Arrowhead Subsidiary Unidym Establishes Partnership with Continental Carbon Company

PASADENA, Calif.--(Business Wire)--
Arrowhead Research Corporation (Nasdaq:ARWR) announced that its Unidym, Inc.
subsidiary, a leader in carbon nanotube (CNT) technology, and Continental Carbon
Company ("CCC"), a global leader in carbon blacks, conductive blacks and carbon
nanotubes, have entered into a partnership for CCC to take over Unidym`s bulk
CNT materials business. Under the agreement, CCC will form a new subsidiary,
Continental Carbon Nanotechnologies, Inc. ("CCNI"), that will exclusively supply
Unidym with proprietary electronics-grade CNTs for its core markets and sell
high quality CNTs directly into other, non-competing markets. The transfer of
assets will take place in two steps: the first involves the transfer of certain
assets related to the materials business, including manufacturing equipment and
select inventory; and the second will include the transfer of certain
intellectual property and third party agreements necessary for the materials
business as well as a supply agreement for CCNI to provide proprietary CNTs to
Unidym. The upfront and royalty payments associated with the second closing are
not yet finalized, but will be in addition to an earn-out of up to $26,500,000
based on meeting certain sales milestones. CCC will also have a three-year
option to acquire shares of Unidym equivalent to 10% of the subsidiary`s
outstanding shares on a fully diluted basis.

The agreement is the latest in a series of steps taken by Unidym to accelerate
the development of its CNT technology for application to the electronics
industry and reduce its cost structure. It is intended to provide Unidym and its
partners with a reliable and scalable source of high quality CNTs by leveraging
CCC`s deep experience manufacturing large quantities of carbon materials. In
addition, it will allow Unidym to capture additional value from its extensive
CNT patent portfolio by enabling CCNI to focus on end-markets that are not core
to Unidym`s business.

"This agreement is part of Unidym`s efforts to better focus its operational
strategy by establishing high quality partnerships," stated Dr. Christopher
Anzalone, Arrowhead`s President and CEO. "Working with CCC enables Unidym to
focus on its core competencies while establishing ready access to large
quantities of proprietary high quality CNTs manufactured by a leader in carbon
materials. We believe this will accelerate Unidym`s ability to penetrate the
touch-screen and LCD markets and, longer term, its entrance into such diverse
industries as solar energy and printable electronics. The partnership will also
allow Unidym to monetize its CNT patents via markets that are not core to its
electronics business."

Mark Tilley, CEO of Unidym, stated, "Continental Carbon`s global manufacturing
operations and expertise will be an integral component of our go-to-market
strategy. We expect that demand from the touch panel, LCD and solar markets will
require a significant ramp-up of CNT capacity in the coming years."

Kim Pan, President of Continental Carbon, said, "We are pleased to join forces
with Unidym and look forward to expanding the market for CNTs. We will work
exclusively with Unidym to support Unidym`s transparent conductive films
business, and expect to pursue several applications for these extraordinary
materials beyond Unidym`s core markets."

About Arrowhead Research Corporation

Arrowhead Research Corporation (www.arrowheadresearch.com) (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.

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 recent economic slowdown, 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 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.

Investor Relations Contact:
The Piacente Group, Inc.
Sanjay M. Hurry
212-481-2050
sanjay@tpg-ir.co

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