-Dr. August Watanabe Named Chairman of the Board of Directors-

SAN DIEGO, CA — July 20, 2005 — Kalypsys, a privately owned San Diego-based drug discovery and development company, announced today the appointment of August Watanabe, M.D., as non-executive Chairman of its Board of Directors.

Dr. Watanabe was appointed to the Kalypsys Board of Directors on March 15, 2005. He served as a senior executive at Eli Lilly Company for 13 years beginning in 1990. From 1994 until his retirement in 2003, he held the positions of Executive Vice President of science and technology, President of Lilly Research Laboratories and was a member of the company's Board of Directors. During his leadership of R&D; at Lilly, the company became recognized as having one of the strongest pipelines of new compounds in the industry, including the recently launched drugs Alimta®, Byetta™, Cialis®, Cymbalta® and Straterra®.

Prior to joining Eli Lilly, Dr. Watanabe was a faculty member of the Department of Internal Medicine at Indiana University School of Medicine for 18 years and was Chairman of the Department of Internal Medicine from 1983 to 1990. Dr. Watanabe was a Director of the American Heart Association, a Trustee of the American College of Cardiology and a member of the American Society of Clinical Investigation and the Association of American Physicians. Dr. Watanabe currently serves as a Director of Guidant Corporation, the Indiana University Foundation and the Damon Runyon Cancer Research Foundation.

"We are very pleased that Dr. Watanabe has accepted the position as Chairman. With his experience as a former top executive at Lilly, he will provide extraordinary insight and guidance at a critical time for Kalypsys," said John McKearn, Ph.D., President and CEO of Kalypsys.

Dr. Watanabe succeeds Mr. Isy Goldwasser, who had served as chairman of the Kalypsys Board of Directors since the company's inception in September of 2001.

About Kalypsys

Kalypsys is a privately owned San Diego small molecule drug discovery and development company that is applying its integrated drug discovery infrastructure, suite of ultra-high throughput lead discovery technologies, and seasoned team of scientists to advance its pipeline into clinical development. Kalypsys uses its technologies, integrated capabilities and sizeable drug-like compound collection to improve the drug discovery research process and generate a robust pipeline for itself and its partners. Kalypsys' mission is to participate in targeted commercial opportunities by building a sustainable drug candidate pipeline from target to proof of efficacy and safety in the clinic with unmatched speed, efficiency, and success rates. For more information on Kalypsys, please visit www.kalypsys.org.