Karolinska Development Announces a SEK 220 million Strategic Deal

STOCKHOLM – December 21, 2012. Karolinska Development AB announced today that a
syndicate led by the life science investor Rosetta Capital Limited (“Rosetta”)
will acquire a minority share in Karolinska Development’s holdings in 13 of its
25 portfolio companies for SEK 220 million. A conference call will be held today
at 3.00pm CET.
For the purpose of the transaction, Karolinska Development will transfer 13 of
its portfolio company holdings to a new private holding company (“KDev
Investments AB”). The KDev Investments portfolio will include both early and
clinical stage pharmaceutical assets as well as some technology assets. Rosetta
will acquire 7.33% of the common shares in KDev Investments AB for SEK 110
million and preference shares in KDev Investments AB for a further SEK 110
million. The terms of the preference shares, which are set out below, provide
for gradually reducing returns for Rosetta, limiting Rosetta’s upside in return
for partial protection of its downside.

The consideration to be paid by Rosetta implies a total value of the KDev
Investments portfolio of approximately SEK 1,500 million, about two times
Karolinska Development’s investment in the same portfolio and a 23% premium to
the reported fair value. After the transaction, Karolinska Development’s cash
and short-term investments will be approximately SEK 500 million.

Torbjörn Bjerke, CEO of Karolinska Development:

“This deal shows the value that Karolinska Development has created in recent
years. Our financial position is significantly strengthened and this will
enhance our ability to build further value in both KDev Investments as well as
the rest of our portfolio, by taking products onwards to the point where we can
secure partnerships with pharmaceutical companies as well as trade sales of
portfolio companies.”

Karolinska Development’s pro forma net asset value (NAV) which reflects the
transaction with Rosetta, but is otherwise in accordance with the reported NAV
as of September 30, 2012, amounts to SEK 46.3 per share, compared to SEK 40.4
prior to the transaction.

Mr. Donald Macpherson, Chairman of Rosetta Capital Limited:

“We are delighted to be investing in the Karolinska Development portfolio and
are extremely impressed by the quality of the underlying science and the
commercial opportunities. We look forward to significant investment returns for
all stakeholders, and the development of new and innovative medical treatments
for the benefit of society as a whole. Our team is delighted to have the
opportunity work actively alongside the Karolinska Development team.”

Invitation to Conference Call at 3.00pm CET

Please dial in at the following number a few minutes before the start of the
conference call:
SE: +46 (0) 8 505 598 75, from the UK: +44 (0)20 710 862 05 or the US: +1 866
676 58 70.

About the Transaction

Karolinska Development will transfer 13 of its portfolio company holdings to
KDev Investments AB in exchange for all the issued shares. Concurrently, Rosetta
will acquire shares in KDev Investments AB from Karolinska Development as
follows:

(a) 7.33% of the common shares of KDev Investments AB; and

(b) Preference shares representing approximately another 7.33% of KDev
Investments AB at expected return levels

Karolinska Development will receive the SEK 220 million cash consideration in
two tranches. The first tranche of SEK 203 million will be received on
completion of the deal, planned to close on January 31, 2013, and the second
tranche is due when the total accumulated return from KDev Investments AB has
reached SEK 17 million.

Rosetta’s preference shares will have a priority on future returns from the
entire KDev Investments portfolio as outlined below. All remaining total return
is to be divided between the common shareholders, with 92.67% to Karolinska
Development and 7.33% to Rosetta.

(i) 100% of the total future return up to SEK 220 million*;

(ii) 30% of the total future return between SEK 220 million and SEK 880 million;

(iii) 18.33% of the total future return between SEK 880 million and SEK 1,320
million; and

(iv) 0% of the total future return over SEK 1,320 million.

*From which Karolinska Development will receive its second tranche of SEK 17
million

The experienced Rosetta team will assist by taking additional board roles in
portfolio companies, and shall be involved together with Karolinska Development
personnel in the direction and management of all of the holdings in portfolio
companies owned by KDev Investments AB, wherever their specific expertise can
assist the company concerned.

About KDev Investments AB

Karolinska Development is the majority owner of KDev Investments AB. The
shareholders of KDev Investments AB have entered into a shareholders agreement
regulating the management of the company.

KDev Investments AB consists of 13 of Karolinska Development’s holdings in
portfolio companies; Akinion Pharmaceuticals AB, Aprea AB, Axelar AB, Biosergen
AS, Clanotech AB, Dilafor AB, Dilaforette Holding AB, Inhalation Sciences in
Sweden AB, NeoDynamics AB, NovaSAID AB, Pergamum AB, Promimic AB, and Umecrine
Mood AB. Following the transaction, KDev Investments AB will be 92.67% owned by
Karolinska Development AB and 7.33% by Rosetta Capital IV LP.

Financial Reporting Consequences

The KDev Investments group will become a joint venture of Karolinska Development
presented at Fair value. Several existing subsidiaries in the Karolinska
Development Group will be part of the KDev Investments group. As KDev
Investments group is a joint venture, these companies will also be presented at
Fair value. The impact on the balance sheet and income statement of Karolinska
Development group resulting from this transaction will be accounted for
accordingly.

For further information, please contact:
Torbjörn Bjerke, CEO, Karolinska Development AB
Phone: +46 (0)72 744 41 23, e-mail: torbjorn.bjerke@karolinskadevelopment.com

Robin Wright, CFO, Karolinska Development AB
Phone: +44 (0)7720 300025, e-mail: robin.wright@karolinskadevelopment.com

Benjamin Nordin, IRO, Karolinska Development AB
Phone: +46 (0)73 093 60 80, e-mail: benjamin.nordin@karolinskadevelopment.com

TO THE EDITORS

About Karolinska Development AB
Karolinska Development aims to create value for patients, researchers, and
investors by developing innovations from world class science into products that
can be sold or out-licensed with high returns. The business model is to: SELECT
the most commercially attractive medical innovations; DEVELOP innovations to the
stage where the greatest return on investment can be achieved; and COMMERCIALIZE
the innovations through the sale of companies or out-licensing of products. An
exclusive deal flow agreement with Karolinska Institutet Innovations AB, along
with other cooperation agreements with leading Nordic universities, delivers a
continuous flow of innovations. Today, the portfolio consists of 34 projects, of
which 15 are in clinical development. For more information, please visit
www.karolinskadevelopment.com.

Karolinska Development is listed on NASDAQ OMX. Karolinska Development may be
required to disclose the information provided herein pursuant to the Securities
Markets Act.

About Rosetta Capital

Rosetta Capital is a specialist venture capital firm focused on the life science
and medical technology sectors, with a multinational team from the venture
capital, pharmaceutical and biotechnology sectors. For more than 10 years,
Rosetta has been working with entrepreneurs, young life science companies and
investors to help them achieve their ambitions. Currently, Rosetta manages funds
with holdings in more than 25 underlying portfolio companies across Europe and
North America and with more than USD 200m in value. Rosetta is focused on co
-investment portfolio transactions and from time to time, Rosetta also makes
direct primary venture investments. Rosetta offers flexibility in transactional
structure, adapting strategies to the investment climate. Rosetta is
headquartered in the United Kingdom. Rosetta Capital Ltd is Authorised and
Regulated by the Financial Services Authority. For more information see
www.rosettacapital.com.