Callisto Pharmaceuticals Amends and Restates Atiprimod License Agreement with Genzyme

Callisto Pharmaceuticals, Inc. (Amex: KAL; FWB: CA4), a developer
of new drug treatments in the fight against cancer and
gastrointestinal diseases, announced today that it has restructured
its license agreement with Genzyme Corporation (Nasdaq: GENZ) for
Atiprimod, Callisto´s lead drug in the clinic to treat advanced
carcinoid cancer.

In August 2002, Callisto´s wholly owned subsidiary, Synergy,
acquired from AnorMED Inc. worldwide exclusive rights to develop,
manufacture and commercialize Atiprimod. AnorMED was acquired by
Genzyme in November 2006.

The restructured agreement eliminates all milestone payments and
reduces royalties owed to Genzyme to single digits. In return for the
reduced future payments to Genzyme, Callisto is paying an upfront fee
in 2008.

"This restructured licensing agreement significantly improves the
potential economic upside value for Atiprimod and puts us in a
stronger position to further develop and commercialize the product,"
said Gabriele M. Cerrone, chairman of Callisto. "We recently completed
enrollment in our Atiprimod Phase II trial in advanced carcinoid
cancer patients and we expect to complete an interim analysis of the
data by the end of the first quarter of this year. We believe this new
agreement with Genzyme will provide substantial help in obtaining
financing for a potential Phase III trial."

About Atiprimod

Atiprimod is an orally bio-available small molecule drug that
displays multiple mechanisms of action. The drug has been shown to be
antiangiogenic, inhibit secretion of VEGF and IL-6, elicit an
apoptotic response (programmed cellular death), and inhibit
phosphorylation of key kinases involved in tumor progression and
survival including Akt and STAT3. The drug is presently in two
clinical trials: a Phase II trial in advanced carcinoid cancer
patients, and a Phase I/IIa human clinical trial in relapsed or
refractory multiple myeloma patients. Callisto earlier announced in
June, 2006 interim data from a Phase I trial of Atiprimod in advanced
cancer patients. The patients who were entered into this trial had
growing tumors and symptoms that were no longer controlled by the
standard therapies utilized. During treatment, three of the five
advanced carcinoid patients had measurable tumor regressions and loss
of many of the debilitating symptoms of this disease.

About Carcinoid Cancer

Carcinoid tumors, or carcinoids, originate in hormone-producing
cells of the gastrointestinal (GI) tract, the respiratory tract, the
hepatobiliary (liver) system and the reproductive glands. The most
common site of origin is the GI tract, with tumors often developing in
the rectum, and other sections of the small intestine. Approximately
7,000 cases of carcinoid cancer are diagnosed in the U.S. annually,
with the number increasing over the past 20-30 years. Carcinoid tumors
that metastasize to the liver have a poor prognosis. Traditionally,
chemotherapy relieves symptoms in less than 30% of cases of metastatic
carcinoid tumors, usually for less than 1 year. Carcinoid tumors
typically produce a condition called "carcinoid syndrome" which is
caused by the release of hormones by the tumors into the blood stream.
The symptoms vary depending on which hormones are released by the
tumors, but typically include diarrhea, facial flushing, wheezing,
abdominal pain and valvular heart disease.

About Callisto Pharmaceuticals, Inc.

Callisto is a biopharmaceutical company focused on the development
of new drugs to treat various forms of cancer and gastrointestinal
diseases. 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 gastrointestinal disorders. One of the Company´s lead drug
candidates, Atiprimod is presently in a Phase II clinical trial in
advanced carcinoid cancer patients, a neuroendocrine tumor, and in a
Phase I/IIa human clinical trial in relapsed or refractory multiple
myeloma patients. 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. L-Annamycin is currently
in a Phase I clinical trial in adult relapsed or refractory acute
lymphocytic leukemia, and in a Phase I clinical trial in children and
young adults with refractory or relapsed acute lymphocytic leukemia or
acute myelogenous leukemia. L-Annamycin, a member of the anthracycline
family of proven anti-cancer drugs, has a novel therapeutic profile,
including potential activity against multi-drug resistant tumors and
significantly reduced cardiotoxicity, or damage to the heart, compared
to currently available drug alternatives. Callisto also has a
proprietary drug Guanilib in preclinical development for
gastro-intestinal disorders. Callisto has exclusive worldwide licenses
from Genzyme 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 for the year ended December
31, 2006, 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.