Callisto Pharmaceuticals' Majority-Owned Subsidiary Synergy Pharmaceuticals Completes Phase I Trial of SP-304 in Volunteers.

Synergy Plans Major Push to Develop SP-304 to treat GI disorders

NEW YORK -- Callisto Pharmaceuticals, Inc. (OTC BB:CLSP.OB), a developer of new drugs to treat cancer and gastrointestinal disorders, announced today that Synergy Pharmaceuticals (OTC BB: SGYP), its majority-owned subsidiary, successfully completed the Phase I clinical trial of SP-304 in healthy volunteers that was initiated in June, 2008. This first study was a double-blind, placebo-controlled, randomized single, oral, ascending dose trial performed in 71 healthy male and female volunteers. The primary objective of the Phase I clinical trial with SP-304 was to characterize the safety, tolerability, pharmacokinetic and pharmacodynamic effects of the drug in healthy volunteers.

"The completion of this clinical trial with SP-304 marks an important step in Synergy's development of this unique drug to treat human gastrointestinal conditions," said Gary S. Jacob, Ph.D., CEO of Callisto Pharmaceuticals, and President and Acting CEO of Synergy. "The data from the trial are included in an abstract submitted to the Digestive Disease Week conference that meets in Chicago on May 30th - June 4th, 2009. We are extremely pleased with the results of the trial and are planning to initiate a repeated-oral-dose trial of SP-304 in chronic constipation patients in 2009."

About SP-304

SP-304 is a new member of a novel class of non-systemic drugs for treatment of chronic constipation (CC), irritable bowel syndrome with constipation (IBS-C) and other GI diseases. SP-304 is a synthetic analog of uroguanylin, a natriuretic hormone that regulates ion and fluid transport in the GI tract. Orally administered SP-304 binds to and activates guanylate cyclase C (GC-C) expressed on the epithelial cells lining the GI mucosa, resulting in activation of the cystic fibrosis transmembrane conductance regulator (CFTR), and leading to an augmented flow of chloride and water into the lumen of the gut to facilitate bowel movement. In animal models, oral administration of SP-304 promotes intestinal secretion and ameliorates gastrointestinal inflammation.

About Chronic Constipation

Chronic constipation is a very common gastrointestinal disorder. Up to 26 million Americans suffer from the disorder, and of this population about 5 million have a severe condition necessitating relief. The prevalence of the disorder is similar in other developed countries. Patients with chronic constipation often experience hard stools, straining during bowel movements and not enough bowel movements during the week. People with chronic constipation can experience serious discomfort which adversely affects their ability to work and their quality of life.

About Irritable Bowel Syndrome

Up to one sixth of adults experience inflammatory bowel syndrome (IBS), a condition marked by disturbed bowel function and abdominal pain. IBS patients can have three different sets of symptoms; diarrhea-predominant (IBS-D), constipation-predominant (IBS-C) and mixed or alternating disorder (IBS-M). The split in prevalence between the forms is about 1/3rd each. In addition, most patients suffering from the mixed form of IBS (IBS-M) are believed to mainly have constipation. An estimated 10 million people in the US and an additional 10 million people in the EU suffer from IBS-C. IBS (all forms) accounts for 12% of adult visits to primary care physicians in the US.

About Callisto Pharmaceuticals, Inc.

Callisto is a biopharmaceutical company focused on the development of new drugs to treat cancer and gastrointestinal disorders. The Company's lead drug in the clinic, Atiprimod, is presently in a Phase II extension trial in advanced carcinoid cancer patients. Callisto's second cancer drug in the clinic, L-Annamycin, is currently in a Phase I clinical trial in children and young adults with refractory or relapsed acute lymphocytic leukemia or acute myelogenous leukemia. Callisto's majority-owned subsidiary, Synergy Pharmaceuticals recently began clinical development of SP-304 in June 2008 for gastro-intestinal disorders. SP-304 recently finished a Phase I clinical trial in volunteers and Synergy plans to initiate a Phase Ib clinical trial of SP-304 in chronic constipation patients in 2009. SP-304 is a synthetic analog of the human gastrointestinal hormone uroguanylin, and acts by activating the guanylate cyclase C (GC-C) receptor on epithelial cells of the colon. Callisto has exclusive worldwide licenses from Genzyme Inc. and M.D. Anderson Cancer Center to develop, manufacture, use and sell Atiprimod and L-Annamycin, respectively. Callisto is also listed on the Frankfurt Stock Exchange under the ticker symbol CA4. More information is available at http://www.callistopharma.com.