Arrowhead Research's NanoPolaris Acquires Assets in Unidym, a Carbon Nanostructure Electrics Company; Arrowhead Commits $7 Million to Scale up Production and Device Integration

PASADENA, California – (BUSINESS WIRE) – June 14, 2006 – Arrowhead Research (Nasdaq:ARWR) announced today that NanoPolaris, its wholly-owned subsidiary, acquired substantially all the assets of Unidym, a Los Angeles company that develops carbon nanotube-based electronics. Dr. George Gruener, Unidym founder and distinguished UCLA professor, will be the Chief Technical Officer of the combined company. The first product, transparent and conductive nanotube networks, could enable the next generation of flat panel displays, touch screens, light-emitting diodes, and solar cells.

Prior to this transaction, NanoPolaris had assembled exclusive commercial rights to nanotube materials and processes developed at the California Institute of Technology, University of California at Los Angeles, Duke University, Pennsylvania State University, University at Buffalo, University of Toronto, Rensselaer Polytechnic Institute, and Tsinghua University. As appropriate, NanoPolaris will continue to execute its strategy of consolidating key technologies and intellectual property in this field.

"Combining the recent product development achievements by Dr. Gruener with the NanoPolaris patent portfolio creates significant value," said R. Bruce Stewart, Arrowhead's Chairman. "We believe carbon nanomaterials represent the next technological revolution."

Existing products such as flat panel displays, touch screens, and solar cells use indium tin oxide (ITO) as the transparent electrode. ITO, however, has limitations in its performance, a dramatically increasing price, and is not optimally suited for integration into many existing and new device architectures. Unidym's carbon nanotube networks are mechanically flexible, can be deposited on lightweight plastics instead of heavy glass, and could be substantially more conductive than ITO.

"Our transparent and conductive nanotube networks are just the beginning of the transition to an electronics industry based on carbon. Expected subsequent products include nanotube thin film transistors that enable palm pilots to bend, electronic brochures to roll up, or low cost RFID tags. As one looks to the future, there is a strong possibility that carbon nanomaterials might be used to replace metal interconnects and silicon transistors," said Dr. Gruener. "Our strategy is to leverage our knowledge of these materials to develop and bring to market increasingly sophisticated electronic devices."

NanoPolaris acquired substantially all of Unidym's net assets, including its intellectual property, prototypes, and equipment, for a purchase price consisting of cash and shares of NanoPolaris common stock equal to 10% of NanoPolaris' outstanding voting stock at closing. At the closing of this acquisition, Arrowhead Research invested $3 million in NanoPolaris and committed up to $4 million of additional capital to NanoPolaris, with $2 million to be paid on the first anniversary of closing and the remaining $2 million to be paid on the second anniversary of closing.

About Arrowhead Research Corporation

Arrowhead Research Corporation (www.arrowheadresearch.com) is a publicly-traded nanotechnology company commercializing new technologies in the areas of life sciences, electronics, and energy. Arrowhead is building value for shareholders through the progress of majority owned subsidiaries founded on nanotechnologies originally developed at universities. The company works closely with universities to source early stage deals and to generate rights to intellectual property covering promising new nanotechnologies. Currently, Arrowhead has four subsidiaries commercializing nanotech products and applications, including anti-cancer drugs, RNAi therapeutics, carbon-based electronics and compound semiconductor materials.

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This news release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based upon our current expectations and speak only as of the date hereof. Our actual results may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, including the recent economic slowdown affecting technology companies, the future success of our scientific studies, our ability to successfully develop products, rapid technological change in our markets, changes in demand for our future products, legislative, regulatory and competitive developments and general economic conditions. Our Annual Report on Form 10-K and 10-K/A, recent and forthcoming Quarterly Reports on Form 10-Q and 10-Q/A, recent Current Reports on Forms 8-K and 8-K/A, our Registration Statement on Form S-3, and other SEC filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Contacts

Virginia Dadey; Vice President, Investor Relations
Telephone: 212.541.3707
Email: vdadey@arrowres.com