Karo Bio Obtains Rights to A-348441 and Selected C ompounds from Abbott Laboratories for the Treatment of Diabetes

KARO BIO OBTAINS RIGHTS TO A-348441 AND SELECTED COMPOUNDS FROM ABBOTT
LABORATORIES FOR THE TREATMENT OF DIABETES

Karo Bio today announced that the company immediately will obtain rights
to technologies, lead compounds and preclinical data from its joint
diabetes collaboration with Abbott Laboratories. For strategic reasons
Abbott Laboratories has decided to transfer these rights in the joint
program to Karo Bio including the novel, first-in-class compound, A-
348441 for the treatment of type 2 diabetes.

In 1999 Karo Bio AB and Abbott Laboratories initiated a joint project
for the discovery and development of new treatments for type 2 diabetes.
The joint drug discovery phase concluded in January 2003 after
successfully discovering a new and promising concept for type 2 diabetes
based upon the lead compound A-348441. This compound targets the
glucocorticoid receptor within the liver, which is known to be an
important target for regulating glucose output.

In studies involving diabetic and dyslipidemic animals, A-348441 has
been shown to normalize blood glucose levels and to lower levels of
certain elevated lipids. In addition, A-348441 significantly reduces
hepatic glucose output with secondary improvements in insulin
sensitivity across multiple animal species. Glucocorticoid receptors are
present in a variety of tissues and the A-348441 compound also possesses
binding activity to the progesterone receptor. However, A-348441 is
pharmacologically selective for the liver, thereby minimizing potential
side effects in other parts of the body. One side effect commonly
observed with the currently marketed insulin sensitizers is weight gain;
however, no weigh gain was observed in animals treated with the A-348441
compound. “We are very excited by A-348441’s improved profile compared
to several drugs on the market, as well as compounds currently in
development. This compound reduces blood glucose effectively but also
significantly reduces triglycerides, cholesterol and free fatty acids
which all are important risk factors for diabetics. While we enjoyed
working with Abbott Laboratories and would have been delighted to see
them continue in the program, we respect Abbott’s strategic decision. It
is our intention to move the program forward as soon as the transfer of
the project information and materials has been concluded. We believe a
program based on A-348441 has a very high potential in the diabetes
market due to its unique pharmacological profile and the medical
community’s urgent need for compounds with new mechanisms of action,”
says Björn Nilsson, President & CEO of Karo Bio.

Diabetes is a major health issue in industrialized countries, where one
in ten adults may develop type 2 diabetes in their lifetime. Over 150
million people worldwide have type 2 diabetes, and this number is
projected to rise to 300 million by 2025. It is estimated that more than
one-third of the people with type 2 diabetes are undiagnosed and only 13
percent of treated patients are able to reach desired blood glucose
levels. Therefore, an urgent need exists for new, safe and effective
treatments for type 2 diabetes.

KARO BIO AB

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

Per Otteskog, Senior Vice President
Telephone: +46 8 608 6018

Facts about Karo Bio
Karo Bio has operations in Sweden and the United States. The Company has
124 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 368 patent cases
including 120 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 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
Bristol-Myers Squibb, Merck & Co., Inc. and Wyeth Pharmaceuticals.

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

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