STRATEGIC ALLIANCE AGREEMENT

                                                                   EXHIBIT 10(a)

                                                               EXECUTION VERSION

            STRATEGIC ALLIANCE AGREEMENT (this   "AGREEMENT"),   dated
            as of December 6, 2006 (the   "EFFECTIVE   DATE"),   by and
            between    ELITE    PHARMACEUTICALS,    INC.,    a   Delaware
            corporation ("ELITE"),   VEERAPPAN S. SUBRAMANIAN ("VS"),
            and   VGS   PHARMA,   LLC,   a   Delaware   limited   liability
             company ("VGS", and together with VS, the "VGS PARTIES")
            --------------------------------------------------------

                            INTRODUCTION

      Elite   Pharmaceuticals is a specialty   pharmaceutical   company principally
engaged   in   the   development   and   manufacturing   of   oral    controlled-release
products.   Elite, both   independently and with selected   partners,   develops and
in-licenses new drug products as wells as generic drug products.

      VS is an expert   in the   formulation   and   development   of drug   products,
particularly   generic drug   products.   VGS is   wholly-owned   subsidiary   of Kali
Capital,   L.P.,   a Delaware   limited   partnership   which is   controlled   by Kali
Management,   LLC ("KALI"),   its general   partner,   and Kali is controlled by Anu
Subramanian, its managing member.

      Elite and the VGS Parties wish to enter into a strategic alliance whereby,
among other things,   the parties have incorporated Novel   Laboratories,   Inc., a
Delaware corporation ("NOVEL") as a joint venture for the research, development,
manufacturing,   in-licensing, out-licensing, marketing, product acquisition, and
distribution of certain agreed upon pharmaceutical products.

      Elite   desires to have VS perform,   and VS has agreed to perform,   certain
strategic   advisory   services   for   Elite,    advising   Elite   on   the   research,
development    and    commercialization    of   Elite's    existing   and   prospective
pharmaceutical products.

      As a condition   to the   formation   of Novel and the   commencement   of this
strategic   relationship,   VGS desires to purchase, and Elite has agreed to sell,
shares of its common   stock and   warrants   exercisable   for shares of its common
stock to VGS.

                                     AGREEMENT

      In    consideration    of    the    foregoing    and    the    mutual    promises,
representations,   warranties, and covenants hereinafter set forth, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

      1. SALE AND PURCHASE.

            1.1 SALE AND PURCHASE OF COMMON STOCK OF ELITE AND NOVEL.

                  (a) SALE AND PURCHASE OF ELITE COMMON STOCK AND   WARRANTS.   At
the Closing (as defined below), Elite shall sell and issue to VGS, and VGS shall
purchase and accept from Elite (i) 957,396   shares (the   "PURCHASED   SHARES") of
common stock, par value US$0.01 of Elite (the "COMMON STOCK"),   for an aggregate
purchase   price   of   Two   Million   United   States   Dollars   (US$2,000,000)   (the
"PURCHASE PRICE"), with the purchase price per Purchased Share

<PAGE>

being equal to the trailing   average closing price of the Common Stock as listed
on the American   Stock   Exchange   during the ten (10)   trading days   immediately
preceding the execution of this   Agreement,   and (ii) a warrant (the   "WARRANT",
and together with the Purchased Shares, the "SECURITIES"),   in substantially the
form attached   hereto as EXHIBIT A, to purchase   478,698 shares of Common Stock,
at a purchase price per share of US$ 3.00 (the "WARRANT SHARES").

                  (b) SALE AND PURCHASE OF NOVEL COMMON   STOCK.   At the Closing,
(i) Elite shall subscribe for 49,000 shares of Class A Voting Common Stock,   par
value   US$0.0001 per share, of Novel   (collectively,   the "ELITE NOVEL SHARES"),
for an aggregate purchase price of US$9,800 ("ELITE NOVEL SUBSCRIPTION   PRICE");
and (ii) VGS shall   subscribe   for 51,000 shares of Class A Voting Common Stock,
par value US$0.0001 per share, of Novel (collectively,   the "VGS NOVEL SHARES"),
for and aggregate purchase price of US$10,200 ("VGS NOVEL SUBSCRIPTION PRICE").

            1.2 CLOSING.   The closing of the transactions   described in Sections
1.1   (the   "CLOSING")   shall   take   place   at the   offices   of   Reitler   Brown &
Rosenblatt LLC, 800 Third Avenue,   21st Floor, New York, New York on December 6,
2006, or at such other time or place as Elite and VS may mutually agree.

            1.3 CLOSING DELIVERIES. At the Closing:

                   (a) VGS shall pay to Elite or its   designee,   by wire transfer
to the account or accounts   listed on EXHIBIT B, attached   hereto,   the Purchase
Price in immediately available funds;

                  (b) Elite shall   deliver to VGS (i) a   certificate   evidencing
VGS's ownership of the number of Purchased Shares purchased by VS hereunder, and
(ii) the   Warrant,   registered   in the name of VGS, to the address set forth for
VGS on the signature page hereof; and

                  (c)   Elite   shall   deliver   to   Novel,   by   wire   transfer   of
immediately available funds, the Initial Contribution (as defined below).

            1.4 CONDITIONS TO OBLIGATIONS OF THE VGS PARTIES AT THE CLOSING. The
obligations   of the VGS Parties at the   Closing are subject to the   satisfaction
(or   waiver   by VS) of each   of the   following   conditions   at or   prior   to the
Closing:

                  (a)   REPRESENTATIONS   AND WARRANTIES TRUE. The representations
and   warranties   made by Elite in Section   2.2 shall be true and   correct in all
material   respects as of the   Closing   with the same force and effect as if they
had been made as of the Closing;

                  (b) PERFORMANCE OF OBLIGATIONS. Elite shall have performed and
complied with all   agreements and covenants   herein   required to be performed or
complied with by Elite on or prior to the Closing pursuant to this Agreement;

                  (c) Elite   shall pay to Novel   the   Elite   Novel   Subscription
Price;

                  (d) VGS shall pay to Novel the VGS Novel Subscription Price;


                                      -2-
<PAGE>

                  (e) Elite shall pay to Novel the Initial Contribution;

                  (f) DELIVERY OF   SECURITIES.   Elite or its transfer   agent for
Common Stock shall have delivered the   instruments   evidencing the Securities as
described in Section 1.3(b) hereof;

                  (g) ADDITIONAL DELIVERIES.   Delivery of the following executed
documents and instruments (collectively with the agreement identified in Section
1.5(c)(v), the "STRATEGIC ALLIANCE Documents"):

                        (i) this Agreement duly executed by Elite;

                        (ii) that   certain   Advisory   Agreement   between   VS and
      Elite,   in   substantially   the form   attached   hereto   as   EXHIBIT   C (the
      "ADVISORY AGREEMENT"), duly executed by Elite;

                        (iii) that certain   Non-Qualified Stock Option Agreement
      between VS and Elite, in substantially the form attached hereto as EXHIBIT
      D (the "STOCK OPTION AGREEMENT"), duly executed by Elite;

                        (iv) that certain   Employment   Agreement   between VS and
      Novel,   in   substantially   the form   attached   hereto   as   EXHIBIT   E (the
      "EMPLOYMENT AGREEMENT"), duly executed by Novel;

                        (v) that certain Subscription   Agreement between VGS and
      Novel for the purchase by VGS of the VGS Novel   Shares,   in   substantially
      the form attached   hereto as EXHIBIT F-1, (the   "SUBSCRIPTION   AGREEMENT")
      duly executed by Novel;

                        (vi) a   stock   certificate   of   Novel   evidencing   VGS's
      ownership of the VGS Novel Shares, duly executed on behalf of Novel;

                        (vii) that certain Stockholders' Agreement,   dated as of
      the date hereof,   between Elite, VS, VGS and Novel, in   substantially   the
      form attached hereto as EXHIBIT G (the   "STOCKHOLDERS'   AGREEMENT"),   duly
      executed by both Elite and Novel; and

                        (viii) the certain Registration Rights Agreement between
      Elite, VS and VGS, in substantially   the form attached hereto as EXHIBIT H
      (the "REGISTRATION RIGHTS AGREEMENT"), duly executed by Elite.

                  (h) CONSENTS,   PERMITS, AND WAIVERS. Elite shall have obtained
any   and   all   consents,   permits   and   waivers   necessary   or   appropriate   for
consummation of the transactions contemplated hereby.

            1.5   CONDITIONS   TO   ELITE'S   OBLIGATIONS   AT THE   CLOSING.   Elite's
obligations at the Closing are subject to the   satisfaction (or waiver by Elite)
of each of the following conditions at or prior to the Closing:


                                      -3-
<PAGE>

                  (a)   REPRESENTATIONS   AND WARRANTIES TRUE. The representations
and warranties   made by the VGS Parties in Section 2.3 shall be true and correct
in all material   respects as of the Closing with the same force and effect as if
they had been made as of the Closing;

                  (b)   PERFORMANCE   OF   OBLIGATIONS.   Each VGS Party   shall have
performed and complied with all agreements and covenants   herein   required to be
performed or complied   with by such VGS Party on or before the Closing   pursuant
to this Agreement;

                  (c)   DELIVERIES.    Delivery   of   the   following   payments   and
executed documents and instruments:

                        (i) the Purchase Price;

                        (ii) this Agreement duly executed by VS and VGS;

                        (ii) the Advisory Agreement, duly executed by VS;

                        (iii) the Stock Option Agreement, duly executed by VS;

                        (iv) the   Employment   Agreement,   duly executed by Novel
      and VS;

                        (v) that certain   Subscription   Agreement   between Elite
      and   Novel   for the   purchase   by   Elite of the   Elite   Novel   Shares,   in
      substantially   the form   attached   hereto as EXHIBIT F-2, duly executed by
      Novel;

                        (vi) a stock   certificate   of Novel   evidencing   Elite's
      ownership of the Elite Novel Shares, duly executed on behalf of Novel;

                        (vii) the Subscription   Agreement,   duly executed by VGS
      and Novel;

                        (viii) the Stockholders Agreement,   duly executed by VS,
      VGS and Novel; and

                        (ix) the Registration Rights Agreement, duly executed by
      VGS and VS.

                  (d) CONSENTS, PERMITS, AND WAIVERS. The VGS Parties shall have
obtained any and all consents,   permits and waivers necessary or appropriate for
consummation of the transactions contemplated hereby.

            1.6   TERMINATION.   Prior   to   the   Closing,   this   Agreement   may be
terminated   by (a) the   mutual   written   consent   of Elite and VS, or (b) either
Elite or VS in the event that the Closing does not occur on or prior to December
7, 2006.


                                      -4-
<PAGE>

      2. REPRESENTATIONS AND WARRANTIES.

            2.1   CONSTRUCTION.   For   purposes   of this   Section   2, a Person (as
defined below) shall be deemed to have "knowledge" of a particular fact or other
matter if the Person is actually   aware of such fact or other   matter.   A Person
that is a corporation,   partnership or other business   entity shall be deemed to
have "knowledge" of a particular fact or other matter if any executive   officer,
a director (in the case of a corporation),   a manager or managing member (in the
case of a limited   liability   company),   or a general   partner (in the case of a
partnership)   of such   Person   has   knowledge   (as   described   in the   preceding
sentence) of such fact or other matter. For purposes of this Agreement, the term
"PERSON"   shall mean an individual,   corporation,   partnership,   trust,   limited
liability company,   unincorporated organization,   joint stock corporation, joint
venture,   association   or other   entity,   or any   government,   or any   agency or
political subdivision thereof or any branch of any legal entity.

            2.2 ELITE'S   REPRESENTATIONS AND WARRANTIES.   Except as set forth in
the SEC   Reports (as defined   below) or under the   corresponding   section of the
disclosure   schedules   delivered to the VGS Parties   concurrently   herewith (the
"DISCLOSURE   SCHEDULES"),   which   Disclosure   Schedules   shall be   deemed a part
hereof and to qualify any   representation   or warranty   otherwise made herein to
the extent of such disclosure,   Elite hereby makes the following representations
and warranties to the VGS Parties as of the date of this Agreement and as of the
time of the Closing.   For purposes of this Section 2.2, the SEC Reports shall be
deemed to have been "provided" to VS:

            (a)   ORGANIZATION,   GOOD   STANDING   AND   QUALIFICATION.   Elite   is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware.   Elite has all requisite corporate power and authority
to own and   operate   its   properties   and   assets,   to execute   and   deliver the
Strategic   Alliance   Documents   to   which it is a   party,   and to carry   out the
provisions   of the   Strategic   Alliance   Documents to which it is a party and to
carry on its business as   presently   conducted   and as presently   proposed to be
conducted.   Elite is duly   qualified   and is authorized to do business and is in
good standing as a foreign   corporation in all jurisdictions in which the nature
of its   activities   and of its properties   makes such   qualification   necessary,
except   for   those   jurisdictions   in which   failure   to do so would not have or
reasonably be expected to result in (i) a material adverse effect on the results
of operations, assets, business, prospects or condition (financial or otherwise)
of Elite, or (ii) a material   adverse effect on Elite's   ability to perform,   in
any material   respect,   on a timely basis its   obligations   under the   Strategic
Alliance Documents to which it is a party (a "MATERIAL ADVERSE EFFECT").

            (b) AUTHORIZATION;   VALID AND BINDING   AGREEMENT.   The execution and
delivery by Elite of the   Strategic   Alliance   Documents to which it is a party,
the   performance   by Elite of its   obligations   and   undertakings   hereunder and
thereunder,   and the   consummation   by   Elite of the   transactions   contemplated
hereby and   thereby,   have been duly and   validly   authorized   by all   necessary
action   on the part of Elite and no other   proceedings   on the part of Elite are
necessary   to   authorize   the   execution   or delivery by Elite of the   Strategic
Alliance   Documents   to   which it is a party,   the   performance   by Elite of its
obligations   and   undertakings   hereunder and thereunder or the   consummation by
Elite   of the   transactions   contemplated   hereby   and   thereby.   The   Strategic
Alliance   Documents to which it is a party have been duly executed and delivered
by Elite, and constitute the valid and binding obligations of Elite, enforceable
against Elite in


                                      -5-
<PAGE>

accordance   with   their   terms   except   as   limited   by   applicable   bankruptcy,
insolvency,    reorganization,    moratorium   or   other   similar   laws    affecting
enforcement and by general principles of equity.

                  (c) CONFLICTS;   CONSENTS.   The execution and delivery by Elite
of the Strategic   Alliance   Documents to which it is a party, the performance by
Elite of its obligations and undertakings contemplated hereunder and thereunder,
and the   consummation   by   Elite of the   transactions   contemplated   hereby   and
thereby,   do not and will not conflict   with,   or result in any violation of, or
default   under   or   result   in the   creation   of   any   mortgage,   pledge,   lien,
encumbrance,   charge or adverse   claim   (each,   a "LIEN") on the   properties   or
assets of Elite under,   any provision of (i) the   certificate of   incorporation,
bylaws or other charter or governance   documents of Elite,   each as the same has
been amended to date, (ii) any contract, agreement, instrument or arrangement to
which   Elite is a party or by which any of   Elite's   properties   or   assets   are
bound, (iii) any license,   franchise, permit or other similar authorization held
by Elite,   or (iv) to the   knowledge of Elite,   any   judgment,   order or decree,
statute,   law,   ordinance,   rule or   regulation   applicable   to Elite or Elite's
properties or assets.

                   (d) ISSUANCE OF THE SECURITIES.   The Purchased Shares are duly
authorized   and,   when   issued   and paid for in   accordance   with the   terms and
conditions hereof, will be validly issued,   fully paid and   non-assessable,   and
free and clear of all Liens imposed by Elite other than restrictions on transfer
or other   dispositions   provided for in the Strategic   Alliance   Documents.   The
shares of Common   Stock   issuable   upon   exercise of the Warrant   (the   "WARRANT
SHARES"),   when issued in accordance with the terms of the Warrant, will be duly
authorized, validly issued, fully paid and non-assessable, and free and clear of
all   Liens   imposed   by Elite   other   than   restrictions   or   transfer   or other
dispositions   provided   for in   the   Strategic   Alliance   Documents.   Elite   has
reserved   from its duly   authorized   capital   stock a number of shares of Common
Stock for   issuance   upon the   exercise   of the Warrant   equal to the   aggregate
number of Warrant   Shares   issuable   upon   exercise of the   Warrant   immediately
following the Closing.

                  (e) CAPITALIZATION.   Except as set forth on SCHEDULE 2.2(E) of
the   Disclosure   Schedules   attached   hereto,   prior   to   giving   effect   to the
transaction   contemplated in the Strategic   Alliance   Documents,   the authorized
capital   stock   of   Elite   immediately   prior   to the   Closing   consists   of (i)
65,000,000   shares of Common Stock,   of which   19,599,325   shares are issued and
outstanding, and of which 7,000,000 shares are reserved for future issuance upon
exercise of options   granted to employees,   officers,   directors and consultants
pursuant to Elite's   2004 Stock   Option   Plan,   as amended,   and (ii)   5,000,000
shares of preferred   stock,   of which 10,000   shares are   designated as Series B
Preferred   Stock,   par value   U.S.$   0.01 per   share   (the   "SERIES B   PREFERRED
STOCK"),   9,695 of which are issued and   outstanding.   As of the Closing,   Elite
shall have   reserved a sufficient   number of shares of Common Stock for issuance
upon exercise of the Warrant. Other than in connection with the offering and the
sale by Elite of the Series B Preferred Stock and except as set forth in the SEC
Reports or as set forth on SCHEDULE 2.2(E) of the Disclosure   Schedules attached
hereto, there are no preemptive rights, voting agreements, rights of first offer
or refusal,   options,   warrants or other   conversion   or exchange   privileges or
rights presently outstanding to purchase, subscribe for or otherwise acquire any
of Elite's capital stock. The Warrant,   when issued against payment therefore in
accordance with this Agreement, will be duly authorized and validly issued.


                                      -6-
<PAGE>

                  (f) LITIGATION.   Except as set forth on SCHEDULE 2.2(F), there
is no action,   suit, inquiry,   notice of violation,   proceeding or investigation
pending or, to the knowledge of Elite,   threatened   against or affecting   Elite,
any   subsidiary   of Elite   (each,   a   "SUBSIDIARY")   or any of their   respective
properties   before or by any court,   arbitrator,   governmental or administrative
agency or   regulatory   authority   (federal,   state,   county,   local or   foreign)
(collectively,   an   "ACTION")   which (i)   adversely   affects or   challenges   the
legality,   validity or enforceability of any of the Strategic Alliance Documents
to which Elite is a party or the   Securities,   or (ii)   could,   if there were an
unfavorable   decision,   have or   reasonably   be expected to result in a Material
Adverse Effect.   Neither Elite nor any   Subsidiary,   nor any director or officer
thereof, is or has been the subject of any Action involving a claim of violation
of or liability   under federal or state   securities laws or a claim of breach of
fiduciary duty.

                  (g) SEC   REPORTS;   FINANCIAL   STATEMENTS.   Elite has filed all
reports,   schedules,   forms, statements and other documents required to be filed
with the   Commission   by it under the   Securities   Act of 1933,   as amended (the
"SECURITIES   ACT") and the   Securities   Exchange   Act of 1934,   as amended   (the
"EXCHANGE   ACT"),   for the two years   preceding the date hereof (or such shorter
period as Elite was required by law or   regulation to file such   material)   (the
foregoing materials,   including the exhibits thereto and documents   incorporated
by   reference   therein,   being   collectively   referred   to   herein   as the   "SEC
REPORTS") on a timely   basis or has   received a valid   extension of such time of
filing and has filed any such SEC Reports   prior to the   expiration   of any such
extension.   As of   their   respective   dates,   the SEC   Reports   complied   in all
material   respects with the   requirements of the Securities Act and the Exchange
Act and the rules and regulations of the Commission promulgated   thereunder,   as
applicable,   and none of the SEC   Reports,   when   filed,   contained   any   untrue
statement of a material   fact or omitted to state a material fact required to be
stated   therein or necessary   in order to make the   statements   therein,   in the
light of the circumstances under which they were made, not misleading.

            2.3 PURCHASER'S REPRESENTATIONS,   WARRANTIES AND COVENANTS. Each VGS
Party, jointly and severally, hereby represents, warrants and covenants to Elite
as of the date of this Agreement and as of the time of Closing as follows:

                  (a) ORGANIZATION,   GOOD STANDING AND   QUALIFICATION.   VGS is a
limited liability company duly organized,   validly existing and in good standing
under the laws of the State of Delaware.   VGS has all requisite   corporate power
and   authority   to own and operate   its   properties   and assets,   to execute and
deliver the Strategic   Alliance   Documents to which it is a party,   and to carry
out the   provisions of the Strategic   Alliance   Documents to which it is a party
and to carry on its business as presently conducted and as presently proposed to
be   conducted.   VGS is duly   qualified   and is   authorized to do business in all
jurisdictions   in which the nature of its activities and of its properties makes
such qualification necessary, except for those jurisdictions in which failure to
do so would not have or reasonably   be expected to result in a Material   Adverse
Effect.

                  (b) VGS   OWNERSHIP.   Schedule   2.3(b)   set   forth   a true   and
complete list of the holders own all of the outstanding partnership interests in
VGS and each holder's type of partnership interest,   percentage of voting rights
as to actions to be taken by VGS and right to receive   allocations of profit and
losses from VGS. There are no preemptive rights,   voting   agreements,   rights of
first offer or refusal, options, warrants or other conversion or exchange


                                      -7-
<PAGE>

privileges   or   rights   presently   outstanding   to   purchase,   subscribe   for or
otherwise acquire any of the partnership interests in VGS.

                  (c) AUTHORIZATION; VALID AND BINDING AGREEMENT. Such VGS Party
has all requisite legal capacity, power and authority to execute and deliver the
Strategic   Alliance   Documents   to which he or it is a party,   to perform   their
obligations and   undertakings   hereunder and   thereunder,   and to consummate the
transactions   contemplated hereby and thereby. The execution and delivery of the
Strategic   Alliance   Documents to which he or it is a party,   the performance of
his or its   obligations   and   undertakings   hereunder   and   thereunder,   and the
consummation of the transactions contemplated hereby and thereby, have been duly
and validly authorized by all necessary action on the part of such VGS Party and
no other   proceedings   on the part of,   or on   behalf   of,   such VGS   Party   are
necessary   to authorize   the   execution   or delivery of the   Strategic   Alliance
Documents to which he or it is a party,   the   performance of its obligations and
undertakings   hereunder and thereunder or the   consummation of the   transactions
contemplated hereby and thereby.