Karo Bio to spin off preclinical development

In order to achieve better allocation of resources and competences, Swedish biotech firm Karo Bio (STO: KARO) is preparing to spin off the company’s preclinical activities. This function will therefore be transferred into a subsidiary that is intended to become autonomous in operations as well as by ownership. It is proposed that the spun-out subsidiary will assume the name Karo Bio name.

Karo Bio says it is currently dominated by the eprotirome project which has very large potential. The drug is currently in late-stage clinical development for the treatment of dyslipidemia. At the same time, it is among the world leaders in drug development of pharmaceuticals that act through nuclear receptors, the company says. This drug class represents 10%-15% of the global pharmaceutical market and is expected to continue to grow.

Most of Karo Bio’s operations that are currently conducted at the Huddinge campus are preclinical R&D along with several projects. Before these operations are transferred into a separate subsidiary, a cost efficiency program will be implemented. In order to do so, Karo Bio will immediately initiate negotiations with labor unions about organizational changes. An independent management will be appointed in the subsidiary ahead of the spin-off.