Arrowhead Research Corp. CEO and President Interview: Christopher Anzalone

• On 3:13 pm EDT, Tuesday September 15, 2009

67 WALL STREET, New York - September 15, 2009 - The Wall Street Transcript has just published its Medical Research Services report offering a timely review of the sector to serious investors and industry executives. This 23 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Medical Device Research Services - Pharmaceutical Research Services - Diagnostics - Life Science Research Supplies - Biology R & D - Lab Services Business Model - International Economic Exposure - Effect of Recession on Sector Stocks - Top Stock Winners and Losers in Medical Research Services - Top Stock Winners and Losers in Medical Diagnostics

Companies include: Arrowhead Research (ARWR); Cleveland BioLabs (CBLI); IR BioSciences Holdings (IRBS); Power3 Medical Products (PWRM); Illumina (ILMN); Luminex (LMNX); Waters (WAT); Life Technologies (LIFE); QIAGEN (QGEN); Sangamo BioSciences (SGMO); Beckman Coulter (BEC); Invitrogen (IVGN); Amgen (AMGN); Bristol-Myers (BMY); Eli Lilly & Co. (LLY); Myriad Genetics (MYGN); Genomic Health (GHDX); Targeted Genetics (TGEN); Dow Chemical (DOW); Sigma-Aldrich (SIAL); MDS (MDZ); Danaher (DHR); Cepheid (CPHD); Inverness Medical Innovations (IMA); Quidel (QDEL); Meridian Bioscience (VIVO); Gen-Probe (GPRO); Sequenom (SQNM); Genoptix (GXDX); Response Genetics (RGDX); Affymetrix (AFFX); Monogram Bioscience (MGRN); LabCorp (LH)

In the following brief excerpt from the 23 page report, Christopher Anzalone discusses the outlook for the sector and for investors.

TWST: Would you give me a brief history of your company and what your focus is on now?

Mr. Anzalone: We started out as a nanotechnology company founded by Bruce Stewart. Bruce has a track record of starting companies and taking them public. Nanotechnology was a relatively new field of science at the time, and he saw a big opportunity to provide investors with a mechanism to gain exposure to this new field. Essentially, Arrowhead was designed to be a scalable platform for building highly specialized subsidiaries with an eye toward maximizing capital efficiency and accelerating the rate of product development. The founders of the company determined the best way to support this was by becoming a public entity, and in 2004 we went public via a reverse merger. The first company that Arrowhead acquired was a company called Insert Therapeutics, which was initially a drug delivery company that built on top of that foundation. I joined Arrowhead in December of 2007 during the initial stages of the market meltdown.

TWST: In mid-July, you were listed on StandoutStocks.com as among stocks that stand out. What were the reasons you would say that your company stock stands out?

Mr. Anzalone: I think we stand out for two primary reasons: One is the quality of the science that backs our companies and, therefore, the quality of these companies. If you look at Unidym as a key example, what we have is a replacement material for what's currently being used in displays, meaning LCDs and touchscreens used, for example, in cell phones. These are very large markets; they're growing quite rapidly even in this recessionary period. These markets have been looking for a replacement for a key component called ITO, or indium tin oxide. It has been clear to the large manufacturers for some time that what's being used now is a suboptimal material, and that is one of the key drivers for developing a replacement. We believe Unidym's product can be that replacement. We've been working with large companies for some time now, including Samsung and LG, to break into these markets. We've conducted extensive sampling of our prototypes, we have made literally dozens of working prototypes in both touch screens and LCDs that use our material in place of this ITO. And we think that we are very near breaking into touch screen markets with initial entry expected later this year.

TWST: Would you say you're undervalued?

Mr. Anzalone: I think that we have very compelling stories, we have very compelling technology designed to address large markets, we have very good companies and we have a seasoned management team. And I think that we have near-term opportunities to penetrate these markets. Our stock price has really suffered over the last year, and we have made significant progress in controlling cost and continuing development, which ultimately positions us for driving near-term value in new product introductions as well as being in a more stable financial position when the market returns. We are at least as close to the large markets right now as we were a year ago, but our stock price is a fraction of what it was at that point.

TWST: When do you expect to have the Phase I results?

Mr. Anzalone: It's difficult to say. I can tell you that it won't be done this year, but we think it'll be done in the first half of 2010. We will be looking at data between now and then of course, but we don't think that the entire trial will be complete until first half of 2010.

TWST: Would you say that iss your competitive advantage as you keep your fingers in various pots?

Mr. Anzalone: I don't see any other publicly traded company doing what we do in nanotechnology. Certainly there are other companies that are looking to commercialize nanotechnology, but I don't see any other companies that are looking to actively operate multiple subsidiaries to exploit nanotechnology. With this strategy, we have a sound portfolio effect, which mitigates risk because we are working on a number of different platforms, a number of different technologies in different markets, and so that helps our risk profile, certainly. The challenge for us is to be properly valued because it's very difficult for analysts to properly value all our holdings across industries. So it's just incumbent upon us to help to educate the market about what we are doing. So I think that's one competitive advantage, the way we are running the business. I think that we have a capital-efficient model of tracking value from diverse nanotechnologies. I think that it may be hard to find other companies that do that as well as we do. I think we have very good access to the movers and shakers in basic nanotechnology research.

TWST: Thank you. (MR)

Christopher Anzalone, PhD President & CEO Arrowhead Research Corporation 201 South Lake Avenue, Suite 703 Pasadena, CA 91101 (626) 304-3400 (626) 304-3401 - FAX www.arrowheadresearch.com

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