Publication Of Early Research On Callisto Pharmaceutical's Degrasyn Drug Class Suggests Potential To Treat Brain Tumors

Callisto Pharmaceuticals, Inc. (Amex: KAL - News; FWB: CA4), a developer of new drug treatments in the fight against cancer and other major health threats, announced today a recent publication by a research group at the University of Texas M. D. Anderson Cancer Center on a Degrasyn (STAT3 Pathway Inhibitor) drug candidate showing promise as a therapeutic agent to treat malignant gliomas - brain tumors. STAT3 pathway inhibitors are a new class of drugs that were licensed to Callisto Pharmaceuticals from The University of Texas M. D.

Anderson Cancer Center in January 2006. The report, published in the journal Oncogene, 10.1038/sj.onc.1210031, describes studies with WP1066 on human malignant glioma (brain tumor) cells and in a mouse model of human brain cancer. Notably, WP1066 administered to mice significantly inhibited the growth of subcutaneous malignant glioma (brain cell) xenografts during the 30-day follow-up period.

Importantly, the researchers also demonstrated that STAT3, a key protein involved in tumor proliferation and survival, showed reduced phosphorylation in tumor tissue treated with WP1066. Phosphorylation of STAT3 is required for activation of the pathway leading to tumorogenesis and cancer-cell proliferation and survival. The authors conclude that STAT3 pathway inhibitors such as WP1066 show potential as therapeutic agents against malignant gliomas, the most common primary cancer of the brain.

The publication: "A Novel Inhibitor of the STAT3 Pathway Induces Apoptosis in Malignant Glioma Cells In Vitro and In Vivo" appeared in Oncogene (2006), 1-10; and was authored by A. Iwamaru, S. Szymanski, E. Iwado, H. Aoki, T. Yokoyama, I. Fokt, K. Hess, C. Conrad, T. Madden, R. Sawaya, S. Kondo, W. Priebe and Y. Kondo.

About STAT3 Pathway Inhibitors (Degrasyns)

STAT3 pathway inhibitors represents a new class of drugs that were discovered by Prof. Waldemar Priebe and his colleagues and were licensed to Callisto Pharmaceuticals from The University of Texas M. D. Anderson Cancer Center in January 2006. The novel anti-cancer activity of these compounds relates to their ability to effectively inhibit Jak2/STAT3 pathway and subsequently tumor cell proliferation and survival. This pathway is activated in a wide range of tumors.

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 drug candidates, Atiprimod, is in development to treat advanced carcinoid cancer, a neuroendocrine tumor, and relapsed multiple myeloma, a blood cancer. Atiprimod is presently in a Phase II clinical trial in advanced carcinoid cancer patients, and in a Phase I/IIa human clinical trials in relapsed or refractory multiple myeloma patients. Another anti- cancer drug, L-Annamycin, discovered by Prof. Waldemar Priebe and his colleagues is being developed as a treatment for forms of relapsed or refractory acute leukemia, a currently incurable blood cancer. Callisto initiated a clinical trial of L-Annamycin in adult relapsed or refractory acute lymphoblastic 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. Callisto also has drugs in preclinical development for gastro-intestinal inflammation, and cancer. 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 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.

Callisto Pharmaceuticals, Inc.
http://www.callistopharma.com