Callisto Establishes Intellectual Property Department to Expand New Drug Pipeline and Strengthen Patent Protection; Veteran Biotechnology Executive and Patent Agent David Ladner Named Director of New Department.

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, today announced the formation of a Department of Intellectual Property to spearhead growth of the Company's pipeline of new drug candidates, while broadening protection of its intellectual property portfolio through creation of multiple patents around broad classes of new drugs, as well as narrowly-focused claims on specific compounds.

Callisto has named Dr. David Ladner, a patent agent and research scientist with extensive background in the pharmaceutical and chemical industries, to head the unit in the position of Director of Intellectual Property.

"The robust expansion of our intellectual property portfolio is a cornerstone of our strategy to maximize Callisto's revenue potential, and further strengthen our fundamental mission to develop important new medical treatments," said Dr. Gary S. Jacob, CEO and Chief Science Officer of Callisto Pharmaceuticals. "Our strategy is designed to expand as well as aggressively protect our intellectual property assets as our scientific personnel and clinical research programs work to develop new drug treatments."

Callisto is continuing to build its portfolio of drug technologies through in-licensing of new drug compounds that address significant health care needs and markets. Dr. Ladner and Dan D'Agostino, Chief Business Officer for Callisto, will lead M&A and development activities to expand the company's intellectual property portfolio through the identification and acquisition of promising drug candidates. The Company continues to foster strategic research collaborations with universities and other key research partners with the objective of substantially increasing its portfolio of new drug candidates.

The move to create the new unit comes on the heels of pivotal intellectual property growth at Callisto, including recently announced allowed US patent for a first-in-class, breakthrough drug compound to treat and prevent gastro-intestinal diseases, including colon cancer and ulcerative colitis, a frequently devastating condition in need of more effective medical treatments. Some 500,000 Americans are estimated to have ulcerative colitis, in a market valued at $800 million. Callisto's drug, currently called SP304, is the first compound in this newly emerging class of treatments to receive patent protection.

In addition, Callisto is developing new antibodies and peptides in a Homeland Defense drug program to create a proprietary class of superantigen technologies to combat biowarfare threats. The Company is developing a drug and vaccine to protect against biowarfare agents from the class of Staphylococcus and Streptococcus pathogens, with the aid of a major development grant from the National Institute of Allergy and Infectious Diseases. These compounds are covered by extensive patent estates, including both 'composition-of-matter' and 'use' patents. A poster presentation about the Superantigen Biodefense Program will appear in the "Late-Breaker Research Session" at the 45th Interscience Conference on Antimicrobial Agents and Chemotherapy (control #4024) on December 17, 2005, at 10:00 am, at the Washington, DC Convention Center (ICAAC(TM); http://www.icaac.org/).

Callisto recently announced the launch of adult human clinical trials of a second anti-cancer drug, L-Annamycin, being developed as a treatment for relapsed or refractory acute lymphocytic leukemia.

Dr. Ladner, a longtime senior research scientist with extensive experience as a patent agent and specialist in the chemical and pharmaceutical industries, holds a Ph.D. in Organic Chemistry. He was a manager of Intellectual Property at Bayer Pharmaceutical Division for the last five years, where he handled patent filing and prosecution for Chemical Research. He also served as Patent Liaison as well as Research Manager at American Cyanamid Co., for over 20 years, overseeing key aspects of patents and intellectual property. Dr. Ladner holds 22 patents himself, and has published widely in professional journals.

In the post, Dr. Ladner will oversee a range of matters pertaining to patents, licensing rights and other proprietary technologies for Callisto. "Our mission is to continue to accelerate Callisto's strategic efforts to develop a broad array of drugs targeting multiple market segments worldwide," said Dr. Ladner. "We anticipate the establishment of new strategic research partnerships and in-licensing initiatives to broaden our portfolio of therapeutic drug candidates."

About Callisto Pharmaceuticals, Inc.

Callisto is a biopharmaceutical company committed to the development of innovative new drugs to treat cancer and other major diseases and health threats. Currently, the Company's drug development pipeline includes anti-cancer drugs to treat blood, or hematological, cancers, and related diseases, as well as new drugs with Homeland Security applications designed to protect against potential bio-warfare agents, including staphylococcus and streptococcus. Currently, Callisto is developing two anti-cancer drug candidates to treat multiple myeloma and leukemia, both serious blood cancers. The Company's L-Annamycin drug candidate entered a clinical trial to treat adult relapsed or refractory acute lymphocytic leukemia (ALL) on December 1, 2005. L-Annamycin has a novel therapeutic profile that includes the potential to treat patients whose cancers have shown resistance to other cancer drugs; it also has shown potential for significantly reduced cardiotoxicity, or danger to the heart, compared with existing anthracycline cancer drugs. Callisto's anti-cancer drug Atiprimod is being explored as a treatment for relapsed or refractory multiple myeloma. Atiprimod is currently in a Phase I/IIa clinical trial in relapsed or refractory multiple myeloma patients at four clinical sites in the United States.

Callisto also has another exciting program based on its proprietary technology on guanylate cyclase receptor agonist (GCRA). U.S. Patent and Trademark Office has given a Notice of Allowance on a patent for a novel drug compound created by Callisto scientists to treat a variety of inflammatory diseases of the bowel, including colon cancer. The drug is first-in-class of a new category of compounds with the potential to revolutionize therapy for gastro-intestinal disease, while presenting virtually no known side effects or toxicity. The preclinical efficacy of the lead GCRA peptide SP304 has been demonstrated in animal models for ulcerative colitis. Callisto plans to advance the lead drug candidate for clinical evaluation in humans in 2006. Callisto also has received a major biodefense partnership grant from the National Institute of Allergy and Infectious Diseases (NIAID) to develop a monoclonal antibody and vaccine against bacterial superantigen toxins. Bacterial superantigens are among the most lethal of toxins that can potentially be used as bioweapons. 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, please 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.