2/11/05

                     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                 December 31, 2004
                               -------------------------------------------------


                                       or

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

For the transition period ended ______________________ to ______________________


                        Commission File Number: 333-45241
--------------------------------------------------------------------------------

                           ELITE PHARMACEUTICALS, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


Delaware                                                  22-3542636
----------------------------------------         -------------------------------
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                       Identification No.)


165 Ludlow Avenue, Northvale, New Jersey                    07647
----------------------------------------         -------------------------------
(Address of principal executive offices)                 (Zip Code)



                                 (201) 750-2646
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)



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

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 [ ]

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

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                                                                Yes [ ]   No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of the common stock, $.01 par value,
as of February 8, 2005: 15,775,517 (exclusive of 100,000 shares held in
treasury).

<PAGE>


                  ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES




                                      INDEX


                                                                        Page No.

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

           Consolidated Balance Sheets as of December 31, 2004
           (unaudited) and March 31, 2004                                  1 - 2

           Consolidated Statements of Operations for the three
           and nine months ended December 31, 2004 and
           December 31, 2003 (unaudited)                                       3

           Consolidated Statement of Changes in Stockholders' Equity
           for the nine months ended December 31, 2004 (unaudited)             4

           Consolidated Statements of Cash Flows for the nine months
           ended December 31, 2004 and December 31, 2003 (unaudited)           5

           Condensed Notes to Consolidated Financial Statements           6 - 13

Item 2.  Management's Discussion And Analysis of Financial
         Condition And Results Of Operations                             14 - 19

Item 3.  Quantitative And Qualitative Disclosures About Market Risk           20

PART II  OTHER INFORMATION                                               20 - 21

Item 2.  Changes in Securities and Use of Proceeds

Item 6.  Exhibits and Reports on Form 8-K


SIGNATURES                                                                    22

EXHIBITS

<PAGE>


                  ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS

                                                     DECEMBER 31,    MARCH 31,
                                                         2004           2004
                                                     ------------   ------------
                                                     (Unaudited)

CURRENT ASSETS:
   Cash and cash equivalents                         $  4,564,948   $  2,104,869
   Accounts receivable, net                                    --        153,250
   Restricted cash                                        116,645        203,995
   Prepaid expenses and other current assets               54,833        137,892
                                                     ------------   ------------

       Total current assets                             4,736,426      2,600,006
                                                     ------------   ------------


PROPERTY AND EQUIPMENT, net of accumulated
    depreciation and amortization                       4,273,898      4,090,250
                                                     ------------   ------------


INTANGIBLE ASSETS - net of accumulated amortization        83,791        102,196
                                                     ------------   ------------


OTHER ASSETS:
   Prepaid expenses                                        41,013             --
   Deposit on equipment                                        --        398,580
   Restricted cash - debt service reserve                 300,000        300,000
   Restricted cash - note payable                              --        225,000
   EDA bond offering costs, net of accumulated
      amortization of  $67,058 and $60,458,
      respectively                                        127,502        137,402
                                                     ------------   ------------

      Total other assets                                  468,515      1,060,982
                                                     ------------   ------------


      Total assets                                   $  9,562,630   $  7,853,434
                                                     ============   ============


                  The accompanying notes are an integral part
                   of the consolidated financial statements.

                                      -1-
<PAGE>


                  ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                   DECEMBER 31,      MARCH 31,
                                                       2004            2004
                                                   (Unaudited)

CURRENT LIABILITIES:
   Current portion - note payable                  $    130,000    $     75,000
   Current portion of EDA bonds                         165,000         150,000
   Accounts payable and accrued expenses                595,014       1,085,242
                                                   ------------    ------------
      Total current liabilities                         890,014       1,310,242
                                                   ------------    ------------

LONG TERM LIABILITIES:
   Note payable - net of current portion                205,051         150,000
   EDA bonds - net of current portion                 2,180,000       2,345,000
                                                   ------------    ------------
      Total long-term liabilities                     2,385,051       2,495,000
                                                   ------------    ------------

      Total liabilities                               3,275,065       3,805,242
                                                   ------------    ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
   Preferred stock - $.01 par value;
      Authorized - 5,000,000 and 0 shares at
      December 31, 2004 and March 31, 2004,
      respectively; Series A 8% Convertible
      Preferred Stock Authorized 660,000
      shares  at December 31, 2004 aggregate
      liquidation preference of $5,303,662
      at December 31, 2004                                4,312              --
   Common stock - $.01 par value;
      Authorized - 65,000,000 and 25,000,000
      shares, respectively at December 31, 2004
      and March 31, 2004
      Issued and outstanding - 13,111,547
      and 12,204,426 shares, respectively               131,115         122,044
   Additional paid-in capital                        46,289,033      39,338,140
   Accumulated deficit                              (39,830,054)    (35,105,151)
                                                   ------------    ------------
                                                      6,594,406       4,355,033
   Treasury stock, at cost (100,000 shares)            (306,841)       (306,841)
                                                   ------------    ------------
      Total stockholders' equity                      6,287,565       4,048,192
                                                   ------------    ------------


      Total liabilities and stockholders' equity   $  9,562,630    $  7,853,434
                                                   ============    ============


                   The accompanying notes are an integral part
                   of the consolidated financial statements.

                                      -2-
<PAGE>


                  ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED              NINE MONTHS ENDED
                                                             DECEMBER 31,                   DECEMBER 31,
                                                     ----------------------------    ----------------------------
                                                         2004            2003            2004            2003
                                                     ------------    ------------    ------------    ------------
<S>                                                  <C>             <C>             <C>             <C>
REVENUES                                             $         --    $     30,000    $    151,450    $     30,000
                                                     ------------    ------------    ------------    ------------

COST OF OPERATIONS:
   Research and development                               726,175         536,723       1,937,794       1,480,788
   General and administrative                             625,323         394,867       1,675,041       1,543,926
   Depreciation and amortization                           45,360          89,610         271,080         268,830
                                                     ------------    ------------    ------------    ------------
                                                        1,396,858       1,021,200       3,883,915       3,293,544
                                                     ------------    ------------    ------------    ------------

LOSS FROM OPERATIONS                                   (1,396,858)       (991,200)     (3,732,465)     (3,263,544)
                                                     ------------    ------------    ------------    ------------

OTHER INCOME (EXPENSES):
   Interest income                                         13,131           6,284          18,842          16,469
   Litigation settlement                                       --         150,000              --         150,000
   Sale of New Jersey tax losses                          205,792         151,027         205,792         151,027
   Interest expense                                       (62,499)        (52,093)       (176,696)       (159,777)
   Expenses relating to issuance of stock options         (44,982)        (45,184)       (325,558)     (1,096,349)
   Expenses relating to issuance of stock warrants             --        (587,983)       (241,010)       (587,983)
   Expenses relating to repricing of stock options             --              --        (397,732)             --
   Expenses relating to warrant exchange offer                 --              --              --        (172,324)
                                                     ------------    ------------    ------------    ------------
                                                          111,442        (377,949)       (916,362)     (1,698,937)
                                                     ------------    ------------    ------------    ------------

LOSS BEFORE PROVISION FOR INCOME TAXES                 (1,285,416)     (1,369,149)     (4,648,827)     (4,962,481)

PROVISION FOR INCOME TAXES                                     --              --           1,000           1,000
                                                     ------------    ------------    ------------    ------------

NET LOSS                                               (1,285,416)     (1,369,149)     (4,649,827)     (4,963,481)

Preferred stock dividends                                 (75,076)             --         (75,076)             --
                                                     ------------    ------------    ------------    ------------

NET LOSS ATTRIBUTABLE TO COMMON
   SHAREHOLDERS                                      $ (1,360,492)   $ (1,369,149)   $ (4,724,903)   $ (4,963,481)
                                                     ============    ============    ============    ============

BASIC AND DILUTED LOSS PER COMMON SHARE              $       (.11)   $       (.12)   $       (.39)   $       (.46)
                                                     ============    ============    ============    ============

WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING                           12,258,569      11,381,926      12,231,405      10,829,626
                                                     ============    ============    ============    ============
</TABLE>


                   The accompanying notes are an integral part
                   of the consolidated financial statements.

                                      -3-
<PAGE>


                             ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                             FOR THE NINE MONTHS ENDED DECEMBER 31, 2004
                                             (UNAUDITED)

<TABLE>
<CAPTION>
                                         SERIES A
                                       8% CONVERTIBLE
                                      PREFERRED STOCK         COMMON STOCK      ADDITIONAL                                 STOCK-
                                    -------------------   --------------------    PAID-IN     TREASURY    ACCUMULATED     HOLDERS'
                                     SHARES     AMOUNT      SHARES     AMOUNT     CAPITAL       STOCK       DEFICIT        EQUITY
                                    --------   --------   ----------  --------  -----------   ---------   ------------   ----------
<S>                                  <C>       <C>        <C>         <C>       <C>           <C>         <C>            <C>

BALANCE AT MARCH 31, 2004 (AUDITED)       --   $     --   12,204,426  $122,044  $39,338,140   $(306,841)  $(35,105,151)  $4,048,192


  Series A 8% convertible preferred
  shares and warrants issued in
  connection with private placement  516,558      5,166                           5,861,434          --             --    5,866,600

  Common shares issued in
  connection with consulting
  agreement                               --         --       26,500       265       58,035          --             --       58,300

  Preferred shares converted to
  common shares                      (85,366)      (854)     853,660     8,537       (7,683)         --             --           --


  Expenses related to issuance of
  stock options                           --         --           --        --      325,558          --             --      325,558


  Expenses related to issuance of
  stock warrants                          --         --           --        --      241,010          --             --      241,010


  Expenses related to repricing of
  stock options                           --         --           --        --      397,732          --             --      397,732


  Common stock issued as dividend
  on Series A 8% convertible
  preferred stock
                                          --         --       26,961       269       74,807          --        (75,076)          --

NET LOSS FOR NINE MONTHS ENDED
  DECEMBER 31, 2004                       --         --           --        --           --          --     (4,649,827)  (4,649,827)
                                    --------   --------   ----------  --------  -----------   ---------   ------------   -----------

BALANCE AT DECEMBER 31, 2004
      (Unaudited)                    431,192   $  4,312   13,111,547  $131,115  $46,289,033   $(306,841)  $(39,830,054)  $6,287,565
                                    ========   ========   ==========  ========  ===========   =========   ============   ==========
</TABLE>


                   The accompanying notes are an integral part
                   of the consolidated financial statements.

                                      -4-
<PAGE>


                  ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                    NINE MONTHS ENDED
                                                                                      DECEMBER 31,
                                                                              -----------------------------
                                                                                  2004             2003
                                                                              ------------     ------------
<S>                                                                           <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                                   $ (4,649,827)    $ (4,963,481)
   Adjustments to reconcile net loss to cash used in operating activities:
      Depreciation and amortization                                                271,080          268,830
      Expenses related to issuance of stock options                                325,558        1,096,349
      Expenses related to issuance of stock warrants                               241,010          587,983
      Expenses related to repricing of stock options                               397,732               --
      Expenses related to modification of warrant exchange offer                        --          172,324
      Expenses related to issuance of common stock                                  58,300               --
      Changes in assets and liabilities:
         Accounts and accrued interest receivable                                  153,250            4,681
         Prepaid expenses and other current assets                                  83,059           48,803
         Accounts payable, accrued expenses and other current liabilities         (490,228)         222,018
                                                                              ------------     ------------

NET CASH USED IN OPERATING ACTIVITIES                                           (3,610,066)      (2,562,493)
                                                                              ------------     ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of equipment                                                           (27,843)              --
   Purchase of patent                                                                   --          (20,500)
   Restricted cash                                                                 312,350           (9,300)
                                                                              ------------     ------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                                284,507          (29,800)
                                                                              ------------     ------------

CASH FLOWS FROM  FINANCING ACTIVITIES:
   Net proceeds from issuance of Series A 8% Convertible Preferred Stock
      and warrants                                                               5,866,600        3,209,000
   Principal bank note payments                                                   (225,000)         (56,250)
   Proceeds from equipment loan                                                    400,000               --
   Principal equipment note payments                                               (64,989)              --
   Principal repayments of NJEDA Bonds                                            (150,000)        (140,000)
   Prepaid interest                                                                (41,013)              --
                                                                              ------------     ------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                        5,785,638        3,012,750
                                                                              ------------     ------------

NET CHANGE IN OPERATING CASH AND CASH EQUIVALENTS                                2,460,079          420,457

OPERATING CASH AND CASH EQUIVALENTS - beginning of period                        2,104,869        3,264,081
                                                                              ------------     ------------

OPERATING CASH AND CASH EQUIVALENTS - end of period                           $  4,564,948     $  3,684,538
                                                                              ------------     ------------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid for interest                                                     $    132,231     $    112,341
   Cash received for income taxes                                                  204,792          150,027

SCHEDULE OF NON-CASH FINANCING ACTIVITIES:
   Preferred Stock dividends of $75,076 paid by issuance of 26,961 shares
      of Common Stock                                                         $     75,076               --
</TABLE>


                   The accompanying notes are an integral part
                   of the consolidated financial statements.

                                      -5-
<PAGE>


                  ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             THREE AND NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
                                   (UNAUDITED)

NOTE 1  -  BASIS OF PRESENTATION
           ---------------------

           The  information  in this Form 10-Q  Report  includes  the results of
           operations  of  Elite  Pharmaceuticals,  Inc.  and  its  consolidated
           subsidiaries  (collectively the "Company") including its wholly-owned
           subsidiaries, Elite Laboratories, Inc. ("Elite Labs"), Elite Research
           Ltd. ("ERL") and Elite Research, Inc. ("ERI"), for the three and nine
           month  periods  ended  December 31, 2004 and December 31, 2003. As of
           December  31,  2004,  the  financial  statements  of all entities are
           consolidated and all significant intercompany accounts are eliminated
           upon consolidation. The accompanying unaudited consolidated financial
           statements  have been prepared  pursuant to rules and  regulations of
           the  Securities  and Exchange  Commission.  Accordingly,  they do not
           include all of the information  and footnotes  required by accounting
           principles  generally  accepted  in the United  States of America for
           complete  financial  statements.  In the opinion of  management,  all
           adjustments  considered  necessary  for a  fair  presentation  of the
           consolidated financial position, results of operations and cash flows
           of the Company for the periods presented have been included.

           The  financial  results for the interim  periods are not  necessarily
           indicative  of the results to be expected for the full year or future
           interim periods.

           The  accompanying  consolidated  financial  statements of the Company
           have been prepared in accordance with accounting principles generally
           accepted for interim financial  statement  presentation and should be
           read in conjunction  with the consolidated  financial  statements and
           notes  included in the  Company's  Annual Report on Form 10-K for the
           year ended March 31, 2004.  There have been no changes in significant
           accounting policies since March 31, 2004.

           The Company  does not  anticipate  being  profitable  for fiscal year
           2005;   therefore  a  current   provision  for  income  tax  was  not
           established  for the nine months ended  December  31, 2004.  Only the
           minimum  corporation  tax  liability  required for state  purposes is
           reflected.

NOTE 2  -  STOCKHOLDERS' EQUITY
          ---------------------

           The  shareholders at the Annual Meeting of Stockholders  adjourned to
           July  21,  2004,   approved  the  amendment  to  the  Certificate  of
           Incorporation  increasing the number of authorized  shares of capital
           stock from 25,000,000 of Common Stock to 65,000,000  shares of Common
           Stock and 5,000,000 shares of Preferred Stock,  each with a par value
           of $.01 per share.

           SERIES A 8% CONVERTIBLE PREFERRED STOCK TRANSACTION

           In October 2004, the Company  completed a private  placement  through
           Indigo  Securities  LLC, the Placement  Agent,  for  aggregate  gross
           proceeds of $6,600,000 of 516,558 shares of Series A Preferred Stock,
           par value  $0.01  per share  ("Preferred  Shares")  convertible  into
           5,165,580   shares  of  Common  Stock.   The  Preferred  Shares  were
           accompanied by warrants to purchase an aggregate of 5,165,580  shares
           of Common  Stock at exercise  prices  ranging from $1.54 to $1.84 per
           share. The Company paid commissions  aggregating  $633,510 and issued
           five year warrants to purchase  494,931 shares of Common Stock to the
           Placement Agent. The Company also paid legal fees and expenses of the
           Agent's counsel of $75,000 and legal fees and expenses of one counsel
           for the investors in the private placement of $25,000.

                                      -6-
<PAGE>


                  ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             THREE AND NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
                                   (UNAUDITED)

NOTE 2  -  STOCKHOLDERS' EQUITY (Continued)
          ---------------------

           SERIES A 8% CONVERTIBLE PREFERRED STOCK TRANSACTION (Continued)

           The holders of the Preferred  Shares are entitled to dividends at the
           rate of 8% of the original issue price of $12.30 per share payable on
           December 1 and June 1 of each year in cash or shares of Common Stock.
           Holders are entitled to elect one Director, are entitled to ten votes
           per share, and vote with the Common  Stockholders as one class on all
           other matters. Each Preferred Share is convertible into ten shares of
           Common Stock. The purchaser of the Preferred Shares (the "INVESTORS")
           received for each Preferred  Share acquired two Common Stock Purchase
           Warrants,   one   exercisable  on  or  prior  to  December  31,  2005
           ("SHORT-TERM  WARRANTS")  and the  other  exercisable  on or prior to
           December 28,2009 ("LONG-TERM WARRANTS").  Each warrant represents the
           right to purchase five shares of Common Stock.

           The  private  placement  was  effected in three  tranches.  The first
           tranche  involved  the sale on October  6, 2004 of 379,122  Preferred
           Shares at a price of $12.30 per share  convertible  into an aggregate
           of  3,791,220  shares  of  Common  Stock  accompanied  by  Short-Term
           Warrants  and  Long-Term  Warrants  to purchase at $1.54 per share an
           aggregate of 3,791,220  shares of Common  Stock.  The second  tranche
           involved the sale on October 12, 2004 of 119,286  Preferred Shares at
           a price of $14.00  per share  convertible  into  1,192,860  shares of
           Common Stock  accompanied  by Short-Term  and  Long-Term  Warrants to
           purchase an aggregate of 1,192,860  shares of Common Stock at a price
           of $1.75 per share.  The third  tranche  involved the sale on October
           26,  2004 of 18,150  Preferred  Shares at a price of $14.70 per share
           convertible  in to 181,  500 shares of Common  Stock  accompanied  by
           Short Term and Long Term Warrants to purchase at a price of $1.84 per
           share an aggregate of 181,500 shares of Common Stock.

           Pursuant to the Placement Agent Agreement,  the Company issued to the
           Placement  Agent and its  designees  Long Term  Warrants  to purchase
           357,495 shares of Common Stock at $1.23 per share,  119,286 shares of
           Common  Stock at a price of $1.40 per  share,  and  18,150  shares of
           Common Stock at a price of $1.47 per share, respectively.

           Holders of the Preferred  Shares are provided  demand and  piggy-back
           registration rights at the Company's expense.  The Company registered
           under the Securities Act of 1933 (the "ACT") for resale the shares of
           Common  Stock  issuable  upon  conversion  of the  Preferred  Shares,
           exercise of the warrants  (including the Placement  Agent's warrants)
           and as payment of dividends on the Preferred Shares.

           Each of the purchasers of the Preferred  Shares has represented  that
           the  purchaser is an  "accredited  investor"  and has agreed that the
           securities  issued in the private placement are to bear a restrictive
           legend  against  resale  without  registration  under  the  Act.  The
           Preferred Shares and warrants were sold by Registrant pursuant to the
           exemption from  registration  afforded by Section 4(2) of the Act and
           Registration D thereunder.

           Dr. Charan Behl, the Company's Chief Scientific Advisor, purchased at
           $12.30 per share 20,000  Preferred  Shares and  received  warrants to
           purchase  200,000  shares of Common Stock.  His payment  consisted of
           $16,675  in cash  and the  release  of the  Company's  obligation  of
           $229,325  due to Dr.  Charan Behl for  consulting  fees for  services
           rendered through September 30, 2004.

           The December 1, 2004  dividends in the amount of $75,076 were paid by
           issuance of 26,961  shares of Common  Stock.  By December  31,  2004,
           85,366 shares of Series A Preferred Stock were converted into 853,660
           shares of Common Stock.

                                      -7-
<PAGE>


                  ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             THREE AND NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
                                   (UNAUDITED)

NOTE 2  -  STOCKHOLDERS' EQUITY (Continued)
          ---------------------

           COMMON STOCK TRANSACTION

           On July 6, 2004, the Company issued 26,500 shares of Common Stock and
           agreed to pay $10,000 per month to a corporation in consideration for
           the rendering for a six-month period of investor relation  consulting
           services, including the distribution of the Company's press releases,
           the  provision of related  strategic  advice and the inclusion of the
           Company on the  consultant's  website.  The Company agreed to provide
           the holder with "piggy-back"  registration rights with respect to the
           shares.


           DECEMBER 2003 PRIVATE PLACEMENT

           The  Company  completed  in  December  2003 a  private  placement  of
           1,645,000 shares of its common stock at $2.00 per share,  exempt from
           registration pursuant to Section 4(2) and Regulation D under the Act.
           In connection  with the offering,  the Company paid a cash commission
           of $75,000 to First Montauk Group Inc., as Placement Agent and issued
           to the  agent a five  year  warrant  to  purchase  50,000  shares  of
           Company's  common  stock at a price of $2.00 per  share.  Legal  fees
           approximating  $36,000  were also  incurred in  connection  with this
           private placement. Pursuant to its agreement with the purchasers, the
           Company at its expense  registered  the shares  issued and the shares
           issuable upon exercise of the warrant under the Act

           TREASURY STOCK TRANSACTIONS

           The Company  purchased  prior to March 31, 2003,  in the open market,
           100,000 shares of common stock for a total  consideration of $306,841
           pursuant to the  authorization  by the Board of Directors on June 27,
           2002.

           WARRANTS AND OPTIONS

           On July 20, 2004, the Company issued  five-year  warrants to purchase
           50,000  shares  of  Common  Stock at a price of $3.00 per share to an
           individual  in  consideration  of his  agreement to render  financial
           consulting  services.   Pursuant  to  rules  of  the  American  Stock
           Exchange,  stockholders  at the next Annual  Meeting will be asked to
           ratify the issuance of the warrants .

           On July 8, 2004,  Elite  Labs,  to finance  the  purchase  of certain
           machinery  and  equipment,  borrowed  $400,000  and  designees of the
           lender received 50,000 warrants which vested immediately, to purchase
           an aggregate of 50,000 shares of the Company's  common stock at $4.20
           per share.

           On June 3, 2004, the Company granted  five-year  warrants to purchase
           100,000  shares  of  Common  Stock at a price of $2.50 per share to a
           Company as consideration for financial consulting services.

           The per share  weighted-average  fair  value of the  above  mentioned
           warrants  under this  subcaption  ranged  from $.83 - $1.50 using the
           Black-Scholes    warrant    pricing    model   with   the   following
           weighted-average  assumptions: no dividend yield; expected volatility
           of 80.34;  risk free interest  rate of 3.0% and expected  lives of 10
           years.

           In June 2004, the  stockholders of the Company  approved the adoption
           by the Board of  Directors  of the  Company's  2004 Stock Option Plan
           (the "2004 Plan"). The Plan reserves 1,500,000 shares of Common Stock
           for grant by the Board of  Directors  of  incentive  or  nonqualified
           stock options to officers, employees, or directors of and consultants
           to the Company.

                                      -8-
<PAGE>


                  ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             THREE AND NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
                                   (UNAUDITED)

NOTE 2  -  STOCKHOLDERS' EQUITY (Continued)
          ---------------------

           WARRANTS AND OPTIONS (Continued)

           On June 22,  2004,  the Company  granted  under its 2004 Stock Option
           Plan,  120,000  options to Directors and 123,300 options to employees
           to purchase an aggregate of 243,300 shares of Common Stock at a price
           of $2.34 per share.  The 120,000  options granted under the 2004 Plan
           to members of the Board of  Directors  expire ten years from the date
           of issuance and are fully vested. The per share weighted-average fair
           value  of  the   243,300   options   amounted   to  $1.91  using  the
           Black-Scholes    options    pricing    model   with   the   following
           weighted-average  assumptions: no dividend yield; expected volatility
           of 76.69%; risk free interest rate of 4.0%; and expected lives of ten
           years. The Company has taken a charge of $229,632 for the nine-months
           ended  December  31,  2004,  which  represents  the fair value of the
           vested options,  utilizing the Black-Scholes options pricing model on
           the grant date.

           The 120,000  options  granted to  employees  were in  replacement  of
           previously  granted options  containing  exercise prices greater than
           $2.34  per  share.  On  the  same  date  the  stockholders   approved
           amendments  made  previously by the Board of Directors to outstanding
           warrants and options  including  the repricing of options to purchase
           420,000 shares of which options to purchase  330,000 shares were held
           by  Directors  of the  Company.  Accordingly,  during the nine months
           ended  December  31, 2004  options  with  respect to an  aggregate of
           543,300  options were repriced  (treating the options granted in lieu
           of  outstanding  options as repriced  options).  The new options have
           exercise  prices between $2.21 and $2.34 per share.  162,300  options
           are vested and 381,000  options  are in various  stages of three year
           vesting periods.  The options expire ten years from date of issuance.
           The per share  weighted-average fair value of options repriced during
           the nine months ended  December  31, 2004,  ranged from $1.51 - $1.91
           using the  Black-Scholes  options  pricing  model with the  following
           weighted-average  assumptions: no dividend yield; expected volatility
           of 76.69%; risk-free interest rate of 4.0%; and expected lives of ten
           years. The Company has taken a charge of $397,732 for the nine months
           ended  December  31,  2004  which  represents  the fair  value of the
           options vested,  utilizing the Black-Scholes options pricing model on
           each grant date.

           The following  table  illustrates the effect on net loss and loss per
           share  as if the  Company  had  applied  the fair  value  recognition
           provisions of SFAS No. 123 to all  outstanding and unvested awards in
           each period presented:

<TABLE>
<CAPTION>
                                           THREE MONTHS ENDED DECEMBER       NINE MONTHS ENDED DECEMBER
                                          -----------------------------     -----------------------------
                                              2004             2003             2004             2003
                                          ------------     ------------     ------------     ------------
<S>                                       <C>              <C>              <C>              <C>
Net loss as reported                      $ (1,285,416)    $ (1,369,149)    $ (4,649,827)    $ (4,963,481)

Add: Stock-based compensation
expense included in reported net loss,
net of related tax effects                      44,982          633,167          964,300        1,684,332

Deduct: Total stock-based
compensation expense determined
under fair value method for all awards
net of related tax effects                     (58,739)        (853,370)      (1,005,571)      (2,344,940)
                                          ------------     ------------     ------------     ------------

Pro-forma net loss                          (1,299,173)      (1,589,352)      (4,691,098)      (5,624,089)

Loss per share as reported                        (.10)            (.12)            (.38)            (.46)
Pro-forma loss per share                          (.10)            (.14)            (.38)            (.52)
</TABLE>

                                      -9-
<PAGE>


                  ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             THREE AND NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
                                   (UNAUDITED)

NOTE 2  -  STOCKHOLDERS' EQUITY (Continued)
           --------------------

           WARRANTS AND OPTIONS (Continued)

           At December 31, 2004,  Elite had outstanding  2,377,050  options with
           exercise  prices  ranging from $1.00 to $3.00 and 8,514,750  warrants
           (exclusive  of the Short Term  Warrants  and the Long Term  Warrants)
           with  exercise  prices  ranging from $2.00 to $5.00;  each option and
           warrant representing the right to purchase one share of common stock.

           CLASS A WARRANT EXCHANGE OFFER

           On October 23, 2002, the Company entered into a Settlement  Agreement
           with various parties in order to end a Consent  Solicitation  contest
           and various  legal  actions  initiated by the Company.  The agreement
           provided,  among other  things,  an agreement to commence an exchange
           offer (the "Exchange Offer") whereby holders of the Company's Class A
           Warrants which expired on November 30, 2002 (the "Old  Warrants") had
           the opportunity to exchange those warrants for New Warrants (the "New
           Warrants")  upon  payment to the  Company of $.10 per share of common
           stock  issuable upon the exercise of the old  warrants.  In September
           2003 the  Company  discontinued  the  Exchange  offer and  issued New
           Warrants  to the record  holders as of  November  30, 2002 of the Old
           Warrants without requiring any cash payment.

           New Warrants are  exercisable for the same number of shares of common
           stock as the Old  Warrants at an  exercise  price of $5.00 per share,
           and  expires  on  November  30,  2005.   The  New  Warrants  are  not
           transferable except pursuant to operation of law.

           During the year ended March 31, 2003, the Company  expensed  $242,338
           relating to the Exchange  Offer,  which  represents the fair value of
           the New Warrants,.  The per share weighted-average fair value of each
           warrant on the date of grant was $1.10 using the Black-Scholes option
           pricing model with the  following  weighted-average  assumptions:  no
           dividend yield;  expected  volatility of 73.77%;  risk-free  interest
           rate of 2.88%;  and expected lives of 3 years. The elimination of the
           $0.10 per share fee  resulted  in an  additional  charge of  $172,324
           during the year ended March 31, 2004.

           For the year ended March 31, 2003 the Company incurred legal fees and
           other costs amounting to approximately  $100,000,  in connection with
           the Exchange Offer, which was charged to additional paid-in capital.

NOTE 3  -  COMMITMENTS AND CONTINGENCIES
           -----------------------------

           SETTLEMENT OF LITIGATION WITH ATUL M. MEHTA

           The Company had an employment agreement ("Employment Agreement") with
           its former President/CEO, Dr. Atul M. Mehta ("Mehta").

           On June 3, 2003,  Mehta resigned from all positions that he held with
           the  Company,   while  reserving  his  rights  under  his  Employment
           Agreement  and under  common law. On July 3, 2003,  Mehta  instituted
           litigation  against  the  Company  and  one of its  directors  in the
           Superior  Court of New  Jersey,  alleging,  among other  things,  the
           breach of his Employment Agreement and defamation,  and claiming that
           he is  entitled  to receive  his  salary  through  June 6, 2006.  The
           Company has made certain counter claims against Mehta.

                                      -10-
<PAGE>


                  ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             THREE AND NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
                                   (UNAUDITED)


NOTE 3  -  COMMITMENTS AND CONTINGENCIES (Continued)
           -----------------------------

           SETTLEMENT OF LITIGATION WITH ATUL M. MEHTA (Continued)

           Under a settlement agreement dated April 21, 2004, Mehta relinquished
           any rights to the Company's  patents and intellectual  properties and
           agreed to certain non-disclosure and certain limited  non-competition
           covenants.  The  Company  paid Mehta  $400,000  and  certain  expense
           reimbursements,  and received a short-term  option for the Company or
           its designees to acquire all of the shares of the common stock of the
           Company  held by Mehta and his  affiliates  at $2.00 per  share.  The
           Company paid $100,000 into escrow which was released to Mehta because
           the option was not exercised in full. As part of the settlement,  the
           Company  extended  expiration  dates of certain  options to  purchase
           770,000 shares of common stock at prices ranging from $1.00 to $10.00
           per  share  held  by  Mehta  and  also   provided  him  with  certain
           "piggyback" registration rights with respect to shares underlying his
           options.  The Company entered into an agreement dated October 7, 2004
           with Mehta  pursuant  to which  100,000 of the  $10.00  options  were
           terminated,  the expiration  dates of the other 670,000  options were
           extended  from June 13,  2005 to December  31, 2007 and the  exercise
           price of 170,000 options were reduced from $10.00 to $2.34 per share.
           The  agreement  also  obligates the Company to bear Mehta's legal and
           other expenses for the two year period from the litigation settlement
           will not exceed $50,000.

           REFERRAL AGREEMENT

           In January 2002, the Company  entered into a Referral  Agreement with
           one of its directors  (Referring  Party) whereby the Company will pay
           the Referring Party a fee based upon payments received by the Company
           from  sales  of  products,   development  fees,  licensing  fees  and
           royalties  generated  as a  direct  result  of  the  Referring  Party
           identifying  customers  for  the  Company.  These  amounts  are to be
           reduced  by  the  cost  of  goods  sold  directly   incurred  in  the
           manufacturing  or  development  of  products  as well  as any  direct
           expenses associated with these efforts. The Referral Agreement has no
           expiration date.

           The Company  committed to pay the Referring Party a referral fee each
           year as follows:

                    PERCENTAGE OF                 REFERRAL BASE
                    REFERRAL BASE            FROM                TO
                         ----             ----------         ----------
                          5%              $        0         $1,000,000
                          4%               1,000,000          2,000,000
                          3%               2,000,000          3,000,000
                          2%               3,000,000          4,000,000
                          1%               4,000,000          5,000,000

           As of December 31, 2004,  no payments  were required to be made under
           this agreement.

           COLLABORATIVE AGREEMENTS

           On December 18,  2003,  the Company and Pivotal  Development,  L.L.C.
           entered into an agreement  to develop a  controlled  release  product
           utilizing Elite's proprietary drug delivery  technology.  The product
           is a generic  equivalent  to a drug losing  patent  exclusivity  with
           addressable  market revenues of approximately  $150 million per year.
           The agreement also provides an option to develop a controlled release
           NDA product.

           Under  the  collaboration  agreement,  Pivotal  Development  will  be
           responsible  for  taking  the  Elite  formulation   through  clinical
           development and the FDA regulatory approval process. The partners are
           to seek a license during the development  cycle from a pharmaceutical
           company,  which has the resources to  effectively  market the product
           and share the cost of defending the product against any lawsuits.

           Elite and  Pivotal  are to bear  costs in their  respective  areas of
           responsibility.  In addition  Pivotal is to pay Elite  $750,000  upon
           attainment of certain milestones outlined in the agreement.

                                      -11-
<PAGE>


                  ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             THREE AND NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
                                   (UNAUDITED)

NOTE 3  -  COMMITMENTS AND CONTINGENCIES (Continued)
           -----------------------------

           COLLABORATIVE AGREEMENTS (Continued)

           Pivotal did not raise the capital  required to move  forward with the
           development  agreement  and did not go forward under the terms of the
           agreement.  Elite is  attempting  to identify other partners for this
           project.

           In June 2001,  the Company  entered  into two  separate  and distinct
           development  and  license  agreements  with  another   pharmaceutical
           company, ECR Pharmaceuticals, Inc. ("ECR"). The Company is developing
           two drug  compounds for the partner in exchange for certain  payments
           and royalties. The Company also reserves the right to manufacture the
           compounds.  On November  15,  2004,  ECR  announced  that it launched
           LODRANE 24, utilizing Elite's exclusive extended release  technology,
           for  once  daily  dosing.  The  Company  is  currently  manufacturing
           commercial  batches for promotion by ECR for which Elite will receive
           a royalty  on product  revenues.  No amounts  were  earned  under the
           agreements  in the nine months  ended  December  31, 2004 or the nine
           months ended December 31, 2004.

           On September  13, 2002,  the  Company,  entered into a  manufacturing
           agreement with Ethypharm S.A. ("Ethypharm").  Under the terms of this
           agreement,   the  Company   initiated  the  manufacturing  of  a  new
           prescription  drug  product for  Ethypharm.  The Company  received an
           upfront  manufacturing  fee for the  first  phase  of the  technology
           transfer and billed an additional  amount upon the  completion of the
           first phase of manufacturing.

           The Company is entitled to receive additional fees in advance for the
           final  phase  of the  manufacturing.  In  addition,  if and  when FDA
           approval is obtained and if requested by Ethypharm,  the Company will
           manufacture  commercial  batches of the product on terms to be agreed
           upon.  There were no amounts  earned in the nine month  periods ended
           December 31, 2004 and 2003.

           EMPLOYMENT AGREEMENT

           On July 23,  2003,  the Company  appointed  Bernard Berk as its Chief
           Executive  Officer  and  President  and  entered  into an  employment
           agreement  with him.  The  initial  term of this  agreement  is three
           years. Pursuant to the agreement:

           -  Mr. Berk is  entitled  to receive a base  salary of  $200,000  per
           annum,  subject  to  increase  to  $330,140  if and when the  Company
           consummates  a Strategic  Transaction  (as defined in the  employment
           agreement);

                                      -12-
<PAGE>


                  ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             THREE AND NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
                                   (UNAUDITED)

NOTE 3  -  COMMITMENTS AND CONTINGENCIES (Continued)
           -----------------------------

           EMPLOYMENT AGREEMENT (Continued)

           -  The Company  confirmed  its  grant to Mr.  Berk on June 3, 2003 of
           options to purchase  300,000 shares of the Company's  common stock at
           $2.01 per share. All of these options are vested.

           -  The Company  granted Mr.  Berk  options to purchase an  additional
           300,000  shares of its common stock,  with an exercise price equal to
           $2.15, the closing price of the Company's common stock on the date of
           grant.  These  options  will  vest  solely  upon  consummation  of  a
           Strategic Transaction, as defined.

           -  Mr. Berk will be entitled to receive severance in accordance  with
           the employment agreement if he is terminated without cause or because
           of  his  death  or  permanent  disability  or  if he  terminates  his
           employment for good reason or as a result of a "change of control" as
           defined.  The severance will be payable in accordance  with the terms
           of his employment agreement.

           On May 14, 2004, the Company's Board of Directors  appointed  Bernard
           Berk to the position of Chairman of the Board of Directors.

           CONSULTING AGREEMENTS

           On July 3, 2003,  the Company  entered into an agreement with Leerink
           Swann & Company to  provide a  Valuation  and a  Fairness  Opinion in
           order  for  the   Company  to   complete   a   proposed   acquisition
           (subsequently   not   effected)   for  which  the   Company   paid  a
           non-refundable  retainer  fee of  $50,000.  If and when the  Board of
           Directors requests a Fairness Opinion,  Leerink's  compensation is to
           be $50,000.  No amounts were  expensed in the nine month period ended
           December 31, 2004 and 2003.

           The Company entered into one year consulting  agreements with each of
           Saggi Capital Corp. and Bridge Ventures Inc. on November 4, 2003. The
           consultant's   services   include  advice  with  respect  to  overall
           strategic  planning,  financing  opportunities,  acquisition  policy,
           commercial  and  investment  banking  relationships  and  stockholder
           matters.  In consideration  of the consultant's  agreement to provide
           services,  the  Company  pays  each  consultant  $75,000  in  monthly
           installments  of $6,250  and issued to each  consultant  a warrant to
           purchase  100,000 shares of the Company's  common stock at a price of
           $2.00 per share.  These  agreements  were  extended for an additional
           year  until  November  4, 2005 at a cash fee of $6,250  per month for
           each.

           On June 3, 2004,  the  Company  agreed to engage a company to provide
           consulting  services and issued in  connection  therewith a five-year
           warrant  to  purchase  100,000  shares of Common  Stock at a price of
           $2.50 per share.

           On July 20,  2004,  the  Company  agreed to engage an  individual  to
           provide  financial  consulting  services  and  issued  in  connection
           therewith a three-year  warrant to purchase  50,000  shares of common
           stock at a price of $3.00  per  share.  Pursuant  to the rules of the
           American  Stock  Exchange,  the  issuance  of the  warrants  is to be
           presented  for  ratification  by  shareholders  at  the  next  Annual
           Meeting.

           For the  three  and nine  month  periods  ended  December  31,  2004,
           consulting  expenses under these agreements  amounted to an aggregate
           of $30,000 and  $120,000,  respectively.  For the three  months ended
           December  31,  2003,   consulting  expenses  under  these  agreements
           amounted to $15,000 plus approximately  $470,000  attributable to the
           issuance of warrants.

                                      -13-
<PAGE>


                  ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             THREE AND NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
                                   (UNAUDITED)

NOTE 4  -  SUBSEQUENT EVENTS
           -----------------

           Effective  January 24, 2005, Mr. John Moore resigned as a director of
           the Company and a member of its Audit and  Nominating  Committee  and
           was replaced by Mr. Edward  Neugeboren who was appointed  pursuant to
           the  Certificate of  Designation of the Series A Preferred  Stock  by
           the Placement Agent of the private placement in which the shares were
           sold as the agent of the Preferred Shareholders.  He was appointed by
           the Board of Directors to the Audit and Nominating Committees.

           The  Company has  announced  March 22, 2005 as the date of its annual
           shareholders meeting and the record date for such meeting is February
           15, 2005.

           During the period  January 1, 2005 through February 9, 2005,  245,322
           shares of Series A Preferred  Stock had been converted into 2,453,220
           shares of common stock.

           During  the period  January 1, 2005  through  February  9, 2005,  the
           Company  received  proceeds of $313,005  from the exercise of 203,250
           short-term  warrants  resulting in the issuance of 203,250  shares of
           Common Stock.

           Subsequent  to December 31, 2004,  the Company  received  proceeds of
           $15,000 from the exercise of 7,500 warrants resulting in the issuance
           of 7,500 shares of Common Stock.

                                      -14-
<PAGE>


                           ELITE PHARMACEUTICALS, INC.
                                     PART I.

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

        THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2004 COMPARED TO
            THE THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2003

        The following discussion and analysis should be read in conjunction with
the  Consolidated  Financial  Statements,  the  related  Notes  to  Consolidated
Financial  Statements  and  Management's  Discussion  and  Analysis of Financial
Condition and Results of Operations  included in the Company's  Annual Report on
Form 10-K for the  fiscal  year  ended  March  31,  2004  (the  "10-K")  and the
Unaudited  Consolidated  Financial  Statements and related Notes to Consolidated
Financial  Statements  included in Item 1 of Part I of this Quarterly  Report on
Form 10-Q.

        The   Company   has   included   in  this   Quarterly   Report   certain
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation Reform Act of 1995 concerning the Company's business,  operations and
financial condition.  "Forward-looking statements" consist of all non-historical
information,   and  the  analysis  of  historical  information,   including  the
references in this  Quarterly  Report to future  revenue  growth,  collaborative
agreements,  future expense  growth,  future credit  exposure,  earnings  before
interest,   taxes,   depreciation  and   amortization,   future   profitability,
anticipated   cash  resources,   anticipated   capital   expenditures,   capital
requirements, and the Company's plans for future periods. In addition, the words
"could",  "expects",  "anticipates",  "objective",  "plan",  "may affect",  "may
depend", "believes",  "estimates",  "projects" and similar words and phrases are
also intended to identify such forward-looking statements.

        Actual  results  could  differ  materially  from those  projected in the
Company's forward-looking statements due to numerous known and unknown risks and
uncertainties,   including,  among  other  things,  unanticipated  technological
difficulties,  the  volatile  and  competitive  environment  for  drug  delivery
products,  changes in  domestic  and  foreign  economic,  market and  regulatory
conditions, the inherent uncertainty of financial estimates and projections, the
uncertainties involved in certain legal proceedings,  instabilities arising from
terrorist actions and responses thereto, and other  considerations  described as
"Risk Factors" in other filings by the Company with the SEC including the Annual
Report on Form 10-K. Such factors may also cause  substantial  volatility in the
market price of the Company's Common Stock. All such forward-looking  statements
are current only as of the date on which such  statements were made. The Company
does not  undertake  any  obligation  to  publicly  update  any  forward-looking
statement to reflect  events or  circumstances  after the date on which any such
statement is made or to reflect the occurrence of unanticipated events.

OVERVIEW

        The Company is involved in the  development of controlled  drug delivery
systems and  products.  Its products are in varying  stages of  development  and
testing. In addition, from time to time, the Company has also conducted research
and development  projects on behalf of other  pharmaceutical  companies although
these activities have generated only limited revenue to date.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

        Management's  discussion addresses the Company's  consolidated financial
statements,  which have been prepared in accordance with  accounting  principles
generally  accepted in the United States of America.  The  preparation  of these
financial  statements requires management to make estimates and assumptions that
affect the  reported  amounts  of assets  and  liabilities,  the  disclosure  of
contingent  assets and  liabilities at the date of financial  statements and the
reported  amounts of revenues and expenses  during the reporting  period.  On an
ongoing basis, management evaluates its estimates and judgment,  including those
related to long-lived  assets,  intangible  assets,  income taxes,  equity-based
compensation,  and contingencies and litigation.  Management bases its estimates
and  judgments on  historical  experience  and on various other factors that are
believed to be reasonable 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.

                                      -15-
<PAGE>


                           ELITE PHARMACEUTICALS, INC.
                                     PART I.

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

        THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2004 COMPARED TO
            THE THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2003

                                   (CONTINUED)

        Management  believes the following critical accounting  policies,  among
others,  affect  its  more  significant  judgments  and  estimates  used  in the
preparation of its consolidated financial statements.

        The Company's most critical  accounting policies include the recognition
of revenue upon  completion  of certain  phases of projects  under  research and
development  contracts.  Revenues  from  these  contracts  are  recognized  when
management determines the Company has completed its obligation under each phase.
The Company  also  assesses a need for an  allowance  to reduce its deferred tax
assets to the amount that it believes  are more likely than not to be  realized.
Management  estimates its net operating  losses will probably not be utilized in
the near future,  and has not  recognized  a tax benefit from this  deferred tax
asset. If management  anticipated the Company being  profitable,  a deferred tax
benefit would be  recognized  and such  estimate  would  increase net income and
earnings  per share  accordingly.  The Company  assesses the  recoverability  of
long-lived   assets  and  intangible   assets  whenever  events  or  changes  in
circumstances  indicate  that  the  carrying  value  of the  assets  may  not be
recoverable.  Management  estimates  the  Company's  patents  and  property  and
equipment  are not  impaired.  If these  assets were  considered  impaired,  the
Company would  recognize an impairment  loss which would  increase the Company's
net loss and net loss per share  accordingly.  The Company assesses its exposure
to current  commitments  and  contingencies  by advice of counsel.  It should be
noted that  actual  results  may differ  from these  estimates  under  different
assumptions or conditions.

        During the fiscal year ended  March 31,  2003,  the  Company  elected to
prospectively recognize the fair value of stock options granted to employees and
members of the Board of  Directors,  effective as of the beginning of the fiscal
year. The prospective method allowed by the Financial Accounting Standards Board
effects the Company's results of operations for the three and nine month periods
ended  December  31, 2004 and 2003 as options  were  granted or repriced  during
these periods which either vested  immediately or vest over three to five years.
The Company does not know the future effect of options and warrants which may be
granted to  employees  and  members  of the Board of  Directors.  The  Financial
Accounting   Standards  Board  provided  three   transition   alternatives   for
recognizing  stock-based  compensation  cost  using the fair  value  method.  If
management did not elect the prospective  method during the three and nine month
periods ended  December 31, 2004 and 2003, net loss and net loss per share would
have been decreased.  However,  the two other methods would have required either
greater  compensation  cost  to be  recognized  as  an  expense  or  retroactive
restatement of previously reported net loss.

RESULTS OF CONSOLIDATED OPERATIONS

THREE MONTHS ENDED DECEMBER 31, 2004 COMPARED TO THREE MONTHS ENDED
DECEMBER 31, 2003

        As a result of  inadequate  funds to conduct  significant  research  and
development  and the  resignations  in  June  2003  of the  Company's  principal
scientific  officers,  the  Company was unable to  generate  revenues  under its
existing customer  contracts or to secure revenues from other sources during the
three  months  ended  December  31,  2004.  Revenues  for the three months ended
December 31, 2003 were $30,000, which consisted of research and development fees
earned in conjunction with its distinct  development,  license and manufacturing
agreements.

                                      -16-
<PAGE>


                           ELITE PHARMACEUTICALS, INC.
                                     PART I.

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

        THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2004 COMPARED TO
            THE THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2003

                                   (CONTINUED)

THREE MONTHS ENDED DECEMBER 31, 2004 COMPARED TO THREE MONTHS ENDED
DECEMBER 31, 2003 (continued)

        General and administrative  expenses for the three months ended December
31, 2004 were  $625,323,  an increase of $230,456 or 58.4% from $394,867 for the
comparable period of the prior year, substantially due to increased salaries and
staff,  consulting  fees and the  write-off of a bad debt  relating  to accounts
receivable.

        Research and  development  expenses for the three months ended  December
31, 2004 were  $726,175,  an increase of $189,452 or 35.3% from $536,723 for the
comparable  period  of  the  prior  year,  substantially  due  to  increases  in
consulting fees, lab and manufacturing supplies and raw materials.

        Other income for the three months ended  December 31, 2004 was $111,442,
an increase of $489,391 as compared with other  expenses of  $(377,949)  for the
three months ended December 31,2003. This increase was primarily the result of a
$104,665 increase in sales of New Jersey tax losses and the $587,983 decrease in
charges in the 2003 period related to the issuance of stock warrants.

        As a result  of the  foregoing,  the  Company's  net loss for the  three
months ended  December 31, 2004 was  $1,285,416  compared to $1,369,149  for the
comparable period of the prior year.

NINE MONTHS ENDED DECEMBER 31, 2004 COMPARED TO NINE MONTHS ENDED
DECEMBER 31, 2003

        Revenues for the nine months ended December 31, 2004 were $151,450,  all
realized  during  the first six  months of the  period of which  $150,000  was a
non-refundable payment received from Purdue Pharma L.P. granting it the right to
evaluate certain abuse  resistance drug  formulation  technology of the Company.
The Company was unable to generate any significant additional revenues under its
existing customer  contracts for the nine months ended December 31, 2004 and any
revenues, other than $30,000, during the year earlier nine month period 2003 due
to inadequate  funds and the resignation of the Company's  principal  scientific
officers in 2003.

        General and  administrative  expenses for the nine months ended December
31, 2004 were $1,675,041,  an increase of $131,115 or (8.5%) from $1,543,926 for
the comparable  period of the prior year,  substantially due to the increases in
salaries and staff,  consulting fees and the write-off of a bad debt relating to
accounts receivable.

        Research and development expenses for the nine months ended December 31,
2004 were  $1,937,794,  an  increase of  $457,006  or  approximately  30.9% from
$1,480,788 for the comparable period of the prior year,  primarily the result of
increased research and development wages, consulting fees, lab and manufacturing
supplies and raw materials.

        Other  expenses  for the  nine  months  ended  December  31,  2004  were
$916,362, a decrease of $782,575, or approximately 46.1% from $1,698,937 for the
comparable  period of the prior year, due to reductions of $1,117,764 in charges
related to the  issuance of stock  options and warrants and a charge of $172,324
in the 2003 period related to the warrant  exchange offer,  offset  partially by
a charge  relating to the  repricing of stock options in the amount of $397,732.

        As a result of the  foregoing the Company's net loss for the nine months
ended December 31, 2004 was $4,649,827 compared to $4,963,481 for the comparable
period of the prior year.

                                      -17-
<PAGE>


                           ELITE PHARMACEUTICALS, INC.
                                     PART I.

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

        THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2004 COMPARED TO
            THE THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2003

                                   (CONTINUED)

MATERIAL CHANGES IN FINANCIAL CONDITION

        The Company's  working  capital (total current assets less total current
liabilities), which was $1,289,764 as of March 31, 2004, increased to $3,864,412
as of December 31, 2004, primarily due to net proceeds received from the sale of
Series A Preferred  Stock  ($5,866,600)  partially  offset by the $3,356,146 net
cash loss from operations, exclusive of non-cash charges of $1,293,680.

        The  Company   experienced   negative  cash  flows  from  operations  of
$3,610,066  for the nine months ended  December 31, 2004,  primarily  due to the
Company's  net  loss from  operations  of  $4,649,827,  less non-cash charges of
$1,293,680,  which  included  the  charges of  $397,732  in connection  with the
repricing of stock  options,  $325,558 in connection  with the issuance of stock
options, and $241,010 in connection with the issuance of stock warrants.

        The Company recently  completed a Good  Manufacturing  Practices ("GMP")
batch for a product  currently  licensed with a  pharmaceutical  company under a
development and license  agreement  entered into June 2001. The Company received
$30,000 in  November  2003 under the  Agreement  and  expects  to  complete  two
additional  GMP  batches  in the near  future  under the terms of the  licensing
agreement.  The  Company  expects  to  manufacture  the  product  with  revenues
projected to be generated in the fourth  quarter of its fiscal year ending March
31, 2005 and anticipates the earning of additional  milestone payments under the
Agreement subject to completion of the GMP batches.

        The Company recently entered into an agreement with Pivotal Development,
L.L.C. pursuant to which the Company is to receive an aggregate of $750,000 upon
attaining  certain  milestones.   The  Company  anticipates  that  some  of  the
milestones will be achieved the last quarter of the current fiscal year.

        No assurance  can be given that the Company will  consummate  any of the
transactions discussed above.

LIQUIDITY AND CAPITAL RESOURCES

        For the nine months  ended  December  31,  2004,  the  Company  recorded
positive  cash flow and  financed  its  operations  through  utilization  of its
existing cash. In October 2004,  the Company raised net cash of $5,866,600  from
its private  placement of its Series A Preferred  Stock.  The Company's  working
capital at December 31, 2004 was $3.8 million  compared with working  capital of
$1.3 million at March 31, 2004.  Cash and cash  equivalents at December 31, 2004
were $4.6  million,  an increase of $2.5  million from the $2.1 million at March
31, 2004.

                                      -18-
<PAGE>


                           ELITE PHARMACEUTICALS, INC.

                                     PART I.

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

        THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2004 COMPARED TO
            THE THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2003

                                   (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES (Continued)

        In order to conserve  cash for the twelve  months  ending  December  31,
2005,  the Company  intends to reduce costs by  continuing  the reduction of the
number of products under active development to nine.

        The Company purchased machinery and equipment amounting to approximately
$426,000 in the nine months ending  December 31, 2004.  This equipment was fully
financed except for minor expenditures. No capital expenditures were made during
the nine months ended December 31, 2003.

        The  Company had bonds of  $2,345,000  outstanding,  as of December  31,
2004.  The  bonds  bear  interest  at a rate of 7.75%  per  annum and are due on
various dates between 2005 and thereafter. The bonds are secured by a first lien
on the Company's facility in Northvale, New Jersey. Pursuant to the terms of the
bonds, several restricted cash accounts have been established for the payment of
bond principal and interest.  Bond proceeds were utilized for the refinancing of
the land and  building  the  Company  currently  owns,  the  purchase of certain
manufacturing equipment and related building improvements and the maintenance of
a $300,000 debt service reserve. All of the restricted cash, other than the debt
service  reserve,  is  expected  to be  expended  within  twelve  months  and is
therefore  categorized as a current asset on the Company's  consolidated balance
sheet as of  December  31,  2004.  Pursuant  to the terms of the bond  indenture
agreement  pursuant to which the bonds were  issued,  the Company is required to
observe certain  covenants,  including  covenants  relating to the incurrence of
additional  indebtedness,  the granting of liens and the  maintenance of certain
financial covenants.  As of December 31, 2004 the Company was in compliance with
the covenants contained in the bond indenture agreement.

        On July 8, 2004, Elite Labs entered into a loan and financing  agreement
in order to finance the purchase of certain machinery and equipment.  Elite Labs
borrowed $400,000 payable in 36 monthly installments of $13,671,each,  including
principal  and  interest  at 14% per  annum.  The first  four and the last three
months of  scheduled  payments are being held by the lender and were and will be
applied to the principal  balance when due. The loan is secured by two pieces of
equipment and the guaranty of the Company.  In addition,  the Company  issued to
designees of the lender 50,000  warrants,  which vest  immediately,  to purchase
50,000 shares of the Company's  common stock at $4.20 per share.  If the loan is
repaid within nine months,  15,000  warrants  will be forfeited,  but the lender
will be entitled to a $10,000 prepayment penalty. A charge for the cost of these
warrants is reflected in the nine month period ended December 31, 2004.

        The  Company  from  time  to  time  will  consider  potential  strategic
transactions  including  acquisitions,  strategic alliances,  joint ventures and
licensing arrangements with other pharmaceutical companies. The Company retained
an investment banking firm to assist with its efforts. There can be no assurance
that any such transaction will be available or consummated in the future.

                                      -19-
<PAGE>


                           ELITE PHARMACEUTICALS, INC.

                                     PART I.

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

        THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2004 COMPARED TO
            THE THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2003

                                   (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES (Continued)

        In October  2004,  the Company  effected a private  placement of 516,558
shares of its Series A Preferred Stock for gross proceeds of $6,600,000,  before
payment of  commission  of $623,520 and other  expenses.  The Series A Preferred
Shareholders  are  entitled  to a  preferential  dividend of 8% per annum of the
original  issue  price of $12.30 per share  payable on  December 1 and June 1 of
each year.  Dividends  are payable in cash or shares of common  stock  valued at
their fair market value as defined. The December 1, 2004 dividend of $75,076 was
paid by the issuance of 26,961 shares of Common Stock. The Company believes that
the net proceeds of the  placement  have  provided  sufficient  cash to fund the
Company's  operations and capital  requirements  through at least  September 30,
2005.

        On November 15, 2004, Elite's partner,  ECR, launched LODRANE 24, a once
a day allergy product,  utilizing Elite's extended release technology to provide
for once  daily  dosing.  Under  its  agreement  with  ECR,  Elite is  currently
manufacturing  commercial  batches of LODRANE 24 in exchange  for  royalties  on
product  revenues.  The  Company  expects  to  generate  cash  flows  from these
royalties  commencing in its fiscal  quarter  ended March 31, 2005.  The Company
expects  these  royalties  to  provide  additional  cash  flows to help fund its
continuing operations.

                                      -20-
<PAGE>


ITEM 3.         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

                The Company had no  investments  in marketable  securities as of
                December   31,  2004  or  assets  and   liabilities   which  are
                denominated  in a currency  other  than U.S.  dollars or involve
                commodity price risks.

PART II. OTHER INFORMATION

Item 2.         CHANGES IN SECURITIES AND USE OF PROCEEDS

        In  addition  to the  sales in  October  2004 of the  shares of Series A
Preferred Stock and the Short Term and Long Terms Warrants, which were described
in the Company's  Current  Reports on Form 8-K (see Item 6(b)),  since March 31,
2004, the Company issued or granted the following warrants or options:

        On June 3, 2004,  the  Company  granted  five year  warrants to purchase
100,000  shares  of Common  Stock at a price of $2.50  per share to D. H.  Blair
Investment Banking Corp. as consideration for financial consulting services.

        On July 6, 2004,  the Company  issued  26,500  shares of Common Stock to
CEOcast,  Inc. in partial consideration for rendering during a nine-month period
investor  relation  consulting  services  and agreed to provide  the holder with
"piggy-back" registration rights.

        On July 8, 2004,  the Company  issued three year warrants to purchase an
aggregate  of 50,000  shares  of  Common  Stock at a price of $4.20 per share to
designees of a lender in  connection  with the  refinancing  of the  outstanding
equipment  loan, with the provision that warrants to purchase 15,000 shares will
be cancelled  in the event of the  repayment in full of the new loan within nine
months,  in which  event  the  Company  is to pay  $10,000  to the  lender  as a
prepayment penalty.

        On July 20,  2004,  the  Company  issued to Mr.  Jason  Lyons  five-year
warrants to purchase 50,000 shares of Common Stock at a price of $3.00 per share
in  consideration  of his  agreement to render  financial  consulting  services.
Ratification  of the  issuance of the warrants  will be sought at the  Company's
next Annual Meeting of Stockholders.

        CEOcast,  Inc.  and  each of the  warrant  holders  has  agreed  that no
transfer of the shares,  warrants or any shares  acquired  upon  exercise of the
warrants will be made unless such transfer is registered under the Act or exempt
from registration under the Act.

        In the opinion of the Company,  the issuance of the foregoing securities
was exempt from registration under the Act by virtue of Section 4(2) of the Act.

Item 6.         EXHIBITS AND REPORTS ON FORM 8-K

                (a)     Exhibits:

                        10.1    Form of Warrant issued to D. H. Blair Investment
                                Banking Corp.

                        10.2    Form of Warrant  issued to  designees  of lender
                                with  respect to  financing  of  equipment  loan
                                filed as Exhibit 10.2 to Registrant's  Quarterly
                                Report on Form 10-Q for the three  months  ended
                                June  30,  2004  and   incorporated   herein  by
                                reference thereto.

                        10.3    Form of Warrant  issued to Jason  Lyons filed as
                                Exhibit 10.3 to Registrant's Quarterly Report on
                                Form 10-Q for the three  months  ended  June 30,
                                2004  and   incorporated   herein  by  reference
                                thereto.

                        31.1    Certification   of   Chief   Executive   Officer
                                pursuant  to Section  302 of the  Sarbanes-Oxley
                                Act of 2002.

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

                                      -21-
<PAGE>


                        32.1    Certification   of   Chief   Executive   Officer
                                pursuant  to Section  906 of the  Sarbanes-Oxley
                                Act  of  2002.

                        32.2    Certification   by   Chief   Financial   Officer
                                pursuant  to Section  906 of the  Sarbanes-Oxley
                                Act of 2002.

                (b)     Reports on Form 8-K.

                        The following  Reports on Form 8-K were filed during the
                        three months ended December 31, 2004:

                        Report on Form 8-K filed  October 12,  2004  relating to
                        items 3.02, 3.03, 5.03 and 9.01.

                        Report on Form 8-K filed  October 19,  2004  relating to
                        items 3.02 and 9.01

                        Report on Form 8-K filed  November  1, 2004  relating to
                        items 3.02 and 9.01


                                      -22-
<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.



                           ELITE PHARMACEUTICALS, INC.


Date: February 11, 2005    By: /s/Bernard Berk
                           ----------------------------
                           Bernard Berk
                           Chief Executive Officer
                           (Principal Executive Officer)


Date: February 11, 2005    By:  /s/Mark I. Gittelman
                           ----------------------------
                           Mark I. Gittelman
                           Chief Financial Officer and Treasurer
                           (Principal Financial and Accounting Officer)



                                      -23-