EXHIBIT 99.2

OSI PHARMACEUTICALS GRANTS LICENSE TO MERCK & CO., INC. UNDER PATENT COVERING
COMBINATION THERAPY USING DIPEPTIDYL PEPTIDASE IV (DPIV) INHIBITORS AND OTHER
ANTIDIABETIC AGENTS THROUGH ITS DIABETES BUSINESS UNIT, (OSI) PROSIDION

      MELVILLE, N.Y., Jun 30, 2005 (BUSINESS WIRE) -- OSI Pharmaceuticals, Inc.
(NASDAQ: OSIP), announced today that its diabetes and obesity business unit
(OSI) Prosidion, has granted Merck & Co. Inc. a worldwide, non-exclusive license
under U.S. Patent No. 6,890,898 and foreign equivalents thereof which claim
combination therapy comprising administration of a DPIV inhibitor and another
therapeutic agent for the treatment of type 2 diabetes and related indications.
OSI will receive upfront, milestone and royalty payments. Additional financial
terms were not disclosed.

      (OSI) Prosidion acquired its DPIV technology platform, which includes a
Phase II compound, PSN9301, and a portfolio of DPIV medical use patents from
Probiodrug AG of Germany in July 2004. The DPIV medical use patents include
issued patents and pending patent applications corresponding to U.S. 6,303,661,
U.S. 6,890,898 and WO 01/72290, with claims covering DPIV as a target for
anti-diabetes therapy and the use of combinations of DPIV inhibitors with other
anti-diabetes drugs. The license to Merck supplements their existing
non-exclusive license under part of this patent portfolio. A number of
non-exclusive licenses to the patent estate have now been granted and (OSI)
Prosidion expects to grant additional non-exclusive licenses in the future.

      "We believe that the Merck license further validates the strength of our
DPIV related patent estate and the importance of this target to the development
of innovative new medicines for the treatment of diabetes," stated Anker
Lundemose, M.D., Ph.D., President of (OSI) Prosidion.

      ABOUT (OSI)

      OSI Pharmaceuticals is committed to "shaping medicines and changing lives"
by discovering, developing and commercializing high-quality and novel
pharmaceutical products that extend life or improve the quality of life for
cancer and diabetes patients worldwide. The company operates through two
business teams, (OSI) Oncology and (OSI) Prosidion. (OSI) Oncology is focused on
developing molecular targeted therapies designed to change the paradigm of
cancer care. (OSI) Prosidion is committed to the generation of novel, targeted
therapies for the treatment of type 2 diabetes and obesity. OSI's flagship
product, Tarceva(R) (erlotinib), is the first drug discovered and developed by
OSI to obtain FDA approval and the only EGFR inhibitor to have demonstrated the
ability to improve survival in both non-small cell lung cancer and pancreatic
cancer patients. OSI markets Tarceva through partnerships with Genentech, Inc.
in the U.S. and with Roche throughout the rest of the world.

      (OSI) Prosidion is the diabetes and obesity business team within OSI
Pharmaceuticals, dedicated to the discovery and development of novel drugs for
the treatment of type 2 diabetes and obesity. (OSI) Prosidion's lead compound,
PSN9301, is a Dipeptidyl Peptidase IV (DPIV) inhibitor currently in Phase II
clinical trials. Other products targeting glycogen phosphorylase inhibition and
glucokinase activation are scheduled to enter Phase I clinical trials in 2005.
(OSI) Prosidion owns or has licensing rights to a portfolio of DPIV medical use
patents with claims covering DPIV as a target for anti-diabetes therapy and the
use of combinations of DPIV inhibitors with other anti-diabetes drugs such as
metformin. A number of non-exclusive licenses



to the patent estate have been granted to major pharmaceutical companies. (OSI)
Prosidion operates through OSI's wholly-owned subsidiary, Prosidion Limited, in
Oxford, U.K.

      This news release contains forward-looking statements. These statements
are subject to known and unknown risks and uncertainties that may cause actual
future experience and results to differ materially from the statements made.
Factors that might cause such a difference include, among others, the completion
of clinical trials, the FDA review process and other governmental regulation,
Prosidion's and OSI's and their collaborators' abilities to successfully develop
and commercialize drug candidates, competition from other pharmaceutical
companies, the ability to effectively market products and other factors
described in OSI Pharmaceuticals' filings with the Securities and Exchange
Commission. PSN9301, PSN105, PSN357 and PSN010 are investigational compounds and
have not yet been approved as safe or efficacious in humans for their ultimate
intended use.

SOURCE: OSI Pharmaceuticals, Inc.
OSI Pharmaceuticals, Inc.
Kathy Galante, 631-962-2000