Callisto Announces Report Update from Equity Analyst General Research with Projected Share Price of $3.00 and Buy Rating; Analyst Cites Recent Callisto Announcement of Encouraging Anti-Tumor Response of Drug Candidate Atiprimod.

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 General Research GmbH, a fee-based equity analysis firm based in Munich, Germany, has issued an updated report revising its 6-month share price target upward to $3.00, and reiterated its speculative 'Buy' rating.

The research firm's new target price projection represents a significant increase over previous projections that were initially issued as part of a comprehensive research report three months ago. The new target in part reflects Callisto's recent announcement of clinical findings in studies of its anti-cancer drug candidate Atiprimod. General Research issued the update following Callisto's announcement that researchers in clinical trials of Atiprimod recently found a "clear response" against carcinoid cancer in a patient with advanced carcinoid cancer, and additional encouraging clinical data on other carcinoid patients. As a result, Callisto announced plans to launch clinical development of Atiprimod for carcinoid cancer.

"The most recently published data on Atiprimod have been unexpectedly positive and may give the development of this drug a major boost," the General Research update wrote. "The licensing of another class of therapeutic agent enhances the company's already relatively strong pipeline." Callisto recently announced the in-licensing of a class of anti-cancer drugs called Degrasyns from The University of Texas M. D. Anderson Cancer Center.

The General Research update added: "Callisto remains significantly undervalued compared to its Peer Group, with a market capitalization of $62 million and a tech value of $55 million. This relative undervaluation ought to be increasingly realized by the markets and corrected. As a result of the favorable interim results with Atiprimod and the successful completion of a private placement, a significant increase in the valuation is anticipated in the medium-term, in a generally positive market environment."

Callisto has engaged General Research to provide research coverage, under the compensation terms described below.

Callisto has also been developing Atiprimod as a therapy for multiple myeloma, a blood cancer. In light of the carcinoid tumor response, the Company now plans to pursue a dual anti-cancer development path for the drug, including initiating a Phase I/II trial in patients with advanced carcinoid tumors. Callisto believes there exists an "unmet medical need" for new treatments for advanced and metastatic carcinoid tumors because there are no FDA approved drugs for these types of tumors.

General Research is a leading equity research firm whose paid coverage of Callisto is fully independent. The report was originally written in German by recognized biotech analyst, Dr. Georg Hochwimmer, for dissemination to the European investor community. The full text of the report, translated into English, can be viewed at http://www.trilogy-capital.com/tcp/callisto/hochwimmer.html

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.

Compensation Disclosures

This study does not represent any offer to sell or buy securities and is not any part of such. It is not an invitation for an offer to buy or sell securities, and it should not be construed as such, nor may it, or any part of it, be used as the basis for a binding contract, of whatever kind, or adduced as authoritative in such a context. This study is based upon sources of information that we consider to be trustworthy. However, the data, sources, and information used in this study were not verified by General Research GmbH. General Research GmbH reserves the right to change the study at any time and without prior notice. Neither General Research GmbH nor the author accept any responsibility or warranty for the validity, adequacy, accuracy, or completeness of the information presented in this study. Neither General Research GmbH nor the author nor Callisto Pharmaceuticals, Inc., accept any liability for damages that might arise from the use of this publication or its contents or from any other connection. This study, in so far as it is distributed in the UK, may only be made available to individuals who are considered authorized under the Financial Services Act 1986 or are exempt, or to individuals as defined in ss. 9 (3) of the Financial Services Act (Investment Advertisement) (Exemptions) 1988 Issue (amended version), and may not be conveyed to other individuals or groups, either directly or indirectly. This publication or copies of it may not be exported to Japan, nor distributed in Japan or conveyed to Japanese citizens who live outside Japan. Individuals who receive this publication must inform themselves about all such restrictions and observe them. By accepting this study, you agree to abide by the aforementioned restrictions. Duplication, in particular, reproduction, creation of copies, or use in electronic media including extracts -- is only permitted after prior discussion with the publisher. Investment in shares in general has risks that may even include the total loss of invested capital. Investors should get information about the relevant company from multiple sources prior to purchasing shares and, as a basic principle, should only use a restricted part of their liquid assets for the purchase of shares in a company. It is advisable to seek the advice of a financial advisor before buying or selling shares.

For the U.S. -- Compensation Disclosures

This study was commissioned by Callisto Pharmaceuticals. Callisto Pharmaceuticals paid EUR 12,500 for this report. Neither the author of the study, nor General Research GmbH currently own shares in Callisto Pharmaceuticals.

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.