KARO BIO'S PREFERENTIAL RIGHTS ISSUE FULLY SUBSCRIBED

KARO BIO'S PREFERENTIAL RIGHTS ISSUE FULLY SUBSCRIBED

Karo Bio has conducted a new share issue with preferential rights for the
company's shareholders. The new share issue will generate 406 MSEK, before
transaction costs.

The subscription period ended May 8, 2007. The rights issue will generate 406
MSEK before transaction costs and is to 99 % subscribed with preferential rights
for the company's shareholders. The remaining shares will be allocated by the
Karo Bio board to shareholders who have declared an interest to subscribe for
shares, over and above their right. The level of applications to subscribe
without preferential rights amount to 47 MSEK.

”We are very pleased with the support that our shareholders have shown us in
relation to this rights issue. The issue will provide Karo Bio with a stable
financial position and capital that will last up to 2010. Our projects are
developing according to plan and through this share issue we create
opportunities to develop the projects to late clinical phase and to take further
steps towards developing Karo Bio to a profitable and sustainable pharmaceutical
company”, says Per Olof Wallström, CEO for Karo Bio.

The new shares are estimated to be subject to trading around June 8, 2007 at the
Stockholm Stock Exchange Nordic List. The total number of shares will after the
new share issue amount to 116 119 192 and represent a share capital amounting to
58.1 MSEK.

Catella Health Care and Mangold Fondkommission have acted as financial advisors
to Karo Bio.

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

Leif Carlsson, Chief Financial Officer
Telephone: +46 8 608 60 73





Facts about Karo Bio 
Karo Bio is a drug discovery and development company specializing in nuclear
receptors for the development of novel pharmaceuticals with focus on metabolic
diseases. Karo Bio has three clinical and four preclinical projects. 

The company has expanded from being a drug discovery company by adding in-house
preclinical and clinical development resources and competence for development of
drugs to treat metabolic diseases. The company has a strong project portfolio
with innovative molecules that primarily targets diseases such as diabetes,
atherosclerosis and dislipidemia. In all of these areas there are significant
market opportunities and a growing need for new pharmaceuticals with new
mechanisms of action. 

In addition to the proprietary projects Karo Bio has two strategic
collaborations with international pharmaceutical companies and one biotech
collaboration for development of innovative therapies for the treatment of
common diseases.

Karo Bio is listed on the Stockholm Stock Exchange since 1998 (Reuters:
KARO.ST).

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