Callisto Pharmaceuticals, Inc. (Amex: KAL; Frankfurt: CA4), a developer of new drug treatments in the fight against cancer and other major health threats, announced today the opening of a multi-center, open-label, dose-escalation Phase I clinical trial of L-Annamycin in children and young adults with refractory or relapsed acute lymphocytic leukemia (ALL) or acute myelogenous leukemia (AML) at Phoenix Children's Hospital, Phoenix, AZ, and the University of Arizona, Tucson, AZ. The Principal Investigator at Phoenix Children's Hospital is Jessica Boklan, MD, Director of Oncology Research. The Principal Investigator at the University of Arizona is Rochelle Bagatell, MD.

The trial utilizes POETIC (Pediatric Oncology Experimental Therapeutics Investigators Consortium), a consortium of prestigious pediatric cancer centers that focuses on early clinical development of promising therapies for the treatment of children, adolescents and young adults with cancer. This ten-member group includes Phoenix Children's, Children's Healthcare of Atlanta, Johns Hopkins Kimmel Cancer Center, MD Anderson Cancer Center, Memorial Sloan-Kettering Cancer Center, University of Florida Health Science Center, University of Colorado - Denver Children's, University of Arizona, University of Calgary, University of Florida and Vanderbilt Medical Center. Other member institutions of POETIC are currently reviewing the trial protocol, and the Company anticipates that additional sites will open in the very near future.

The primary objectives of the Phase I clinical trial are: 1) to evaluate safety and identify the maximum tolerated dose (MTD) of L-Annamycin, starting at 130 mg/m2/day, given over three consecutive days, and escalating in sequential cohorts until an MTD is reached, and 2) to evaluate the antileukemia activity of L-Annamycin in children and young adults with refractory or relapsed ALL or AML. The secondary objective is to measure the pharmacokinetics of annamycin and its metabolite, annamycinol. L-Annamycin is administered by infusion using a unique patented liposomal formulation. Further details of this trial can be found at clinicaltrials.

"We are particularly interested in exploring the potential of L-Annamycin to treat children and young adults with acute leukemia," notes Dr. Gary S. Jacob, Chief Executive Officer of Callisto. "L-Annamycin is presently in a Phase I clinical trial in adult relapsed or refractory ALL patients, and we have gained important experience with this drug in the adult setting that we hope to apply to the pediatric trial."

About L-Annamycin

L-Annamycin, a drug from the anthracycline family originally developed by scientists at the M.D. Anderson Cancer Center to address the clinical limitations associated with anthracycline drugs is presently in a Phase I clinical trial in adult relapsed or refractory ALL patients at three clinical sites in the US. In animal and in-vivo studies, L-Annamycin circumvents multi-drug resistance and shows decreased cardiotoxicity. An earlier Phase I clinical trial of L-Annamycin in relapsed or refractory acute leukemia patients, performed by a previous sponsor, suggested potential to treat this disease and was the basis for the initiation by Callisto in December, 2005 of a Phase I clinical trial of L-Annamcyin in adult relapsed or refractory ALL patients. In June, 2005, L-Annamycin was given orphan drug designation to treat both ALL and AML by the FDA.

About Pediatric Acute Leukemia

Pediatric leukemia is the most prevalent cancer among children up to the age of 19 in the U.S. Approximately 3200-3500 new cases of leukemia in children and adolescents were diagnosed in the U.S. in 2006, with ALL accounting for approximately 75% of these new cases, AML for approximately 20% and CML less than 5% of new cases. Notably, survival rates in children have improved significantly in the last decade but there are a significant percentage, approximately 20% of ALL and 50% of AML patients who do not remain in remission and require further treatment. Patients with relapsed or refractory acute leukemia who have prior treatment with approved chemotherapeutics generally have a poor prognosis at this point in the disease and are in need of new agents.

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 Phase I/IIa human clinical trials in relapsed or refractory multiple myeloma patients, and advanced cancer patients, respectively. Another anti-cancer drug, L-Annamycin, 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 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 Form S-3/A declared effective on February 15, 2007 and its 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.
callistopharma

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