Callisto Pharmaceuticals Opens Phase I Clinical Trial of SP?304 to Treat Chronic Constipation and Irritable Bowel Syndrome

Callisto Pharmaceuticals, Inc. (AMEX: KAL; FWB: CA4) announced today that through its wholly–owned subsidiary, Synergy Pharmaceuticals, Inc., it initiated oral dosing of healthy volunteers in a Phase I clinical trial of SP–304.

The primary objective of the Phase I clinical trial is to assess safety and tolerability of an oral dose of SP–304 in healthy adult volunteers.

"The start of this first clinical trial with SP–304 marks an important stage in the development of the class of guanylate cyclase C receptor (GC–C) agonists to treat human gastrointestinal conditions," said Gary S. Jacob, Ph.D., CEO of Callisto, and Chairman of Synergy Pharmaceuticals. "There is increasing clinical evidence of efficacy and safety for this class of compounds to treat chronic constipation and IBS patients, and we are hopeful that SP–304 may address the significant unmet medical needs of patients suffering from these conditions as well as other gastrointestinal disorders and diseases."

About SP–304

SP–304 is an analog of uroguanylin, a natural hormone produced in the gastro–intestinal (GI) tract that is a key regulator of intestinal function. SP–304 works by activating a unique receptor, the GC–C receptor, on intestinal epithelial cells, promoting fluid and ion transport. The drug is administered orally. Nonclinical animal studies have shown SP–304 to be well tolerated, displaying almost no absorption systemically. SP–304 exerts its pharmacologic effect locally on GC–C receptors within the gut.

About Chronic Constipation

Chronic constipation is a very common gastrointestinal disorder. Up to 26 million Americans suffer from the disorder, and of this population about 5 million have a severe condition necessitating relief. The prevalence of the disorder is similar in other developed countries. Patients with chronic constipation often experience hard stools, straining during bowel movements and not enough bowel movements during the week. People with chronic constipation can experience serious discomfort which adversely affects their ability to work and their quality of life.

Irritable Bowel Syndrome

Up to one sixth of adults experience inflammatory bowel syndrome (IBS), a condition marked by disturbed bowel function and abdominal pain. IBS patients can have three different sets of symptoms; diarrhea–predominant (IBS–D), constipation–predominant (IBS–C) and mixed or alternating disorder (IBS–M). The split in prevalence between the forms is about 1/3rd each. In addition, most patients suffering from the mixed form of IBS (IBS–M) are believed to mainly have constipation. An estimated 10 M people in the US and an additional 10 M people in the EU suffer from IBS–C. IBS (all forms) accounts for 12% of adult visits to primary care physicians in the US.

About Callisto Pharmaceuticals, Inc.

Callisto is a biopharmaceutical company focused on the development of new drugs to treat various forms of gastrointestinal diseases and cancer. Callisto´s drug candidates include SP–304, a proprietary drug for gastrointestinal disorders that is currently being developed by its wholly–owned subsidiary, Synergy Pharmaceuticals, as well as two anti–cancer agents. Synergy´s proprietary drug SP–304 (Guanilib) began clinical development in June 2008 for gastro–intestinal disorders. SP–304 is a synthetic analog of the human gastrointestinal hormone uroguanylin, and acts by activating the guanylate cyclase C (GC–C) receptor on epithelial cells of the colon. The Company´s lead drug in the clinic, Atiprimod, is presently in a Phase II clinical trial in advanced carcinoid cancer, a neuroendocrine tumor, and in a Phase II extension trial in advanced carcinoid cancer patients. Callisto´s second cancer drug in the clinic, L–Annamycin, is currently in a Phase I/II 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. Callisto has exclusive worldwide licenses from Genzyme 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 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, 2007, 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.

Web site: http://www.callistopharma.com