Nanotechnology Now - Press Release: Arrowhead CEO Provides Perspective on $4.5 million Alliance Between Subsidiary Unidym and Samsung Electronics

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Abstract:
Arrowhead Research Corporation's (NASDAQ: ARWR) ("the Company") President and Chief Executive Officer today issued the following open letter to the Company's shareholders:

Arrowhead CEO Provides Perspective on $4.5 million Alliance Between Subsidiary Unidym and Samsung Electronics

Pasadena, CA | Posted on December 10th, 2010

Dear Shareholders:

Yesterday, Unidym announced that it has entered into intellectual property cooperation and license agreements with Samsung Electronics Co., Ltd., and I wanted to provide our shareholders with a brief overview of how this event fits into our overall business strategy. These are important agreements that will help Unidym grow its business, and they represent the accomplishment of two more goals Arrowhead articulated for 2010: establishment of a new partnership for Unidym and movement toward Unidym becoming financially independent.

Under the agreements, Unidym non-exclusively licensed and transferred certain patent rights to Samsung, including patent rights for manufacture and use of carbon nanotubes (CNTs) in electronic products. An intellectual property cooperation agreement includes provisions for Samsung to underwrite and support Unidym licensing and enforcement of these patents against third parties. A business cooperation agreement includes provisions for Unidym to supply CNTs to Samsung, as well as an initial prepaid purchase order. The agreements preserve rights for Unidym's current and future business needs and the needs of current and future licensees.

This deal couples the strength of Samsung in the electronics markets and the power of Unidym's intellectual property for CNT manufacturing and applications. Unidym has been working with Samsung for several years to develop next generation CNT-based displays, and we are pleased that this relationship is moving into a new phase.

These agreements fit squarely into Arrowhead's plans for Unidym. As we have said in the past, we see considerable value in Unidym, but it no longer fits within Arrowhead's long-term strategic roadmap. We believe our shareholders are best served by an Arrowhead that becomes a focused nanomedicine company, so our goal has been to build Unidym's business and adoption of its technology such that it may become financially independent of Arrowhead and ultimately be acquired. We view these agreements as important steps toward these goals.

* They provide a moderate non-dilutive net cash infusion, enabling Unidym to repay Arrowhead nearly $1 million of intercompany debt and providing Unidym with operating capital. This enables Arrowhead to allocate extra capital to its nanomedicine initiatives.
* They provide Samsung with a clear path through Unidym's large patent estate and, therefore, the ability to bring products to market. We view this as an important opportunity with a potential customer. Should Samsung need to source high quality CNT materials for such products, Unidym hopes to leverage its deep experience in this area to compete as a potential supplier.
* Samsung is an innovator in electronics, and we hope it will open new markets and customers for Unidym. Should other companies move to incorporate CNTs into electronic devices, Unidym would be well positioned to sell licenses to it patents and supply CNT materials in these markets.
* The patent enforcement alliance enhances Unidym's ability to protect its patent estate from infringement, improving Unidym's ability to execute high quality licenses and supply agreements.

With this alliance complete, we hope that Unidym will further develop the relationship it has built with Samsung over the years. We see this as a strong validation of Unidym's broad platform and indicative of a growing interest in developing potentially market-changing CNT-based products. Beyond Samsung, we view this as a step toward expanding Unidym's customer base and strengthening Unidym's position with new customers and partners. Finally, this alliance has immediate value as a source of capital for Unidym beyond Arrowhead. We believe that these factors ultimately drive value for our shareholders by easing Arrowhead's near term capital requirements and making Unidym a more attractive acquisition target.

Thank you for your interest in our company, and we wish you a happy and peaceful holiday season.

Sincerely,

Christopher Anzalone

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

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 current state of the economy, capital resources available to us, 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 most recent Annual Report on Form 10-K, as amended, and subsequent Quarterly Reports on Form 10-Q and other SEC filings discuss some of the important risk factors that may affect our business, results of operations and financial condition, including the risks relating to the development of Unidym's technology and business. We disclaim any intent to revise or update publicly any forward-looking statements for any reason.

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About Arrowhead Research Corporation
Arrowhead Research Corporation (NASDAQ: ARWR) is a nanotechnology company commercializing new technologies in the areas of life sciences, electronics, and energy. Arrowhead is seeking to build value for shareholders through the progress of majority owned subsidiaries. Currently, Arrowhead has four subsidiaries commercializing nanotech products and applications and minority investments in two privately held nanobiotech companies.

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Contacts:
Brandi Floberg
The Piacente Group, Inc.
212-481-2050

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