7 October 2005, Stockholm, Sverige

Catella Investments Participates in Karo Bio Rights Issue

The Board of Directors of the Swedish pharmaceutical research company Karo Bio AB has decided to make a modification of the company’s strategy.

In addition to the current partnership based model, Karo Bio will bring selected compounds to late stage clinical development. Such compounds will potentially be launched by Karo Bio in selected markets.
To implement the strategy, Karo Bio’s board has decided to issue new shares with preferential rights. Assuming full subscription, the rights issue will generate MSEK 280 to the company, before transaction costs.
A number of larger shareholders, together representing 35 per cent of the share capital, have declared their intent to subscribe for their share of the rights issue. In addition, Bliwa Livförsäkring, Catella Investments AB, Fonden Pecunia, Laurent Leksell and Stena AB have issued guarantees to subscribe for shares corresponding to 59 percent of the share issue. Hence, statements of intent and guarantees amounting to 94 percent of the issue amount have been obtained.
“With this strategy we broaden our business opportunities and build shareholder value short and long term”, says Per Olof Wallström, President and Chief Executive Officer of Karo Bio.
“We intend to use the proceeds of the new share issue to bring four existing projects into clinical phase within the next two years.”