SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

Filed by the Registrant [X]

Filed by a party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement

[_] Confidential for Use of the Commission Only (as permitted by Rule 14a-6(e)
(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12

ELITE PHARMACEUTICALS, INC.
---------------------------
(Name of Registrant as Specified In Its Charter)

N/A
---
(Name of Person(s) Filing Proxy Statement if other than Registrant)

Payment Filing Fee (Check the appropriate box):

[X] No fee required.

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1) Title of each class of securities to which transaction applies:

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2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):

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5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing:

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4) Date Filed:

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ELITE PHARMACEUTICALS, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

October 11, 2001

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

The 2001 annual meeting of the shareholders of Elite Pharmaceuticals, Inc.
("the Company") will be held at the American Stock Exchange, 86 Trinity Place,
New York, NY, at 11:00 a.m. on Thursday, October 11, 2001, for the following
purposes:

(1) To elect four directors to serve until the next annual meeting of the
shareholders and until their successors shall be elected and shall qualify.

(2) To transact such other business as may properly come before the
meeting or any adjournments thereof.

The close of business on August 17, 2001, has been fixed as the record
date for the determination of the shareholders entitled to notice of and to vote
at said meeting.

Management hopes all shareholders can attend this meeting. Whether or not
you expect to be present, you are requested to date and sign the enclosed proxy
and return it promptly in the enclosed envelope. The proxy will be returned to
any shareholder who attends the meeting and requests such return.

By order of the Board of Directors

Mark I. Gittelman
Secretary and Treasurer

August 24, 2001

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

PROXY STATEMENT

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

Annual Meeting of the
Shareholders of Elite Pharmaceuticals, Inc.
to be held October 11, 2001

SOLICITATION AND REVOCATION OF APPOINTMENT OF PROXY

The enclosed appointment of proxy is solicited by the Board of Directors of
Elite Pharmaceuticals, Inc. ("the Company"). It is revocable upon receipt of
written notice of revocation by the Secretary of the Company at any time before
it is exercised. If the enclosed appointment of proxy is signed and returned,
the shares covered by the appointment will be voted at the meeting (and all
adjourned sessions).

The cost of soliciting appointments of proxy will be borne by the Company,
and such costs are not expected to exceed an amount normally expended for a
solicitation for an election of directors in the absence of a contest and costs
represented by salaries and wages of regular employees and officers, who will
carry out any solicitations to be made, which amount is not expected to exceed
$1,000.00.

The mailing address of the principal executive offices of the Company is:

Elite Pharmaceuticals, Inc.
165 Ludlow Ave.
Northvale, New Jersey 07647

The approximate date on which the proxy statements and proxy cards are
first sent or given to shareholders is September 10, 2001.

VOTING RIGHTS

The holders of stock of the Company on August 17, 2001 are the only
shareholders entitled to notice of and to vote at the annual meeting of
shareholders on October 11, 2001 and at any adjournments thereof. On August 17,
2001, (the record date) there were 9,576,697 shares of stock outstanding and
entitled to vote. Each share of stock is entitled to one vote.

VOTING PROCEDURES

If a majority of the shares of the Company issued and outstanding are
present at the meeting in person or by proxy, a quorum will exist.

Each shareholder entitled to vote shall have the right to cast one vote per
share outstanding in the name of such shareholder (a) on the motion before the
body or (b) as to election of directors, for as many persons as there are
directors to be elected. For a motion to pass, the votes cast in favor of the
motion must exceed the votes cast against the motion. Directors are elected by a
plurality of the votes cast; the nominees with the largest number of votes will
be elected up to the maximum number of directors to be elected.

Votes by proxy will be tabulated by Jersey Transfer & Trust Company, the
stock transfer agent for the Company. The votes by proxy will be cast at the
meeting by the proxy holders. Any shareholder may vote in person at the meeting
if no appointment of proxy has been made or if the appointment is revoked. Votes
will be tabulated by the secretary of the Company.

Under Delaware law and under the articles of incorporation and bylaws of
the Company, abstentions and broker non-votes have no effect since a majority of
the votes cast will carry a motion and directors are elected by a plurality of
the votes cast.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

Shown in the table below is any person (including any "group") known to the
Company to be the beneficial owner of more than five percent (5%) of any class
of the Company's voting securities as of August 3, 2001.

Title of Class Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership

Common Atul M. Mehta, Director/Officer 2,932,914(1) 27.1%
165 Ludlow Avenue Direct and
Northvale New Jersey 07647 Indirect

Common John de Neufville and Mely Rahn, Trustees 788,400(2) 8.3%
Margaret de Neufville Revocable Trusts Direct and
197 Meister Avenue Indirect
North Branch, NJ 08876

Common Bakul and Dilip Mehta 630,000 6.61%
P.O. Box 438 Direct
Muscat, Sultanate of Oman

Common Bridge Ventures, Inc. 583,104(3) 5.9%
575 Lexington Avenue, Ste. 410 Direct and
New York, NY 10022 Indirect

(1) Includes (i) 6,300 shares held by Dr. and Mrs. Mehta as custodians for Amar
Mehta; (ii) 6,300 shares held by Dr. and Mrs. Mehta as custodians for Anand
Mehta; and (iii) options to purchase 1,445,214 shares of common stock (including
options for 500,000 shares held by Dr. Mehta which do not begin vesting until
December 31, 2001 and then vest 100,000 shares on that date and 100,000 shares
annually thereafter for four years).

(2) Represents (i) 353,400 shares held in trust for the benefit of John P. de
Neufville, (ii) 410,000 shares held in trust for David T. de Neufville and (iii)
options personally held by John P. de Neufville to purchase 25,000 shares.

(3) Includes (i) 56,334 shares owned by SMACS Holding Corp., an affiliate of
Bridge Ventures, Inc., (ii) warrants to purchase 206,250 shares held by Bridge
Ventures, Inc., (iii) warrants to purchase 75,000 shares held by SMACS Holding
Corp., and (iv) 47,500 shares held by the Bridge Ventures, Inc. Employee Pension
Plan.

The Company is informed and believes that as of August 3, 2001, Cede & Co.
held 5,562,262 shares of the Company and 781,195 Class A warrants for shares of
the common stock of the Company as nominee for Depository Trust Company, 55
Water Street, New York, New York 10004. It is the Company's understanding that
Cede & Co. and Depository Trust Company both disclaim any beneficial ownership
therein and that such shares are held for the account of numerous other persons,
no one of whom is believed to beneficially own five percent or more of the
common stock of the Company.

SECURITY OWNERSHIP OF MANAGEMENT

Shown below, as of August 3, 2001, are the shares of the Company
beneficially owned by all directors, by the chief executive officer and by
executive officers of the Company as a group.

Title of Class Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership

Common Atul M. Mehta, Director/Officer 2,932,914(1) 27.1%
165 Ludlow Avenue Direct and
Northvale New Jersey 07647 Indirect

Common Donald S. Pearson, Director 78,750(2) 0.8%
1305 Peabody Avenue Direct
Memphis, TN 38104

Common Harmon Aronson, Director 60,000(3) 0.6%
26 Monterey Drive Direct
Wayne, NJ 07470

Common Eric L. Sichel, Director 30,000(4) 0.3%
411 Highview Road Direct
Englewood, NJ 07631

Common Mark I. Gittelman, Treasurer/Secretary 10,000(5) 0.1%
300 Colfax Avenue Direct
Clifton, NJ 07013

Common Officers and Directors as a Group 3,131,664 30.0%
Direct
and Indirect

(2) Includes options to purchase 60,000 shares. Options for 20,000 shares are
vested. The remaining options vest in increments of 10,000 shares each on
September 1, 2001, January 2, 2002, September 2, 2002 and January 2, 2003.

(3) Comprised of options to purchase 60,000. Options for 20,000 shares are
vested. The remaining options vest in increments of 10,000 shares each on
September 1, 2001, January 2, 2002, September 2, 2002 and January 2, 2003.

(4) Comprised of options to purchase 30,000 shares. These options vest in
increments of 10,000 each on August 2, 2002, August 2, 2003 and August 2, 2004.

(5) Comprised of options to purchase 10,000 shares.

Information on the stock ownership of these persons was provided to the
Company by the persons.

DIRECTORS AND EXECUTIVE OFFICERS

The current directors and the executive officers of the Company are:

Name Age Position
---- --- --------

Atul M. Mehta 52 President, Chief Executive Officer and Director
Donald S. Pearson 65 Director
Harmon Aronson 58 Director
Eric L. Sichel 42 Director
Mark I. Gittelman 41 Secretary and Treasurer

There are no arrangements between any director or executive officer and any
other person, pursuant to which the director or officer is to be selected as
such. There is no family relationship between the directors, executive officers,
or persons nominated or chosen by the Company to become directors or executive
officers.

Atul M. Mehta, Ph.D., the founder of ELI, has been a director of ELI since
its inception in 1990 and a director of EPI since 1997. He has been employed as
the President of ELI since 1990 and President of EPI since 1997. Prior to that,
he was Vice President at Nortec Development Associates, a company specializing
in the development of food, pharmaceutical and chemical specialty products, from
1984 to 1989. From 1981 to 1984, he was associated with Ayerst Laboratories, a
division of American Home Products Corporation in the solids formulation section
as Group Leader. His responsibilities included development of formulations of
ethical drugs for conventional and controlled-release dosage forms for both USA
and international markets. He received his B.S. degree in Pharmacy with honors
from Shivaii University, Kolhapur, India, and a BS, MS, and a Doctorate of
Philosophy in Pharmaceutics from the University of Maryland in 1981. Other than
Elite Labs, no company with which Dr. Mehta was affiliated in the past was a
parent, subsidiary or other affiliate of the Company.

Donald S. Pearson, a director since 1999, has been employed since 1997 as
the President of Pearson & Associates, Inc., a company that provides consulting
services to the pharmaceutical industry. Prior to starting Pearson & Associates,
Mr. Pearson served for five years as the Director of Licensing at Elan
Pharmaceuticals, and prior to that he was employed by Warner-Lambert for thirty
years in various marketing, business development and licensing capacities. Mr.
Pearson holds a B.S. in Chemistry from the University of Arkansas and studied
steroid chemistry at St. John's University. He has served on the informal
advisory board of ELI for several years; other than ELI, no company with which
Dr. Pearson was affiliated in the past was a parent, subsidiary or other
affiliate of the Company.

Harmon Aronson, Ph.D., a director since 1999, has been employed since 1997
as the President of Aronson Kaufman Associates, Inc., a New Jersey-based
consulting firm that provides manufacturing, FDA regulatory and compliance
services to the pharmaceutical and biotechnology companies. Its clients include
United States and international firms manufacturing bulk drugs and finished
pharmaceutical dosage products who are seeking FDA approval for their products
for the US Market. Prior to that, Dr. Aronson was employed by Biocraft
Laboratories, a leading generic drug manufacturer, most recently in the position
of Vice President of Quality Management; prior to that he held the position of
Vice President of Non-Antibiotic Operations, where

he was responsible for the manufacturing of all the firm's non-antibiotic
products. Dr. Aronson holds a Ph.D. in Physics from the University of Chicago.
Other than ELI, no company with which Dr. Aronson was affiliated in the past was
a parent, subsidiary or other affiliate of the Company.

Eric L. Sichel, M.D., a director since August 2, 2001, is President of
Sichel Medical Ventures, Inc., Englewood, NJ, which company provides
biotechnology company assessments and investment banking services. Dr. Sichel
has been the owner and President of Sichel Medical Ventures, Inc. since 1997.
From 1995 through 1996, Dr. Sichel was a senior analyst in the biotechnology
field for Alex. Brown & Sons, Inc. of New York, NY. Prior to that, Dr. Sichel
was affiliated with Sandoz Pharmaceuticals Corp. of East Hanover, NJ, in various
capacities, including associate director of transplantation/immunology. Dr.
Sichel is licensed to practice medicine by the State of New York.

Mark I. Gittelman, CPA is the President of Gittelman & Co., P.C., an
accounting firm in Clifton, NJ. Prior to forming Gittelman & Co., P.C. in 1984,
he worked as a certified public accountant with the international accounting
firm of KPMG Peat Marwick, LLP. Mr. Gittelman holds a B.S. in accounting from
New York University and a Masters of Science in Taxation from Farleigh Dickinson
University. He is a Certified Public Accountant licensed in New Jersey and New
York, and is a member of the American Institute of Certified Public Accountants
("AICPA"), the Securities and Exchange Practice Section of the AICPA, and the
New Jersey State and New York States Societies of CPAs. Other than ELI, no
company with which Mr. Gittelman was affiliated in the past was a parent,
subsidiary or other affiliate of the Company.

Each director holds office (subject to the Company's By-Laws) until the
next annual meeting of stockholders and until such director's successor has been
elected and qualified. All executive officers of the Company are serving until
the next annual meeting of directors and until their successors have been duly
elected and qualified. There are no family relationships between any of the
directors and executive officers of the Company.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

ELI became a reporting company, and reports to the Securities and Exchange
Commission on Form 3, Form 4 and Form 5 became obligatory, as of August 14,
1998. None of the officers, directors or holders of 10% or more of securities of
the Company made a timely filing of Form 3. Atul Mehta, President of the
Company, Mark Gittelman, Secretary and Treasurer of the Company, and Harmon
Aronson and Donald S. Pearson, directors, have now filed reports on Form 3. Dr.
Mehta has filed six late reports (involving 21 transactions) on Form 4. Mr.
Pearson has filed two late reports (involving one transaction each) on Form 4.
Mr. Aronson has filed one late report (involving one transaction) on Form 4.
John P. deNeufville and Mely Rahn, Trustees,

previously beneficial owners of 10% or more of the Company's stock, have now
filed a report on Form 3 and have filed three late reports (involving 12
transactions) on Form 4.

ELECTION OF DIRECTORS

Four directors are to be elected at the annual meeting of shareholders to
be held on October 11, 2001. Directors are to be elected to serve until the next
annual meeting of shareholders and until their successors shall be elected and
shall qualify. All nominees are incumbents. The enclosed proxy will be voted in
favor of the election of the following nominees as directors: Atul M. Mehta,
Donald S. Pearson, Harmon Aronson and Eric L. Sichel.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company is a party to an agreement whereby fees are paid to a company
wholly owned by Mark Gittelman, the Company's Secretary/Treasurer, in
consideration for services rendered by Mr. Gittelman in his capacity as
Treasurer. For the fiscal ended March 31, 2001 and 2000, the fees paid to that
company were $82,639 and $75,945, respectively.

COMMITTEES

The Company has an Audit Committee, and the Company's Board of Directors
has adopted a written charter for the Audit Committee, a copy of which is an
appendix to this Proxy Statement. The Company has no other standing committees
of the Board of Directors.

AUDIT COMMITTEE

The Company deems the members of its Audit Committee to be independent as
independence is defined in Section 121(a) of the American Stock Exchange Listing
Standards.

The Audit Committee has reviewed and discussed the audited financial
statements with management. The Audit Committee has discussed with the
independent auditors of the Company the matters required to be discussed by SAS
61 (Codification of Statements on Auditing Standards, AU 380), as modified or
supplemented. The Audit Committee has received the written disclosures and the
letter from the independent accountants required by Independence Standards Board
Standard No. 1 (Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees), as modified or

supplemented. The Audit Committee has discussed with the independent accountant
the independent accountant's independence. Based upon the foregoing review and
discussions, the Audit Committee has recommended to the Board of Directors of
the Company that the audited financial statements of the Company be included in
the Company's Annual Report on Form 10-KSB for the last fiscal year ended March
31, 2001 for filing with the Securities and Exchange Commission.

The foregoing report of the Audit Committee is presented by members of the
Audit Committee of the Company: Donald S. Pearson, Harmon Aronson and Eric L.
Sichel.

BOARD MEETINGS

The Board of Directors of the Company had four meetings held during the
fiscal year ended March 31, 2001. No incumbent director attended fewer than 75%
of the meetings of the Board during that year.

EXECUTIVE COMPENSATION

The following table provides information on the compensation of Dr. Atul M.
Mehta, the chief executive officer of EPI for the last three fiscal years. No
other executive officer or employee of the Company received salary and bonus
exceeding $100,000 during those periods.

Summary Compensation Table

Annual Compensation Long Term Compensation
------------------- ----------------------

(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Fiscal Salary Bonus Other Restricted Securities LTIP All other
principal Year Annual stock Underlying payouts compen-
position Compen- awards options sation
sation

Atul M. 2000 $248,050 $ 45,000 $ 3,040 -- 425,000 -- --
Mehta 1999 $227,030 $ 25,000 $ 3,040 -- 500,000 -- --
President 1998 $193,333 $ 0 $ 3,220 -- 300,000 -- --

The Company's fiscal year beings April 1 and ends March 31. The information
is provided for each fiscal year beginning April 1.

Other Annual Compensation represents use of a company car and premiums paid
by the Company for life insurance on Dr. Mehta's life for the benefit of his
wife paid by the Company.

Option Grants in Last Fiscal Year

On December 15, 2000, Dr. Mehta surrendered options for 425,000 shares of
the Company's common stock (exercisable at $7.00 per share) and in return
received an option for 425,000 shares of the Company's common stock exercisable
on January 2, 2001 and expiring January 1, 2006. The exercise price is the
greater of 110% of the opening price of the Company's common stock on January 2,
2001 adjusted upward to the nearest half dollar or $7.00. On January 2, 2001,
the stock of the Company opened at $6.25 per share, therefore the exercise price
for the stock subject to these options is $7.00 per share.

Option/SAR Grants Table in Last Fiscal Year

Individual Grants

(a) (b) (c) (d) (e)
Number of % Grant Represents Exercise or
Name Securities of Options Base Price Expiration date
Underlying Options to Employees ($/sh)
Granted

Atul M. Mehta 425,000 82.2% $7.00 1-1-06

Options for 500,000 shares which were granted to Dr. Mehta during the
fiscal year ended March 31, 2000 vest at the rate of 100,000 shares per year on
each December 31 beginning December 31, 2001. The options expire on the earlier
of (a) one year after Dr. Mehta ceases to be employed by EPI or to serve as an
officer or director of EPI or (b) March 31, 2010. Notwithstanding, the options
shall become fully vested and exercisable if Dr. Mehta's employment agreement or
his position as an officer and director is terminated by the Company for any
reason or if it expires as a result of the Company giving notice of nonrenewal.
If the board of directors of the Company votes to approve the acquisition of
more than 50% of the stock of the Company by any person or entity, the Company
may require Dr. Mehta to exercise or sell the options. In addition to the above
stated options, by board action on September 22, 2000, Dr. Mehta was granted a
preemptive right to acquire shares of the Company in a sufficient number to
maintain his percentage ownership of the shares outstanding. Under this
preemptive right, upon issuance by the Company of shares of common stock for any
reason, or of securities convertible into common stock upon demand, Dr. Mehta
shall be permitted to purchase shares of common stock of the Company sufficient
to maintain the greater of his percentage ownership of outstanding common stock
of the Company determined on an absolute basis and upon a fully diluted basis as
existed prior to the stock issuance. The price which Dr. Mehta shall pay for
such stock shall be the lower of (a) the then current market price (discounted
15% if the shares are not registered) or (b) the price to be paid by the party
in the transaction triggering the

preemptive right. The right shall be exercised and the price shall be paid
within 120 days of the issuance of the stock triggering the preemptive right.

Aggregated Executive Option Exercises in Last
Fiscal Year and F-Y End Option Values
- -------------------------------------

a b c d e
No. of Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options/
at FY-End at FY-End

Name Shares Acquired Value Exercisable/ Exercisable/
on Exercise Realized Unexercisable Unexercisable

Atul M. Mehta None $0 945,214/500,000 $6,947,323/$3,675,000

These shares are unregistered, and their market value is unknown and
incalculable. However, the registered common stock of the Company was trading
for $7.35 per share as of the close of business on May 30, 2001. It is on this
hypothetical value that the figures in column (e) are calculated. These figures
may have no relation to the actual value of the unexercised options.

The Company's Board has no compensation committee. The Company has adopted
no specific policies applicable to compensation of the Company's sole executive
officer, Dr. Mehta. The bases for the compensation of the CEO reported for the
last completed fiscal year include Dr. Mehta's prior experience, his expertise
in the pharmaceutical field, his strategic relationships with other companies in
the pharmaceutical field, and the contributions he has made to the Company
during its period of growth. Statement of these bases is made by the entire
Board of Directors, Donald S. Pearson, Harmon Aronson and Dr. Atul M. Mehta.

COMPENSATION OF DIRECTORS

Each non-affiliated director receives $2,000 as compensation for each
meeting of the Board of Directors attended.

EMPLOYMENT AGREEMENT

The only employment agreement which the Company has with an executive
officer is the Amended and Restated Employment Agreement entered into March 31,

2000 between the Company and Dr. Atul Mehta (the "Agreement"). The Agreement
provides that the Company will employ Dr. Mehta for a period of five years
ending December 31, 2005 (unless sooner terminated pursuant to provisions of the
Agreement). At the end of said period of five years, the Agreement will be
automatically renewed for an additional five year term unless either party gives
written notice of nonrenewal by December 31, 2004. Subsequent to December 31,
2010, the Agreement is automatically extended for periods of one year unless
either party gives notice of nonrenewal at least one year prior to the date of
expiration. The Agreement provides for an annual salary of $242,000, which
amount is to be increased by the board of directors not less than 10% annually
beginning January 1, 2001. The Agreement further provides that Dr. Mehta will
receive 5% of the net profit each fiscal year, health insurance to cover Dr.
Mehta and his dependents, insurance on the life of Dr. Mehta for the benefit of
his spouse or his estate in an amount of at least $300,000 and such bonus as the
board in its discretion may award Dr. Mehta from time to time. In addition, the
Agreement provides that Dr. Mehta will receive options to purchase the common
stock of Elite at a price of $10.00 per share in a total amount of 500,000
shares, exercisable in increments of 100,000 shares annually beginning December
31, 2000. The options shall be exercisable from the date of vesting until one
year after Mehta ceases to be employed by the Company or to serve as an officer
and director of the Company or March 31, 2010, whichever is earlier. The options
are exercisable by Dr. Mehta if the Agreement or Dr. Mehta's position as an
officer and director is terminated by the Company for any reason or if the
Agreement is not renewed by the Company. The Agreement further provides that if
the board of directors votes to approve the acquisition of more than 50% of the
stock by any person or entity, the Company may require Dr. Mehta to elect to
exercise the options or to sell the options at a price equal to the difference
between the exercise price and an amount which is 110% of the then fair market
value of the stock. Dr. Mehta's compensation subsequent to December 31, 2005,
the agreement provides that the parties shall determine Dr. Mehta's compensation
after said period; and, such compensation shall be on terms no less favorable to
Dr. Mehta then the terms of compensation for the first five years and shall be
no less than 110% of his annual salary for the year ended December 31, 2005. The
Agreement shall terminate upon (a) Mehta's death, (b) election of either party
if Mehta is unable to perform his duties on account of disability for a total
period of 120 days or more during any consecutive period of twelve months, by
Elite upon "severe cause" and (d) by Mehta upon the occurrence of certain
events. If the Agreement is terminated due to Dr. Mehta's death, his surviving
spouse, or his estate if his spouse does not survive, shall receive Dr. Mehta's
salary, incentive commissions, benefits and any deferred compensation accrued
through the last day of the third calendar month following the month in which
termination occurred; in addition, one-half of his salary would be paid for an
additional period of three years. If the Agreement is terminated by the Company
because of Dr. Mehta's disability or upon "severe cause", Dr. Mehta will receive
his salary, incentive commissions, benefits and any deferred compensation
through the last day of the calendar month in which the termination occurs. If
the Agreement is terminated by Dr. Mehta upon the occurrence of one of the
events specified which would permit him to so terminate, Dr. Mehta shall then
receive all

accrued salary, incentive commissions, benefits and any deferred compensation
through the later of May 22, 2006 or the third anniversary of such termination.

COMPARATIVE SHAREHOLDER RETURN

The graph which follows compares the yearly percentage change in the
Company's cumulative total shareholder return on its common stock with the
cumulative total shareholder return of (1) all United States companies traded on
the American Stock Exchange (where the Company's common stock is now traded) and
(2) 51 companies traded on the American Stock Exchange which carry the Standard
Industrial Classification (SIC) code 283 (Pharmaceuticals). The graph was
prepared by the Center for Research in Security Prices at the University of
Chicago Graduate School of Business, Chicago, IL.

The stock of the Company was traded on the NASDAQ over-the-counter bulletin
board from July 23, 1998 until February 24, 2000. The stock of the Company began
trading on the American Stock Exchange on February 24, 2000. The period covered
by the comparison begins September 1998 because no trading data was available
for the period from July 23, 1998 through August 31, 1998. The Company's fiscal
year ends on March 31.

Comparison of Cumulative Returns

Performance Graph for
Elite Pharmaceuticals, Inc.

Produced on 08/09/2001 including data to 03/30/2001

[CHART]

Legend

Symbol CRSP Total Returns Index for: 09/1998 03/1999 09/1999 03/2000 09/2000 03/2001
- ------ ----------------------------- ------- ------- ------- ------- ------- -------

___________ [_] Elite Pharmaceuticals, Inc. 100.0 158.4 520.0 1780.0 1900.0 880.0
__ __ __ __. * AMEX Stock Market (US Companies) 100.0 117.5 128.9 166.6 159.6 132.9
- ------------ /\ Amex Stocks (SIC 2830 - 2839) US Companies) 100.0 136.2 121.3 267.8 347.9 156.3
Drugs

Notes:

A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 09/30/1998.
E. Data for Elite Pharmaceuticals, Inc. from 09/1998 to 01/2000 was
provided by the client.

DISCRETIONARY AUTHORITY

The proxy being solicited confers, and the holders of each proxy shall
have, discretionary authority to vote with respect to any of the following
matters:

(1) Any matter, if the Company did not have notice of the matter by June
22, 2000, which is at least 45 days before the date on which the Company first
mailed its proxy materials for the prior year's annual meeting of shareholders.

(2) Approval of the minutes of the prior meeting but such approval shall
not amount to ratification of the action taken at that prior meeting.

(3) The election of any person to any office for which a bona fide nominee
is named in the proxy statement and such nominee is unable to serve or for good
cause will not serve.

(4) Any proposal omitted from the proxy statement and form of proxy
pursuant to Rule 14a-8 or Rule 14a-9 of the Rules of the Securities and Exchange
Commission.

(5) Matters incident to the conduct of the meeting.

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors shall select the independent public accounting firm
for the Company each year at its annual meeting following the annual meeting of
shareholders. Therefore, no accounting firm is being recommended to or selected
at this annual meeting of shareholders. Miller Ellin & Company, New York, New
York, is the independent public accounting firm for the Company. It is expected
that a representative from Miller Ellin & Company will be present at the annual
shareholders meeting. That representative will have the opportunity to make a
statement if he desires to do so and is expected to be available to respond to
appropriate questions.

PROPOSALS OF SHAREHOLDERS

Any proposals of shareholders intended to be presented at the 2002 annual
meeting of the shareholders, now scheduled for not more than 30 days after
October 11, 2001, must be received by the Company for inclusion in the Company's
proxy statement and form of proxy relating to that meeting not later than May
15, 2002. Any such proposal must be received at the principal executive offices
of the Company.

- --------------------------------------------------------------------------------
FORM 10-KSB

THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON SOLICITED, UPON THE
WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE COMPANY'S ANNUAL REPORT ON
FORM 10-KSB, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO, FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED MARCH 31,
2001. SUCH REQUEST SHOULD BE DIRECTED TO MARK I. GITTELMAN, ELITE
PHARMACEUTICALS, INC., 165 LUDLOW AVENUE, NORTHVALE, NEW JERSEY 07647.
- --------------------------------------------------------------------------------

ELITE PHARMACEUTICALS, INC.
CHARTER AND POWERS OF THE AUDIT COMMITTEE

RESOLVED, that the charter and powers of the Audit Committee of the Board of
Directors (the "Audit Committee") shall be:

. Overseeing that management has maintained the reliability and
integrity of the accounting policies and financial reporting and
disclosure practices of the Company;

. Overseeing that management has established and maintained processes to
assure that an adequate system of internal control is functioning
within the Company;

. Overseeing that management has established and maintained processes to
assure compliance by the Company with all applicable laws, regulations
and Company policy;

RESOLVED, that the Audit Committee shall have the following specific powers and
duties:

1. Holding such regular meetings as may be necessary and such special meetings
as may be called by the Chairman of the Audit Committee or at the request of the
independent accountants or the Treasurer,

2. Creating an agenda for the ensuing year;

3. Reviewing the performance of the independent accountants and making
recommendations to the Board of Directors regarding the appointment or
termination of the independent accountants;

4. Conferring with the independent accountants and the internal auditors
concerning the scope of their examinations of the books and records of the
Company and its subsidiaries; reviewing and

approving the independent accountants' annual engagement letter; reviewing and
approving the Company's internal audit charter, annual audit plans and budgets;
directing the special attention of the auditors to specific matters or areas
deemed by the Committee or the auditors to be of special significance; and
authorizing the auditors to perform such supplemental reviews or audits as the
Committee may deem desirable;

5. Reviewing with management, the independent accountants and internal auditors
significant risks and exposures, audit activities and significant audit
findings;

6. Reviewing the range and cost of audit and non-audit services performed by the
independent accountants;

7. Reviewing the Company's audited annual financial statements and the
independent accountants' opinion rendered with respect to such financial
statements, including reviewing the nature and extent of any significant changes
in accounting principles or the application therein;

8. Reviewing the adequacy of the Company's systems of internal control;

9. Obtaining from the independent accountants and internal auditors their
recommendations regarding internal controls and other matters relating to the
accounting procedures and the books and records of the Company and its
subsidiaries and reviewing the correction of controls deemed to be deficient;

10. Providing an independent, direct communication between the Board of
Directors, internal auditors and independent accountants;

11. Reviewing the adequacy of internal controls and procedures related to
executive travel and entertainment, including use of Company-owned aircraft;

12. Reviewing with appropriate Company personnel the actions taken to ensure
compliance with the Company's Code of Conduct and the results of confirmations
and violations of such Code;

13. Reviewing the programs and policies of the Company designed to ensure
compliance with applicable laws and regulations and monitoring the results of
these compliance efforts;

14. Reviewing the procedures established by the Company that monitor the
compliance by the Company with its loan and indenture covenants and
restrictions;

15. Reporting through its Chairman to the Board of Directors following the
meetings of the Audit Committee;

16. Maintaining minutes or other records of meetings and activities of the Audit
Committee;

17. Reviewing the powers of the Committee annually and reporting and making
recommendations to the Board of Directors on these responsibilities;

18. Conducting or authorizing investigations into any matters within the Audit
Committee's scope of responsibilities. The Audit Committee shall be empowered to
retain independent counsel, accountants, or others to assist it in the conduct
of any investigation;

19. Considering such other matters in relation to the financial affairs of the
Company and its accounts, and in relation to the internal and external audit of
the Company as the Audit Committee may, in its discretion, determine to be
advisable.

ELITE PHARMACEUTICALS, INC.

APPOINTMENT OF PROXY

Annual Meeting of Shareholders, October 11, 2001

The undersigned shareholder hereby appoints Atul M. Mehta, President of the
Company, and Mark I. Gittelman, Secretary and Treasurer of the Company, with
full power of substitution, the lawful attorneys, agents and proxies of the
undersigned to vote all shares of Elite Pharmaceuticals, Inc. held by the
undersigned with respect to the election of directors, at the Annual Meeting of
its shareholders to be held at 11:00 A.M. on October 11, 2001, at the offices of
the American Stock Exchange, 86 Trinity Place, New York, NY, and all adjourned
sessions thereof, with all the powers the undersigned would possess if
personally present at such meeting, and upon the following matters:

1. The election of the following persons who will be nominated to serve
as directors:

Atul M. Mehta Donald Pearson Harmon Aronson Eric L. Sichel

INSTRUCTIONS: You May Withhold Authority To Vote For Any Nominee By Lining
Through Or Otherwise Striking Out The Name Of Any Nominee. If You Execute This
Proxy In Such A Manner As Not To Withhold Authority To Vote For The Election Of
Any Nominee, This Proxy Shall Be Deemed To Grant Such Authority.

2. Such other business and matters as may be brought before the meeting
or any adjournments thereof, including any matters which are not known or
anticipated a reasonable time before the solicitation.

The shares represented by this proxy will be voted as directed by the
shareholder. If the person solicited specifies that authority to vote for a
nominee for director be withheld, the shares will be voted in accordance with
such specification. If no direction is given, the shares will be voted FOR all
nominees for director. To be voted, the proxy must be received prior to the
meeting.

This Appointment of Proxy Confers Upon the Holders Discretionary Authority
To Vote On The Matters Specified In The Proxy Statement Under The Heading
"Discretionary Authority."

This Appointment of Proxy is Solicited By The Board of Directors Of The
Company.

Dated:___________________________, 2001

_______________________________________
Signature of Shareholder

(Please Sign exactly as name appears on this proxy.
Executors, Trustees, etc. should give full title).

Please return to:

Jersey Transfer & Trust Co.
201 Bloomfield Ave.
Verona, NJ 07044

CORPORATE PROFILE

Elite Pharmaceuticals, Inc. (AMEX:ELI) through its wholly owned subsidiary,
Elite Laboratories, Inc., specializes in the development of oral drug delivery
systems such as delayed, sustained, pulsatile, or targeted release pellets,
granules, crystals, and powders in tablet and capsule dosage forms.

To date, Elite has nine products in its pipeline, comprising generic (ANDA) and
brand (NDA) products in the therapeutic categories of cardiovascular,
anthi-arthirtic, anti-diabetic, anti-infective, and CNS disorders. Previously
Elite has assisted in the development of several other products under contract
for companies such as SmithKline Beecham, Novo Nordisk, and Celgene Corporation.

In June of 2000, Elite signed a Memorandum of Understanding to form a joint
venture in Japan with Inabata, a Japanese pharmaceutical conglomerate. Elite
will retain the control of the joint venture company and contribute products and
technology, whereas Inabata will provide funding and marketing support.

In October of 2000, Elite entered into a joint venture agreement with Elan
Corporation for the development of three oral drug delivery products.

In June of 2001, Elite signed two exclusive agreements with a US based
pharmaceutical company, to develop, license, and manufacture two prescription
products for the North American market.

Last year Elite established a state of the art facility in Northvale, NJ with
the intent to manufacture products in sufficient quantities to support
submission of drug applications to the Food and Drug Administration. This
facility is registered with FDA and DEA.

August 30, 2001

Dear Shareholder:

In fiscal year 2000 we laid the foundations by listing on AMEX,
establishing an FDA and DEA registered state-of-the art facility in Northvale,
NJ, recruiting professionals in key positions, filing two more patents based on
the results of the pilot studies conducted in human volunteers, and forming an
alliance with a Japanese company, Inabata.

We have further built on these foundations during the past fiscal year
towards fulfilling our strategic objectives and positioning Elite for
accelerated growth. It is my pleasure to report to you the progress we have made
since I last communicated with you.

2001 Progress Report

We have continued with the development of several products in our pipeline.
These include:

Three products targeted to be generically equivalent to marketed drug delivery
products. These will require ANDA filings, and to date, there are no generics
marketed for two of these products.

Six products are being developed which will require NDA filings, and when
approved will be promoted as brand products. Some of these products have already
shown proof of concept in human studies, and could be licensed out to larger
pharmaceutical companies.

Two products are being developed in collaboration with Elan with whom we formed
a joint venture company, Elite Research Limited, last year.

Two products are being developed for another US pharmaceutical company under a
contract signed in June 2001.

The current combined US market size for all of the above-mentioned products
exceeds $5 billion.

I mentioned in my previous communication that our pulse- release patent for
methylphenidate, which was assigned to Celgene, has now been licensed to
Novartis, the innovator company for methylphenidate (Ritalin(R)). Elite retains
certain manufacturing rights for the pulse-release methylphenidate product and
we remain hopeful Novartis will market it. Further, Elite has retained rights to
the pulse-release technology with regard to all non-methylphenidate drugs

As you are aware, our manufacturing facility is registered with both FDA and
DEA. Management initiatives included writing, reviewing and the implementation
of over 250 Standard Operating Procedures covering each department, its
functions, and performance, operation, and maintenance of equipment as well as
system flow analysis, and selection of material specification and release
parameters.

Pursuant to signing an MOU to form a joint venture with Inabata, to license and
market Elite products in Japan, we have met several Japanese pharmaceutical
companies and are in active discussions for the development of various products
under contract for these companies.

In support of our initiatives for Elite on a global basis, I am happy to report
that in October of 2000 we signed a joint venture agreement with Elan
Corporation for the development of three prescription products. Elan Corporation
is a publicly held company based in Dublin, Ireland and renowned for its
expertise in drug delivery systems. We are honored to be recognized by such a
prestigious firm in seeking out our expertise for the joint development of three
products. The joint venture company is named Elite Research Limited and Elite
Laboratories Inc. holds 80.1% ownership. I am pleased to report that the first
product formulated by Elite is ready to be tested in vivo and development of the
second product has begun.

In continuation of our collaborative growth efforts, on June 28, 2001, Elite
signed two development and license agreements for the development and
manufacture of two prescription products for a US based, pharmaceutical company.
These products are intended to compete in the therapeutic category that has a US
market size of approximately $3 billion. Under the terms of the agreement, Elite
is entitled to receive the upfront development fees for the various phases of
the development. In addition, upon FDA approval, Elite has the right to
manufacture commercial batches of these products, and to receive royalties for
the 15-year term of the agreement. To date, Elite has received the upfront
payment for the first phase of the first product and has commenced the
development of this product.

We are now generating revenues and expect this to continue throughout this
fiscal year. Our net loss per common share has been reduced, thus allowing us to
continue to improve our working capital posture as we pursue strategic alliances
and new product development. The company's cash position has significantly
increased due to the issuance of common stock ($5 million equity investment by
Elan at a strategic premium), and from the exercise of warrants (approximately
$1.5 million)

Outlook

We are poised for accelerated growth due to our cash position, intellectual
property, product pipeline, infrastructure with an FDA and DEA registered
facility, and alliances such as with Inabata and Elan.

We have spread our risk by developing both brand and selected generic drug
delivery products encompassing several therapeutic categories and market size.
The development of brand products, presents an opportunity to generate cash flow
in the near future through product licensing and development fees while
retaining long term returns through manufacturing revenues and royalties.

I take this opportunity to acknowledge the Elite team comprised of the
employees, board members, advisors and consultants, and on behalf of our team, I
thank our shareholders, customers, and business partners for their support and
loyalty.

Sincerely yours,

/s/ Atul M. Mehta, Ph.D.

Atul M. Mehta, Ph.D.
President & CEO

CONTROLLED RELEASE TECHNOLOGY

Elite is not limited to controlled release technology over 24 hours (a once
daily dose), but can also delay, target, or pulsate the release of a drug at
predetermined times or locations in the GI tract. These types of release
patterns are desirable for certain drugs in order to improve drug
bioavailability, to increase the therapeutic effect, or to decrease side
effects. In addition, Elite can mask the taste of a drug so that it can be
presented in chewable or fast dissolve dosage forms.

Figure 1 depicts chrono delivery of a cardiovascular drug, which incorporates
Elite's delayed and sustained release technology. This type of profile is
suitable for bedtime administration.

Figure 2 depicts Elite's technology to deliver a drug in a pulsatile fashion.
This is applicable to many drugs including, but not limited to, drugs with heavy
first pass effect.

Figure 3 depicts Elite's ability to develop pH independent drug release profile.

The formulation technology of Elite thus can customize the release of a wide
range of therapeutic agents such as cardiovasculars, anti-arthritics,
anti-diabetics, anti-infectives, bronchodilators, analgesics and drugs used in
CNS disorders.

Some of the notable features of process technology employed by Elite are
environmentally friendly processes (no organic solvents), reproducibility, high
manufacturing yields, scale-up capabilities, patentability, and cost
effectiveness.

The three US patents issued as a result of Elite's proprietary technology
include pulse-release methylphenidate (US 5,837,284). This patent has been
assigned to Celgene who has in turn licensed it to Novartis. Currently, Elite
has two patents pending and more to follow.

CORPORATE INFORMATION

Directors of Elite Pharmaceuticals, Inc.
and Elite Laboratories, Inc. Advisory Board Members Corporate Information
- ----------------------------------------------- -------------------------- --------------------------------------

Atul M. Mehta, Ph.D. Barri M. Blauvelt, MBA INDEPENDENT AUDITORS
Director Miller, Ellin & Co., LLP
President and Chief Executive Officer Jerome P. Skelly, Ph.D. 750 Lexington Avenue
New York, NY 10022
Donald S. Pearson Joseph R. Robinson, Ph.D.
Director REGISTRAR AND
Vijay Patel, R.Ph. CO-TRANSFER AGENT
Harmon Aronson, Ph.D. Jersey Transfer and Trust Co.
Director Anil Kothari, MD 201 Bloomfield Avenue
Verona, NJ 07052
Eric Sichel, M.D. John deNeufville, Ph.D.
Director CO-TRANSFER AGENT
Harris Trust Company of New York
430 Park Avenue
New York, NY 10022

Officers of Elite Pharmaceuticals, Inc.
and Elite Laboratories, Inc.
- -----------------------------------------------

Atul M. Mehta, Ph.D. STOCK LISTING
President and Chief Executive Officer The Company's Common Stock is
traded on the American Stock
Mark I. Gittelman, CPA Exchange under the symbol "ELI".
Secretary and Treasurer
The Company's warrants are traded on the
OTC:BB under the symbol "ELIPz".

FORMS 10-KSB and 10-QSB
AVAILABILITY
Additional copies of the Company's
Annual Report filed with the SEC
on Form 10-K and Quarterly Reports
filed with the SEC on Form
10-Q are available upon written
request to:
Elite Pharmaceuticals, Inc.
165 Ludlow Avenue
Northvale, New Jersey 07647

This Annual Report contains certain forward-looking statements which involve
known and unknown risks, delays, uncertainties and other factors not under the
Company's control which may cause actual results, performance or achievements of
the Company to be materially different from the results, performance or other
expectations implied by these forward-looking statements. These factors include
results of current or pending research and development activities, actions by
the FDA and other regulatory authorities, actions or decisions of third parties,
and those factors detailed in the Company's filings with the Securities and
Exchange Commission such as 10K, 10Q and 8K reports.