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General Research Equity Analyst Initiates Coverage of Callisto With Projected 6-Month Share Price Target of $2.20; German-Based Analyst Praises Callisto's Anti-Cancer and Other Drug Development Programs, Recommends a Buy Rating

Posted on: Wednesday, 28 December 2005, 12:00 CST

Callisto Pharmaceuticals, Inc. (AMEX:KAL) (FWB:CA4), a developer of new drug treatments in the fight against cancer and other major health threats, today announced that General Research GmbH, an equity analysis firm based in Munich, Germany, has initiated paid coverage of the Company with a comprehensive research report that recommends a speculative "Buy" rating for Callisto and projects a 6-month share price target of $2.20.

The independent, third party research report, written by analyst Dr. Georg Hochwimmer, also projects considerably higher share values within the coming 12-18 months. It highlights in particular Callisto's numerous "Opportunities and Strengths," including a diversified drug pipeline including two major anti-cancer compounds that have advanced to human clinical studies. Those compounds, called L-Annamycin and Atiprimod, are being developed to treat acute and often terminal forms of blood cancer. It is considered to be a major achievement in itself for an emerging biotechnology company to have two leading drugs in clinical development.

In addition, the report notes that two of Callisto's drug candidates, L-Annamycin and Atiprimod, have been given valuable Orphan Drug designations by the FDA, which provides them with certain key marketing exclusivity rights following approval.

The report cites Callisto's, "exceedingly attractive preclinical pipeline." These include the Company's Homeland Security Superantigen Platform for the development of vaccines and antibodies to fight potential biowarfare threats. Callisto's Superantigen program has received a grant from U.S. government agencies in the amount of nearly $1 million, the report notes.

Other drug candidates in development noted by the report include the Company's proprietary and novel compound now known as Guanilib. Callisto is developing Guanilib for the treatment of serious inflammatory bowel diseases, such as ulcerative colitis.

"In our view, Callisto Pharmaceuticals stock is presently a speculative exposure in the biotech area, which promises a substantial upside in the medium term," reads the report. "The company has several promising agents for the treatment of various types of cancer which are more rare and therefore not the subject of attention for their considerably larger competitors. Based upon a Peer Group Comparison, a significant price rise can be justified. On the way up, there are certainly some technical hurdles for the stock to overcome. We grade the stock as speculative buy with a short-term target in the next six (6) months of US$ 2.20 per share. Provided that the clinical development program continues according to plan and without significant delays, considerably higher prices can be expected over 12-18 months."

Other Callisto strengths noted include an "extremely attractive medium- and long-term oncology market environment" and anticipated increased demand for new cancer treatments as the Baby Boom generation continues to age. "Because cancers typically occur in the last third of a life, the market ought to grow strongly over the coming decades as a result of demographic changes."

In addition, Callisto stock is deemed as significantly undervalued as compared to similar companies on the market, according to the report, which "opens up substantial potential price rises to the speculative investor."

CEO and Chief Scientific Officer, Dr. Gary S. Jacob said, "Callisto has engaged and compensated Dr. Hochwimmer, a widely recognized independent equity analyst and market researcher in Europe, to conduct a thorough, responsibly researched and credible analysis of Callisto Pharmaceuticals and its market potential. Callisto did not participate in its creation of conclusions nor in its price growth projections. The resulting 20-page, comprehensive analysis and assessment is General Research's own independent work product. We are pleased to see that the resulting report provides an extensive, thoughtful and balanced analysis. Though it is paid research, we believe the report presents a detailed and fair view of our Company and its new drug candidates in development to treat a wide range of diseases and conditions."

An English-language version of the full report, produced under compensation terms described below, can be found at http://www.trilogy-capital.com/tcp/callisto/report.html. The original report was written in German for the European investor community.

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 a range of other significant health care market segments, including biodefense. One of the Company's lead drug candidates, L-Annamycin, is being developed as a treatment for forms of relapsed 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. Atiprimod has entered Phase I/IIa human clinical trials in relapsed multiple myeloma patients. 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 M.D. Anderson Cancer Center to develop, manufacture, use and sell Atiprimod and L-Annamycin, respectively. For investor-specific information about Callisto, including recent news and stock price data, please visit http://www.trilogy-capital.com/tcp/callisto/. For an Investor Fact Sheet about Callisto, please visit http://www.trilogy-capital.com/tcp/callisto/factsheet.html. To view an informational presentation of the Company's development pipeline of drug candidates, visit http://www.trilogy-capital.com/tcp/callisto/powerpoint.html. Callisto is also listed on the Frankfurt Stock Exchange under the ticker symbol CA4. For additional information, visit www.callistopharma.com.

Compensation Disclosures

This study does not represent any offer to sell or buy securities and is not any part of such. It is not an invitation for an offer to buy or sell securities, and it should not be construed as such, nor may it, or any part of it, be used as the basis for a binding contract, of whatever kind, or adduced as authoritative in such a context. This study is based upon sources of information that we consider to be trustworthy. However, the data, sources, and information used in this study were not verified by General Research GmbH. General Research GmbH reserves the right to change the study at any time and without prior notice. Neither General Research GmbH nor the author accept any responsibility or warranty for the validity, adequacy, accuracy, or completeness of the information presented in this study. Neither General Research GmbH nor the author nor Callisto Pharmaceuticals, Inc., accept any liability for damages that might arise from the use of this publication or its contents or from any other connection. This study, in so far as it is distributed in the UK, may only be made available to individuals who are considered authorized under the Financial Services Act 1986 or are exempt, or to individuals as defined in ss. 9 (3) of the Financial Services Act (Investment Advertisement) (Exemptions) 1988 Issue (amended version), and may not be conveyed to other individuals or groups, either directly or indirectly. This publication or copies of it may not be exported to Japan, nor distributed in Japan or conveyed to Japanese citizens who live outside Japan. Individuals who receive this publication must inform themselves about all such restrictions and observe them. By accepting this study, you agree to abide by the aforementioned restrictions. Duplication, in particular, reproduction, creation of copies, or use in electronic media including extracts - is only permitted after prior discussion with the publisher. Investment in shares in general has risks that may even include the total loss of invested capital. Investors should get information about the relevant company from multiple sources prior to purchasing shares and, as a basic principle, should only use a restricted part of their liquid assets for the purchase of shares in a company. It is advisable to seek the advice of a financial advisor before buying or selling shares.

For the U.S. - Compensation Disclosures

This study was commissioned by Callisto Pharmaceuticals. Callisto Pharmaceuticals paid EUR 12,500 for this report. Neither the author of the study, nor General Research GmbH currently own shares in Callisto Pharmaceuticals.

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.

Source: Business Wire

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