QUARTERLY REPORT JANUARY - MARCH 2006

• Karo Bio will receive a milestone payment from Wyeth for the selection of a clinical development candidate in the joint LXR project for the treatment of atherosclerosis • KB2115 – Clinical phase I study (KBT001) successfully completed • KB2115 – New improved pharmaceutical formulation for KB2115 approved for clinical study (KBT002) • KB3305 – Decision to move KB3305 to clinical phase I study has been taken • Net sales for the period amounted to MSEK 2.0 (44.5) • The loss for the period amounted to MSEK 36.2 (4.3) • Cash flows from operating activities for the period amounted to MSEK -41.0 (8.5) • Liquid assets and other short-term investments amounted to MSEK 304.5 (189.0) at the end of the period • Loss per share for the period amounted to SEK 0.47 (0.10)