Business Model
Arrowhead is a nanotechnology company commercializing new technologies in the areas of life sciences, electronics, and energy. Arrowhead’s mission is to build shareholder value through the identification, development and commercialization of nanotechnology-related products and applications. The Company works closely with universities to source early stage deals and to generate rights to intellectual property covering promising new nanotechnologies. Arrowhead takes a portfolio approach by operating multiple subsidiaries, each pursuing a different nanotechnology opportunity. Currently, Arrowhead operates five majority-owned subsidiaries commercializing nanotech products and applications and funds a number of development efforts in leading university labs in exchange for the exclusive right to license the technology.
Majority-owned Subsidiaries
Arrowhead owns majority interest in its subsidiaries, securing substantial participation in any success. Each subsidiary is staffed with its own technical and business team that focuses on its specific technology and markets while Arrowhead provides accounting, financial, strategic, and administrative services. The Company’s five majority-owned subsidiaries are commercializing a variety of nanotech products and applications, including anti-cancer drugs, RNAi therapeutics, carbon-based electronics and compound semiconductor materials. In the near term, Arrowhead expects to add to its portfolio through selective acquisition and formation of new companies.
Sponsored Research
In exchange for the exclusive right to license the technology developed in sponsored laboratories, Arrowhead and its subsidiaries have sponsored research at some of the most highly-regarded academic institutions in the country, including the California Institute of Technology (Caltech), Stanford University, Duke University and the University of Florida, in critical areas such as stem cell research, carbon electronics and molecular diagnostics. By funding university research, Arrowhead has the ability to evaluate the probability of technical success at low research cost. Moreover, the cultivation of relationships in the academic community provides an additional window into other promising technologies.
The Arrowhead Edge
This approach is structured to give Arrowhead a competitive edge in commercializing nanotechnologies:
Discrimination: Arrowhead's management and scientific advisers can identify opportunities with the most near term market potential while acquiring intellectual property rights to technologies with more long-term potential.
Financial efficiency: Arrowhead can obtain rights to valuable intellectual property without having to pay for all of the overhead costs associated with R&D. The operational resources at the corporate office avoid the duplicate infrastructure at each subsidiary.
Knowledge synergy: Arrowhead, its subsidiaries and sponsored scientists can leverage technology, know-how and intellectual property generated by others within the Arrowhead family of companies or developed in sponsored research projects.
Access to capital: As a public company, we can access the public markets for the purpose of raising capital and provide meaningful incentives in the form of stock options to attract the most talented managers and scientists.
Focus: By offering financial, administrative, corporate and strategic resources to our subsidiary companies, each individual management team can maintain focus on specific technologies and specific markets, increasing the likelihood of successful technological development and commercialization.
Flexibility: Arrowhead maintains a great deal of flexibility in financing different research and commercial projects.
Diversification: Ultimately, this strategy is designed so that Arrowhead will have a stake in a variety of different nanoscale materials, devices, and systems that could impact diverse markets. As such, the Company is positioned to capture significant revenue streams from the general trend toward miniaturization in coming years.