KARO BIO ANNUAL GENERAL MEETING

At Karo Bio AB’s Annual General Meeting on Wednesday May 3, 2006 the following was resolved.

Dividend No dividend is to be paid for the financial year 2005. Board of Directors Dana M. Fowlkes re-election Lars Ingelmark re-election Laurent Leksell new election Ulla Litzén re-election Per-Olof Mårtensson re-election Leon E. Rosenberg re-election Per Olof Wallström re-election Jan-Åke Gustafsson deputy, re-election Per-Olof Mårtensson was elected Chairman of the Board. Nominating Committee The Meeting resolved that the four largest shareholders as of August 31, 2006, not being represented in the board of directors, shall appoint one representative each, which together with the chairman of the board shall be members of the nominating committee in respect of the 2007 annual general meeting. The representatives shall be appointed and announced no later than in conjunction with the company’s quarterly report for the third quarter 2006. Change of by-laws The Meeting resolved in accordance with the board’s proposal to change the by-laws for the purpose of adapting the by-laws to the new Swedish Companies Act, and to make certain editorial adjustments. Change of by-laws and reduction of share capital The Meeting resolved in accordance with the board’s proposal to reduce the company’s share capital by SEK 116,119,193 to SEK 38,706,398 to immediately be used to cover the loss as per the adopted balance sheet. The reduction shall be made without redemption of shares, whereby the ratio value of the share will be reduced from SEK 2 to SEK 0.50. KARO BIO AB For further information, please contact: Per Olof Wallström, President & Chief Executive Officer Telephone: +46 70 942 95 20 Bertil Jungmar, Chief Financial Officer Telephone: +46 8 608 60 52. 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.