Karo Bio earns Milestone payment from partner Bristol-Myers Squibb for initiation of phase i clinical studies of jointly

KARO BIO EARNS MILESTONE PAYMENT FROM PARTNER BRISTOL-MYERS SQUIBB FOR
INITIATION OF PHASE I CLINICAL STUDIES OF JOINTLY DISCOVERED OBESITY
TREATMENT CANDIDATE

Press release September 25, 2001

Karo Bio announced today that Karo Bio’s drug discovery and development
partner, Bristol-Myers Squibb, initiated Phase I clinical trials of a
jointly discovered drug candidate. This drug candidate targets the
thyroid receptor and is being developed for the treatment of obesity.
Phase I clinical studies focus primarily on safety in humans.

“This achievement earns an important milestone payment for Karo Bio,”
says Dana M. Fowlkes MD-PhD, Chief Scientific Officer for Karo Bio.
“Furthermore, the initiation of clinical studies by our partner
represents a very significant scientific accomplishment for numerous
Karo Bio and Bristol-Myers Squibb scientists.”

Native thyroid hormone increases one’s metabolic rate, which is believed
to reduce obesity. However, native thyroid hormone also has effects on
the heart that prevent its use for the treatment of obesity. In their
joint research program, Karo Bio and Bristol-Myers Squibb discovered a
tissue selective modulator of the thyroid hormone receptor that
increases metabolism without inducing cardiac side effects. In relevant
animal models, the program’s drug candidate has demonstrated a
significant weight-reducing activity and a broad therapeutic window.

Obesity is one of the most serious health problems in the western world,
often leading to life threatening chronic diseases like heart failure,
vascular disease and diabetes. Since the medical need for the treatment
of obesity is largely unmet, the Karo Bio/Bristol-Myers Squibb drug
candidate has significant market potential.

In addition to the first generation compound that has entered the
clinic, Karo Bio and Bristol-Myers Squibb continue to collaborate on the
discovery and development of second-generation compounds that may expand
the possible indications that can be treated with novel thyroid hormone
receptor modulators.

KARO BIO AB (publ)

For further information contact:

Karo Bio AB
Björn Nilsson, President
Direct telephone: +46-8-608-6020
Mobile telephone: +46-70-218-1500

Per Otteskog, Senior Vice President Investor Relations
Direct telephone: +46-8-608-6018
Mobile telephone: +46-70-632-7527

Background
Karo Bio has operations in the United States and Sweden. The Company
employs 130 people.
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 upon 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 250 patent cases
including 100 granted patents.
Karo Bio has drug discovery programs in several therapeutic areas
including men and women’s health care, metabolic disorders such as
obesity, cardiovascular disease, diabetes, dermatology and
ophthalmology.
Karo Bio collaborates with major pharmaceutical companies for
development of products and marketing. In these partnerships Karo Bio
receives upfront payments, R&D funding, milestone payments as well as
royalties on net sales when products reach the market.
Karo Bio has strategic pharmaceutical drug discovery partnerships with
Abbott Laboratories, American Home Products, Bristol-Myers Squibb, Merck
& Co., and Aventis.

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