8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 12, 2005
___________________________________________________________
IGI, INC.
(Exact Name of Registrant as Specified in Charter)
___________________________________________________________
Delaware		001-08568	01-0355758
(State or Other Jurisdiction		(Commission File Number)	(I.R.S. Employer
of Incorporation)			Identification Number)
105 Lincoln Avenue
Buena, New Jersey 08310
(Address of Principal Executive Offices) (Zip Code)
(856) 697-1441
(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[   ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[   ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[   ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[   ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02.  Results of Operations and Financial Condition

      The information in this Current Report is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

      On August 12, 2005, IGI, Inc. (the "Company") issued a press release announcing the Company's earnings for the second quarter ended June 30, 2005. A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01.  Financial Statements and Exhibits.

      (c)   Exhibits

            99.1   IGI, Inc. Press Release dated August 12, 2005.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
	IGI, INC.
	By:  /s/ Frank Gerardi
	Frank Gerardi
	Chairman & Chief Executive Officer
Date:   August 12, 2005

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EXHIBIT INDEX
Exhibit
Number	Description
99.1	IGI, Inc. Press Release dated August 12, 2005

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EX-99

News From
Buena, NJ 08310
Release Date: August 12, 2005	Exhibit 99.1

Contact:	Frank Gerardi
	Chairman & Chief Executive Officer
	IGI, Inc.
	856-697-1441 ext. 102
	www.askigi.com
IGI Announces Second Quarter Results
Buena, N.J. - August 12, 2005 - IGI, Inc. (AMEX: IG) announces today its second quarter financial and operational results.
Recent Developments:

-	As a result of our manufacturing service agreement signed earlier this quarter with Infusion Biotechnologies L.L.C., manufacturing has been initiated for the early 2006 launch to large department stores and specialty stores.
-	As a result of our manufacturing service agreement signed in July with Plastic Surgery Innovations, Inc., product development for the line is in the final stages for a fourth quarter launch.
-	Initiated manufacturing for Pierre Fabre's new Glytone Essentials product line to be distributed by dermatologists
-	Initiated clinical safety and efficacy studies for our patented Vitamin C Serum
-	Initiated development of a proprietary topical anesthesia for the skin
Second Quarter 2005 Financial Results
Product sales for the second quarter of 2005 were $593,000 and $1,098,000 for the six months ended June 30, 2005, which represented a decrease of $192,000 for the quarter and $542,000 for the six months ended, compared to the comparable period in 2004. Licensing and royalty income decreased $181,000 for the second quarter and $43,000 for the six months ended June 30, 2005, compared to June 30, 2004. This decrease in revenues is due to a royalty payment received in 2004 of $300,000 from Tarpan Therapeutics and the shift in revenues from Estee Lauder from product sales to royalty revenues. However, despite an overall decrease in revenues, there was an increase in product sales from several of our existing customers. Product sales to Genesis Pharmaceuticals, Chattem Inc., Interwood Marketing Group, and Estee Lauder contract manufacturing have all increased in 2005 compared to 2004.
Cost of sales increased by $18,000, or 5%, in the second quarter 2005 and $82,000, or 12%, for the six months ended June 30, 2005 compared to the comparable period in 2004. The increase in the cost of sales is a result of products being sold with a lower gross margin and a $34,000 expense related to the metal finishing line that was also included for this quarter.
Selling, general and administrative expenses decreased by $295,000, or 45%, for the second quarter of 2005 and $413,000, or 38% for the six months ended June 30, 2005 compared to the comparable period in 2004. The decrease is primarily due to a severance accrual of $203,000 that was recorded in the second quarter of 2004 and a reduction of executive salaries, travel, and entertainment expenditures in 2005.
Product development and research expenses decreased by $786,000, or 75% for the quarter ended June 30, 2005 and $763,000, or 60% for the six months ended June 30, 2005 compared to the comparable period in 2004. This decrease was due to the $520,000 SFAS 123 stock option expense related to a stock option grant to Dr. Holick and a cash expenditure of $232,000 paid to Dr. Holick in accordance with his license agreement in 2004. We continue to see growth in product development from our R&D Department.

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The Company reported a net loss attributable to common stock of $191,000 or $(.02) per share for the second quarter of 2005 compared to net loss attributable to common stock of $842,000, or $(.07) per share in second quarter 2004. For the six months ended June 30, 2005, the net loss attributable to common stock was $374,000 or $(.03) per share compared to a net loss attributable to common stock of $838,000 or $(.07) per share for the comparable period in 2004. The Company was also required to record an impairment of marketable securities in the amount of $77,000 that relates to the Company's investment in Novavax (NVAX) stock. This amount is included in the net loss for the period ended June 30, 2005.

"We are pleased with our product mix which is showing increased revenues from some of our existing customers and we are beginning to ship product for a new customer. The anticipated decline in revenue was a result of the removal of the exclusivity agreement with our largest customer, which is allowing us to develop many new products formulated in the Novasome transdermal delivery technology for new and existing customers in the United States, Europe, and Asia. We believe these efforts will result in increased revenue and growth anticipated to begin in the fourth quarter and continuing through 2006. We look forward to speaking with our investors on today's 10:00 AM investor conference call." stated Frank Gerardi, Chairman and CEO.

IGI is a company committed to growth by applying proprietary technologies to achieve cost-effective solutions for varied customer needs. IGI offers the patented Novasome® nano-vesicular, transdermal delivery technology which contributes value-added qualities to cosmetics, skin care products, dermatological formulations and other consumer products, providing improved dermal absorption, controlled and sustained release as well as improved stability and greater ease of formulation. IGI has licensed Novasome® nano-vesicular delivery technology to leading global dermatological and skin care companies including Johnson & Johnson Consumer Products, Inc., Estee Lauder Corporation, Chattem Inc., Genesis Pharmaceutical, Inc. and Apollo Pharmaceutical, Inc., and recently sub-licensed the rights to obtain FDA approval for and market IGI's PTH (1-34) compound using Novasome® nano-vesicular delivery technology for psoriasis, which is slated for Phase II clinical trials, to Tarpan Pharmaceut icals, Inc. IGI is also exploring the licensing of the topical PTH (7-34) compound for the prevention/treatment of chemotherapy induced-alopecia in patients undergoing chemotherapy.

This report contains forward-looking statements relating to IGI's hopes and expectations for the future. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "will," "possible," "one time," "provides an opportunity," "continue" and similar expressions are intended to identify forward-looking statements. Such statements involve a number of risks and uncertainties and actual future events and results could differ materially from those indicated by such forward-looking statements due to general economic conditions, and the risk factors detailed in IGI's periodic reports and registration statements filed with the Securities and Exchange Commission.

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IGI, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share information)
(Unaudited)
	Three months ended June 30,				Six months ended June 30,
	2005		2004		2005		2004
Revenues:
Product sales, net	$	593	$	785	$	1,098	$	1,640
Licensing and royalty income		232		413		502		545
Total revenues		825		1,198		1,600		2,185
Cost and expenses:
Cost of sales		354		336		767		685
Selling, general and administrative expenses		362		657		673		1,086
Product development and research expenses		265		1,051		500		1,263
Operating (loss)		(156)		(846)		(340)		(849)
Loss on impairment of investment securities		(77)		-		(77)		-
Interest income		2		6		5		15
Other income		32		-		32		-
Loss from continuing operations before benefit
(provision) for income taxes		(199)		(840)		(380)		(834)
Benefit (provision) for income taxes		8		(2)		6		(4)
Net loss attributable to common stock	$	(191)	$	(842)	$	(374)	$	(838)
Basic and Diluted Loss Per Common Share
Net loss per share	$	(.02)	$	(.07)	$	(.03)	$	(.07)
Weighted Average of Common Stock and
Common Stock Equivalents Outstanding
Basic and diluted	11,859,984		11,579,582		11,771,247		11,513,417

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IGI, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share information)
	June 30, 2005
	(unaudited)		December 31, 2004
ASSETS
Current assets:
Cash and cash equivalents	$	214	$	380
Restricted cash		50		50
Marketable securities		327		377
Accounts receivable, less allowance for doubtful accounts
of $10 in 2005 and 2004		395		306
Licensing and royalty income receivable		151		155
Inventories		428		247
Prepaid expenses and other current assets		136		8
Total current assets		1,701		1,523
Property, plant and equipment, net		3,208		3,168
Other assets		32		39
Total assets	$	4,941	$	4,730
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		492		157
Accrued payroll		13		16
Other accrued expenses		179		243
Income taxes payable		-		5
Deferred income		218		180
Total current liabilities		902		601
Deferred income		49		121
Total liabilities		951		722
Stockholders' equity:
Common stock $.01 par value, 50,000,000 shares authorized;
14,070,700 and 13,547,520 shares issued in 2005 and 2004,
respectively		141		135
Additional paid-in capital		24,788		24,467
Accumulated deficit		(19,541)		(19,167)
Accumulated other comprehensive loss		(3)		(32)
Less treasury stock, 1,965,740 shares at cost
in 2005 and 2004		(1,395)		(1,395)
Total stockholders' equity		3,990		4,008
Total liabilities and stockholders' equity	$	4,941	$	4,730

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