Karo Bio: Interim Report January–September 2011

Regulatory News:

Karo Bio: (STO:KARO)

The January–September period and the third quarter 2011 in brief

· Net sales amounted to MSEK 0.0 (0.0)

· Net loss was MSEK 176.0 (113.4), whereof the third quarter MSEK 51.1 (34.4)

· Loss per share was SEK 0.45 (0.48), whereof the third quarter SEK 0.13 (0.14)

· Cash flow from operating activities was MSEK -160.4 (-114.6), whereof the third quarter MSEK -47.7 (-33.7).The difference from the previous period concerns costs related to the phase III program for eprotirome

· Cash and cash equivalents and other short-term investments totalled MSEK 198.4 (116.2) at the end of the period

· Discussions are ongoing regarding the out licensing of ERbeta and RORgamma

· The phase III eprotirome trial AKKA started in September

Significant events after the end of the reporting period Spin-off of preclinical operations

· The Board of Directors is preparing a spin-off of the preclinical part of the company by transferring these operations to a subsidiary · The company has initiated an efficiency program to reduce costs as part of the spin-off

Management changes

· Per Bengtsson was appointed CEO

· Henrik Palm was appointed new CFO

Conference call today at 10.00 CET CEO Per Bengtsson will present the report today at 10.00 CET in an audiocast, held in Swedish, available via a link on www.karobio.se and telephone: +46 8 5051 59809 or +44 20 710 863 03

Corp. reg. no. 556309-3359

Website: www.karobio.com

The information in this report is such that Karo Bio is required to disclose under the Swedish Securities Market Act. The information was disclosed on October 25, 2011, 08:30 CET.

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