Karo Bio uppdates status of compound from Merck collaboration

Karo Bio updates status of compound from Merck collaboration

Karo Bio announces today that Merck & Co, Inc. (NYSE:MRK) has decided to
discontinue development of the first of the two candidate compounds that
have been identified in the collaboration between the two companies.
Development of the compound was discontinued due to adverse findings in
the final stages of preclinical testing. The second drug candidate
continues to be studied in preclinical testing. In addition, other
estrogen receptor compounds, arising from the Karo Bio and Merck & Co,
Inc. collaboration continue to be evaluated.

The collaboration with Merck & Co., Inc. was initiated in November 1997
with the objective of developing new treatments in the field of estrogen
receptors, which is particularly relevant in women’s health care. The
collaboration is based on the discovery of the estrogen receptor beta,
which offers the potential for the development of selective drugs that
can target either the alpha-receptor or the beta-receptor. Such
selective compounds may have the potential to address unmet clinical
needs.

The pre-clinical milestone for the first drug candidate was reached in
July 2002, and a milestone for a second drug candidate was reached
recently in May 2003.

“Even though the discontinuation of the first drug candidate causes
delay in the program we have a second drug candidate identified in the
Merck collaboration that continues in preclinical development”, says
Björn O. Nilsson, President and Chief Executive Officer of Karo Bio. “We
are also encouraged by the fact that additional compounds continue to be
evaluated for further study.”

KARO BIO AB

For further information, please contact:

Björn Nilsson, President & Chief Executive Officer
Telephone: +46 8 608 60 20

Per Otteskog, Senior Vice President
Telephone: +46 8 608 6018

Facts about Karo Bio

Karo Bio has operations in Sweden and the United States. The Company has
124 employees.

Karo Bio has been listed on the Stockholm stock exchange (Reuters:
KARO.ST) since 1998 and maintains a leading position in the field of
drug discovery focused on nuclear receptors. Nuclear receptors are
validated drug targets for a number of clinical indications and the
Company uses proprietary technologies for the development of novel and
improved therapies for major markets. Karo Bio has 368 patent cases
including 120 granted patents.

Karo Bio has drug discovery programs in several therapeutic areas
including men and women’s health care, metabolic disorders such as
obesity, cardiovascular disease, diabetes, dermatology and
ophthalmology.

Karo Bio collaborates with major pharmaceutical companies for the
development of products and marketing. In these collaborations Karo Bio
receives upfront payments, R&D funding and milestone payments, as well
as royalties on net sales when products reach the market.

Karo Bio has strategic pharmaceutical drug discovery collaborations with
Abbott Laboratories, Bristol-Myers Squibb, Merck & Co., Inc. and Wyeth
Pharmaceuticals.

This press release is also available online at www.karobio.com and at
www.waymaker.net.

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https://www.waymaker.net/bitonline/2003/08/19/20030819BIT00070/wkr0001.doc
https://www.waymaker.net/bitonline/2003/08/19/20030819BIT00070/wkr0002.pdf