FILED PURSUANT TO RULE 424(B)(3)
                                           REGISTRATION STATEMENT NO. 333-124279

PROSPECTUS
                                 84,940 SHARES

                                   (OSI LOGO)

                     COMMON STOCK, PAR VALUE $.01 PER SHARE

                             ----------------------

     The stockholders named on page 14 are selling up to 84,940 shares of OSI's
common stock.

     OSI's common stock is traded on the Nasdaq National Market under the symbol
"OSIP". On May 2, 2005, the reported closing price of the common stock was
$46.93 per share.

                             ----------------------

     THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 1 OF
THIS PROSPECTUS.

                             ----------------------

     Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.

                   The date of this prospectus is May 4, 2005


                               TABLE OF CONTENTS

                                                           
Risk Factors................................................    1
Recent Events...............................................   10
Use of Proceeds.............................................   10
Selling Stockholders........................................   10
Plan of Distribution........................................   12
Available Information.......................................   13
Incorporation of Certain Documents by Reference.............   13
Legal Matters...............................................   14
Experts.....................................................   14



     In this prospectus, "OSI," "our company," "we," "us," and "our" refer to
OSI Pharmaceuticals, Inc. and subsidiaries. We own or have rights to use various
copyrights, trademarks and trade names used in our business, including the
following: Tarceva(TM) (erlotinib) and Novantrone(R)(mitoxantrone for injection
concentrate).

                                        i


                                  RISK FACTORS

     (Cautionary Statement under the Private Securities Litigation Reform Act of
1995, as amended)

     This prospectus contains forward-looking statements that do not convey
historical information, but relate to predicted or potential future events, such
as statements of our plans, strategies and intentions, or our future performance
or goals for our product development programs. These statements can often be
identified by the use of forward-looking terminology such as "believe,"
"expect," "intend," "may," "should," or "anticipate" or similar terminology. The
statements involve risks and uncertainties and are based on various assumptions.
Stockholders and prospective stockholders are cautioned that these statements
are only projections. In addition, any forward-looking statement that we make is
intended to speak only as of the date on which we made the statement. Except for
our ongoing obligations to disclose material information under the federal
securities laws, we will not update any forward-looking statement to reflect
events or circumstances that occur after the date on which the statement is
made. The following risks and uncertainties, among others, may cause our actual
results to differ materially from those described in forward-looking statements
made in this report or presented elsewhere by management from time to time.

WE HAVE INCURRED LOSSES SINCE OUR INCEPTION, AND WE EXPECT TO INCUR LOSSES OVER
THE NEXT FEW YEARS, WHICH MAY CAUSE THE VALUE OF OUR COMMON STOCK TO DECREASE.

     We have had net operating losses since our inception in 1983. We expect to
continue to incur operating losses over the next few years as a result of our
expenses for the continued research, development and commercialization of
Tarceva(TM) (erlotinib) and our other clinical products. We cannot predict when
our business will become profitable. We do not expect to achieve profitability
for at least two years following the launch of Tarceva.

     At December 31, 2004, our accumulated deficit was $814.0 million. Our net
losses for the three months ended December 31, 2004 and 2003 were $48.4 million
and $40.1 million, respectively. Our net losses were $260.4 million, $181.4
million and $218.5 million for fiscal years 2004, 2003 and 2002, respectively.
Our net loss for fiscal 2004 included an in-process research and development
charge of $32.8 million related to the acquisition of certain assets from
Probiodrug AG in July 2004 and a charge of $24.6 million related to an
impairment of an intangible asset. Our net loss for fiscal 2003 included an
in-process research and development charge of $31.5 million related to the
acquisition of Cell Pathways, Inc. in June 2003. Our net loss for fiscal 2002
included an in-process research and development charge of $130.2 million related
to the acquisition of certain assets from Gilead Sciences, Inc. in December
2001.

WE, TOGETHER WITH OUR ALLIANCE PARTNERS GENENTECH, INC. AND ROCHE, MAY NOT BE
ABLE TO MARKET OR GENERATE SALES OF TARCEVA TO THE EXTENT ANTICIPATED.

     Our ability to successfully penetrate the market and generate sales of
Tarceva may be limited by a number of factors, including the following:

     - Certain of our competitors in the HER1/EGFR field, namely AstraZeneca plc
       and Bristol-Myers Squibb Company/ImClone Systems Incorporated, have
       already received regulatory approvals for and have begun marketing
       similar products in the United States, the EU, Japan and other
       territories, which may result in greater physician awareness of their
       products as compared to Tarceva.

     - Information from our competitors or the academic community indicating
       that current products or new products are more effective than Tarceva
       could, if and when it is generated, impede our market penetration or
       decrease our existing market share.

     - Physicians may be reluctant to switch from existing treatment methods,
       including traditional chemotherapy agents, to Tarceva.

     - The price for Tarceva, which is set by Genentech in the United States
       after consultation with us and will be set by Roche outside of the United
       States, as well as pricing decisions by our competitors, may have an
       effect on our Tarceva-derived revenues.

     - Our Tarceva-derived revenues may diminish if third-party payors,
       including private health coverage insurers and health maintenance
       organizations, do not provide adequate coverage or reimbursement for
       Tarceva.

                                        1


IF GOVERNMENT AGENCIES DO NOT GRANT US OR OUR COLLABORATIVE PARTNERS REQUIRED
APPROVALS FOR ANY OF OUR POTENTIAL PRODUCTS IN A TIMELY MANNER OR AT ALL, WE OR
OUR COLLABORATIVE PARTNERS WILL NOT BE ABLE TO DISTRIBUTE OR SELL OUR PRODUCTS
CURRENTLY UNDER DEVELOPMENT.

     All of our potential products must undergo extensive regulatory approval
processes in the United States and other countries. These regulatory processes,
which include pre-clinical testing and clinical trials of each compound to
establish safety and efficacy, can take many years and require the expenditure
of substantial resources. The FDA and the other regulatory agencies in
additional markets which are material to us and our collaborative partners,
including the European Agency for the Evaluation of Medicinal Products, or EMEA,
and the Japanese Ministry of Health, may delay or deny the approval of our
potential products. Although we have been successful in gaining regulatory
approval for Tarceva in the United States, and our partner Roche has gained
approval in Switzerland, for the NSCLC indication, there can be no guarantee of
subsequent approvals either for Tarceva in other territories (including the EU)
or for other indications in the United States or for other products in the
United States and other territories.

     Delays or rejections may be encountered during any stage of the regulatory
process based upon the failure of the clinical data to demonstrate compliance
with, or upon the failure of the product to meet, a regulatory agency's
requirements for safety, efficacy and quality. Any such delay could have a
negative effect on our business. A drug candidate cannot be marketed in the
United States until it has been approved by the FDA. Once approved, drugs, as
well as their manufacturers, are subject to continuing and ongoing review, and
discovery of previously unknown problems with these products or the failure to
adhere to manufacturing or quality control requirements may result in
restrictions on their distribution, sale or use, or their withdrawal from the
market. The FDA also has the authority, when approving a product, to impose
significant limitations on the product in the nature of warnings, precautions
and contra-indications that could negatively affect the profitability of a drug.

     Furthermore, once a drug is approved, the drug can only be marketed for the
indications and claims approved by the FDA. If we fail to comply with the FDA
regulations prohibiting promotion of off-label uses and the promotion of
products for which marketing clearance has not been obtained, the FDA, or the
Office of the Inspector General of the U.S. Department of Health and Human
Services, or state Attorneys General could bring an enforcement action against
us that would inhibit our marketing capabilities as well as result in
significant penalties. The ability to market and sell a drug product outside of
the United States is also subject to stringent and, in some cases, equally
complex regulatory processes that vary depending on the jurisdiction.

WE ARE RESPONSIBLE FOR THE SUPPLY OF TARCEVA IN THE UNITED STATES. SINCE WE HAVE
NO COMMERCIAL MANUFACTURING FACILITIES, WE ARE DEPENDENT ON TWO SUPPLIERS FOR
THE ACTIVE PHARMACEUTICAL INGREDIENT, OR API, FOR TARCEVA AND A SINGLE SUPPLIER
FOR THE TABLETING OF TARCEVA IN THE UNITED STATES.

     We are responsible for manufacturing and supplying Tarceva in the United
States under the terms of a Manufacturing and Supply Agreement entered into with
Genentech in 2004. We rely on two third-party suppliers to manufacture the API,
erlotinib, for Tarceva. We also currently rely on a single manufacturer to
formulate the Tarceva tablets. We are presently seeking another manufacturer to
serve as an alternative (i.e. back-up) provider of Tarceva tablets. If our
relationships with any of these manufacturers terminate or if they are unable to
meet their obligations, we will need to find other sources of supply. Such
alternative sources of supply may be difficult to find on terms acceptable to us
or in a timely manner, and, if found, would require FDA approval which could
cause delays in the availability of erlotinib and ultimately Tarceva tablets,
which, in turn, could negatively impact our Tarceva-derived revenues.

     Furthermore, the manufacturing of our products is, and will continue to be,
subject to current good manufacturing practices regulations prescribed by the
FDA or other standards prescribed by the appropriate regulatory agency in the
country of use. If our manufacturers, including the current manufacturers of
erlotinib and Tarceva tablets, do not comply with all applicable regulatory
standards, they may not be permitted to manufacture Tarceva or any other product
for commercial sale. If this occurs, we might not be able to identify another
third-party manufacturer on terms acceptable to us or in a timely manner, or
such other third-party manufacturer may not receive FDA approval in a timely
manner or at all. Any of the foregoing could cause

                                        2


delays in the availability of our products, including erlotinib and/or Tarceva
tablets, which would negatively impact our revenues. If we fail to meet our
manufacturing obligations, our partner, Genentech, also has the right to take
over supply of Tarceva in the United States.

IF WE DO NOT MAINTAIN OUR CO-DEVELOPMENT AND MARKETING ALLIANCE WITH GENENTECH
AND ROCHE FOR TARCEVA, THE MARKETING AND SALE OF TARCEVA MAY BE COMPROMISED OR
DELAYED.

     Tarceva is being developed and commercialized in an alliance under
co-development and marketing agreements with Genentech and Roche. The
development program is managed by us, Genentech and Roche under a global
development committee. Under the alliance, Genentech leads the marketing efforts
in the United States and Roche will market the drug in the rest of the world. In
2004, we signed an amendment to our collaboration agreement with Genentech to
provide us with the right to co-promote Tarceva in the United States and signed
a Manufacturing and Supply Agreement with Genentech that clarified our role in
supplying Tarceva for the U.S. market.

     The OSI/Genentech collaboration agreement continues until the date on which
neither we nor Genentech is entitled to receive a share of the operating profits
or losses on any products resulting from the collaboration, that is, until the
date that we and Genentech mutually agree to terminate the collaboration or
until either party exercises its early termination rights as described as
follows. The OSI/ Genentech collaboration agreement is subject to early
termination in the event of certain customary defaults, such as material breach
of the agreement and bankruptcy. Since January 8, 2003, Genentech has had the
right to terminate the OSI/Genentech collaboration agreement with six months'
prior written notice. The provisions of the amendment allowing us to co-promote
are also subject to termination by Genentech upon a material breach of the
amendment by us which remains uncured or upon a pattern of nonmaterial breaches
which remain uncured.

     The OSI/Roche agreement continues until the date on which we are no longer
entitled to receive a royalty on products resulting from the development of
Tarceva, that is, until the date of expiration or revocation or complete
rejection of the last to expire patent covering Tarceva or, in countries where
there is no valid patent covering Tarceva, on the tenth anniversary of the first
commercial sale of Tarceva in that country. The OSI/Roche agreement is subject
to early termination in the event of certain customary defaults, such as
material breach of the agreement and bankruptcy. In addition, since July 31,
2003, Roche has had the right to terminate the agreement on a country-by-country
basis with six months' prior written notice. Since July 31, 2003, we also have
had the right to terminate the agreement on a country-by-country basis if Roche
has not launched or marketed a product in such country under certain
circumstances.

     If we do not maintain a successful collaborative partnership with Genentech
and Roche for the co-development and commercialization of Tarceva, we may be
forced to focus our efforts internally to commercialize Tarceva on our own. This
would require greater financial resources and would result in us incurring
greater expenses and may cause a delay in market penetration while we continue
to build our own commercial operation or seek alternative collaborative
partners.

                                        3


IF ANY OF OUR CURRENT OR FUTURE MARKETED PRODUCTS, INCLUDING TARCEVA OR
NOVANTRONE(R) (MITOXANTRONE FOR INJECTION CONCENTRATE) WERE TO BECOME THE
SUBJECT OF PROBLEMS RELATED TO THEIR EFFICACY, SAFETY, OR OTHERWISE, OR IF NEW,
MORE EFFECTIVE TREATMENTS WERE TO BE INTRODUCED, OUR REVENUES FROM SUCH MARKETED
PRODUCTS COULD DECREASE.

     If Tarceva or Novantrone or any of our other current or future marketed
products become the subject of problems, including those related to, among
others:

     - efficacy or safety concerns with the products, even if not justified;

     - unexpected side-effects;

     - regulatory proceedings subjecting the products to potential recall;

     - publicity affecting doctor prescription or patient use of the product;

     - pressure from competitive products; or

     - introduction of more effective treatments;

our revenues from such marketed products could decrease. For example, efficacy
or safety concerns may arise, whether or not justified, that could lead to the
recall or withdrawal of such marketed products. In the event of a recall or
withdrawal of a product such as Tarceva or Novantrone, our revenues would
significantly decline.

IF WE DO NOT RECEIVE ADEQUATE THIRD-PARTY REIMBURSEMENT FOR THE SALES OF OUR
PRODUCTS, WE MAY NOT BE ABLE TO SELL SUCH PRODUCTS ON A PROFITABLE BASIS.

     Sales of our products will depend, in part, upon the extent to which the
costs of our products will be paid by health maintenance, managed care, pharmacy
benefit and similar reimbursement sources, or reimbursed by government health
administration authorities, private health coverage insurers and other
third-party payors. Such third-party payors continue to aggressively challenge
the prices charged for healthcare products and services. Additionally, federal
and state governments have prioritized the containment of healthcare costs, and
drug prices have been targeted in this effort. If these organizations and
third-party payors do not consider our products to be cost-effective, they may
not reimburse providers of our products, or the level of reimbursement may not
be sufficient to allow us to sell our products on a profitable basis.

THE MEDICARE PRESCRIPTION DRUG IMPROVEMENT AND MODERNIZATION ACT OF 2003
MATERIALLY CHANGES THE MEDICARE REIMBURSEMENT GUIDELINES FOR INTRAVENOUS AND
ORAL ONCOLOGY PRODUCTS. SUCH CHANGES MAY NEGATIVELY IMPACT OUR REVENUES FOR
NOVANTRONE.

     The Medicare Prescription Drug Improvement and Modernization Act of 2003,
or MMA, will have a substantive impact on companies that produce pharmaceutical
products, including chemotherapeutics, and the providers that prescribe these
medications. MMA reduced the levels of Medicare reimbursement to oncologists for
intravenous oncology products like Novantrone. Under MMA, Medicare benefits will
be primarily provided through private entities that will attempt to negotiate
price concessions from pharmaceutical manufacturers, which may increase pressure
to lower prescription drug prices. MMA also includes other cost containment
measures for Medicare in the event Medicare cost increases exceed a certain
level, which may also impose limitations on prescription drug prices. These
changes in Medicare reimbursement could have a negative impact on our revenues
derived from sales of Novantrone.

IF SERONO S.A. DOES NOT FULFILL ITS OBLIGATIONS FOR MANUFACTURING AND SUPPLYING
NOVANTRONE, WE MAY NOT BE ABLE TO CONTINUE THE MARKETING AND DISTRIBUTION OF THE
PRODUCT WHICH COULD CAUSE OUR REVENUES TO DECREASE.

     Serono is responsible for the manufacture and supply of Novantrone. Under
our agreement with Serono, we do not have the obligation nor the right to
manufacture Novantrone. These obligations and rights are held solely by Serono.
If Serono is delayed in or restricted from supplying the product, we would be
directly affected in that any such delay or restriction would impede us from
selling the product. Without the sales of Novantrone, our revenues would
decrease.

                                        4


ONE ASPECT OF OUR BUSINESS STRATEGY DEPENDS ON OUR ABILITY TO IDENTIFY AND
ACQUIRE PRODUCT CANDIDATES AND MARKETED PRODUCTS, WHICH IF NOT MET, MAY PREVENT
US FROM ACHIEVING EXPECTED FUTURE PERFORMANCE.

     As part of our business strategy, we plan to identify and acquire product
candidates and approved products for markets that we can reach through our
commercial operations. We may not be able to acquire rights to additional
products or product candidates on acceptable terms, if at all. If we fail to
obtain, develop and successfully commercialize such additional product
candidates and approved products, we may not achieve expectations of our future
performance.

ALTHOUGH WE HAVE POTENTIAL PRODUCTS THAT APPEAR TO BE PROMISING AT EARLY STAGES
OF DEVELOPMENT AND IN CLINICAL TRIALS, NONE OF OUR POTENTIAL PRODUCTS MAY REACH
THE COMMERCIAL MARKET FOR A NUMBER OF REASONS.

     Successful research and development of pharmaceutical products is high
risk. Most products and development candidates fail to reach the market. Our
success depends on the discovery of new drugs that we can commercialize. It is
possible that our potential oncology products and diabetes and obesity products
may never reach the market for a number of reasons. They may be found
ineffective or may cause harmful side-effects during pre-clinical testing or
clinical trials or fail to receive necessary regulatory approvals. We may find
that certain products cannot be manufactured on a commercial scale basis and,
therefore, they may not be economical to produce. Our products could also fail
to achieve market acceptance or be precluded from commercialization by
proprietary rights of third parties. We have a number of product candidates in
various stages of development and do not expect them to be commercially
available for a number of years, if at all. Our candidates that are in clinical
trials will still require significant research and development and regulatory
approvals before we or our collaborative partners will be able to market them.

IF OUR COMPETITORS SUCCEED IN DEVELOPING PRODUCTS AND TECHNOLOGIES THAT ARE MORE
EFFECTIVE THAN OUR OWN, OR IF SCIENTIFIC DEVELOPMENTS CHANGE OUR UNDERSTANDING
OF THE POTENTIAL SCOPE AND UTILITY OF OUR PRODUCTS, THEN OUR PRODUCTS AND
TECHNOLOGIES MAY BE RENDERED LESS COMPETITIVE.

     We face significant competition from industry participants that are
pursuing similar products and technologies that we are pursuing and are
developing pharmaceutical products that are competitive with our products and
potential products. Some of our industry competitors have greater capital
resources, larger overall research and development staffs and facilities, and a
longer history in drug discovery and development, obtaining regulatory approval
and pharmaceutical product manufacturing and marketing than we do. With these
additional resources, our competitors may be able to respond to the rapid and
significant technological changes in the biotechnology and pharmaceutical
industries faster than we can. Our future success will depend in large part on
our ability to maintain a competitive position with respect to these
technologies. Rapid technological development, as well as new scientific
developments, may result in our compounds, products or processes becoming
obsolete before we can recover any of the expenses incurred to develop them. For
example, changes in our understanding of the appropriate population of patients
who should be treated with a targeted therapy like Tarceva may limit the drug's
market potential if it is subsequently demonstrated that only certain subsets of
patients should be treated with the targeted therapy.

OUR RELIANCE ON THIRD PARTIES, SUCH AS CLINICAL RESEARCH ORGANIZATIONS, OR CROS,
MAY RESULT IN DELAYS IN COMPLETING, OR A FAILURE TO COMPLETE, CLINICAL TRIALS IF
THEY FAIL TO PERFORM UNDER OUR AGREEMENTS WITH THEM.

     In the course of product development, we engage CROs to conduct and manage
clinical studies and to assist us in guiding our products through the FDA review
and approval process. For example, we collaborated with the National Cancer
Institute of Canada's Clinical Trial Group based at Queens University, Ontario,
in connection with our Tarceva Phase III trials. Because we have engaged and
intend to continue to engage CROs to help us obtain market approval for our drug
candidates, many important aspects of this process have been and will be out of
our direct control. If the CROs fail to perform their obligations under our
agreements with them or fail to perform clinical trials in a satisfactory
manner, we may face delays in completing our clinical trials, as well as
commercialization of one or more drug candidates. Furthermore, any loss or delay
in obtaining contracts with such entities may also delay the completion of our
clinical trials and the market approval of drug candidates.
                                        5


THE USE OF ANY OF OUR POTENTIAL PRODUCTS IN CLINICAL TRIALS AND THE SALE OF ANY
APPROVED PRODUCTS EXPOSES US TO LIABILITY CLAIMS.

     The nature of our business exposes us to potential liability risks inherent
in the testing, manufacturing and marketing of drug candidates and products. If
any of our drug candidates in clinical trials or our marketed products harm
people or allegedly harm people, we may be subject to costly and damaging
product liability claims. A number of patients who participate in trials are
already critically ill when they enter a trial. The waivers we obtain may not be
enforceable and may not protect us from liability or the costs of product
liability litigation. While we currently maintain product liability insurance
that we believe is adequate, we are subject to the risk that our insurance will
not be sufficient to cover claims. There is also a risk that adequate insurance
coverage will not be available in the future on commercially reasonable terms,
if at all. The successful assertion of an uninsured product liability or other
claim against us could cause us to incur significant expenses to pay such a
claim, could adversely affect our product development and could cause a decline
in our product revenues. Even a successfully defended product liability claim
could cause us to incur significant expenses to defend such a claim, could
adversely affect our product development and could cause a decline in our
product revenues.

THE FAILURE TO PREVAIL IN LITIGATION OR THE COSTS OF LITIGATION COULD HARM OUR
FINANCIAL PERFORMANCE AND BUSINESS OPERATIONS.

     As a public company, we are susceptible to certain types of litigation,
including claims asserting violations of securities and derivative actions. In
particular, we currently face a securities class action alleging violations of
securities laws which are described in Part II, Item 1, "Legal Proceedings" of
our Transition Report on Form 10-Q for the transition period ended December 31,
2004. Litigation is inherently unpredictable and we may incur substantial
expense in defending ourselves or asserting our rights in the litigation to
which we are currently subject, or in new lawsuits or claims brought against us.
Litigation can be expensive to defend, regardless if a claim has merit, and the
defense of such actions may divert the attention of our management that would
otherwise be engaged in running our business and utilize resources that would
otherwise be used for the business. While we currently maintain insurance that
we believe is adequate, we are subject to the risk that our insurance will not
be sufficient to cover claims.

IF WE OR OUR COLLABORATIVE PARTNERS ARE REQUIRED TO OBTAIN LICENSES FROM THIRD
PARTIES, OUR REVENUES AND ROYALTIES ON ANY COMMERCIALIZED PRODUCTS COULD BE
REDUCED.

     The development of some of our products may require the use of technology
developed by third parties. The extent to which efforts by other researchers
have resulted or will result in patents and the extent to which we or our
collaborative partners are forced to obtain licenses from others, if available,
on commercially reasonable terms is currently unknown. If we or our
collaborative partners must obtain licenses from third parties, fees must be
paid for such licenses, which would reduce the revenues and royalties we may
receive on commercialized products.

IF WE CANNOT SUCCESSFULLY PROTECT, EXPLOIT OR ENFORCE OUR INTELLECTUAL PROPERTY
RIGHTS, OUR ABILITY TO DEVELOP AND COMMERCIALIZE OUR PRODUCTS WILL BE SEVERELY
LIMITED.

     We hold numerous U.S. and foreign patents and have many pending
applications for additional patents. We intend to continue to seek patent
protection for or maintain as trade secrets all of the commercially promising
product candidates that we have discovered, developed or acquired. Our success
depends, in part, on our ability and our collaborative partners' ability to
obtain and maintain patent protection for new product candidates, maintain trade
secret protection and operate without infringing the proprietary rights of third
parties. As with most biotechnology and pharmaceutical companies, our patent
position is highly uncertain and involves complex legal and factual questions.
Without patent and other similar protection, other companies could offer
substantially identical products for sale without incurring the sizeable
discovery and development costs that we have incurred. Our ability to recover
these expenditures and realize profits upon the sale of products could be
diminished. The process of obtaining patents can be time-consuming and expensive
with no certainty of success. Even if we spend the necessary time and money, a
patent may not issue or it may
                                        6


insufficiently protect the technology it was intended to protect. We can never
be certain that we were first to develop the technology or that we were the
first to file a patent application for the particular technology because most
U.S. patent applications are confidential until a patent publishes or issues,
and publications in the scientific or patent literature lag behind actual
discoveries. If our pending patent applications are not approved for any reason
or if we are unable to receive patent protection for additional proprietary
technologies that we develop, the degree of future protection for our
proprietary rights will remain uncertain. Furthermore, third parties may
independently develop similar or alternative technologies, duplicate some or all
of our technologies, design around our patented technologies or challenge our
issued patents.

IF OTHER COMPANIES CLAIM THAT WE INFRINGE ON THEIR INTELLECTUAL PROPERTY RIGHTS,
WE MAY BE SUBJECT TO COSTLY AND TIME-CONSUMING LITIGATION AND DELAYS IN PRODUCT
INTRODUCTION.

     Our processes and potential products may conflict with patents that have
been or may be granted to competitors, academic institutions or others. As the
biotechnology and pharmaceutical industries expand and more patents are filed
and issued, the risk increases that our product candidates may give rise to a
declaration of interference by the U.S. Patent and Trademark Office, to
administrative proceedings in foreign patent offices or to claims of patent
infringement by other companies, institutions or individuals. These entities or
persons could bring legal proceedings against us seeking substantial damages or
seeking to enjoin us from testing, manufacturing or marketing our products. If
any of these actions were successful, we may also be required to cease the
infringing activity or obtain the requisite licenses or rights to use the
technology that may not be available to us on acceptable terms, if at all. Any
litigation, regardless of the outcome, could be extremely costly to us.

WE HAVE OUTSTANDING OPTIONS, CONVERTIBLE DEBT, CONTINGENT VALUE RIGHTS AND
WARRANTS, THE EXERCISE, CONVERSION OR EXCHANGE OF WHICH COULD DILUTE STOCKHOLDER
VALUE AND CAUSE OUR STOCK PRICE TO DECLINE.

     We grant stock options to our employees and other individuals as part of
our overall compensation plan which, upon vesting, are exercisable for common
stock. In addition, we have issued convertible debt which may be converted into
common stock as well as contingent value rights which, upon the occurrence of
certain events, may be exchanged for common stock. We are not able to estimate
when, if ever, the stock options or convertible debt will be exercised or
converted into common stock or when, if ever, shares will be issued in
connection with the contingent value rights, but any such conversion or issuance
would almost certainly dilute stockholder value.

     Further, if some or all of such shares are registered and sold into the
public market over a short time period, the price of our stock is likely to
decline, as the market may not be able to absorb those shares at the prevailing
market prices.

OUR OUTSTANDING INDEBTEDNESS INCREASED SUBSTANTIALLY WITH THE ISSUANCE OF
CONVERTIBLE SENIOR SUBORDINATED NOTES IN SEPTEMBER 2003, OR THE 2023 NOTES, AND
WE MAY NOT BE ABLE TO MAKE THE REQUIRED PAYMENTS ON THESE NOTES WHEN DUE AND
THEREFORE MAY FACE LIQUIDITY PROBLEMS.

     As a result of the issuance of our 2023 Notes, our long-term debt
represented by these notes was $150 million as of December 31, 2004. Our 2023
Notes significantly increased our interest expense and related debt service
costs. Interest on these notes accrues at the rate of 3.25% per annum. This
amounts to interest payments of $2.4 million due and payable on the 2023 Notes
semi-annually on March 8 and September 8 of each year on the outstanding amount
of the notes. Total interest payments of $92.6 million are scheduled to be paid
between March 8, 2005 and September 8, 2023 on the 2023 Notes.

     This long-term debt may:

     - make it more difficult for us to obtain any necessary financing in the
       future for working capital, capital expenditures, debt service
       requirements or other purposes; and

     - make us more vulnerable in the event of a downturn in our business.

                                        7


     We currently are not generating sufficient net cash flow to satisfy the
annual debt service payments on the notes. If we are unable to satisfy our debt
service requirements, we will default on our 2023 Notes, and we would face
liquidity problems as a result.

IF THE MARKET PRICE OF OUR COMMON STOCK, SIMILAR TO OTHER BIOTECHNOLOGY
COMPANIES, REMAINS HIGHLY VOLATILE, THEN OUR STOCKHOLDERS MAY NOT BE ABLE TO
SELL THEIR STOCK WHEN DESIRED OR AT DESIRABLE PRICES.

     When the stock prices of companies in the Nasdaq Biotechnology Index fall,
our stock price will most likely fall as well. The stock price of biotechnology
and pharmaceutical companies, including our stock price, has been volatile and
may remain volatile for the foreseeable future. From October 1, 2001 through
September 30, 2002, the range of our stock price was between $50.94 and $11.50,
and the range of the Nasdaq Biotechnology Index was between 978.42 and 397.36.
From October 1, 2002 through September 30, 2003, the range of our stock price
was between $38.34 and $12.84, and the range of the Nasdaq Biotechnology Index
was between 801.40 and 442.09. From October 1, 2003 through September 30, 2004,
the range of our stock price was between $98.70 and $24.47, and the range of the
Nasdaq Biotechnology Index was between 851.44 and 622.01. From October 1, 2004
through May 2, 2005, the range of our stock price was between $74.95 and $39.48
and the range of the Nasdaq Biotechnology Index was between 774.43 and 636.66.
The following factors, among others, some of which are beyond our control, may
also cause our stock price to decline:

     - sales of Tarceva;

     - fluctuations in operating results;

     - announcements of technological innovations or new therapeutic products by
       others;

     - negative or neutral clinical trial results;

     - developments concerning strategic alliance agreements;

     - unanticipated clinical efficacy or safety results from our competitors'
       products;

     - changes in government regulation, including pricing controls;

     - delays with the FDA in the approval process for clinical candidates;

     - developments in patent or other proprietary rights;

     - public concern as to the safety of our products;

     - future sales of substantial amounts of our common stock by existing
       stockholders; and

     - comments by securities analysts and general market conditions.

     In addition, historically, our stock price has been affected by
technological, clinical and regulatory developments in the HER1/EGFR field,
including developments with respect to the products of our main competitors in
the field. It is possible that future developments concerning our competitors'
products as well as further research and clinical results of targeted therapies
in general and the HER1/EGFR field in particular could have an impact on our
stock price due to Tarceva's classification as a targeted therapy in the HER1/
EGFR field.

     If our stock price falls, our stockholders may not be able to sell their
stock when desired or at desirable prices.

OUR GOVERNANCE DOCUMENTS AND STATE LAW PROVIDE CERTAIN ANTI-TAKEOVER MEASURES
WHICH WILL DISCOURAGE A THIRD PARTY FROM SEEKING TO ACQUIRE US AND MAY IMPEDE
THE ABILITY OF STOCKHOLDERS TO REMOVE AND REPLACE OUR BOARD OF DIRECTORS AND,
THEREFORE, OUR MANAGEMENT.

     We have had a shareholder rights plan, commonly referred to as a "poison
pill," since January 1999. The purpose of the shareholder rights plan is to
protect stockholders against unsolicited attempts to acquire control of us that
do not offer a fair price to our stockholders as determined by our board of
directors. Under the plan, the acquisition of 17.5% or more of our outstanding
common stock by any person or group, unless approved by
                                        8


our board of directors, will trigger the right by our stockholders to acquire
additional shares of our common stock, and, in certain cases, the stock of the
potential acquiror, at a bargain purchase price, thus significantly increasing
the acquisition cost to a potential acquiror. The shareholder rights plan may
have the effect of dissuading a potential hostile acquiror from making an offer
for our common stock at a price that represents a premium to the then current
trading price. Our certificate of incorporation and by-laws contain certain
additional anti-takeover protective devices. For example,

     - no stockholder action may be taken without a meeting, without prior
       notice and without a vote; solicitations by consent are thus prohibited;

     - special meetings of stockholders may be called only by our board of
       directors;

     - nominations by stockholders of candidates for election to the board of
       directors at our annual meeting of stockholders must be made at least 45
       days prior to the date on which we first mailed our proxy materials for
       the prior year's annual meeting of stockholders; and

     - our board of directors has the authority, without further action by the
       stockholders, to fix the rights and preferences, and issue shares, of
       preferred stock. An issuance of preferred stock with dividend and
       liquidation rights senior to the common stock and convertible into a
       large number of shares of common stock could prevent a potential acquiror
       from gaining effective economic or voting control.

     Further, we are subject to Section 203 of the Delaware General Corporation
Law which, subject to certain exceptions, restricts certain transactions and
business combinations between a corporation and a stockholder owning 15% or more
of the corporation's outstanding voting stock for a period of three years from
the date the stockholder becomes a 15% stockholder. In addition to discouraging
a third party from acquiring control of us, the foregoing provisions could
impair the ability of existing stockholders to remove and replace our management
and/or our board of directors.

                                        9


                                 RECENT EVENTS

     As of April 14, 2005, we exchanged 0.29685 shares of our common stock,
totaling 84,940 shares, for each share of Prosidion Limited stock held by the
stockholders listed below under the section entitled "Selling Stockholders." We
agreed to file the registration statement, of which this prospectus is a part,
which enables the selling stockholders to sell their shares. We also agreed to
reimburse the selling stockholders for liability we may cause if we make any
untrue statements of material fact or failing to state a material fact in this
registration statement.

                                USE OF PROCEEDS

     The proceeds from the sale of the shares of common stock are solely for the
account of the selling stockholders. We will not receive any proceeds from the
sale of the shares.

                              SELLING STOCKHOLDERS

     The table below describes the amount of common stock owned by the selling
stockholders as of April 14, 2005 and the number of shares of common stock the
selling stockholders are selling under this prospectus.



                                                                PERCENTAGE OF   PERCENTAGE OF
                                                      SHARES    SHARES OWNED    SHARES OWNED
                                            SHARES    OFFERED     PRIOR TO          AFTER
SELLING STOCKHOLDERS                       OWNED(1)   HEREBY     OFFERING(2)     OFFERING(2)
- --------------------                       --------   -------   -------------   -------------
                                                                    
Arch, Jon(3).............................      237       237          *               *
Bali, Utsav(4)...........................      306       296          *               *
Bradley, Stuart(4).......................    2,103       593          *               *
Cherrington, Alan(3).....................      737       237          *               *
Christiansen, Lars(4)....................    4,452     4,452          *               *
Darker, Sinead(5)........................      296       296          *               *
Demuth, Hans-Ulrich(3)...................      237       237          *               *
Doel, Sheila(4)..........................      534       445          *               *
Fyfe, Matthew(4).........................      831       831          *               *
Gadher, Smita(4).........................      445       445          *               *
Gardner, Lisa(4).........................      296       296          *               *
Hueg, Kim(6).............................      445       445          *               *
Jeevaratnam, Revathy(4)..................      296       296          *               *
Keily, John(4)...........................      593       593          *               *
Krulle, Thomas(4)........................      593       593          *               *
Lundbeck Research USA, Inc. .............   14,842    14,842          *               *
Lundemose, Anker(7)(8)...................   13,358    13,358          *               *
Matthews, David(3).......................      237       237          *               *
Murray, John(5)..........................    3,711     2,968          *               *
O'Rahilly, Stephen(3)....................      237       237          *               *
Overton, Hilary(4).......................      831       831          *               *
Petkevich, Misha(8)......................      396       296          *               *
Procter, Martin(4).......................    1,291     1,038          *               *
Rasamison, Chrystelle(4).................      296       296          *               *
Reynet-McCormack, Christine(4)...........    1,484     1,484          *               *
Rowley, Robert(4)........................      568       445          *               *
Schofield, Karen(4)......................      296       296          *               *
Shah, Vilas(4)...........................    1,213       445          *               *
Tanabe Seiyaku Co. Ltd. .................   29,684    29,684          *               *
Thomas, Gerard(4)........................      831       831          *               *


                                        10




                                                                PERCENTAGE OF   PERCENTAGE OF
                                                      SHARES    SHARES OWNED    SHARES OWNED
                                            SHARES    OFFERED     PRIOR TO          AFTER
SELLING STOCKHOLDERS                       OWNED(1)   HEREBY     OFFERING(2)     OFFERING(2)
- --------------------                       --------   -------   -------------   -------------
                                                                    
Thomsen, Mikael(4).......................    5,936     5,936          *               *
Williams, Geoffrey(4)....................    1,109       593          *               *
Wong Kai in, Phil(4).....................      831       831          *               *


- ---------------

 *  Represents less than one percent.

(1) Based on information provided by the Selling Stockholders. Excludes stock
    options potentially held.

(2) Based on shares of common stock issued and outstanding as of April 20, 2005.

(3) Consultant to Prosidion Limited, our wholly-owned subsidiary.

(4) Employee of Prosidion.

(5) Former employee of Prosidion.

(6) Former member of the Board of Directors of Prosidion.

(7) Executive Vice President and President of (OSI) Prosidion.

(8) Member of the Board of Directors of Prosidion.

                                        11


                              PLAN OF DISTRIBUTION

     Any distribution hereunder of the shares by the selling stockholders may be
effected from time to time in one or more of the following transactions:

     - through brokers, acting as principal or agent, in transactions (which may
       involve block transactions) on Nasdaq or otherwise, in special offerings,
       in the over-the-counter market, or otherwise, at market prices obtainable
       at the time of sale, at prices related to such prevailing market prices,
       at negotiated prices or at fixed prices,

     - to underwriters who will acquire the shares for their own account and
       resell them in one or more transactions, including negotiated
       transactions, at a fixed public offering price or at varying prices
       determined at the time of sale (any public offering price and any
       discount or concessions allowed or reallowed or paid to dealers may be
       changed from time to time),

     - directly or through brokers or agents in private sales at negotiated
       prices,

     - to lenders pledged as collateral to secure loans, credit or other
       financing arrangements and any subsequent foreclosure, if any,
       thereunder, or

     - combination of any of the foregoing or by any other legally available
       means.

     Also, offers to purchase shares may be solicited by agents designated by
the selling stockholders from time to time. Underwriters or other agents
participating in an offering made pursuant to this prospectus (as amended or
supplemented from time to time) may receive underwriting discounts and
commissions under the Securities Act of 1933, or Securities Act, as amended, and
discounts or concessions may be allowed or reallowed or paid to dealers, and
brokers or agents participating in such transactions may receive brokerage or
agent's commissions or fees. The selling stockholders may effect sales of shares
to or through broker-dealers, and such broker-dealers may receive compensation
in the form of discounts, concessions or commissions from the selling
stockholders and/or the purchasers of the shares for whom such broker-dealers
may act as agents or to whom they sell as principals, or both (which
compensation as to a particular broker-dealer might be in excess of customary
commissions).

     At the time a particular offering of any shares is made hereunder, to the
extent required by law, a prospectus supplement will be distributed which will
set forth the amount of shares being offered and the terms of the offering,
including the purchase price or public offering price, the name or names of any
underwriters, dealers or agents, the purchase price paid by any underwriter for
any shares purchased from the selling stockholders, any discounts, commissions
and other items constituting compensation from the selling stockholders and any
discounts, commissions or concessions allowed or filed or paid to dealers. The
shares may be sold from time to time in one or more transactions at a fixed
offering price, which may be changed, or at varying prices determined at the
time of sale or at negotiated prices. Such prices will be determined by the
selling stockholders or by agreement between the selling stockholders and
underwriters or dealers, if any. The selling stockholders also may, from time to
time, authorize dealers, acting as selling stockholders' agents, to solicit
offers to purchase the shares upon the terms and conditions set forth in any
prospectus supplement.

     In order to comply with the securities laws of certain states, if
applicable, the shares will be sold hereunder in such jurisdictions only through
registered or licensed brokers or dealers.

     We have been advised that, as of the date hereof, the selling stockholders
have made no arrangements with any broker for the sale of their shares. The
selling stockholders and any underwriters, brokers or dealers involved in the
sale of the shares may be considered "underwriters" as that term is defined by
the Securities Act although the selling stockholders disclaim such status. We
have agreed to reimburse the selling stockholders against certain liabilities
that may be incurred in connection with the sale of the shares under this
prospectus. In addition, the selling stockholders have agreed to reimburse us
against certain liabilities. We have agreed to pay certain expenses incident to
the registration statement and the sale of the shares hereunder to the public,
other than certain internal administrative and similar costs of the selling
stockholders, legal fees and expenses of counsel for the selling stockholders
and any underwriting discount and commissions, selling or placement agent or
broker fees or commissions, and transfer taxes, if any, in connection with the
sale of securities by the selling stockholders. We will not receive any proceeds
from any sales of the shares pursuant to

                                        12


this prospectus. Each selling stockholder will be subject to applicable
provisions of the Securities Exchange Act of 1934, or Exchange Act, as amended,
and the rules and regulations thereunder, including, without limitation,
Regulation M, which provisions may limit the timing of purchases and sales of
shares of our common stock by the selling stockholders.

                             AVAILABLE INFORMATION

     We have filed a registration statement, of which this prospectus is a part,
and related exhibits with the Securities and Exchange Commission, or SEC,
pursuant to the Securities Act. The registration statement contains additional
information about us and our common stock. We also filed annual and quarterly
reports, proxy statements and other information with the SEC. You may read and
copy the registration statement or any other document we file with the SEC at
the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
Public Reference Room.

     The SEC also maintains a website that contains reports, proxy and
information statements, and other information that we have filed electronically.
The SEC's website is located at http://www.sec.gov.  We maintain our own website
which is located at http://www.osip.com.

                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

     The SEC allows us to "incorporate by reference" the information we provide
in documents filed with the SEC, which means that we can disclose important
information by referring to those documents. The information incorporated by
reference is an important part of this prospectus. Any statement contained in a
document which is incorporated by reference in this prospectus is automatically
updated and superseded if information contained in this prospectus, or
information that we later file with the SEC, modifies and replaces this
information. We incorporate by reference the following documents we have filed
with the SEC:

          1. annual report on Form 10-K for the fiscal year ended September 30,
     2004, filed with the SEC on December 14, 2004;

          2. current reports on Form 8-K, filed with the SEC on October 21,
     2004, November 4, 2004, November 19, 2004 as amended on November 24, 2004,
     November 24, 2004, December 16, 2004, January 27, 2005, February 8, 2005,
     March 8, 2005, March 21, 2005, March 30, 2005, April 5, 2005, April 12,
     2005, April 20, 2005 and April 22, 2005;

          3. item 8.01 and exhibit 99.2 of the current report on Form 8-K filed
     with the SEC on February 11, 2005;

          4. transition report on Form 10-Q for the period ended December 31,
     2004, filed with the SEC on February 9, 2005;

          5. proxy statement, dated February 2, 2005, for our 2005 annual
     meeting of stockholders, filed with the SEC on January 28, 2005; and

          6. the description of our common stock, which is registered under
     Section 12 of the Exchange Act, contained in our registration statement on
     Form 8-A, including any amendments or reports filed for the purpose of
     updating such description.

     All documents we have filed with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this prospectus (other than
respective filings or portions of filings that are furnished, under applicable
SEC rules, rather than filed) will be deemed incorporated by reference in this
prospectus and will become a part of this prospectus. To receive a free copy of
any of the documents incorporated by reference in this prospectus call or write
Robert L. Van Nostrand, Vice President and Chief Financial Officer, OSI
Pharmaceuticals, Inc., 58 South Service Road, Suite 110, Melville, New York
11747, (631) 962-2000. We will not send exhibits to the documents unless those
exhibits have been specifically incorporated by reference in this prospectus.

     You should rely only on the information incorporated by reference or
included in this prospectus or the applicable prospectus supplement. We have not
authorized anyone else to provide you with different information. The selling
stockholders may only use this prospectus to sell securities if a prospectus
supplement is delivered with the prospectus, to the extent one is required. The
selling stockholders are only offering these securities in states where the
offer is permitted. You should not assume that the information in this
prospectus

                                        13


or the applicable prospectus supplement is accurate as of any date other than
the dates set forth on the front of these documents.

                                 LEGAL MATTERS

     Saul Ewing LLP, Philadelphia, Pennsylvania, will pass upon the validity of
the shares of common stock offered in this prospectus by us.

                                    EXPERTS

     The consolidated financial statements of OSI Pharmaceuticals, Inc. and its
subsidiaries as of September 30, 2004 and 2003, and for each of the years in the
three-year period ended September 30, 2004, have been incorporated by reference
herein and in the registration statement in reliance upon the report of KPMG
LLP, independent registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing. The audit report covering the September 30, 2004 consolidated
financial statements reflects (i) the adoption of EITF 00-21 "Revenue
Arrangements with Multiple Deliverables" in 2004; (ii) the full adoption of the
provisions of Statement of Financial Accounting Standards, "SFAS", No. 142,
"Goodwill and Other Intangible Assets" in 2003; and (iii) the early adoption of
the provisions of SFAS No. 145 "Rescission of FASB Statements No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical Corrections" relating to the
classification of the effect of early debt extinguishments in 2002.

                                        14


     You should rely only on the information contained in this prospectus or
incorporated by reference. We have not authorized anyone to provide you with
additional or different information. We are not making an offer of these
securities in any jurisdiction where the offer or sale is not permitted. You
should not assume that the information contained in or incorporated by reference
in this prospectus is accurate as of any date other than the date on the front
cover of this prospectus, regardless of the date of delivery of this prospectus
or the date of any sale of the securities.

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                                 84,940 SHARES

                                   [OSI LOGO]

                                  COMMON STOCK

                            ------------------------

                                   PROSPECTUS
                            ------------------------

                                  MAY 4, 2005
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