QUARTERLY REPORT APRIL – JUNE 2006

• Karo Bio has received a milestone payment from Wyeth for the selection of a clinical development candidate in the joint LXR project for the treatment of atherosclerosis • KB5359 has been selected as candidate drug for treatment of common forms of dyslipidemia • Bioavailability study with KB2115 in new formulation successfully completed • Net sales for the six month period amounted to MSEK 15.2 (47.2) • The loss for the six month period amounted to MSEK 61.3 (42.4) • Cash flows from operating activities for the six month period amounted to MSEK -69.5 (-29.5) • Liquid assets and other short-term investments amounted to MSEK 272.7 (146.8) at the end of the period • Loss per share for the six month period amounted to SEK 0.79 (0.97)