KARO BIO TO RECEIVE MILESTONE PAYMENT FROM WYETH PHARMACEUTICALS

The Swedish company Karo Bio, listed on the Stockholm Stock Exchange (KARO), today announced that the company will receive a milestone payment from Wyeth for the selection of a clinical development candidate in the joint LXR modulator project for treatment and prevention of atherosclerosis.

The collaboration with Wyeth Pharmaceuticals started in 2001 and in August 2005 it was extended for one year until August 31, 2006, with the primary objective of selecting a compound for clinical development. The achievement of this significant milestone triggers a payment to KaroBio. Under mutual agreement by the parties, other financial details have not been publicly disclosed. “The collaboration with Wyeth has been very productive, and the selection of a clinical development candidate is an important event for both partners in this innovative project”, says Per Olof Wallström, President and CEO of Karo Bio. “We are now looking forward to the initiation of clinical studies tentatively planned for the second half of this year”. LXR is a nuclear hormone receptor that is an important regulator of cholesterol metabolism in mammals. LXR has many features that make it an attractive drug development target for prevention and treatment of atherosclerosis and dyslipidemia. Modulation of LXR with small molecule compounds has been demonstrated to enhance the efflux of cholesterol from cells in atherosclerotic blood vessels, resulting in a reduction in the progression of atherosclerotic disease in selected experimental models. Modulation of LXR has also been implicated in reducing vascular inflammation which, in addition to cholesterol, is an important mediator of atherosclerosis. It is believed that these features of LXR are of central importance for a new generation of drugs to treat and prevent atherosclerosis successfully. Karo Bio has been a leader in the development of LXR as a drug development target and in collaboration with Wyeth has built a highly competitive program to advance compounds into clinical development. KARO BIO AB For further information, please contact: Per Olof Wallström, President & Chief Executive Officer Telephone: +46 8 608 60 20 Per Otteskog, Senior Vice President Telephone: +46 8 608 60 18 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.