Callisto Establishes Guanilib as Developmental Name for Novel Drug Candidate for GI Disease; Name Established as Company Moves Forward with First-in-Class Compound Planned for Clinical Trial.

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, has established Guanilib as the developmental name for its proprietary drug candidate previously identified as SP304. Callisto scientists developed this first-in-class compound as a treatment for serious inflammatory gastro-intestinal diseases.

Guanilib is designed to mimic a naturally-occurring hormone called uroguanylin normally produced in the body's intestinal tract, but with the added advantage of providing greater anti-inflammatory potency and therapeutic effect. Research also suggests that the drug may also act as a preventative against the formation of polyps that are a major risk factor in the development of colon cancer.

"The preclinical research on Guanilib has been very encouraging, indicating that this is an enormously promising new compound and therapeutic approach with the potential to greatly impact the treatment of serious inflammatory bowel diseases," said Dr. Gary S. Jacob, CEO and Chief Scientific Officer of Callisto. "We are very excited to be at the forefront of development of this groundbreaking new drug technology."

Callisto recently announced receipt of a Notice of Allowance from the U.S. Patent and Trademark Office on a patent covering SP304, now known as Guanilib. The Notice of Allowance was given for the patent entitled, "Guanylate or Guanylyl Cyclase Receptor Agonists for the Treatment of Tissue Inflammation and Carcinogenesis." The USPTO has allowed key claims covering the composition of matter of the SP304 compound; additional claims are pending in divisional applications. Allowed patents are expected to issue in the near future.

Ulcerative colitis, a chronic disease of the digestive tract that Guanilib is being developed to treat, afflicts approximately 500,000 Americans. Ulcerative colitis can be painful and debilitating, and can lead to other serious and life-threatening complications.

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.