Animal Data on Callisto's Drug Candidate Guanilib to be Presented at Key Scientific Conference on Digestive Diseases; Guanilib Found to Reduce Key Causative inflammatory Mediators in an Animal Model of Ulcerative Colitis.

NEW YORK -- Callisto Pharmaceuticals, Inc. (AMEX:KAL) (FWB:CA4), a developer of new drug treatments in the fight against cancer and other major health threats, announced today that an abstract on Guanilib (SP304), Callisto's drug candidate for gastrointestinal inflammation, was accepted for poster presentation at the Digestive Disease Week Conference in May 2006.

The abstract on Guanilib, which involves a collaboration with a team of scientists at the University of Pittsburgh School of Medicine, headed by Dr. Scott Plevy, a well-known research and clinical gastroenterologist, and scientists at Callisto, will be presented at the annual meeting of the Digestive Disease Week (DDW), a leading scientific conference covering diseases of the digestive tract. The meeting will be held at the Los Angeles Convention Center in Los Angeles, California, May 20-25, 2006.

The Callisto drug candidate Guanilib, also known by its laboratory name SP304, is an orally deliverable compound designed to mimic a naturally-occurring hormone called uroguanylin, which is normally produced in the body's intestinal tract. Deficiency of this hormone is predicted to be one of the primary reasons for the formation of polyps that can lead to colon cancer, as well as debilitating and difficult-to-treat GI inflammatory disorders such as ulcerative colitis.

The abstract presentation at the DDW meeting, entitled: "SP304, An Analog of Uroguanylin, Ameliorates Inflammation in a Model of Experimental Colitis" authored by Refaat Hegazi, Fengling Li, Gabriel Calilao, Antonia Sepuveda, Kunwar Shailubhai and Scott E. Plevy, will describe results suggesting that oral administration of Guanilib ameliorates inflammation in a mouse model of experimental colitis, presumably via downregulation of the key cytokines, such as tumor necrosis factor, that are known to be involved in the causes of IBD. For more information on the conference, visit http://www.ddw.org.

Dr. Scott Plevy, Associate Professor of Medicine and Immunology and the Co-Director of the Inflammatory Bowel Disease Center at the University of Pittsburg Medical Center, Pittsburg, PA, is a principle collaborator on Callisto's Guanilib research program.

"We are very encouraged by the Guanilib data from Dr. Plevy's laboratory, and pleased to have this new research presented to leading research professionals in the field," said Callisto CEO Dr. Gary S. Jacob. "Dr. Plevy and his group were the first to demonstrate that Guanilib inhibits gastrointestinal inflammation in an animal model of colitis, and now are providing insight into just how Guanilib exerts its antiinflammatory activity. Their research supports our commitment to pursue development of Guanilib as a completely new approach to the treatment of gastrointestinal disease."

One of the major physiological functions of uroguanylin is in the regulation of the continual renewal process, which is to eliminate mutated or damaged cells and replenish them with healthy new cells. "This delicate balance of elimination and renewal of the cells of the colon lining is crucial to the prevention of cancer and other GI inflammatory disorders. Guanilib is first-in-class of a new category of compounds called guanylate cyclase receptor agonists (GCRA) with the potential to provide a new way to treat gastrointestinal diseases, while exhibiting minimal side effects or toxicity," said Dr. Kunwar Shailubhai, Senior Vice President, Discovery Research for Callisto, who is one of the co-authors of the abstract and also one of the inventors of the GCRA technology.

A patent allowance covering therapeutic applications of this compound in GI inflammatory diseases has recently been granted by the U.S. Patent and Trademark Office. "This patent allowance is a scientific and strategic milestone for Callisto," added Dr. Jacob.

More than 500,000 Americans are afflicted with ulcerative colitis, a type of inflammatory bowel disease (IBD) that causes chronic inflammation of the digestive tract. Along with Crohn's disease, the other major form of IBD, ulcerative colitis can be painful and debilitating, and can lead to other serious and life-threatening complications. There is currently no medical cure for ulcerative colitis.

Colon cancer, also called colorectal cancer, is the second leading cause of cancer death among men and women in the United States and Canada, and is the third most diagnosed cancer, excluding skin cancer. The American Cancer Society estimates that there will be 146,940 new cases of colorectal cancer diagnosed in the U.S. in 2004 -- roughly one new case every 4 minutes. Although colon cancer can be treated through surgery, chemotherapy and radiation, currently there are no drugs specifically designed for its prevention and treatment.

About Callisto Pharmaceuticals, Inc.

Callisto is a biopharmaceutical company focused on the development of new drugs to treat various forms of cancer and other serious afflictions. Callisto's drug candidates in development currently include anti-cancer agents in clinical development, in addition to drugs for a range of other significant health care market segments, including biodefense. One of the Company's lead drug candidates, L-Annamycin, is being developed as a treatment for forms of relapsed leukemia, a currently incurable blood cancer. Callisto initiated a clinical trial of L-Annamycin in adult relapsed acute lymphocytic leukemia patients in 4Q 2005. L-Annamycin, a new compound from the anthracycline family of proven anti-cancer drugs, has a novel therapeutic profile, including activity against resistant diseases and significantly reduced cardiotoxicity, or damage to the heart, compared to currently available drug alternatives. Another anti-cancer drug, Atiprimod, is in development to treat relapsed multiple myeloma, a blood cancer. Atiprimod has entered Phase I/IIa human clinical trials in relapsed multiple myeloma patients. Callisto also has drugs in preclinical development for gastro-intestinal inflammation, and a program focused on the development of a drug to protect against Staphylococcus and Streptococcus biowarfare agents. Callisto has exclusive worldwide licenses from AnorMED Inc. and M.D. Anderson Cancer Center to develop, manufacture, use and sell Atiprimod and L-Annamycin, respectively. For investor-specific information about Callisto, including recent news and stock price data, please visit http://www.trilogy-capital.com/tcp/callisto/. For an Investor Fact Sheet about Callisto, please visit http://www.trilogy-capital.com/tcp/callisto/factsheet.html. To view an informational presentation of the Company's development pipeline of drug candidates, visit http://www.trilogy-capital.com/tcp/callisto/powerpoint.html. Callisto is also listed on the Frankfurt Stock Exchange under the ticker symbol CA4. For additional information, visit www.callistopharma.com.

Forward-Looking Statements

Certain statements made in this press release are forward-looking. Such statements are indicated by words such as "expect," "should," "anticipate" and similar words indicating uncertainty in facts and figures. Although Callisto believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations reflected in such forward-looking statements will prove to be correct. As discussed in the Callisto Pharmaceuticals Annual Report on Form 10-K/A for the year ended December 31, 2004, and other periodic reports, as filed with the Securities and Exchange Commission, actual results could differ materially from those projected in the forward-looking statements as a result of the following factors, among others: uncertainties associated with product development, the risk that products that appeared promising in early clinical trials do not demonstrate efficacy in larger-scale clinical trials, the risk that Callisto will not obtain approval to market its products, the risks associated with dependence upon key personnel and the need for additional financing.