Arrowhead Pharmaceuticals (ARWR) 8-K Index to (Unaudited) Pro Forma Combined Condensed Financial Statements

Exhibit 99.1

ARROWHEAD RESEARCH CORPORATION

INDEX TO (UNAUDITED) PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS

	Page
Pro Forma Financial Information		B-2
Pro Forma Combined Condensed Balance Sheet at September 30, 2010		B-3
Pro Forma Combined Condensed Statement of Operations for the year ended September 30, 2010		B-4
Notes to the Pro Forma Combined Condensed Financial Statements		B-5

B-1

ARROWHEAD RESEARCH CORPORATION

(UNAUDITED) PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION

The accompanying (unaudited) pro forma combined condensed financial statements present the historical financial information of Arrowhead Research Corporation (“Arrowhead”), as adjusted for the disposition of Unidym, Inc. (“Unidym”).

The accompanying pro forma combined condensed balance sheet presents the historical financial information of Arrowhead as of September 30, 2010, as adjusted assuming the disposition of Unidym took place on September 30, 2010.

The accompanying pro forma combined condensed statement of operations for the year ended September 30, 2010, presents the historical financial information of Arrowhead with adjustments to reflect the exclusion of Unidym for the respective period, as if the disposition had occurred on October 1, 2009.

The pro forma combined condensed financial statements have been prepared by management, based on the historical financial statements of Arrowhead and Unidym. These pro forma combined condensed financial statements may not be indicative of the results that actually would have occurred if the disposition had taken place on the dates indicated. The pro forma combined condensed financial statements should be read in conjunction with the historical financial statements of Arrowhead for the year ended September 30, 2010.

B-2

ARROWHEAD RESEARCH CORPORATION

PRO FORMA COMBINED CONDENSED BALANCE SHEET (UNAUDITED)

AS OF SEPTEMBER 30, 2010

	Arrowhead Research Corp. (consolidated)			Unidym, Inc.			Pro Forma Adjustments		Footnote Reference			Proforma Combined
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	6,847,162		$	302,613			302,613		(1	)	$	6,847,162
Trade receivable, net of allowances		58,864			58,555								309
Other receivables		871,819			—			622,823		(1	)		1,494,642
Prepaid expenses		239,097			125,635								113,462
Other current assets		114,833			—			2,500,000		(3	)		2,614,833
TOTAL CURRENT ASSETS		8,131,775			486,803								11,070,408
PROPERTY AND EQUIPMENT
Computers, office equipment and furniture		335,784			60,191								275,593
Research equipment		752,850			749,336								3,514
Software		150,445			73,425								77,020
Leasehold improvements		78,594			12,146								66,448
		1,317,673			895,098								422,575
Less: Accumulated depreciation and amortization		(1,176,404	)		(795,762	)							(380,642	)
NET PROPERTY AND EQUIPMENT		141,269			99,336								41,933
OTHER ASSETS
Rent deposit		34,735			34,735								—
Patents		2,046,836			73,816								1,973,020
Investments and other noncurrent assets		1,999,927			—			2,757,644		(3	)		4,757,571
TOTAL OTHER ASSETS		4,081,498			108,551								6,730,591
TOTAL ASSETS	$	12,354,542		$	694,690							$	17,842,932
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	681,563		$	257,867							$	423,696
Accrued expenses		371,236			119,564								251,672
Accrued payroll and benefits		191,425			35,027								156,398
Accrued severance		23,500			—								23,500
Intercompany liability		—			925,436			925,436		(1	)		—
Derivative liability		2,408,522			—								2,408,522
Note payable		500,000			—								500,000
TOTAL CURRENT LIABILITIES		4,176,246			1,337,894								3,763,788
TOTAL STOCKHOLDERS’ EQUITY		8,178,296			(643,204	)		5,257,644		(3	)		14,079,144
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	12,354,542		$	694,690							$	17,842,932

B-3

ARROWHEAD RESEARCH CORPORATION

PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED)

FOR THE YEAR ENDED SEPTEMBER 30, 2010

	Arrowhead Research Corp. (consolidated)			Unidym, Inc.			Pro Forma Adjustments		Footnote Reference			Proforma Combined
REVENUE	$	620,097		$	620,097							$	—
OPERATING EXPENSES
Salaries		4,297,930			1,727,244			534,801		(2	)		3,105,487
Consulting		514,041			102,463								411,578
General and administrative expenses		3,183,077			748,360								2,434,717
Research and development		1,111,473			863,677								247,796
Patent amortization		315,625			73,817								241,808
TOTAL OPERATING EXPENSES		9,422,146			3,515,561								6,441,386
OPERATING LOSS		(8,802,049	)		(2,895,464	)							(6,441,386	)
OTHER INCOME (EXPENSE)
Loss on equity of investments - Nanotope		(219,540	)		—								(219,540	)
Gain on sale of subsidiary		—			—			4,002,455		(4	)		4,002,455
Gain/(loss) on sale of fixed assets, net		10,881			10,881								—
Interest income (expense), net		(48,025	)		(25,242	)							(22,783	)
Change in value of derivative liability		1,761,385			—								1,761,385
Other income		(87,032	)		(88,804	)							1,772
TOTAL OTHER INCOME		1,417,669			(103,165	)							5,523,289
LOSS FROM CONTINUING OPERATIONS		(7,384,380	)		(2,998,629	)							(918,097	)
Earnings per share - basic and diluted:
Loss from continuing operations	$	(0.10	)									$	(0.01	)
Weighted average shares outstanding - basic and diluted		64,342,448											64,342,448

B-4

Note 1 - Basis of presentation

The accompanying pro forma combined financial statements are presented to reflect the disposition of Unidym Inc. (“Unidym”) by Arrowhead Research, Inc. (“Arrowhead”).

The accompanying pro forma combined condensed balance sheet has been prepared to give effect to the disposition of Unidym by Arrowhead as if the disposition occurred on September 30, 2010. The accompanying pro forma combined condensed statements of operations include the historical operations of Arrowhead and exclude the operations of Unidym as if the disposition had occurred on October 1, 2009

Note 2 - Pro forma adjustments

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates.

The unaudited pro forma combined condensed financial statements reflect the following pro forma adjustments:

Adjustment (1) - This adjustment reflects the repayment of intercompany debt between Arrowhead and Unidym, which is assumed to be settled in cash prior to the disposition. The cash settlement is reflected at $302,613, Unidym’s cash balance at the transaction date. The balance is reflected as an other receivable.

Adjustment (2) - This adjustment reflects charges from Arrowhead to Unidym for a portion of certain Arrowhead employees costs related to management and administrative services, which amounts would be absorbed by Arrowhead in the absence of Unidym.

Adjustment (3) - This adjustment reflects the proceeds from the disposal, the gain on the transaction, and the related entries to equity and noncontrolling interest, as if the transaction occurred on September 30, 2010.

Adjustment (4) - This adjustment reflects the gain on the transaction, as if the transaction occurred on October 1, 2009.

B-5