Callisto Announces Updated Report from Beacon Equity Research with New Share Price Target of $3.37; Beacon Report Cites Potential New Cancer Target of Callisto Drug Candidate Atiprimod Following Anti-Tumor Response.

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 Beacon Equity Research, a fee-based equity research firm, has issued a research update that includes a new share price target of $3.37, following Callisto's recent announcement of encouraging new data on the anti-tumor efficacy of Atiprimod, one of the Company's drug candidates.

The update was issued following important clinical and business developments that Callisto has announced recently. Among those was Callisto's announcement that researchers in human clinical trials of Atiprimod showed a clear response in a patient with advanced carcinoid cancer plus additional encouraging data on other carcinoid patients.

Based on the carcinoid data, the Company announced plans to initiate a Phase I/II clinical trial with Atiprimod specifically in advanced carcinoid patients. The drug is presently also in two Phase I/IIa clinical trials in multiple myeloma and advanced cancer patients. The additional development path has the potential to give Callisto its first approved drug considerably earlier than the Company previously expected.

"According to the Company, the time frame for the clinical trials should begin in 2006," the Beacon research update states. "The Company also states that if the results are positive, it may be possible to move to a more advanced trial which may eventually lead to FDA approval. This could then translate into a possible approval within 2-3 years. The best case scenario is that since there are no other drugs currently available to fight these specific ailments, there is potential for accelerated approval by the FDA."

The full text of the updated Beacon report is available free of charge to all interested investors at http://www.beaconequityresearch.com and http://www.investrendresearch.com. Callisto has engaged Beacon to provide research coverage under the compensation terms described below.

About Beacon Research

Beacon Equity Research, LLC is a fee-based, comprehensive investment research firm, focusing primarily on the underserved small-cap sector. All Beacon analysts are seasoned industry professionals and adhere to the CFA Institute's (CFAI) stringent ethics and standards of practice guidelines. Beacon Research does not have any investment banking relationships with any of the companies covered. All analysts are compensated prior to performing their investment research and are not compensated in any way based on the future performance of the equities they follow.

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

Beacon Equity Research (otherwise known as BER) is an independent research firm specializing in small and micro capitalization companies. BER has no investment banking or consultation conflicts thereby minimizing the inherent conflicts of interest between the research analysts and the companies they cover. BER is not a registered investment advisor or broker dealer. No information in this report should be construed as an endorsement to either buy or sell any securities mentioned in this report. The analyst(s) who prepared this report rely on publicly available information which neither the analyst, nor BER, can guarantee to be error free or factually accurate. All conclusions in this report are deemed reasonable and appropriate by the author. Beacon Equity Research has been compensated sixteen-thousand five-hundred dollars by Callisto Pharmaceuticals for a one year enrollment in its research program. All decisions are made solely by the analyst and independent of outside parties or influence. The Private Securities Litigation Reform Act of 1995 provides investors a "safe harbor" in regard to forward-looking statements. To fully comply with the requirements of this law, BER cautions all investors that such forward-looking statements in this report are not guarantees of future performance. Unknown risk, uncertainties, as well as other uncontrollable or unknown factors may cause actual results to materially differ from the results, performance or expectations expressed or implied by such forward-looking statements. Investors should exercise good judgment and perform adequate due-diligence prior to making any investment. In accordance with the "Standards for Independent Research Providers" issued by the FIRST Research Consortium, BER makes the following assertions: ratings and price targets in this report should not be construed as recommendations or stock price predictors. Conflicts are inimical to credible professional research; however, the analysts responsible for this report publicly state that they do not own a stake in any of the companies covered in this report. Neither they nor principals of this research provider are permitted to trade any form of equities of companies being covered prior to research being initiated.

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.