Karo Bio releases an update on the clinical development of thyroid hormone analogue kb002611

KARO BIO RELEASES AN UPDATE ON THE CLINICAL DEVELOPMENT OF THYROID
HORMONE ANALOGUE KB002611

Skin atrophy is a condition where the skin becomes thin and looses some
of its function. The negative consequences are easy bruising and
impaired wound healing. Skin atrophy results from topical treatment with
corticosteroids but can also be caused by aging or sun exposure. In the
atrophied skin there is a marked reduction of collagen, a protein which
plays an important role for skin structure. Karo Bio has previously
demonstrated in animal models that analogues of thyroid hormone,
including KB002611, can restore collagen production (measured as
formation of procollagen) after exposure to strong steroids. Through a
series of United States patents and pending European patent
applications, Karo Bio has a strong intellectual property portfolio
related to formulations of thyroid hormone analogues, such as KB002611,
in dermatological applications.

Karo Bio has performed two clinical dermatology studies with drug
candidate KB002611. These clinical studies were designed to determine
whether topical treatment with this thyroid hormone analogue (KB002611-
cream preparation) has activity in human skin for the treatment of skin
atrophy.

The first study was a mechanistic one conducted in healthy volunteers
that were initially treated with a potent corticosteroid followed by one
of either three different cream formulations; one high dose formulation
of KB002611, one low dose formulation of KB002611 or a placebo-
formulation. When evaluated by increased production of procollagen in
the skin, Karo Bio’s studies have demonstrated a substantially better
effect of KB002611-treatment when compared to a placebo cream;
furthermore, the lower-dose preparation appeared to be more effective
than the higher-dose formula.

The second clinical study was conducted in parallel with the study
described above. In this study, Karo Bio sought to determine if KB002611
could reverse the deleterious effects of skin damaging agents such as
potent topic corticosteriods. An important parameter in the diagnosis of
skin atrophy and thus the assessment of skin atrophy is skin-thickness,
which was selected as the primary parameter for evaluating KB002611. A
high-dose formulation of KB002611 and a placebo preparation were
compared in patients that had previously been treated with potent
corticosteroids for certain medical conditions. A non-invasive technique
(sonography) was used to measure skin thickness during the study and
skin biopsies were taken to evaluate changes in skin morphology.

Based upon the sonograhic data, there was no apparent difference between
KB002611-treatment and placebo-treatment. However, the examination of
the biopsies has not been completed and will be necessary before final
conclusion can be drawn from this particular study.

Treatment with KB002611 seems to have been safe and well tolerated in
both studies. No hematology, clinical chemistry or thyroid hormone
laboratory measurements suggested a systemic effect of the treatments.

Based on the final result of the study Karo Bio will decide whether to
seek partnership or choose to further develop the project internally.

Huddinge, October 9, 2001

KARO BIO AB (publ)

For further information contact:

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

Background

Karo Bio has operations in Sweden and the United States. 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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