Callisto Announces Sponsored Laboratory Study Agreement With M. D. Anderson Cancer Center On Degrasyn Anticancer Agents

Pharmaceuticals,
Inc. (Amex: KAL; FWB: CA4), a developer of new drug treatments in the fight
against cancer and other major health threats, announced today that a
sponsored laboratory study agreement has been executed with The University
of Texas M. D. Anderson Cancer Center to support development of the
Company's Degrasyn class of cancer-fighting compounds.


The two-year agreement is intended to support in-vitro and animal model
studies to be performed by a group of research scientists at M. D.
Anderson, who will focus on evaluating Degrasyn analogs being synthesized
under the auspices of a separate executed sponsored laboratory study
agreement with M. D. Anderson.


Callisto recently licensed the Degrasyn class of compounds, formerly
referred to as tyrphostins, from The University of Texas M. D. Anderson
Cancer Center, a leading center devoted to cancer patient care and
research. The novel anti-cancer activity of Degrasyns relates to their
ability to selectively promote degradation of key proteins involved in
tumor growth and survival.


"The planned research by M. D. Anderson scientists, where the Degrasyn
class of drugs was initially developed, provides an exciting opportunity to
advance the Degrasyn program towards the clinic," said Dr. Donald Picker,
Callisto's Executive Vice President of Research and Development. "This
program is a high priority activity at Callisto which we hope could yield
an important new tumor-fighting drug to treat a variety of cancers."


Dr. Nicholas J. Donato, associate professor in the Department of
Experimental Therapeutics, at M. D. Anderson will serve as principal
investigator on the program, formally titled, "Analysis of the Anti-Tumor
Activity and Mechanism of Action of WP1130 and its Analogs."


"We are working closely with Callisto and with my colleague at M. D.
Anderson, Dr. William Bornmann and his associates, to evaluate a library of
synthesized Degrasyn analogs utilizing state-of-the-art biological assays,"
said Dr. Donato. "We also are continuing to explore the unique
mechanism-of- action elicited by this interesting class of compounds."


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 for other significant
health care markets, including ulcerative colitis and biodefense. One of
the Company's lead drug candidates, L-Annamycin, is being developed as a
treatment for forms of relapsed acute leukemia, a currently incurable blood
cancer. Callisto initiated a clinical trial of L-Annamycin in adult
relapsed acute lymphocytic 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. Another anti-cancer drug,
Atiprimod, is in development to treat relapsed multiple myeloma, a blood
cancer, and advanced carcinoid cancer. Atiprimod is presently in Phase
I/IIa human clinical trials in relapsed multiple myeloma patients, and
advanced cancer patients, respectively. Callisto also has drugs in
preclinical development for gastro- intestinal 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 The University of Texas 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. For additional information, visit
callistopharma .















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.

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