Quarterly report April - June 2005

•Phase Ia clinical studies with KB2115 initiated and completed according to plan •Significant progress in the thyroid hormone receptor project regarding lipid lowering capacity of the most advanced compounds •On April 11, Karo Bio announced that Merck decided to discontinue development of lead compound in clinical trials. A back-up compound is in preclinical testing •Net sales for the six months period amounted to MSEK 47.2 (24.2) •The loss for the six months period amounted to MSEK 42.4 (58.5) •Cash flows from operating activities for the six months period amounted to MSEK -29.5 (-54.1) •Cash and bank balances and short-term investments amounted to MSEK 146.8 (126.0) at the end of the period •Loss per share before dilution for the six months period amounted to SEK 1.37 (2.96) For further information, please contact Per Olof Wallström, President, tel. +46 8 608 60 20, Per Otteskog, Senior Vice President Corporate Development, tel. +46 8 608 60 18, Bertil Jungmar, Chief Financial Officer, tel. +46 8 608 60 52.