Karo Bio achieves first milestone in Pfizer collaboration

STOCKHOLM, 5 September 2013 – The collaboration between Karo Bio AB and Pfizer
Inc. has successfully resulted in a significant achievement within the RORgamma
project triggering the first milestone payment to Karo Bio. The purpose of the
collaboration is to develop drugs for treatment of autoimmune diseases.
“The teams from Karo Bio and Pfizer have enjoyed an excellent interaction and
relationship which has helped meet this goal. This achievement clearly
demonstrates the value Karo Bio brings to its partners in the area of nuclear
receptor drug discovery”, says Karo Bio’s CEO Per Bengtsson.

The collaboration that started in December 2011, aims to discover and develop
novel small molecule RORgamma modulators for the treatment of autoimmune
diseases. The nuclear hormone receptor RORgamma is a novel attractive target for
the treatment of autoimmune diseases like rheumatoid arthritis, multiple
sclerosis and psoriasis. RORgamma directly controls the production and secretion
of the cytokine IL-17, a major contributor to inflammation. The receptor’s key
role in driving disease pathology has been implicated in clinical trials using
monoclonal antibodies that neutralize IL-17 activity.

For further information, please contact:
CEO Per Bengtsson: phone: +46 8 608 6027, +46 734 474 128 or by e-mail:
per.bengtsson@karobio.se

About Karo Bio
Karo Bio is a pharmaceutical company focused on the research and development of
innovative drugs for large medical needs. The world-leading knowledge of nuclear
receptors as target proteins for the development of pharmaceuticals and the
related mechanisms of action, is utilized as a foundation for developing novel,
more effective and safer pharmaceuticals. The company runs drug development
projects mainly within the therapeutic areas neuropsychiatry, inflammation,
autoimmune diseases and cancer. The company has a number of strategic agreements
and collaborations with international pharmaceutical companies. Karo Bio is
based in Huddinge, Sweden, has 42 employees and is listed on NASDAQ OMX
Stockholm.

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 05 September, 2013, at 09.00 am CET.

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