Karo Bio in partnership to develop new drug for atherosclerosis

KARO BIO IN PARTNERSHIP TO DEVELOP NEW DRUG FOR ATHEROSCLEROSIS

HUDDINGE, Sweden – September 3, 2001 — Swedish biotechnology company,
Karo Bio, has entered into a three-year collaboration agreement with
global pharmaceutical company, American Home Products (NYSE:AHP).
Together, the two companies aim to develop a completely new drug to
prevent and treat atherosclerosis – one of the most common causes of
death in the Western world.

“This new collaboration with AHP is of strategic importance for Karo Bio
to further enhance our leading position in the field of nuclear receptor-
based drug discovery,” says Per-Olof Mårtensson, Karo Bio’s Chairman of
the Board of Directors. “The negotiations for collaboration have
resulted in a well balanced agreement.”

If the partnership results in two distinct globally marketed products,
Karo Bio will receive up to USD 100 million, comprising an up-front
payment, R&D funding, and milestone payments linked to development and
global approvals. Karo Bio will also receive royalties on sales revenue
and an in-market bonus if certain sales goals are met. The world market
for atherosclerosis drugs is approximately USD 15-20 billion.

“Together Karo Bio and American Home Products are taking the first step
towards a completely new way of preventing and treating
atherosclerosis,” says Björn Nilsson PhD, CEO Karo Bio. “We are pleased
and excited about this collaboration. AHP has an excellent drug
discovery organisation, a proven record in development, and corporate
commitment to lead the development of treatments for cardiovascular
disease.”

“Karo Bio is a world leader within the research area of nuclear
receptors. Its unique technology and knowledge about the causes of
atherosclerosis complement our strengths in drug discovery, clinical
development and marketing,” says C. Richard Lyttle, PhD, Vice-President
Discovery, Women’s Health Research, Wyeth-Ayerst Research. “We look
forward to a successful partnership.”

The collaboration is also an acknowledgment of Karo Bio’s expertise in
discovering new drug applications based on nuclear receptors, which have
been shown to be a central factor in the course of many diseases.
Equally, Karo Bio has been able to commercialise its knowledge through
strategic partnerships with major international pharmaceutical
companies.

Focusing on the liver X receptor (LXR), the joint research programme
will concentrate initially on developing treatments for atherosclerosis.
Correctly acting upon LXR stimulates production of a specific transport
protein, which dissolves dangerous cholesterol build-up in arteries,
thereby preventing atherosclerosis. The proof of principle is that in
Tangier’s disease the patients lack a functioning transport protein and
therefore develop atherosclerosis

KARO BIO AB (publ)

For further information: Björn Nilsson, CEO, Karo Bio AB. Telephone: +46-
8-608 6020

Press conference: Monday September 3, 11am, Stockholm, Berns restaurant,
main entrance Berzelii Park, Rektangelsalen. Snacks will be served.
Those who wish to participate in the press conference by telephone,
please ring +46-8-598 008 84 by 10:55 a.m.

Background:

Atherosclerosis
Atherosclerosis results from cholesterol and fat attaching to artery
walls and creating obstructions. The artery narrows, leading to blood
flow being restricted or blocked. The condition can lead to a number of
disorders, including high blood pressure, vascular spasm, cardiac
insufficiency, chest pain, and thrombotic events, of which heart attack
and stroke are the most dangerous forms. At present, no drug is
available which is able to give hardened arteries back their elasticity.
Certain cholesterol-reducing drugs, so-called statins, can be used in a
preventative manner. Diseases resulting from atherosclerosis are very
common in the Western world. Cardivascular disease affects 13 per cent
of the Swedish population, and causes approximately 48 per cent of
deaths annually*. The market for drugs to treat atherosclerosis is
estimated to be approximately USD 15-20 billion per year.
*Source: Swedish National Board of Health and Welfare, 1998

Karo Bio
Karo Bio has operations in Sweden and the USA. The company has 120
employees and 250 patent cases, including 100 approved patents.

Karo Bio has been listed on Stockholmsbörsen (KARO) since 1998, and
maintains a leading position in the field of drug discovery based on
nuclear receptors. Nuclear receptors are significant and validated drug
targets for many clinical indications, and the company uses proprietary
technologies to develop novel and improved therapies for major markets.

Karo Bio has drug discovery programmes in many therapeutic areas,
including women’s health care, metabolic disorders such as obesity,
cardiovascular disease, diabetes, dermatology, ophthalmology, and
infectious disease. Karo Bio collaborates with leading pharmaceutical
companies to develop and market products. These partnerships provide
Karo Bio with a revenue stream comprising up-front payments, R&D
funding, and royalties on net sales when products reach the market.

Karo Bio has strategic drug discovery partnerships in place with Abbott
Laboratories, Bristol-Myers Squibb, Merck & Co., Aventis Pharma and
American Home Products.

AHP
American Home Products Corporation is one of the world’s largest
pharmaceutical companies. AHP’s pharmaceutical and biotechnology-based
research and development focuses on therapeutic areas including women’s
health care, transplant and immunology, musculoskeletal disorders,
cardiovascular disease, infectious diseases, neuroscience, oncology,
vaccines, nutritionals, gastrointestinal disease, and haemophilia. AHP
has 47,000 employees in more than 100 countries, and the company’s sales
for 2000 totalled USD 13.3 billion. The company is headquartered in New
Jersey.

Illustration of LXR mechanism (available in Word format on
www.karobio.se)

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