KARO BIO PRESENTS NEW IMPORTANT ADVANCES AT ITS ANNUAL R&D DAY

Three New Clinical Programs Planned For 2006 STOCKHOLM, March 29 2006. The Swedish biotech company Karo Bio, listed on the Stockholm stock exchange (Attract 40 list), presents an overview of its project pipeline at its annual R&D Day. The company also updates the market on the recent development in the company.

These are the highlights from the presentations: KB2115 Phase I Study • Safe at expected therapeutic doses • Significant lowering of LDL cholesterol • Bioequivalence study with new formulation in Q2 2006 • Phase II studies planned for late Q3 2006 TR STAD • Up to 80% lowering of LDL cholesterol in animals with KB3495 without effects on the heart • KB3495 acts synergistically with statins in an animal model • KB3495 is positioned for formal candidate drug selection in the near future KB3305 • Breakthrough in pharmaceutical formulation of KB3305 for clinical studies • Phase I study planned for Q3 2006 Wyeth Collaboration • IND planned for H2 2006 “We feel we are on the right track with our most important projects”, said Per Olof Wallström, CEO of Karo Bio. “Recent development underlines the strength of our new strategy, where we both develop certain key projects ourselves and at the same time continue our fruitful collaborations with pharmaceutical companies such as Wyeth”, he continued Here follows a review of the recent development of the most advanced projects in Karo Bio’s portfolio: KB2115 KB2115 is a compound that reduces blood lipids and body weight by stimulation of the thyroid hormone receptor. In contrast to thyroid hormone, KB2115 exhibits pharmacological selectivity, and activation of the heart is thereby avoided. The compound has in particular a promising profile for treatment of severe dyslipidemia, an area where with a great need for new drugs. Phase I Study During the fall of 2005 Karo Bio successfully completed a phase I study with KB2115 in healthy but overweight individuals with dyslipidemia. The primary objective of the phase I study was to determine the short-term safety and tolerability of single (phase Ia) and multiple oral doses of KB2115 administered daily over a 14-day period (phase Ib). No serious adverse events were recorded, and KB2115 was well tolerated. A mild increase in liver enzymes was recorded in some subjects at the highest doses in the multi dose study. Excellent bioavailability and pharmacokinetic properties were documented. No negative effects on the heart were reported. Pharmacodynamics Significant lowering of total and LDL cholesterol was documented. For example, all individuals receiving KB2115 showed a marked reduction of LDL levels, and a reduction of up to 40% was recorded. Lowering of triglycerides was also observed in individuals with elevated levels of triglycerides. New Pharmaceutical Formulation A bioequivalence study with an improved pharmaceutical formulation of KB2115 will be performed in the first half of 2006.This improved formulation is intended to be used in the phase II studies. Planning for phase II studies in patients is ongoing. These are expected to be initiated in late Q3 2006. Market The market for lipid lowering drugs is considerable. The worlds most sold drug Lipitor, which is a statin, has an annual sale of over 80 billion SEK. In spite of the success with statins a considerable portion of the patients do not reach treatment goals and the demand for new pharmaceuticals with new mechanisms of action is great. KB2115 could become useful for the reduction of LDL cholesterol, triglycerides and Lp(a), as stand alone treatment or in combination with other agents such as statins and fibrates. In the treatment of severe genetically disposed dyslipidemia KB2115 will have potential value as a novel treatment for patients already on statins but not reaching LDL cholesterol goals as well as in statin intolerant patients. TR STAD - Selective Thyroid hormone Agonists for Dyslipidemia Karo Bio has developed a new series of compounds intended for treatment of common forms of dyslipidemia. The TR STAD compounds have an improved safety profile compared to KB2115. Potent compounds, which lower LDL cholesterol up to 80% in rats, with no effects on the heart, have been developed. Based on results on LDL lowering in the rat, there are indications that these compounds may act synergistically with statins. The compounds also have the ability to lower independent risk factors for development of cardiovascular disease such as body weight, triglycerides, blood glucose and lipoprotein(a). Karo Bio is preparing for GLP toxicology studies and expects to formally select KB3495 as candidate drug in the near future. There is still an unmet medical need for treatments that can significantly lower blood lipids, either as single therapy or in combination with other drugs, primarily statins. STADs are regarded as very promising for treatment of broad patient populations with dyslipidemia. GR - Glucocorticoid receptor KB3305 KB3305, intended for treatment of type 2 diabetes, has a favourable pharmacological profile in several different animal diabetes models. KB3305 acts by selectively antagonizing the action of glucocorticoid hormone in the liver. By developing compounds that are liver selective the pharmacological effects in other organs can be minimized. In animals, KB3305 normalizes the hyperglycemia associated with type 2 diabetes. Preclinical safety and toxicity studies suggest that KB3305 is a safe and well-tolerated drug with more than a 100-fold safety margin over the expected clinical dose. KB3305 has a high molecular weight and a low solubility, which are challenging properties when it comes to formulating the compound for clinical studies as well as in developing a product for the market. Karo Bio has worked intensively with the development of new formulations and has recently achieved satisfactory levels of bioavailability in rats and dogs. It has been decided to move the compound into clinical studies and the plan is to initiate phase I studies in Q3 this year. Karo Bio - Wyeth Pharmaceuticals Collaboration The collaboration targets the liver X receptor (LXR) with the aim to develop new treatments for atherosclerosis. LXR is a regulator of cholesterol metabolism. It has been demonstrated that compounds that modulate the activity of LXR promote net cholesterol efflux from atherosclerotic blood vessels that may result in the regression of vascular plaque formation. Proof of concept for the most advanced compounds has been obtained in animal models. Wyeth intends to formally select a candidate drug and initiate clinical studies later this year. KARO BIO AB For further information, please contact: Per Olof Wallström, President & Chief Executive Officer Telephone: +46 8 608 60 21 Per Otteskog, Senior Vice President Telephone: +46 8 608 60 21 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.