NOTICE OF EXTRAORDINARY GENERAL MEETING OF THE SHAREHOLDERS OF KARO BIO AKTIEBOLAG

An extraordinary general meeting of the shareholders of Karo Bio Aktiebolag (publ) will be held on Wednesday April 11, 2007 in Strindbergsalen, Berns, Berzelii Park, Stockholm, Sweden. The extraordinary general meeting will be held immediately after the 2007 annual general meeting that will begin at 4.00 p.m.

I. RIGHT TO PARTICIPATE, NOTIFICATION
Shareholders who wish to participate in the general meeting must be recorded in the share register kept by the Swedish Securities Register Centre (VPC AB) by Tuesday April 3, 2007 and, further, must notify the company of their intention to participate in the meeting by no later than Wednesday April 4, 2007 at 4.00 p.m.

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 sgm@karobio.com. Notification can also be made on the company’s web site www.karobio.com/sgm. 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 the Swedish Securities Register Centre (VPC AB) no later than Tuesday April 3, 2007, which means that shareholders must notify their nominee well in advance of that date.

II. 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. Resolution to approve the Board’s resolution to issue new shares with pre-emptive rights for the shareholders
8. Closing of the meeting.


III. PROPOSED RESOLUTIONS
Item 7: Resolution to approve the Board’s resolution to issue new shares with pre-emptive rights for the shareholders
The Board of Directors proposes that the general meeting approve the Board of Directors’ resolution of 26 March 2007 to increase the Company’s share capital by a maximum of SEK 19,353,198.50 through issue of a maximum of 38,706,397 shares, or the higher amount or higher number of shares, respectively, as a result of any exercise of warrants under the Company’s option programs 2001/2008 and 2003/2011: A-D, although not more than a maximum of SEK 19,606,816 and 39,213,632 shares, respectively. For each subscribed share SEK 10.50 shall be paid. The shareholders shall have pre-emptive right to subscribe for the new shares and two existing shares shall entitle to subscription of one new share. If not all shares are subscribed for by the exercise of subscription rights, the Board shall decide on the allotment of shares up to the maximum amount of the new share issue, and the Board shall primarily allot shares to those who have subscribed for shares by the exercise of subscription rights, on a pro rata basis in relation to their subscription by the exercise of subscription rights, and secondarily to those who have declared interest in subscribing for shares without subscription rights, on a pro rata basis in relation to their declared interest. Any remaining shares shall be allotted to those who have underwritten the new share issue in proportion to their underwriting undertakings. The record date for determining which shareholders shall be entitled to subscribe for new shares on a pre-emptive basis shall be 18 April 2007. The new shares may be subscribed for during the period as from, and including, 24 April 2007 until, and including 8 May 2007, or such later date as the Board of Directors may decide. Subscription by the exercise of subscription rights shall be made through simultaneous cash payment. Subscription without subscription rights shall be made on a separate subscription list and be paid in cash within three (3) banking days of the dispatch of information on allotment to the subscriber, or such later date which the Board of Directors may decide. The new shares shall entitle to dividends as from the first record date for dividends following registration of the new share issue with the Companies Registration Office.

IV. DOCUMENTS
The Board’s resolution under item 7 above in its entirety as well as documents in accordance with Chapter 13 Section 6 of the Swedish Companies Act will be available at the company’s offices in Huddinge and on the company’s web site www.karobio.com/sgm as from Wednesday March 28, 2007. 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.

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Huddinge in March 2007
Karo Bio Aktiebolag (publ)
The Board of Directors


KARO BIO AB

For further information, please contact:
Per Olof Wallström, President & Chief Executive Officer
Telephone: +46 8 608 60 20


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.