<PAGE>   1
                                                                    EXHIBIT 10.1

Portions of Exhibit 10.1 have been redacted and are the subject of a
confidential treatment request filed with the Secretary of the Securities and
Exchange Commission.


<PAGE>   2


                                LICENSE AGREEMENT

          AGREEMENT made this 3rd day of January, 2000 (the "Effective Date") by
and between OSI Pharmaceuticals, Inc. ("OSI"), a Delaware corporation with
principal offices at 106 Charles Lindbergh Boulevard, Uniondale, New York
11553-3649, American Home Products Corporation ("AHPC"), a Delaware corporation
with principal offices at Five Giralda Farms, Madison, New Jersey 07940, and
American Cyanamid Company ("ACC"), a Maine corporation and wholly-owned
subsidiary of AHPC with principal offices at One Campus Drive, Parsippany, New
Jersey 07054.

                              W I T N E S S E T H:

          WHEREAS, OSI is the owner of certain gene transcription patents and is
willing to grant a license under such patents to AHPC and its Affiliates,
including ACC; and

          WHEREAS, AHPC and its Affiliates, including ACC, are the owners of
certain patents relating to yeast screening assays and AHPC and its Affiliates,
including ACC, are willing to grant a license under such patents to OSI; and

          WHEREAS, OSI and AHPC desire to cross license their respective
patents, according to the terms contained herein.

          NOW, THEREFORE, in consideration of the covenants and premises
contained herein, the Parties agree as follows:

1.     DEFINITIONS

       1.1    "Affiliate" means any corporation, company, partnership, joint
              venture and/or firm which controls, is controlled by or is under
              common control with a Party. For purposes of this Section 1.1,
              "control" means (a) in the case of corporate entities, direct or
              indirect ownership of at least 50% of the stock or shares entitled
              to vote for the election of directors; and (b) in the case of
              non-corporate entities, direct or indirect ownership of at least
              50% of the equity interest with the power to direct the management
              and policies of such non-corporate entities.

       1.2    **

       1.3    "AHPC Licensed Compound" means any compounds or other molecules,
              and any compounds or other molecules derived therefrom, the
              identification, development, manufacture, use, importation or sale
              of which in a specific

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**     This portion has been redacted pursuant to a request for confidential
       treatment.


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              country would, in the absence of this Agreement, infringe an
              issued or granted claim in an AHPC Licensed Patent.

       1.4    "AHPC Licensed Patents" means the U.S. patents and patent
              applications listed on Exhibit A hereto, any patent applications
              filed prior or subsequent to the Effective Date that claim the
              benefit of the filing date of any patent application listed on
              Exhibit A and any reissues, extensions, substitutions,
              confirmations, re-registrations, re-examinations, continuations,
              divisionals or continuations-in-part of the foregoing patents and
              patent applications, as well as all foreign counterparts thereof.

       1.5    "AHPC Licensed Product" means any product for sale by OSI or its
              Affiliates to a Third Party in the OSI Field of Use which contains
              an AHPC Licensed Compound.

       1.6    "Confidential Information" means all information received by a
              Party from another Party pursuant to this Agreement, which is
              deemed confidential by the disclosing Party and is designated
              confidential at the time the information is disclosed, subject to
              the exceptions set forth in Section 6.

       1.7    "Cosmeceuticals" means compounds, or assays for discovering
              compounds, useful for (a) stimulation or control of hair growth,
              (b) prevention or reversal of wrinkling of the skin, and (c)
              alteration of skin or hair pigmentation.

       1.8    "Licensed Patent" means an AHPC Licensed Patent or an OSI Licensed
              Patent.

       1.9    "Licensed Product" means an AHPC Licensed Product or an OSI
              Licensed Product.

       1.10   "OSI Field of Use" means the internal research and development by
              OSI and its Third Party collaborators, without the right to
              sublicense, of products for human therapeutic purposes.

       1.11   "OSI Licensed Compound" means any compounds or other molecules,
              and any compounds or other molecules derived therefrom, the
              identification, development, manufacture, use, importation or sale
              of which in a specific country would, in the absence of this
              Agreement, infringe an issued or granted claim in an OSI Licensed
              Patent.

       1.12   "OSI Licensed Patents" means the U.S. patents and patent
              applications listed on Exhibit B hereto, any patent applications
              filed prior or subsequent to the Effective Date that claim the
              benefit of the filing date of any patent application listed on
              Exhibit B and any reissues, extensions, substitutions,
              confirmations, re-registrations, re-examinations, continuations,
              divisionals or continuations-in-part of the foregoing patents and
              patent applications, as well as all foreign counterparts thereof.





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       1.13   "OSI Licensed Product" means any product for sale by AHPC or its
              Affiliates to a Third Party in the AHPC Field of Use which
              contains an OSI Licensed Compound.

       1.14   "Party" means any of AHPC, ACC or OSI and "Parties" means AHPC,
              ACC and OSI, collectively.


       1.15   "Person" means any individual, corporation, limited liability
              company, cooperative, partnership, trust, unincorporated
              association or any other entity which possesses a juridical
              personality, including any governmental authorities or body of
              competent jurisdiction; pronouns, when referring to a Person,
              shall have a similar extended meaning.

       1.16   "Third Party" means any entity other than AHPC or its Affiliates,
              including ACC, or OSI or its Affiliates.

2. LICENSE GRANT

       2.1    By OSI.

              2.1.1  OSI hereby grants to AHPC and its Affiliates, including
                     ACC, for the AHPC Field of Use, a nonexclusive,
                     nontransferable (other than as permitted by Section 8.1),
                     worldwide, ** license under the OSI Licensed Patents to
                     make, have made, use, sell, offer for sale, import, export,
                     or otherwise exploit OSI Licensed Products.

              2.1.2  OSI agrees that commencing **

       2.2    By AHPC. Each of AHPC and ACC hereby grants to OSI and its
              Affiliates, for the OSI Field of Use, a nonexclusive,
              nontransferable, world-wide, ** license under the AHPC License
              Patents owned by it to make, have made, use, sell, offer for sale,
              import, export or otherwise exploit AHPC Licensed Products,
              provided that the foregoing license shall not include the right
              for OSI to sell any compositions or methodologies used in the
              discovery or development of such AHPC Licensed Products, ** , to a
              Third Party or otherwise provide Third Parties (other than OSI's
              collaborators) with access to same.

3.     PATENT RIGHTS AND INFRINGEMENT

       3.1    OSI shall have complete control, at its expense and within its
              sole discretion, over the prosecution, maintenance and enforcement
              of the OSI Licensed Patents.


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**     This portion has been redacted pursuant to a request for confidential
       treatment.




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              When information comes to the attention of AHPC or its Affiliates,
              including ACC, that an OSI Licensed Patent has been or is
              threatened to be infringed by a Third Party, AHPC shall promptly
              bring such infringement or threatened infringement to the
              attention of OSI. OSI shall have the right (but not the
              obligation), in its sole discretion, at its own risk and expense,
              and using counsel of its choice, to take such action as it may
              deem necessary to prosecute or prevent such infringement.

       3.2    AHPC shall have complete control, at its expense and within its
              sole discretion, over the prosecution, maintenance and enforcement
              of the AHPC Licensed Patents. When information comes to the
              attention of OSI that an AHPC Licensed Patent has been or is
              threatened to be infringed by a Third Party, OSI shall promptly
              bring such infringement or threatened infringement to the
              attention of AHPC. AHPC shall have the right (but not the
              obligation), in its sole discretion, at its own risk and expense,
              and using counsel of its choice, to take such action as it may
              deem necessary to prosecute or prevent such infringement.

       3.3    If AHPC or any of its customers shall be sued by a Third Party for
              infringement of a patent because of the research, development,
              manufacture, use or sale of OSI Licensed Products, AHPC shall
              promptly notify OSI in writing of the institution of such suit.
              OSI shall have all authority over such suit (including the right
              to exclusive control of the defense of any such suit, action, or
              proceeding and the exclusive right to compromise, litigate,
              settle, or otherwise dispose of any such suit, action, or
              proceeding). AHPC and its Affiliates shall provide information and
              assistance necessary to defend or settle any such suit, action or
              proceeding at OSI's expense. If OSI does not elect to manage the
              defense against such infringement action or fails to take
              appropriate and diligent action with respect to such defense, then
              AHPC shall have the right to assume such defense, at its own cost
              and expense.

       3.4    If OSI or any of its customers shall be sued by a Third Party for
              infringement of a patent because of the research, development,
              manufacture, use or sale of AHPC Licensed Products, OSI shall
              promptly notify AHPC in writing of the institution of such suit.
              AHPC shall have all authority over such suit (including the right
              to exclusive control of the defense of any such suit, action, or
              proceeding and the exclusive right to compromise, litigate,
              settle, or otherwise dispose of any such suit, action, or
              proceeding). OSI shall provide information and assistance
              necessary to defend or settle any such suit, action or proceeding
              at AHPC's expense. If AHPC does not elect to manage the defense
              against such infringement action or fails to take appropriate and
              diligent action with respect to such defense, then OSI shall have
              the right to assume such defense, at its own cost and expense.




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<PAGE>   6


4.     REPRESENTATIONS AND WARRANTIES

       4.1    Representations and Warranties of AHPC, ACC and OSI. As of the
              Effective Date, each Party hereby represents and warrants that:



              4.1.1  Corporate Power. Such Party is duly organized and validly
                     existing and in good standing under the laws of the state
                     of its incorporation and has all requisite corporate power
                     and authority to enter into this Agreement and to carry out
                     the provisions hereof.

              4.1.2  Due Authorization. Such Party is duly authorized to execute
                     and deliver this Agreement and to perform its obligations
                     hereunder.

              4.1.3  Binding Agreement. This Agreement is a legal and valid
                     obligation binding upon it and enforceable in accordance
                     with its terms. The execution, delivery and performance of
                     this Agreement by such Party does not conflict with any
                     agreement, instrument or understanding, oral or written, to
                     which it is a party or by which it may be bound, nor
                     violate any law or regulation of any court, governmental
                     body or administrative or other agency having jurisdiction
                     over it.

              4.1.4  Patents. Such Party acknowledges and agrees that nothing in
                     this Agreement shall be construed as a warranty or
                     representation that any Licensed Product is, or will be,
                     free from infringement of patents of Third Parties.

              4.1.5  Right to License. Such Party owns all right, title and
                     interest in and to the Licensed Patents licensed by it
                     hereunder.

              4.1.6  Patents. There are no pending or, to its knowledge,
                     threatened suits, claims, or proceedings including
                     interferences or opposition proceedings relating to the
                     Licensed Patents licensed by it hereunder, other than
                     normal patent prosecution proceedings.

5.            INDEMNITY

              5.1    AHPC shall indemnify and hold harmless OSI, its Affiliates
                     and all directors, officers, employees and agents of OSI
                     and its Affiliates from and against any and all claims,
                     demands, actions, liabilities, judgments, costs and
                     expenses of whatever kind, whether based on contract,
                     negligence, strict liability or statutory liability,
                     including, without limitation, attorneys' fees and costs of
                     defense, arising out of or related in any way to the
                     clinical testing or use, production, sale, offer to sell,
                     import, export or other exploitation of OSI Licensed
                     Products by AHPC or its Affiliates under this Agreement,
                     other than such as arise out of or are related to OSI's
                     gross negligence or intentional misconduct.




                                       5
<PAGE>   7


              5.2    OSI shall indemnify and hold harmless AHPC, its Affiliates
                     and all directors, officers, employees and agents of AHPC
                     and its Affiliates from and against any and all claims,
                     demands, actions, liabilities, judgments, costs and
                     expenses of whatever kind, whether based on contract,
                     negligence, strict liability or statutory liability,
                     including, without limitation, attorneys' fees and costs of
                     defense, arising out of or related in any way to the
                     clinical testing or use, production, sale, offer to sell,
                     import, export or other exploitation of AHPC Licensed
                     Products by OSI or its Affiliates under this Agreement,
                     other than such as arise out of or are related to AHPC's
                     gross negligence or intentional misconduct.


              5.3    Each of AHPC and OSI shall indemnify and hold the other and
                     the other's Affiliates harmless with respect to any injury,
                     loss or cost resulting from the breach of any
                     representation or warranty provided pursuant to Section 4
                     hereof.

6.            CONFIDENTIALITY

              6.1    Confidential Information. Except as expressly provided
                     herein, the Parties agree that the receiving Party shall
                     keep completely confidential and shall not publish or
                     otherwise disclose to another Party and shall not use for
                     any purpose other than to perform the purposes contemplated
                     by this Agreement any Confidential Information furnished to
                     it by the disclosing Party hereto pursuant to this
                     Agreement, except to the extent that it can be established
                     by the receiving Party by competent proof that such
                     Confidential Information (a) was already known to the
                     receiving Party, other than under an obligation of
                     confidentiality, at the time of disclosure; (b) was
                     generally available to the public or otherwise part of the
                     public domain at the time of its disclosure to the
                     receiving Party; (c) became generally available to the
                     public or otherwise part of the public domain after its
                     disclosure and other than through any act or omission of
                     the receiving Party in breach of this Agreement; (d) was
                     lawfully disclosed to the receiving Party by a person other
                     than a Party hereto; or (e) was independently developed by
                     the receiving Party.

              6.2    Permitted Use and Disclosures. Each Party hereto may use or
                     disclose Confidential Information disclosed to it by
                     another Parry to the extent such use or disclosure is
                     reasonably necessary in filing or prosecuting patent
                     applications, prosecuting or defending litigation,
                     complying with applicable law, governmental regulation or
                     court order, submitting information to tax or other
                     governmental authorities, or otherwise exercising its
                     rights hereunder, provided that if a Party is required to
                     make any such disclosure of another Party's Confidential
                     Information, it will give reasonable advance notice to the
                     latter Party of such disclosure and, save to the extent
                     inappropriate in the case of patent applications, will use
                     reasonable efforts to secure confidential treatment of such
                     information prior to its disclosure (whether through
                     protective orders or otherwise).





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<PAGE>   8

              6.3    Confidential Terms. Except as expressly provided herein,
                     each Party agrees not to disclose any terms of this
                     Agreement to a Third Party without the consent of the other
                     Parties; provided, however, that each Party reserves the
                     right to make reasonable disclosures as required by
                     securities or other applicable laws, or to actual or
                     prospective investors or corporate partners, or to
                     accountants, attorneys and other professional advisors on a
                     need-to-know basis under circumstances that reasonably
                     ensure the confidentiality thereof, or to the extent
                     required by law. If such Confidential Information is to
                     become public information by such disclosure the disclosing
                     Party must obtain the written consent of the non-disclosing
                     Parties in order to obtain protection of the Confidential
                     Information if necessary.

              6.4    Press Release. Notwithstanding the foregoing, the Parties
                     shall agree upon a press release to announce the execution
                     of this Agreement. Thereafter, OSI, AHPC and ACC may each
                     disclose to Third Parties the information contained in such
                     press release without the need for further approval by the
                     other.

       7.     TERM AND TERMINATION

              7.1    This Agreement is effective as of the Effective Date and
                     shall continue in full force and effect, with respect to a
                     Party, on a country by country basis until the last
                     expiration date of all patents encompassed within the
                     Licensed Patents licensed to such Party hereunder.

              7.2    If a Party shall fail in any material respect to perform or
                     observe any term, covenant or understanding contained in
                     this Agreement or in any of the other documents or
                     instruments delivered pursuant to, or concurrently with,
                     this Agreement, and any such failure shall remain
                     unremedied for ** days after written notice to the
                     defaulting Party, the Party not responsible may, by notice
                     to the defaulting Party, terminate the license granted by
                     such Party to the defaulting Party.

              7.3    OSI shall have the right to terminate the Agreement if
                     either AHPC or ACC makes an assignment for the benefit of
                     its creditors, becomes insolvent, files a petition in
                     bankruptcy, petitions or applies to any tribunal for the
                     appointment of a custodian, receiver or any trustee for it
                     or a substantial part of its assets, or commences any
                     proceeding under any bankruptcy, reorganization,
                     arrangement, readjustment of debt, dissolution or
                     liquidation law or statute of any jurisdiction, whether now
                     or hereafter in effect; or if there has been filed any such
                     petition or application against either AHPC or ACC, or any
                     such proceeding has been commenced against it, in which an
                     order for relief is entered or which remains

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        treatment.





                                       7
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                     undismissed for a period of 60 days or more; or if either
                     AHPC or ACC, by any act or omission, indicates its consent
                     to, approval of or acquiescence in, any such petition,
                     application or proceeding or order for relief or the
                     appointment of a custodian, receiver or any trustee for it
                     or any substantial part of any of its properties, or is the
                     subject of any such custodianship, receivership or
                     trusteeship that continues undischarged for a period of 60
                     days or more.

              7.4    AHPC and ACC shall have the right to terminate the
                     Agreement if OSI makes an assignment for the benefit of its
                     creditors, becomes insolvent, files a petition in
                     bankruptcy, petitions or applies to any tribunal for the
                     appointment of a custodian, receiver or any trustee for it
                     or a substantial part of its assets, or commences any
                     proceeding under any bankruptcy, reorganization,
                     arrangement, readjustment of debt, dissolution or
                     liquidation law or statute of any jurisdiction, whether now
                     or hereafter in effect; or if there has been filed any such
                     petition or application against OSI, or any such proceeding
                     has been commenced against it, in which an order for relief
                     is entered or which remains undismissed for a period of 60
                     days or more; or if OSI, by any act or omission, indicates
                     its consent to, approval of or acquiescence in, any such
                     petition, application or proceeding or order for relief or
                     the appointment of a custodian, receiver or any trustee for
                     it or any substantial part of any of its properties, or is
                     the subject of any such custodianship, receivership or
                     trusteeship that continues undischarged for a period of 60
                     days or more.

       8.     MISCELLANEOUS

              8.1    Binding Effect; Assignment. This Agreement shall be binding
                     upon the Parties' respective successors and permitted
                     assigns. Neither Party may assign this Agreement or any of
                     its rights or obligations hereunder without the prior
                     written consent of the other Party (not to be unreasonably
                     withheld) except that either Party may assign this
                     Agreement as part of a merger or consolidation in which the
                     surviving entity assumes all of the Party's rights and
                     obligations hereunder or a sale of substantially all of the
                     assets of such Party to which this Agreement relates. In
                     addition, if AHPC sells to a Third Party all of the stock
                     of ACC or if ACC sells all or substantially all of its
                     assets to a Third Party, AHPC or ACC, as the case may be,
                     may assign the license granted by OSI in Section 2.1 to
                     such Third Party purchaser, without the consent of OSI,
                     only to the extent that such license is for the ** (i.e.,
                     subsection (b) of Section 1.1), provided that such Third
                     Party purchaser assumes the obligations of AHPC or ACC, as
                     the case



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       treatment.





                                       8
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                     may be, to grant the license set forth in Section 2.2. In
                     the event of such a sale, the license granted in Section
                     2.1 to AHPC shall remain in effect as to AHPC and its
                     Affiliates only with respect to the research and
                     development of ** (i.e., subsection (a) of Section 1.1).

              8.2    Effect of Waiver. No waiver of any default, condition,
                     provisions or breach of this Agreement shall be deemed to
                     imply or constitute a waiver of any other default,
                     condition, provision or breach of this Agreement.

              8.3    Force Majeure. No Party shall lose any rights hereunder or
                     be liable to the other Parties for damages or losses
                     (except for payment obligations) on account of failure of
                     performance by the defaulting Party if the failure is
                     occasioned by war, strike, fire, acts of God, earthquake,
                     flood, lockout, embargo, governmental acts or orders or
                     restrictions, failure of suppliers, or any other reason
                     where failure to perform is beyond the reasonable control
                     and not caused by the negligence or intentional conduct or
                     misconduct of the nonperforming Party, and such Party has
                     exerted all reasonable efforts to avoid or remedy such
                     force majeure; provided, however, that in no event shall a
                     Party be required to settle any labor dispute or
                     disturbance.

              8.4    Amendment. No modification, supplement to or waiver of this
                     Agreement or any of the provisions hereof or any Exhibit
                     hereto shall be binding upon a Party hereto unless made in
                     writing and duly signed by an authorized representative of
                     OSI, AHPC or ACC.

              8.5    Entire Agreement. This Agreement, including the Exhibits
                     attached hereto, sets forth the entire understanding and
                     agreement of the Parties as to the subject matter hereof,
                     and there are no other understandings, representations or
                     promises, written or verbal, not set forth herein on which
                     a Party has relied.

              8.6    Notices. All notices under this Agreement shall be given in
                     writing and shall be addressed to the Parties at the
                     following addresses:

                         For OSI:     OSI Pharmaceuticals, Inc.
                                      106 Charles Lindbergh Blvd.
                                      Uniondale, NY 11553
                                      Attn: Chief Executive Officer

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       treatment.




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                      For AHPC:    American Home Products
                                   c/o Wyeth-Ayerst Research
                                   87 Cambridge Park Drive
                                   Cambridge, MA 02140
                                   Attn:  Vice President, Law

                      For ACC:     American Cyanamid Corporation
                                   One Campus Drive
                                   Parsippany, NJ 07054
                                   Attn:  Director, Technology Assessment and
                                            Acquisition

                     Notices shall be in writing and shall be deemed delivered
                     when received, if delivered by hand, courier or overnight
                     delivery service, or on the second business day following
                     mailing, if sent by first-class certified or registered
                     mail, postage prepaid, and return receipt requested.

              8.7    Governing Law; Jurisdiction. This Agreement shall be
                     governed by and construed in accordance with the laws of
                     the State of New York, applicable to agreements made in New
                     York except that the federal laws of the United States
                     shall apply to questions regarding the validity or
                     infringement or enforceability of United States federal
                     patents. The parties hereto agree that the state and
                     federal courts sitting in the state and city of New York
                     shall be the proper forums for any legal controversy
                     arising in connection with this Agreement and the parties
                     irrevocably and unconditionally consent to the
                     non-exclusive jurisdiction of such courts for such
                     purposes.

              8.8    Severability. This Agreement is intended to be severable.
                     If any provision of this Agreement is or becomes invalid,
                     is ruled illegal by a court of competent jurisdiction or is
                     deemed unenforceable under the current applicable law from
                     time to time in effect during the term hereof, it is the
                     intention of the Parties that the remainder of this
                     Agreement shall not be affected thereby and shall continue
                     to be construed to the maximum extent permitted by law at
                     such time. It is further the intention of the Parties that
                     in lieu of each such provision which is invalid, illegal,
                     or unenforceable, there shall be substituted or added as
                     part of this Agreement by such court of competent
                     jurisdiction a provision which shall be as similar as
                     possible in terms of the economic and business objectives
                     intended by the Parties, to such invalid, illegal or
                     unenforceable provision, but shall be valid, legal and
                     enforceable.

              8.9    Independent Contractors. The Parties hereto are acting as
                     independent contractors and shall not be considered
                     partners, joint venturers or agents of the other. Except as
                     expressly provided herein, no Party shall have the right to
                     act on behalf of, or to bind, the other.



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              8.10   Headings; Counterparts. Captions and paragraph headings are
                     for convenience only and shall not form an interpretative
                     part of this Agreement. This Agreement may be executed in
                     two or more counterparts, each of which will be deemed an
                     original.




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

                             OSI PHARMACEUTICALS, INC.

                             By:    /s/ Colin Goddard
                                -------------------------------------------
                                   Name:  Colin Goddard, Ph.D.
                                   Title: President and Chief Executive
                                                Officer

                             AMERICAN HOME PRODUCTS CORPORATION

                             By:    /s/ Gerald A. Jibilian
                                -------------------------------------------
                                   Name:  Gerald A. Jibilian
                                   Title: Vice President and Associate
                                              General Counsel

                             AMERICAN CYANAMID COMPANY

                             By:   /s/ Gerald A. Jibilian
                                -------------------------------------------
                                   Name:  Gerald A. Jibilian
                                   Title: Vice President and Associate
                                            General Counsel





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                                    EXHIBIT A

                                       **

















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<PAGE>   15


                                    EXHIBIT B

                                       **





















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       treatment.