RIGHTS ISSUE IN KARO BIO COMPLETED

Not for release, publication or distribution, directly or indirectly, in or into
the United States, Australia, Canada, Hong Kong, Japan, New Zeeland, Singapore,
South Africa or Switzerland, or within any other jurisdiction in which the
distribution of this press release would not comply with applicable laws and
regulations.

STOCKHOLM, December 18, 2012 – Karo Bio (publ). The rights issue in Karo Bio,
with last day for subscription on December 12, is now completed. In the rights
issue, 108 883 397 shares will be issued raising SEK 32.6m before transactions
costs.
In the rights issue, 82 085 759 shares where subscribed for with preferential
right, raising SEK 24.6m and 26 797 638 shares where subscribed for without
preferential right, raising SEK 8.0m. The shares subscribed for without
preferential right include 16 666 667 shares subscribed for by board member Per
-Anders Johansson and 3 333 333 shares subscribed for by chairman of the board,
Göran Wessman, in accordance with their guarantee undertakings.

”The capital raised in the rights issue gives us the opportunity to continue the
development of Karo Bio with the goal of creating a company with significant
value” says Göran Wessman, chairman of the board of Karo Bio.

Upon registration by the Swedish Companies Registration Office, the total number
of outstanding shares in Karo Bio will amount to 495 947 369 shares and the
share capital to 9 884 231 SEK. Trade in paid subscribed shares (BTA) will
continue on NASDAQ OMX Stockholm until the rights issue has been registered by
the Swedish Companies Registration Office, which is expected in the beginning of
January 2013.

For further information, please contact:
Per Bengtsson, CEO, mobile phone +46 734 474 128 or e-mail
per.bengtsson@karobio.se
Henrik Palm, CFO, mobile phone +46 70/540 40 14 or e-mail henrik.palm@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 company runs a number of drug
development projects within the indication areas neuropsychiatry, inflammation,
autoimmune diseases and cancer. 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. Karo Bio is based in Huddinge, Sweden, has around 44 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 December 18, 2012, at 3:30pm CET.

IMPORTANT INFORMATION
This press release is not an offer or solicitation to acquire shares in Karo
Bio. A prospectus relating to the rights issue referred to in this press release
has been filed with the Swedish Financial Supervisory Authority. The prospectus
is published and available on Karo Bio’s website.

This press release does not constitute or form part of an offer or solicitation
to purchase or subscribe for securities in the United States. The securities
referred to herein may not be sold in the United States absent registration or
an exemption from registration under the US Securities Act of 1933, as amended.
Karo Bio does not intend to register any portion of the offering of the
securities in the United States or to conduct a public offering of the
securities in the United States. The information in this press release may not
be announced, published or distributed, directly or indirectly, to the United
States, Australia, Canada, Hong Kong, Japan, New Zeeland, Singapore, South
Africa or Switzerland, or in any other jurisdiction where the announcement,
publication or distribution of the information would not comply with applicable
laws and regulations.

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