Karo Bio earns Milestone payment from partner Bristol-Myers Squibb for initiation of phase i clinical studies of jointly

KARO BIO EARNS MILESTONE PAYMENT FROM PARTNER BRISTOL-MYERS SQUIBB FOR INITIATION OF PHASE I CLINICAL STUDIES OF JOINTLY DISCOVERED OBESITY TREATMENT CANDIDATE Press release September 25, 2001 Karo Bio announced today that Karo Bio's drug discovery and development partner, Bristol-Myers Squibb, initiated Phase I clinical trials of a jointly discovered drug candidate. This drug candidate targets the thyroid receptor and is being developed for the treatment of obesity. Phase I clinical studies focus primarily on safety in humans. "This achievement earns an important milestone payment for Karo Bio," says Dana M. Fowlkes MD-PhD, Chief Scientific Officer for Karo Bio. "Furthermore, the initiation of clinical studies by our partner represents a very significant scientific accomplishment for numerous Karo Bio and Bristol-Myers Squibb scientists." Native thyroid hormone increases one's metabolic rate, which is believed to reduce obesity. However, native thyroid hormone also has effects on the heart that prevent its use for the treatment of obesity. In their joint research program, Karo Bio and Bristol-Myers Squibb discovered a tissue selective modulator of the thyroid hormone receptor that increases metabolism without inducing cardiac side effects. In relevant animal models, the program's drug candidate has demonstrated a significant weight-reducing activity and a broad therapeutic window. Obesity is one of the most serious health problems in the western world, often leading to life threatening chronic diseases like heart failure, vascular disease and diabetes. Since the medical need for the treatment of obesity is largely unmet, the Karo Bio/Bristol-Myers Squibb drug candidate has significant market potential. In addition to the first generation compound that has entered the clinic, Karo Bio and Bristol-Myers Squibb continue to collaborate on the discovery and development of second-generation compounds that may expand the possible indications that can be treated with novel thyroid hormone receptor modulators. KARO BIO AB (publ) For further information contact: Karo Bio AB Björn Nilsson, President Direct telephone: +46-8-608-6020 Mobile telephone: +46-70-218-1500 Per Otteskog, Senior Vice President Investor Relations Direct telephone: +46-8-608-6018 Mobile telephone: +46-70-632-7527 Background Karo Bio has operations in the United States and Sweden. The Company employs 130 people. Karo Bio has been listed on the Stockholm stock exchange (Reuters: KARO.ST) since 1998 and maintains a leading position in the field of drug discovery focused upon nuclear receptors. Nuclear receptors are validated drug targets for a number of clinical indications and the Company uses proprietary technologies for the development of novel and improved therapies for major markets. Karo Bio has 250 patent cases including 100 granted patents. Karo Bio has drug discovery programs in several therapeutic areas including men and women's health care, metabolic disorders such as obesity, cardiovascular disease, diabetes, dermatology and ophthalmology. Karo Bio collaborates with major pharmaceutical companies for development of products and marketing. In these partnerships Karo Bio receives upfront payments, R&D funding, milestone payments as well as royalties on net sales when products reach the market. Karo Bio has strategic pharmaceutical drug discovery partnerships with Abbott Laboratories, American Home Products, Bristol-Myers Squibb, Merck & Co., and Aventis. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/09/25/20010925BIT00040/bit0002.doc http://www.waymaker.net/bitonline/2001/09/25/20010925BIT00040/bit0002.pdf