Healthcare Industry News:  Novartis Pharmaceuticals 

Biopharmaceuticals Gastroenterology

 News Release - October 3, 2007

Callisto Pharmaceuticals Announces Major Strategic Initiative for Guanilib in GI Disorders

NEW YORK--(HSMN NewsFeed)--Callisto Pharmaceuticals, Inc. (AMEX: KAL; FWB: CA4), a developer of new drug treatments in the fight against cancer and gastrointestinal disorders and diseases, announced today a major strategic initiative to develop Guanilib, its guanylate cyclase C receptor (GCCR) agonist. Guanilib will be developed primarily for chronic constipation and constipation-predominant irritable bowel syndrome (IBS-C).

"This is a major new development for Callisto," said Dr. Gary S. Jacob, Chief Executive Officer of Callisto. "The value for products in this class was recently set in a partnership deal between Microbia Inc. and Forest Laboratories (NYSE: FRX ). That deal provided upfront and milestone payments to Microbia of up to $330 million - and that was for essentially a 50/50 profit split for the US only. We have the only other compound in this class. We were the first company to develop GCCR agonists based on the natural human intestinal hormone uroguanylin, and our patent on Guanilib issued in May, 2007, giving us a proprietary position with our drug. We are now behind Microbia but we hope to have a compound that is best in class."

As part of its initiative, Callisto announced plans to file an IND for Guanilib in the first quarter of 2008, and initiate a Phase 1 trial shortly thereafter. Callisto is also shifting the immediate development focus from gastro-inflammatory diseases to chronic constipation and IBS-C. "Callisto will devote at least half of its available funds exclusively for Guanilib development," said Dr. Jacob. "In addition to our cancer products, we now aim to become a leading GI drug development company. Drugs in these markets have very large sales potential, and we will build the organization and devote the resources needed to realize this ambition."

About Guanilib

Guanilib (also called SP-304) is a potent analog (synthetic molecule) of uroguanylin developed by Callisto scientists, and is proprietary to Callisto. Guanilib has been demonstrated to be superior to the natural hormone, uroguanylin, in its biological activity, protease stability and pH characteristics. The compound is currently undergoing pre-clinical animal safety studies as a treatment for chronic constipation and IBC-C. The compound is not absorbed systemically and demonstrates a very good safety profile. Callisto plans to initiate clinical trials of Guanilib in early 2008.

About Chronic Constipation and Irritable Bowel Syndrome

Chronic constipation is a very common condition. Up to 26 million Americans suffer from the condition and of these about 5 million have a severe problem. The prevalence 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.

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). About 35% of patients suffer from IBS-C. IBS accounts for 12% of adult visits to primary care physicians in the US.

There are currently few therapies available for chronic constipation or IBS-C. The main product in this market, Zelnorm from Novartis Pharmaceuticals (NYSE: NVS ), was withdrawn due to cardiotoxicity in April 2007 in the US. In 2006 Zelnorm sold about $561 million with about a 30% growth rate at the time of withdrawal.

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 include two anti-cancer agents as well as a drug for 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 is also listed on the Frankfurt Stock Exchange under the ticker symbol CA4. More information is available at

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.

Source: Callisto Pharmaceuticals

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