Arrowhead Research Corporation Acquires Alvos Therapeutics and Proprietary Library of Targeting Peptides

  Arrowhead Research Corporation Acquires Alvos Therapeutics and Proprietary
  Library of Targeting Peptides

       Pioneer in targeting for tumors and tumor vasculature in humans

Business Wire

PASADENA, Calif. -- April 11, 2012

Arrowhead Research Corporation (NASDAQ: ARWR), a nanomedicine company with
development programs in RNA therapeutics and obesity, today announced that it
has acquired Alvos Therapeutics, Inc. (formerly known as Mercator
Therapeutics, Inc.), a privately-held company that licensed a large platform
of proprietary human-derived homing peptides from MD Anderson Cancer Center
(MDACC) and the method for their discovery. The technology, designed to
specifically bind and enter tumor cells and the vasculature supporting tumors,
is thought to be the world’s largest library of human-derived targeting
agents, representing thousands of unique peptide sequences. These targeting
sequences can be linked to Arrowhead’s siRNA delivery vehicles as well as to
traditional small molecule drugs to preferentially shuttle them into target
cells. As such, the new platform is a natural addition to Arrowhead from both
an operational and strategic standpoint, and it represents a significant leap
forward in targeted therapeutics. MDACC has already achieved clinical proof of
concept in targeting metastatic prostate cancer with one of the sequences, and
Alvos has multiple other anti-cancer development programs in the pipeline.

Alvos was co-founded in 2010 by the MDACC developers of the technology, Drs.
Renata Pasqualini and Wadih Arap, along with Mark Leuchtenberger, CEO of Rib-X
Pharma, and Dr. Roy Lobb. Dr. Lobb, who became Alvos’ CSO, is an experienced
biotech executive and entrepreneur who also founded Avila Therapeutics which
was sold earlier this year for a total potential payout of nearly $1bn
including $350m upfront. At MDACC, Drs. Pasqualini and Arap used a technique
called phage display to generate a vast library of specific peptides that home
to both known and novel receptors. The process has generated powerful data in
two primary areas: (1) new receptors were discovered that are present
primarily or solely on the surface of specific cell types of interest,
including cancer cells; and (2) peptides were identified that specifically
bind these and previously known receptors and are rapidly internalized by the
cells of interest. Importantly, this has been performed in terminal cancer
patients, therefore the novel receptors and targeting peptides were identified
in human patients with spontaneous disease, including metastases. The
acquisition also enables Arrowhead to further expand the library by working
with Drs. Pasqualini and Arap to generate additional data with more patient
screening at MDACC.

Arrowhead intends to apply the new technology for targeting their proprietary
DPC and RONDEL™ siRNA delivery platforms. In addition, the peptides can be
linked to small molecule cancer drugs to create a new class of drugs,
“Peptide-Drug Conjugates”, or PDCs, designed to preferentially accumulate at
and inside tumors. This new class has the potential to significantly advance
cancer treatment by decreasing side effects, increasing efficacy, and/or
decreasing dose of traditional therapies.

“The work that Drs. Pasqualini and Arap have done is truly revolutionary in
the sheer number of targeting sequences and new receptors that have been
discovered, the exquisite specificity of many of the peptides, and the fact
that these were generated in human patients rather than experimental animal
models,” said Christopher Anzalone, Arrowhead’s CEO. “Alvos has identified
rapidly internalizing cell surface receptors for over 30 diseased and normal
tissue types and peptides that efficiently target them. We do not believe that
any other group in the world has generated data in humans that approaches
this; therefore it is unique, powerful, and immediately applicable to man.
This substantially enhances our existing siRNA programs by providing us with a
huge proprietary library of human-derived targeting ligands to couple with our
well-established and well-tolerated DPC and RONDEL delivery platforms. In
addition, this acquisition allows for the creation of new PDCs against cancer
and other indications, thereby expanding our business and capabilities in a
cost effective way. The unique potential of this technology offers substantial
opportunities to partner with other biotech and pharmaceutical companies.”

Arrowhead plans to integrate development of the Alvos technology into its
Madison, WI facility. By leveraging existing employees, facilities, and
expertise, additional costs assumed as a result of the transaction are
expected to be low.

“We were attracted to Arrowhead as an acquirer because of its ability to
accelerate development of the platform through its excellent scientific staff
and state-of-the-art facilities,” commented Alvos’ co-founder and CSO Dr. Roy
Lobb. “In addition, their work on Adipotide, which was also discovered by Drs.
Pasqualini and Arap, creates natural synergies between the obesity and cancer
development programs. Direct screening in cancer patients can eliminate some
of the uncertainty that has plagued traditional discovery methods. We are
delighted that Arrowhead will advance this transformative platform and produce
novel differentiated therapies.”

In exchange for all the outstanding shares of Alvos Therapeutics, Inc.,
Arrowhead issued an upfront payment of 315,467 shares in restricted Arrowhead
common stock. Alvos stockholders are also eligible to receive additional
issuances of stock valued at up to $23.5m at the time of issuance based on the
achievement of clinical and regulatory milestones, which begin with
demonstrating statistically significant efficacy in clinical trials. Alvos
stockholders could receive additional Arrowhead stock as the first three drugs
using the new technology achieve certain sales milestones.

Conference Call

Management will host a conference call today, April 11, 2012 at 4:30 Eastern
time (1:30 Pacific time). To participate in the conference call, please dial
877-317-6789 (toll free from the US and Canada), or 412-317-6789 (for
international callers). Investors may also access a live audio webcast of this
conference call on the Company's website at

A replay of the webcast will be available approximately two hours after the
conclusion of the call. The webcast archive 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 made available until May 11, 2012. The
audio replay can be accessed by dialing 877-344-7529 (toll free from the US
and Canada), or 412-317-0088 (for international callers) and entering Event ID

About Alvos Therapeutics, Inc.

Alvos Therapeutics is the first biopharmaceutical company to usein vivophage
display technology systematically to develop novel cancer drugs. Alvos was
founded to translate the research of Drs. Wadih Arap and Renata Pasqualini
into effective cancer therapeutics. Drs. Arap and Pasqualini pioneered the use
ofin vivophage display to identify peptides that are believed to selectively
deliver tumor-killing payloads without damaging surrounding tissue. Targeting
of drugs selectively to tumors in man has been a goal of basic and
translational research for decades. The Arap-Pasqualini Lab is addressing this
problem by directly injecting peptide-expressing phage librariesin vivo–
most recently in end-stage cancer patients under strict ethical guidelines –
and identifying a suite of peptides responsible for tumor targeting. Alvos has
exclusive rights to translate this research into novel cancer therapeutics.

About Arrowhead Research Corporation

Arrowhead Research Corporation is a clinical stage nanomedicine company
developing innovative therapies at the interface of biology and
nanoengineering. Arrowhead’s world-class capabilities and intellectual
property covering nucleic acid delivery, siRNA chemistry, and tissue targeting
allow it to design and develop therapeutic agents for a wide range of
diseases. The company’s lead products include CALAA-01, an oncology drug
candidate based on the gene silencing RNA interference (RNAi) mechanism, and
Adipotide^TM, an anti-obesity peptide that targets and kills the blood vessels
that feed white adipose tissue. Arrowhead is leveraging its proprietary
Dynamic PolyConjugate^TM (DPC), Liposomal Nanoparticle (LNP), and RONDEL^TM
delivery platforms to support its own pipeline of preclinical and clinical
candidates and to secure external partnerships and collaborations with biotech
and pharmaceutical companies. For more information, please visit

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 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.


Investor Relations Contact:
The Trout Group, LLC
Michael Levitan, 646-378-2920
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