PRESSRELEASE FROM THE EXTRAORDINARY GENERAL MEETING OF KARO BIO AB (PUBL)

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.

PRESSRELEASE FROM THE EXTRAORDINARY GENERAL MEETING OF KARO BIO AB (PUBL) 

STOCKHOLM, November 10, 2009. At the extraordinary general meeting of Karo Bio
AB (publ) (Reuters: KARO.ST) on November 10, 2009 it was resolved to approve the
Board of Director's resolution of October 23, 2009 on a preferential rights
issue. 

Resolution to approve the Board's resolution on a preferential rights issue
The general meeting resolved to approve the Board of Director's resolution on
the new share issue with preferential rights for the shareholders, which can
increase the share capital with an amount of not more than SEK 19,353,198.50 and
the number of shares with no more than 38,706,397, or the higher amount and
higher number of shares, respectively, that may follow from the exercise of
outstanding warrants. The terms of the rights issue provide that for every
existing share in Karo Bio, the holder is entitled to one (1) subscription right
and three (3) subscription rights entitle the holder to subscribe for one (1)
new share. The subscription price is SEK 4.30 per share, which means that the
rights issue will raise a maximum of approx. SEK 166m before transaction costs. 

The record date at the Swedish Central Securities Depository, Euroclear Sweden
AB, for receipt of subscription rights is November 17, 2009. This means that the
Karo Bio share will trade excluding subscription rights from and including
November 13, 2009. The subscription period will run from and including November
18 up to and including December 2, 2009, or such later date as decided by the
Board of Directors. For shareholders who choose not to participate in the rights
issue, a dilution effect of up to approx. 25 percent will occur. However,
shareholders can gain economic compensation for this dilution by selling their
subscription rights.

Timetable for the rights issue 
	
November 11, 2009	
Publication of prospectus
	
November 13, 2009	
First day of trading excluding subscription rights
	
November 17, 2009	
Record date, i.e. shareholders registered in the share register as of this day
will receive subscription rights which entail a right to participation in the
rights issue
	
November 18 - November 27, 2009
Trading in subscription rights, i.e. shareholders who choose not to subscribe
for new shares in the rights issue and do not want to lose the value of the
subscription rights can sell their subscription rights during this period
	
November 18 - December 2, 2009	
Subscription period
	
On or about December 7, 2009	
Announcement of preliminary outcome of the rights issue
	
Subscription undertakings and underwriting agreements
The Board member and one of the single largest shareholders of Karo Bio, Bo
Håkansson (through Farstorps Gård AB), together with certain other members of
the board and the management team have undertaken to subscribe for shares in
relation to their respective holdings in Karo Bio, which represent in aggregate
approx. 3.1 percent of the rights issue. Furthermore, Bo Håkansson (through
Farstorp Invest AB), AB Grenspecialisten, Fibonacci Growth Capital AB, Karl
Perlhagen, Fårö Capital AB, Tedde Jeansson, Handels & Investment AB Venture as
well as Dirbal AB have entered into underwriting agreements with Karo Bio and
ABG Sundal Collier to subscribe for shares amounting to approx. SEK 161m, which
means that 100 percent of the offering is covered by subscription undertakings
and underwriting agreements.

Financial advisors
ABG Sundal Collier and Piper Jaffray are acting as financial advisors to Karo
Bio in connection with the rights issue.

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 publishes this information in accordance with the Swedish Securities
Markets Act and/or the Swedish Financial Instruments Trading Act. The
information was published on November 10, 2009 at 4:30pm CET.

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.