Arrowhead Reports Fiscal 2014 Third Quarter Financial Results and Provides Update on ARC-520

– Conference Call Today at 4:30 p.m. EDT

PASADENA, Calif.–(BUSINESS WIRE)–

Arrowhead Research Corporation (NASDAQ: ARWR), a biopharmaceutical

company developing targeted RNAi therapeutics, today announced financial

results for its fiscal 2014 third quarter ended June 30, 2014 and

provided an update on the Phase 2a study of ARC-520, its RNAi-based

candidate for the treatment of chronic hepatitis B infection. The

company is hosting a conference call at 4:30 p.m. EDT to discuss

results. Conference call and webcast details can be found below.

ARC-520 Phase 2a Study Update

• Completed dosing of 1 mg/kg and 2 mg/kg dose cohorts

• Initial blinded data suggest that the magnitude of HBsAg knockdown is

  similar to non-human primate studies, including the chronically

  infected chimpanzee reported on previously

• Duration of knockdown appears to be substantially more sustained than

  in non-human primates, with patients in the 2 mg/kg group still

  demonstrating substantial knockdown after 8 weeks, which is the most

  recent time point available

• HBsAg levels appear to continue to decline in a number of patients at

  the 8 week time point in the 2 mg/kg group

• Based on initial review, dosing less frequent than once monthly will

  be explored in Phase 2b

• ARC-520 continues to be well tolerated, with no dropouts or serious

  adverse events reported

• The overall rate of AEs has been lower in the Phase 2a than in the

  Phase 1 normal volunteer study and safety labs continue to show no

  indication of end organ toxicity

• Enrolled and dosed additional subjects at 3 mg/kg in the still open

  normal volunteer study and the dose performed well, without detected

  differences from safety and tolerability results at the other doses.

  Overall AEs do not appear to be increasing in frequency or severity

  with dose

• Received IRB and DSMB approvals to proceed and began enrolling an

  additional dose cohort at 3 mg/kg in the Phase 2a patient study

Fiscal 2014 Third Quarter and Recent Company Highlights

• Nominated a second clinical candidate using our DPC delivery system,

  ARC-AAT, for the treatment of a rare liver disease associated with

  alpha-1 antitrypsin deficiency and hosted an analyst day to present

  preclinical data

• Signed an agreement with The Alpha-1 Project (TAP), the venture

  philanthropy subsidiary of the Alpha-1 Foundation. Under the terms of

  the agreement, TAP will partially fund the development of ARC-AAT. In

  addition, TAP will make its scientific advisors available to

  Arrowhead, assist with patient recruitment for clinical trials through

  the Alpha-1 Foundation Patient Research Registry, and engage in other

  collaborative efforts that support the development of ARC-AAT

• Initiated the final steps required to file an IND or equivalent

  application for ARC-AAT, including necessary toxicology studies

• Expanded intellectual property protection with U.S. Patent Application

  number 13/535,454 covering ARC-520’s siRNA component, being recently

  allowed by the U.S. Patent and Trademark Office

• Presented data on advancements made to the DPC delivery system at

  multiple scientific meetings

• Arrowhead added to the broad-market Russell 3000 index and small-cap

  Russell 2000 index

Selected Fiscal 2014 Third Quarter Financial Results

Net loss attributable to Arrowhead for the quarter was $11.6 million, or

$0.22 per share based on 51.9 million weighted average shares

outstanding. This compares with a net loss attributable to Arrowhead of

$6.1 million, or $0.23 per share based on 26.1 million weighted average

shares outstanding, for the quarter ended June 30, 2013.

Total operating expenses for the quarter were $12.7 million, compared to

$6.4 million for the quarter ended June 30, 2013. Research and

development related expenses were $6.4 million and general and

administrative expenses were $1.6 during the quarter.

Net cash used in operating activities for the first nine months of

fiscal 2014 was $24.5 million, compared with $13.6 million in the prior

year period.

The company’s cash and investments of cash were $188.5 million at June

30, 2014, compared to $29.8 million at September 30, 2013. The increase

in the cash balance reflects financings completed in October 2013 and

February 2014, plus cash inflow from exercise of warrants and stock

options of $12.4 million.

Common shares outstanding at June 30, 2014, were 52.9 million, and 58.5

million assuming conversion of preferred stock outstanding.

Conference Call and Webcast Details

To participate in the conference call, please dial 855-215-6159 (toll

free from the US) or 315-625-6887 (for international callers) and enter

Conference ID 82825377. Investors may also access a live audio webcast

of this conference call on the Company’s website at http://ir.arrowheadresearch.com/events.cfm.

A replay of the webcast will be available approximately two hours after

the conclusion of the call and 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 available for 7 days. The audio

replay can be accessed by dialing 855-859-2056 (toll free from the US),

or 404-537-3406 (for international callers) and entering Conference ID

82825377.

About ARC-520

Arrowhead’s RNAi-based candidate ARC-520 is designed to treat chronic

HBV infection by reducing the expression and release of new viral

particles and key viral proteins. The goal is to achieve a functional

cure, which is an immune clearant state characterized by hepatitis B

s-antigen negative serum with or without sero-conversion. The siRNAs in

ARC-520 intervene at the mRNA level, upstream of where nucleotide and

nucleoside analogues act. In transient and transgenic mouse models of

HBV infection, a single co-injection of Arrowhead’s Dynamic

Polyconjugate (DPC) delivery vehicle with cholesterol-conjugated siRNA

targeting HBV sequences resulted in multi-log knockdown of HBV RNA,

proteins and viral DNA with long duration of effect. The company is

conducting a single dose Phase 2a study in chronic HBV patients, and

expects to follow with a multi-dose, multi-national Phase 2b program.

Approximately 350 million people worldwide are chronically infected with

the hepatitis B virus. Chronic HBV infection can lead to cirrhosis of

the liver and is responsible for 80% of primary liver cancers globally.

About ARC-AAT

Arrowhead has developed ARC-AAT for the treatment of liver disease

associated with Alpha-1 Antitrypsin Deficiency (AATD), a rare genetic

disease that severely damages the liver and lungs of affected

individuals. ARC-AAT employs a novel unlocked nucleobase analog (UNA)

containing RNAi molecule designed for systemic delivery using the

Dynamic Polyconjugate delivery system. ARC-AAT is highly effective at

knocking down the Alpha-1 antitrypsin (AAT) gene transcript and reducing

the hepatic production of mutant AAT (Z-AAT) protein. Reduction of

inflammatory Z-AAT protein, which has been clearly defined as the cause

of progressive liver disease in AATD patients, is important as it is

expected to halt the progression of liver disease and allow fibrotic

tissue repair. The Company plans to file for regulatory permission in

the fourth quarter of 2014 and to commence clinical studies.

About Arrowhead Research Corporation

Arrowhead Research Corporation is a biopharmaceutical company developing

targeted RNAi therapeutics. The company is leveraging its proprietary

Dynamic Polyconjugate delivery platform to develop targeted drugs based

on the RNA interference mechanism that efficiently silences

disease-causing genes. Arrowhead’s pipeline includes ARC-520 for chronic

hepatitis B virus, ARC-AAT for liver disease associated with Alpha-1

antitrypsin deficiency, and partner-based programs in obesity and

oncology.

For more information please visit http://www.arrowheadresearch.com,

or follow us on Twitter @ArrowRes.

To be added to the Company’s email list to receive news directly, please

send an email to ir@arrowres.com

Safe Harbor Statement under the Private Securities Litigation Reform

Act:

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 our ability to finance our operations, the

future success of our scientific studies, our ability to successfully

develop drug candidates, the timing for starting and completing clinical

trials, rapid technological change in our markets, and the enforcement

of our intellectual property rights. Arrowhead Research Corporation’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 assume

no obligation to update or revise forward-looking statements to reflect

new events or circumstances.

Arrowhead Research Corporation
Vince Anzalone, CFA
626-304-3400
ir@arrowres.com
or
Investor

Relations:
The Trout Group
Lauren Glaser
646-378-2972
ir@arrowres.com
or
Media:
Russo

Partners
Martina Schwarzkopf, Ph.D.
212-845-4292
martina.schwarzkopf@russopartnersllc.com

Source: Arrowhead Research Corporation

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