CALLISTO PHARMACEUTICALS ANNOUNCES POSITIVE ANIMAL DATA ON SP304 IN ULCERATIVE COLITIS MODEL

NEW YORK, NY – June 21, 2005 – Callisto Pharmaceuticals, Inc. (AMEX: KAL), a biopharmaceutical company primarily focused on the development of drugs to treat cancer, announced today that SP304, Callisto’s drug currently being evaluated pre-clinically for treatment of inflammatory bowel diseases (IBD) showed pronounced reduction of inflammation based on histopathology data. SP304 was evaluated in a TNBS-induced ulcerative colitis mouse model, which is an animal model widely used to evaluate drug candidates for treatment of human IBD. SP304 demonstrated a significant reduction in histopathological indicators of inflammation.

SP304, an orally deliverable and highly stable peptide, is an analog of the native human peptide uroguanylin, a guanylate cyclase receptor agonist (GCRA) normally produced in the intestinal tract. SP304, unlike the parent peptide uroguanylin, exists in a single active conformer, and is an excellent candidate for drug development.

"The histopathology data demonstrating the anti-inflammatory properties of SP304 are particularly impressive because the peptide was administered once a day at very small doses of 0.01-0.02 mg," remarked Dr. Kunwar Shailubhai, Senior Vice President Discovery Research, Synergy Pharmaceuticals, a wholly owned subsidiary of Callisto Pharmaceuticals.

"We are very encouraged by the SP304 data from Dr. Scott Plevy's laboratory," said Callisto Chief Executive Officer Dr. Gary S. Jacob. "Dr. Plevy is an internationally recognized researcher in IBD, and has been a principle investigator on a number of multi-center clinical trials in IBD."
About Guanylate Cyclase Receptor Agonist (GCRA) Program
Callisto's GCRA program is focused on a drug to treat GI inflammatory diseases. Callisto's patented technology covers development of agonists superior to uroguanylin, a peptide hormone found in the intestinal tract. Callisto's drug candidate, SP304, has demonstrated superior biological activity, stability and pH characteristics.

In earlier studies conducted by Dr. Shailubhai, production of uroguanylin was found to be reduced in colon cancer patients, indicating that lowered expression of uroguanylin is a primary cause of colon carcinogenesis in humans. In addition, oral administration of uroguanylin in mice that develop high levels of polyps was shown to substantially reduce polyp formation and progression to adenocarcinoma (Cancer Research 60: 5151-51577, 2000 http://cancerres.aacrjournals.org/cgi/content/full/60/18/5151). Experiments conducted with SP304 demonstrate that it clearly outperforms uroguanylin in a series of in-vitro and in-vivo experiments.


About Callisto Pharmaceuticals, Inc.

Callisto is a biopharmaceutical company focused on the development of drugs to treat cancer. Callisto has two lead drugs in clinical development, Annamycin to treat relapsed leukemia, and Atiprimod to treat relapsed multiple myeloma. Callisto intends to initiate a clinical trial of Annamycin in relapsed acute lymphoblastic leukemia patients in mid 2005. Annamycin, a drug from the anthracycline family, has a novel therapeutic profile, including activity against drug resistant tumors and significantly reduced cardiotoxicity. Callisto’s second drug, Atiprimod, is in a Phase I/IIa clinical trial in relapsed multiple myeloma patients, and is a small-molecule, orally available drug with antiproliferative and antiangiogenic activity. Callisto also has drugs in preclinical development for melanoma, 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 Annamycin, respectively. 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.



Investor Relations:
Marty Tullio
McCloud Communications, LLC
949.553.9748
marty@McCloudCommunications.com
Company Contact:

Dan D’Agostino
Callisto Pharmaceuticals, Inc.
212.297.0010 x227
dagostino@callistopharma.com



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