================================================================================


                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


   [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934

          For the quarterly period ended:  June 30, 2004


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

          For the transition period from ______________ to ______________


                         COMMISSION FILE NUMBER 1-11352






                             ABLE LABORATORIES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)



                                 NOT APPLICABLE
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)


           DELAWARE                                              04-3029787
--------------------------------------------------------------------------------
(State or other jurisdiction of                                (IRS Employer
 incorporation or organization)                              Identification No.)


                                6 Hollywood Court
                           South Plainfield, NJ 07080
--------------------------------------------------------------------------------
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)



                                 (908) 754-2253
--------------------------------------------------------------------------------
                           (ISSUER'S TELEPHONE NUMBER)




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 [_]

Indicate by checkmark whether the registrant is an accelerated filer (as defined
in Rule 12b-2 of the Exchange Act).  Yes [X]   No [_]

As of July 31, 2004 there were 17,356,268 outstanding shares of common stock,
$.01 par value per share.

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<PAGE>
                             ABLE LABORATORIES, INC.

                                    FORM 10-Q

                                QUARTERLY REPORT

                                 MARCH 31, 2004

                                TABLE OF CONTENTS


Facing Page..................................................................  1
Table of Contents............................................................  2


PART I.   FINANCIAL INFORMATION(*)

Item 1.   Financial Statements:
          Condensed Balance Sheets...........................................  3
          Condensed Statements of Income.....................................  4
          Condensed Statements of Changes in Stockholders' Equity ...........  5
          Condensed Statements of Cash Flows.................................  6
          Notes to Unaudited Condensed Financial Statements..................  7

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations................................ 11

Item 4.   Controls and Procedures............................................ 17



PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings.................................................. 18
Item 2.   Changes in Securities.............................................. 18
Item 4.   Submission of Matters to a Vote of Security Holders................ 18
Item 5.   Other Information.................................................. 19
Item 6.   Exhibits and Reports on Form 8-K................................... 19

SIGNATURES .................................................................. 22



(*)  The financial information at December 31, 2003 has been derived from the
     audited financial statements at that date and should be read in conjunction
     therewith. All other financial statements are unaudited.





                                       -2-
<PAGE>
                          PART I. FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                             ABLE LABORATORIES, INC.
                            CONDENSED BALANCE SHEETS
                                   (Unaudited)
<TABLE><CAPTION>
                                     ASSETS
                                                                             June 30,         December 31,
                                                                               2004               2003
                                                                          -------------      -------------
<S>                                                                       <C>                <C>
Current assets:
Cash and cash equivalents                                                 $   7,948,098      $  20,065,248
Accounts receivable, net of allowances of $22,677,801 and $24,007,583        15,256,839          8,626,023
Inventory                                                                    20,763,805         16,602,608
Deferred income tax asset                                                     4,760,000          4,760,000
Prepaid expenses and other current assets                                     2,351,783          1,644,068
                                                                          -------------      -------------
            Total current assets                                             51,080,525         51,697,947
                                                                          -------------      -------------

Property and equipment, net                                                  29,203,377         18,953,744
                                                                          -------------      -------------
Other assets:
Debt financing costs, net of accumulated amortization                              --               91,708
Cash deposits with bond trustee                                                    --              525,907
Deferred income tax asset                                                     9,046,000          9,709,000
Goodwill                                                                      3,922,655          3,904,094
Deposits and other assets                                                       357,712            481,755
                                                                          -------------      -------------
            Total other assets                                               13,326,367         14,712,464
                                                                          -------------      -------------
                                                                          $  93,610,269      $  85,364,155
                                                                          =============      =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:
Notes payable and current portion of long-term debt                       $        --        $     239,038
Accounts payable                                                              5,874,232          3,293,168
Accrued expenses                                                              1,239,016          1,114,976
                                                                          -------------      -------------
            Total current liabilities                                         7,113,248          4,647,182
Long-term debt, less current portion                                          3,000,000          3,935,000
                                                                          -------------      -------------
            Total liabilities                                                10,113,248          8,582,182
                                                                          -------------      -------------
Stockholders' equity:
Preferred stock, $.01 par value, 10,000,000 shares authorized, 13,598
   and 17,025 shares of Series Q outstanding (liquidation value
   $1,359,800 and $1,702,500)                                                       137                171
Common stock, $.01 par value, 25,000,000 shares authorized,
   17,255,242 and 16,761,216 shares issued and outstanding                      172,552            167,611
Additional paid-in capital                                                  118,684,726        116,060,210
Accumulated deficit                                                         (35,257,549)       (39,295,941)
Unearned stock-based compensation                                              (102,845)          (150,078)
                                                                          -------------      -------------
            Total stockholders' equity                                       83,497,021         76,781,973
                                                                          -------------      -------------
                                                                          $  93,610,269      $  85,364,155
                                                                          =============      =============
</TABLE>
       See accompanying notes to unaudited condensed financial statements.

                                      -3-
<PAGE>

                             ABLE LABORATORIES, INC.
                         CONDENSED STATEMENTS OF INCOME
                                   (Unaudited)

<TABLE><CAPTION>
                                                      Three Months Ended                   Six Months Ended
                                                 ------------------------------      ------------------------------
                                                   June 30,          June 30,          June 30,          June 30,
                                                     2004              2003              2004              2003
                                                 ------------      ------------      ------------      ------------
<S>                                              <C>               <C>               <C>               <C>
Sales, net                                       $ 23,005,282      $ 18,943,696      $ 44,457,718      $ 33,943,761
Cost of sales                                      12,191,868         9,943,280        24,110,880        18,394,933
                                                 ------------      ------------      ------------      ------------
         Gross profit                              10,813,414         9,000,416        20,346,838        15,548,828
                                                 ------------      ------------      ------------      ------------
Operating expenses:
   Selling, general and administrative              3,629,760         2,273,700         6,628,176         4,688,668
   Research and development                         3,493,548         2,276,083         7,039,936         4,402,695
                                                 ------------      ------------      ------------      ------------
         Total operating expenses                   7,123,308         4,549,783        13,668,112         9,091,363
                                                 ------------      ------------      ------------      ------------

         Operating income                           3,690,106         4,450,633         6,678,726         6,457,465
                                                 ------------      ------------      ------------      ------------
Other income (expense):
   Interest and financing expense                     (50,619)         (219,759)         (108,585)         (421,082)
   Loss on early retirement of debt                  (118,440)         (241,999)         (118,440)         (241,999)
   Miscellaneous income (expense), net                 24,061            51,981           101,691            41,512
                                                 ------------      ------------      ------------      ------------
         Other income (expense), net                 (144,998)         (409,777)         (125,334)         (621,569)
                                                 ------------      ------------      ------------      ------------

Income before income taxes                          3,545,108         4,040,856         6,553,392         5,835,896
Provision for income taxes                          1,360,000         1,613,900         2,515,000         2,324,900
                                                 ------------      ------------      ------------      ------------
         Net income                                 2,185,108         2,426,956         4,038,392         3,510,996

Dividends on preferred stock                           30,289            75,595            61,409           178,069
                                                 ------------      ------------      ------------      ------------
Net income applicable to common stockholders     $  2,154,819      $  2,351,361      $  3,976,983      $  3,332,927
                                                 ============      ============      ============      ============
Net income per share:
         Basic                                   $       0.13      $       0.17      $       0.23      $       0.25
                                                 ============      ============      ============      ============
         Diluted                                 $       0.11      $       0.14      $       0.21      $       0.20
                                                 ============      ============      ============      ============

Weighted average shares outstanding:
         Basic                                     17,144,985        13,516,125        16,995,839        13,141,577
                                                 ============      ============      ============      ============
         Diluted                                   19,395,331        17,471,244        19,348,754        17,319,932
                                                 ============      ============      ============      ============
</TABLE>
       See accompanying notes to unaudited condensed financial statements.

                                      -4-
<PAGE>

                             ABLE LABORATORIES, INC.
             CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                     Six Months Ended June 30, 2004 and 2003
                                   (Unaudited)
<TABLE><CAPTION>
                                                               Preferred Stock                        Common Stock
                                                      --------------------------------      -------------------------------
                                                          Shares            Amount              Shares             Amount
                                                      -------------      -------------      -------------     -------------
<S>                                                   <C>                <C>                <C>               <C>
Balance at December 31, 2002                                 53,150      $         532         12,554,206     $     125,542

Sale of common stock                                           --                 --            1,600,000            16,000
Stock options and warrants exercised                           --                 --              116,759             1,168
Conversion of debt                                             --                 --              126,097             1,260
Conversion of preferred stock                               (20,984)              (210)         1,231,786            12,318
Dividends on preferred stock                                   --                 --                 --                --
Stock-based compensation                                       --                 --                 --                --
Amortization of unearned stock-based compensation              --                 --                 --                --
Tax benefit on stock options                                   --                 --                 --                --
Net income                                                     --                 --                 --                --

Balance at June 30, 2003                                     32,166      $         322         15,628,848     $     156,288


Balance at December 31, 2003                                 17,025      $         171         16,761,216     $     167,611

Stock options and warrants exercised                           --                 --              292,854             2,929
Conversion of preferred stock                                (3,427)               (34)           201,172             2,012
Dividends on preferred stock                                   --                 --                 --                --
Amortization of unearned stock-based compensation              --                 --                 --                --
Tax benefit on stock options                                   --                 --                 --                --
Net income                                                     --                 --                 --                --
                                                      -------------      -------------      -------------     -------------
Balance at June 30, 2004                                     13,598      $         137         17,255,242     $     172,552
                                                      =============      =============      =============     =============

                                                        Additional                           Unearned
                                                         Paid-in          Accumulated       Stock-Based
                                                         Capital            Deficit         Compensation           Total
                                                      -------------      -------------      -------------      -------------
Balance at December 31, 2002                          $  82,423,790      $ (47,783,489)     $     (74,600)     $  34,691,775

Sale of common stock                                     28,457,000               --                 --           28,473,000
Stock options and warrants exercised                        323,577               --                 --              324,745
Conversion of debt                                        2,148,693               --                 --            2,149,953
Conversion of preferred stock                               (12,108)              --                 --                 --
Dividends on preferred stock                               (178,069)              --                 --             (178,069)
Stock-based compensation                                    145,000               --             (145,000)              --
Amortization of unearned stock-based compensation              --                 --               26,706             26,706
Tax benefit on stock options                                489,900               --                 --              489,900
Net income                                                     --            3,510,996               --            3,510,996
                                                      -------------      -------------      -------------      -------------
Balance at June 30, 2003                              $ 113,797,783      $ (44,272,493)     $    (192,894)     $  69,489,006
                                                      =============      =============      =============      =============

Balance at December 31, 2003                          $ 116,060,210      $ (39,295,941)     $    (150,078)     $  76,781,973

Stock options and warrants exercised                      1,121,903               --                 --            1,124,832
Conversion of preferred stock                                (1,978)              --                 --                 --
Dividends on preferred stock                                (61,409)              --                 --              (61,409)
Amortization of unearned stock-based compensation              --                 --               47,233             47,233
Tax benefit on stock options                              1,566,000               --                 --            1,566,000
Net income                                                     --            4,038,392               --            4,038,392
                                                      -------------      -------------      -------------      -------------
Balance at June 30, 2004                              $ 118,684,726      $ (35,257,549)     $    (102,845)     $  83,497,021
                                                      =============      =============      =============      =============
</TABLE>
       See accompanying notes to unaudited condensed financial statements

                                      -5-
<PAGE>

                            ABLE LABORATORIES, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE><CAPTION>
                                                                            Six Months Ended
                                                                     ------------------------------
                                                                    June 30, 2004      June 30, 2003
                                                                     ------------      ------------
<S>                                                                  <C>               <C>
Cash flows from operating activities:
   Net income                                                        $  4,038,392      $  3,510,996
   Adjustments to reconcile net income to net cash provided by
      (used for) operating activities:
      Deferred income tax expense                                       1,958,000         1,698,000
      State tax benefit for stock options                                 271,000           110,300
      Loss on early retirement of debt                                    118,440           241,999
      Amortization of unearned compensation                                47,233            26,706
      Depreciation and amortization                                     1,311,130         1,104,503
   (Increase) decrease in operating assets:
      Accounts receivable                                              (6,630,816)       (6,583,106)
      Inventory                                                        (4,161,197)       (2,468,934)
      Prepaid expenses and other current assets                          (707,715)         (361,553)
      Deposits and other assets                                           649,950            25,139
   Increase (decrease) in operating liabilities:
      Accounts payable and accrued expenses                             2,730,385        (2,604,831)
                                                                     ------------      ------------
            Net cash provided by (used for) operating activities         (375,198)       (5,300,781)
                                                                     ------------      ------------
Cash flows from investing activities:
   Purchase of property and equipment                                 (11,551,133)       (4,073,961)
   Purchase of LiquiSource assets                                         (18,561)             --
                                                                     ------------      ------------
            Net cash provided by (used for) investing activities      (11,569,694)       (4,073,961)
                                                                     ------------      ------------
Cash flows from financing activities:
   Net proceeds from stock warrants and options                         1,124,832           324,745
   Net proceeds from private stock placement                                 --          28,473,000
   Net proceeds from debt obligations                                        --          11,589,422
   Repayment of debt obligations                                       (1,200,600)         (916,646)
                                                                     ------------      ------------
   Preferred stock dividends paid                                         (96,490)         (238,297)
                                                                     ------------      ------------
            Net cash provided by (used for) financing activities         (172,258)       39,232,224
                                                                     ------------      ------------

Net change in cash and cash equivalents                               (12,117,150)       29,857,482
Cash and cash equivalents at beginning of period                       20,065,248         1,801,127
                                                                     ------------      ------------

Cash and cash equivalents at end of period                           $  7,948,098      $ 31,658,609
                                                                     ============      ============

Supplemental cash flow information:
   Interest paid                                                     $     98,954      $    344,882
   Income taxes paid                                                      499,073           580,000
   Conversion of debt into common stock                                      --           2,149,953
</TABLE>
       See accompanying notes to unaudited condensed financial statements.

                                      -6-
<PAGE>

                             ABLE LABORATORIES, INC.

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

1.        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS AND BASIS OF PRESENTATION

          Able Laboratories, Inc. ("Able") develops, manufactures, and sells
generic pharmaceuticals. The results of operations for the periods reported are
not necessarily indicative of those that may be expected for a full year. In the
opinion of management, all adjustments (consisting only of normal recurring
adjustments) which are necessary for a fair statement of operating results for
the interim periods presented have been made.

          The financial information included in this report has been prepared in
conformance with the accounting policies reflected in the financial statements
included in our Annual Report on Form 10-K for the year ended December 31, 2003
filed with the Securities and Exchange Commission.

USE OF ESTIMATES

          In preparing financial statements in conformity with generally
accepted accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities as of the
balance sheet date and the reported amounts of revenue and expenses during the
reporting period. Material estimates that are particularly susceptible to
significant change in the near term relate to the carrying values of
receivables, including allowances for chargebacks, rebates and returns,
inventory, and the valuation of deferred tax assets. Actual results could differ
from those estimates.

STOCK-BASED COMPENSATION

          Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation" encourages all entities to adopt a
fair value based method of accounting for employee stock compensation plans,
whereby compensation cost is measured at the grant date based on the value of
the award and is recognized over the service period, which is usually the
vesting period. However, it also allows an entity to continue to measure
compensation cost for those plans using the intrinsic value based method of
accounting prescribed by APB Opinion No. 25, "Accounting for Stock Issued to
Employees," whereby compensation cost is the excess, if any, of the quoted
market price of the stock at the grant date (or other measurement date) over the
amount an employee must pay to acquire the stock. Stock options issued under our
stock option plans generally have no intrinsic value at the grant date, and
under Opinion No. 25 no compensation cost is recognized for them. We do not plan
to adopt the fair value accounting model for stock-based employee compensation
under SFAS No. 123.

          We have two stock-based compensation plans and stock options issued
outside of the plans. We apply APB Opinion No. 25 and related Interpretations in
accounting for stock options issued to employees and directors. Had compensation
cost for stock options issued to employees and directors been determined based
on the fair value at the grant dates consistent with SFAS No. 123, our net
income and net income per share would have been adjusted to the pro forma
amounts indicated below:

                                      -7-
<PAGE>

<TABLE><CAPTION>
                                                Three Months Ended                  Six Months Ended
                                                     June 30,                            June 30,
                                          ------------------------------      ------------------------------
                                              2004              2003              2004              2003
                                          ------------      ------------      ------------      ------------
<S>                                       <C>               <C>               <C>               <C>
Net income as reported                    $  2,185,108      $  2,426,956      $  4,038,392      $  3,510,996
Add stock-based compensation under
   APB No. 25                                   25,825            17,381            47,233            26,706
Deduct stock-based compensation under
   SFAS No. 123                               (724,866)         (258,792)       (1,203,204)         (382,582)
                                          ------------      ------------      ------------      ------------
Pro forma net income                         1,486,067         2,185,545         2,882,421         3,155,120
Less dividends on preferred stock               30,289            75,595            61,409           178,069
                                          ------------      ------------      ------------      ------------
Pro forma net income applicable to
   common stockholders                    $  1,455,778      $  2,109,950      $  2,821,012      $  2,977,051
                                          ============      ============      ============      ============

Net income per share:
       Basic - as reported                $       0.13      $       0.17      $       0.23      $       0.25
                                          ============      ============      ============      ============
       Basic - pro forma                  $       0.08      $       0.16      $       0.17      $       0.23
                                          ============      ============      ============      ============
       Diluted - as reported              $       0.11      $       0.14      $       0.21      $       0.20
                                          ============      ============      ============      ============
       Diluted - pro forma                $       0.08      $       0.13      $       0.15      $       0.18
                                          ============      ============      ============      ============
</TABLE>

EARNINGS PER SHARE

          Basic earnings per share represents income available to common stock
divided by the weighted-average number of common shares outstanding during the
period. Diluted earnings per share reflects additional common shares that would
have been outstanding if dilutive potential common shares had been issued, as
well as any adjustment to income applicable to common stockholders that would
result from the assumed issuance.

2.        ACQUISITION OF LIQUISOURCE, INC.

          On November 17, 2003, we acquired substantially all the net assets of
LiquiSource, Inc. for cash. LiquiSource was a privately held developer and
manufacturer of prescription generic liquid pharmaceuticals. The acquisition has
been accounted for as a purchase and the results of operations of LiquiSource
have been included in our financial statements since the date of acquisition. We
acquired inventory of $250,000, property and equipment of $68,565 and other
assets totaling $30,000, net of accounts payable and accrued expenses of
$88,861. We recorded goodwill of $3,922,655 for the excess of the purchase price
over the net assets acquired, which includes acquisition costs of $63,770.
Goodwill will not be amortized but will be tested at least annually for
impairment. For income tax purposes, we expect the full amount of the goodwill
to be deductible over its fifteen-year amortization period.

          Unaudited pro forma operating results, assuming the acquisition of
LiquiSource had been made as of the beginning of 2003, are as follows:

                                            Three Months Ended  Six Months Ended
                                              June 30, 2003       June 30, 2003
                                               ------------       ------------
Sales, net                                     $ 19,506,632       $ 34,964,329
Net income applicable to common stockholders   $  2,564,392       $  3,618,183
Net income per share:
         Basic                                 $       0.19       $       0.28
         Diluted                               $       0.15       $       0.22

                                      -8-
<PAGE>

3.        INVENTORY

          Inventory consists of the following:

                                                      JUNE 30,      DECEMBER 31,
                                                        2004            2003
                                                    -----------     -----------
           Raw materials                            $12,359,657     $ 9,247,553
           Work-in-progress                           1,935,112       2,153,363
           Finished goods                             6,469,036       5,201,692
                                                    -----------     -----------
                                                    $20,763,805     $16,602,608
                                                    ===========     ===========



4.        PROPERTY AND EQUIPMENT

          Property and equipment consists of the following:

                                                      JUNE 30,      DECEMBER 31,
                                                        2004            2003
                                                    -----------     -----------
           Machinery and equipment                  $11,541,977     $10,671,907
           Furniture, fixtures and computers          2,161,950       1,678,832
           Building and leasehold improvements       16,104,997       9,107,877
           Land                                         561,000         561,000
           Construction in process                    4,736,806       1,535,981
                                                    -----------     -----------
                                                     35,106,730      23,555,597
           Less accumulated depreciation and
             amortization                            (5,903,353)     (4,601,853)
                                                    -----------     -----------
                                                    $29,203,377     $18,953,744
                                                    ===========     ===========

5.        DEBT

          Debt consists of the following:

                                                      JUNE 30,      DECEMBER 31,
                                                        2004            2003
                                                    -----------     -----------
           NJEDA bonds                              $      --       $ 1,030,000
           Revolving credit agreement                 3,000,000       3,000,000
           Unsecured notes payable, net of discount        --           144,038
                                                    -----------     -----------
                       Total                          3,000,000       4,174,038
           Less current portion                            --           239,038
                                                    -----------     -----------
           Long-term debt                           $ 3,000,000     $ 3,935,000
                                                    ===========     ===========

REVOLVING CREDIT AGREEMENT

          On March 2, 2004, we entered into a new $20 million revolving credit
agreement with our existing lender. This new revolver replaces the existing
revolving credit facility of $10 million. The new revolver bears interest, at
inception, at LIBOR plus 1.25% based upon our current leverage ratio and
requires no monthly principal payments. In addition, the new revolver is
expandable to $30 million upon our request and the approval of the bank. The
revolver matures in March 2007.

                                      -9-
<PAGE>

          The revolver is secured by substantially all of our assets including
accounts receivable, inventory, furniture, fixtures, equipment and intellectual
property. The loan is subject to certain financial covenants, including a fixed
charge coverage ratio, a leverage ratio and a net worth test. In the first
quarter of 2004, we used this new revolver to repay the entire outstanding
balance under the old revolver of $3.0 million.

NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY BONDS

          In May 2004, we repaid the entire outstanding principal and accrued
interest on the bonds to the New Jersey Economic Development Authority. The May
payment included a principal payment of $1,030,000, the face value of the bonds,
and accrued interest of $41,200. In connection with the redemption, we paid a
call premium of $20,600, other fees and expenses of approximately $9,800 and
wrote off the $88,040 balance of deferred debt financing costs resulting in a
loss on early retirement of $118,440. The Authority redeemed the bonds in June
2004.

6.        PREFERRED STOCK

          The Series Q carries an 8% dividend and is convertible to common stock
at approximately 58.7 shares of common stock for each share of Series Q. The
outstanding 13,598 shares of Series Q are convertible into 798,216 shares of
common stock.























                                      -10-
<PAGE>

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

                                  INTRODUCTION

          The following information should be read in conjunction with the
financial statements and notes thereto in Part I, Item 1 of this Quarterly
Report and with Management's Discussion and Analysis of Financial Condition and
Results of Operations contained in our Annual Report on Form 10-K for the year
ended December 31, 2003.

                 CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

          We do not provide forecasts of our future financial performance.
However, from time to time, information provided by us or statements made by our
employees may contain "forward-looking" information that involves risks and
uncertainties. In particular, statements contained in this Form 10-Q which are
not historical facts constitute forward-looking statements and are made under
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements involve substantial risks and uncertainties.
You can identify these statements by forward-looking words such as "may",
"will", "expect", "anticipate", "believe", "estimate", "continue", and similar
words. You should read statements that contain these words carefully because
they: (1) discuss our future expectations; (2) contain projections of our future
operating results or financial condition; or (3) state other "forward-looking"
information. Various factors listed below, as well as any other instances of
cautionary language in this report, refer to or provide examples of risks,
uncertainties and events that may cause our actual results to be materially
different than the expectations described in our forward-looking statements. You
should be aware that the occurrence of any of the events described in these risk
factors and elsewhere in this Form 10-Q could materially and adversely affect
our business. All forward-looking statements included in this Form 10-Q are
based on information available to us on the date hereof, and we assume no
obligation to update any such forward-looking statements.

          Each forward-looking statement should be read in conjunction with the
financial statements and notes thereto in Part I, Item 1, of this Quarterly
Report and with the information contained in Item 2, including, but not limited
to, the factors set forth below, together with Management's Discussion and
Analysis of Financial Condition and Results of Operations contained in our
Annual Report on Form 10-K for the year ended December 31, 2003, including but
not limited to the section therein entitled "Certain Factors That May Affect
Future Results," as well as the factors discussed in our Registration Statement
on Form S-3, File No. 333-106964, filed with the Securities and Exchange
Commission on July 11, 2003, under the heading "Risk Factors."

          In addition to the risks and uncertainties posed generally by the
generic drug industry, we face the following risks and uncertainties:

          o   we may have difficulty managing our growth;

          o   if we are unable to retain our key personnel or continue to
              attract and retain additional qualified professionals we may be
              unable to carry out our plans to maintain or expand our business;

          o   we face intense competition from other manufacturers of generic
              drugs;

          o   our revenues and gross profit from individual generic drug
              products are likely to decline as competing firms introduce their
              own equivalent products;

          o   in some circumstances, we may retroactively reduce the price of
              products that we have already sold to customers but that have not
              been resold by such customers;

                                      -11-
<PAGE>

          o   our ability to develop liquid formulations is unproven;

          o   new developments by other manufacturers could render our products
              uncompetitive or obsolete;

          o   we are obligated to issue a large number of shares of common stock
              for no additional consideration at prices lower than the current
              market value;

          o   conversion of outstanding shares of convertible preferred stock or
              the exercise of other derivative securities may reduce the market
              price of our outstanding common stock;

          o   the value of our common stock has fluctuated widely in the past
              and investors could lose money on their investments in our stock;

          o   we may face product liability for which we may not be adequately
              insured;

          o   intense regulation by government agencies or our failure to comply
              with applicable regulations may delay or impede our efforts to
              commercialize our proposed drug products (see Item 5, "Other
              Information -- FDA Warning Letter" below); and

          o   we depend on third parties to supply the raw materials used in our
              products, and any failure to obtain a sufficient supply of raw
              materials from these suppliers could materially and adversely
              affect our business.

          Because of the foregoing and other factors, we may experience material
fluctuations in our future operating results on a quarterly or annual basis
which could materially adversely affect our business, financial condition,
operating results and stock price.

                                    OVERVIEW

          We develop, manufacture and sell generic drugs. Generic drug
development, manufacturing and distribution is a highly competitive business and
there are several companies with substantially greater resources that compete
with us.

          In 2004, we expect to continue to increase our sales of generic drug
products by attempting to increase sales of our existing products and by
obtaining ANDA approvals from the FDA for new products. Also, in November 2003,
we acquired substantially all the assets of LiquiSource, Inc., a privately-held
developer and manufacturer of liquid pharmaceuticals. We intend to develop our
liquids formulation capability and position ourselves to add liquids products to
our product line, through our utilization of the assets we acquired from
LiquiSource. To accomplish these objectives, in 2003, we entered into a
long-term lease for our new facility in Cranbury, New Jersey, which we intend to
use for our solid and semi-solid dosage manufacturing operations and our
executive offices. Also, in 2003, we purchased the building located at 6
Hollywood Court, South Plainfield, New Jersey, where we currently conduct all of
our manufacturing operations and which we intend to use in the future for our
liquids manufacturing business.

          In the section of this Report entitled "Certain Factors That May
Affect Future Results," we have described several risk factors which we believe
are significant. We consider each of these risks specific to us, although some
are industry or sector related issues which could also impact, to some degree,
other businesses in our market sector. You should give very careful
consideration to these risks when you evaluate us.

                                      -12-
<PAGE>

                          CRITICAL ACCOUNTING POLICIES

          Our significant accounting policies are more fully described in Note 1
to our financial statements included in this Quarterly Report and in Note 1 to
our financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 2003 filed with the Securities and Exchange Commission.
Certain of our accounting policies are particularly important to the portrayal
of our financial position and results of operations and require the application
of significant judgment by our management. As a result, these policies are
subject to an inherent degree of uncertainty. In applying these policies, our
management makes estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses and related disclosures. We base our
estimates and judgments on our historical experience, the terms of existing
contracts, our observance of trends in the industry, information that we obtain
from our customers and outside sources, and on various other assumptions that we
believe to be reasonable and appropriate under the circumstances, the results of
which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates under different assumptions or conditions.

          Our significant accounting policies, including inventory valuation,
revenue recognition, accounts receivable allowances for chargebacks, rebates,
and similar items, and income taxes are each discussed in more detail in our
Annual Report on Form 10-K. We have reviewed and determined that those policies
remain our critical accounting policies for the three months ended June 30,
2004. We did not make any changes in those policies during the period.

RESULTS OF OPERATIONS -- THREE MONTHS ENDED JUNE 30, 2004 COMPARED TO THREE
MONTHS ENDED JUNE 30, 2003

          Sales for the three months ended June 30, 2004 increased by $4,061,586
or 21.4%, from the corresponding period in 2003, primarily due to a greater
number of products available for sale as well as higher demand for our products.
Sales for the three months ended June 30, 2004 were $23,005,282, compared to
$18,943,696 for the three months ended June 30, 2003. During the three months
ended June 30, 2004, we had 23 FDA approved product families, in 57 different
strengths, available for sale, compared to 19 FDA approved product families in
44 different strengths, available for sale during the three months ended June
30, 2003.

          Cost of sales was $12,191,868, or 53.0% of sales, for the three months
ended June 30, 2004, compared to $9,943,280, or 52.5% of sales, for the three
months ended June 30, 2003. The increase in our gross profit of $1,812,998, from
$9,000,416 for the three months ended June 30, 2003 to $10,813,414 for the three
months ended June 30, 2004 is primarily attributable to a favorable product mix
including sales of an increased number of first-to-market products, offset by
approximately $591,000 of expenses incurred while building our new Cranbury, NJ
manufacturing facility. We expect that the ongoing move will continue to affect
our gross margins in this manner until we complete the move and achieve the
manufacturing efficiencies that we expect the new facility to offer.

          Selling, general and administrative expenses for the three months
ended June 30, 2004 were $3,629,760, compared to $2,273,700 for the three months
ended June 30, 2003. The increase of $1,356,060 is primarily due to increases in
salaries and benefits, business insurance, and advertising and trade show
expenses of approximately $244,000, $171,000 and $1,243,000, respectively. These
increased expenses were partially offset by cost savings of approximately
$254,000 and $27,000 in sales commissions and investor relations fees,
respectively, in addition to various other additional cost savings. We added
several new employees after June 30, 2003 to support our growth effort
throughout 2003 and 2004. The increased expenses for business insurance relate
to increased product sales which require additional insurance coverage. We
increased our presence at a number of industry trade shows, in addition to
increasing our marketing and promotional expenses. The cost reductions are the
direct result

                                      -13-
<PAGE>

of our increased focus on reducing our dependence on third party vendors. The
expiration of our sales agreement with Bi-Coastal Pharmaceutical Corporation
contributed to the commissions cost savings. Our decision to move the majority
of our investor relations activities in-house resulted in the investor relations
cost savings.

          Research and development expenses for the three months ended June 30,
2004 were $3,493,548, compared to $2,276,083 for the three months ended June 30,
2003. A significant portion of these expenses relate to research which is
currently being conducted to develop generic drugs. The increase of $1,217,465
is primarily due to an increase in salaries expense of approximately $477,000,
as well as milestone payments to raw material suppliers and others working with
us to develop new products and biostudies and outside assays conducted by
independent contract research organizations of approximately $343,000. The
balance of approximately $397,000 is due to increased activity in supporting a
higher number of research projects, offset by various cost savings in other
areas. These support activities include quality assurance, stability testing and
regulatory support. At this time approximately 40 quality and regulatory
employees are providing support function for our primary research and
development activities. We received FDA approval for six new products during the
three months ended June 30, 2004. In July, we received approval for an
additional 13 products. As of July 31, 2004, we had four abbreviated new drug
applications pending approval with the FDA and we expect to increase our
research and development activities for additional products over the next
several months.

          Our operating income for the three months ended June 30, 2004
decreased by $760,527 to $3,690,106, compared to $4,450,633 for the three months
ended June 30, 2003. This decrease is primarily due to our increased investment
in research and development expenses of $1,217,465 and the $1,356,060 increase
in selling, general and administrative expenses, partially offset by a
$1,812,998 increase in gross profit resulting from an increase in our sales
volume.

          Interest and financing expenses for the three months ended June 30,
2004 were $50,619, compared to $219,759 for the three months ended June 30,
2003. Interest expense decreased as we paid down debt obligations in July 2003
with our June 2003 private placement proceeds and as we paid off $1,030,000 in
New Jersey Economic Development Authority bonds and unsecured notes payable of
$150,000 in May 2004 and June 2004, respectively. Miscellaneous income primarily
consists of interest income from cash deposits resulting from the sale of common
stock, partially offset by miscellaneous expenses.

          Income tax expense for the three months ended June 30, 2004 was
$1,360,000, compared to income tax expense of $1,613,900 for the three months
ended June 30, 2003. Our effective tax rate for the three months ended June 30,
2004 and 2003 was 38.4% and 39.9%, respectively. The decrease in our effective
tax rate is due to a lower effective rate for state taxes. Our income tax
expense is primarily a non-cash expense. We do not expect to pay federal income
tax, other than the alternative minimum tax, until we fully utilize our net
operating loss carryforwards.

          We recorded net income of $2,185,108 for the three months ended June
30, 2004, compared to net income of $2,426,956 for the three months ended June
30, 2003. We recorded net income applicable to common stock of $2,154,819 or
$0.13 per share, for the three months ended June 30, 2004, compared to net
income applicable to common stock of $2,351,361 or $0.17 per share for the three
months ended June 30, 2003. Diluted earnings per share were $0.11 for the three
months ended June 30, 2004, compared to diluted earnings per share of $0.14 for
the three months ended June 30, 2003.

RESULTS OF OPERATIONS -- SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO SIX MONTHS
ENDED JUNE 30, 2003

          Sales for the six months ended June 30, 2004 increased by $10,513,957
or 31.0%, from the corresponding period in 2003, primarily due to a greater
number of products available for sale as well as

                                      -14-
<PAGE>

higher demand for our products. Sales for the six months ended June 30, 2004
were $44,457,718, compared to $33,943,761 for the six months ended June 30,
2003. During the six months ended June 30, 2004, we had 23 FDA approved product
families, in 57 different strengths, available for sale, compared to 19 FDA
approved product families in 44 different strengths, available for sale during
the six months ended June 30, 2003.

          Cost of sales was $24,110,880, or 54.2% of sales, for the six months
ended June 30, 2004, compared to $18,394,933, or 54.2% of sales, for the six
months ended June 30, 2003. The increase in our gross profit of $4,798,010, from
$15,548,828 for the six months ended June 30, 2003 to $20,346,838 for the six
months ended June 30, 2004 is primarily attributable to a favorable product mix
including sales of an increased number of first-to-market products, offset
partially by approximately $982,000 of expenses incurred in connection with our
new Cranbury, NJ manufacturing facility.

          Selling, general and administrative expenses for the six months ended
June 30, 2004 were $6,628,176, compared to $4,688,668 for the six months ended
June 30, 2003. The increase of $1,939,508 is primarily due to increases in
salaries and benefits, business insurance, and advertising and trade show
expenses of approximately $527,000, $468,000 and $1,504,000, respectively. These
increased expenses were partially offset by cost savings of approximately
$411,000 and $156,000 in sales commissions and investor relations fees,
respectively. We added several new employees after June 2003 to support our
growth effort throughout 2003 and 2004. The increased expenses for business
insurance relate to increased product sales which require additional insurance
coverage. We increased our presence at a number of industry trade shows, in
addition to increasing our marketing and promotional expenses. The cost
reductions are the direct result of our increased focus on reducing our
dependence on third party vendors. The expiration of our sales agreement with
Bi-Coastal Pharmaceutical Corporation contributed to the commissions cost
savings. Our decision to move the majority of our investor relations activities
in-house resulted in the investor relations cost savings.

          Research and development expenses for the six months ended June 30,
2004 were $7,039,936, compared to $4,402,695 for the six months ended June 30,
2003. A significant portion of these expenses relate to research which is
currently being conducted to develop generic drugs. The increase of $2,637,241
is primarily due to an increase in salaries expense of approximately $579,000,
as well as milestone payments to raw material suppliers and others working with
us to develop new products and biostudies and outside assays conducted by
independent contract research organizations of approximately $1,478,000. The
balance of approximately $580,000 is due to increased activity in supporting a
higher number of research projects offset by various cost savings in other
areas. These support activities include quality assurance, stability testing and
regulatory support. At this time approximately 40 quality and regulatory
employees are providing support function for the primary research and
development activity. We received FDA approval for seven new products during the
six months ended June 30, 2004.

          Our operating income for the six months ended June 30, 2004 increased
by $221,261 to $6,678,726, compared to $6,457,465 for the six months ended June
30, 2003. This improvement is primarily due to an increase in our sales volume,
which resulted in a $4,798,010 increase in gross profit. The increase in gross
profit was partially offset by our increased investment in research and
development expenses of $2,637,241 and the $1,939,508 increase in selling,
general and administrative expenses.

          Interest and financing expenses for the six months ended June 30, 2004
were $108,585, compared to $421,082 for the six months ended June 30, 2003.
Interest expense decreased as we paid down debt obligations in July 2003 with
our June 2003 private placement proceeds and as we paid off $1,030,000 in New
Jersey Economic Development Authority bonds and unsecured notes payable of
$150,000 in May 2004 and June 2004, respectively. Miscellaneous income primarily
consists of interest income from cash deposits resulting from the sale of common
stock, partially offset by miscellaneous expenses.

                                      -15-
<PAGE>

          Income tax expense for the six months ended June 30, 2004 was
$2,515,000, compared to income tax expense of $2,324,900 for the six months
ended June 30, 2003. Our effective tax rate for the six months ended June 30,
2004 and 2003 was 38.4% and 39.8%, respectively. The decrease in our effective
tax rate is due to a lower effective rate for state taxes. Our income tax
expense is primarily a non-cash expense. We do not expect to pay federal income
tax, other than the alternative minimum tax, until we fully utilize our net
operating loss carryforwards.

          We recorded net income of $4,038,392 for the six months ended June 30,
2004, compared to net income of $3,510,996 for the six months ended June 30,
2003. We recorded net income applicable to common stock of $3,976,983 or $0.23
per share, for the six months ended June 30, 2004, compared to net income
applicable to common stock of $3,332,927 or $0.25 per share for the six months
ended June 30, 2003. Diluted earnings per share were $0.21 for the six months
ended June 30, 2004, compared to diluted earnings per share of $0.20 for the six
months ended June 30, 2003.

                         LIQUIDITY AND CAPITAL RESOURCES

          As of June 30, 2004, we had working capital of $43,967,277, compared
to working capital of $47,050,765 at December 31, 2003. Cash was $7,948,098 as
of June 30, 2004, compared to $20,065,248 at December 31, 2003. The $3,083,488
decrease in working capital is primarily due to our net income of $4,038,392 for
the six months ended June 30, 2004 and non-cash expenses for deferred taxes,
depreciation and amortization of $3,316,363 being offset by our additional
investment of $11,551,133 in property and equipment. The repayment of our New
Jersey Economic Development Authority bonds decreased working capital by
approximately $409,000 as we used the deposits held by the bond trustee to repay
the majority of the debt. We expect to make additional investments of
approximately $10,000,000 in property and equipment during the next twelve
months at our new Cranbury, New Jersey facility. Our new facility should allow
us to expand our current manufacturing capabilities and alleviate certain
current manufacturing constraints. In addition, the new facility should allow us
to consolidate a substantial portion of our existing operations upon expiration
of current lease obligations. We expect to use our cash on hand, plus cash from
operations, to make these additional investments. However, we can give no
assurance that our operations will generate sufficient cash to make the planned
investments or that we will have sufficient availability under our loan
facility. See "Certain Factors That Could Affect Future Results," above.

          Other significant changes in our working capital components include an
increase of $6,630,816 in accounts receivable, an increase of $4,161,197 in
inventory and an increase of $2,705,104 in accounts payable and accrued
expenses. The increase in accounts receivable is primarily due to a slow-down in
collections through the first half of 2004. The accounts receivable allowance
consists of allowances for returns, doubtful accounts, customer chargebacks,
rebates, and pricing adjustments. Our allowance for chargebacks, rebates,
returns, pricing adjustments and other allowances consists primarily of
allowances stipulated by contracts with major drug wholesalers and are customary
in the generic drug industry. We establish these allowances as we recognize the
sales and monitor these allowances on an ongoing basis. To date, actual amounts
have not differed materially from our estimates. The increase in inventory
corresponds with our increased sales activity, as most of the $4,161,197
increase consists of raw materials. The increase in accounts payable and accrued
expenses is the direct result of our increased raw materials purchases and the
build out of our new Cranbury facility.

          On March 2, 2004, we entered into a new $20 million revolving credit
agreement with our existing lender. This new revolver replaces the existing
revolving credit facility of $10 million. The new revolver bears interest, at
inception, at LIBOR plus 1.25% based upon our current leverage ratio and
requires no monthly principal payments. In addition, the new revolver is
expandable to $30 million upon our request and the approval of the bank. The
revolver matures in March 2007.

                                      -16-
<PAGE>

          The revolver is secured by substantially all of our assets including
accounts receivable, inventory, furniture, fixtures, equipment and intellectual
property. The loans are subject to certain financial covenants, including a
fixed charge coverage ratio, a leverage ratio and a net worth test. We used this
new revolver to repay the entire outstanding balance under the old revolver of
$3.0 million.

          In May 2004, we repaid the $1,030,000 of outstanding New Jersey
Economic Development Authority bonds. The Authority redeemed the bonds in June
2004.

          We expect to fund our working capital needs from operations and from
amounts available for borrowing under our revolving credit agreement.

ITEM 4.  CONTROLS AND PROCEDURES

          "Disclosure controls and procedures" are controls and other procedures
designed to ensure that we timely record, process, summarize and report the
information that we are required to disclose in the reports that we file or
submit with the SEC. These include controls and procedures designed to ensure
that such information is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosure.

          As required under the Sarbanes-Oxley Act of 2002, our Chief Executive
Officer and Chief Financial Officer conducted a review of our disclosure
controls and procedures as of the end of the period covered by this report. They
concluded, as of the evaluation date, that our disclosure controls and
procedures are effective.

          During the three months ended June 30, 2004, there were no changes in
our internal control over financial reporting that have affected, or are
reasonably likely to affect, materially our internal control over financial
reporting.











                                      -17-
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

          We are involved in certain legal proceedings from time to time
incidental to our normal business activities. While the outcome of any such
proceedings cannot be accurately predicted, we do not believe the ultimate
resolution of any existing matters should have a material adverse effect on our
financial position or results of operations.

ITEM 2.  CHANGES IN SECURITIES

          (a) Not applicable

          (b) Not applicable

          (c) Sales of Unregistered Securities. During the quarter ending June
30, 2004, we issued 10,653 shares of common stock upon the exercise of warrants
in reliance on one or more exemptions under the Securities Act including Section
3(a)(9) of the Act and Rule 506 under the Act.

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

          On June 23, 2004 we held our annual meeting of stockholders. Two
matters were presented for stockholder consideration: to elect directors for the
ensuing year and to approve an increase in the number of shares of common stock
authorized for issuance under our 2003 Stock Incentive Plan. As of the record
date for the meeting, there were 17,946,360 votes eligible to be cast at the
meeting; of these, 15,962,567 were present in person or represented by proxy.
The results for each of these proposals were as follows:

          Proposal 1: To elect a board of directors for the ensuing year:

                                                                 Withholding
                      Name                          For           Authority
                      Elliot F. Hahn, Ph.D.      15,653,284        309,283
                      Harry Silverman            15,485,283        477,284
                      Jerry I. Treppel           15,614,788        347,779
                      Dhananjay G. Wadekar       15,697,386        265,181
                      Robert J. Mauro            15,856,979        105,588
                      David S. Tierney, M.D.     15,697,657        264,910


          Proposal    2: To approve the increase in the number of shares of
                      common stock authorized for issuance under our 2003 Stock
                      Incentive Plan:

                      For........................................ 7,476,880

                      Against.................................... 2,684,944

                      Abstain....................................   180,934

                      Broker Non-Votes........................... 5,619,809

                                      -18-
<PAGE>

ITEM 5.  OTHER INFORMATION

FDA Warning Letter

          Our facilities are subject to periodic FDA inspection for, among other
things, conformance to current Good Manufacturing Practices, or cGMP. Following
an inspection, the FDA typically provides its observations, if any, in the form
of a Form 483 notice. In January 2004, the FDA initiated an inspection of our
South Plainfield, New Jersey manufacturing facility. Following the inspection,
the FDA issued to us a Form 483 notice concerning our compliance with cGMP,
including certain observations by the inspectors related to our failure to
report adverse drug events in accordance with the applicable rules and
regulations. Although we responded to the Form 483 to address and correct the
deficiencies, the FDA further issued a warning letter on April 23, 2004 relating
to these observations. We have reviewed each of the observations in the warning
letter and submitted a written response with an explanation of the corrective
actions that we took. To date, the FDA has not responded.

          We expect to be able to address the FDA's observations in a timely and
effective manner, and we believe that the warning letter may not materially
affect our operations. Since receiving the warning letter, we have received 14
new ANDA approvals. We can, however, give no assurance that we will receive
approval from the FDA to market the products covered by our pending and planned
applications, or that regulation by the FDA or other government agencies will
not delay or impede our efforts to commercialize our proposed products. See
"Certain Factors That May Affect Future Results," above.

RxBazaar Notes Receivable

         We hold senior subordinated notes of RxBazaar, Inc. in the principal
amount of $2,250,000 ("Notes"), the Notes were initially due on June 17, 2004.
We also hold 477,841 shares of common stock, shares of Series A Preferred Stock
convertible into 345,333 shares of common stock and warrants to purchase
additional common stock. As of June 30, 2004, the Notes and equity remain
outstanding and are carried at a net valuation of zero on our balance sheet.

         In June 2004, we agreed to extend the maturity date of the Notes by one
year and to forgive certain interest payments. We also agreed that, if RxBazaar,
Inc. achieved certain capital raising objectives, we would forgive the
outstanding principal amount of the Notes. We do not expect that any disposition
of the Notes or the agreement with RxBazaar will have a material impact on our
financial condition or results of operations.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      List of Exhibits
         ----------------

          The following exhibits, required by Item 601 of Regulation S-K are
filed as part of this Quarterly Report on Form 10-Q. Exhibit numbers, where
applicable, in the left column correspond to those of Item 601 of Regulation
S-K.

EXHIBIT
NO.                     ITEM
--------                ----

     3.1       Restated Certificate of Incorporation (filed as Exhibit 3a to the
               Company's Report on Form 10-Q for the Quarter ended June 30,
               1998, as amended on September 14, 1998, and incorporated herein
               by reference).

                                      -19-
<PAGE>

     3.2       Certificate of Amendment of Certificate of Incorporation dated
               May 31, 2000 (filed as Exhibit 3.2 to the Company's Report on
               Form 10-QSB for the quarter ended June 30, 2000 and incorporated
               herein by reference).

     3.3       Amended and Restated By-Laws dated as of May 26, 2000 (filed as
               Exhibit 3.3 to the Company's Report on Form 10-QSB for the
               quarter ended June 30, 2000 and incorporated herein by
               reference).

     3.4       Certificate of Designations, Preferences and Rights of Series Q
               Preferred Stock of Able Laboratories, Inc. (filed as Exhibit 4.1
               to the Company's Current Report on Form 8-K filed August 31, 2001
               and incorporated by reference).

     3.5       Certificate of Amendment of Certificate of Incorporation dated
               May 9, 2001 (filed as Exhibit 3.3 to the Company's Report on Form
               10-Q for the quarter ended June 30, 2001 and incorporated herein
               by reference).

     3.6       Certificate of Ownership and Merger dated May 18, 2001 (filed as
               Exhibit 99.1 to the Company's Current Report on Form 8-K dated
               May 18, 2001 and incorporated herein by reference).

     3.7       Certificate of Amendment of Certificate of Incorporation dated
               May 31, 2002 (filed as Exhibit 3.7 to the Company's Report on
               Form 10-Q for the quarter ended June 30, 2002, and incorporated
               herein by reference).

     10.1      *Employment Agreement dated April 26, 2004, with Garth Boehm.

     10.2      *Stock Option dated April 26, 2004, issued to Garth Boehm.

     10.3      *Employment Agreement dated April 26, 2004, with Robert James
               Mauro.

     10.4      *Stock Option dated April 26, 2004, issued to Robert James Mauro.

     10.5      First Amendment dated June 30, 2004, to Credit Agreement with
               Citizens Bank of Massachusetts dated March 2, 2004.

     10.6      *Amended and Restated 2003 Stock Incentive Plan, as amended June
               23, 2004 (included as Appendix B to the Company's definitive
               Proxy Statement for its annual meeting of stockholders held on
               June 23, 2004, and incorporated herein by reference).

     31.1      Certification of Chief Executive Officer of Periodic Report
               Pursuant to Rule 13a-14(a) or Rule 15d-14(a).

     31.2      Certification of Chief Financial Officer of Periodic Report
               Pursuant to Rule 13a-14(a) or Rule 15d-14(a).

     32.1      Certification by Chief Executive Officer and Chief Financial
               Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350.

-----------------------
* Management contract or compensatory plan, contract or arrangement.

(b) Reports on Form 8-K
    -------------------

                                      -20-
<PAGE>

            On April 28, 2004, we filed a Form 8-K relating to the press release
reporting our financial results for the quarter ended March 31, 2004 and the
press releases relating to the appointment of Garth Boehm as Senior Vice
President and Chief Scientific Officer and the appointment of Robert J. Mauro as
President and Chief Operating Officer.









































                                      -21-
<PAGE>

                                   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 thereunto duly authorized.

                                     ABLE LABORATORIES, INC.


Dated:  August 6, 2004               By: /s/ Dhananjay G. Wadekar
                                        ----------------------------------------
                                        Dhananjay G. Wadekar
                                        Chief Executive Officer


                                     By: /s/ Robert Weinstein
                                        ----------------------------------------
                                        Robert Weinstein
                                        Chief Financial Officer



























                                      -22-
<PAGE>


                                  EXHIBIT INDEX

EXHIBIT
NO.                     ITEM
--------                ----

     10.1      *Employment Agreement dated April 26, 2004, with Garth Boehm.

     10.2      *Stock Option dated April 26, 2004, issued to Garth Boehm.

     10.3      *Employment Agreement dated April 26, 2004, with Robert James
               Mauro.

     10.4      *Stock Option dated April 26, 2004, issued to Robert James Mauro.

     10.5      First Amendment dated June 30, 2004, to Credit Agreement with
               Citizens Bank of Massachusetts dated March 2, 2004.

     31.1      Certification of Chief Executive Officer of Periodic Report
               Pursuant to Rule 13a-14(a) or Rule 15d-14(a).

     31.2      Certification of Chief Financial Officer of Periodic Report
               Pursuant to Rule 13a-14(a) or Rule 15d-14(a).

     32.1      Certification by Chief Executive Officer and Chief Financial
               Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350.

















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