Callisto Pharmaceuticals Announces Collaboration with the Institute of Hepatitis Viral Research to Pave the Way to Development of Next-Generation Bio-Warfare Vaccines.

NEW YORK -- Callisto Pharmaceuticals, Inc. (AMEX:KAL), a developer of novel drug treatments in the fight against hematological cancers and other diseases and conditions, today announced a research collaboration with the Institute of Hepatitis Viral Research (IHVR) to further develop its biodefense program. The IHVR and the Drexel Institute of Biotechnology and Viral Research (DIBVIR) are located in Doylestown, PA and are affiliated with Drexel University in Philadelphia, PA.

"The collaboration is designed to accelerate the development of monoclonal antibodies and vaccines against bacterial superantigen toxins -- highly lethal toxins that can be used as instruments of bioterrorism," said Dr. Gary Jacob, CEO of Callisto.

"This is an important and exciting opportunity for Callisto to be on the front lines in the fight against increasingly viable biowarfare threats," said Dr. Kunwar Shailubhai, Senior Vice President of Drug Discovery at Callisto and the principal investigator on the joint project. "We will concentrate on the enterotoxin of staphylococcus aureus B, a potentially potent, incapacitating and lethal toxin that can be easily weaponized in simple laboratories without sophisticated tools. There is clearly an urgent and unmet medical need for the development of broad-spectrum countermeasures to these threats. Our collaboration will be leading the charge to create effective vaccines, therapies and diagnostic tools to fight the use of this deadly class of toxins as a weapon against innocent U.S. civilians."

Dr. Shailubhai, who also has joint appointments as a professor at the IHVR and as an adjunct Professor at the DIBVIR, will be focused on the development of lead monoclonal antibodies (mAb) and antagonist peptides to provide broad-spectrum protection against superantigens from the staphylococcal and streptococcal bacterial strains. The project is formally entitled, "Peptide and Antibodies as Antidotes for Superantigens," and is being funded in part by a major grant to Callisto of more than $885,000 from the National Institute of Allergy and Infectious Diseases (NIAID).

"Kunwar brings many years of experience in drug discovery and development in the pharmaceutical industry and we are very pleased to have him guiding this research collaboration," said Dr. Timothy Block, President of the Institute of Hepatitis Viral Research. "In addition, his obvious passion for biodefense-related research is consistent with our own dedication to the discovery and development of novel therapies for cancer, viruses and bioterrorism-related diseases."

About the Institute of Hepatitis Viral Research (IHVR)

The mission of the IHVR, also known as the "Pennsylvania Commonwealth Institute," is to use discovery science to find new therapies for viral hepatitis and liver cancer; to advance its research discoveries through traditional scholarship and educational opportunities; to nurture biotechnology; and to promote public health outreach programs to improve the quality of life for those affected by viral hepatitis. For more information, please visit: www.ihvr.org/index.htm.

About Callisto Pharmaceuticals, Inc.

Callisto is a biopharmaceutical company committed to developing innovative anti-cancer drugs to treat blood cancers and related diseases, including acute lymphoblastic leukemia (ALL), acute myelogenous leukemia (AML), relapsed or refractory multiple myeloma, and osteolytic disease. Callisto also has drugs in preclinical development for gastrointestinal inflammation, as well as for protection against the potential bio-warfare agents, staphylococcus and streptococcus. Callisto's two lead anti-cancer products include Annamycin, a novel liposomal drug from the anthracycline family with potentially reduced cardiotoxicity, a patented liposomal formulation, and the potential to circumvent multi-drug resistance in both ALL and AML; and Atiprimod, a small-molecule oral drug with a potential multiplicity of effects, including tumor cell anti-proliferative and anti-angiogenic activities to treat relapsed multiple myeloma (MM). Atiprimod is presently in a Phase I/IIa clinical trial in relapsed or refractory MM patients at four clinical sites in the U.S. In addition to cancer treatments, Callisto is developing a drug pre-clinically for treatment of inflammatory bowel disease (IBD). 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. 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.