Press Room

ARROWHEAD SUBSIDIARY UNIDYM SIGNS STRATEGIC ALLIANCE WITH BATTELLE

Pasadena, CA, July 12, 2007

Arrowhead Research Corporation (NASDAQ: ARWR) announced today that its majority-owned subsidiary, Unidym, has signed a strategic alliance agreement with Battelle, a global science and technology enterprise that develops and commercializes technologies. Under the alliance agreement, Unidym and Battelle will explore opportunities to leverage their respective capabilities to commercialize nanotube-based products. Battelle will also have the option of investing up to $2 million in Unidym's next round of financing.

"Arrowhead is pleased to be working with an organization of the global standing, technical expertise and product development experience of Battelle," stated Art Swift, President and CEO of Unidym. "Our partnership could facilitate more rapid commercialization of disruptive nanotube-based products in different industries."

"Unidym is well positioned to commercialize carbon nanotubes in a broad range of markets,ˇ¨ explained Alex Kawczak, VP of Nanotechnology at Battelle. "The combination of Unidym's IP portfolio and expertise in CNT production and CNT-based electronics combined with Battelle's IP and experience in areas ranging from composite materials to fuel cells makes this a very powerful alliance."

Battelle President and CEO Carl Kohrt added, ˇ§Battelle continues to invest in nanomaterials technology platforms that are designed to be coupled with innovation alliances that are market-driven. The strategic alliance with Unidym is an example of a multi-laboratory collaboration focused on developing and commercializing carbon nanotube-based products into high-value electroactive nanomaterials product-market segments."

Unidym is a leader in the manufacture and application of carbon nanotubes (CNTs), a novel material with extraordinary electrical, thermal, and mechanical properties. Unidym provides bulk materials, CNT-enabled products, and intellectual property to a wide range of customers and business partners. As a result of its recent merger with CNI, Unidym possesses a foundational patent portfolio that covers nearly every aspect of CNT manufacturing and processing as well as multiple product applications.

Unidym is focused on the electronics industry where its initial products include transparent electrodes for touch screens, flat panel displays, solar cells, and solid state lighting; electrodes for fuel cells; and thin film transistors for printable electronics. Unidym is also pursuing an aggressive, cross-industry partnership strategy to capture value from the wide ranging uses of CNTs. Unidym's licensing program, technical expertise and manufacturing facilities can enable partners to rapidly develop CNT solutions for their specific applications.

About Battelle
Battelle is the world's largest non-profit independent research and development organization, with 20,000 employees in more than 120 locations worldwide, including five national laboratories Battelle manages or co-manages for the U.S. Department of Energy. Headquartered in Columbus, Ohio, Battelle conducts $3.8 billion in R&D annually through contract research, laboratory management, and technology commercialization. As a non-profit charitable trust with an eye toward the future, Battelle actively supports and promotes science and math education. For more information visit www.battelle.org or contact Media Relations Manager Mark Berry at 614-424-5544 or at berrym@battelle.org.

About Arrowhead Research Corp.
Arrowhead Research Corporation (www.arrowheadresearch.com) is a publicly-traded nanotechnology company commercializing new technologies in the areas of life sciences, electronics, and energy. Arrowhead is building value for shareholders through the progress of majority owned subsidiaries founded on nanotechnologies originally developed at universities. The company works closely with universities to source early stage deals and to generate rights to intellectual property covering promising new nanotechnologies. Currently, Arrowhead has four subsidiaries commercializing nanotech products and applications, including anti-cancer drugs, RNAi therapeutics, carbon-based electronics and compound semiconductor materials.

About Unidym, Inc.
Unidym, Inc. is developing low-cost, carbon-based materials, processes, and devices for the electronics industry. The Company's initial product is a thin, transparent film of carbon nanotubes that replaces the expensive, failure-prone materials currently employed by manufacturers of devices such as touch screens, flat panel displays, and solid state lighting. Unidym is also developing novel carbon nanotube-based transistors and conductive inks for the printable electronics industry to replace todayˇ¦s complex and capital intensive semiconductor manufacturing processes with inexpensive, solution-based printing processes. Unidym differentiates itself through its emphasis on low-cost materials and processes, in-house carbon nanotube production, aggressive partnership strategy, and significant intellectual property portfolio that includes foundational IP in both of its initial applications.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This news release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based upon our current expectations and speak only as of the date hereof. Our actual results may differ materially and adversely from those expressed in any forward-looking statements as a result of various factorsand uncertainties, including the recent economic slowdown affecting technology companies, the future success of our scientific studies, our ability to successfully develop products, rapid technological change in our markets, changes in demand for our future products, legislative, regulatory and competitive developments and general economic conditions. Our Annual Report on Form 10-K and 10-K/A, recent and forthcoming Quarterly Reports on Form 10-Q and 10-Q/A, recent Current Reports on Forms 8-K and 8-K/A, our Registration Statement on Form S-3, and other SEC filingsdiscuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.