NOTICE OF ANNUAL GENERAL MEETING OF THE

The annual general meeting of the shareholders of Karo Bio Aktiebolag (publ) will be held on Friday April 23, 2010 at 2.00 p.m. in Hörsalen, Mannheimer Swartling, Norrlandsgatan 21, Stockholm, Sweden.

1. RIGHT TO PARTICIPATE, NOTIFICATION Shareholders who wish to participate in the annual general meeting must be recorded in the share register kept by Euroclear Sweden AB on Saturday April 17, 2010 and, further, must notify the company of their intention to participate in the meeting no later than Monday April 19, 2010, preferably before 4.00 p.m. As the record day (April 17, 2010) falls on a Saturday, shareholders must be registered as entitled to vote at Euroclear Sweden AB on Friday April 16, 2010, to be entitled to participate in the general meeting. Notification should be made in writing to Karo Bio AB, att: Eva Kruse, Novum, SE-141 57 Huddinge, Sweden, by fax + 46 8 774 52 80, or by e-mail to stamma@karobio.com. Notification can also be made on the company’s web site www.karobio.com/agm. When notifying, the shareholders should state name, personal/corporate identity number (where applicable), address, telephone number, and e-mail address. In the case of representatives participating in the meeting, proof of due authorization should be forwarded to the company in conjunction with the notification. One or two advisors may accompany a shareholder to the meeting, provided that the shareholder gives notice as to the number of such advisors. Shareholders whose shares are registered under the name of a nominee must temporarily register their shares in their own names to be entitled to participate in the meeting. Such registration must be in effect at Euroclear Sweden AB on Saturday April 17, 2010, which means that shareholders must notify their nominee well in advance of that date. 2. PROPOSED AGENDA 1. Opening of the meeting; 2. Election of chairman at the meeting; 3. Preparation and approval of the voting list; 4. Approval of the agenda; 5. Election of persons to confirm the minutes; 6. The determination as to whether the meeting has been duly convened; 7. Presentation of the annual report and the audit report as well as the group consolidated financial statement and the audit report thereon; 8. Resolution to adopt the income statement and the balance sheet as well as the consolidated income statement and the consolidated balance sheet; 9. Resolution as to the treatment of the loss in accordance with the adopted balance sheet involving a reduction of the statutory reserve to cover the loss; 10. Resolution as to the board of directors’ and the president’s discharge from liability; 11. Resolution as to the number of board directors and deputy board directors; 12. Resolution on the remuneration to the board of directors and auditor; 13. Election of board of directors and the chairman of the board; 14. Resolution on a nominating committee; 15. Resolution as to principles for remuneration of executive management; 16. Resolution on issuance of share warrants and approval of the transfer of the share warrants by a subsidiary; 17. Closing of the meeting. 3. PROPOSED RESOLUTIONS Item 2: Election of chairman at the meeting The nominating committee, consisting of Bengt Belfrage, chairman and appointed by Nordea; Ragnhild Wiborg, Consepio; Thomas Josefsson, Borås Postorder; Johan Claesson, CA Fastigheter; as well as Dr. Leon E. Rosenberg, chairman of the Karo Bio board of directors, proposes Sven Unger as chairman at the meeting. Item 9: The board of directors’ proposal as to the treatment of the loss in accordance with the adopted balance sheet involving a reduction of the statutory reserve to cover the loss The board of directors proposes that no dividend be paid for the financial year 2009 and that the parent company’s aggregate deficit, amounting to SEK 23,672,175 following the requisitioning of the share premium reserve, be covered by SEK 23,672,175 from the statutory reserve. The statutory reserve will amount to SEK 138,014,105 after the reduction. Item 11: Resolution as to the number of board directors and deputy board directors The nominating committee proposes that the board of directors consist of five board members with no deputy members. Item 12: Resolution on remuneration of the board of directors and the auditor The nominating committee proposes that the remuneration to the board of directors be unchanged and paid with SEK 495,000 to the chairman and SEK 180,000 each to the other directors elected by the annual general meeting. It is also proposed SEK 120,000 in remuneration for committee work to be distributed within the audit committee with SEK 30,000 to its chairman and SEK 20,000 to the other two members and within the compensation committee with SEK 20,000 to its chairman and SEK 15,000 to the other two members. Remuneration of the auditor is proposed to be as per approved invoice. Item 13: Election of board of directors and chairman The nominating committee proposes that Bo Håkansson, Johan Kördel, Jon Risfelt and Birgit Stattin Norinder be re-elected as directors and that Margaret von Platen be elected as new director. Bo Håkansson is proposed to be chairman. Leon E. Rosenberg has informed the nominating committee that he does not wish to be nominated for a new term. Margaret von Platen (1959) Primary education and title: BA, Uppsala University, MBA, Columbia Business School, New York. Primary experience: Financial analyst, journalist and author of several books. Previous engagements: board member of Nordstjernan and Världsnaturfondens Allemansfond, and worked with the World Wildlife Fund Economic Committee. Information on the other proposed directors is available on the company’s web site www.karobio.com. Item 14: Resolution on a nominating committee The nominating committee proposes that the chairman shall ask each of the four largest shareholders as of August 31, 2010 to appoint one representative each, where such representative shall not be a member of the board, who together with the chairman of the board shall be members of the nominating committee in respect of the 2011 annual general meeting. The representatives shall be appointed and announced not later than six months prior to the annual general meeting 2011. The nominating committee shall appoint a chairman among the members, where the chairman of the board of directors shall not be chairman of the committee. Should a shareholder decline to participate in the nominating committee or leave the nominating committee before its work is completed, the right to appoint a representative shall turn to the next largest shareholder not represented in the nominating committee. Should the ownership structure significantly change subsequent to the establishment of the nominating committee, the composition of the nominating committee shall be changed in accordance with the above principles. However no such changes shall be effected less than two months prior to the annual general meeting of 2011 or if the nominating committee deems it work finalized. The nominating committee shall prepare proposals to be presented at the annual general meeting 2011 for resolution as regards chairman at the general meeting, number of directors, remuneration of the board of directors and auditors, election of chairman, other members of the board of directors and auditor, and appointment of and instructions for a nominating committee. The term of office of the nominating committee runs until a new nominating committee has been appointed in accordance with the resolution on appointment of the nominating committee by the annual general meeting 2011. If the nominating committee finds it necessary, it may utilize reasonable resources, such as external consultants, on the account of the company. Item 15: Resolution as to principles for remuneration of executive management The board of directors’ proposal on guidelines for remuneration of executive management includes the following items. Executive management consists of the president of Karo Bio AB and executives that report directly to the president as well as presidents of Karo Bio’s subsidiaries. Remuneration and other employment terms for executive management shall be competitive. In addition to fixed salary, executive management shall receive variable remuneration, which shall be linked to the fixed salary and shall not exceed 40 per cent of the fixed annual salary for the president and the other executives and be based on the achievement of determined business goals. Dismissal and severance pay shall not exceed 24 months’ salary in total for each executive. Pension benefits shall be based on defined benefit pension schemes or accede to the Swedish ITP-plan. The board may derogate from the guidelines where there are special reasons for doing so. Item 16: Resolution on issuance of share warrants and approval of the transfer of the share warrants by a subsidiary The board proposes the general meeting to resolve to issue at most 5,000,000 share warrants, each entitling to subscription for one share in the company. With deviation from the shareholders’ preferential rights the company’s wholly-owned subsidiary Karo Bio Research AB shall be entitled to subscribe for all share warrants free of charge no later than 30 April 2010. The subsidiary shall in accordance with instructions from the board of Karo Bio transfer the share warrants to members of executive management of the company as per the board’s decision in accordance with the resolution of the general meeting. The share warrants may be exercised for subscription for shares from and including 1 July 2013 until and including 31 December 2013. The subscription price per share shall be 180 per cent of the average of the, for each trading day from and including 26 April 2010 until and including 7 May 2010, calculated averages of the highest and the lowest paid price according to NASDAQ OMX’ official share price list for shares in the company. The share warrants shall be transferred to members of executive management on market conditions, based on a calculation in accordance with the so-called Black & Scholes valuation model executed by KPMG AB which is to be considered independent in relation to the company. The incoming president will be offered to acquire at most 2,100,000 share warrants. Other members of executive management may be offered to acquire a total of at most 2,900,000 share warrants and none of them shall be offered to acquire more than 1,000,000 share warrants individually. If all share warrants are subscribed for and exercised, the company’s share capital will increase with SEK 2,500,000 divided into 5,000,000 shares, which corresponds to a dilution of approx. 3.1 per cent of shares and votes. The reason for the deviation from the shareholders’ preferential rights is that the company wants to be able to offer members of the executive management of the company the possibility to take part in the development of the company’s future value. A long term economic interest in the company is assumed to stimulate the executive management’s interest in the company’s business, increase the motivation and strengthen the involvement in the company. Thus the board finds that it is in the interest of the company and the shareholders that members of the executive management are accordingly offered to purchase share warrants in the company. The share warrants will be offered to the employees at market price, meaning that the company will not be liable for costs for social security contributions. Consequently, the company will not incur any costs for the issue, except administrative costs. The resolution is valid only where supported by shareholders holding not less than nine-tenths of both the shares voted and of the shares represented at the general meeting. 4. DOCUMENTS The nominating committee’s proposal and statement are available on the company’s website. The annual report, the audit report and other documentation that shall be made available under the Swedish Companies Act, will be available at the company’s offices in Huddinge and on the company’s web site www.karobio.com/agm no later than Friday April 9, 2010. Copies of all documents will be sent to shareholders that so request and state their address or e-mail address. Copies of all documents will be available at the general meeting. Proxy forms in accordance with Chapter 7 Section 54a of the Swedish Companies Act (2005:551) will be available at the company’s website and may be ordered from the company. The total number of shares and votes in the company amounts to 154,825,589. Huddinge, March 2010 Karo Bio Aktiebolag (publ) The Board of Directors For more information please contact: Erika Söderberg Johnson, CFO and responsible for Investor Relations Phone: +46 8 608 6052 E-mail: erika.soderberg.johnson@karobio.se About Karo Bio Karo Bio is a drug discovery and development company specializing in endocrinology and targeting nuclear receptors as target proteins for the development of novel pharmaceuticals. The company has a project portfolio with innovative molecules that primarily target dyslipidemia, CNS-disorders, inflammation, and women’s health. In these areas, there are significant market opportunities and a clear need for pharmaceuticals with new mechanisms of action. Karo Bio develops compounds aimed at treating broad patient populations up to clinical proof of concept before out-licensing. In therapeutic niche areas, Karo Bio has the capacity to bring selected compounds into late stage clinical development and, potentially, to the market. In addition to the proprietary projects, Karo Bio has three strategic collaborations with international pharmaceutical companies for development of innovative therapies for the treatment of common diseases. Karo Bio is listed on NASDAQ OMX Stockholm since 1998 (Reuters: KARO.ST). This press release is also available online at: www.karobio.com and www.newsroom.cision.com