Arrowhead Reports Fiscal 2014 Year End Financial Results

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

PASADENA, Calif.–(BUSINESS WIRE)–

Arrowhead Research Corporation (NASDAQ: ARWR), a biopharmaceutical

company developing targeted RNAi therapeutics, today announced financial

results for its fiscal 2014 fourth quarter and year ended September 30,

2014. The company is hosting a conference call at 4:30 p.m. EST to

discuss results.

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 38229976. 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

38229976.

Fiscal 2014 Year End Company Highlights

Corporate Highlights

• Strengthened our balance sheet with equity financings totaling

  approximately $172.6 million in net proceeds during fiscal 2014

• Hired additional R&D staff in key areas, including manufacturing,

  toxicology, chemistry, biology, quality assurance, regulatory and

  clinical operations to support rapid development of ARC-520 and

  additional clinical candidates

• Upgraded NASDAQ listing to the Global Select Market

• Joined the broad-market Russell 3000 Index and the small-cap Russell

  2000 Index

Pipeline Highlights

• Nominated ARC-AAT as the Company’s next clinical candidate and held an

  analyst day in June 2014 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

• Completed planned enrollment of six initial dose cohorts (n=36) and

  three additional cohorts (n=18) in a Phase 1 clinical trial indicating

  ARC-520 was generally well-tolerated in all nine cohorts at ascending

  dose levels of 0.01 – 4.0 mg/kg

• Initiated a Phase 2a dose finding study of ARC-520 and completed

  dosing of three initial dose cohorts (n=24) at 1.0, 2.0, and 3.0

  mg/kg, with a 4.0 mg/kg cohort now underway

• Presented preclinical data on ARC-520 at the 2013 AASLD Liver Meeting

  demonstrating reduction of key HBV antigens and DNA, and evidence of

  immune reactivation in a chimpanzee with chronic HBV infection

• Presented interim data on the ongoing Phase 2a study of ARC-520 and

  additional preclinical data on ARC-AAT at the 2014 AASLD Liver Meeting

Selected Fiscal 2014 Year End Financial Results

ARROWHEAD RESEARCH CORPORATION
CONSOLIDATED CONDENSED FINANCIAL INFORMATION
			Year Ended September 30,
OPERATING SUMMARY				2014				2013
REVENUE			$	175,000			$	290,266
OPERATING EXPENSES
Research and development				23,138,050				8,705,627
Salaries and payroll-related costs				12,829,355				6,667,669
General and administrative expenses				5,894,008				3,488,864
Stock-based compensation				5,696,173				1,536,271
Depreciation and amortization				1,345,655				1,751,412
Impairment expense				2,172,387				1,308,047
Contingent consideration – fair value adjustments				2,375,658				1,421,652
TOTAL OPERATING EXPENSES				53,451,286				24,879,542
OPERATING LOSS				(53,276,286	)			(24,589,276	)
OTHER INCOME/(EXPENSE), LOSS FROM DISCONTINUED OPERATIONS, PROVISION FOR INCOME TAXES				(5,449,126	)			(7,114,157	)
NET LOSS			$	(58,725,412	)		$	(31,703,433	)
EARNINGS PER SHARE (BASIC AND DILUTED):			$	(1.25	)		$	(1.30	)
WEIGHTED AVERAGE SHARES OUTSTANDING				46,933,030				24,002,224
FINANCIAL POSITION SUMMARY			September 30,
				2014				2013
CASH AND CASH EQUIVALENTS				132,510,610				19,114,444
SHORT AND LONG-TERM INVESTMENTS				44,741,378				10,732,414
TOTAL CASH RESOURCES (CASH, CASH EQUIVALENTS AND INVESTMENTS)				177,251,988				29,846,858
OTHER ASSETS				5,564,768				7,482,773
TOTAL ASSETS				182,816,756				37,329,631
TOTAL LIABILITIES				16,831,501				11,594,842
TOTAL STOCKHOLDERS’ EQUITY				165,985,255				25,734,789
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY				182,816,756				37,329,631
SHARES OUTSTANDING				54,656,936				32,489,444
PROFORMA SHARES OUTSTANDING (INCLUDING CONVERSION OF PREFERRED SHARES)				58,644,142				37,899,280

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. Arrowhead has

completed enrollment in a Phase 1 single ascending dose study in normal

volunteers. The company is conducting a single dose Phase 2a study in

chronic HBV patients, and expects to follow with multi-dose,

multi-national Phase 2b studies. Approximately 350-400 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 trigger 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 the mutant AAT (Z-AAT) protein in

animal models. Reduction of liver production of the 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 potentially allow fibrotic tissue

repair. The Company filed to initiate testing in humans in the fourth

quarter of 2014 and intends to begin the study shortly after receiving

approval.

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 and receive news directly,

please visit http://ir.arrowheadresearch.com/alerts.cfm.

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.

Source: Arrowhead Research Corporation

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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