NOVADEL REPORTS NET LOSS OF $6,341,000 FOR FISCAL 2004.

NovaDel Pharma Inc. (AMEX:NVD), Flemington, N.J. has reported results for the fiscal year ended July 31, 2004 and restated results for fiscal 2003.

Net losses for the period were $6,341,000, or 24 cents per share, compared to year-ago restated net losses of $6,956,000, or 45 cents per share. At July 31, 2004, the company had cash, cash equivalents, and investment securities of $9,684,000, compared to $3,086,000 at July 31, 2003. As previously announced, the company discovered that, as a result of a cashless option exercise provision that had been approved in January 2002, its outstanding stock options were subject to variable accounting under APB No. 25. This required the company to restate its financials for all of the intervening reporting periods in its current 10-K. While the overall impact of the variable accounting treatment was deemed to be material, the changes were relevant only to non-cash compensation expense and have no bearing on the company's cash flow, liquidity or capital resources position or total shareholders' equity.

The company has revisited its option plan provisions and rescinded the "cashless exercise" provision. Variable accounting is not anticipated to be applied to the company's accounting after first quarter of fiscal 2005. The company previously reported a net loss for fiscal 2003 of $5,815,000. As restated, the net loss for fiscal 2003 of $6,956,000 includes a variable plan accounting charge of $1,141,000. For fiscal 2004, the net loss of $6,341,000 was impacted by a variable plan accounting credit of $736,000.

Net cash used in operating activities for fiscal 2004 was $6,120,000 compared to $4,320,000 in the year ago period. This increase was primarily attributable to R&D expenditures which were $2,492,000, a substantial increase over the year ago R&D expense of $1,087,000.

Commenting on the year, Gary A. Shangold, MD, NovaDel's president and chief executive officer said, "We have made substantial progress on several fronts during the past year. We submitted our first NDA and completed important proof of concept studies on two of our Tier I priority projects, with another study underway and two more studies to begin shortly. Further, our aggressive business development efforts have resulted in multiple partnerships which will generate revenue for the company while also helping to fund our product development programs, as seen in our report for fiscal year 2004, during which our R&D activity increased significantly."

Highlights of the fiscal year just ended and subsequent events include the following:

-- Submission of company's first New Drug Application to the US FDA which was accepted for filing under PDUFA guidelines in September.

-- Execution of an aggressive business development strategy that led to product partnerships with: (1) Par Pharmaceutical Companies (NYSE:PRX)

for nitroglycerin (for angina pectoris); and (2) Hana Biosciences, Inc. (OTCBB: HNAB) for ondansetron, the leading anti-emetic.

-- A broad partnering and licensing agreement for animal health market applications of NovaDel's lingual spray technology was entered into with Velcera Pharmaceuticals, Inc.

-- Pilot studies of two other lingual spray candidates, sumatriptan and alprazolam, were conducted; successful results of the sumatriptan study were announced last month

-- A $14 million private placement was completed in January, key staff positions were filled, including Jean Whitehead Frydman as vice president and general counsel, facilities were expanded, and the company's IP was strengthened with two new patents. The company has been awarded five US and four international patents to date. A total of 28 applications are pending worldwide.

Commenting on 2005, Dr. Shangold said he expects it to be another year of key accomplishments, with plans on schedule for achieving several important business and clinical milestones.

-- The company's PDUFA date for a response from the US FDA on its lingual spray nitroglycerin NDA is June 4, 2005. The product is partnered with Par Pharmaceutical for the US and Canada. If approved as submitted, it will be indicated for acute relief of an attack or acute prophylaxis of angina pectoris due to coronary artery disease.

-- Pilot studies of lingual spray versions of ondansetron (the leading antiemetic marketed as Zofran(R)), and zolpidem (the leading sleep- inducing agent marketed as Ambien(R)) will be started shortly and completed during the first half of 2005.

-- The pilot study of alprazolam (the leading anti-anxiety drug marketed as Xanax(R)) will be completed before the end of 2004.

-- Preparation for an IND filing has begun and the clinical program is expected to continue during 2005 for lingual spray sumatriptan (the leading migraine remedy marketed as Imitrex(R)) in support of a 505(b)(2) NDA submission.

-- Velcera, the exclusive licensee for NovaDel's lingual spray delivery technology for animal health applications, expects to start and complete several pilot studies in preparation for expanded animal trials and marketing approval.

-- Revenue increases in FY 2005 are anticipated to result from upfront payments from new partnerships, milestone payments from existing partnerships, and the potential for royalties from the company's nitroglycerin partnership with Par Pharmaceutical, assuming timely FDA approval.

About NovaDel

NovaDel Pharma Inc. is a specialty pharmaceutical company engaged in the development of novel drug delivery systems for prescription and over-the-counter drugs. The company's proprietary lingual spray technology delivery system offers the patient the potential for (i) fast onset of action; (ii) improved drug safety by reducing the required drug dosage and reducing side effects; (iii) improved patient convenience and compliance; and (iv) enhanced dosage reliability. The company plans to develop such products independently and through collaborative arrangements with major pharmaceutical and biotech companies.

For more information, visit http://www.novadel.com or call 908/782-3431, ext. 2160.