Arrowhead CEO Provides Update on Tego Biosciences Corporation

PASADENA, Calif. — Arrowhead Research Corporation’s (NASDAQ: ARWR) Chief Executive Officer announces an update to stockholders on its wholly owned subsidiary, Tego Biosciences Corporation.

 

Dear Arrowhead Stockholders;

Since Arrowhead’s inception in 2003, we have followed the development of a relatively new class of molecules, known as fullerenes, with great interest. These are highly ordered clusters of carbon atoms with unique properties that may be leveraged across multiple fields, from industrial uses to medical imaging and therapeutics. In November 2007, we formed Tego Bioscience, Inc. to address these opportunities. Tego, a wholly owned subsidiary of Arrowhead, was created around the acquisition of C Sixty, Inc., a company that had been developing fullerene-based products since 1999. We saw this as a powerful platform because C Sixty was widely recognized as a leader in the new field and the Chairman of its Scientific Advisory Board was Dr. Richard Smalley, who won the 1996 Nobel Prize in Chemistry for his role in discovering fullerenes.

Tego has an extensive patent portfolio that we believe positions it as a critical participant in many fullerene-based products. We do not plan to invest heavily in product development, infrastructure, and sales and marketing. Rather, Tego is focused on generating near term revenue and long-term potential upside through partnerships and licensing of its patents relating to fullerene therapeutics. Tego does not control the intellectual property relating to making fullerenes, however we believe that it does control key patents that are critical in making fullerenes into useable products.

Fullerenes are a family of symmetrical carbon-cage molecules whose prototypical soccer-ball shaped member is comprised of sixty carbon atoms (denoted C60), known as a buckminsterfullerene, or "buckyball.” Although the C60 buckyball is the most widely known fullerene, scientists have since discovered hundreds of different types of fullerenes including, ‘buckybabies’ – spheroid molecules containing fewer than 60 carbon atoms, ‘giant fullerenes’ – containing hundreds of carbon atoms, and a variety of fullerenes having between 70 and 84 carbon atoms. Many of these are thought to have great biopharmaceutical potential, but without certain modifications they are virtually useless for medical applications. Tego controls key patents surrounding what we believe to be product-critical modifications, positioning the company as a potentially important enabling component to commercialization.

In order to exploit the therapeutic potential of fullerenes, they must first be chemically modified to render them water-soluble. A patented process known as the Bingel reaction is of particular significance to fullerene chemistry because it enables modification of the fullerene sphere to provide solubility and appropriate physiologic behavior. Tego has an exclusive license to patents directed at the Bingel reaction itself, as well as a large number of modified soluble fullerenes created through its use. Tego also owns or has exclusive licenses to patents directed to a wide variety of medical uses of Bingel-modified fullerenes.

Much data have been generated characterizing these types of fullerenes. For example, several studies have shown that modified fullerenes can be used to encapsulate MRI contrast agents such as gadolinium, to reduce their toxic side effects. Biomedical researchers have also generated data showing that fullerenes are powerful free radical scavengers and neuroprotectants. Carboxyfullerenes have demonstrated neuroprotection against excitotoxic, apoptotic and metabolic insults in neuronal cell cultures. Researchers recently published data showing that administration of Tego’s patented fullerene “C3,” significantly extended lifespan and improved cognitive function in mice. Researchers also showed that systemic administration of the C3 delayed motor deterioration and death in a mouse model of familial amyotrophic lateral sclerosis (FALS).

We are very excited about the fullerene-related development in therapeutics and medical imaging and believe that Tego has a role in these potential future products through licensing and partnership. Tego is also testing its proprietary compounds as therapeutics for eye disease. In particular, Tego is targeting dry age-related macular degeneration, the most common cause of vision loss in the developed world. There are approximately 18 million cases of dry AMD in the U.S. and Europe, and there is no suitable therapy.

We believe that Tego is currently in a position to monetize its proprietary compounds and enabling patents without assuming any significant direct costs, therefore it has streamlined its operations. Tego is in discussions with numerous companies about potential partnerships and licenses that we believe will enable Arrowhead to capture value via near term revenue as well as long term royalties.

 

Sincerely,
Christopher Anzalone

About Arrowhead Research Corporation

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.

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 factors and 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 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.