CLINICAL TRIALS INITIATED AND SIGNIFICANT MILESTONE REACHED IN THE COLLABORATION BETWEEN KARO BIO AND MERCK & CO., INC.

Clinical trials have been initiated for the most advanced compound in the drug discovery and development collaboration between Merck & Co., Inc. and Karo Bio. The advancement of this compound, in clinical development to address an important unmet clinical need, has triggered a significant milestone payment from Merck to Karo Bio.

The collaboration with Merck & Co., Inc. (NYSE: MRK) was initiated in November 1997 with the objective of developing new treatments targeting estrogen receptors, which may be particularly relevant in women's healthcare, but also in other major clinical areas. The joint drug discovery phase of the collaboration with Merck was completed in 2002 and has been successful in the discovery of numerous selective compounds. Merck has exclusive world wide rights to all compounds identified during the collaboration and is responsible for their further preclinical and clinical development. In addition to the most advanced compound, which now has progressed into clinical testing, Merck continues to evaluate additional compounds for potential use in other clinical indications. Karo Bio may receive additional milestone payments from Merck dependent upon the selection of new drug candidates as well as the successful clinical development of the compounds and final drug approval. Karo Bio also has rights to royalties on future drug sales. ''We are very happy to achieve this important milestone in our productive collaboration with Merck'', says Dr. Björn O. Nilsson, President & CEO of Karo Bio. ”We are excited that clinical trials of this innovative ER subtype selective compound now are initiated for a major clinical indication”. KARO BIO AB For further information, please contact Dr. Björn O. Nilsson, President & CEO, +46 8 608 6020 Dr. Per Otteskog, Senior Vice President, +46 8 608 6018