KARO BIO GETS APPROVAL TO START CLINICAL PHASE I STUDY FOR KB3305

The Swedish Medical Products Agency (MPA) has approved initiation of clinical studies with Karo Bio’s diabetes drug KB3305. Phase I clinical studies will be initiated in Q4 2006.

Type 2 diabetes is a rapidly spreading disease that is linked to lifestyle, diet and an aging population. Existing therapies for type 2 diabetes remain inadequate, why there is a great need for development of new drugs. Type 2 diabetes is characterized by increased hepatic glucose production. None of the existing treatments directly targets the increased glucose production in the liver that occurs in type 2 diabetics and that is driven by glucocorticoid hormones.

KB3305 is designed to selectively antagonize glucocorticoid action in the liver and has a favourable pharmacological profile in several different animal diabetes models. In animals, KB3305 normalizes the hyperglycemia associated with type 2 diabetes. KB3305 also lowers independent risk factors like triglycerides and serum cholesterol. Preclinical safety and toxicity studies suggest that KB3305 is a safe and well-tolerated drug with more than a 100-fold safety margin over the expected clinical dose.

The phase I program will consist of placebo controlled, double blind, single and multiple ascending dose studies in healthy volunteers. The results will be available in Q1, 2007.

KB3305 represents the fourth ongoing clinical project for Karo Bio. KB2115 for severe dyslipidemia is in clinical development, and Karo Bio’s partners, Merck and Wyeth, are both in phase I clinical development with collaboration compounds.

KARO BIO AB

For further information, please contact:
Per Olof Wallström, President & Chief Executive Officer
Telephone: +46 8 608 60 20

Per Otteskog, Senior Vice President
Telephone: +46 8 608 60 18

Facts about Karo Bio
Karo Bio is an innovative drug discovery and development company specializing in nuclear receptors for the development of novel pharmaceuticals with focus on metabolic diseases. Karo Bio is listed on the Stockholm stock exchange (Reuters: KARO.ST) since 1998.

The Company has expanded from being a drug discovery company by adding in-house preclinical development resources and competence for development of drugs to treat metabolic diseases. The Company has a strong project portfolio primarily targeting diseases such as diabetes, obesity, atherosclerosis and dyslipidemia.

In addition, Karo Bio has two strategic collaborations with international pharmaceutical companies for development of innovative therapies for the treatment of common diseases.

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