<PAGE>

                                                                    EXHIBIT 10.1

Note: Certain portions of this document have been marked "[c.i.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.

                       THIRD AMENDMENT TO SUPPLY AGREEMENT

      THIS THIRD AMENDMENT TO SUPPLY AGREEMENT (this "Amendment") is entered
into as of the 29th day of July 2005 (the "Effective Date") by and between DUSA
PHARMACEUTICALS, INC. ("DUSA"), a corporation organized and existing under the
laws of the State of New Jersey, with principal offices at 25 Upton Drive,
Wilmington, Massachusetts 01887, U.S.A., and SOCHINAZ S.A. ("SOCHINAZ"), a
corporation registered under the laws of the Canton of Valais, Switzerland, with
principal offices at 22, rte du Simplon, CH-1895 Vionnaz, Switzerland. All
capitalized terms used herein and not otherwise defined shall have the
meaning(s) prescribed thereto in the Supply Agreement (defined below).

      WHEREAS, DUSA and SOCHINAZ previously entered into a certain Supply
Agreement, dated December 24, 1993, as amended by the First Amendment to Supply
Agreement, dated July 7, 1994, and the Second Amendment (the "Second Amendment")
to Supply Agreement, dated June 20, 2000 (collectively, the "Supply Agreement");

      WHEREAS, pursuant to Section 9.1 of the Supply Agreement, DUSA, by letter
dated April 28, 2003, exercised its option to renew the Supply Agreement for a
period of three (3) additional years through December 3, 2007 (the "Current
Term"); and

      WHEREAS, DUSA and SOCHINAZ wish to further amend certain terms and
conditions of the Supply Agreement as provided herein.

      NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree as follows:

      1. DUSA and SOCHINAZ agree to extend the Current Term of the Supply
Agreement through December 31, 2009 (the "Extension Period"); provided, however,
that DUSA shall have the option to extend the term of the Extension Period for
an additional one (1) year (i.e. through December 31, 2010) upon a minimum of
two (2) years advance written notice (i.e. on or before December 31, 2007) to
SOCHINAZ.

      2. DUSA and SOCHINAZ agree that Exhibit B mentioned in Paragraph 4.1 of
the Supply Agreement is hereby amended in its entirety to read as follows:

                                    EXHIBIT B

<TABLE>
<CAPTION>
        YEAR                                 COST/KG (U.S. DOLLARS)
        ----                                 ----------------------
<S>                                          <C>
        2005                                         [c.i.]
        2006                                         [c.i.]
        2007                                         [c.i.]
        2008                                         [c.i.]
        2009                                         [c.i.]
2010 (as applicable)                                 [c.i.]
</TABLE>

<PAGE>

Note: Certain portions of this document have been marked "[c.i.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.

      Exchange rate fluctuation:

      DUSA and SOCHINAZ agree that the costs per kilogram stated above shall
      [c.i.] set for purposes of the Supply Agreement and this Amendment at
      [c.i.] fluctuates by more than [c.i.] as determined below. If the rate of
      exchange between the USD and the CHF [c.i.], the parties shall [c.i.]
      shall take place [c.i.] in which the [c.i.]. The [c.i.] shall be applied
      for [c.i.], or until a [c.i.] takes place and [c.i.] are [c.i.] as
      provided for herein. [c.i.] unless agreed to in writing signed by DUSA and
      SOCHINAZ. Simultaneously therewith, the parties shall also [c.i.] for
      purposes of [c.i.] hereunder.

      In the event the parties are unable to agree [c.i.] or [c.i.] have begun,
      the parties agree to refer the matter to the Chief Operating Officer of
      DUSA and the Chief Executive Officer of SOCHINAZ, or their designees, for
      review and attempted resolution. The officers shall confer and attempt to
      reach a mutual resolution of the issue. If the dispute cannot be resolved
      by the respective officers, or their designees, [c.i.] after the dispute
      has been so referred, then the parties agree [c.i.] pursuant to [c.i.],
      except as modified herein. The [c.i.]. The [c.i.], and shall [c.i.]. The
      parties shall [c.i.]. The costs per kilogram in effect immediately prior
      to the[c.i.], shall remain effective [c.i.].

      Any fluctuation in the exchange rate shall be determined by calculating
      the average rate of exchange between the USD and the CHF over the course
      of [c.i.]. Such average rate of exchange shall then be compared against
      the Exchange Rate.

      3. Section 2.4 of the Supply Agreement is hereby amended in its entirety
to read as follows:

            2.4 Notwithstanding Paragraph 2.1 above, DUSA shall have the right
      to purchase any or all of DUSA's requirements for Product from third
      parties in the event SOCHINAZ is unable to supply in a timely manner all
      Products ordered in three consecutive purchase orders, whether or not such
      orders are in excess of DUSA's forecasts. In addition, DUSA shall have the
      right to purchase [c.i.] of its requirements for Product from third
      parties in the event SOCHINAZ fails to fulfill a purchase order and cannot
      remedy such shortage within [c.i.] of the original delivery due date.
      Further, DUSA shall have the right to purchase [c.i.] of its requirements
      for Product from third parties in the event SOCHINAZ fails to fulfill
      [c.i.] within a [c.i.] and cannot remedy such shortage [c.i.] of the
      original delivery due dates, respectively.

      4. Except as expressly provided in this Amendment, the Supply Agreement
shall remain unmodified and in full force and effect and is hereby ratified and
affirmed. The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of DUSA or SOCHINAZ under the
Supply Agreement, except as expressly provided for herein.

                                       -2-

<PAGE>

Note: Certain portions of this document have been marked "[c.i.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.

      IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
by their duly authorized representatives as of the date first provided above.

SOCHINAZ S.A.                                      DUSA PHARMACEUTICALS, INC.

By:/s/ Jean-Marie Rosset                           By:/s/ Mark Carota
   --------------------------                         --------------------------
Name: Jean-Marie Rosset                            Name: Mark Carota
Title: V.P. Sales & Marketing                      Title: V.P. Operations

                                       -3-