Arrowhead Raises Additional Capital from Institutional Shareholders; Increases Ownership in RNAi Subsidiary.

PASADENA, Calif. -- Arrowhead Research Corporation, (NASDAQ:ARWR) a nanotechnology company commercializing new technology in the areas of life sciences, electronics and energy, today announced that it has closed the sale of 204,918 shares of restricted common stock to Knott Partners, LP and Potomac Capital Partners, LP and certain of their affiliates. A portion of the proceeds of the sale was used to increase Arrowhead's ownership position in its majority-owned subsidiary, Calando Pharmaceuticals.

Under the terms of the agreement, Knott Partners and Potomac Capital purchased 102,250 and 102,668 shares, respectively of restricted common stock at $4.88 per share which represents the 10-day trailing average price from August 4, the date Arrowhead's Board approved the transaction. Arrowhead purchased 240,000 shares of the common stock of Calando Pharmaceuticals from a minority holder for an aggregate purchase price of $480,000. The remainder of the proceeds will be used for general corporate purposes.

About Arrowhead Research Corporation

Arrowhead Research Corporation 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.

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 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.