NEW SHARE ISSUE FULLY SUBSCRIBED

Karo Bio has carried out a new share issue with preferential rights for the Company’s shareholders generating MSEK 279 before transaction costs.

The subscription period for the new issue ended Thursday November 10, 2005. The rights issue generates MSEK 278.7 before transaction costs and was to 98 percent subscribed with preferential right for the shareholders. Remaining shares will be allocated by the Karo Bio Board of Directors. The interest for the remaining shares was very great. “The cash generated gives us the opportunity to take our projects further in clinical development and to build a clinical pipeline which create value for our shareholders. We are pleased to notice that the new strategy receives support from our owners which is demonstrated by the over-subscription of the share issue, says Per Olof Wallström, President and CEO. The new shares are expected to become available for trading on the O-list of the Stockholm Stock Exchange on or about December 13, 2005. The total number of shares amounts to 77 412 795 shares after the new issue, representing a share capital amounting to MSEK 154.8. KARO BIO AB For further information, please contact: Per Olof Wallström, President & Chief Executive Officer Telephone: +46 8 608 60 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.