Callisto Pharmaceuticals Cites Independent Report from European Equity Analyst with Projected Share Price of $2.50; Leading Analyst Cites Encouraging Clinical Study Results of Two Lead Anti-Cancer Drug Candidates.

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 today that a leading European equity analyst, Engelbert Hoermannsdorfer, editor-in-chief of "betafaktor.de," has issued an independent research recommendation that targets the Company's potential share price at $2.50.

In his analysis, Mr. Hoermannsdorfer also projects that Callisto's current market cap of $57 million could foreseeably double in value with continued clinical successes on the Company's anti-cancer drug development front.

The current edition of "Doersam letter" summarizes Mr. Hoermannsdorfer's key points, including his $2.50 projection of Callisto's share price. "In Hoermannsdorfer's judgment, the stock market value of about US $57 million seems conservative," according to the Doersam letter. "With just one successful Phase III Study, the stock value could clearly jump into the three-figure range."

The researcher's fully independent analysis reflects Callisto's continued progress in the development of drug candidates to treat cancer and other conditions. The report noted the Company's most advanced drug candidates, Atiprimod and L-Annamycin.

Atiprimod is currently being evaluated in multiple myeloma and advanced cancer patients. Callisto also recently announced that Atiprimod may hold additional substantial therapeutic potential for cancer patients stricken with difficult-to-treat carcinoid tumors. In light of recent clinical data, Callisto recently announced it intends to initiate a Phase I/II trial specifically in patients with advanced carcinoid tumors.

Other Callisto compounds in development are Guanilib, a first-in-class drug candidate to treat gastrointestinal disease that was developed in-house, and is now being advanced towards the clinic with the intention of filing an IND by late 2006. On May 9, 2006 a patent covering Guanilib to treat tissue inflammation and carcinogenesis was issued.

The German text of the Doersam letter article on the report can be found at www.cortalconsor.de, by entering "Callisto" in the search field. An English translation of the article can be found at www.callistopharma.com.

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 other significant health care markets, including ulcerative colitis and biodefense. One of the Company's lead drug candidates, L-Annamycin, is being developed as a treatment for forms of relapsed acute 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, and advanced carcinoid cancer. Atiprimod is presently in Phase I/IIa human clinical trials in relapsed multiple myeloma patients, and advanced cancer patients, respectively. Callisto also has drugs in preclinical development for gastrointestinal 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, 2005, 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.