Arrowhead Subsidiary Calando to Jointly Develop RNAi Therapeutics to Fight Childhood Cancer with the National Cancer Institute

The agreement with the NCI's Pediatric Oncology Branch will focuson developing RNAi therapeutics to attack neuroblastoma, the mostcommon extracranial (outside the brain cavity) solid tumor in childrenyounger than five. Despite advances in modern therapy, neuroblastomathat has spread to other parts of the body (metastatic) remainsincurable. One roadblock is finding an effective way to deliver RNAitherapeutics to metastatic cancer, which could be located anywhere inthe body.

In 2005, Calando took a step toward breaking down this barrierwhen a study by Caltech and Children's Hospital Los Angelesdemonstrated that Calando's proprietary delivery technology caneffectively carry short interfering RNA ("siRNA") to targeted cancercells and inhibit tumor growth in mice by silencing the target gene.

Terms of the collaboration will be governed by a CooperativeResearch and Development Agreement (CRADA) Letter of Intent now beingfinalized by Calando and the NCI, a division of the NationalInstitutes of Health (NIH). The program is expected to last at leastthree years through preclinical research and into human clinicaltrials. Calando and the NCI will share responsibilities in developingthe therapeutics.

"Securing this collaborative relationship with the NCIdemonstrates both the scientific and competitive strength of Calando'stechnologies," said R. Bruce Stewart, Arrowhead's Chairman.

Many of today's vital drugs have taken the fast lane from lab tomarket since the Federal Technology Transfer Act of 1986 made CRADAdeals possible between private companies and government agencies.These agreements allow the private sector to share costs and retainlicensing options, while the federal agency saves the taxpayers' moneyand ensures responsible use of the technology. The anti-cancer drugTaxol, approved for advanced ovarian cancer in 1992, was the result ofa CRADA between pharmaceutical company Bristol-Myers Squibb (NYSE:BMY)and the National Institutes of Health.

Calando, a majority owned subsidiary of Arrowhead, was launched todevelop and commercialize proprietary RNAi technologies, a techniquethat was discovered only a few years ago. A key roadblock to thetherapeutic use of RNAi has been designing the right delivery platformthat is small enough to penetrate cancer cells, large enough not to beflushed out of the body and does not degrade before it reaches itstarget. Calando's self-assembling RNAi therapeutic nanoparticlecontains linear cyclodextrin (a form of sugar), an siRNA and atargeting molecule.

Cyclodextrin-containing drug formulations have been approved andmarketed for the past three decades and are used for various purposes,including improving drugs' solubility and enhancing their stability.Calando's proprietary technology enables the synthesis of linearcyclodextrin molecules that are uniquely able to interact with siRNAmolecules to protect them as they travel through the body. Degradationof the molecule has been a primary roadblock in the development ofeffective siRNA therapeutics, along with troublesome immune responsestriggered by other delivery approaches.

Last year's successful animal studies, published in the journalCancer Research, raises the hope for an easier regulatory path throughthe Food and Drug Administration.

"We are very excited to be able to collaborate with such a diverseand talented group of physicians and scientists at the NCI," said JohnPetrovich, Calando's chief executive officer. "Through thiscollaboration, Calando and the NCI hope to develop therapeutics totreat more effectively some of the deadliest cancers."

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.

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