Newsletter

March 21, 2006

Volume VII, Issue 26

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To OTC Journal Members:

Bad Toys (OTC BB: BTYH) Announces Contract Extension

Bad Toys was out with a contract extension announcement for its Southland Health Care subsidiary. Southland is the entity all of us shareholders hope to see trade on the AMEX or NASDAQ Small Cap on a stand alone basis later this year.

The contract extension, estimated to be worth about $3 million in '06 revenues, is with Pearl County MS- one of the hardest hit areas during Katrina. Southland dispatched resources from three other surrounding states during Katrina to aid with the relief effort.

I am expecting the following upcoming events for Bad Toys: 1. The release of 2005 audited results in the company's annual 10k filing. For the first three quarters of '05, BTYH generated $34.1 million in revenues and $2.7 million in profits ($.16 EPS). 2. BTYH will be filing the S1 Registration Statement to affect the spin off of Southland Health Corp as a separate public company. We will then see Southland's corporate performance on a stand alone basis.

And yes: If you own the stock, you are entitled to the 1.3 Southland share dividend as of this date. I believe we will still not know when the stock will trade x dividend until after the S1 is filed.

Until then, I will keep everyone up to date. Click Here to read the full text of today's news.

Callisto Pharmaceuticals (AMEX: KAL) Expands Clinical Trial

KAL was also out with news today concerning their developing Leukemia therapy L-Annamycin. KAL announced the Phase I/IIa trial has been expanded to include Roswell Park Cancer Institute in Buffalo, NY. According to the press release, the first patient at the site was enrolled back on March 6th.

Technically, the stock is extending out in a tight range at about the $1.60 level. The tighter and longer it extends, the more violent the eventual break out or break down move will be when it happens.

I have a target price in the $2 range for investors to consider taking some profits. I am also suggesting a stop loss of $1.20 should the stock decide to break in an unfavorable manner. If you are a long term investor (a year or more) you can ignore these stop losses or target prices.

Here is the complete text of today's news for your review:

Press Release Source: Callisto Pharmaceuticals, Inc.

Callisto Pharmaceuticals Clinical Study of Anti-Leukemia Drug L-Annamycin Expanded to Third Clinical Site

Tuesday March 21, 3:30 am ET

Roswell Park Cancer Institute Commences Enrollment of Adult Leukemia Patients in Phase I/IIa Clinical Trial

NEW YORK--(BUSINESS WIRE)--March 21, 2006--Callisto Pharmaceuticals, Inc. (AMEX:KAL - News; FWB:CA4), a developer of new drug treatments in the fight against cancer and other major health threats, today announced the expansion of its ongoing research trial of L-Annamycin, the Company's drug candidate to treat adult patients with relapsed or refractory acute lymphocytic leukemia (ALL), to a third clinical trial site.

The new site to join the Phase I/IIa clinical trial of L-Annamycin is the Roswell Park Cancer Institute in Buffalo, New York, one of the nation's leading cancer research centers. The first patient at this site was enrolled on March 6, 2006 under the direction of Dr. Meir Wetzler, the principal investigator at Roswell Park.

"We are very pleased to announce this latest benchmark in our development of a promising new compound to treat acute lymphocytic leukemia, a serious cancer of the blood for which new treatments are desperately needed," said Dr. Donald Picker, Callisto's Executive Vice President of Research and Development. "The Roswell Park Cancer Institute is one of the nation's preeminent institutions for the study of cancer, and we are very gratified that clinicians there will be helping to advance the clinical trial of L-Annamycin. This new clinical trial site provides an additional pool of potential patients for the present study."

In previous published animal studies, L-Annamycin has demonstrated that it can kill tumor cells that are resistant to other anthracycline anticancer drugs. In addition, earlier studies have shown that L-Annamycin may have other key advantages over other anthracycline drugs, including a decreased risk of treatment-related cardiomyopathy (inflammation of the heart muscle), a complication associated with this family of anticancer drugs.

Callisto additionally plans to evaluate L-Annamycin for the treatment of children with refractory or relapsed ALL, and refractory or relapsed acute myelogenous leukemia (AML), respectively, as well as in the treatment of adults with relapsed or refractory AML in combination with Ara-C. Callisto intends to begin separate clinical trials in these populations in 2006. If these trials are successful, an even broader population of leukemia patients could benefit from L-Annamycin.

The first clinical trials of L-Annamycin were initiated in December, 2005 at the University of Texas M. D. Anderson Cancer Center, in Houston, Texas, where it remains ongoing.

L-Annamycin is one of two anticancer drugs in development by Callisto that has received Orphan Drug designation by the FDA. This designation guarantees that after FDA approval of the drug, the sponsoring company has marketing exclusivity within the United States for seven years following commercial launch. The FDA's Orphan drug designation also provides significant additional benefits to the sponsoring company, including eligibility for research grants and protocol assistance, opportunities for regulatory agency assistance on review of clinical protocols, and waiver of the Prescription Drug User Fee Act (PDUFA) filing fee.

About Roswell Park Cancer Institute (RPCI)

Roswell Park Cancer Institute is America's first cancer center, founded in 1898 by Dr. Roswell Park. RPCI is the only upstate New York facility to hold the National Cancer Center designation of "comprehensive cancer center" and to serve as a member of the prestigious National Comprehensive Cancer Network. Over its long history, Roswell Park Cancer Institute has made fundamental contributions to reducing the cancer burden and has successfully maintained an exemplary leadership role in setting the national standards for cancer care, research and education. For more information visit http://www.roswellpark.org.

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.

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.

Contact:

Callisto Pharmaceuticals, Inc.
Dan D'Agostino, 212-297-0010 ext. 227
dagostino@callistopharma.com
or
Trilogy Capital Partners, Inc.
Paul Karon, 800-592-6067 (Investor Relations)
paul@trilogy-capital.com

Source: Callisto Pharmaceuticals, Inc.

Comments in the BLOG

Lots of news going on with several of our current followings. Dexcom (NASDAQ: DXCM) and HyperDynamics (AMEX: HDY) are probably the two most volatile and exciting situations I cover. Both have been quite active of late, and I have fresh new BLOG comments up on both. The BLOGS are a must read if you have an interest in either or both of these stocks. Also- there was news today from two other current followings- Callisto Pharmaceuticals (AMEX: KAL) and Bad Toys (OTC BB: BTYH). Read on McDuff.

To use the BLOG, simply go to the home page at www.otcjournal.com - the BLOG will scroll down automatically on the right side of your screen. You can look there by company. The most current journal entries appear in the middle of your screen in chronological order. Check back frequently for updates particularly when stocks are moving to overbought or oversold levels or in volatile markets. Your questions and postings do not automatically appear, so don't bother posting the same question multiple times. I personally go through to moderate and respond to every reasonable question.

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