QUARTERLY REPORT JANUARY - MARCH 2005

• Clinical trial application for KB2115 submitted to the Swedish Medical Products Agency • Per Olof Wallström appointed as new President for Karo Bio • Significant milestone payment from Merck & Co for initiation of phase I clinical trials received • On April 11, Karo Bio announced that Merck had decided to discontinue development of the lead compound in clinical trials. A back-up compound is being studied in preclinical testing • New potent compounds for treatment of dyslipidemia discovered • Continued good progress in the Wyeth Pharmaceuticals collaboration • Net sales amounted to MSEK 44.5 (10.1) • The loss for the period amounted to MSEK 4.3 (34.2) • Cash flows from operating activities amounted to MSEK 8.5 (-36.1) • Cash and bank balances and short-term investments amounted to MSEK 189.0 (148.9) at the end of the period • Loss per share for the period amounted to SEK 0.14 (1.73)

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.