RESOLUTIONS PASSED BY THE GENERAL MEETING OF KARO BIO AB (PUBL)

RESOLUTIONS PASSED BY THE GENERAL MEETING OF KARO BIO AB (PUBL) 

Stockholm, November 25, 2010 -  At the extraordinary general meeting of
Karo Bio AB (publ) (Reuters: KARO.ST) on November 24, 2010, it was
resolved to approve the Board of Director's resolution of October 25,
2010, 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 116,119,191.50 and the number of shares with no more than
232,238,383. The terms of the rights issue provide that for every
existing two (2) shares in Karo Bio, the holder is entitled to three (3)
subscription rights and one (1) subscription rights entitle the holder
to subscribe for one (1) new share. The subscription price is SEK 1.40
per share, which means that the rights issue will raise a maximum of
approx. SEK 325 million before transaction costs.

The record date at the Swedish Central Securities Depository, Euroclear
Sweden AB, for participation in the rights offering is November 29,
2010. The subscription period will run from and including December 2,
2010, up to and including December 16, 2010, 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. 60
percent will occur. However, shareholders can gain economic compensation
for this dilution by selling their subscription rights.

The general meeting resolved to approve the Board of Director's
resolution to change the Articles of Association, that the Company's
share capital limits should be increased from at least SEK 35 000 000
and at most SEK 140 000 000 to at least SEK 75 000 000 and at most SEK
300 000 000, that the limits for the number of shares are to be
increased from at least 70 000 000 and at most 280 000 000 to at least
150 000 000 and at most 600 000 000 and that the general meeting shall
be allowed to be held in Huddinge, besides in Stockholm.

The general meeting resolved to approve the revocation of the resolution
of the 2009 Annual General Meeting to amend Article 7 of the Articles of
Association to the extent this has not yet been entered into force.
After the adoption of the new Articles of Association the general
meeting repeated the decision to amend Article 7 in the Articles of
Association as decided by the 2009 annual general meeting, but not yet
entered into force. The amendment enables the Company to give notice of
general meetings by advertisement in Post- och Inrikes Tidningar
(Swedish Official Gazette) and on the Company's website, instead of by
advertisement in Post- och Inrikes Tidningar (Swedish Official Gazette)
and in Dagens Industri. The fact that notice has been given shall be
advertised in Dagens Industri. The decision shall be conditional upon an
amendment of the Swedish Companies Act having entered into force,
whereby the wording of Article 7 as decided above will be compatible
with the Companies Act. The statutory amendment is anticipated to enter
into force on January 1, 2011.

The general meeting also resolved to approve the financing contract,
known as an Equity Credit Facility, which Karo Bio has entered with
Azimuth Opportunity Ltd and that gives the company access to further
financing of USD 35 million, equivalent to approximately SEK 230 million
at current exchange rate, through on at most 36 occasions over 36 months
implement new issues directed to Azimuth Opportunity Ltd. The
subscription price per share will have a discount of five per cent. In
addition to the discount, Azimuth Opportunity Ltd. is entitled to a lump
sum payment of one per cent of the commitment amount under the contract
in conjunction with the contract entering into force and also a draw
down fee of one per cent for each draw down. 

The general meeting resolved to approve the Board of Director's
resolution to authorize the board to issue shares to Azimuth Opportunity
Ltd. The board is given authorization to issue new shares before the
next Annual General Meeting, without limitation in any way other than as
is prescribed by the Articles of Association applicable from time to
time concerning limits on the number of shares and share capital. The
subscription price shall be determined in accordance with the financing
contract between the Company and Azimuth Opportunity Ltd. 

Indicative timetable for the rights offering

 November 25, 2010    The first day of trading in Karo Bio's share
without preferential right to participate in the rights issue
 November 25, 2010    Preliminary day for publication of the prospectus
 November 29, 2010    Record date for participation in the rights issue,
i.e. shareholders that on this day are on Karo Bio's share register will
receive subscription rights and be able to participate in the rights
issue
 December 2-13, 2010  Trading in subscription rights
 December 2-16, 2010  Subscription period
 December 22, 2010    Announcement of preliminary outcome

Guarantees and commitments
The rights issue is fully underwritten, subject to customary conditions.
Azimuth Opportunity Ltd., Storford Limited, Ponderus Invest AB and
Carnegie have guaranteed an amount totaling approximately SEK 330
million. In addition, Karo Bio's chairman Bo Håkansson and the company's
CEO Fredrik Lindgren have declared their intentions to subscribe for
their respective proportions of the rights issue.

Financial and legal advisors
Carnegie is Lead manager and Bookrunner in the rights issue. Carnegie
and HDR Partners are financial advisors to Karo Bio. Fredersen
Advokatbyrå acts as legal advisor to Karo Bio. Gernandt & Danielsson
acts as legal advisor to Carnegie and HDR Partners.
For further information please contact:
Fredrik Lindgren, CEO
Phone: +46 70 561 61 77

Erika Söderberg Johnson, CFO and VP Investor Relations
Phone: +46 70 720 48 20

About Karo Bio
Karo Bio is a pharmaceutical company focused on the research and
development of innovative drugs for unmet medical needs. Karo Bio's
vision is to become a pharmaceutical company with sustainable
profitability, commercial products and a competitive project portfolio.

Karo Bio runs a number of development projects within the indication
areas cardiovascular and metabolic diseases, neuropsychiatry,
inflammation, cancer and women's health. An important foundation for the
company's activities is its unique knowledge of nuclear receptors as
target proteins for the development of novel pharmaceuticals, as well as
related mechanisms of action. Important processes and competencies
within the company include structurally based research, drug discovery,
preclinical and clinical development, and medical and regulatory
expertise.

Karo Bio has the capacity to process select compounds for niche
indications through the whole development chain, while compounds
addressing large patient groups require development collaborations or
outlicensing at some stage in the process. In addition to proprietary
projects, Karo Bio has three strategic collaborations with international
pharmaceutical companies.

Karo Bio, headquartered in Huddinge, has 70 employees, and 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 25, 2010, at 08:30 am
CET.
 

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