KARO BIO AND WYETH EXTEND RESEARCH COLLABORATION

KARO BIO AND WYETH EXTEND RESEARCH COLLABORATION

The Swedish company Karo Bio, listed on the Stockholm Stock Exchange (KARO),
today announced that Wyeth (NYSE:WYE) and Karo Bio extended their
atherosclerosis collaboration for an additional year until August 31, 2008. The
primary objective of the extension is to characterize back up compounds and to
further evaluate additional clinical possibilities by targeting LXR.

The collaboration with Wyeth started in 2001 with the aim to develop novel
compounds for treatment of atherosclerosis with LXR as target receptor. In
August 2006 Wyeth entered phase I clinical development which triggered a
milestone payment to Karo Bio.

 “We are happy for continuing to work with Wyeth in our joint collaboration and
we see great opportunities for compounds that target LXR”, says Per-Olof
Wallström, President of Karo Bio. 

LXR is a nuclear hormone receptor that is an important regulator of cholesterol
metabolism in mammals. LXR has many features that make it an attractive drug
development target for prevention and treatment of atherosclerosis and
dyslipidemia. Modulation of LXR with small molecule compounds has been
demonstrated to enhance the efflux of cholesterol from cells in atherosclerotic
blood vessels, resulting in a reduction in the progression of atherosclerotic
disease in selected experimental models. Modulation of LXR has also been
implicated in reducing vascular inflammation which, in addition to cholesterol,
is an important mediator of atherosclerosis. It is believed that these features
of LXR are of central importance for a new generation of drugs to treat and
prevent atherosclerosis successfully. 

KARO BIO AB

For further information, please contact:
Per Olof Wallström, President & Chief Executive Officer 
Telephone: +46 8 608 60 18

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

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 dyslipidemia. 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 OMX Nordic Exchange Stockholm AB since 1998 (Reuters:
KARO.ST).

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