Market Value on the date of exercise equal to the amount of the purchase price, provided that payment in this fashion is allowable only if the Company applies FAS 123(R), or a successor thereto, to this option and, as a result, the accounting consequences of exercising this option in this manner are no different than if the Exercise Price was payable solely in cash; (v) to the extent then allowed by applicable law, by delivering to the Company a full recourse three-year promissory note which shall (A) bear interest, payable at maturity, at the applicable federal rate (as defined in and under Section 1274(d) of the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder), and (B) be secured by a pledge of the Shares delivered on such exercise, subject to the Optionee’s right to sell such Shares within the limitations described in Section 3(g) of the Employment Agreement and remit the after-tax proceeds of such sale to the Company in repayment of such note; or (vi) by any combination of (i), (ii), (iii), (iv) or (v).

(c) Delivery of Shares Tendered in Payment of Purchase Price. Payment by delivery of Shares may be effected by delivering one or more stock certificates or by otherwise delivering Shares to the Company’s reasonable satisfaction (including, without limitation, through an “attestation” procedure that is reasonably acceptable to the Company), in each case accompanied by such endorsements, stock powers, signature guarantees or other documents or assurances as may reasonably be required by the Company. If a certificate or certificates or other documentation representing Shares in excess of the amount required are delivered, a certificate (or other satisfactory evidence of ownership) representing the excess number of Shares shall promptly be returned by the Company.

(d) Delivery of Option Shares. The Company shall, upon payment in accordance with Section 3(b) above of the aggregate purchase price for the number of Shares purchased, make prompt delivery of such Shares to the Optionee and pay all original issue and transfer taxes and all other fees and expenses incident to such delivery. All Shares delivered upon any exercise of this option shall, when delivered: (i) be duly authorized, validly issued, fully paid and nonassessable; (ii) be registered, or otherwise qualified, for sale, and for resale, under state and Federal securities laws to the extent that other Shares of the same class are then so registered or qualified; provided, however, that in no event shall the Company be required to prepare and file a Form S-3 reoffer prospectus; and (iii) be listed, or otherwise qualified, for trading on any securities exchange or securities market on which Shares of the same class are then listed or qualified. To the extent that Shares are not promptly delivered to the Optionee when due, the Company shall promptly make the Optionee whole for any resulting expense or loss of benefit. The Company shall deliver cash in lieu of any fractional Share. Section 2.10 of the Plan shall not apply to this option.

(e) Tax Withholding. The Company’s obligation to deliver Shares upon an exercise of this option shall be subject to the Optionee’s satisfaction of all applicable Federal, state and local income, excise, employment and other tax withholding requirements (“tax obligations”). The Optionee may satisfy any such tax obligations in any of the manners provided in Section 3(b)(i), (ii) or (iv) above for payment of the purchase price, or any combination thereof.

4. Restrictions on Disposition of Option Shares. The provisions of Section 3(g) of the Employment Agreement shall apply to this option.

5. Nontransferability of Option. This option is personal and no rights granted hereunder may be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) nor shall any such rights be subject to execution, attachment or similar process, except that this option may be transferred in whole or in part (x) by will or the laws of descent and distribution or (y) gratuitously to any Family Member who agrees to be bound by the provisions of this Stock Option Agreement. For purposes of clause (y) of the preceding sentence, “Family Member” shall mean “family member” as such term is used as of the Grant Date in Section A1(a)(5) of the General Instructions to SEC Form S-8, together with any entity described in clause (ii) of such Section A1(a)(5). Any Person to whom this option has been transferred in whole or in part in accordance with the first sentence of this Section 5 shall, to the extent of the transfer, succeed to the rights, and assume the obligations, of the Optionee under Sections 2, 3, 5 and 6 of this Stock Option Agreement, except that such Person may not

transfer this option (in whole or in part) pursuant to clause (y) of such sentence to any Person to whom the original Optionee would not have been permitted to transfer this option (in whole or in part). The Optionee shall give notice to the Company of any transfer of this option, in whole or in part, pursuant to clause (y) of the first sentence of this Section 5.

6. Adjustments. In the event that, at any time after the Grant Date, any merger, consolidation, reorganization, recapitalization, spin-off, split-up, combination, modification of securities, exchange of securities, liquidation, dissolution, share split, share dividend, other distribution of securities or other property in respect of Shares or other securities (other than ordinary-course cash dividends), or other change in corporate structure or capitalization affecting the rights or value of securities of any class then subject to this option occurs, appropriate adjustment(s) shall promptly be made in the number and/or kind of securities subject to this option and/or in the Exercise Price and/or in other terms and conditions of this option, and/or appropriate provision(s) shall promptly be made for supplemental distributions of cash, securities and/or other property, so as to avoid dilution or enlargement of the rights of the Optionee and the value represented by this option. If an event occurs that may require an adjustment (or other action) pursuant to this Section 6, the Company shall promptly deliver to the Optionee a certificate, signed by an officer of the Company, setting forth in reasonable detail (x) the event in question and (y) either the adjustment (or other action) being implemented and the method by which such adjustment (or other action) was calculated or determined or the reasons why the Company believes no adjustment (or other action) is needed.

7. Miscellaneous.

(a) This Stock Option Agreement, together with the Plan, contains the entire understanding and agreement between the Parties concerning the specific subject matter hereof. It shall be governed, construed and enforced in accordance with its express terms, and otherwise in accordance with the laws of the State of Delaware without regard to principles of conflict of laws.

(b) Sections 4(a), 11, 12, 13 (first sentence only), 14(b), 14(c), 16(a) and 16(d) of the Employment Agreement (relating, respectively, to representations, notices, dispute resolution, severability, amendment and waiver, inconsistencies, references and headings) shall be deemed incorporated herein in full, with the references to the “Agreement” in such Sections being treated as references to this Stock Option Agreement and the references to “you” in such Sections being treated as references to the original Optionee.

(c) Nothing contained in this Stock Option Agreement shall be construed or deemed by any Person under any circumstances to bind the Company to continue the employment of the Optionee for any particular period of time.

(d) This Stock Option Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall be deemed to be one and the same instrument. Signatures delivered by facsimile shall be effective for all purposes.

Grant Date: September 20, 2007

[Signature Page Follows]

GENTA INCORPORATED
By:
Name:	Douglas Watson
Title:	Chairman of the Compensation Committee of the Board
Date:	November ___, 2007

ACCEPTED AND AGREED

OPTIONEE

Dr. Raymond P. Warrell, Jr.

Date: November __, 2007

EXHIBIT B

FORM OF MUTUAL RELEASE

Each of Dr. Raymond P. Warrell, Jr. (“Warrell”, and together with his heirs, family members, executors, administrators, agents and assigns, the “Executive”), and Genta Incorporated (“Genta”, and together with its officers, directors, its affiliates, subsidiaries, employees, attorneys, successors, assigns, representatives and other agents, the “Company”) (and each of the Executive and the Company, a “Party”), hereby waives any legal rights and releases and forever discharges the other Party from any and all liabilities, demands, claims, suits, actions, charges, damages, judgments, levies or executions, whether known or unknown, liquidated, fixed, contingent, direct or indirect, which have been, could have been or could be raised against such Party by the releasing Party and which relate in any way to Warrell’s employment by the Company or termination of that employment.

Each Party acknowledges the full and final waiver and release, to the extent provided, of all claims which such Party has or may have against the other Party, specifically including without limitation all claims for relief or remedy of any type under any state or federal laws, including but not limited to the federal and state statutes relating to civil rights, employment discrimination (based on race, color, age, sex, national origin, marital status, handicap, veterans status, religion, workers compensation and family relationship), labor, employment rights or benefits, or relating to employment or termination of employment, wage payments, all as amended, and including but not limited to claims based on breach of fiduciary duty, misrepresentation, fraud, defamation, tortious conduct of any type arising from or relating to Warrell’s employment by Genta or any termination of such employment, or any other common law theories; and including but not limited to any claims for additional compensation, back pay or benefits of any type, and including but not limited to any claim for attorney fees or costs, for reinstatement or reemployment, or for compensatory or punitive damages under any applicable statutes or common law theories, except to the extent that waiver or release of future claims is specifically prohibited by law.

Warrell acknowledges that in addition to the foregoing he is waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967 (“ADEA”), as amended by the Older Workers Benefit Protection Act (“OWBPA”); claims under Title VII of the Civil Rights Act of 1964, as amended (“TITLE VII”); claims under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (excluding claims for vested benefits); claims under the Americans With Disabilities Act (“ADA”); claims under the Family and Medical Leave Act (“FMLA”); claims under the Fair Labor Standards Act (“FLSA”); claims under the Worker Adjustment and Retraining Notification Act (“WARN”); claims under the Sarbanes-Oxley Act of 2002 (“SOX”); claims under the New Jersey Law Against Discrimination (“LAD”); claims under the New Jersey Conscientious Employee Protection Act (“CEPA”); claims under the New Jersey Family Leave Act (“FLA”); claims under the New Jersey Wage and Hour laws;and that this Release is knowing and voluntary. Warrell and Genta agree that this Release does not apply to any rights or claims that may arise after the date this Release is executed by Warrell. Warrell acknowledges that the consideration given for this Release is in addition to anything of value to which Warrell was already entitled. Warrell further acknowledges that he has been advised by this writing that:

• he should consult with an attorney prior to executing this Release;

• he has up to twenty-one (21) days within which to consider this Release;

• he has seven (7) days following his execution of this Release to revoke this Release; and,

• this Release will not be effective until the revocation period has expired.

This waiver and release shall not apply to claims for payments or benefits arising under, or preserved by, Section 10 of Warrell’s Employment Agreement dated as of January 1, 2006. In the event of any breach by either Party of any aspect of this Mutual Release, such Party agrees to promptly and

fully indemnify the other Party against any and all losses, costs, expenses and judgments resulting from such breach.

Upon reasonable request, Warrell agrees to make himself available and cooperate in any reasonable manner in providing reasonable assistance to the Company in concluding any pending business or legal matters and in connection with any such matters that may arise in the future which relate to his employment with the Company; provided such cooperation and assistance shall not unreasonably interfere with any subsequent employment obtained by Warrell.

The Parties agree that each shall not make any disparaging remarks about the other Party to any third party unless otherwise compelled by law.

The Parties shall not, without the prior written consent of the other Party disclose the terms of this Mutual Release, including, but not by way of limitation, the amount or fact of any payment to be made under the Employment Agreement or any of the facts or events surrounding or leading to this Mutual Release (including any characterization thereof) to any person or entity. Notwithstanding the foregoing, Warrell may disclose this information to his spouse, attorneys, tax or financial advisors, or lenders for the purpose of confidential legal or financial counseling, and both Parties may disclose this information as required by law, or for purposes of enforcement of this Mutual Release.

The provisions of Sections 5, 6, 7, 8, 11, 12, 13 (first sentence only), 14(b), and 16 of the Employment Agreement shall be deemed incorporated into this Mutual Release as if fully set forth herein, except that references in such Sections to “this Agreement” shall be deemed to be references to this Mutual Release. This Mutual Release shall not change any terms, rights or responsibilities under any option agreements executed by the Parties. This Mutual Release shall be ineffective unless countersigned by Genta, and delivered to Warrell or his counsel, no later than thirty days after Genta receives from Warrell or his counsel the signed Mutual Release.

DR. RAYMOND P. WARRELL, JR

Date signed:

GENTA INCORPORATED

By: 

Title:

Date signed:

EX-21

Exhibit 21

GENTA INCORPORATED

SUBSIDIARIES OF THE REGISTRANT

The names of the Company’s subsidiaries are omitted. Such subsidiaries would not, if considered in the aggregate as a single subsidiary, constitute a significant subsidiary within the meaning of Item 601(b)(21)(ii) of Regulation S-K.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 33-72130, 33-58362, 333-3846, 333-35215, 333-40634, 333-50330, 333-75134 and 333-114151 of Genta Incorporated on Form S-3 and Registration Statement Nos. 33-85887, 333-94181, 333-94185, 333-101022, 333-118987 and 333-128381 of Genta Incorporated on Form S-8 of our reports dated March 17, 2008, relating to (i) the consolidated financial statements of Genta Incorporated (which report expressed an unqualified opinion and included explanatory paragraphs relating to Genta Incorporated’s ability to continue as a going concern and the adoption of Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment, effective January 1, 2006, and Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109, effective January 1, 2007) and (ii) the effectiveness of Genta Incorporated’s internal control over financial reporting appearing in this Annual Report on Form 10-K of Genta Incorporated for the year ended December 31, 2007.

/s/ DELOITTE & TOUCHE LLP

Parsippany, New Jersey
March 17, 2008

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Raymond P. Warrell, Jr., M.D., certify that:

1. I have reviewed this annual report on Form 10-K of Genta Incorporated (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 17, 2008

/s/ RAYMOND P. WARRELL, JR., M.D.

Name: Raymond P. Warrell, Jr., M.D.
Title: Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gary Siegel, certify that:

1. I have reviewed this annual report on Form 10-K of Genta Incorporated (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 17, 2008

/s/ GARY SIEGEL

Name: Gary Siegel
Title: Vice President, Finance

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the accompanying Annual Report of Genta Incorporated (the “Company”) on Form 10-K for the year ended December 31, 2007 (the “Report”), I, Raymond P. Warrell, Jr., M.D., Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 17, 2008

/s/ RAYMOND P. WARRELL, JR., M.D.*

Name: Raymond P. Warrell, Jr., M.D.
Title: Chairman and Chief Executive Officer

* A signed original of this written statement required by Section 906 has been provided to Genta Incorporated and will be retained by Genta Incorporated and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the accompanying Annual Report of Genta Incorporated (the “Company”) on Form 10-K for the year ended December 31, 2007 (the “Report”), I, Gary Siegel, Vice President, Finance of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 17, 2008

/s/ GARY SIEGEL*

Name: Gary Siegel
Title: Vice President, Finance

* A signed original of this written statement required by Section 906 has been provided to Genta Incorporated and will be retained by Genta Incorporated and furnished to the Securities and Exchange Commission or its staff upon request.