UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

(Mark One)

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007

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

For the transition period from ___________________ to ____________________

Commission file number 0-19724

PROTEIN POLYMER TECHNOLOGIES, INC.

(Exact name of small business issuer as specified in its charter)

Delaware		33-0311631
(State or other jurisdiction of		(IRS Employer Identification No.)
incorporation or organization)

10655 Sorrento Valley Road, San Diego, CA 92121

(Address of principal executive offices)

(858) 558-6064

(Issuer's telephone number)

(former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of November 2, 2007, 67,809,204 shares of common stock were outstanding.

Transitional Small Business Disclosure Format (check one): Yes o No x

PROTEIN POLYMER TECHNOLOGIES, INC.

FORM 10-QSB

INDEX

		Page No.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Balance Sheets September 30, 2007 and December 31, 2006		3

Statements of Operations For three and nine months ended September 30, 2007 and 2006		4

Statements of Cash Flows For the nine months ended September 30, 2007 and 2006		5

Notes to Financial Statements		6

ItIItem 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		12

Item 3. Controls and Procedures		19

PART II. OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Preceeds		20

Item 4. Submission of Matters to a Vote of Security Holders		20

Item 6. Exhibits		21

Signatures		22

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Protein Polymer Technologies, Inc.
Balance Sheets
(unaudited)

	September 30,			December 31,
	2007			2006
Assets
Current assets:
Cash and cash equivalents	$	58,566		$	73,495
Contract receivable		—			21,068
Current portion of rent receivable		—			39,527
Prepaid expenses and other current assets		25,475			49,940
Total current assets		84,041			184,030

Deposits		31,279			29,679
Equipment and leasehold improvements, net		152,561			228,475
Investment, at cost		520,000			520,000
Total assets	$	787,881		$	962,184

Liabilities and stockholders' (deficit) equity
Current liabilities:
Accounts payable	$	703,651		$	1,098,820
Accrued liabilities		716,911			422,730
Secured note payable - related party		5,876,000			3,461,516
Current maturities of notes payable		261,667			146,697
Total current liabilities		7,558,229			5,129,763

Notes payable, net of current maturities		257,404			372,374
Deferred rent		13,269			13,269
Total liabilities		7,828,902			5,515,406

Commitments and contingencies

Stockholders' deficit:
Convertible preferred stock, $.01 par value; 5,000,000 shares authorized; 65,645 shares issued and outstanding at September 30, 2007 and December 31, 2006 - liquidation preference of $6,564,500 at September 30, 2007 and December 31, 2006		6,019,917			6,019,917

Common stock, $.01 par value; 1,000,000,000 and 120,000,000 shares authorized at September 30, 2007 and December 31, 2006, repectively; 67,809,204 and 67,409,204 shares issued and outstanding at September 30, 2007 and December 31, 2006, respectively		678,092			674,092
Additional paid-in capital		55,959,108			55,760,511
Accumulated deficit		(69,698,138	)		(67,007,742	)
Total stockholders' deficit		(7,041,021	)		(4,553,222	)
Total liabilities and stockholders' deficit	$	787,881		$	962,184

See accompanying notes.

Protein Polymer Technologies, Inc.
Statements of Operations
(unaudited)

	Three months ended						Nine months ended
	September 30,						September 30,
	2007			2006			2007		2006
Revenues:
Contract revenue	$	14,500		$	—		$	282,118	$	410,532
Product and other income					10,568					40,684
Total revenues		14,500			10,568			282,118		451,216

Operating expenses:
Cost of sales		—			—			—		1,640
Research and development		438,858			767,024			1,712,011		2,951,882
Selling, general and administrative		452,996			448,772			1,124,294		3,065,986
Total expenses		891,854			1,215,796			2,836,305		6,019,508

Net loss from operations		(877,354	)		(1,205,228	)