Callisto Announces Newly Allowed Patent on First-in-Class Drug for Colon Cancer and Other Diseases; Research Data Supports Drug's Potential as Revolutionary, Safe, Non-Toxic Preventative for Cancer and Treatment for Gastro-Intestinal Diseases

NEW YORK--()--Nov. 28, 2005---Callisto Pharmaceuticals, Inc. (AMEX:KAL) (FWB:CA4), a developer of new drug treatments in the fight against cancer and other major health threats, announced that the 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 and prevent 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 Callisto drug candidate, currently known by its laboratory name 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. People with colon cancer lack sufficient quantities of uroguanylin, and this deficiency is linked with colon carcinogenesis. SP304 is designed to replace the naturally occurring compound, but with the added advantage of providing greater anti-inflammatory potency and therapeutic effect. Also significantly, because Callisto's SP304 is a close molecular relative of the naturally occurring hormone, it is anticipated to be virtually non-toxic.

"Research in animal models has indicated that this new class of compounds and therapeutic approach, represented by Callisto's drug SP304, has the potential to genuinely revolutionize the treatment of certain very serious inflammatory bowel diseases, as well as colon cancer," said Dr. Gary S. Jacob, CEO and CSO of Callisto. "The science behind SP304 is an exciting new avenue in cancer and anti-inflammatory treatment research, and Callisto is proud to be the first to patent a drug in this groundbreaking, next-generation category of potential therapies."

Callisto's SP304 drug candidate is designed to help replenish damaged cells in the lining of the colon -- cells that may become cancerous -- to function as therapies for people who have gastro-intestinal diseases such as ulcerative colitis or colon cancer. It also is being evaluated as a preventative measure to stop cancer and other diseases from developing.

One of the major physiological functions of uroguanylin is the regulation of cell health in the colon lining, including the elimination of mutated cells and the replenishment of healthy cells. "This delicate balance of elimination and renewal of the cells of the colon lining is crucial to the prevention of cancer. We believe SP304 can be an effective oral therapy to prevent benign colorectal polyps from becoming cancerous," said Dr. Kunwar Shailubhai, Senior Vice President, Discovery Research for Callisto, who is one of the drug's inventors. "Research data has also shown the drug to have very impressive anti-inflammatory properties, suggesting it is an excellent candidate as a treatment for inflammatory bowel diseases such as ulcerative colitis."

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.

Colon cancer, also called colorectal cancer, is the second leading cause of cancer death among men and women in the United States and Canada, and is the third most diagnosed cancer, excluding skin cancer. The American Cancer Society estimates that there will be 146,940 new cases of colorectal cancer diagnosed in the U.S. in 2004 -- roughly one new case every 4 minutes. Although colon cancer can be treated through surgery, chemotherapy and radiation, currently there are no drugs specifically designed for its prevention and treatment.

The Notice of Allowance for Callisto's SP304 was given for the patent titled, "Guanylate Cyclase Receptor Agonists for the Treatment of Tissue Inflammation and Carcinogenesis." The USPTO has allowed key claims covering the composition of matter of the SP304 compound; additional claims are pending in divisional applications.

"This patent allowance is a scientific and strategic milestone for Callisto that further strengthens our pipeline of significant drug technologies and our mission to develop needed new medical treatments," added Dr. Jacob.

About Callisto Pharmaceuticals, Inc.

Callisto is a biopharmaceutical company committed to developing 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 is presently planned to enter a clinical trial to treat adult relapsed or refractory acute lymphocytic leukemia (ALL) in Q4 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. In addition to cancer treatments, Callisto is developing a drug pre-clinically for treatment of ulcerative colitis. 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.

Contacts

Callisto Pharmaceuticals, Inc.
Dan D'Agostino, 212-297-0010 x227
dagostino@callistopharma.com
or
Trilogy Capital Partners, Inc.
Paul Karon, 800-592-6067 (Financial Communications)
paul@trilogy-capital.com

Contacts

Callisto Pharmaceuticals, Inc.
Dan D'Agostino, 212-297-0010 x227
dagostino@callistopharma.com
or
Trilogy Capital Partners, Inc.
Paul Karon, 800-592-6067 (Financial Communications)
paul@trilogy-capital.com