UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                |X| QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended October 31, 2004


               | | TRANSITION REPORT UNDER SECTION 13 or 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                   For the transition period from _____to_____

                        Commission file number 001-32177

                               NOVADEL PHARMA INC.
        (Exact name of small business issuer as specified in its charter)

           Delaware                                       22-2407152
(State or other jurisdiction of                       (I.R.S. Employer
 incorporation or organization)                      Identification No.)


        25 Minneakoning Road
       Flemington, New Jersey                                08822
(Address of Principal Executive Offices)                   (Zip Code)

                                 (908) 782-3431
                           (Issuer's telephone number)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes |X| No |_|

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 33,491,437 shares of common
stock outstanding as of December 2, 2004.
<PAGE>

                                      INDEX

                                                                            Page

PART I   FINANCIAL INFORMATION

Item 1.  Financial Statements..................................................1

Item 2.  Management's Discussion and Analysis or Plan of Operation............11

Item 3.  Controls and Procedures..............................................16

PART II  OTHER INFORMATION

Item 1.  Legal Proceedings....................................................19

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds..........19

Item 3.  Defaults Upon Senior Securities......................................19

Item 4.  Submission of Matters to a Vote of Security Holders..................19

Item 5.  Other Information....................................................19

Item 6.  Exhibits.............................................................19

Signatures....................................................................20


                                       ii
<PAGE>

SAFE HARBOR STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995

This  Current  Report  on Form  10-QSB  includes  "forward-looking  statements",
including statements regarding the Company's expectations,  beliefs,  intentions
or strategies for the future and the Company's  internal controls and procedures
and outstanding financial reporting obligations and other accounting issues. The
Company  intends  that  all   forward-looking   statements  be  subject  to  the
safe-harbor  provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking  statements are only predictions and reflect the Company's
views as of the date they are made with respect to future  events and  financial
performance. In particular, the "Management's Discussion and Analysis or Plan of
Operation"  section  in  Part  I,  Item  2 of  this  Quarterly  Report  includes
forward-looking statements that reflect the Company's current views with respect
to future  events and  financial  performance.  The  Company  uses words such as
"expect,"  "anticipate,"  "believe,"  and  "intend" and similar  expressions  to
identify   forward-looking   statements.   A  number  of  important   risks  and
uncertainties could,  individually or in the aggregate,  cause actual results to
differ  materially  from  those  expressed  or  implied  in any  forward-looking
statements.

Examples  of the risks and  uncertainties  include,  but are not limited to: the
inherent risks and uncertainties in developing  products of the type the Company
is  developing;  possible  changes in the  Company's  financial  condition;  the
progress of the Company's  research and  development;  clinical  trials  require
adequate supplies of drug substance and drug product,  which may be difficult or
uneconomical  to procure or manufacture;  timely  obtaining  sufficient  patient
enrollment  in the  Company's  clinical  trials;  the impact of  development  of
competing  therapies  and/or  technologies  by other  companies;  the  Company's
ability to obtain additional  required  financing to fund its research programs;
the  Company's  ability  to enter into  agreements  with  collaborators  and the
failure of collaborators to perform under their agreements with the Company; the
progress of the FDA  approvals in  connection  with the conduct of the Company's
clinical  trials and the marketing of the  Company's  products;  the  additional
costs and  delays  which may  result  from  requirements  imposed  by the FDA in
connection  with  obtaining  the required  approvals;  the risks  related to the
Company's  internal controls and procedures;  and the risks identified under the
section  entitled  "Risk  Factors"  following Item 5 in Part II of the Company's
Annual Report on Form 10-KSB for the fiscal year ended July 31, 2004,  and other
reports,  including  this report and other filings filed with the Securities and
Exchange Commission from time to time.

                                      iii
<PAGE>

                                     PART I

                              FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS.


                               NOVADEL PHARMA INC.
                            CONDENSED BALANCE SHEETS
                    AS OF OCTOBER 31, 2004 AND JULY 31, 2004

<TABLE>
<CAPTION>
                                                                                   October 31,          July 31,
                                                                                      2004                2004
                                                                                                      As Restated
                                                                                   (Unaudited)      (Notes 1 and 3)
                                                                                --------------------------------------
<S>                                                                               <C>                 <C>
ASSETS

Current Assets:

  Cash and cash equivalents                                                       $ 1,835,000         $  2,166,000
  Short-term investments                                                            6,439,000            6,211,000
  Accounts receivable - trade                                                          65,000              130,000
  Prepaid expenses and other current assets                                           281,000              255,000
                                                                                ----------------------------------
     Total Current Assets                                                           8,620,000            8,762,000

  Property and equipment, net                                                       1,472,000            1,066,000
  Long-term investments                                                             1,548,000            1,307,000
  Other assets                                                                        351,000              351,000
  Other investment                                                                    500,000                    -
                                                                                ----------------------------------
TOTAL ASSETS                                                                      $12,491,000         $ 11,486,000
                                                                                ==================================
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable-trade                                                        $     275,000         $    241,000
  Accrued expenses and other current liabilities                                      827,000              798,000
  Current portion of deferred revenue                                                 162,000               19,000
  Current portion of capitalized lease obligation                                           -               28,000
                                                                                ----------------------------------
    Total Current Liabilities                                                       1,264,000            1,086,000

Non current portion of deferred revenue                                             2,795,000              343,000
Non current portion of capitalized lease obligation                                         -               34,000
                                                                                ----------------------------------
    Total Liabilities                                                               4,059,000            1,463,000
                                                                                ----------------------------------
COMMITMENTS AND CONTINGENCIES


STOCKHOLDERS' EQUITY:
   Preferred stock, $.01 par value:
        Authorized 1,000,000 shares, none issued
   Common stock, $.001 par value: Authorized - 100,000,000 shares
        Issued and outstanding 33,491,437 shares at October 31, 2004 and
        33,091,467 shares at July 31, 2004                                             33,000               33,000
   Additional paid-in capital                                                      35,602,000           34,937,000
   Accumulated deficit                                                            (27,197,000)         (24,941,000)
   Less:  Treasury stock, at cost, 3,012  shares                                       (6,000)              (6,000)
                                                                                ----------------------------------
     Total Stockholders' Equity                                                     8,432,000           10,023,000
                                                                                ----------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                      $  12,491,000         $ 11,486,000
                                                                                ==================================
</TABLE>


See accompanying notes to condensed financial statements.
<PAGE>

                               NOVADEL PHARMA INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                    Three Months Ended
                                                                        October 31,
                                                           ----------------------------------------------
                                                                     2004                     2003
                                                                                     As Restated (Note 3)
                                                           -----------------------   --------------------
<S>                                                                       <C>                       <C>
LICENSE FEE                                                               $19,000                   $ -

CONSULTING REVENUES                                                        99,000                 2,000
                                                           -----------------------   -------------------

TOTAL REVENUES                                                            118,000                 2,000
                                                           -----------------------   -------------------
RESEARCH AND DEVELOPMENT
    EXPENSES                                                              660,000               269,000

CONSULTING, SELLING, GENERAL AND
    ADMINISTRATIVE EXPENSES                                             1,736,000               769,000
                                                           -----------------------   -------------------

TOTAL EXPENSES                                                          2,396,000             1,038,000
                                                           -----------------------   -------------------
LOSS FROM OPERATIONS                                                   (2,278,000)           (1,036,000)

INTEREST INCOME                                                            22,000                 6,000
                                                           -----------------------   -------------------

NET LOSS                                                             $ (2,256,000)        $  (1,030,000)
                                                           =======================   ===================

BASIC AND DILUTED LOSS PER SHARE                                            $(.07)                $(.06)
                                                           =======================   ===================
SHARES USED IN COMPUTATION OF
    BASIC AND DILUTED LOSS PER
    SHARE                                                              33,100,163            17,972,760
                                                           =======================   ===================
</TABLE>

See accompanying notes to condensed financial statements.

                                       2
<PAGE>


                               NOVADEL PHARMA INC.
             CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (Unaudited)
                                    (Note 3)

<TABLE>
<CAPTION>
                                                    Common Stock
                                              -------------------------
                                                                           Additional                                     Total
                                                 Shares         Amount      Paid-in      Accumulated      Treasury     Stockholders'
                                                                            Capital        Deficit          Stock         Equity
                                              ------------    ---------  --------------  --------------  -----------   -------------
<S>                                            <C>             <C>         <C>            <C>              <C>          <C>
BALANCE, August 1, 2004                        33,091,437      $33,000     $34,937,000    $(24,941,000)    $(6,000)     $10,023,000
Impact of variable plan accounting                      -            -          29,000               -           -           29,000
Shares issued to Hana Biosciences Inc. per                                                           -
     license agreement                            400,000            -         636,000                           -          636,000
   Net Loss                                             -            -               -      (2,256,000)          -       (2,256,000)
                                              ------------    ---------  --------------  --------------  -----------   -------------
BALANCE,  October 31, 2004                     33,491,437      $33,000     $35,602,000    $(27,197,000)    $(6,000)     $ 8,432,000
                                              ============    =========  ==============  ==============  ===========   =============
</TABLE>

See accompanying notes to condensed financial statements.

                                       3
<PAGE>

                               NOVADEL PHARMA INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                          Three Months Ended
                                                                                              October 31,
                                                                                   ---------------------------------
                                                                                        2004               2003
                                                                                                       As Restated
                                                                                                         (Note 3)
                                                                                   --------------     --------------
<S>                                                                                 <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                          $ (2,256,000)      $ (1,030,000)
  Adjustments to reconcile net loss to net cash
      used in operating activities:
      Impact of variable plan accounting                                                  29,000           (695,000)
      Depreciation and amortization                                                      107,000             49,000
  Changes in operating assets and liabilities:
      Accounts receivable                                                                 65,000                  -
      Prepaid expenses and other current assets                                          (26,000)          (100,000)
      Other assets                                                                             -              2,000
      Accounts payable - trade                                                            34,000            226,000
      Accrued expenses and other current liabilities                                      29,000             86,000
      Deferred revenue                                                                 2,095,000                  -
                                                                                   --------------     --------------
  Net cash provided by (used in) operating activities                                     77,000         (1,462,000)
                                                                                   --------------     --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of investments                                                             (4,280,000)                 -
  Maturities of investments                                                            3,811,000
  Purchase of property and equipment                                                    (513,000)          (308,000)
                                                                                   --------------     --------------
     Net cash used in investing activities                                              (982,000)          (308,000)
                                                                                   --------------     --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from shares of common stock issued to Hana Biosciences                        636,000                  -
  Payments on capital lease obligation                                                   (62,000)                 -
                                                                                   --------------     --------------
    Net cash provided by financing activities                                            574,000                  -
                                                                                   --------------     --------------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                               (331,000)        (1,770,000)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                         2,166,000          3,086,000
                                                                                   --------------     --------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                              $1,835,000         $1,316,000
                                                                                   ==============     ==============

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
   FINANCING ACTIVITIES:

   Equipment acquired under capitalized lease obligation                               $      -          $   81,000
                                                                                   ==============     ==============
   Investment in Hana Biosciences common stock received in connection with
   license agreement                                                                   $500,000          $        -
                                                                                   ==============     ==============
</TABLE>

See accompanying notes to condensed financial statements.

                                       4
<PAGE>


NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - THE COMPANY AND BASIS OF PRESENTATION

         THE COMPANY - NovaDel  Pharma Inc. (the  "Company"),  is engaged in the
         development of novel  application  drug delivery  systems for presently
         marketed prescription,  over-the-counter  ("OTC") and veterinary drugs.
         The Company's patented and patent-pending  delivery system is a lingual
         spray potentially  enabling drug absorption through the oral mucosa and
         more rapid  absorption  into the bloodstream  than presently  available
         oral  delivery  systems.  The  Company's  proprietary  delivery  system
         potentially   enhances  and  greatly   accelerates  the  onset  of  the
         therapeutic  benefits within minutes of  administration.  The Company's
         development efforts for its novel drug delivery system are concentrated
         on making such system  available  for drugs that are already  available
         and  proven  in  the   marketplace.   In  addition  to  increasing  the
         bioavailability  of a drug by avoiding  metabolism  by the liver before
         entry into the  bloodstream,  the Company believes that its proprietary
         drug delivery system offers the following significant  advantages:  (i)
         more rapid  delivery of drugs to the  bloodstream  allowing for quicker
         onset of  therapeutic  effects  compared  to  conventional  oral dosage
         forms;  (ii)  improved  drug safety  profile by reducing  the  required
         dosage,  including possible  reduction of side-effects;  (iii) improved
         dosage reliability; (iv) allowing medication to be taken without water;
         and (v) improved patient convenience and compliance.

         The  Company's  strategy  is to  concentrate  its  product  development
         activities primarily on pharmaceutical products for which there already
         are  significant  prescription  sales,  where the use of the  Company's
         proprietary,  novel drug delivery technology will greatly enhance speed
         of onset of therapeutic effect, reduce side effects through a reduction
         of the  amount of active  drug  substance  required  to produce a given
         therapeutic effect and improve patient convenience or compliance.

         The  Company  has  identified  six  tier-one   priority   products  for
         development, namely nitroglycerin,  sumatriptan,  alprazolam, zolpidem,
         ondansetron  and propofol.  The Company also has identified a number of
         other  development  initiatives  which are currently less of a priority
         than the Company's six tier-one  priority  programs.  These initiatives
         include, among other products, clemastine, loratadine and estradiol and
         progesterone lingual sprays.

         To date, the Company has entered into strategic license agreements with
         (i) Manhattan Pharmaceuticals,  Inc. ("Manhattan"),  in connection with
         propofol, (ii) Velcera Pharmaceuticals, Inc. ("Velcera"), in connection
         with veterinary  applications for currently marketed  veterinary drugs,
         (iii) Par Pharmaceutical, Inc. ("Par"), for the marketing rights in the
         United States and Canada for the Company's nitroglycerin lingual spray,
         and (iv) Hana  Biosciences Inc.  ("Hana"),  for the marketing rights in
         the United  States and Canada  for the  Company's  ondansetron  lingual

                                       5
<PAGE>

         spray.  Recently,  the Company entered into an agreement with INyX USA,
         Ltd.  for the  manufacture  and supply of the  Company's  nitroglycerin
         lingual  spray  (see Note 7).  The  Company  has not  entered  into any
         material  development  arrangements with any pharmaceutical  companies.
         The Company believes that it will require  additional  financing and/or
         additional   alliances  with  development  partners  to  undertake  and
         maintain its business plan.

         BASIS OF  PRESENTATION - The balance sheet at July 31, 2004, the end of
         the preceding  fiscal year,  has been derived from the audited  balance
         sheet contained in the previously filed Annual Report on Form 10-KSB of
         the Company for the fiscal year ended July 31,  2004,  and is presented
         for comparative purposes. All other financial statements are unaudited.
         The  condensed  financial  statements  are  presented  on the  basis of
         accounting  principles  generally  accepted in the United  States.  The
         preparation  of  financial  statements  in  conformity  with  generally
         accepted accounting principles in the United States requires management
         to  make  certain   estimates  and  assumptions  that  affect  reported
         earnings,  financial position and various  disclosures.  Actual results
         could differ from those  estimates.  In the opinion of management,  all
         adjustments,  which include only normal recurring adjustments necessary
         to present  fairly the financial  position,  results of operations  and
         cash flows for all  periods  presented,  have been made in the  interim
         financial statements. Results of operations for interim periods are not
         necessarily  indicative of the  operating  results to be expected for a
         full fiscal year.

         Certain footnote  disclosures normally included in financial statements
         prepared in accordance with accounting principles generally accepted in
         the United  States have been omitted in  accordance  with the published
         rules and  regulations of the Securities and Exchange  Commission.  The
         condensed  financial  statements  in  this  report  should  be  read in
         conjunction with the financial statements and notes thereto included in
         the  Company's  Annual  Report on Form 10-KSB for the fiscal year ended
         July 31, 2004.

         The Company has reported a net loss of $2,256,000  for the three months
         ended  October  31,  2004 and a net loss of  $1,030,000  for the  three
         months ended  October 31, 2003,  as restated  (see Note 3).  Management
         believes that the Company will continue to incur net losses  through at
         least October 31, 2005.  Management believes that the Company's capital
         resources will be adequate to fund operations  through at least October
         31, 2005.  As of October 31, 2004,  the Company had working  capital of
         $7,356,000,  cash and cash  equivalents  of $1,835,000  and  short-term
         investments  of $6,439,000.  Until and unless the Company's  operations
         generate significant revenues,  the Company will attempt to continue to
         fund  operations  from  cash on hand and  marketable  investments.  The
         Company's long-term liquidity is contingent upon achieving sales and/or
         obtaining  additional  financing.  The most likely sources of financing
         include private  placements of the Company's  equity or debt securities
         or bridge loans to the Company from third party lenders.

                                       6
<PAGE>

         Management  of the  Company  believes  that no later  than  the  fiscal
         quarter  ending  January 31, 2006, it will be necessary for the Company
         to obtain additional  financing and/or consummate a strategic  alliance
         with a business partner.  There are a number of risks and uncertainties
         related to the  Company's  attempt to complete a financing or strategic
         partnering arrangement that are outside the control of the Company. The
         Company may not be able to successfully obtain additional  financing on
         terms acceptable to the Company, or at all.

NOTE 2 - LOSS PER COMMON SHARE

         Loss per common share is computed  pursuant to SFAS No. 128,  "Earnings
         Per Share." Basic loss per share is computed as net loss divided by the
         weighted  average number of common shares  outstanding  for the period.
         Diluted  net loss per  common  share is the same as basic  net loss per
         common share,  since potentially  dilutive  securities from the assumed
         exercise  of  all  outstanding  options  and  warrants  would  have  an
         antidilutive effect because the Company incurred a net loss during each
         period  presented.  As  of  October  31,  2004  and  2003,  there  were
         20,119,000 and 15,507,000 shares, respectively,  issuable upon exercise
         of options and warrants  which were  excluded from the diluted loss per
         share computation.

NOTE 3 - RESTATEMENT OF FINANCIAL STATEMENTS

         In connection  with the  preparation of the Company's  Annual Report on
         Form 10-KSB of the Company for the fiscal year ended July 31, 2004, the
         Company's independent  registered public accounting firm brought to the
         attention  of the  Company  that  certain of the  Company's  issued and
         outstanding  stock  options  should have been subject to variable  plan
         accounting   treatment  under  applicable   accounting  standards  and,
         accordingly,  previously unrecognized compensation expenses should have
         been recognized in the Company's previously issued financial statements
         under the Financial  Accounting  Standards Board's  Interpretation  44,
         "Accounting for Certain  Transactions  involving Stock  Compensation-an
         interpretation  of  APB  Opinion  No.  25"  (Issue  Date  3/00).  After
         reviewing the matter with its current and former independent registered
         public accounting  firms, the Company  identified  certain  adjustments
         that  necessitated the restatement of its financial  statements for the
         first three quarters of fiscal 2004, the interim periods of fiscal 2003
         and 2002, and for the fiscal years 2003 and 2002.

         These  adjustments  reflect  variable plan accounting  treatment of the
         affected  stock  options  for  the  relevant  periods,  resulting  from
         cashless  exercise  provisions  applicable to options held by employees
         and  directors.  Under  variable plan option  accounting,  compensation
         expense is  increased or decreased as a result of changes in the market
         price of the Company's common stock. The restatement adjustment for the
         three months ended  October 31, 2003  resulted in credits to Research &
         Development  and  Consulting,   Selling,   General  and  Administrative
         Expenses of $24,000 and  $671,000,  respectively.  For the three months
         ended October 31, 2003,  net loss  decreased by $695,000 as a result of
         the variable plan accounting treatment adjustment.

                                       7
<PAGE>

         On October 20, 2004,  the Board of  Directors of the Company  rescinded
         the  Company's  cashless  exercise  provision  for all of the Company's
         outstanding  option  grants.  Thus,  the Company  expects that variable
         accounting  will no longer be required  after the end of the  Company's
         fiscal quarter ended October 31, 2004.

NOTE 4 - INVESTMENTS

         Investments include short-term  investments,  long-term investments and
         an  investment  in common stock  received from a licensee (See Note 6).
         Short-term   investments   are  carried  at   amortized   cost,   which
         approximates  fair market value, and consist of certificates of deposit
         and US treasury  securities with original maturities greater than three
         months and less than one year.  Long-term  investments  are  carried at
         amortized cost,  which  approximates  fair market value, and consist of
         certificates  of deposit,  and US treasury  securities  with maturities
         greater  than  one  year.  Unregistered,   nonmarketable  common  stock
         received from the licensee is carried at cost.

NOTE 5 - STOCK OPTIONS AND WARRANTS

         The Company uses the  intrinsic  value method of  accounting  for stock
         options  pursuant to the provisions of APB Opinion No. 25,  "Accounting
         for Stock Issued to Employees" (APB 25) and related  interpretations in
         accounting for its employee  stock options.  Because the exercise price
         of the Company's  stock  options  equals or exceeds the market price of
         the underlying  stock on the date of grant, no compensation  expense is
         initially  recognized  under APB 25.  Compensation  expense and credits
         were recorded as a result of variable plan  accounting for options with
         cashless exercise  provisions.  Had compensation  costs been determined
         using the  Black-Scholes  option  pricing model in accordance  with the
         fair  value  method   prescribed   by   "Accounting   for   Stock-Based
         Compensation"  (SFAS  123) for all  options  issued  to SFAS  No.  123,
         employees and amortized over the vesting period, the Company's net loss
         applicable  to common  shares and net loss per common  share (basic and
         diluted) would have been  increased to the pro forma amounts  indicated
         below.

                                       8
<PAGE>

<TABLE>
<CAPTION>
                                                                            THREE MONTHS ENDED
                                                                                OCTOBER 31,
                                                                  -----------------------------------------
                                                                          2004                   2003
                                                                  -------------------    ------------------
<S>                                                                    <C>                   <C>
                    Net loss, as reported                              $ (2,256,000)         $ (1,030,000)
                    Compensation expense (credit) resulting
                    from variable plan accounting                            29,000              (695,000)

                    Total Stock-based employee compensation
                         expense using the fair-value based
                         method for all awards                             (171,000)              (10,000)
                                                                  -------------------    ------------------
                    Pro forma net loss                                  $(2,398,000)          $(1,735,000)
                                                                  ===================    ==================

                    Loss per share:


                               Basic and diluted, as reported                 $(.07)                $(.06)
                                                                  ===================    ==================
                               Basic and diluted, pro forma                   $(.07)                $(.10)
                                                                  ===================    ==================
</TABLE>



         The fair market value of options granted during the three-month  period
         ended  October  31, 2004 and 2003 were  estimated  at the date of grant
         using  a   Black-Scholes   option  pricing  model  with  the  following
         weighted-average assumptions, respectively: risk-free interest rates of
         4.0%;  dividend yield of 0.0%;  volatility factors of 61% for the three
         months  ended  October  31,  2004;  55-67% for the three  months  ended
         October 31, 2003; and a  weighted-average  expected life of the options
         of five to 10 years for the three  months  ended  October  31, 2004 and
         2003.

         During the fiscal quarter ended October 31, 2004,  the Company  granted
         60,000 options to an employee  under the 1998 Stock Option Plan.  These
         options  vest  equally  over three  years and  expire in 10 years.  The
         exercise  price of the options  granted  during this fiscal  quarter is
         $1.82. During such quarter, the Company also issued 10,000 options to a
         former board member.  These options have an exercise price of $1.72 and
         vested immediately.

NOTE 6 - RELATED PARTY TRANSACTIONS - LICENSE AND DEVELOPMENT AGREEMENTS

         In April 2003,  the  Company  entered  into a license  and  development
         agreement  with Manhattan for the  worldwide,  exclusive  rights to the
         Company's  proprietary lingual spray technology to deliver propofol for
         pre-procedural  sedation.  The terms of the agreement  call for certain
         milestone and other payments, the first $125,000 of which was partially
         received during June 2003.  During the fiscal year ended July 31, 2004,
         the Company invoiced Manhattan  approximately $400,000 for reimbursable
         expenses.   In  November  2003,  the  Company  received  $375,000  from
         Manhattan for license fees. The Company has included these license fees
         in deferred  revenue and is  recognizing  these  license  fees over the
         20-year term of the license.  During the three months ended October 31,

                                       9
<PAGE>


         2004,  the  Company  invoiced  Manhattan   approximately   $65,000  for
         reimbursable expenses.

         In June 2004, the Company  entered into a 20-year  worldwide  exclusive
         license agreement with Velcera, a veterinary company.  The agreement is
         for the  exclusive  rights to the  Company's  propriety  lingual  spray
         technology  for  animals.  In  September  2004,  the  Company  received
         $1,500,000 from Velcera in connection  with the agreement.  The upfront
         payment has been included in deferred  revenue and is being  recognized
         in income  over the  20-year  term of the  agreement.  The  Company may
         receive  additional  milestone  payments and royalty  payments over the
         20-year term of the agreement.

         In October  2004,  the Company  entered into a license and  development
         agreement  pursuant to which,  the Company granted to Hana an exclusive
         license to develop and market the  Company's  lingual  spray version of
         ondansetron  in the United States and Canada.  Pursuant to the terms of
         the  agreement,  in exchange for  $1,000,000,  Hana  purchased  400,000
         shares of the Company's  common stock at a per share price of $2.50,  a
         premium of $.91 per share or $364,000 over the then market value of the
         Company's  common  stock.  The Company  accounted  for this  premium as
         deferred  revenue  related  to the  license.  In  connection  with  the
         agreement, Hana issued to the Company $500,000 worth of common stock of
         Hana (73,121  shares  based on a market value of $6.84 per share).  The
         proceeds received from Hana attributable to the premium are included in
         deferred  revenue  and are  being  recognized  over the  period  of the
         agreement.   The  Company  may  receive  additional  license  fees  and
         royalties over the 20-year term of the agreement.

         Lindsay A. Rosenwald,  M.D., a significant  stockholder of the Company,
         may be deemed to be an affiliate of the Company, Manhattan, Velcera and
         Hana.  Companies  affiliated with Dr. Rosenwald have provided financial
         and other  services  unrelated  to the  Company's  agreements  with the
         parties to such agreements from time to time.


NOTE 7 - SUBSEQUENT EVENTS


         On November 18, 2004,  the Company  entered  into a  manufacturing  and
         supply  agreement  with  INyX USA,  Ltd.  ("INyX"),  whereby  INyX will
         manufacture and supply the Company's nitroglycerin lingual spray. For a
         five-year  period  beginning  November  18,  2004,  INyX  will  be  the
         exclusive  provider of the  nitroglycerin  lingual spray to the Company
         worldwide,  excluding Poland, Byelorussia, the former Russian Republics
         of Ukraine,  Latvia,  Lithuania,  Estonia and the United Arab Emirates.
         Pursuant  to the  terms and  conditions  of the  agreement,  it will be
         INyX's   responsibility   to   manufacture,   package  and  supply  the
         nitroglycerin lingual spray in such territories.  Thereafter, INyX will
         have a non-exclusive  right to manufacture such spray for an additional
         five  years.  The  targeted  date for INyX to  commence  production  is
         presently mid-2005.

                                       10
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Since the  Company's  inception,  substantially  all of its  revenues  have been
derived from  consulting  activities  and license fees,  primarily in connection
with product development for various pharmaceutical  companies.  The Company has
had a history of recurring losses from operations, giving rise to an accumulated
deficit  at  October  31,   2004,   of   approximately   $27,197,000.   Although
substantially  all of the Company's  revenues to date have been derived from its
consulting business,  the future growth and profitability of the Company will be
principally  dependent upon its ability to successfully develop its products and
to enter into additional  license agreements with drug companies who will market
and distribute the final products.

Over the next fiscal  year,  the Company  intends to continue to stay focused on
its six tier-one priority  products:  nitroglycerin,  sumatriptan,  ondansetron,
zolpidem, alprazolam and propofol. The Company currently has cash and marketable
investment balances of approximately $9,822,000,  which the Company believes are
sufficient  to maintain  operating  costs until at least  October 31, 2005.  The
Company  continues  to  seek  collaborative   arrangements  with  pharmaceutical
companies for joint development of delivery systems and the successful marketing
of these  delivery  systems.  In view of the Company's  limited  resources,  its
anticipated  expenses  (resulting  in  significant  operating  losses)  and  the
competitive  environment in which the Company operates,  the Company anticipates
that it will need to pursue a financing by the end of the fiscal  quarter ending
January 31, 2006. See "Liquidity and Capital Resources" below.

RESULTS OF OPERATIONS

THE THREE MONTHS ENDED OCTOBER 2004 (THE "2005 PERIOD") COMPARED TO OCTOBER 2003
(THE "2004 PERIOD")

Consulting and license fee revenues for the 2005 Period increased  approximately
$116,000 to $118,000 from $2,000 for the 2004 Period.  This revenue increase for
the 2005 Period was  attributable  to an increase in consulting  assignments and
revenue attributable to the Company's arrangements with Manhattan in addition to
amortization of deferred revenue from license fees received.


Research and development expenses increased  approximately  $391,000 to $660,000
from  $269,000  for the 2005 Period.  The  increase in research and  development
expenses is primarily  related to outsourced  manufacturing  fees,  purchases of
additional laboratory and manufacturing  supplies and increased  Pharmacokinetic
study activities for the Company's tier-one products.


Consulting, selling, general and administrative expenses increased approximately
$967,000 to  $1,736,000  from  $769,000  for the 2005  Period.  The  increase in
consulting, selling, general and administrative expenses is related to increased
payroll,  recruiting  and relocation  expenses as a result of hiring  additional
employees,  higher  accounting and legal fees,  increased  travel and trade show
attendance,  increased  rent  expense  due  to  the  leasing  and  occupying  of
additional  space  for the  Company's  operations  and a  $671,000  decrease  in
compensation  expense related to variable  accounting  adjustments to certain of

                                       11
<PAGE>

the Company's  outstanding  stock options in the 2004 Period. As a result of the
factors described above,  total costs and expenses for the 2005 Period increased
approximately  $1,358,000  to  approximately  $2,396,000  compared  to the  2004
Period.

Interest income increased  approximately  $16,000 to $22,000 for the 2005 Period
from $6,000 for the 2004 Period as a result of the $12.8  million  received from
the January 2004 private  placement of the Company's common stock, the remaining
portion of which is invested in liquid securities.

The resulting net loss for the 2005 Period was $2,256,000 compared to a net loss
of $1,030,000 for the 2004 Period.

         LIQUIDITY AND CAPITAL RESOURCES

Net cash  provided by  operating  activities  approximated  $77,000 for the 2005
Period  compared  to net cash  used in  operating  activities  of  approximately
$1,462,000 for the 2004 Period.  Net cash used in operating  activities for both
the  2005  and  2004  periods  was  primarily  attributable  to the net  loss of
$2,256,000  and  $1,030,000,  respectively,  offset by an  increase  in deferred
revenue for the 2005 Period of  $2,095,000.  For the 2005  Period,  $981,000 was
used  for  investing  activities,   principally  for  capital  expenditures  and
purchases of liquid investments, net of maturities, compared to $308,000 for the
2004 Period. For the 2005 Period,  financing  activities provided  approximately
$574,000,  which  consisted of cash received for shares issued to Hana offset by
payments on a capital lease.

The Company has  reported a net loss of  $2,256,000  for the three  months ended
October 31, 2004 and a net loss of $1,030,000 for the three months ended October
31, 2003,  as restated (see Note 3).  Management  believes that the Company will
continue  to incur net losses  through at least  October  31,  2005.  Management
believes  that  the  Company's  capital  resources  will  be  adequate  to  fund
operations  through at least  October  31,  2005.  As of October 31,  2004,  the
Company  had  working  capital  of  $7,356,000,  cash  and cash  equivalents  of
$1,835,000  and  short-term  investments  of  $6,439,000.  Until and  unless the
Company's operations generate significant revenues,  the Company will attempt to
continue to fund  operations from cash on hand and marketable  investments.  The
Company's   long-term  liquidity  is  contingent  upon  achieving  sales  and/or
obtaining  additional  financing.  The most likely sources of financing  include
private  placements  of its  equity or debt  securities  or bridge  loans to the
Company from third party lenders.

Management of the Company  believes that by the end of the fiscal quarter ending
January 31,  2006,  it will be  necessary  for the Company to obtain  additional
financing and/or consummate a strategic alliance with a business partner.  There
are a number of risks and  uncertainties  related  to the  Company's  attempt to
complete a financing or strategic  partnering  arrangement  that are outside the
control of the  Company.  The  Company  may not be able to  successfully  obtain
additional financing on terms acceptable to the Company, if at all.

                                       12
<PAGE>


         RESEARCH AND DEVELOPMENT EXPENSES


Research and development expenses for the first quarter 2005 Period and the 2004
Period were $660,000 and  $269,000,  respectively.  The  Company's  research and
development  costs are expensed as incurred.  These include all internal  costs,
external  costs  related to services  contracted  by the  Company  and  research
services conducted for others.  Research and development costs consist primarily
of salaries and benefits, contractor fees, clinical drug supplies of preclinical
and clinical  development  programs,  consumable research supplies and allocated
facility and administrative  costs. These cost categories  typically include the
expenses  discussed below. The increase in research and development  expenses is
primarily  related to  outsourced  manufacturing  fees,  purchases of additional
laboratory  and  manufacturing  supplies  and  increased  Pharmacokinetic  study
activities for the Company's tier-one products.

         RESEARCH AND PRE-CLINICAL OPERATIONS

Research and pre-clinical operations reflect activities associated with research
prior to the initiation of any potential human clinical trials. These activities
predominantly  represent projects associated with the formulation development of
lingual sprays which may include animal safety studies and validation testing.

         DIRECT EXPENSES - CLINICAL TRIALS

Direct expenses of clinical trials include patient  enrollment  costs,  external
site costs,  expense of clinical drug supply and external costs such as contract
research consultant fees and expenses.

         MANUFACTURING DEVELOPMENT

Manufacturing  Development  primarily reflects costs incurred to prepare current
good  manufacturing  procedures  (cGMP)  manufacturing  capabilities in order to
provide  clinical scale drug supply.  These costs primarily  reflect  activities
with  external  contract  manufacturing  resources.  Included  in  manufacturing
development  are  personnel  costs,   depreciation,   expenses  associated  with
technology  transfer,  process  development and validation,  quality control and
assurance activities, and analytical services.

         UNALLOCATED DEVELOPMENT - CLINICAL AND REGULATORY OPERATIONS

Clinical and regulatory  operations reflect the preparation,  implementation and
management of the Company's clinical trial activities in accordance with current
good clinical practice (cGCP).  Included in unallocated clinical development and
regulatory operations are costs associated with personnel, supplies, facilities,
fees to consultants,  other related costs for clinical trial  implementation and
management,  clinical quality control,  regulatory compliance  activities,  data
management and biostatistics.

The following  summarizes the Company's research and development expenses by the
foregoing categories for the fiscal quarters ended October 31, 2004 and 2003:

                                       13
<PAGE>


<TABLE>
<CAPTION>
                                                                       QUARTER ENDED
                                                                        October 31,
                                                                  --------------------------
                                                                       2004          2003
                                                                  -------------  -----------
<S>                                                                    <C>         <C>
      RESEARCH AND DEVELOPMENT EXPENSES:
           Research and pre-clinical operations                       $ 15,000     $ 16,000
           Direct clinical trial expenses                              132,000       66,000
           Manufacturing development                                    30,000            -
           Unallocated development                                     483,000      187,000
                                                                  -------------  -----------
     RESEARCH AND DEVELOPMENT EXPENSES                                $660,000     $269,000
                                                                  =============  ===========
</TABLE>


OFF BALANCE SHEET ARRANGEMENTS

The  Company  has no off balance  sheet  arrangements  within the meaning of SEC
rules.

INFLATION

The Company does not believe  that  inflation  has had a material  effect on its
results  of  operations  during  the past three  fiscal  years.  There can be no
assurance  that the Company's  business will not be affected by inflation in the
future.

RISK FACTORS THAT MAY AFFECT FUTURE RESULTS

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

Currently,  none of the  Company's  drug product  candidates  are  available for
commercial  sale.  All of the  Company's  potential  products are in  regulatory
review, clinical development or pre-clinical development.  The status of each of
the Company's six tier-one  priority  products is discussed in "General," above.
Successful  completion of  development  of the  Company's six tier-one  priority
programs are  contingent on numerous  risks,  uncertainties,  and other factors,
which are described in the section  entitled "Risk Factors" in Item 5 of Part II
of the Company's Annual Report on Form 10-KSB for the fiscal year ended July 31,
2004. These factors include:

      o  Completion of pre-clinical and clinical trials of the product candidate
with the scientific  results that support further  development and/or regulatory
approval

      o  Receipt of necessary regulatory approvals

                                       14
<PAGE>

      o  Obtaining adequate supplies of sufficient raw materials on commercially
reasonable terms

      o  Obtaining capital necessary to fund the Company's operations, including
the Company's research and development efforts,  manufacturing  requirements and
clinical trials

      o  Performance of  third-party  collaborators  on whom the Company  relies
heavily for the commercialization and manufacture of drug product

      o  Obtaining manufacturing,  sales and  marketing  capabilities  for which
the Company presently has limited resources

As a result of the amount and nature of these factors, many of which are outside
the Company's  control,  the success,  timing of completion and ultimate cost of
development of any of the Company's  product  candidates is highly uncertain and
cannot  be  estimated  with any  degree of  certainty.  The  timing  and cost to
complete drug trials alone may be impacted by, among other things:

      o  Slow patient enrollment

      o  Long treatment time required to demonstrate effectiveness

      o  Lack of sufficient clinical supplies and material

      o  Adverse medical events or side effects in treated patients

      o  Lack of effectiveness of the product candidate being tested

      o  Lack of sufficient funds

If the Company does not successfully  complete clinical trials, the Company will
not receive regulatory approval to market its six tier-one priority products. If
the Company does not obtain and maintain  regulatory  approval for its products,
the Company will not generate any revenues from the sale of its products and the
Company's  value and its financial  condition and results of operations  will be
substantially harmed.

The  Company is engaged in  research  and  development  activities  which  often
provide  services and transfer rights under complex  licensing  agreements.  The
arrangements may include payment terms that include receipt of up-front fees and
milestone payments. The Company has entered into such arrangements which contain
multiple elements including up-front fees, milestone payments,  royalty fees and
equity issuances,  among others. Different methods of accounting for revenue and
expense recognition may be appropriate under each of these  arrangements.  It is
currently  expected that upfront and milestone  payments will be recognized over
the life of the relevant agreements.

                                       15
<PAGE>

The Company  presently has four major  agreements  with each of Manhattan,  Par,
Velcera and Hana.  The Company is entitled  to certain  milestone  payments  and
double-digit  royalties,  generally on either net sales or gross revenues. It is
speculative as to when any such payments or royalties will be earned or paid, if
at all. On November  18, 2004,  the Company  entered  into a  Manufacturing  and
Supply Agreement with INyX,  whereby INyX will be the exclusive  provider of the
nitroglycerin  lingual  spray  to  the  Company  worldwide,   excluding  Poland,
Byelorussia, the former Russian Republics of Ukraine, Latvia, Lithuania, Estonia
and the United Arab Emirates. See Note 7 to the Financial Statements.


ITEM 3.  CONTROLS AND PROCEDURES.


Disclosure  controls and procedures are controls and other  procedures  that are
designed to ensure that the information required to be disclosed by a company in
the reports that it files or submits under the  Securities  Exchange Act of 1934
("Exchange  Act") is recorded,  processed,  summarized and reported,  within the
time  periods  specified in the SEC's rules and forms.  Disclosure  controls and
procedures  include,  without  limitation,  controls and procedures  designed to
ensure that  information  required to be disclosed in the reports that a company
files or submits under the Exchange Act is accumulated  and  communicated to the
company's management,  including its Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding required disclosure.


The  Company's  Chief  Executive  Officer  and its Interim  Principal  Financial
Officer have  evaluated  the  effectiveness  of the design and  operation of the
Company's  disclosure  controls and procedures (as defined in Rule 13a-15(e) and
Rule  15d-15(e) of the Exchange Act as of the end of the period  covered by this
Quarterly Report on Form 10-QSB.  Based on this evaluation,  the Company's Chief
Executive Officer and its Interim Principal  Financial Officer concluded that as
of the end of the period covered by this report,  except as set forth below, the
Company's  disclosure  controls and procedures were effective in their design to
ensure that  information  required to be disclosed by us in the reports that the
Company  files  or  submits  under  the  Exchange  Act is  recorded,  processed,
summarized and reported within the time periods specified in the SEC's rules and
forms.



In  connection  with its audit of the  Company's  financial  statements  for the
fiscal  year ended July 31,  2004,  J.H.  Cohn LLP,  the  Company's  independent
registered public accounting firm ("J.H. Cohn"), brought to the attention of the
Company  that  certain  issued and  outstanding  options  that permit  "cashless
exercise"  should  be  subject  to  variable  plan  accounting  treatment  under
applicable  accounting  standards,  and,  accordingly,  previously  unrecognized
compensation  expense  needed to be  recognized as  compensation  expense in the
Company's  previously issued financial statements under the Financial Accounting
Standards  Board's  Interpretation  44,  "Accounting  for  Certain  Transactions
Involving Stock  Compensation--an  interpretation  of APB Opinion No. 25" (Issue
Date 3/00). See Note 3 to Notes to Financial Statements.


J.H. Cohn also advised the Audit  Committee and  management of certain  material
weaknesses,  including  the  failure to record and retain  comprehensive  option
grants  issued by the Company,  inability to prepare  financial  statements  and
footnotes in accordance with U.S. generally accepted  accounting  principles and
SEC rules,  a lack of an  appropriate  system of policies and procedures for the

                                       16
<PAGE>

internal review of financial reports,  including inadequate  staffing,  training
and  expertise  and improper  accounting  procedures  for grants with  "cashless
exercise" provisions per Financial  Accounting Standards Board's  Interpretation
44,  "Accounting  for Certain  Transactions  Involving  Stock  Compensation - an
interpretation  of APB Opinion No. 25". J.H. Cohn indicated that they considered
these  deficiencies  to be  material  weaknesses  as that term is defined  under
standards  established by the Public Company Accounting  Oversight Board (United
States).  These  material  weaknesses  also  included the  following:  a lack of
effective  documentation for stock options and other compensatory equity grants;
the absence of a procedure  to obtain from  officers and  directors  information
required to be disclosed about such persons; the absence or ineffectiveness of a
rule compliance checking procedure for SEC filings; and lack of effective record
keeping and compliance  assistance  for reports  required under Section 16(a) of
the Exchange Act.

In light  of the  need for a  restatement  and the  material  weaknesses  in the
Company's  internal  controls,  commencing in the first quarter of the Company's
2005 fiscal  year,  the  Company  began to  undertake a review of the  Company's
disclosure,  financial  information and internal  controls and procedures.  This
review  will  include  increased  diligence  by  the  Company's  management  and
directors,  as well as the use of additional outside  resources.  The Company is
committed to addressing its control environment and reporting procedures.

The  Company  believes  that the  hiring of a new  Chief  Financial  Officer  is
important to its efforts to improve its  internal  controls,  particularly  with
respect to its need to comply  with  Section  404 of the  Sarbanes-Oxley  Act of
2002. The Company has completed its search for a new Chief Financial Officer and
has identified a potential candidate for the position.  Although there can be no
assurance,  the Company anticipates employing the new Chief Financial Officer by
the end of the calendar year.

To address the  weaknesses  identified  in the Company's  internal  controls and
disclosure  practices,  the Company has drafted written disclosure  controls and
procedures applicable to periodic reports and certain public communications.  By
the end of the calendar  year,  the Company  will have a  Disclosure  Committee,
which will be chaired by the Company's  Vice  President and General  Counsel and
comprised  of  other  executives.   The  Disclosure  Committee  will  establish,
maintain,  monitor and evaluate the Company's  written  disclosure  controls and
procedures and coordinate the preparation of the Company's  periodic reports and
certain other of its public communications pursuant to formal written disclosure
controls and procedures.

On October  20,  2004,  the Board of  Directors  of the  Company  rescinded  the
cashless exercise provision for all of the Company's  outstanding option grants.
Thus, the Company  expects that variable  accounting  will no longer be required
after the Company's  fiscal quarter ended October 31, 2004. To address  weakness
in  recordkeeping  related to issued option  grants,  the Company is planning to
evaluate,  test and install software to assist in the  reconciliation of options
and warrants issued by the Company.

The Company's management,  including its Chief Executive Officer and its Interim
Principal  Financial  Officer,  does not  expect  that  disclosure  controls  or
internal  controls  over  financial  reporting  will  prevent  all errors or all
instances of fraud,  even as the same are improved to address any  deficiencies.
The design of any system of controls is based in part upon  certain  assumptions

                                       17
<PAGE>

about the  likelihood of future  events,  and there can be no assurance that any
design will succeed in achieving  its stated  goals under all  potential  future
conditions.  A control  system,  no matter how well designed and  operated,  can
provide only  reasonable,  not  absolute,  assurance  that the control  system's
objectives  will be met. Over time,  controls may become  inadequate  because of
changes in conditions or deterioration in the degree of compliance with policies
or  procedures.  Further,  the design of a control  system must reflect the fact
that there are  resource  constraints,  and the  benefits  of  controls  must be
considered relative to their costs.  Because of the inherent  limitations in all
control systems,  no evaluation of controls can provide absolute  assurance that
all control issues and instances of fraud,  if any, within the Company have been
detected.

Because  of  the  inherent  limitation  of  a  cost-effective   control  system,
misstatements  due to  error or  fraud  may  occur  and not be  detected.  These
inherent limitations include the realities that judgments in decision-making can
be faulty,  and that  breakdowns  can occur  because of simple error or mistake.
Controls can also be  circumvented  by the individual  acts of some persons,  by
collusion of two or more people, or by management override of the controls.

                                       18
<PAGE>


                           PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS.


         Not applicable.


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.


         Not applicable.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.


         Not applicable.


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


         Not applicable.


ITEM 5.  OTHER INFORMATION.


         Not applicable.


ITEM 6.  EXHIBITS.


         Exhibit No.    Description

         10.33          *License and Development Agreement, dated as of October
                        27, 2004, by and between the Company and Hana
                        Biosciences, Inc.

         10.34          Manufacturing and Supply Agreement, dated as of November
                        18, 2004, by and between the Company and INyX USA, Ltd.

         31.1           Rule 13a-14(a) Certification of Chief Executive Officer

         31.2           Rule 13a-14(a) Certification of Chief Financial Officer

         32.1           Certification under 18 U.S.C. 1350

         32.2           Certification under 18 U.S.C. 1350


*Confidential treatment requested as to certain portions of this exhibit. Such
portions have been redacted and filed separately with the SEC.


                                       19
<PAGE>

                                   SIGNATURES


In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed  on its  behalf  by the  undersigned, thereunto  duly
authorized.

                                       NOVADEL PHARMA INC.




Dated:   December 15, 2004             By:   /s/  Gary A. Shangold, M.D.
                                          -------------------------------------
                                          Gary A. Shangold, M.D.
                                          President & Chief Executive Officer


Dated:   December 15, 2004             By:  /s/  Howard D. Kance
                                          -------------------------------------
                                          Howard D. Kance
                                          Interim Principal Financial Officer

                                       20