Annual report 2004

2004 IN BRIEF

• Clinical trials have been initiated for the most advanced com- pound in the drug discovery and development collaboration with Merck & Co. This was announced in January 2005 and is associated with a significant milestone payment to Karo Bio.

• Preclinical development of the KB3305 compound for treat- ment of type 2 diabetes has progressed during 2004. The goal is to file an application in 2005 to initiate clinical trials.

• The collaboration project with Wyeth Pharmaceuticals on atherosclerosis advanced to predevelopment status in June 2004, yielding a milestone payment to Karo Bio. Research terms extended with one year through August 2005.

• Bristol-Myers Squibb decided to return project rights, including lead compound KB2115, to Karo Bio in April 2004.

• Karo Bio is now preparing for additional multi dose studies for KB2115 addressing safety as well as efficacy. The first successful single dose phase I study conducted by Bristol-Myers Squibb with KB2115 appeared to be safe and well tolerated.

• Cost savings initiatives, including a staff reduction, have been implemented to re-allocate resources to drug development activities.

• Successful new share issue completed in October 2004, generating in total MSEK 119.6 before transaction costs.

• Net sales amounted to MSEK 39.0 (85.1).

• The loss amounted to MSEK 107.2 (208.7).

• Cash flows from operating activities amounted to MSEK -111.7 (-128.6).

• Cash and bank balances and short-term investments amounted to MSEK 181.0 (184.0) at the end of the year.

• Loss per share amounted to SEK 4.82 (11.77).