Arrowhead decreases second-quarter consolidated operating expenses by 58%

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

“These esteemed gentlemen, along with the preeminent leaders in nanotechnology already on the Board, are expected to play a key role in refining Arrowhead's strategy as we increase our focus on the opportunities to develop medical applications based on the advances in materials engineering at the nanoscale.”

"During the fiscal 2010 second quarter, Arrowhead took a remarkable step forward," said Christopher Anzalone, Arrowhead's Chief Executive Officer. "In March, our majority-owned subsidiary, Calando Pharmaceuticals, announced data that demonstrated first proof of systemic delivery of siRNA and gene silencing via RNAi in humans. This is an exciting milestone both for our Company and the broader industry. It had long been our goal to be the first company to demonstrate systemic delivery, and we have now achieved that goal. Positive industry and market reception has been encouraging and provides further validation and recognition of the potential value of this remarkable achievement.

"We also continue to make progress with Unidym, following the prior achievement of our goal of initial market entry in calendar 2009 with our first sale in December of our transparent conductive film product in the touch panel market. Since then, we have continued to work with manufacturers to integrate our product into their devices and make connections in key Asian geographies as well as with potential U.S. partners to increase our market traction.

"As we look to add to our portfolio of nanomedicine subsidiaries, we also welcomed two new members to our Scientific Advisory Board: Nobel laureate Dr. Leland Hartwell and former commissioner of the FDA, Dr. Andrew von Eschenbach," continued Dr. Anzalone. "These esteemed gentlemen, along with the preeminent leaders in nanotechnology already on the Board, are expected to play a key role in refining Arrowhead's strategy as we increase our focus on the opportunities to develop medical applications based on the advances in materials engineering at the nanoscale."

SECOND QUARTER FISCAL 2010 AND RECENT COMPANY HIGHLIGHTS:

• Business highlights:
  • Calando announced what it believes to be: (1) the first proof of gene silencing via RNA interference in humans; (2) the first proof of systemic delivery of siRNA in humans; and (3) the first dose-dependent accumulation of systemically administered nanoparticles in target tissue with results published in the premier science journal Nature.
  • Arrowhead added two members to its Scientific Advisory Board, Nobel Laureate Dr. Leland Hartwell and former U.S. Food and Drug Administration Commissioner and National Cancer Institute Director, Dr. Andrew von Eschenbach.
  • Arrowhead appointed Kenneth Myszkowski, MBA, CPA, as its Chief Financial Officer.
  • Unidym's transparent conductive film-enabled touch sensitive MP4 players displayed at the 75^th China Electronics Fair.
  • Unidym entered into a joint venture with Wise Power (KOSDAQ: 040670) to market and co-develop Unidym's proprietary film and electronic ink products in the Korean touch panel and display industries.
  • Unidym added Dr. Malcolm Gillis, former president of Rice University, to its Board of Directors.
• Financial highlights:
  • Decreased consolidated quarterly operating expenses by 58% versus the prior year's quarter from $5.4 million to $2.3 million.
  • Decreased, on a consolidated basis, cash used in operating activities from $11.3 million in the prior year first half to $3.4 million in the current year first half.

SELECTED FISCAL 2010 SECOND QUARTER FINANCIAL RESULTS

For the quarter ended March 31, 2010, Arrowhead reported revenue of $157,000, compared with $236,000 in the quarter ended March 31, 2009. The prior period revenue included $118,000 in revenue from 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 March 31, 2010 were $2.3 million, a decrease of $3.1 million from $5.4 million during the quarter ended March 31, 2009. 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 March 31, 2010 was $2.1 million, or $0.03 per share based on 62.9 million weighted average shares outstanding. This compares with a net loss of $5.3 million, or $0.12 per share based on 42.9 million weighted average shares outstanding, for the quarter ended March 31, 2009.

SOURCE Arrowhead Research Corporation