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<SEC-DOCUMENT>0001193125-09-258956.txt : 20091223
<SEC-HEADER>0001193125-09-258956.hdr.sgml : 20091223
<ACCEPTANCE-DATETIME>20091223124529
ACCESSION NUMBER:		0001193125-09-258956
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20091222
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20091223
DATE AS OF CHANGE:		20091223

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ARROWHEAD RESEARCH CORP
		CENTRAL INDEX KEY:			0000879407
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731]
		IRS NUMBER:				460408024
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-21898
		FILM NUMBER:		091257310

	BUSINESS ADDRESS:	
		STREET 1:		201 SOUTH LAKE AVENUE
		STREET 2:		SUITE 703
		CITY:			PASADENA
		STATE:			CA
		ZIP:			91101
		BUSINESS PHONE:		626-304-3400

	MAIL ADDRESS:	
		STREET 1:		201 SOUTH LAKE AVENUE
		STREET 2:		SUITE 703
		CITY:			PASADENA
		STATE:			CA
		ZIP:			91101

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	INTERACTIVE GROUP INC
		DATE OF NAME CHANGE:	20020509

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	INTERACTIVE INC
		DATE OF NAME CHANGE:	19940224
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML><HEAD>
<TITLE>Form 8-K</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P
STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>UNITED STATES </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="3"><B>WASHINGTON, D.C. 20549 </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P
STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>FORM 8-K </B>
</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P
STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>CURRENT REPORT </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman"
SIZE="3"><B>PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Date of Report (Date of earliest event
reported): December&nbsp;22, 2009 </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P
STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="6"><B>Arrowhead Research Corporation </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>(Exact name of registrant as specified in its charter) </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P
STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>0-21898 </B>
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Commission File Number) </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="50%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="48%"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Delaware</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>46-0408024</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(State or other jurisdiction of incorporation)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(IRS Employer Identification No.)</B></FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>201 South Lake Avenue, Suite 703, Pasadena, CA 91101 </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Address of principal executive offices) (Zip Code) </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Registrant&#146;s telephone number, including area code (626)&nbsp;304-3400 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Check the
appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule 13e-4(c)&nbsp;under the Exchange Act (17 CFR 240.13e-4(c)) </FONT></TD></TR></TABLE> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P
STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;2.02.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Results of Operations and Financial Condition. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman"
SIZE="2">On December&nbsp;22, 2009, Arrowhead Research Corporation announced and commented on its fourth quarter and year-end financial results for the period ended September&nbsp;30, 2009. A copy of the press release is furnished herewith as
Exhibit&nbsp;99.1 and incorporated by reference herein. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>In accordance with General Instruction B.2 of Form 8-K, the information in this
Current Report on Form 8-K, including Exhibits&nbsp;99.1 and 99.2, shall not be deemed &#147;filed&#148; for purposes of Section&nbsp;18 of the Securities Exchange Act of 1934, as amended (the &#147;<U>Exchange Act</U>&#148;), or otherwise subject
to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as expressly set forth by
specific reference in such filing to this Current Report on Form 8-K. </I></FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="9%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;9.01.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Financial Statements and Exhibits. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman"
SIZE="2">(d)&nbsp;Exhibits </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD WIDTH="90%"></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP> <P STYLE="border-bottom:1px solid #000000;width:39pt"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Exhibit&nbsp;No.</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Description</B></FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">99.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Press Release, dated December 22, 2009.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">99.2</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Transcript of earnings release conference call on December 22, 2009.</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">*&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp; * </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SIGNATURES </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. </FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Date: December 22, 2009</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">ARROWHEAD RESEARCH CORPORATION</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
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<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Christopher Anzalone</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Christopher Anzalone</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chief
Executive Officer</FONT></P></TD></TR>
</TABLE>

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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>EXHIBIT INDEX </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="92%"></TD></TR>
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<TD VALIGN="bottom" NOWRAP ALIGN="center"> <P STYLE="border-bottom:1px solid #000000;width:28pt" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Exhibit<BR>Number</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Description of Exhibit</B></FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">99.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Press Release, dated December 22, 2009.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
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<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">99.2</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Transcript of earnings release conference call on December 22, 2009.</FONT></TD></TR>
</TABLE>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>dex991.htm
<DESCRIPTION>PRESS RELEASE, DATED DECEMBER 22, 2009
<TEXT>
<HTML><HEAD>
<TITLE>Press Release, dated December 22, 2009</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 99.1 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center">

<IMG SRC="g80109g61j03.jpg" ALT="LOGO"> </P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>PRESS RELEASE</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px; margin-left:1.00em; text-indent:-1.00em"><FONT
STYLE="font-family:Times New Roman" SIZE="2">December&nbsp;22, 2009</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Investor Relations Contact:</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">Brandi Floberg</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Piacente Group, Inc.</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">212-481-2050</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="right"><FONT STYLE="font-family:Times New Roman"
SIZE="2">arrowres@tpg-ir.com</FONT></P></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>ARROWHEAD REPORTS FISCAL 2009 </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>FOURTH QUARTER AND FULL-YEAR FINANCIAL RESULTS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>PASADENA, Calif. &#151; December&nbsp;22, 2009 &#151; Arrowhead Research Corporation (NASDAQ: ARWR) </B>today announced financial results for its fiscal 2009 fourth quarter and full-year ended
September&nbsp;30, 2009. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Fiscal 2009 marked a period of transition in which we successfully streamlined our business model,
significantly reduced our cost structure, and made material advances with our lead subsidiaries,&#148; said Dr.&nbsp;Christopher Anzalone, Arrowhead&#146;s President and CEO. &#147;Our aggressive cost-cutting initiatives that we undertook at the
beginning of the year continue to pay-off. We are now a more efficient and flexible company, and have simultaneously retained the means to capitalize on longer-term growth opportunities. We strengthened our balance sheet through a number of
mechanisms, including: securing over $3.7 million in license fees, product sales, and grants; raising $4.1 million of equity capital directly into Calando and Unidym; and, raising $2.8 million directly in Arrowhead via an oversubscribed equity
financing transaction. Last week, after the end of fiscal 2009, we raised an additional $3.2 million of equity capital into Arrowhead by selling units of restricted stock and warrants at nearly $0.13 higher than our share price traded on the day the
financing closed. With this financing in place, we believe our current cash position is sufficient to advance our existing subsidiaries&#146; prospects through fiscal 2010. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;We also made key progress with our most advanced subsidiaries, Unidym and Calando. During the fourth quarter, we began selling Unidym&#146;s CNT film into the commercial touch panel market and we
are beginning to realize modest revenue contribution from the initial introduction of this product. While still in its early stages of market introduction, this marks a crucial milestone for our Company and signifies early adoption of new
technologies in the touch panel industry. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;We have reached an advanced point in Calando&#146;s siRNA Phase I clinical trial. We are seeing
exciting results that we believe could drive significant shareholder value in the near-term. A manuscript describing some of the data has been prepared for possible publication in a peer-reviewed scientific journal. While we have little control over
the timing of potential publication, we look forward to discussing the data once it is published,&#148; Dr.&nbsp;Anzalone concluded. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman"
SIZE="2"><B>FOURTH QUARTER FISCAL 2009 AND RECENT COMPANY HIGHLIGHTS: </B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Business highlights: </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">o</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Entered the touch panel market with majority owned Unidym, Inc.&#146;s carbon nanotube (CNT) film. </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">o</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Increased ownership in Unidym to nearly 80% to capture additional subsidiary value. </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">o</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Advanced Unidym&#146;s potential future revenue stream through licensing of certain fullerene derivatives patents to Nano-C for use in the growing thin film solar
industry. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">o</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Secured joint development agreements with leading liquid crystal display (LCD) manufacturers to progress Unidym&#146;s CNT product integration into display devices:
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="14%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Extended Samsung Electronics Co., Ltd. agreement for CNTs in flexible displays. </FONT></P></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="14%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Entered into new agreement with a major LCD manufacturer for CNTs in glass-based LCDs. </FONT></P></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">o</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Enhanced subsidiary Calando Pharmaceuticals, Inc.&#146;s strategic leadership with the addition of Mostafa Analoui, Ph.D., and Bruce D. Given, MD, to its Board of
Directors. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">o</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Completed consolidation activities to further streamline Unidym and Calando operations and maximize potential for near-term opportunities while conserving cash.
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="1%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Financial highlights: </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">o</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Decreased quarterly operating expenses by 68% year-over-year to $3.7 million. </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">o</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Decreased cash burn by 72% in the fourth quarter of fiscal 2009, compared with the same quarter in the prior fiscal year. </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">o</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">On August&nbsp;6, 2009, completed an oversubscribed financing transaction that raised gross proceeds of $2.8 million. </FONT></TD></TR></TABLE>

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<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">o</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">On December&nbsp;11, 2009, completed a private placement for gross proceeds of $3.2 million. </FONT></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"
ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SELECTED FISCAL 2009 FOURTH QUARTER FINANCIAL RESULTS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">For the fourth
quarter ended September&nbsp;30, 2009, Arrowhead reported revenues of $203,000, compared with ($60,000) in the same period in 2008. The loss in revenue for the fiscal 2008 period reflects an adjustment across periods in grant revenue. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total operating expenses for the fourth quarter of fiscal 2009 decreased by 68% to $3.7 million, compared with total operating expenses of $11.5 million for
the fourth quarter of fiscal 2008. The significant reduction in operating expenses was a direct result of measures undertaken by management at the beginning of the year to streamline its businesses and better align its cost structure with its
capital resources. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Net loss for the fourth quarter of fiscal 2009 was ($3.5) million, or ($0.06) per share based on 51.9&nbsp;million
weighted average shares outstanding. This compares with a net loss of ($8.7) million, or ($0.22) per share based on 40.5&nbsp;million weighted average shares outstanding, for the fourth quarter of fiscal 2008. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SELECTED FISCAL 2009 FULL-YEAR FINANCIAL RESULTS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">For the fiscal year ended September&nbsp;30, 2009, Arrowhead reported revenues of $3.8 million, compared with $1.3 million for the fiscal year ended September&nbsp;30, 2008. Net loss for the 2009 fiscal
year was ($19.3) million, or ($0.43) per share based on 45.2&nbsp;million weighted average shares outstanding, compared with a net loss of ($27.1) million, or ($0.69) per share based on 39.2&nbsp;million weighted average shares outstanding in the
2008 fiscal year. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Company&#146;s net cash used in operations for the 2009 fiscal year was $15.3 million, compared with $27.6 million in
the 2008 fiscal year. Arrowhead&#146;s consolidated cash flows included approximately $2.5 million raised from outside investors through a note offering by Calando and the sale of $2.0 million of newly issued Unidym C-1 shares to TEL Ventures in the
first quarter of fiscal 2009. Additionally, Unidym realized a $0.7 million gain through the sale of its equity interest in Ensysce BioSciences, Inc. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">As of September&nbsp;30, 2009, Arrowhead had cash and cash equivalents of $2.0 million and
stockholders&#146; equity of $4.9 million. Subsequent to the close of the 2009 fiscal year, Arrowhead sold an aggregate of 5.1&nbsp;million units comprised of common stock and warrants in private placement transactions with accredited investors for
gross proceeds of $3.2 million. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>Fiscal 2010 Outlook </U></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;We have reached an important inflection point that we believe could increase shareholder value in 2010 and beyond,&#148; said Dr.&nbsp;Anzalone. &#147;Our near-term goals for 2010 will be focused on
gaining market traction with Unidym&#146;s CNTs in the large touch panel market where we see considerable opportunity to drive value and growth. We&#146;ve made exceptional progress on this front as evidenced by our initial product introduction, as
well as our continued and new partnerships with leading LCD manufacturers. We also plan to continue to enroll patients in Calando&#146;s clinical Phase I escalating dose trial and believe that our initial data set holds important implications for
the future of RNAi therapeutics. In-line with our strategy to maximize revenue opportunity with minimal expenditure, we believe that as this trial proceeds, we will be well-positioned to monetize the value of Calando&#146;s delivery system and
therapeutic drug candidate through potential partnering, licensing or M&amp;A activities. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;In addition, after a year-long suspension of
efforts instituted to preserve capital, we have begun exploring new opportunities in the nanobiotech space. Given where Calando and Unidym are in their development, we are beginning to slowly shift from our defensive posture toward becoming more
opportunistic. We continue to keep a close eye on costs and plan to accelerate into this transition once we have better visibility into possible future liquidity events and extra available capital. This marks an important step that we believe will
enhance our portfolio and create additional shareholder value.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>Conference Call </U></B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Company will conduct a financial announcement conference call on, Tuesday, December&nbsp;22, 2009, at 4:30 p.m. Eastern time/1:30 p.m. Pacific time to
discuss the Company&#146;s results. To participate in the conference call, please dial 877-941-2068 toll free from the US our Canada, or 480-629-9712 from outside the US. Investors may also access a live audio web cast of this conference call on the
Company&#146;s website at www.arrowheadresearch.com. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">A replay of the webcast will be available approximately two hours after the conclusion of the call. The
webcast replay will remain available for 90 days. An audio replay will also be available approximately two hours after the conclusion of the call and will be made available until Tuesday, January&nbsp;5, 2010. The audio replay can be accessed by
dialing 800-406-7325 toll free from the US or Canada, or 303-590-3030 internationally, and entering access ID number 4196542#. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>About
Arrowhead Research Corporation </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Arrowhead Research Corporation (www.arrowheadresearch.com) (NASDAQ: ARWR) is a nanotechnology company
commercializing new technologies in the areas of life sciences and electronics. Arrowhead is seeking to build value for shareholders through the progress of its subsidiaries and investments. Currently, Arrowhead is focused primarily on its two
majority owned subsidiaries, Unidym, a leader in carbon nanotube technology for electronic applications, and Calando, at the forefront of clinical application of RNAi delivery technology. Arrowhead also has minority investments in two privately held
nanobiotech companies. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: </I></B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>This news release contains forward-looking statements within the meaning of the &#147;safe harbor&#148; 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 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, the financial resources available to us, and general economic conditions. For example, there can be no assurance that Arrowhead or its subsidiaries will be able to sustain operations for expected periods, that we will be
able to achieve or sustain targeted levels of expense reductions or that any of these entities will be successful in obtaining additional funding needed to sustain operations. Arrowhead Research Corporation&#146;s most recent Annual Report on Form
10-K and subsequent Quarterly Reports on Form 10-Q discuss some of the important risk factors that may affect our business, results of operations and financial condition. We disclaim any intent to revise or update publicly any forward-looking
statements for any reason. </I></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"># # # </FONT></P>
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<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>dex992.htm
<DESCRIPTION>TRANSCRIPT OF EARNINGS RELEASE CONFERENCE CALL ON DECEMBER 22, 2009
<TEXT>
<HTML><HEAD>
<TITLE>Transcript of earnings release conference call on December 22, 2009</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 99.2 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>ARROWHEAD RESEARCH </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4Q FISCAL 2009 CONFERENCE CALL </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>December&nbsp;22, 2009 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MANAGEMENT&#146;S
PREPARED REMARKS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Safe Harbor Statement </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>The below comments made during Arrowhead&#146;s conference may contain certain forward-looking statements within the meaning of Section&nbsp;27(A) of the Securities Act of 1933 and Section&nbsp;21(E)
of the Securities Exchange Act of 1934. All statements other than statements of historical fact, including without limitation those with respect to Arrowhead&#146;s goals, plans, and strategies are forward-looking statements. Without limiting the
generality of the foregoing, words such as may, will, expect, believe, anticipate, intend, could, estimate, or continue, or the negative or other variations thereof, or comparable terminology, are intended to identify forward-looking statements. In
addition, any statements that refer to projections of Arrowhead&#146;s future financial performance, trends in its businesses, or other characterizations of future events or circumstances are forward-looking statements. Forward-looking statements
represent management&#146;s current expectations and are inherently uncertain. You should also refer to the discussions under risk factors in Arrowhead&#146;s annual report on Form 10-K and the Company&#146;s quarterly reports on Form 10-Q for
additional matters to be considered in this regard. Thus, actual results may differ materially. Arrowhead undertakes no duty to update any of the forward-looking statements discussed on today&#146;s call. </I></FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Chris Anzalone </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Good afternoon everyone and
thank you for joining us on our call today. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">I believe we accomplished a great deal during fiscal 2009 and in recent months, and I will
address some of these accomplishments in the following categories: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">We secured additional capital to enable us to continue moving forward with our subsidiaries; </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">We made material advances in our subsidiaries; and </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">We completed streamlining our business model and cost reduction program. </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;
</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">1 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Based on these achievements, I believe Arrowhead has reached an important inflection point that positions us
well to drive significant shareholder value. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">During fiscal 2009, we secured over $3.7mm in license fees, product sales, and grants. During
the same period, we raised $4.1mm in equity financing directly into Calando and Unidym. Only $2.76 million was raised in an oversubscribed equity financing transaction directly into Arrowhead. Together, this capital provided funds for our operations
and enabled important progress from our lead subsidiaries throughout the year. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Last week, after the end of fiscal 2009, we secured over $3.2
million of additional capital through a private placement, in which we sold units consisting of shares and warrants at nearly $0.13 higher than our stock was trading on the day the financing closed. I personally participated in this offering and
have now invested a total of $500,000 into the company over the past two years. The current financing puts us on more solid footing to advance our strategic initiatives as we move through fiscal 2010. With our restructured operations and
significantly lower cost structure, we expect this financing to provide sufficient capital to cover operations through fiscal 2010. That said, we are pursuing potential exits, partnerships, and spin-outs as sources of additional capital to
accelerate our development and enable us to move into new opportunities. We believe that the current financing enables us to significantly increase the likelihood of such liquidity events. In addition, as our technical and market progress become
increasingly evident in coming months, it may make sense to strengthen our negotiating position with potential partners by further shoring up our balance sheet via the capital markets if terms are attractive. I believe that we are in the reasonably
strong position now of not <I>having</I> to raise any new capital in the near term, but rather only doing so if it clearly promotes near-term value creation or liquidity event opportunities. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Let us now turn to the performance of our subsidiaries. Our primary focus has been on our two most mature
subsidiaries, Calando Pharmaceuticals and Unidym. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Looking back at fiscal 2009, Calando made great progress cutting its costs while retaining
upside potential. We executed a partnership with Cerulean Pharma for the non-RNAi side of the business. This included the Cyclosert delivery system and drug candidate IT-101. We received $2.4 million in upfront payments, with potential future
revenues up to $2.75mm in additional milestone payments as IT-101 progresses through the clinic, and up to $30mm in sales and milestone payments should IT-101 be approved by the FDA plus royalties on net sales. As a delivery platform, Cyclosert has
the potential to generate a large number of new drugs in addition to IT-101. The agreement provides Calando with payments for <I>each </I>new compound that Cerulean brings to market with the Cyclosert platform. These payments include $3mm in
development milestones, up to $15mm in sales milestones, plus royalties on net sales for <I>each</I> new drug candidate. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">With the Cerulean
deal done, Calando focused its resources on continuing its RNAi clinical program with the ultimate goal of selling or partnering the platform. Because this is an area of intense interest within the pharmaceutical industry and because of our position
as a leader in the field of siRNA delivery, we believe this is an extremely efficient use of capital that has the potential to create significant shareholder value. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We believe we have reached a pivotal point in Calando&#146;s siRNA clinical trial, and this is critical when evaluating its near-term value and proximity to a liquidity event. As a reminder, this is a
Phase I ascending-dose trial whereby three patients receive a given dose of drug candidate CALAA-01 and if there are no serious drug-related toxicities, three new patients receive a higher dose, and so on. We have seen no significant drug-related
side effects and we are now very
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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deep into the trial. Of course, the primary endpoints for Phase I trials relate to safety and dose range of a drug candidate. While we have not yet finished the trial, we are seeing that CALAA-01
is very well tolerated and we continue to search for the maximum tolerated dose, or MTD. Importantly, at the current dose range we are beginning to see some very encouraging clinical activity and we believe we still may be significantly below the
MTD. A manuscript describing some of these data has been prepared for possible publication in a peer-reviewed scientific journal. We have little control of the timing of such publication but will update you when we can. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">I continue to be extremely excited about the results and believe that our data set will ultimately bolster the value of Calando&#146;s drug candidate and
proprietary RNAi delivery system. I think it is important to look at Calando&#146;s value in these two ways: as being derived both from CALAA-01 as a specific drug candidate <I>and</I> from RONDEL as a broader, flexible siRNA delivery system. It is
our hope that positive clinical data will suggest that CALAA-01 may ultimately be a valuable drug, and that CALAA-01 is also a proof of concept that demonstrates the value of RONDEL for delivering virtually any other oncology-related siRNA sequence.
With respect to the former, large pharmaceutical companies have repeatedly demonstrated a willingness to pay high prices to acquire the rights to effective oncology drugs. With respect to the latter, we believe that Calando&#146;s greatest value
will be derived from its flexibility as a sequence-agnostic siRNA delivery vehicle. Our goal is to partner CALAA-01 and RONDEL in one or multiple transactions in such a way that Arrowhead will experience a liquidity event and have long-term upside
potential as RONDEL-derived therapies approach the market. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Four key factors relating to our ability to monetize Calando existed a year ago
and still remain. They are: (1)&nbsp;systemic delivery of siRNA continues to be viewed as the &#147;holy grail&#148; of RNAi therapeutics; (2)&nbsp;there is no technology that has yet been widely accepted as a solution to the delivery problem in
humans; (3)&nbsp;to the
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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best of our knowledge, Calando was the first company to initiate a clinical trial using siRNA against cancer; and (4)&nbsp;to the best of our knowledge, Calando was the first to use a delivery
vehicle for the systemic delivery of siRNA in humans. What has changed is our clinical data set. We believe that the combination of an unmet need in a potentially large new class of therapeutics, our early entrance into the field, and new clinical
data demonstrating the power of our technology together represent an attractive opportunity to partner or sell Calando. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In preparation for
our future activity with Calando, we have enhanced Calando&#146;s leadership with the addition of Dr.&nbsp;Mostafa Analoui, and Dr.&nbsp;Bruce Given, to the Company&#146;s Board of Directors. We welcome Mostafa and Bruce to the team and expect their
deep clinical and extensive Pharma experience will be invaluable assets as we work to monetize Calando. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Now to Unidym. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">I am proud to announce that Unidym successfully met its goal of beginning sales of production scale film into the commercial touch panel market.<B> </B>Let
me be clear that this does not yet mean the gadgets you buy this holiday season at your local retailer will have our materials in them, but it marks a significant milestone for both our company and the industry. It points to the likelihood of early
adoption of new replacement technologies in the electronic display market. In line with our expectations, the initial revenue from film sales to touch panel manufacturers is very small at this stage. However, we are optimistic that our penetration
rates will rise as touch panel manufacturers see a viable alternative in Unidym&#146;s CNT film products. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">To our knowledge, the overwhelming
majority of large-scale commercial touch screen devices currently rely on indium tin oxide, or ITO, however, we are finding among customers a widespread interest in the integration of an effective replacement. Based on this, we expect that the first
company to offer a scalable and cost-competitive replacement has the potential to create substantial value. It has been our goal to be that company and with our initial entry to this market we are now closer than ever to achieving that goal.
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">5 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Unidym&#146;s initial value proposition for its CNT materials relies heavily on price concerns and
availability of ITO. However, going forward we believe we may have favorable pricing flexibility because we expect our product lines to provide significant advantages over ITO including: improved touch screen life, decreased cost of ownership,
increased manufacturing throughput, decreased environmental impact, better supply security, and enhanced design options such as the ability to make flexible screens and seamlessly integrate LCD and touch panel into singular devices. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">As we&#146;ve said in the past, our initial targets for CNTs are in the touch panel, LCD and solar cell markets. To this end, we have made continued
progress to set the stage for future revenue streams from Unidym&#146;s CNT materials. In the last several months we have secured key joint development agreements with leading LCD manufacturers to continue our progress in this field. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In December, we extended our joint development agreement with Samsung Electronics for a third year. This agreement continues our collaboration with Samsung
to integrate CNT materials as the transparent conductive layer in display devices. Samsung Electronics has used Unidym&#146;s film materials to demonstrate what we believe is the world&#146;s first flexible, solution printable 14.3-inch color
electrophoretic display, or EPD. EPDs are currently being used in products such as Amazon&#146;s Kindle electronic book device. EPDs represent a next generation of displays with inherent advantages over traditional flat panels, due to their low
power consumption and bright light readability. We believe that CNTs could play a crucial role in the development of next generation displays as they are both cost effective and carry superior properties compared with ITO. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">6 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We also entered into a new joint development agreement with a major LCD manufacturer for CNTs in glass-based
LCDs. Our products are well suited for incorporation into glass-based LCDs as they offer a lower cost of material and deposition, increased yield, and elimination of the acid patterning process associated with ITO. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In addition to the value creation we see from commercializing Unidym&#146;s CNTs, we have also focused our efforts on licensing opportunities with our
extensive patent portfolio. To this end, Unidym recently signed a license agreement with Nano-C, a leading developer of nano-constructed carbon materials. Through this agreement, we have granted Nano-C an exclusive license to certain fullerene
patents for use in the development of the growing thin film solar industry. We believe they are well-positioned to help us extract significant value from this intellectual property. We are in the process of completing other similar license
agreements. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Unidym continues to work closely with its collaboration customers to break into our target markets. Our partners include
industry-leading companies such as Samsung Electronics and Tokyo Electron. We are delighted to maintain these distinguished relationships as these companies have broad reach in Asia where the bulk of the display manufacturing takes place. We also
believe that these partnerships provide third-party affirmation of Unidym&#146;s product lines. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Because Unidym&#146;s technology may be
applied to a wide variety of products across multiple markets, the display and solar industries are by no means our only long-term target. After we begin to penetrate these industries, we plan to accelerate our work in the use of films for
applications including solid-state lighting, smart windows and energy storage. For now, our resources are focused on commercializing printable transparent conductive films and licensing opportunities. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">7 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">To capture the value of Unidym&#146;s products, we have strategically increased our stake in Unidym and now
own almost 80% of this subsidiary. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In addition to Calando and Unidym, our two most mature subsidiaries, we have two wholly owned
subsidiaries, Tego Biosciences and Agonn Systems, and two minority-owned holdings, Nanotope and Leonardo Biosystems. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Tego has broad
intellectual property relating to modified fullerenes for use in diagnostics, therapeutic, imaging, and other biopharmaceutical-related applications. We believe that Tego&#146;s patent portfolio is potentially quite valuable and its proprietary
technology can be used to develop a large number of different products. In line with our strategy to realize value from our subsidiaries while limiting ongoing costs, Tego has adopted a licensing model and we have ceased most ongoing expenses
associated with it. Tego has executed an exclusive license with the Bronx Project to develop and commercialize carboxylated fullerenes for development in neurodegenerative fields, multiple sclerosis, brain trauma and schizophrenia. We signed this
agreement in July for $100,000 in upfront fees, $2.35 million in milestone payments plus royalties, as well as 5% of the proceeds if The Bronx Prjoect itself is sold to a third party. We have also been working on additional partnerships and expect
to complete a deal in coming months. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Like Tego, Agonn is a virtual company with no operations and minimal capital requirements. While we see
an opportunity for Agonn with its IP and know-how surrounding the use of CNTs in supercapacitors, a class of energy storage devices, this has not been a major focus for us as we have sought to restructure Arrowhead, cut our burn, and focus on
nearer-term opportunities. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Nanotope and Leonardo Biosystems are both minority Arrowhead holdings, however, we see compelling opportunities
for both companies and expect to enter commercial partnerships in 2010. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">8 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Nanotope is a regenerative medicine company that leverages a core platform technology to regenerate diverse
tissue types. In multiple animal models, it has demonstrated the ability to: 1) reverse paralysis by regenerating spinal cord tissue after injury; 2) accelerate wound healing; 3) regenerate bone; and 4) regenerate cartilage. Most recently, it has
generated exciting new data in a rodent Parkinson&#146;s Disease model. Nanotope&#146;s business model is to develop product candidates through proof of concept in animals and then source appropriate partners to bring them through clinical trials
and to the market. We expect that we will enter a commercialization corporate partnership over the next several months. Again, this allows us to keep Nanotope&#146;s burn rate low, avoid the expenses associated with clinical trials, and maximize the
chances of widespread adoption of approved products by working with best-in-class companies for its target markets. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Leonardo is a Texas-based
cancer drug delivery company built around the work of Dr.&nbsp;Mauro Ferrari. It was built on the concept that drug delivery will be far more efficient if multiple vehicles are used, each customized to get through specific biological barriers.
Importantly, the delivery system is therapeutic-agnostic, hence it can be used for multiple classes of drugs and a virtually infinite number of different products. Leonardo has a very low burn rate because it works closely with
Dr.&nbsp;Ferrari&#146;s laboratory, one of the best funded drug delivery groups in the world, to advance the technology. We are very excited about Leonardo and its potential to create value. We have been working closely with the state of Texas over
the past year and are optimistic that Leonardo will receive funding from the Texas Emerging Technology Fund over the next few months. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">While
we are focused on our current projects, we believe this is an attractive time to source new technologies and start new projects. Given where Calando and Unidym are in their development, we are beginning to slowly shift our posture from defensive
toward becoming more opportunistic. As such, we are beginning to explore some exciting new prospects in the nanobiotech space. We continue to keep a close eye on costs and this transition will not accelerate appreciably until we have better
visibility into possible future liquidity events and extra available capital. However, this is an important step that we believe will enhance our portfolio and create additional shareholder value. We look forward to updating you on this front as new
agreements come to fruition. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Lastly,</B> but by no means less important, I am pleased to report that we have completed our ongoing
restructuring measures. Our aggressive cost-cutting initiatives that we began over a year ago continue to pay-off as evidenced by our 45% reduction in net cash used in operations for fiscal 2009 compared with the prior fiscal year. We are now
operating at a run rate of approximately $580,000 per month and are a far more efficient and flexible company. Amid our aggressive cost-cutting initiatives and increased focus on near-term revenue, we have retained the means to capitalize on
longer-term growth opportunities, which is paramount to our future success. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">With that, I would like to turn the call over to our interim
chief financial officer Ted Kingsley to provide details of our financial results for the quarter. Ted? </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Ted Kingsley </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Thank you Chris. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px;padding-bottom:3px;"><FONT STYLE="font-family:Times New Roman" SIZE="2">As we reported earlier today, on a consolidated basis,
Arrowhead finished fiscal 2009 with a net loss of $19.3 million compared to a net loss of $27.1 million in the prior-year, a 28.8% decrease in net loss. The reduction in spending across the board resulted in a 4</FONT><FONT
STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">th</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"> quarter loss of $3.5 million and we expect this trend to continue in
fiscal 2010. On a consolidated basis, net cash used in operating activities during the year totaled $15.3 million compared to $27.6 million in the prior-year. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Cash as of the end of the fiscal year 2009 totaled approximately $2 million compared to $10.2 million as of the end of the prior fiscal year. However, our cash position has been supplemented by the
financing of $3.2 million which we announced last week. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Revenues increased to $3.8 million in fiscal 2009 compared to $1.3 million in the
prior year. This increase was primarily attributable to $2.4 million received through the licensing of IT101 platform to a third party. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px;padding-bottom:3px;"><FONT
STYLE="font-family:Times New Roman" SIZE="2">During the year, the company had consolidated operating expenses of $23.5 million compared to $36.3 million in the prior year, a decrease of 35.3%. Operating expenses for fiscal 2009 included
approximately $6 million in non cash items. The non-cash items were as follows: $2.7 million of non-cash stock-based compensation expense, $2.3 million in non-cash charges to purchased in process R&amp;D related to the issuance of Arrowhead stock to
acquire additional interest in Unidym and $1.0 million in non-cash depreciation charges. Operating expenses for the 4</FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">th</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"> quarter of fiscal 2009 were $3.7 million compared to operating expenses of $11.5 million for the 4</FONT><FONT
STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">th</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"> quarter of 2008, a decrease of 67.8%. This decrease in operating
expenses is attributable to consolidating facilities across the organization, as well as reductions in headcount and other cost saving actions and is expected to continue into fiscal 2010. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">I will now turn the call over to Chris for concluding remarks. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chris Anzalone </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Thanks Ted. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">As I outlined earlier, we have reached a critical stage in our development and have laid a solid foundation for 2010 and beyond. Our near-term goals for
2010 will be focused on three core initiatives: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">First, we plan to enroll new patients in Calando&#146;s clinical trial and believe that if
our initial data set holds, it will generate important implications for the future of RNAi therapeutics. We believe that as this trial proceeds, we&#146;ll be well-positioned to monetize Calando&#146;s delivery system and drug candidate through
partnering, licensing or M&amp;A activities. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Second, we will continue to work to gain market traction with Unidym&#146;s CNTs in the large
touch panel and LCD market where we see considerable opportunity to drive value and growth. We&#146;ve made exceptional progress on this front as evidenced by our initial market introduction, as well as our continued and new partnerships with
leading LCD manufacturers. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Third, we will begin looking to other opportunities beyond Unidym and Calando by moving forward with our earlier
stage companies, Nanotope and Leonardo. In addition, we have begun exploring new opportunities. After a long suspension of efforts instituted to preserve capital, we are prepared to keep a keen eye out for new projects that will drive our near-term
value. We remain focused on keeping our costs low, but as our bandwidth increases and additional capital becomes
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">12 </FONT></P>


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available, we are excited about the prospects of building and acquiring new nanobiotech companies. We have high quality core competency here and view this as a uniquely attractive time to do new
deals. Disruptions in the capital markets have caused a bulging in the supply of relatively late stage technologies that have yet to be commercialized. We see multiple opportunities to acquire later stage technologies for less capital than any time
in recent history. If we are able to capitalize on this, it potentially means less time to market, less time to a liquidity event, and lower capital consumption. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We are extremely excited about our progress in 2009 and our prospects as we move into 2010. We believe we have some very valuable assets that are maturing well, and we look forward to begin monetizing
them. As we look ahead, we are delighted by our near- and longer-term prospects and believe we are well-positioned to drive increasing value for our company and our shareholders. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">With that, I&#146;d like to wish you all a wonderful and peaceful holiday season and a very happy new year. I will now open the call to questions. Operator? </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"># # # </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">13 </FONT></P>

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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
