Welcome to Karo Bio AB

Karo Bio ABPresentation to the Annual General Meeting, April 25, 2008P.O. WallströmPresident and CEO2008-04-28

Karo Bio in Brief• Public company with marketcap of approx SEK 0.6 bn• Located in Southern campusof Karolinska Institute• 64 employees, 33 Ph.D• World leader in nuclearreceptor-targeted drugdiscovery• Six ongoing programs• Three partnerships• Strong Financial Position28-Apr-08

Setbacks in 2007 led to decrease inshareholder value• KB5359 terminated inpreclinical development dueto tox findings• Merck stopped clinicalcandidate in phase I. Projectcontinues• Wyeth stopped clinicalcandidate in phase I. Projectcontinues28-Apr-08

Renewed focus on near termopportunities• Eprotirome (KB2115) advanced according to plan• New phase IIb data expected August 2008• Reassessment of eprotirome potential based on newdata• Diabetes compound KB3305 in phase I• Use of proceeds from 2007 share issue financingclinical projects and driving results• Restructuring and lower internal cost base28-Apr-08

28-Apr-08Karo Bio Pipeline

Eprotirome, a Liver Selective Thyroid Agonistfor the Treatment of Dyslipidemia2008-04-28

Residual Risk Reduction with SelectiveThyromimetics0-20CVD MortalityStatins reduce CVD mortality by 28%Annual sales of Statins $25bn%-40-60-80ResidualRiskThyromimetics Provide Residual RiskReduction Through•LDL-C reduction, as monotherapy or incombination with statins•Triglyceride lowering•Lp(a) lowering•Anti-atherosclerotic effects•Glucose lowering•(Weight loss)-100Hebert PR et al. JAMA. 1997;278:313-321.28-Apr-08

Karo Bio TR compound eprotirome (KB2115)• Eprotirome is a liver selective TR agonist that induces mildhyperthyroidism in the liver, while preserving a normal statussystemically• Eprotirome has a short half life (2 hours) and good oralbioavailability• A total of 114 healthy volunteers and 78 patients withhypercholesterolemia has been exposed to eprotirome for up to 3months in four clinical studies• Eprotirome is progressing in phase IIb clinical studies• Eprotirome to be used alone or in combination with other lipidlowering agents28-Apr-08

Eprotirome lowers LDL-cholesterol in first phaseII study (KBT003)6LDL-cholesterolP

Eprotirome lowers triglycerides in first phase IIstudy (KBT003)Change from baseline(mmol/L)10-1-2TriglyceridesAll patientsp=0.019P=0.0190 4 8 12 16Time (Weeks)Change from baseline(mmol/L)10-1-2Triglycerides,Subgroup with baseline TG >1.7 mmol/L ( > 150 mg/dl)0 4 8 12 16Time (Weeks)Placebo100 µg200 µgChange week 12 All patients Pre-dose TG > 1.7 mmol/LPlacebo -1% + 4%100 µg - 22% - 34%200 µg - 38% - 42%28-Apr-08

Eprotirome lowers lipoprotein(a) in first phase IIstudy (KBT003)Change frombaseline (%)Lipoprotein(a)Change from pre-doseSubset with Lp(a) > 300 mmol/L50%25%0%-25%-50%Mean ± SD0 4 8 12 16Time (Weeks)Placebo100 µg200 µgRelative change (%)100%50%0%-50%Lipoprotein(a)Change (week 12 versus baseline)as function of pre-treatment value-100%10 1003001000 10000mg/L28-Apr-08

Eprotirome is safe with good efficacy in first phaseII clinical study•Efficacy– 30 % lowering of LDL-Cholesterol– 40 % lowering of Triglycerides– 50 % lowering of Lipoprotein(a)•Safety– Euthyroid state preserved extra-hepatically– No safety concerns related to heart or bone– Minor reversible effects on liver enzymes(interpreted as a benign response to a more metabolically active liver)28-Apr-08

Continued Eprotirome Phase II Program• KBT004• Efficacy and safety of eprotirome in combination withstatins• Ongoing, 180 patients• Results August 2008• KBT006• Efficacy and safety of eprotirome in combination withezetimibe• Ongoing, 100 patients• Results Quarter 4, 200828-Apr-08

Intended Uses of eprotirome• Add-on to statins and/ or ezetimibe• for patients at high risk who are unable to achievetarget levels with statins and/or ezetimibe• Therapeutic option for mixed dyslipidemia anddiabetic dyslipidemia• Alternative to ezetimibe for those who are intolerantto statins• monotheraphy or combination with ezetimibe28-Apr-08

Eprotirome, potential treatment populationsLow HDLNiacin, FibratesHomozygFHTreatmentResistantApheresisType III MixedFamilialcombinedStatin,EzetimibeNiacin, ResinDiabetesDyslipidemiaStatinFibratesStatinIntoleranceEzetimibePrimary dyslipidemia / FH not at target LDLStatin / EzetimibePrimary dyslipidemia, FH heterozygStatin monotherapy28-Apr-08

Eprotirome, Next Steps• Conclude results from KBT004 (statins) and KBT006(ezetimibe)• Review data with FDA and open IND in the US• Initiate 12 month dog tox• Plan for carcinogenicity studies• Prepare for phase III start in 2009• Negotiate partnership agreement28-Apr-08

KB3305, A novel compound for treatment oftype 2 diabetes2008-04-28

KB3305 – A new treatment for type II diabetesFirst liver selective GR antagonist improving glucose levels and lipid profile‣ New mechanism ofaction‣ Excellent efficacy andsafety in preclinicaldiabetes modelsPhase I/IIa program ongoingGood exposure andpredictable pharmacokineticsin Phase I SAD study‣ Added benefits inlowering ofcholesterol andtriglycerides inpreclinical studies Patent protection until 202328-Apr-08

KB3305 Pharmacokinetics in Phase I SAD Study10000.01000.0• PK appears robust and predictable• Similar exposure with two different formulations100.010.01.00.10 4 8 12 16 20 24 28 32 36Time(h)28-Apr-08

28-Apr-08Karo Bio Pipeline

FinancialsSelected financial information in summary(SEK million)12 monthsJanuary - December3 monthsJanuary-March2006 2007 2007 2008Net sales 44.4 7.5 2.0 1.7Operating expenses -176.0 -223.4 -55.0 -58.2- whereof of R&D expenses -145.0 -190.8 -45.5 -50.3Profit / loss for the period -126.1 -203.4 -51.4 -51.8Cash flow from operating activities -110.4 -178.3 -56.4 -56.0Cash, cash equivalents and other short terminvestments at end of period 231.0 432.3 173.4 375.7No. of shares outstanding (‘000) at end of period 91,587 116,119 91,587 116,11928-Apr-08

Potential News flow in 2008• KB3305 phase I multiple ascending dose study• KB3305 phase 2a, proof of principle study in diabeticpatients• Eprotirome phase IIb data in combination with statins• Eprotirome phase IIb data in combination withezetimibe• Partnership agreement• ER beta CD selection28-Apr-08