KARO BIO AND WYETH EXTEND RESEARCH COLLABORATION AND ADVANCE LEAD COMPOUND

Karo Bio and Wyeth Extend Research Collaboration and Advance Lead
Compound

Wyeth Pharmaceuticals, a division of Wyeth (NYSE:WYE), has advanced into
predevelopment a lead compound for atherosclerosis from the joint
collaboration with Karo Bio. This event is a significant step in the
three-year old collaboration and will result in a milestone payment to
Karo Bio. In addition Wyeth and Karo Bio have agreed to extend the
research term of their collaboration an additional year until August 31,
2005.

In the fall of year 2001 Karo Bio and Wyeth initiated a three-year
research collaboration for discovery of novel treatments for
atherosclerosis targeting the Liver X Receptor (LXR). LXR is a rather
new member of the nuclear receptor protein family that was discovered by
Professor Jan-Åke Gustafsson and his team at Karolinska Institutet,
Huddinge in Sweden. LXR has evolved as a most promising target for
treatment of metabolic disorders, including atherosclerosis. Compounds
modulating LXR function have the potential to become new pharmaceuticals
for treatment and prevention of atherosclerosis.

Further, Wyeth and Karo Bio have agreed to extend research terms of the
collaboration project for another year to continue discovery efforts for
compounds acting on LXR, primarily for treatment of atherosclerosis, but
also to explore additional clinical areas.

“I am very pleased that our successful collaboration with Wyeth
Pharmaceuticals has reached to predevelopment stage in less than three
years”, says Dr. Björn O. Nilsson, President & CEO of Karo Bio. “The
extension year will be important to utilize the strong momentum in the
project for discovery of additional compounds beyond the candidate now
moving towards the clinic.”

KARO BIO AB

For further information, please contact:
Björn O. Nilsson, President & Chief Executive Officer
Telephone: +46 8 608 60 20

Bertil Jungmar, Chief Financial Officer
Telephone: +46 8 608 60 52

Background: Atherosclerosis

Atherosclerosis results from cholesterol and fat attaching to artery
walls and creating obstructions. The artery narrows, leading to blood
flow being restricted or blocked. The condition can lead to a number of
disorders, including high blood pressure, vascular spasm, cardiac
insufficiency, chest pain, and thrombotic events, of which heart attack
and stroke are the most dangerous forms. At present, no drug is
available which is able to give hardened arteries back their elasticity.
Certain cholesterol-reducing drugs, so-called statins, can be used in a
preventative manner. Diseases resulting from atherosclerosis are very
common in the Western world. In the United States, more than 500,000
people die annually of myocardial infarction alone. More than 50 million
people in the United States are candidates for some form of dietary
and/or drug treatment to modify their lipid profile.

*Source: eMedicine, June, 2004

Facts about Karo Bio
Karo Bio has operations in Huddinge, Sweden. The Company has 95
employees.

Karo Bio has been listed on the Stockholm stock exchange (Reuters:
KARO.ST) since 1998 and maintains a leading position in the field of
drug discovery focused on nuclear receptors. Nuclear receptors are
validated drug targets for a number of clinical indications and the
Company uses proprietary technologies for the development of novel and
improved therapies for major markets.

Karo Bio has drug discovery programs in several therapeutic areas
including women’s health care, cancer, cardiovascular disease,
atherosclerosis and diabetes.

Karo Bio collaborates with major pharmaceutical companies for the
development of products and marketing. In these collaborations Karo Bio
receives upfront payments, R&D funding and milestone payments, as well
as royalties on net sales when products reach the market.

Karo Bio has strategic pharmaceutical drug discovery collaborations with
Merck & Co., Inc. and Wyeth Pharmaceuticals.

This press release is also available online at www.karobio.se and at
www.waymaker.net.

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