YEAR-END REPORT JANUARY–DECEMBER 2007

The year in brief
• Net sales amounted to MSEK 7.5 (44.0)
• Net loss amounted to MSEK 203.4 (126.1)
• Loss per share amounted to SEK 1.92 (1.38)
• Cash flow from operating activities amounted to MSEK -178.3 (-110.4). Cash, cash equivalents and other short-term investments totaled MSEK 432.3 (231.0) at December 31, 2007
• A rights issue generating net proceeds of MSEK 387.2 was completed in the second quarter
• In June, promising phase IIa clinical data were presented regarding the cholesterol lowering compound eprotirome (KB2115)
• A phase IIb clinical study with eprotirome, where eprotirome is given to dyslipidemia patients on statin treatment, was initiated in December
• In December, KB3305, for treatment of type 2 diabetes, entered clinical development. Phase I single and multiple ascending doses in healthy volunteers will be followed by a phase IIa study in patients
• The development of KB5359 was discontinued due to compound-specific toxicological findings
• Collaboration partner Merck discontinued a compound in phase I clinical development and selected a new compound for preclinical development
• Collaboration partner Wyeth discontinued phase I development of a lead compound, but prolonged the collaboration agreement with the intention to identify new candidate drugs
• In October it was announced that Karo Bio focuses operations and reduces staff by 14 people
• In October, Leon E. Rosenberg was appointed interim Chairman of the Board of Directors, replacing Per-Olof Mårtensson who resigned for family reasons

Significant events after the end of the reporting period
• A research collaboration with Zydus Cadila has been initiated with the aim to develop novel anti-inflammatory compounds targeting the glucocorticoid receptor

For further information, please contact:
Per Olof Wallström, President, tel. +46 8 608 60 20
Per Otteskog, Senior Vice President Investor Relations, tel. +46 8 608 60 18
Erika Johnson, Chief Financial Officer, tel. +46 8 608 60 52


Legal disclaimer
This financial report includes statements that are forward looking and actual results may differ materially from those stated. In addition to the factors discussed, among other factors that may affect results are development within research programs, including development in preclinical and clinical trials, the impact of competing research programs, the effect of economic conditions, the effectiveness of the Company’s intellectual property rights and preclusions of potential third party’s intellectual property rights, technological development, exchange rate and interest rate fluctuations, and political risks.
Huddinge February 7th, 2008
The Board of Directors