8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 25, 2009

Arrowhead Research Corporation

(Exact name of registrant as specified in its charter)

0-21898

(Commission File Number)

Delaware	46-0408024
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

201 South Lake Avenue, Suite 703, Pasadena, CA 91101

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (626) 304-3400

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)

¨ Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c)

Item 1.01. Entry into a Material Definitive Agreement.

On February 25, 2009, Arrowhead (the “Company”) entered into an exchange agreement (the “Exchange Agreement”) with several holders of Unidym, Inc. (“Unidym”) Series A Preferred Stock. Pursuant to the agreement, Arrowhead will exchange (the “Exchange”) an aggregate of 1,564,610 shares of restricted Arrowhead common stock (the “Exchanged Arrowhead Stock”) for an aggregate of 1,564,610 shares of Unidym Series A Preferred Stock (the “Exchanged Series A Stock”) with the holders after notice periods for rights of first refusal are satisfied. Each share of Unidym Series A Preferred Stock is convertible into 1.68 shares of Unidym common stock. The Exchanges of Series A Stock represents 6.6% of the outstanding stock of Unidym and 7.9% of the stock of Unidym on an as converted, fully diluted basis. The Exchange Agreement provides for a one year prohibition on sales of the Exchanged Arrowhead Stock. If the Exchange of stock is not closed by June 1, 2009, the Exchange Agreement will terminate.

On March 30, 2009, the Company entered into a subscription agreement (the “Subscription Agreement”) with Unidym for the purchase of 125,000 shares of Series C-1 Preferred Stock for an aggregate purchase price of $225,000. Shares of Series C-1 carry the same rights and preferences as the existing Series C Preferred Stock (the “Series C”), except that the Series C-1 are senior to the Series C and all other outstanding stock of Unidym, and the Series C-1 have a $2.16 per share liquidation preference, subject to increase to $3.60 per share in the event Unidym fails to achieve a defined cash flow requirement by June 30, 2009 (as defined in the Certificate of Amendment of the Amended and Restated Certificate of Incorporation (the “Restated Certificate”). The cash flow requirement is the receipt by Unidym of cash proceeds of at least $7 million from the date of the Restated Certificate through June 30, 2009 from any combination of sales of Unidym equity, the monetization by Unidym of some or all of its assets and/or business operations in materials for anti-static polymers and other applications such as carbon fibers, the sale by Unidym of its shares in any of its subsidiaries and net cash flow from operations during the measurement period. The Series C have a liquidation preference of $1.80 with no adjustment for cash flow requirement. The liquidation preferences of the Series C-1 and Series C are subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the relevant series of stock.

Pursuant to the Subscription Agreement, in the event of a qualified transaction, as defined in the Subscription Agreement, the Company may, in its sole and absolute discretion, convert the shares of Series C-1 then owned into the newly authorized and issued series of preferred stock issued in such qualified transaction. Any conversion to the new series of preferred stock will be, based on a weighted-average conversion formula, multiplied by a time factor, as provided in the Subscription Agreement.

After giving effect to the Exchange and the purchase of Series C-1 Preferred Stock, the Company will retain majority ownership of Unidym and hold 58.1% of the outstanding equity of Unidym, or 44.5% on a fully diluted, as converted, basis.

The foregoing is intended only as a summary of the terms of the Exchange Agreement and the Subscription Agreement. Please refer to the forms of Exchange Agreement and the Subscription Agreement, which will be filed as an Exhibit to Arrowhead’s Form 10-Q for the fiscal quarter ended March 31, 2009.

Item 8.01. Other Events.

On March 26, 2008, Dr. Christopher Anzalone, the Chief Executive Officer of Arrowhead Research Corporation (the “Company”), made a presentation following the Company’s regularly scheduled 2009 Annual Meeting of Stockholders. During his presentation, Dr. Anzalone provided a slide presentation, attached hereto as Exhibit 99.1, incorporated herein by reference. The materials and a replay of the webcast of the presentation are posted on the registrant’s website, www.arrowheadresearch.com.

Item 9.01. Financial Statements and Exhibits.

( d ) Exhibits

Exhibit No.	Exhibit Description
99.1	Presentation made on March 26, 2009 by Dr. Christopher Anzalone following the Company’s 2009 Annual Meeting of Stockholders

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: April 3, 2009

ARROWHEAD RESEARCH CORPORATION
By:	/s/     Paul C. McDonnel
	Paul C. McDonnel
	Chief Financial Officer

EX-99.1

Exhibit 99.1

This

presentation

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,

without

limitation,

our

developmental

stage

and

limited

operating

history,

our

ability

to

successfully

develop

products,

rapid

technological

change

in

our

markets,

demand

for

our

future

products,

legislative,

regulatory

and

competitive

developments

and

general

economic

conditions.

Our

Annual

Report

on

Form

10-K,

recent

and

forthcoming

Quarterly

Reports

on

Form

10-Q,

recent

Current

Reports

on

Forms

8-K

and

8-K/A,

and

other

SEC

filings

discuss

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.

Safe Harbor Statement

Arrowhead in the context of

Inspiration vs

Pragmatism

Inspiration

(Innovation)

Pragmatism

(Operations)

Building Value follows a transition from focus on

inspiration to pragmatism or operations

•

Natural transition for a maturing company

Transition is underlined by the

current economic environment

Today’s primary

focus

2008 Was A Challenging Year

•

Implemented Revised Business Models for some subsidiaries

•

Lowered Cash Burn

•

Reduced Cost Structure

•

Consolidated of Management of Subsidiaries

•

CEOs of all subsidiaries are ARWR management

Reducing Cost Structure

Jan ‘08

Mar ‘08

Jun ‘08

Sept ‘08

Dec ‘08

Mar ‘09

Further reductions

in process

Arrowhead and Subsidiaries’

Head Count

2009 -

We are Cautiously Optimistic

•

Further Reductions in Cost Structure

•

Extend Runway

•

Greater Focus on Nearer-term Unidym

Opportunities

•

Calando Partnership Focus

•

Off-load burn

•

Retain upside potential

•

Generate License Revenues from Other Subsidiaries

•

Establish New and Further Leverage Existing Partnerships

2008:

•

Sold high-end proprietary CNT materials commercially

•

Actively sampled CNT films with multiple major touch panel

manufacturers

•

Strategic investment from Entegris

•

Customer that used CNTs

for antistatic polymers

•

Development Agreement with Nippon Kayaku to integrate Unidym

CNTs

films into solar cells

•

Demonstrated world’s first active matrix LCD screen using CNT films

•

Samsung demonstrated first-ever CNT-based electrophoretic

display

using Unidym’s

films

•

Samsung demonstrated first-ever CNT-based color 14.3’

format

electrophoretic

display using Unidym’s

films 

•

Demonstrated CNT-based analog resistive touch panel

•

Strategic investment from Tokyo Electron

2009

Goals:

•

Continue to cut cost structure by focusing model

•

Leverage partnerships

•

Increase ARWR position in Unidym

via stock transaction

•

Believe in the company

•

Significant

downside

potential

in

ARWR

stock

if

Unidym

fails,

but

only 51% of upside if Unidym

succeeds

•

Exclusive supply contract for outsourced CNT production 

•

Film channel partnership in Asia for touch panel market

•

Development agreement with a second major LCD manufacturer

•

Purchase order for film or ink for a commercial touch screen device

2008:

•

Began Phase I clinical trial for CALAA-01

•

We believe the first use of siRNA

against cancer in humans

•

We

believe

the

first

clinical

trial

of

systemic

delivery

of

siRNA

using

a delivery vehicle

•

Launched Phase II clinical trial for IT-101 in Ovarian Cancer

2009 Goals:

•

Complete CALAA-01 Phase I

•

Thus far very well tolerated

•

Partner both the Cyclosert

and RONDEL platforms

•

Limit future expenditures

•

Retain upside potential via possible milestone

payments and royalties

2008:

•

Partnership with Amberwave

Systems

•

We believe they are well positioned and capitalized

to bring the technology to market

•

Eliminates all costs going forward

•

Retains upside potential via milestone payments

and royalties

2009

Goals:

•

Secure next milestone payment of $500k

2008:

•

Explored use of large fullerene patent position for:

•

MRI contrast agent

•

Treatment of macular degeneration

•

Ceased operational expenditures to create license model

•

Enable ARWR to capture upside potential of fullerene-

based therapeutics based on Tego

IP via possible

milestone payments and royalties

•

Assume no costs associated with clinical trials

2009 Goals:

•

Establish partnership/license agreement

2008:

•

Launched to roll-up key IP for CNT-enabled supercapacitors

•

Leverage ARWR experience and knowledge in CNTs

•

Established corporate partnership for testing/development

•

Identified hybrid electric vehicles and inventory management

on the power grid as key target markets

•

Began testing prototypes

•

Operates as a virtual company

2009 Goals:

•

No current operational costs

•

Compete for federal funds with corporate partner

Minority Positions

•

Progress on focus areas of spinal cord regeneration and wound healing

•

New potential breakthrough in cartilage regeneration

•

Progress on multistage drug delivery platform

•

Ferrari

receives

$7mm

Innovator

award

to

support

Leonardo-based

work 

•

New potential breakthrough in cancer diagnostics

Animal data suggest that the chips may be used to identify

responders versus non-responders to cancer therapies

Capital Sources discussed at

last earnings call

1.

A single or series of partnerships for Calando

2.

Direct investments into Calando from strategic and/or financial

investors

3.

Funded JDAs

and partnerships for Unidym;

4.

Revenue

generated

from

Unidym

sales;

5.

License fees to Unidym;

6.

Sale of Unidym’s

bulk material business;

7.

Direct

investments

into

Unidym

from

strategic

and/or

financial

investors

8.

Sale of Tego;

9.

Tego

license fees; and

10.

Continued

scheduled

pay-outs

from

the

2008

Aonex

sale;

In process of partnering:

•

Expenses to decrease

•

Upside potential retained

•

Expenses to virtually zero

•

Upside potential retained

•

Reduced Costs

•

Anticipated increased     

ARWR position

•

Near commercialization

•

Potentially breakthrough technologies

•

High growth markets

In Summary…