Arrowhead Announces $19.6 Million Investment by York Capital Management and Knott Partners

"We think Arrowhead's innovative and scalable business model willposition it well in this growth industry. We are delighted to partnerwith Bruce, Leon and the Arrowhead team, helping them to acceleratetheir plans for investment and growth," stated Alexander Klabin,Senior Vice President of York Capital. John Schneller of KnottPartners, an existing shareholder, added, "We are excited to increaseour ownership position to approximately 12.50% from 9.50% in thispromising emerging growth company."

"We are extremely pleased to partner with well-establishedinstitutions of this caliber," stated Leon Ekchian, President ofArrowhead. "This capital infusion enables Arrowhead to expand itsexisting subsidiaries and make additional strategic investments andacquisitions, as appropriate."

Under the terms of the deal, York will purchase 4,161,429 sharesof restricted common stock and Knott will purchase 1,428,571 shares ofrestricted common stock at $3.50 per share. Additionally, York andKnott will receive, in the aggregate, warrants to purchase anadditional 1,397,500 shares of restricted common stock at $5.04 pershare. The agreement is subject to final approval of the listing ofthe shares by NASDAQ.

About Arrowhead Research Corporation

Arrowhead Research Corporation (www.arrowheadresearch.com) is adiversified nanotechnology company structured to commercializeproducts expected to have revolutionary impacts on a variety ofindustries, including materials, electronics, life sciences, andenergy.

There are three strategic components to Arrowhead's businessmodel:

-- Outsourced R&D Program: Arrowhead identifies patented or patent-pending technologies at universities or government labs and funds additional development of those technologies in exchange for exclusive rights to commercialize the resulting prototypes. Leveraging the resources and infrastructure of these institutions provides Arrowhead with a highly cost-effective development pipeline. Currently, Arrowhead is supporting efforts in nanosensors, stem cell technology, and interconnects for integrated circuits at the California Institute of Technology, Stanford University, and Duke University.

-- Commercialization Program: After prototypes have been sufficiently developed in the laboratories, Arrowhead forms or acquires majority-owned subsidiaries to commercialize the technology and provides the subsidiaries with strategic, managerial, and operational support. At present, Arrowhead owns majority interest in subsidiaries commercializing diverse technologies, including anti-cancer drugs, RNAi therapeutics, compound semiconductor materials and carbon nanotube technologies.

-- The Patent Toolbox: Arrowhead has acquired or exclusively licensed patents and patent applications covering a broad range of nanotechnology. The Company is actively seeking to add to this intellectual property portfolio.

Safe Harbor Statement under the Private Securities LitigationReform Act of 1995:

This news release contains forward-looking statements within themeaning of the "safe harbor" provisions of the Private SecuritiesLitigation Reform Act of 1995. These statements are based upon ourcurrent expectations and speak only as of the date hereof. Our actualresults may differ materially and adversely from those expressed inany forward-looking statements as a result of various factors anduncertainties, including the recent economic slowdown affectingtechnology companies, the future success of our scientific studies,our ability to successfully develop products, rapid technologicalchange in our markets, changes in demand for our future products,legislative, regulatory and competitive developments and generaleconomic conditions. Our Annual Report on Form 10-K and 10-K/A, recentand forthcoming Quarterly Reports on Form 10-Q and 10-Q/A, recentCurrent Reports on Forms 8-K and 8-K/A, our Registration Statement onForm S-3, and other SEC filings discuss some of the important riskfactors that may affect our business, results of operations andfinancial condition. We undertake no obligation to revise or updatepublicly any forward-looking statements for any reason.