ONGOING RIGHTS ISSUE IN KARO BIO AB (PUBL) - PROSPECTUS SUPPLEMENT IS PUBLISHED

ONGOING RIGHTS ISSUE IN KARO BIO AB (PUBL) - PROSPECTUS SUPPLEMENT IS PUBLISHED

Not for release, publication or distribution in Australia, Canada, Japan or the
United States. This announcement does not constitute an offer to sell or the
solicitation of an offer to buy the securities of Karo Bio AB (publ) (the
“Securities”) in Australia, Canada, Japan or the United States or in any other
jurisdiction. Securities may not be offered or sold in the United States absent
registration or an exemption from registration under the U.S. Securities Act of
1933, as amended. The issuer of the Securities has not registered, and does not
intend to register, any portion of the Offering in the United States, and does
not intend to conduct a public offering of the Securities in the United States.

STOCKHOLM, November 27, 2009. Karo Bio AB (publ) (Reuters: KARO.ST) has today
published a supplement to the previously published prospectus pertaining to the
company's rights issue. The prospectus supplement contains Karo Bio's press
release from November 26 regarding Merck & Co., Inc's plans to proceed through a
subsidiary with a phase IIa clinical evaluation of the candidate compound
MK-6913. 

The prospectus and the prospectus supplement are available for download in
electronic format via the Internet from the Swedish Financial Supervisory
Authority's website (www.fi.se) and from Karo Bio's website (www.karobio.se). In
order to receive a printed copy of the Prospectus Supplement, please contact
Avanza Bank at telephone number +46 8 562 25 120. 

Right of withdrawal
Those investors who have applied for or in any other manner consented to
purchase or subscription for securities covered by the rights issue before the
publication of the Prospectus Supplement are entitled to withdraw their
registration until and including Friday, December 4, 2009 (i.e. five working
days from the publication of the prospectus supplement). Such withdrawal must be
submitted in writing to Avanza Bank or, if the subscription application was
submitted through a trustee, to this trustee and must have been received by
Avanza Bank or the trustee at 5.30 p.m. on the last day of withdrawal mentioned
above. A form for withdrawal of the subscription application from directly
registered shareholders is available for download at Karo Bio's website
www.karobio.se and can be ordered from Avanza Bank at telephone number +46 8 562
25 120. Investors who have submitted their subscription application through a
trustee should contact this trustee regarding withdrawal. Subscriptions that are
not withdrawn will remain binding and those subscribers who wish to remain as
subscribers do not need to take any further action.

As a consequence of the withdrawal right triggered by the publication of the
prospectus supplement, the announcement of the  preliminary outcome of the
rights issue will be postponed to on or about December 9, 2009.

For more information please contact:
Per Olof Wallström, President
Tel: +46 8 608 60 20
E-mail: p.o.wallstrom@karobio.se

Erika Söderberg Johnson, CFO and responsible for Investor Relations
Tel: +46 8 608 60 52
E-mail: erika.soderberg.johnson@karobio.se

About Karo Bio
Karo Bio is a drug discovery and development company specializing in
endocrinology and targeting nuclear receptors as target proteins for the
development of novel pharmaceuticals. The company has a project portfolio with
innovative molecules that primarily target dyslipidemia, CNS-disorders,
inflammation, and women's health. In these areas, there are significant market
opportunities and a clear need for pharmaceuticals with new mechanisms of
action. Karo Bio develops compounds aimed at treating broad patient populations
up to clinical proof of concept before out-licensing. In therapeutic niche
areas, Karo Bio has the capacity to bring selected compounds into late stage
clinical development and, potentially, to the market. In addition to the
proprietary projects, Karo Bio has three strategic collaborations with
international pharmaceutical companies for development of innovative therapies
for the treatment of common diseases. Karo Bio is listed on NASDAQ OMX Stockholm
since 1998 (Reuters: KARO.ST).

Karo Bio may be required to disclose the information provided herein pursuant to
the Swedish Securities Markets Act and/or the Swedish Financial Instruments
Trading Act. The information was published on November 27, 2009 at 6.00 pm.

This press release is also available online at: www.karobio.com and
www.newsroom.cision.com

Notice to UK residents. This announcement is only being distributed to, and is
only directed at, persons in the United Kingdom that are qualified investors as
that term is defined in the Prospectus Directive that are also (i) “investment
professionals” falling within article 19(5) of the Financial Service and Markets
Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii)“high net worth
entities” and other persons to whom it may lawfully be communicated, falling
within the meaning of Article 49(2)(a) to (d) of the Order (all such persons
being “relevant persons”). The offered shares of Karo Bio AB are only available
to relevant persons and any invitation, offer or agreement to subscribe,
purchase or otherwise acquire such offered shares will be engaged in only with
relevant persons. Any person who is not a relevant person should not act or rely
on this document or any of its content.