ONGOING RIGHTS ISSUE IN KARO BIO AB (PUBL) – PROSPECTUS SUPPLEMENT IS PUBLISHED

Not for release, publication or distribution in Australia, Canada, Japan or the United States. This announcement does not constitute an offer to sell or the solicitation of an offer to buy the securities of Karo Bio AB (publ) (the “Securities”) in Australia, Canada, Japan or the United States or in any other jurisdiction. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. The issuer of the Securities has not registered, and does not intend to register, any portion of the Offering in the United States, and does not intend to conduct a public offering of the Securities in the United States. STOCKHOLM, November 27, 2009. Karo Bio AB (publ) (Reuters: KARO.ST) has today published a supplement to the previously published prospectus pertaining to the company’s rights issue. The prospectus supplement contains Karo Bio’s press release from November 26 regarding Merck & Co., Inc’s plans to proceed through a subsidiary with a phase IIa clinical evaluation of the candidate compound MK-6913.

The prospectus and the prospectus supplement are available for download in electronic format via the Internet from the Swedish Financial Supervisory Authority’s website (www.fi.se) and from Karo Bio’s website (www.karobio.se). In order to receive a printed copy of the Prospectus Supplement, please contact Avanza Bank at telephone number +46 8 562 25 120.

Right of withdrawal
Those investors who have applied for or in any other manner consented to purchase or subscription for securities covered by the rights issue before the publication of the Prospectus Supplement are entitled to withdraw their registration until and including Friday, December 4, 2009 (i.e. five working days from the publication of the prospectus supplement). Such withdrawal must be submitted in writing to Avanza Bank or, if the subscription application was submitted through a trustee, to this trustee and must have been received by Avanza Bank or the trustee at 5.30 p.m. on the last day of withdrawal mentioned above. A form for withdrawal of the subscription application from directly registered shareholders is available for download at Karo Bio’s website www.karobio.se and can be ordered from Avanza Bank at telephone number +46 8 562 25 120. Investors who have submitted their subscription application through a trustee should contact this trustee regarding withdrawal. Subscriptions that are not withdrawn will remain binding and those subscribers who wish to remain as subscribers do not need to take any further action.

As a consequence of the withdrawal right triggered by the publication of the prospectus supplement, the announcement of the preliminary outcome of the rights issue will be postponed to on or about December 9, 2009.

For more information please contact:
Per Olof Wallström, President
Tel: +46 8 608 60 20
E-mail: p.o.wallstrom@karobio.se

Erika Söderberg Johnson, CFO and responsible for Investor Relations
Tel: +46 8 608 60 52
E-mail: erika.soderberg.johnson@karobio.se

About Karo Bio
Karo Bio is a drug discovery and development company specializing in endocrinology and targeting nuclear receptors as target proteins for the development of novel pharmaceuticals. The company has a project portfolio with innovative molecules that primarily target dyslipidemia, CNS-disorders, inflammation, and women’s health. In these areas, there are significant market opportunities and a clear need for pharmaceuticals with new mechanisms of action. Karo Bio develops compounds aimed at treating broad patient populations up to clinical proof of concept before out-licensing. In therapeutic niche areas, Karo Bio has the capacity to bring selected compounds into late stage clinical development and, potentially, to the market. In addition to the proprietary projects, Karo Bio has three strategic collaborations with international pharmaceutical companies for development of innovative therapies for the treatment of common diseases. Karo Bio is listed on NASDAQ OMX Stockholm since 1998 (Reuters: KARO.ST).

Karo Bio may be required to disclose the information provided herein pursuant to the Swedish Securities Markets Act and/or the Swedish Financial Instruments Trading Act. The information was published on November 27, 2009 at 6.00 pm.

This press release is also available online at: www.karobio.com and www.newsroom.cision.com

Notice to UK residents. This announcement is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors as that term is defined in the Prospectus Directive that are also (i) “investment professionals” falling within article 19(5) of the Financial Service and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii)“high net worth entities” and other persons to whom it may lawfully be communicated, falling within the meaning of Article 49(2)(a) to (d) of the Order (all such persons being “relevant persons”). The offered shares of Karo Bio AB are only available to relevant persons and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such offered shares will be engaged in only with relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its content.