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Callisto Intends to Move Guanilib into Clinical Trials in,Ulcerative Colitis

Announces Positive Data in Animal Models of Ulcerative Colitis

NEW YORK, April 05, 2007 /PRNewswire-FirstCall/ -- Callisto Pharmaceuticals, Inc. , a developer of new drug treatments in the fight against cancer and other major health threats, announced today additional data confirming efficacy of Guanilib, a first-in-class compound currently being developed for the treatment of inflammatory bowel disease (IBD), in two different standard animal models of experimental colitis. Guanilib is an orally deliverable compound designed to mimic a naturally-occurring hormone called uroguanylin. The drug is currently in preclinical development and Callisto intends to move the drug into clinical trials in ulcerative colitis. Guanilib is a proprietary program that was developed in-house by Callisto scientists and the company owns 100% of the worldwide manufacturing and marketing rights.

The new animal data demonstrate that oral administration of Guanilib significantly reduces gastrointestinal (GI) inflammation, and confirm earlier evidence of down-regulation of interleukin-17 (IL-17), IL-23, and tumor necrosis factor (TNF), key cytokines that are known to be involved in etiology of IBD in humans. Guanilib treatment also improved stool consistency and removed intestinal blockage in treated animals.

"These are important findings and suggest a possible mechanism of action of Guanilib and implicate its therapeutic potential in GI inflammatory diseases such as IBD and IBS," said Dr. Kunwar Shailubhai, Senior Vice President, Discovery Research of Callisto, who is also the lead inventor of the issued patent covering therapeutic applications of Guanilib in GI inflammatory diseases and colon cancer.

Callisto believes that Guanilib is presently the best physiological ligand of guanylate cyclase receptor with the potential to provide a new way to treat gastrointestinal diseases, while exhibiting minimal side effects or toxicity. Treatment with Guanilib down-regulated production of IL-17 by 50%, IL-23 by 70% and TNF by 50% in addition to showing reduction of other cytokines including IL-4 and IL-5. Recent data on IBD suggest that proinflammatory IL-17 and IL-23 play major roles in the pathophysiology of this disease as well as irritable bowel syndrome [SCIENCE 314(5804):1461-1463, 2006].

About Guanilib

Guanilib, also known as SP304, is an orally deliverable compound designed to mimic a naturally-occurring hormone called uroguanylin which is normally produced in the body's intestinal tract. Deficiency of this hormone is predicted to be one of the primary reasons for the formation of polyps that can lead to colon cancer, as well as debilitating and difficult-to-treat GI inflammatory disorders such as ulcerative colitis and Crone's disease.

About Inflammatory Bowel Disease (IBD)

The inflammatory bowel diseases Crohn's disease and ulcerative colitis are common, chronic disorders that cause abdominal pain, diarrhea, and gastrointestinal bleeding. Recent data also suggest that irritable bowel syndrome is a low-grade IBD. More than 500,000 Americans are afflicted with ulcerative colitis, a type of inflammatory bowel disease (IBD) that causes chronic inflammation of the digestive tract. Along with Crohn's disease, the other major form of IBD, ulcerative colitis can be painful and debilitating, and can lead to other serious and life-threatening complications. There is currently no medical cure for ulcerative colitis.

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 in pre-clinical development for other significant health care markets, including ulcerative colitis. One of the Company's lead dru g candidates, Atiprimod, is in development to treat advanced carcinoid cancer, a neuroendocrine tumor, and in relapsed or refractory multiple myeloma, a blood cancer. Atiprimod is currently in a Phase II clinical trial in advanced carcinoid cancer patients, and in Phase I/IIa human clinical trials in relapsed or refractory multiple myeloma patients, respectively. A second anti-cancer drug, L-Annamycin, is being developed as a treatment for forms of relapsed or refractory acute leukemia, a currently incurable blood cancer. 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. Callisto also has drugs in preclinical development for gastro-intestinal inflammation, and cancer. Guanilib is the lead candidate of our Guanylate Cyclase Receptor Agonist (GCRA) platform. Callisto own worldwide patent coverage for therapeutic applications of Guanilib in cancer and GI inflammatory diseases. Guanilib is expected to enter clinical trial in inflammatory bowel disease in 2008. 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. Callisto is also listed on the Frankfurt Stock Exchange under the ticker symbol CA4. More information is available at http://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 refle cted in such forward-looking statements will prove to be correct. As discussed in the Callisto Pharmaceuticals Form S-3/A declared effective on February 15, 2007, and its 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.

CONTACT: Dan D'Agostino of Callisto Pharmaceuticals, Inc.,+1-212-297-0010, ext. 227, dagostino@callistopharma.com

Web site: http://www.callistopharma.com/

Ticker Symbol: (AMEX:KAL)

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