KARO BIO GRANTED 3.8 MSEK FROM VINNOVA

STOCKHOLM, July 1, 2014 - Karo Bio AB (publ) has been awarded another SEK 3.8
million from Vinnova for the preclinical development of an ERbeta agonist for
the treatment of different forms of cancer. In total, Karo Bio has thus been
granted SEK 4.8 million for the project from Vinnova.
The financing is granted through the Forska & Väx program and will be paid out
in stages during 2014 and early 2015, to finance studies within Karo Bio’s
project ERbeta cancer, including initiated toxicity and safety pharmacology
studies. Previously in 2014, Vinnova granted Karo Bio about SEK 1 million for
these studies.

The compound has in previous studies shown to reduce tumor size significantly in
preclinical models of mesothelioma and other cancer forms with poor prognosis.
Karo Bio’s cancer program targets several difficult to treat cancers, including
mesothelioma.

“The grant will form an important part of Karo Bio’s financing of the
preclinical development program for ERbeta cancer. It allows us to keep a high
pace in our development work and also reflects the project’s attractiveness”,
says Per Bengtsson, CEO of Karo Bio.

For further information, please contact:
CEO Per Bengtsson: phone: +46 734 474 128 or 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
efforts. 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 Industry.

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

This press release is also available online at www.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 July 1, 2014 at 08:30 CET.