KARO BIO TO BE AWARDED 1 MSEK FROM VINNOVA

STOCKHOLM, March 17, 2014 - Karo Bio AB (publ) will be awarded 1 million SEK
from Vinnova for the preclinical development of an ER-beta agonist for the
treatment of multiple cancers.
The grant is awarded through the Forska & Väx program to finance toxicity and
safety pharmacology studies of an ERbeta agonist. In previous studies, the
compound has been shown to significantly reduce tumor size in preclinical models
of mesothelioma and other types of cancer with poor prognosis.

Mesothelioma, caused by exposure to asbestos, is a highly malignant form of
cancer primarily in the pleura or peritoneum, with very poor prognosis. The
preclinical testing that Vinnova will fund is an essential part of Karo Bio’s
continued development of its cancer program for mesothelioma and other difficult
to treat cancers.

“The support from Vinnova is very encouraging and is recognition of the
attractiveness of our ERbeta cancer project,” says Per Bengtsson, CEO of Karo
Bio.

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 research and development company focused on innovative drugs for
important medical needs. The world-leading knowledge of nuclear receptors as
target proteins for the development of pharmaceuticals and their related
mechanisms of action, are utilized for developing novel, more effective and
safer pharmaceuticals. Karo Bio is active in preclinical development focused on
the areas of neuropsychiatry, inflammation, autoimmune diseases and cancer. Karo
Bio is based in Huddinge, Sweden. The company has around 39 employees and is
listed on NASDAQ OMX Stockholm.

About Vinnova
Vinnova is the Swedish innovation agency, whose mission is to promote
sustainable growth by improving the conditions for innovation and finance needs
driven research. Each year, Vinnova invests about 2.5 billion in various
initiatives. Programs are offered to bodies in society that are important for
Sweden’s innovativeness, such as knowledge-intensive companies, universities,
research institutes and organizations in the public sector. Vinnova is a
government agency under the Ministry of Enterprise, Energy and Communications..

About Forska & Väx
Research & Grow is a program that caters to Swedish companies with the ability
to create growth and societal benefit based on innovation.

This press release is also available online at
www.karobio.com (http://%20www.karobio.com) and www.newsroom.cision.com

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 March 17, 2014 at 10:00 CET.