Callisto Announces Patent Issued on Guanilib, Callisto's First-in-Class Drug for Gastrointestinal Diseases; Data Supports Guanilib's Potential as Treatment for Ulcerative Colitis and Other Gastrointestinal Inflammatory Diseases.

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 that the U.S. Patent and Trademark Office (USPTO) has notified Callisto that on May 9, 2006 its patent will be issued covering a novel drug candidate Guanilib developed by Callisto scientists to treat and prevent a variety of inflammatory diseases of the bowel. The drug candidate is first-in-class of a new category of compounds with the potential to treat gastro-intestinal diseases such as ulcerative colitis.

"The issuance of this patent is a scientific and strategic milestone for Callisto that further strengthens our pipeline of significant drug technologies and our mission to develop needed new medical treatments," stated Dr. Gary S. Jacob, CEO and CSO of Callisto Pharmaceuticals. "Guanilib is a truly novel and innovative drug candidate and we are very excited to be moving it forward towards the clinic."

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 and Crone's disease.

Encouraging animal model data and mechanistic studies on Guanilib were announced in March 2006 and will be presented in an abstract on Guanilib at the Digestive Disease Week conference to be held on May 20-25, 2006. Callisto continues to move forward with preclinical development of this innovative therapy, with the stated intention of filing an Investigational New Drug (IND) application in late 2006 or early 2007.

"Research in animal models has indicated that Guanilib provides a totally new way to treat ulcerative colitis and other serious inflammatory bowel diseases," said Dr. Kunwar Shailubhai, Senior Vice President and co-inventor of Guanilib. "The science behind Guanilib is an exciting new avenue in gastrointestinal anti-inflammatory treatment research, and Callisto is pleased to be the first to patent a drug in this next-generation category of potential therapies for GI inflammatory diseases."

The Notice of Issuance for Callisto's Guanilib was given for the patent entitled, "Guanylate Cyclase Receptor Agonists for the Treatment of Tissue Inflammation and Carcinogenesis." The USPTO has allowed key claims covering the composition of matter of the Guanilib compound, and for prevention, control and treatment of GI inflammatory diseases and colon cancer. Additional claims are pending in divisional applications.

About Ulcerative Colitis

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.

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 other significant health care markets, including ulcerative colitis and biodefense. One of the Company's lead drug candidates, L-Annamycin, is being developed as a treatment for forms of relapsed acute 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, and advanced carcinoid cancer. Atiprimod is presently in Phase I/IIa human clinical trials in relapsed multiple myeloma patients, and advanced cancer patients, respectively. Callisto also has drugs in preclinical development for gastrointestinal 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, 2005, 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.