Arrowhead Research reports revenue of $148,000 for quarter ended December 31, 2009

Arrowhead Research Corporation (NASDAQ: ARWR) today announced financial results for its fiscal 2010 first quarter ended December 31, 2009.

“During the first quarter, we made steady progress in advancing our portfolio companies, and at Arrowhead where we further improved our cost structure and strengthened our balance sheet with the completion of our financing in December”

“During the first quarter, we made steady progress in advancing our portfolio companies, and at Arrowhead where we further improved our cost structure and strengthened our balance sheet with the completion of our financing in December,” said Christopher Anzalone, Arrowhead’s CEO. “In the short time since our last earnings release, Unidym in particular has made excellent business development progress by completing several partnering and licensing agreements with industry leaders. Our nanobiotech portfolio companies are continuing clinical and technical development and we are exploring exciting new opportunities for future investment in the life sciences industry. Additionally, we completed the sale of essentially all of Tego Biosciences’ assets, bringing in a modest upfront payment while retaining future upside potential.

“To support progress with our businesses, we have enhanced our leadership team through several key appointments including a new CFO and the addition of distinguished experts to both Unidym and Calando’s boards. These types of business, technical and organizational developments are indicators of our company’s evolution as we look to add value through the advancement of our subsidiaries. We believe that fiscal 2010 will prove to be an exciting year for Arrowhead and our shareholders,” Dr. Anzalone concluded.

FIRST QUARTER FISCAL 2010 AND RECENT COMPANY HIGHLIGHTS:

• Business highlights:
  • Unidym extended its partnership with Samsung Electronics for flexible displays into a third year and entered into a new JDA with another major LCD manufacturer for glass based LCDs.
  • Unidym entered into a joint venture to market and co-develop its films and electronic ink products into the Korean touch panel and display industries.
  • Unidym entered into license agreements with four companies for applications outside its core electronics focus.
  • The Company completed the sale of Tego’s assets to Luna Innovations, Inc. The purchase price included up-front payments of $430,000 with additional milestone payments in the future.
• Financial highlights:
  • Decreased quarterly operating expenses by 75% versus the prior year’s quarter to $2.3 million.
  • Decreased cash used in operating activities from $7.7 million in the prior year quarter to $1.6 million in the current quarter.
  • On December 11, 2009, completed a private placement for gross proceeds of $3.2 million.

SELECTED FISCAL 2010 FIRST QUARTER FINANCIAL RESULTS

For the quarter ended December 31, 2009, Arrowhead reported revenue of $148,000, compared with $702,000 in the quarter ended December 31, 2008. The prior period revenue included $535,000 in proceeds from license fees and grants, which were not repeated in the current period. The sale of carbon nanotubes by Unidym comprised comparable revenue in both periods.

Total operating expenses for the quarter ended December 31, 2009 were $2.3 million, a decrease of $7.0 million from $9.3 million during the quarter ended December 31, 2008. The significant reduction in operating expenses was a result of measures undertaken by management during 2009 to streamline its businesses and better align its cost structure with its capital resources.

Net loss for the quarter ended December 31, 2009 was $1.5 million, or $0.03 per share based on 58.6 million weighted average shares outstanding. This compares with a net loss of $8.0 million, or $0.19 per share based on 42.9 million weighted average shares outstanding, for the quarter ended December 31, 2008.