CALLISTO PHARMACEUTICALS GRANTED ORPHAN DRUG DESIGNATION FOR ANNAMYCIN TO TREAT ACUTE LYMPHOBLASTIC

NEW YORK, NY – June 24, 2005 – Callisto Pharmaceuticals, Inc. (AMEX: KAL), a biopharmaceutical company primarily focused on the development of drugs to treat cancer, announced today that the Office of Orphan Products Development of the United States Food and Drug Administration (FDA) has granted orphan drug designation to the company’s drug candidate Annamycin for the treatment of acute lymphoblastic leukemia (ALL). Annamycin, a second-generation anthracycline developed at M.D. Anderson Cancer Center, is being developed by Callisto to treat relapsed acute leukemia patients. Callisto plans to begin a clinical trial in adult relapsed acute lymphoblastic leukemia patients in the near future.

"This marks an important step for Callisto’s Annamycin program." commented Callisto Chief Executive Officer Dr. Gary S. Jacob. "Callisto is planning an ambitious program of clinical development of Annamycin starting this year, and the designation of orphan drug status to treat ALL gives additional assurance to both the company and our investors that we are well protected against any potential competition."


About Orphan Drug Designation

The Orphan Drug Act is intended to encourage development of products for rare diseases affecting fewer than 200,000 people in the United States. Orphan drug designation, along with approval by the FDA for commercialization of Annamycin, entitles Callisto to seven years of market exclusivity in the United States, provided Callisto continues to meet certain conditions established by the FDA. During the seven-year exclusivity period, the FDA will not accept or approve other applications to market the same medicinal product for the same therapeutic indication.

For products designated as orphan drugs, the FDA not only provides market protection for the developing company, but also provides certain tax credits, eligibility for research grants and protocol assistance, opportunities for regulatory agency assistance on review of clinical protocols, and waiver of the Prescription Drug User Fee Act (PDUFA) filing fee.


About Annamycin

Annamycin, a drug from the anthracycline family, earlier completed a Phase I/IIa trial in refractory leukemia patients. The drug was developed at the M.D. Anderson Cancer Center to address limitations associated with other anthracyclines. Annamycin circumvents multiple drug resistance, shows decreased cardiotoxicity, and achieves greater than 95 percent incorporation into liposomes, providing a favorable means of drug administration.


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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