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                                                                    EXHIBIT 10.7

                                    CREATIVE
                          IRREVOCABLE LICENSE AGREEMENT

     This Agreement, dated November 20, 1998 by and between Creative
BioMolecules, Inc., a Delaware corporation with its principal office at 35 South
Street, Hopkinton, Massachusetts 01748 ("CBM") and Stryker Corporation, a
Michigan corporation with its corporate office at 2725 Fairfield Road, P.O. Box
4085, Kalamazoo, Michigan 49003-4085 ("Stryker").

     WHEREAS, the patents and patent applications listed on Schedule 1 attached
hereto have been assigned to Stryker by CBM; and

     WHEREAS, it is the intention of Stryker, by this Irrevocable License
Agreement, to grant to CBM an exclusive license under the Assigned Patent
Rights, subject, however, to the exclusive rights of Stryker in the Stryker
Field (as such terms are defined herein);

     NOW, THEREFORE, in consideration of the foregoing, and of the assignment of
the Assigned Patent Rights by CBM to Stryker, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:

     1.   Definitions. As used herein, the following words shall have the
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following meanings:

          a. "Assigned Patent Rights" shall mean (i) the patents and patent
     applications listed on Schedule 1 attached hereto, (ii) any patent
     applications and patents deemed to be Assigned Patents pursuant to Section
     4.2 of the Master Agreement, and (iii) all worldwide counterparts and
     registrations, continuations, divisions, reissues, extensions or
     supplementary protection certificates, continuations-in-part or additions
     (but only to the extent such continuations-in-part or additions claim
     inventions disclosed as required by 35 U.S.C. (S)112 (CIPs) or the
     applicable laws (additions) in the parent application therefor listed in
     Schedule 1) with respect thereto, and all patents issuing therefrom.
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          b. "Biological Materials" shall mean any biological materials, assays,
     substances or reagents, including without limitation transformed or
     transfected cells (including any cell expressing an OP Product or any
     analog, mutation or heterodimer thereof), cell lines, DNA sequences,
     vectors, host cells, proteins, antibodies and any fragments or subcellular
     components thereof.

          c.  "Bone Diseases" shall mean Osteoporosis, Osteomalacia and Paget's
     Disease.

          d. "OP" shall mean proteins (or the active sites thereof) or
     polypeptides or combinations of proteins and polypeptides which produce an
     osteogenic effect.

          e. "OP Products" shall mean OP and polyclonal or monoclonal antibodies
     of OP and specific inhibitors or inhibitory activities of the osteogenic
     effect of OP, which inhibitors or inhibitory activities are found and
     identified as such in the course of the Research Project (as defined in the
     Second Amended and Restated Research, Development and Supply Agreement,
     dated May 17, 1991, between CBM and Stryker, as amended).

          f.  "OP Devices" shall mean the combination of OP Products with
     suitably biocompatible and biodegradable carriers.

          g. "Bone Disease Field" shall mean the prevention or treatment of the
     Bone Diseases other than (i) by the local application of OP Products and OP
     Devices in an insoluble formulation directly on bone or joint tissue for
     local, as opposed to general or systemic, effect and (ii) the treatment of
     fractures regardless of whether they result from a Bone Disease.

          h. "Stryker Manufacturing Know-How" means all inventions, know-how,
     Biological Materials, designs, trade secrets, copyrights, processes,
     formulas, techniques, discoveries, ideas and the like that, as of the
     Closing Date (as defined in the Master Agreement), are owned by Stryker or
     as to which Stryker has acquired rights which are

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     licensable hereunder, that are necessary or useful in the manufacture of OP
     Products or OP Devices.

          i. "Stryker Field" shall mean the field of (i) treatment, repair or
     replacement of bone and joint tissue, including, without limitation,
     meniscus and articular cartilage and ligaments and tendons, but excluding
     the Bone Disease Field, and (ii) treatment, repair or replacement of the
     tooth, dentin, alveolar bone, cementum, enamel, gingiva (to the extent, but
     only to the extent, the gingiva functions as part of the apparatus holding
     the tooth to the jaw) and/or periodontal ligament, but excluding the
     treatment of Oral Ulcerations (as defined below) or any other disease or
     disorder of the tissues of the mouth not involving the tooth, dentin, bone
     (including alveolar bone), cementum, enamel, gingiva (to the extent, but
     only to the extent, the gingiva functions as part of the apparatus holding
     the tooth to the jaw), ligament (including the periodontal ligament),
     tendon and/or cartilage.

          As used herein, "Oral Ulcerations" means the formation of lesions on
     the surface of skin lining the oral cavity caused by loss of tissue but
     does not include Periodontal Disease (as defined below) or any other
     disease or disorder involving the tooth, dentin, bone (including alveolar
     bone), cementum, enamel, gingiva (to the extent, but only to the extent,
     the gingiva functions as part of the apparatus holding the tooth to the
     jaw), ligament (including the periodontal ligament), tendon and/or
     cartilage.

          As used herein, "Periodontal Disease" means degeneration of the
     apparatus holding the tooth to the jaw involving damage to any or all of
     the gingiva (to the extent, but only to the extent, the gingiva functions
     as part of the apparatus holding the tooth to the jaw), alveolar bone,
     cementum, enamel and periodontal ligament.

          j.  "Creative Field" means all uses and applications other than the
     Stryker Field.  The Creative Field includes, without limitation, the Bone
     Disease Field.

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<PAGE>

          k.  "Master Agreement" means the Master Restructuring Agreement dated
     October 15, 1998 between Stryker and CBM.

     2. Grant of Exclusive License. Stryker hereby grants to CBM an irrevocable,
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exclusive, worldwide license, with the unrestricted right to grant sublicenses,
to all of the Assigned Patent Rights for all uses and applications of all
inventions claimed therein, except for the manufacture, use, importation and
sale of OP Products and OP Devices for use in the Stryker Field, which grant
shall be exclusive even as to Stryker, with respect to the Creative Field, it
being understood that Stryker retains the exclusive right to manufacture, use,
import and sell OP Products and OP Devices for use in the Stryker Field. Such
license shall not be terminable by Stryker or any successor, assign or any party
claiming through Stryker under any circumstances or for any reason (including,
without limitation, any breach or default under any other agreement between
Stryker and CBM).

     3. Grant of Non-Exclusive License. Stryker hereby grants to CBM an
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irrevocable, non-exclusive, worldwide license, with the unrestricted right to
grant sublicenses under all Stryker Manufacturing Know-How solely for use (a) in
the manufacture of OP, OP Products or products or devices formulated with OP for
use in the Creative Field, and (b) in the manufacture of proteins or
polypeptides (or combinations of proteins or polypeptides) other than OP.

     4. Retained Rights. Notwithstanding Section 2, Stryker hereby retains for
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itself the right to use OP Products and OP Devices as research and development
tools for the development of other products and devices for use in the Stryker
Field. Nothing in the license granted to Creative hereunder shall preclude
Stryker from engaging in the development, production and sale of products and
devices in the Stryker Field.

     5.   Recording of License. Stryker shall record this license in the United
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States Patent and Trademark Office and such other foreign patent offices as CBM
shall determine to be appropriate.

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<PAGE>

     6.   Miscellaneous.
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          a. This Agreement may only be amended by a written instrument signed
     by both parties, which makes specific reference to this Agreement.

          b. CBM may assign this Agreement without the consent of Stryker. This
     Agreement shall be binding upon and shall inure to the benefit of CBM and
     Stryker and their respective successors and assigns.

          c.  This Agreement is governed by the laws of the State of Delaware.

          d.  This Agreement shall supersede the Irrevocable License Agreement
     dated May 17, 1991 between Stryker and CBM.

     IN WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the date first above written.

CREATIVE BIOMOLECULES, INC.              STRYKER CORPORATION


By: /s/ Michael M. Tarnow                By:  /s/ REK
    ----------------------------              ---------------------------
Title:  President and CEO                Title: Assistant Secretary
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