Conversion of remaining series c shares in karo bio

CONVERSION OF REMAINING SERIES C SHARES IN KARO BIO

In May 1996, Karo Bio acquired Serra Pharmaceuticals Inc. through an issue in
kind. Half of the offering was constituted by series C shares, which were to
be converted to the series B variety if certain scientific and commercial
goals were fulfilled. Otherwise the shares were to be redeemed at SEK 0.01
each. In 1996, 157,000 series C shares were redeemed and 328,452 shares were
converted to series B variety at the beginning of 1998. (The number of shares
has been adjusted to split 2:1.)

The acquisition has been of great scientific and commercial value as regards
both existing collaboration agreements and future collaboration projects
alike. The Board has therefore decided to convert the outstanding 164,224
series C shares to series B variety. Since April 1998, the number of
outstanding shares in Karo Bio has totalled 9,177,172, with a nominal value of
SEK 5. Following the conversion, all shares are of the series B category.

– “The acquisition of Serra Pharmaceuticals Inc. has met Karo Bio’s high
expectations”, says Per-Olof Mårtensson, President of Karo Bio. “The
exclusive consulting agreements concluded with leading scientists at the
University of California San Francisco in conjunction with the acquisition of
Serra Pharmaceuticals, have been prolonged for a further three-year period,
which will be of great importance for future scientific and commercial
successes”.

Karo Bio is a research-based pharmaceuticals company that develops drugs that
act via nuclear receptors for the treatment of conditions including
osteoporosis, cancer, heart and vascular conditions and metabolic disorders.
Developments occur in collaboration with international pharmaceuticals
companies such as Bristol-Myers Squibb and Merck & Co. The company has over 70
employees, and premises are situated at the Novum Research Park near Huddinge
hospital, greater Stockholm. Karo Bio has a subsidiary in the US (San
Francisco), and a comprehensive international scientific network. The company
has been listed on the O List of the Stockholm Stock Exchange since April
1998.

For further information, please contact:

Håkan Hallberg, Vice President Finance & Administration, tel. +46 9 608 6006.

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