Karo Bio Announces Prospectus for the Rights Issue

Regulatory News:

Karo Bio AB (STO:KARO):

Karo Bio hereby announces the publication of the prospectus for the rights issue. The prospectus has today been approved and registered by the Swedish Financial Supervisory Authority.

Karo Bio has today published the prospectus for the rights issue.

All shareholders with share holdings directly registered in Euroclear Sweden AB (”Euroclear”) on the record date November 26, 2012 will receive a prospectus, a pre-printed issue account statement and an application form by post to the address registered in Euroclear. Shareholders whose holdings of shares are registered with a nominee bank or other nominee will receive information and instructions directly from their bank or nominee. The prospectus will be available on Karo Bio’s website www.karobio.com/prospectus and on Aktieinvest FK’s website www.aktieinvest.se The printed prospectus will also be available at Karo Bio’s offices at Hälsovägen 7, in Huddinge, Sweden after November 28, 2012.

About Karo Bio

Karo Bio is a pharmaceutical company focused on the research and development of innovative drugs for large medical needs. The company runs a number of drug development projects within the indication areas neuropsychiatry, inflammation, autoimmune diseases and cancer. An important foundation for the company’s activities is its unique knowledge of nuclear receptors as target proteins for the development of novel pharmaceuticals, as well as related mechanisms of action. Karo Bio is based in Huddinge, Sweden, has around 44 employees and is listed on NASDAQ OMX Stockholm.

Karo Bio publishes this information in accordance with the Swedish Securities Markets Act and/or the Swedish Financial Instruments Trading Act. The information was published on November 26, 2012, at 4:45pm CET.

IMPORTANT INFORMATION This press release is not an offer or solicitation to acquire shares in Karo Bio. A prospectus relating to the rights issue referred to in this press release has been filed with the Swedish Financial Supervisory Authority. The prospectus is published and available on Karo Bio’s website.

This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended. Karo Bio does not intend to register any portion of the offering of the securities in the United States or to conduct a public offering of the securities in the United States. The information in this press release may not be announced, published or distributed, directly or indirectly, to the United States, Australia, Canada, Hong Kong, Japan, New Zeeland, Singapore, South Africa or Switzerland, or in any other jurisdiction where the announcement, publication or distribution of the information would not comply with applicable laws and regulations.

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

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