APPROVAL FOR BIOAVAILABILITY STUDY WITH IMPROVED PHARMACEUTICAL FORMULATION FOR KB2115

Karo Bio has made a new and improved pharmaceutical formulation in its clinical development project with KB2115 for treatment of severe dyslipidemia. This has generated an approval from the Swedish Medical Products Agency for a two week study on healthy volunteers with KB2115. The new formulation is developed for the continued clinical development of KB2115 in a phase II program which is planned for the fall of 2006.

In a previous clinical study Karo Bio has shown that KB2115 significantly lowers the harmful cholesterol, LDL, with up to 40% in a two week period. The study also showed that the substance exhibited a safety profile which is satisfactory for further development. In the early exploratory phase and in animal studies as well as in the first clinical study on healthy volunteers the compound has been administered in a solution. The new formulation is suitable for a daily dosing in patients in the continued clinical development of KB2115. The study which Karo Bio will initiate during spring is conducted for the purpose of determining the pharmacokinetic properties in preparation for the phase II program in patients which is planned for the fall of 2006. KARO BIO AB For further information, please contact: Per Olof Wallström, President & Chief Executive Officer Telephone: 08-608 60 20; Mobile 070 942 95 20 Facts about Karo Bio Karo Bio is an innovative drug discovery and development company specializing in nuclear receptors for the development of novel pharmaceuticals with focus on metabolic diseases. Karo Bio is listed on the Stockholm stock exchange (Reuters: KARO.ST) since 1998. The Company has expanded from being a drug discovery company by adding in-house preclinical development resources and competence for development of drugs to treat metabolic diseases. The Company has a strong project portfolio primarily targeting diseases such as diabetes, obesity, atherosclerosis and dyslipidemia. In addition, Karo Bio has two strategic collaborations with international pharmaceutical companies for development of innovative therapies for the treatment of common diseases. This press release is also available online at: www.karobio.com and www.waymaker.net