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Press Room

UNIDYM ESTABLISHES PARTNERSHIP WITH CONTINENTAL CARBON COMPANY

Menlo Park, CA, May 11, 2009

Unidym, Inc., a leader in carbon nanotube (CNT) technology, announced today that they have entered into a partnership with Continental Carbon Company ("CCC"), a global leader in carbon blacks, conductive blacks and carbon nanotubes, to take over Unidym's bulk CNT materials business. Under the agreement, CCC will form a new subsidiary, Continental Carbon Nanotechnologies, Inc. ("CCNI"), that will exclusively supply Unidym with proprietary electronics-grade CNTs for its core markets and sell high quality CNTs directly into other, non-competing markets. The transfer of assets will take place in two steps: the first involves the transfer of certain assets related to the materials business, including manufacturing equipment and select inventory; and the second will include the transfer of certain intellectual property and third party agreements necessary for the materials business as well as a supply agreement for CCNI to provide proprietary CNTs to Unidym. The upfront and royalty payments associated with the second closing are not yet finalized, but will be in addition to an earn-out of up to $26,500,000 based on meeting certain sales milestones. CCC will also have a three-year option to acquire shares of Unidym equivalent to 10% of the subsidiary's outstanding shares on a fully diluted basis.

The agreement is the latest in a series of steps taken by Unidym to accelerate the development of its CNT technology for application to the electronics industry and reduce its cost structure. It is intended to provide Unidym and its partners with a reliable and scalable source of high quality CNTs by leveraging CCC's deep experience manufacturing large quantities of carbon materials. In addition, it will allow Unidym to capture additional value from its extensive CNT patent portfolio by enabling CCNI to focus on end-markets that are not core to Unidym's business.

Mark Tilley, CEO of Unidym, stated, "Continental Carbon's global manufacturing operations and expertise will be an integral component of our go-to-market strategy. We expect that demand from the touch panel, LCD and solar markets will require a significant ramp-up of CNT capacity in the coming years."

Kim Pan, President of Continental Carbon, said, "We are pleased to join forces with Unidym and look forward to expanding the market for CNTs. We will work exclusively with Unidym to support Unidym's transparent conductive films business, and expect to pursue several applications for these extraordinary materials beyond Unidym's core markets."

About Unidym, Inc.
Unidym is a leader in the manufacture and application of carbon nanotubes (CNTs), a novel material with extraordinary electrical, thermal, and mechanical properties. Unidym provides bulk materials, CNT-enabled products, and intellectual property to a wide range of customers and business partners. As a result of its recent merger with CNI, Unidym possesses a foundational patent portfolio that covers nearly every aspect of CNT manufacturing and processing as well as multiple product applications.

Unidym is focused on the electronics industry where its initial products include transparent electrodes for touch screens, flat panel displays, solar cells, and solid state lighting; electrodes for fuel cells; and thin film transistors for printable electronics. Unidym is also pursuing an aggressive, cross-industry partnership strategy to capture value from the wide ranging uses of CNTs. Unidym's licensing program, technical expertise and manufacturing facilities can enable partners to rapidly develop CNT solutions for their specific applications.

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 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. Arrowhead Research Corporation's 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 Statements 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.