View Filing Data

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Dec. 31, 2012	Feb. 08, 2013
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2012
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Trading Symbol	ARWR
Entity Registrant Name	ARROWHEAD RESEARCH CORP
Entity Central Index Key	0000879407
Current Fiscal Year End Date	--09-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		17,311,209

Consolidated Balance Sheets - USD ($)	Dec. 31, 2012	Sep. 30, 2012
CURRENT ASSETS
Cash and cash equivalents	$ 2,931,032	$ 3,377,288
Trade receivable	115,266	9,375
Other receivables	9,305	9,930
Prepaid expenses and other current assets	460,922	618,130
Marketable securities	56,008	106,500
Note receivable, net	2,491,450	2,446,113
TOTAL CURRENT ASSETS	6,063,983	6,567,336
PROPERTY AND EQUIPMENT
Computers, office equipment and furniture	323,376	323,376
Research equipment	3,225,540	3,319,027
Software	69,623	69,623
Leasehold improvements	2,749,409	2,749,409
Property, Plant and Equipment, Gross, Total	6,367,948	6,461,435
Less: Accumulated depreciation and amortization	(1,941,265)	(1,565,783)
PROPERTY AND EQUIPMENT, NET	4,426,683	4,895,652
OTHER ASSETS
Patents and other intangible assets, net	4,710,454	4,784,569
Derivative asset and other non-current assets	30,011	280,261
TOTAL OTHER ASSETS	4,740,465	5,064,830
TOTAL ASSETS	15,231,131	16,527,818
CURRENT LIABILITIES
Accounts payable	809,524	877,986
Accrued expenses	842,639	730,775
Accrued payroll and benefits	1,067,763	1,127,219
Deferred revenue	109,375	37,500
Derivative liabilities	1,490,584	647,213
Capital lease obligation	216,419	214,801
Notes payable	935,329	100,000
Other current liabilities	606,345	1,592,394
TOTAL CURRENT LIABILITIES	6,077,978	5,327,888
LONG-TERM LIABILITIES
Notes payable, net of current portion	50,000	839,421
Capital lease obligation, net of current portion	1,227,743	1,282,458
Other non-current liabilities	270,931	269,142
TOTAL LONG-TERM LIABILITIES	1,548,674	2,391,021
Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued or outstanding
Common stock, $0.001 par value; 145,000,000 shares authorized; 15,644,158 and 13,579,185 shares issued and outstanding as of December 31, 2012 and September 30, 2012, respectively	110,420	108,354
Additional paid-in capital	149,976,199	145,917,968
Subscription receivable	(1,500,000)	(1,016,000)
Accumulated deficit during the development stage	(139,611,839)	(134,997,680)
Total Arrowhead Research Corporation stockholders' equity	8,974,780	10,012,642
Noncontrolling interest	(1,370,301)	(1,203,733)
TOTAL STOCKHOLDERS' EQUITY	7,604,479	8,808,909
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 15,231,131	$ 16,527,818

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2012	Sep. 30, 2012
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	145,000,000	145,000,000
Common stock, shares issued	15,644,158	13,579,185
Common stock, shares outstanding	15,644,158	13,579,185

Consolidated Statements of Operations - USD ($)	3 Months Ended		116 Months Ended
Consolidated Statements of Operations - USD ($)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
REVENUE	$ 159,016	$ 23,958	$ 4,297,850
OPERATING EXPENSES
Salaries and payroll-related costs	1,629,423	1,320,693	28,021,553
General and administrative expenses	917,676	1,266,908	32,270,891
Research and development	1,576,666	769,074	44,195,414
Stock-based compensation	395,675	251,878	13,977,143
Depreciation and amortization	449,597	454,444	7,858,883
TOTAL OPERATING EXPENSES	4,969,037	4,062,997	126,323,884
OPERATING LOSS	(4,810,021)	(4,039,039)	(122,026,034)
OTHER INCOME (EXPENSE)
Equity in income (loss) of unconsolidated affiliates	(63,557)	(106,527)	(1,026,964)
Impairment of investment in unconsolidated affiliates			(1,642,775)
Gain on purchase of Roche Madison		1,576,107	1,576,107
Gain (loss) on sale of fixed assets, net	18,493		(1,187,972)
Realized and unrealized gain (loss) in marketable securities		(58,091)	62,954
Interest income (expense), net	7,416	7,875	2,757,860
Change in value of derivatives	44,275	(66,904)	3,325,679
Gain on sale of stock in subsidiary			2,292,800
Other income	22,685		272,685
TOTAL OTHER INCOME	29,312	1,352,461	6,430,374
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	(4,780,709)	(2,686,579)	(115,595,660)
Provision for income taxes
LOSS FROM CONTINUING OPERATIONS	(4,780,709)	(2,686,579)	(115,595,660)
Income (loss) from discontinued operations	(18)	(220)	(47,546,660)
Gain on disposal of discontinued operations			4,708,588
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS	(18)	(220)	(42,838,072)
NET LOSS	(4,780,727)	(2,686,799)	(158,433,732)
Net (income) loss attributable to noncontrolling interests	166,568	201,294	18,985,853
NET LOSS ATTRIBUTABLE TO ARROWHEAD	$ (4,614,159)	$ (2,485,505)	$ (139,447,879)
Earnings per share-basic and diluted:
Loss from continuing operations attributable to Arrowhead common shareholders	$ (0.33)	$ (0.25)
Income from discontinued operations attributable to Arrowhead common shareholders
Net loss attributable to Arrowhead shareholders	$ (0.33)	$ (0.25)
Weighted average shares outstanding-basic and diluted	14,113,620	10,121,069

Consolidated Statement of Stockholders' Equity - USD ($)	Total	Issued for cash at $10.00 per unit [Member]	Stock issuance cost charged to additional paid-in capital [Member]	Issued for marketable securities at $10.00 per unit [Member]	Issued for cash at $15.00 per unit [Member]	Issued in acquisition [Member]	Issued as a gift for $10.90 per share [Member]	Issued as stock issuance cost at $15.00 per unit [Member]	Exercised at $2.00 per share [Member]	Exercised at $10.00 per share [Member]	Exercised at $15.00 per share [Member]	Issued to purchase Insert Therapeutics share at $39.80 per share [Member]	Issued at $48.80 per share [Member]	Issued at $38.40 per share [Member]	Issued at $35.00 per share [Member]	Issued at $59.10 per share [Member]	Issued to purchase Calando Pharmaceuticals, Inc. at $51.70 per share [Member]	Issued at $57.80 per share, net [Member]	Issued for purchase of Carbon Nanotechnologies, Inc. at $37.70 per share [Member]	Issued at approximately $18.00 per share, net [Member]	Arrowhead's increase in proportionate share of Insert Therapeutics' equity [Member]	Issued at $27.20 per share to Rice University [Member]	Issued at $28.30 per share to purchase shares of Unidym, Inc. [Member]	Issued at $29.50 per share to purchase MASA Energy, LLC [Member]	Issued at $21.90 per share to Unidym for the acquisition of Nanoconduction [Member]	Issued at $21.80 per share [Member]	Issued at $5.50 per share to Unidym Stockholder in exchange for Unidym's shares [Member]	Issued at $5.20 per share to TEL Ventures in exchange for Unidym's shares [Member]	Arrowhead's increase in proportionate share of Calando's equity [Member]	Issued at $3.00 per share [Member]	Issued to Unidym stockholders in exchange for Unidym's shares [Member]	Issued at $6.30 per share [Member]	Issued at $13.12 per share [Member]	Issued to Calando stockholders in exchange for Calando's Shares [Member]	Issued at $3.80 per share [Member]	Issued at $3.70 per share [Member]	Issued at $4.00 per share [Member]	Issued at $6.23 per share [Member]	Issued at $5.11 per share [Member]	Issued at $2.76 per share [Member]	Preferred stock issued @ $1,000 per share [Member]	Issued @ $2.26 per share [Member]	Issued @ $4.49 per share [Member]	Common Stock [Member]	Common Stock [Member] Issued for cash at $10.00 per unit [Member]	Common Stock [Member] Issued for marketable securities at $10.00 per unit [Member]	Common Stock [Member] Issued for cash at $15.00 per unit [Member]	Common Stock [Member] Issued in acquisition [Member]	Common Stock [Member] Issued as a gift for $10.90 per share [Member]	Common Stock [Member] Issued as stock issuance cost at $15.00 per unit [Member]	Common Stock [Member] Exercised at $2.00 per share [Member]	Common Stock [Member] Exercised at $10.00 per share [Member]	Common Stock [Member] Exercised at $15.00 per share [Member]	Common Stock [Member] Issued to purchase Insert Therapeutics share at $39.80 per share [Member]	Common Stock [Member] Issued at $48.80 per share [Member]	Common Stock [Member] Issued at $38.40 per share [Member]	Common Stock [Member] Issued at $35.00 per share [Member]	Common Stock [Member] Issued at $59.10 per share [Member]	Common Stock [Member] Issued to purchase Calando Pharmaceuticals, Inc. at $51.70 per share [Member]	Common Stock [Member] Issued at $57.80 per share, net [Member]	Common Stock [Member] Issued for purchase of Carbon Nanotechnologies, Inc. at $37.70 per share [Member]	Common Stock [Member] Issued at approximately $18.00 per share, net [Member]	Common Stock [Member] Issued at $27.20 per share to Rice University [Member]	Common Stock [Member] Issued at $28.30 per share to purchase shares of Unidym, Inc. [Member]	Common Stock [Member] Issued at $29.50 per share to purchase MASA Energy, LLC [Member]	Common Stock [Member] Issued at $21.90 per share to Unidym for the acquisition of Nanoconduction [Member]	Common Stock [Member] Issued at $21.80 per share [Member]	Common Stock [Member] Issued at $5.50 per share to Unidym Stockholder in exchange for Unidym's shares [Member]	Common Stock [Member] Issued at $5.20 per share to TEL Ventures in exchange for Unidym's shares [Member]	Common Stock [Member] Issued at $3.00 per share [Member]	Common Stock [Member] Issued to Unidym stockholders in exchange for Unidym's shares [Member]	Common Stock [Member] Issued at $6.30 per share [Member]	Common Stock [Member] Issued at $13.12 per share [Member]	Common Stock [Member] Issued to Calando stockholders in exchange for Calando's Shares [Member]	Common Stock [Member] Issued at $3.80 per share [Member]	Common Stock [Member] Issued at $3.70 per share [Member]	Common Stock [Member] Issued at $4.00 per share [Member]	Common Stock [Member] Issued at $6.23 per share [Member]	Common Stock [Member] Issued at $5.11 per share [Member]	Common Stock [Member] Issued at $2.76 per share [Member]	Common Stock [Member] Issued under Committed Capital Agreement [Member]	Common Stock [Member] Issued @ $2.26 per share [Member]	Common Stock [Member] Issued @ $4.49 per share [Member]	Preferred Stock [Member]	Preferred Stock [Member] Preferred stock issued @ $1,000 per share [Member]	Additional Paid-in Capital [Member]	Additional Paid-in Capital [Member] Issued for cash at $10.00 per unit [Member]	Additional Paid-in Capital [Member] Stock issuance cost charged to additional paid-in capital [Member]	Additional Paid-in Capital [Member] Issued for marketable securities at $10.00 per unit [Member]	Additional Paid-in Capital [Member] Issued for cash at $15.00 per unit [Member]	Additional Paid-in Capital [Member] Issued in acquisition [Member]	Additional Paid-in Capital [Member] Issued as a gift for $10.90 per share [Member]	Additional Paid-in Capital [Member] Issued as stock issuance cost at $15.00 per unit [Member]	Additional Paid-in Capital [Member] Exercised at $2.00 per share [Member]	Additional Paid-in Capital [Member] Exercised at $10.00 per share [Member]	Additional Paid-in Capital [Member] Exercised at $15.00 per share [Member]	Additional Paid-in Capital [Member] Issued to purchase Insert Therapeutics share at $39.80 per share [Member]	Additional Paid-in Capital [Member] Issued at $48.80 per share [Member]	Additional Paid-in Capital [Member] Issued at $38.40 per share [Member]	Additional Paid-in Capital [Member] Issued at $35.00 per share [Member]	Additional Paid-in Capital [Member] Issued at $59.10 per share [Member]	Additional Paid-in Capital [Member] Issued to purchase Calando Pharmaceuticals, Inc. at $51.70 per share [Member]	Additional Paid-in Capital [Member] Issued at $57.80 per share, net [Member]	Additional Paid-in Capital [Member] Issued for purchase of Carbon Nanotechnologies, Inc. at $37.70 per share [Member]	Additional Paid-in Capital [Member] Issued at approximately $18.00 per share, net [Member]	Additional Paid-in Capital [Member] Arrowhead's increase in proportionate share of Insert Therapeutics' equity [Member]	Additional Paid-in Capital [Member] Issued at $27.20 per share to Rice University [Member]	Additional Paid-in Capital [Member] Issued at $28.30 per share to purchase shares of Unidym, Inc. [Member]	Additional Paid-in Capital [Member] Issued at $29.50 per share to purchase MASA Energy, LLC [Member]	Additional Paid-in Capital [Member] Issued at $21.90 per share to Unidym for the acquisition of Nanoconduction [Member]	Additional Paid-in Capital [Member] Issued at $21.80 per share [Member]	Additional Paid-in Capital [Member] Issued at $5.50 per share to Unidym Stockholder in exchange for Unidym's shares [Member]	Additional Paid-in Capital [Member] Issued at $5.20 per share to TEL Ventures in exchange for Unidym's shares [Member]	Additional Paid-in Capital [Member] Arrowhead's increase in proportionate share of Calando's equity [Member]	Additional Paid-in Capital [Member] Issued at $3.00 per share [Member]	Additional Paid-in Capital [Member] Series D Preferred Stock Issued for Subscription in Unidym [Member]	Additional Paid-in Capital [Member] Issued to Unidym stockholders in exchange for Unidym's shares [Member]	Additional Paid-in Capital [Member] Issued at $6.30 per share [Member]	Additional Paid-in Capital [Member] Issued at $13.12 per share [Member]	Additional Paid-in Capital [Member] Issued to Calando stockholders in exchange for Calando's Shares [Member]	Additional Paid-in Capital [Member] Issued at $3.80 per share [Member]	Additional Paid-in Capital [Member] Issuance of Common Stock for Subscription [Member]	Additional Paid-in Capital [Member] Issued at $3.70 per share [Member]	Additional Paid-in Capital [Member] Issued at $4.00 per share [Member]	Additional Paid-in Capital [Member] Issued at $6.23 per share [Member]	Additional Paid-in Capital [Member] Issued at $5.11 per share [Member]	Additional Paid-in Capital [Member] Issued at $2.76 per share [Member]	Additional Paid-in Capital [Member] Issued under Committed Capital Agreement [Member]	Additional Paid-in Capital [Member] Preferred stock issued @ $1,000 per share [Member]	Additional Paid-in Capital [Member] Issued @ $2.26 per share [Member]	Additional Paid-in Capital [Member] Issued @ $4.49 per share [Member]	Subscription Receivable [Member]	Subscription Receivable [Member] Series D Preferred Stock Issued for Subscription in Unidym [Member]	Subscription Receivable [Member] Issued to Unidym stockholders in exchange for Unidym's shares [Member]	Subscription Receivable [Member] Issued at $3.80 per share [Member]	Subscription Receivable [Member] Issuance of Common Stock for Subscription [Member]	Subscription Receivable [Member] Issued at $2.76 per share [Member]	Subscription Receivable [Member] Issued @ $2.26 per share [Member]	Accumulated Deficit during Development Stage [Member]	Noncontrolling Interest [Member]	Noncontrolling Interest [Member] Issued to Unidym stockholders in exchange for Unidym's shares [Member]	Noncontrolling Interest [Member] Issued to Calando stockholders in exchange for Calando's Shares [Member]
Beginning Balance Amount at Sep. 30, 2003	$ 1,419,762																																											$ 4,680																																										$ 1,510,320																																																					$ (95,238)
Stock issuances		$ 475,000		$ 500,000	$ 9,913,182	$ (150,469)	$ 162,750																																						$ 475	$ 500	$ 6,609	$ 706	$ 163																																						$ 474,525		$ 499,500	$ 9,906,573	$ (151,175)	$ 162,587
Beginning Balance Shares at Sep. 30, 2003																																												468,000
Issuance and sold of Common Stock																																													47,500	50,000	660,879	70,553	15,000	35,623
Stock options exercised, Amount	15,000							$ 534,344	$ 15,000	$ 6,000																																		$ 75						$ 356	$ 75	$ 6																																		14,925							$ 533,988	$ 14,925	$ 5,994
Stock options exercised																																												7,500							7,500	600
Stock issuance cost charged to additional paid-in capital	(991,318)		$ (96,500)																																																																																			(991,318)		$ (96,500)
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition, Total	175,653																																																																																					175,653
Net loss attributable to Arrowhead	(751,255)																																																																																																																																										(2,528,954)	$ 1,777,699
Ending Balance Amount at Sep. 30, 2004	11,227,149																																											$ 13,645																																										12,059,997																																																					(2,624,192)	1,777,699
Ending Balance Shares at Sep. 30, 2004																																												1,363,155
Stock issuances	50,000											$ 2,000,000																																$ 12										$ 502																																49,988											$ 1,999,498
Issuance and sold of Common Stock																																												1,250										50,226
Stock options exercised, Amount										$ 25,000	$ 20,719,335																																									$ 25	$ 13,813																																										$ 24,975	$ 20,705,522
Stock options exercised																																																				2,500	1,381,289
Adjustments to additional paid in capital, reallocation of noncontrolling interest	230,087																																																																																					230,087
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition, Total	508,513																																																																																					508,513
Net income (loss) attributable to Arrowhead	(6,733,427)																																																																																																																																										(6,854,918)	121,491
Ending Balance Amount at Sep. 30, 2005	28,026,657																																											$ 27,997																																										35,578,580																																																					(9,479,110)	1,899,190
Ending Balance Shares at Sep. 30, 2005																																												2,798,419
Stock issuances													$ 1,000,000	$ 57,600	$ 19,545,000	$ 150,000	$ 1,077,333																																						$ 205	$ 15	$ 5,590	$ 25	$ 208																																							$ 999,795	$ 57,585	$ 19,539,410	$ 149,975	$ 1,077,125
Issuance and sold of Common Stock																																																							20,485	1,500	559,000	2,536	20,838
Stock options exercised, Amount	341,537																																											$ 116																																										341,421
Stock options exercised																																												11,579
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition, Total	1,369,478																																																																																					1,369,478
Net loss attributable to Arrowhead	(19,961,961)																																																																																																																																										(18,997,209)	(964,752)
Ending Balance Amount at Sep. 30, 2006	31,605,644																																											$ 34,156																																										59,113,369																																																					(28,476,319)	934,438
Ending Balance Shares at Sep. 30, 2006																																												3,414,359
Stock issuances																		$ 15,152,215	$ 5,400,000																																									$ 2,849	$ 1,431																																										$ 15,149,366	$ 5,398,569
Issuance and sold of Common Stock																																																												284,945	143,122
Stock options exercised, Amount	434,727																																											$ 186																																										434,541
Stock options exercised																																												18,616
Adjustments to additional paid in capital, reallocation of noncontrolling interest	2,401,394																																																																																					2,401,394
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition, Total	2,175,544																																																																																					2,175,544
Net loss attributable to Arrowhead	(30,712,947)																																																																																																																																										(29,931,118)	(781,829)
Ending Balance Amount at Sep. 30, 2007	26,456,577																																											$ 38,622																																										84,672,783																																																					(58,407,437)	152,609
Ending Balance Shares at Sep. 30, 2007																																												3,861,042
Stock issuances																				$ 6,960,585		$ 136,000	$ 200,000	$ 310,000	$ 250,000	$ 32,700																																				$ 3,867	$ 50	$ 71	$ 105	$ 114	$ 15																																						$ 6,956,718		$ 135,950	$ 199,929	$ 309,895	$ 249,886	$ 32,685
Issuance and sold of Common Stock																																																														386,399	5,000	7,055	10,505	11,416	1,500
Stock options exercised, Amount	290,027																																											$ 106																																										289,921
Stock options exercised																																												10,536
Adjustments to additional paid in capital, reallocation of noncontrolling interest																					$ 1,720,962																																																																																					$ 1,720,962
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition, Total	3,187,397																																																																																					3,187,397
Net loss attributable to Arrowhead	(27,241,639)																																																																																																																																										(27,089,030)	(152,609)
Ending Balance Amount at Sep. 30, 2008	12,302,609																																											$ 42,950																																										97,756,126																																																					(85,496,467)
Ending Balance Shares at Sep. 30, 2008																																												4,293,452
Stock issuances																											$ 1,133,676	$ 1,158,333		$ 2,758,993																																						$ 2,059	$ 2,222	$ 9,197																																										$ 1,131,617	$ 1,156,111		$ 2,749,796
Reclassification of former Unidym mezzanine debt to equity	2,000,000																																																																																					2,000,000
Issuance and sold of Common Stock																																																																				205,839	222,222	919,664
Issuance of preferred stock in subsidiary																																																																																																																				$ 300,000																	$ (300,000)
Adjustments to additional paid in capital, reallocation of noncontrolling interest	16,297																												$ 2,120,250																																																									16,297																												$ 2,120,250
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition, Total	2,676,170																																																																																					2,676,170
Amortization of discount on Unidym Series D Preferred Stock																																																																																						163,960																																																					(163,960)
Net loss attributable to Arrowhead	(19,308,392)																																																																																																																																										(19,308,392)
Ending Balance Amount at Sep. 30, 2009	4,857,936																																											$ 56,428																																										110,070,327																																														$ (300,000)							(104,968,819)
Ending Balance Shares at Sep. 30, 2009																																												5,641,177
Stock issuances	1,066,050																															$ 3,222,896	$ 3,698,671											$ 2,250																											$ 153	$ 5,083	$ 6,593	$ 1,220												1,063,600																															$ (1,435)	$ 3,217,813	$ 3,692,078	$ (160,667)																				200	$ 1,282	$ 159,447
Issuance and sold of Common Stock																																												225,189																											15,318	508,343	659,299	122,000
Stock options exercised, Amount	7,631																																											$ 7																																										7,624
Stock options exercised																																												688
Divestiture of Unidym	300,000																																																																																					245,345																																																						54,655
Issuance of preferred stock in subsidiary																															$ 300,000																																																																																																							$ 300,000
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition, Total	1,582,149																																																																																					1,582,149
Net loss attributable to Arrowhead	(6,957,038)																																																																																																																																										(5,774,048)	(1,182,990)
Ending Balance Amount at Sep. 30, 2010	8,078,295																																											$ 71,734																																										119,716,834																																																					(110,742,867)	(967,406)
Ending Balance Shares at Sep. 30, 2010																																												7,172,014
Stock issuances	43,279																																		$ 4,643,684									$ 87																															$ 14,574											43,192																																			$ 4,629,110	$ 900,000														$ (900,000)
Issuance and sold of Common Stock																																												8,656																															1,458,917
Stock options exercised, Amount	13,884																																											$ 27																																										13,857
Stock options exercised																																												2,700
Divestiture of Unidym	254,275																																																																																																																																											254,275
Issuance of preferred stock in subsidiary	1,618,509																																																																																					1,618,509
Adjustments to additional paid in capital, reallocation of noncontrolling interest																																																																																						(849,707)																																																						849,707
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition, Total	1,404,640																																																																																					1,404,640
Net loss attributable to Arrowhead	(3,492,399)																																																																																																																																										(3,128,885)	(363,514)
Ending Balance Amount at Sep. 30, 2011	12,564,167																																											$ 86,422																																										127,476,435																																														(900,000)							(113,871,752)	(226,938)
Ending Balance Shares at Sep. 30, 2011																																												8,642,286
Stock issuances	50,406					$ 6,147,830																													$ 425,000	$ 2,247,750	$ 400,000	$ 500,001	$ 500,002	$ 5,796,240	$ 1,015,000			$ 16				$ 9,332																											$ 1,382	$ 6,750	$ 1,000	$ 83	$ 98	$ 2,261	$ 689				$ 1	50,390					$ 6,138,498																														$ 523,618		$ 2,241,000	$ 399,000	$ 499,918	$ 499,904	$ 5,809,979	$ (689)	$ 1,014,999						$ (100,000)		$ (16,000)
Issuance and sold of Common Stock																																												15,511				1,217,159																											138,158	675,000	100,000	83,211	97,831	2,260,869	68,926				1,015
Stock options exercised, Amount	$ 23,833																																	$ 8,000										$ 45																																										23,788																																																								$ 8,000
Stock options exercised	4,883																																											4,583
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition, Total	$ 1,241,404																																																																																					1,241,404
Fractional shares redeemed in reverse stock split																																												(131)
Preferred stock converted to common stock																																												$ 276																																								$ (1)		(275)
Preferred stock converted to common stock, shares																																												275,782																																								(1,015)
Net loss attributable to Arrowhead	(22,110,723)																																																																																																																																										(21,125,928)	(984,795)
Ending Balance Amount at Sep. 30, 2012	$ 8,808,909																																											$ 108,354																																										145,917,968																																														(1,016,000)							(134,997,680)	(1,203,733)
Ending Balance Shares at Sep. 30, 2012																																												13,579,185
Stock issuances																																										$ 2,178,573	$ 986,049																																							$ 1,826	$ 240																																															$ 2,676,747	$ 985,809							$ (500,000)
Issuance and sold of Common Stock																																												1,825,079																																						1,825,079	239,894
Stock options exercised	0
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition, Total	$ 395,675																																																																																					395,675
Subscription payment	16,000																																																																																																																																			16,000
Net income (loss) attributable to Arrowhead	(4,614,159)
Net loss attributable to Arrowhead	(4,780,727)																																																																																																																																										(4,614,159)	(166,568)
Ending Balance Amount at Dec. 31, 2012	$ 7,604,479																																											$ 110,420																																										$ 149,976,199																																														$ (1,500,000)							$ (139,611,839)	$ (1,370,301)
Ending Balance Shares at Dec. 31, 2012																																												15,644,158

Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares	Dec. 31, 2012	Sep. 30, 2012	Sep. 30, 2010	Sep. 30, 2009	Sep. 30, 2008	Sep. 30, 2007	Sep. 30, 2006	Sep. 30, 2005	Sep. 30, 2004	Sep. 30, 2003
Issued for cash at $0.01 per unit [Member]
Common stock & warrants issued for cash, price per unit										$ 0.01
Issued for cash at $10.00 per unit [Member]
Common stock & warrants issued for cash, price per unit									$ 10.00	$ 10.00
Issued for marketable securities at $10.00 per unit [Member]
Common stock & warrants issued for cash, price per unit									10.00
Issued for cash at $15.00 per unit [Member]
Common stock & warrants issued for cash, price per unit									15.00
Issued as a gift for $10.90 per share [Member]
Common stock & warrants issued for cash, price per unit									10.90
Issued as stock issuance cost at $15.00 per unit [Member]
Common stock & warrants issued for cash, price per unit									15.00
Exercised at $2.00 per share [Member]
Exercise of stock options, price per share									2
Exercised at $10.00 per share [Member]
Exercise of stock options, price per share								$ 10	$ 10
Exercised at $15.00 per share [Member]
Exercise of stock options, price per share								15
Issued to purchase Insert Therapeutics share at $39.80 per share [Member]
Common stock issued, par value per share								$ 39.8
Issued at $48.80 per share [Member]
Common stock issued, par value per share							$ 48.8
Issued at $38.40 per share [Member]
Common stock issued, par value per share							38.4
Issued at $35.00 per share [Member]
Common stock issued, par value per share							35
Issued at $59.10 per share [Member]
Common stock issued, par value per share							59.1
Issued to purchase Calando Pharmaceuticals, Inc. at $51.70 per share [Member]
Common stock issued, par value per share							$ 51.7
Issued at $57.80 per share, net [Member]
Common stock issued, par value per share						$ 57.8
Issued for purchase of Carbon Nanotechnologies, Inc. at $37.70 per share [Member]
Common stock issued, par value per share						$ 37.7
Issued at approximately $18.00 per share, net [Member]
Common stock issued, par value per share					$ 18
Issued at $27.20 per share to Rice University [Member]
Common stock issued, par value per share					27.2
Issued at $28.30 per share to purchase shares of Unidym, Inc. [Member]
Common stock issued, par value per share					28.3
Issued at $29.50 per share to purchase MASA Energy, LLC [Member]
Common stock issued, par value per share					29.5
Issued at $21.90 per share to Unidym for the acquisition of Nanoconduction [Member]
Common stock issued, par value per share					21.9
Issued at $21.80 per share [Member]
Common stock issued, par value per share					$ 21.8
Issued at $5.50 per share to Unidym Stockholder in exchange for Unidym's shares [Member]
Common stock issued, par value per share				$ 5.5
Issued at $5.20 per share to TEL Ventures in exchange for Unidym's shares [Member]
Common stock issued, par value per share				5.2
Issued at $3.00 per share [Member]
Common stock issued, par value per share				$ 3
Issued at $6.30 per share [Member]
Common stock issued, par value per share			$ 6.34
Issued at $13.12 per share [Member]
Common stock issued, par value per share			$ 13.12
Issued at $3.80 per share [Member]
Common stock issued, par value per share		$ 3.8
Issued at $3.70 per share [Member]
Common stock issued, par value per share		3.7
Issued at $4.00 per share [Member]
Common stock issued, par value per share		4
Issued at $6.23 per share [Member]
Common stock issued, par value per share		6.23
Issued at $5.11 per share [Member]
Common stock issued, par value per share		5.11
Issued at $2.76 per share [Member]
Common stock issued, par value per share		2.76
Preferred stock issued @ $1,000 per share [Member]
Preferred stock issued, par value per share		$ 1,000
Issued @ $2.26 per share [Member]
Common stock issued, par value per share	$ 2.26
Issued @ $4.49 per share [Member]
Common stock issued, par value per share	$ 4.29

Consolidated Statements of Cash Flows - USD ($)	3 Months Ended		116 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (4,780,727)	$ (2,686,799)	$ (158,433,732)
Net (income) loss attributable to nonconrolling interests	166,568	201,294	18,985,853
Net income (loss) attributable to Arrowhead	(4,614,159)	(2,485,505)	(139,447,879)
(Income) loss from discontinued operations	18	220	42,838,072
Realized and unrealized (gain) loss on investments		58,091	(762,954)
Charge for bad debt allowance			2,497,300
(Gain) loss from sale of subsidiary			(306,344)
(Gain) loss on purchase of Roche Madison		(1,576,107)	(1,576,107)
(Gain) Loss on disposal of fixed assets	(18,493)		1,187,972
Stock issued for professional services			741,632
Change in value of derivatives	(44,275)	66,904	(3,325,679)
Purchased in-process research and development			15,851,555
Stock-based compensation	395,675	251,878	13,977,143
Depreciation and amortization	449,597	454,444	7,858,883
Amortization (accretion) of note discounts, net	572	3,783	2,024
Gain on sale of stock in subsidiary			(2,292,800)
Non-cash impairment expense			1,642,775
Equity in income (loss) of unconsolidated affiliates	63,557	106,527	1,026,964
Noncontrolling interest	(166,568)	(201,294)	(18,985,853)
Changes in operating assets and liabilities:
Receivables	(105,891)	172,230	(5,851)
Other receivables		(419,238)	(2,543,142)
Prepaid expenses	157,208	(30,070)	(323,891)
Other current assets	(12,441)	(1)	(115,654)
Deposits			(60,542)
Accounts payable	(68,459)	137,448	429,851
Accrued expenses	111,865	408,783	832,774
Other liabilities	14,208	346,551	1,144,369
NET CASH USED IN OPERATING ACTIVITIES OF CONTINUING OPERATIONS	(3,837,586)	(2,705,356)	(79,715,382)
CASH FLOWS FROM INVESTING ACTIVITIES OF CONTINUING OPERATIONS:
Purchase of property and equipment	(9,439)	(69,424)	(4,054,748)
Proceeds from sale of investments		509,009	3,313,609
Proceeds from sale of fixed assets	121,418		554,105
Cash transferred in acquisitions/divestitures		100,035	(1,579,365)
Purchase of marketable securities-US Treasury Bills			(18,575,915)
Purchase of MASA Energy, LLC			(250,000)
Minority equity investment			(2,000,000)
Cash paid for interest in Insert			(10,150,000)
Cash obtained from interest in Insert			10,529,594
Proceeds from sale of marketable securities-US Treasury Bills			18,888,265
Proceeds from sale of subsidiaries			359,375
Payment for patents			(303,440)
Restricted cash			50,773
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES OF CONTINUING OPERATIONS	111,979	539,620	(3,217,747)
CASH FLOWS FROM FINANCING ACTIVITIES OF CONTINUING OPERATIONS:
Principal payments on capital leases	(53,098)	(39,940)	(249,704)
Proceeds from issuance of Calando debt			2,516,467
Proceeds from sale of stock in subsidiary		8,000	20,902,100
Proceeds from issuance of common stock and warrants, net	3,332,467	1,463,833	109,585,478
NET CASH PROVIDED BY FINANCING ACTIVITIES OF CONTINUING OPERATIONS	3,279,369	1,431,893	132,754,341
Cash flows from discontinued operations:
Operating cash flows	(18)	(420)	(46,003,805)
Investing cash flows			790,625
Financing cash flows			(1,677,000)
Net cash provided by (used in) discontinued operations:	(18)	(420)	(46,890,180)
NET INCREASE (DECREASE) IN CASH	(446,256)	(734,263)	2,931,032
CASH AT BEGINNING OF PERIOD	3,377,288	7,507,389
CASH AT END OF PERIOD	2,931,032	6,773,126	2,931,032
Supplementary disclosures:
Interest paid	$ 11,114	$ 10,300	291,802
Taxes paid			$ 742,500

SUPPLEMENTAL NON-CASH TRANSACTIONS

3 Months Ended

Dec. 31, 2012

SUPPLEMENTAL NON-CASH TRANSACTIONS

All Arrowhead share and per share amounts have been adjusted to reflect the 1 for 10 reverse stock split effected on November 17, 2011.

On March 23, 2005, Arrowhead purchased 7,375,000 shares of Insert Therapeutics, Inc. common stock from two minority stockholders of Insert for 50,226 newly issued shares of Arrowhead Common Stock valued at $2,000,000 based on the closing market price of Arrowhead Common Stock on NASDAQ on the date of the closing.

On March 31, 2006, Arrowhead purchased 964,000 shares of Calando Pharmaceuticals, Inc. common stock from minority stockholders of Calando for $1,928,000 consisting of 20,838 newly issued shares of Arrowhead Common Stock valued at $1,077,333 plus $850,667 in cash. The 20,838 shares of Arrowhead Common Stock were valued based on the average closing price of Arrowhead’s Common Stock on NASDAQ the ten trading days immediately prior to the date of the closing.

On April 20, 2007, Arrowhead purchased shares of Series E Preferred Stock of Carbon Nanotechnologies, Inc. in exchange for 143,122 shares of Arrowhead Common Stock with an estimated fair market value of $5,400,000 based on the average closing price of Arrowhead’s Common Stock on NASDAQ the ten trading days immediately prior to March 24, 2007, as set forth in the Agreement and Plan of Merger among Unidym, Carbon Nanotechnologies, Inc., Arrowhead, and others.

On April 23, 2008, Arrowhead purchased 200,000 shares of the Common Stock of Unidym Inc., in exchange for 7,054 shares of Arrowhead Common Stock with an estimated fair market value of $200,000 based on the average closing price of Arrowhead’s Common Stock on NASDAQ the ten trading days immediately prior to the date of the closing.

On April 29, 2008, Arrowhead purchased all of the membership units of MASA Energy, LLC for $560,000. The purchase price consisted of 10,504 shares of Arrowhead Common Stock with an estimated fair market value of $310,000 based on the average closing price of Arrowhead’s Common Stock on NASDAQ the ten trading days immediately prior to the date of the closing, plus $250,000 in cash.

On August 8, 2008, Unidym acquired all of the outstanding stock of Nanoconduction, Inc. in exchange for 11,411 shares of Arrowhead stock with an estimated fair market value of $250,000.

On June 11, 2009, Arrowhead issued 132,462 shares of Common Stock with an estimated fair market value of $688,802 in exchange for an equal number of Series A Preferred Stock of Unidym, with minority stockholders of Unidym.

On June 25, 2009, Arrowhead issued 194,444 shares of Common Stock with an estimated fair market value of $972,222 in exchange for an equal number of Series C Preferred Stock of Unidym, with a minority stockholder of Unidym.

On September 22, 2009, Arrowhead issued 9,149 shares of Common Stock with an estimated fair market value of $46,662 in exchange for an equal number of Series A Preferred Stock of Unidym with a minority stockholder of Unidym.

On September 28, 2009, Arrowhead issued 64,227 shares of Common Stock with an estimated fair market value of $398,209 in exchange for 5,574 shares of Series A Preferred Stock and 636,699 shares of Series C Preferred Stock of Unidym, with several minority stockholders of Unidym.

On September 30, 2009, Arrowhead issued 27,777 shares of Common Stock with an estimated fair market value of $186,111 in exchange for an equal number of Series C-1 Preferred Stock of Unidym, with a minority stockholder of Unidym.

In October and November 2009, Arrowhead issued 15,317 shares of Common Stock with an estimated fair market value of $47,485 in exchange for an equal number of shares of Series C Preferred Stock of Unidym, with several minority stockholders of Unidym.

In October and November 2009, Arrowhead issued 114,000 shares of Common Stock with an estimated fair market value of $706,800 in exchange for 2,850,000 shares of Calando’s common stock, with several minority stockholders of Calando. In conjunction with the exchange, Arrowhead also issued 24,000 Warrants to purchase Arrowhead Common Stock in exchange for 600,000 Warrants to purchase Calando common stock.

In February 2010, Arrowhead issued 8,000 shares of Common Stock and 2,400 warrants to purchase Arrowhead Common Stock, at an exercise price of $5.00, to several Calando shareholders, in exchange for 200,000 shares of Calando common stock and 60,000 warrants to purchase Calando common stock.

In March 2010, a warrant holder exercised 24,788 warrants to purchase Arrowhead Common Stock, in a cashless exercise, whereby Arrowhead issued to the warrant holder 12,870 shares of Arrowhead Common Stock.

In September 2010, Arrowhead issued warrants to purchase 390,625 shares of Arrowhead Common Stock, at an exercise price of $5.00, to two Calando shareholders, in exchange for 1,562.5 shares of Series A Preferred Stock of Calando Pharmaceuticals, Inc.

On October 21, 2011, Arrowhead entered into a Stock and Asset Purchase Agreement whereby in acquired all of the outstanding common stock of Roche Madison Inc. and certain intellectual property rights in exchange for 1,288,158 shares of Arrowhead Common Stock, a promissory note of $50,000, and potential contingent consideration based on the achievement of certain regulatory milestones, and sales milestones and royalty payments after drug approval.

On April 5, 2012, Arrowhead entered into a Stock Purchase Agreement whereby it acquired all of the outstanding common stock of Alvos Therapeutics, Inc. for 315,457 shares of Arrowhead Common Stock and potential contingent consideration based on the achievement of certain clinical, regulatory and sales milestones.

Organization and Basis of Presentation

3 Months Ended

Dec. 31, 2012

Organization and Basis of Presentation

NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION

Nature of Business and Going Concern

Arrowhead Research Corporation is a clinical stage targeted therapeutics company with development programs in oncology, obesity, and chronic hepatitis B virus infection. Our novel delivery technologies have the potential to enable revolutionary new classes of drugs, such as RNAi interference and peptide drug conjugates, for a broad range of unmet medical needs. Our pipeline of targeted therapeutics are designed to have increased effectiveness through guided delivery and decreased toxicity through reduction of side effects associated with unwanted exposure in healthy cells and tissues.

Liquidity

Arrowhead has historically financed its operations through the sale of securities of Arrowhead and its Subsidiaries. Development activities have required significant capital investment since the Company’s inception and we expect our current operations to continue to require cash investment in fiscal 2013 and beyond to continue development.

At December 31, 2012, the Company had $2.9 million in cash to fund operations. During the quarter ended December 31, 2012, the Company’s cash position decreased by $0.5 million. The Company received $3.3 million from the issuance of equity, net of fees. Cash collections from licensing revenue was $0.3 million. The company had cash outflow of $4.1 million related to its continuing operating activities.

In September 2011, the Company entered into an equity line facility whereby it has the ability to draw capital up to $15 million, subject to certain provisions, including maintaining a minimum stock price of $2.00 per share. During fiscal 2012, the Company drew $1 million from this facility. During fiscal 2013, the Company has not made any draws on this facility.

In December 2012, the Company sold 1.8 million units at a price of $2.26 per unit in a public offering. Each unit consisted of one share of Common Stock and a warrant to purchase 0.5 share of Common Stock. The exercise price of these warrants is $2.12. Proceeds net of expenses from the offering were $3.9 million, which included a $500,000 promissory note due February 1, 2013.

In January 2013, the Company sold 1.7 million units at a price of $2.12 per unit in a public offering. Each unit consisted of one share of Common Stock and a warrant to purchase 0.5 share of Common Stock, exercisable at $2.14. Proceeds net of expenses from the offering were $3.3 million.

Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has experienced negative cash flows from operations since inception and has an accumulated deficit of approximately $140 million. The Company has funded its activities to date almost exclusively from equity financings.

The Company plans to fund its development activities as cash resources allow. However, the company is dependent on additional equity financing and/or the signing of collaboration/partnership arrangements to supply cash for future development. The Company cannot be certain that such funding will be available on acceptable terms or available at all. To the extent that the Company raises additional funds by issuing equity securities, its stockholders may experience significant dilution. If the Company is unable to raise funds when required or on acceptable terms, it may have to delay, scale back, or discontinue the development and/or commercialization of one or more product candidates, or relinquish or otherwise dispose of rights to technologies, product candidates, or products that it would otherwise seek to develop or commercialize itself and possibly cease operations.

In addition to the normal risks associated with a new business venture, there can be no assurance that the Company’s research and development will be successfully completed or that any product will be approved or commercially viable. The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, dependence on collaborative arrangements, development by the Company or its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, and compliance with Food and Drug Administration (“FDA”) and other governmental regulations and approval requirements.

These matters raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements were prepared under the assumption that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of that uncertainty.

Although the Company has sources of liquidity, as described above, the Company anticipates that further equity financings, and/or asset sales and license agreements will be necessary to continue to fund operations in the future.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results for a full year. The September 30, 2012 balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. This financial information should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2012.

The consolidated financial statements of the Company include the accounts of Arrowhead and its wholly-owned and majority-owned Subsidiaries. Prior to April 2008, Arrowhead’s Subsidiaries included Insert Therapeutics, Inc. (“Insert”), which was merged with Calando in April 2008. The merged entity is majority-owned by Arrowhead and continues to operate under the name of Calando. Arrowhead sold its interests in Unidym and Tego in 2011 and 2009, respectively. Unidym and Tego results are included in the Income (Loss) from Discontinued Operations. Income (Loss) from Discontinued Operations also includes Aonex Technologies, Inc. (“Aonex”), sold in 2008 and Nanotechnica, Inc. (“Nanotechnica”), dissolved in 2005. All significant intercompany accounts and transactions are eliminated in consolidation, and noncontrolling interests are accounted for in the Company’s financial statements. Certain reclassifications have been made to prior period financial statements to conform to the current period presentation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Actual results could differ from those estimates.

Recently Issued Accounting Standards

In July 2012, the FASB issued ASU 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment, which amended the guidance in ASU 2011-08 to simplify the testing of indefinite-lived intangible assets other than goodwill for impairment. ASU 2012-02 becomes effective for annual and interim impairment tests performed for fiscal years beginning on or after September 15, 2012 and earlier adoption is permitted. We adopted this standard in the third quarter of fiscal year 2012. We believe adoption did not have a material effect on our financial statements.

In September 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-08, Intangibles—Goodwill and Other (Topic 350)—Testing Goodwill for Impairment (ASU 2011-08), to allow entities to use a qualitative approach to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If after performing the qualitative assessment an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step goodwill impairment test is unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step goodwill impairment test. ASU 2011-08 is effective for us in fiscal 2013 and earlier adoption is permitted. The adoption of ASU 2011-08 is not anticipated to have any impact on our financial position, results of operations or cash flows.

In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU 2011-04, Fair Value Measurement (“ASU 2011-04”), which amended ASC 820, Fair Value Measurements (“ASC 820”), providing a consistent definition and measurement of fair value, as well as similar disclosure requirements between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles, clarifies the application of existing fair value measurement and expands the disclosure requirements. ASU 2011-04 was effective for us beginning January 1, 2012. The adoption of ASU 2011-04 did not have a material effect on our consolidated financial statements or disclosures.

In June 2010, the FASB issued ASU No. 2010-17, Revenue Recognition—Milestone Method (Topic 605): Milestone Method of Revenue Recognition. This ASU codifies the consensus reached in EITF Issue No. 08-9, “Milestone Method of Revenue Recognition.” The amendments to the Codification provide guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research or development transactions. Consideration that is contingent on achievement of a milestone in its entirety may be recognized as revenue in the period in which the milestone is achieved only if the milestone is judged to meet certain criteria to be considered substantive. Milestones should be considered substantive in their entirety and may not be bifurcated. An arrangement may contain both substantive and nonsubstantive milestones, and each milestone should be evaluated individually to determine if it is substantive. This guidance was adopted effective October 1, 2010. The adoption of this guidance did not have a material impact on our consolidated financial statements.

- Definition

The entire disclosure for the organization, consolidation and basis of presentation of financial statements disclosure, and significant accounting policies of the reporting entity. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements.

+ References + Details

Acquisitions

3 Months Ended

Dec. 31, 2012

Acquisitions

NOTE 2. ACQUISITIONS

Roche Madison

On October 21, 2011, the Company entered into a Stock and Asset Purchase Agreement (the “RNAi Purchase Agreement”) with Hoffmann-La Roche Inc. and F Hoffmann-La Roche Ltd (collectively, “Roche”), pursuant to which the Company purchased from Roche (i) all of the outstanding common stock of Roche Madison Inc. (“Roche Madison”) and (ii) the intellectual property rights then held by Roche related to its RNAi business and identified in the RNAi Purchase Agreement (the “Transaction”). In consideration for the purchase of Roche Madison and the Roche RNAi assets, the Company issued to Roche a promissory note with a principal value of $50,000 and 901,702 shares of Common Stock (as adjusted for the 1-for-10 reverse stock split on November 17, 2011). Subsequently, pursuant to the RNAi Purchase Agreement, the Company issued an additional 239,894 shares of Common Stock. The acquisition provided additional technology, particularly related to RNAi delivery, and provided a state-of-the-art lab facility.

Pursuant to the RNAi Purchase Agreement, Roche has a right of first negotiation on certain product candidates developed by the Company and its affiliates relating to the purchased assets. If the Company proposes to out-license or enters into substantive negotiations to out-license, any Clinical Candidate or Existing Candidate (as such terms are defined in the RNAi Purchase Agreement), the Company must give notice of the Candidate it proposes to out-license and negotiate exclusively and in good faith with Roche for 90 days regarding the applicable out-license. This right of first negotiation applies to all Existing Candidates (as defined in the RNAi Purchase Agreement) and the first five Clinical Candidates for which the Company delivers notice to Roche and subsequently enters into an out-license.

In addition to the consideration paid by the Company as per the closing terms, the Company is obligated to make certain royalty and milestone payments to Roche upon the occurrence of certain events. For certain product candidates that are developed by the Company or its affiliates and that are covered by a valid claim by the patent rights transferred in the Transaction for which the Company and Roche do not enter into a licensing arrangement, the Company will be obligated to pay a 3% royalty on Net Sales (as defined in the RNAi Purchase Agreement), provided that the royalty rate may be reduced or offset in certain circumstances. The obligation to pay royalties on such candidates will last until the later of (i) the expiration of the last to expire patent right related to such product candidate that was transferred in the Transaction and (ii) ten years after the first commercial sale of such product candidate.

The Company will also be obligated to make cash payments to Roche upon the achievement of various milestones, including the first regulatory approval of an Existing Candidate in certain jurisdictions and upon certain annual sales milestones for Existing Candidates that may receive regulatory approval. The potential payments range from $2,500,000 to $6,000,000 per milestone. Based on the Company’s estimate of future payments, a net present value of $84,935 was calculated as contingent consideration, and is recorded as a part of other noncurrent liabilities.

The following table summarizes the estimated fair values at the date of acquisition:


Current assets	$	432,709
Property and equipment		7,215,206
Intangible assets		1,174,935
Other noncurrent assets		6,264
Current liabilities		(414,122	)
Noncurrent liabilities		(1,570,072	)
Gain on purchase		(1,576,106	)

Total purchase consideration	$	5,268,814

The purchase consideration was composed of the following:


Promissory note due Roche	$	50,000
Contingent consideration		84,935
Shares issued to Roche		5,133,879

Total purchase consideration	$	5,268,814

We estimated the fair value of the assets and liabilities acquired through various valuation techniques including a market approach and an income approach. Because the net identifiable tangible and intangible assets and liabilities were in excess of the purchase price, a gain on the purchase of $1.6 million was recorded. The most significant assets capitalized were research equipment and certain in-process research and development. We believe that we were able to acquire these assets at a reasonable purchase price and generate a gain on the transaction due in part from the seller’s desire to exit the relatively early stage of the RNAi business, as compared to the seller’s other business operations, as well as the seller’s desire to dispose of certain on-going costs associated with the facility, primarily lease costs and personnel costs, which were synergistic to the Company’s strategy to establish a research facility to advance development efforts for its drug product candidates.

Alvos Therapeutics

On April 5, 2012, the Company entered into a Stock Purchase Agreement to purchase all of the outstanding shares of Alvos Therapeutics, Inc., (“Alvos”), a privately held company that licensed a large platform of proprietary human-derived Homing Peptides, and the method for their discovery, from MD Anderson Cancer Center. In conjunction with the acquisition, Arrowhead hired one employee from Alvos, and retained one employee on a consulting basis. In exchange for all of the outstanding shares of Alvos, Arrowhead issued an upfront payment of 315,457 shares of Common Stock. The former Alvos stockholders are also eligible to receive additional issuances of stock valued at up to $23.5 million at the time of issuance based on the future achievement of clinical, regulatory and sales milestones. Based on the Company’s estimate of future payments, a net present value of $88,686 was calculated as contingent consideration, and is recorded as a part of other noncurrent liabilities. The Alvos acquisition provided key technology in targeted therapeutics.

The following table summarizes the estimated fair values at the date of acquisition:


Current assets	$	29,332
In-process R&D		2,172,387
Current liabilities		(113,033	)

Total purchase consideration	$	2,088,686

The purchase consideration was comprised of shares of Arrowhead Common Stock issued to the former shareholders of Alvos Therapeutics, Inc.


Shares issued		315,457
Price per share	$	6.34

Share consideration	$	2,000,000
Contingent consideration		88,686

Total purchase consideration	$	2,088,686

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1497-128463

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1490-128463

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1392-128463

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7008-128479

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1486-128463

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6927-128479

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1500-128463

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1524-128463

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7000-128479

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4922-128472

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6996-128479

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1383-128463

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 88-16
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph F4
-Subparagraph e
-Appendix F

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141
-Paragraph 51, 52
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 67-73
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Intangible Assets

3 Months Ended

Dec. 31, 2012

Intangible Assets

NOTE 3. INTANGIBLE ASSETS

Intangible assets consist of in-process research and development (IPR&D) not subject to amortization, and patents and other intangible assets subject to amortization, which were capitalized as a part of a business combination.

IPR&D represents projects that have not yet received regulatory approval and are required to be classified as indefinite assets until the successful completion or the abandonment of the associated R&D efforts. Accordingly, during the development period after the date of acquisition, these assets will not be amortized until approval is obtained in one or more jurisdictions which, individually or combined, are expected to generate a significant portion of the total revenue expected to be earned by an IPR&D project. At that time, we will determine the useful life of the asset, reclassify the asset out of IPR&D and begin amortization. If the associated R&D effort is abandoned the related IPR&D assets will likely be written off and we would record an impairment loss.

Intangible assets subject to amortization include license agreements and patents capitalized as part of a business combination.

The license agreements are being amortized over the estimated life remaining at the time of acquisition which was 4 years. Patents are amortized over a period of three years to twenty years. The weighted average original amortization period is twelve years. Amortization of license agreements and patents is expected to be approximately $222,000 for the balance of fiscal year 2013, and $300,000 for fiscal years 2014, and 2015, $250,000 in 2016, $240,000 in 2017 and $280,000 thereafter.

We review amounts capitalized as in-process research and development for impairment at least annually in the fourth quarter, and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In the event the carrying value of the assets is not expected to be recovered, the assets are written down to their estimated fair values. We continue to test our indefinite-lived IPR&D assets for potential impairment until the projects are completed or abandoned.

The below table provides details on our intangible asset balances:


	Intangible assets not subject to amortization		Intangible assets subject to amortization			Total Intangible assets
Balance at September 30, 2011	$	0	$	1,731,211		$	1,731,211
Additions—Madison acquisition		944,935		230,000			1,174,935
Additions—Alvos acquisition		2,172,387		0			2,172,387
Amortization		0		(293,964	)		(293,964	)

Balance at September 30, 2012	$	3,117,322	$	1,667.247		$	4,784,569
Amortization		0		(74,115	)		(74,115	)

Balance at December 31, 2012	$	3,117,322	$	1,593.132		$	4,710,454

Investment in Subsidiaries

3 Months Ended

Dec. 31, 2012

Investment in Subsidiaries

NOTE 4. INVESTMENT IN SUBSIDIARIES

In addition to 100% ownership interest in Arrowhead Madison, Inc. and Alvos Therapeutics, Inc., Arrowhead also maintains majority ownership in Calando Pharmaceuticals, Ablaris Therapeutics, Inc., and minority investments in Nanotope, Inc. and Leonardo Biosystems, Inc.

Calando Pharmaceuticals, Inc.

Calando is a clinical stage RNAi therapeutics company. On April 17, 2008, Calando merged with and into Insert, with Insert as the surviving company.

In January 2011, Arrowhead invested $9.1 million, through a cash investment of $1.0 million and the conversion of $8.1 million intercompany debt, acquiring newly issued Calando Series B and Series C preferred stock.

As of December 31, 2012, Calando owed to Arrowhead $3.5 million under a series of 8% simple interest notes and advances. It is expected that these loans will either be repaid or converted to equity in the future. The balance of the notes and advances is eliminated in consolidation.

As of December 31, 2012, Arrowhead owned 79% of the outstanding shares of Calando and 76% on a fully diluted basis.

Ablaris Therapeutics, Inc.

Ablaris was formed and began operations in the first quarter of fiscal 2011, based on the license of certain anti-obesity technology developed at the MD Anderson Cancer Center at the University of Texas. During the year ended September 30, 2011, Ablaris raised $2.9 million in cash, of which $1.3 million was invested by Arrowhead and $1.6 million was invested by outside investors, through the issuance of Ablaris Series A Preferred stock.

As of December 31, 2012, Arrowhead owned 64% of the outstanding shares of Ablaris and 64% on a fully diluted basis.

Nanotope, Inc.

Nanotope has closed its R&D facility in Skokie, Illinois; any further research and development would take place at the laboratories of Northwestern University under the direction of Nanotope’s founder, Dr. Samuel Stupp. Arrowhead’s investment in Nanotope has been fully reserved, and Arrowhead maintains a full reserve against its receivable from Nanotope. Any further investments are expected to be minimal. Leonardo Biosystems, Inc.

Leonardo is developing a drug-delivery platform technology based on novel methods of designing porous silicon microparticles that selectively accumulate in tumor vasculature. Arrowhead accounts for its investment in Leonardo using the cost method of accounting. As of December 31, 2012, Leonardo owed to Arrowhead $575,000, included in other receivables. The Company has provided a full reserve against the receivable from Leonardo. As of December 31, 2012, Arrowhead’s ownership interest in Leonardo was 3%.

- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

+ References + Details

Discontinued Operations

3 Months Ended

Dec. 31, 2012

Discontinued Operations

NOTE 5. DISCONTINUED OPERATIONS

Unidym, Inc.

Founded by Arrowhead in 2005, Unidym is developing electronic applications of carbon nanotubes. Arrowhead sold its ownership interest in Unidym to Wisepower, a Korean corporation, in January 2011. The consideration included $2.5 million in Wisepower stock, a convertible bond with a face value of $2.5 million, a percentage of certain revenue streams, as well as contingent payments up to $140 million based on revenue milestones over a ten-year period. The consideration received in the form of Wisepower stock has been liquidated. The consideration received in the form of a bond was held as a current asset as of December 31, 2012. The bond which bears no interest, became convertible on January 17, 2012, became redeemable on January 17, 2013, and becomes due on January 17, 2014.

In conjunction with the disposition of Unidym, the gain on the sale and the results of historical operations are recorded as discontinued operations in the Company’s Statements of Operations. Additionally, the cash flows from Unidym are reflected separately as cash flows from discontinued operations in the Company’s Consolidated Statement of Cash Flows. Any future cash flows as discussed above will also be reflected as a part of cash flows from discontinued operations.

Tego Biosciences, Inc.

On April 20, 2007, Tego, a wholly-owned subsidiary of Arrowhead, acquired the assets of C Sixty, Inc., a Texas-based company developing protective products based on the anti-oxidant properties of fullerenes.

In December 2009, Tego completed the sale of all of its intellectual property assets to Luna Innovations, Inc. The consideration included an upfront purchase price of $350,000 and reimbursements of patent and license expenses of $80,000, as well as contingent payments based on milestones and royalties for each fullerene product developed by Luna and covered by Tego intellectual property. Due to the sale of substantially all of Tego’s assets, the operations of Tego ceased and the gain on the sale and the results of historical operations are recorded as discontinued operation in the Company’s Statements of Operations. Additionally, the cash flows from Tego are reflected separately as cash flows from discontinued operations. Any future cash flows as discussed above will be reflected as a part of cash flows from discontinued operations in the Company’s Consolidated Statements of Cash Flows.

- Definition

The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1436-107760

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1510-107760

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1474-107760

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1020-107759

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e957-107759

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1012-107759

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 45
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=8077374&loc=d3e2443-110228

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2941-110230

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 144
-Paragraph 43-48
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Notes Payable

3 Months Ended

Dec. 31, 2012

Notes Payable

NOTE 6. NOTES PAYABLE

On November 26, 2008, Calando entered into Unsecured Convertible Promissory Note Agreements (“Notes”) for $2.5 million with accredited investors and Arrowhead, which invested $200,000 in the Notes offering. Arrowhead subsequently invested an additional $600,000 in the same offering. Except for one Note in the principal amount of $500,000, all Notes and accrued interest were converted into a total of 2,950 shares of Calando Series A Preferred Stock on June 23, 2009. The remaining Note was renegotiated and extended until November 26, 2013. The terms of the new note include a 10% interest rate and require two times principal payment upon certain events as defined in the note and at maturity. At December 31, 2012, The Note is reflected on the balance sheet at the maturity amount of $1,000,000 less a discount of $164,671. Also, as part of the acquisition of Roche Madison, Inc. in October 2011, the Company recorded as note payable of $50,000, which is due October 17, 2014 and is reflected in long-term liabilities on the Company’s balance sheet.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

Stockholders' Equity

3 Months Ended

Dec. 31, 2012

Stockholders' Equity

NOTE 7. STOCKHOLDERS’ EQUITY

At December 31, 2012, the Company had a total of 150,000,000 shares of capital stock authorized for issuance, consisting of 145,000,000 shares of Common Stock, par value $0.001, and 5,000,000 shares of Preferred Stock, par value $0.001.

At December 31, 2012, 15,644,158 shares of Common Stock were outstanding; no shares of Preferred Stock were outstanding. At December 31, 2012, 2,369,960 shares were reserved for issuance upon exercise of options granted, or available to grant under Arrowhead’s 2000 Stock Option Plan and 2004 Equity Incentive Plan.

On October 20, 2011, the Company and Lincoln Park Capital Fund, LLC, an Illinois limited liability company (“LPC”) entered into a $15 million purchase agreement (the “Purchase Agreement”), together with a registration rights agreement, whereby LPC agreed to purchase up to $15 million of Common Stock, subject to certain limitations, from time to time during the three-year term of the Purchase Agreement. Additionally, the Company filed a registration statement with the U.S. Securities & Exchange Commission covering the resale of the shares that may be issued to LPC under the Purchase Agreement. On January 30, 2012, the SEC declared the registration statement effective for the resale of such shares. The Company has the right, in its sole discretion, over a 36-month period to sell up to $15 million of Common Stock (subject to certain limitations) to LPC, depending on certain conditions as set forth in the Purchase Agreement. As of September 30, 2012, the Company had drawn $1 million from the facility.

On October 21, 2011 and October 24, 2011, the Company entered into Subscription Agreements with certain accredited investors (the “Series A Purchasers”), pursuant to which the Company issued and sold an aggregate of 1,015 shares of Series A Preferred Convertible Stock, $0.001 par value per share, at a purchase price of $1,000 per share. The aggregate purchase price paid for the shares of Series A Preferred was $1,015,000. On February 16, 2012, upon approval by the Company’s shareholders, 1,015 shares of Arrowhead Series A Preferred Convertible Stock, $0.001 par value per share, were converted to 275,782 shares of Common Stock.

On October 21, 2011, the Company entered into a Subscription Agreement with an accredited investor, pursuant to which the Company issued and sold an aggregate of 675,000 shares of Common Stock, $0.001 par value per share, at a purchase price of $3.70 per share. The aggregate purchase price paid by the purchaser for the shares of Common Stock is $2,497,500.

On August 10, 2012, the Company sold 2,260,869 units at a price of $2.76 per unit. Each unit consisted of one share of common stock and a warrant to purchase 0.75 shares of common stock at an exercise price of $3.25. Gross proceeds from the offering were $6.2 million excluding offering fees and expenses.

In December 2012, the Company sold 1,825,079 units at a price of $2.26 per unit. Each unit consisted of one share of common stock and a warrant to purchase 0.5 shares of common stock at an exercise price of $2.20. Gross proceeds from the offering were $4.1 million excluding offering fees and expenses.

As of November 17, 2011, the Company effected a 1 for 10 reverse stock split. As a result of the reverse stock split, each ten shares of the Company’s Common Stock issued and outstanding immediately prior to the reverse stock split was combined into one share of Common Stock. Also, as a result of the reverse stock split, the per share exercise price, and the number of shares of Common Stock underlying Company stock options, warrants, and any Common Stock based equity grants outstanding immediately prior to the reverse stock split was proportionally adjusted, based on the one-for-ten split ratio, in accordance with the terms of such options, warrants or other Common Stock based equity grants as the case may be. No fractional shares of Common Stock were issued in connection with the reverse split. Stockholders received a cash payment in lieu of any fractional shares. All share and per share amounts in these financial statements have been retrospectively adjusted to reflect the reverse stock split.

The following table summarizes information about warrants outstanding at December 31, 2012:


Exercise prices	Number of Warrants		Remaining Life in Years
$70.60		94,897		4.4
$20.00		386,400		0.6
$5.00		1,155,023		1.9
$5.09		461,024		1.9
$1.38		322,150		3.0
$4.16		1,000		4.0
$3.25		1,695,654		3.6
$2.20		912,543		5.0
$2.83		109,505		3.6

Total warrants outstanding		5,138,195

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
-URI http://asc.fasb.org/extlink&oid=6228006&loc=d3e74512-122707

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.29-31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 4
-Subparagraph (SAB TOPIC 4.C)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187143-122770

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187085-122770

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 43
-Section B
-Paragraph 7, 11A
-Chapter 1
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph d
-Article 4

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 20: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4

Reference 21: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C

Reference 22: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 129
-Paragraph 2, 3, 4, 5, 6, 7, 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 23: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

+ Details

Leases

3 Months Ended

Dec. 31, 2012

Leases

NOTE 8. LEASES

In May 2012, the Company signed a lease for new office space for its corporate headquarters, and moved into the new location in August 2012. The lease has a five-year term; rental costs are approximately $13,000 per month, increasing 3% annually.

The Company’s research facility in Madison, Wisconsin is leased through February 28, 2019. Monthly rental expense is approximately $22,000. Other monthly rental expenses include common area maintenance and real estate taxes totaling approximately $13,000 per month. Utilities costs are approximately $16,000 per month. Including monthly payments recorded under a capital lease of approximately $21,000, total monthly costs are approximately $72,000 per month.

Facility and equipment rent expense, related to continuing operations, for the period ended December 31, 2012 and 2011 was $145,000 and $90,000, respectively. From inception to date, rent expense was $4,270,000.

As of December 31, 2012, future minimum lease payments due in fiscal years under capitalized leases are as follows:


2013	$	192,634
2014		256,846
2015		256,846
2016		256,846
2017		256,846
2018		256,846
2019 and thereafter		107,019
Less interest		(139,720	)

Principal		1,444,161
Less current portion		(216,419	)

Noncurrent portion	$	1,227,743

As of December 31, 2012, future minimum lease payments due in fiscal years under operating leases are as follows:


2013	$	270,056
2014		434,229
2015		445,921
2016		457,961
2017		470,154
2018		359,370
2019 and thereafter		125,415

Total	$	2,563,106

- Definition

The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing.

+ References + Details

Stock-Based Compensation

3 Months Ended

Dec. 31, 2012

Stock-Based Compensation

NOTE 9. STOCK-BASED COMPENSATION

Arrowhead has two plans that provide for equity-based compensation. Under the 2000 Stock Option Plan, 153,200 shares of Arrowhead’s Common Stock are reserved for issuance upon exercise of non-qualified stock options. No further grants can be made under the 2000 Stock Option Plan. Under the 2004 Equity Incentive Plan, 1,965,860 shares of Common Stock are reserved for the grant of stock options, stock appreciation rights, restricted stock awards and performance unit/share awards by the Board of Directors to employees, consultants and others. As of December 31, 2012, there were options granted and outstanding to purchase 152,900 and 1,510,694 shares of Common Stock under the 2000 Stock Option Plan and the 2004 Equity Incentive Plan, respectively, and 251,200 options outstanding that were issued outside of equity incentive plans, as inducement options to new employees hired in conjunction with the Company acquisition of its Madison research facility in October 2011.

During the three months ended December 31, 2012, 4,000 options were granted under the 2004 Equity Incentive Plan. All share and per share data in this footnote has been adjusted to reflect the 1 for 10 reverse stock split effected on November 17, 2011.

The following tables summarize information about stock options:


	Number of Options Outstanding			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
Balance At September 30, 2011		729,096			9.03
Granted		1,229,500			4.40
Cancelled		(42,919	)		11.77
Exercised		(4,883	)		5.20

Balance At September 30, 2012		1,910,794		$	6.01
Granted		(4,000	)		2.54
Cancelled		0			0
Exercised		0			0
Balance At December 31, 2012		1,914,794		$	6.00		7.9 years	$	—

Exercisable At December 31, 2012		887,102		$	7.61		7.2 years	$	—

Stock-based compensation expense for the three months ended December 31, 2012 and 2011 was $395,674 and $251,878, respectively. There is no income tax benefit as the company is currently operating at a loss and an actual income tax benefit may not be realized. The loss creates a timing difference, resulting in a deferred tax asset, which is fully reserved by a valuation allowance.

The fair value of the options granted by Arrowhead during the three months ended December 31, 2012 and 2011 is estimated at $6,023 and $1,392,584, respectively. The aggregate fair value of options granted by Calando during the three months ended December 31, 2012 and 2011 is estimated at $0 and $33,690, respectively.

The intrinsic value of the options exercised during the three months ended December 31, 2011 was $0, there were no options exercised during the three months ended December 31, 2012.

As of December 31, 2012, the pre-tax compensation expense for all unvested stock options at Arrowhead in the amount of approximately $3,356,689 will be recognized in our results of operations over a weighted average period of 2.9 years. As of December 31, 2012, the pre-tax compensation expense for all unvested stock options at Calando in the amount of approximately $53,624 will be recognized in our results of operations over a weighted average period of 2.5 years.

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which do not have vesting restrictions and are fully transferable. The determination of the fair value of each stock option is affected by our stock price on the date of grant, as well as assumptions regarding a number of highly complex and subjective variables. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. The assumptions used to value stock options are as follows:


	Three months ended December 31,
	2012	2011
Dividend yield	—	—
Risk-free interest rate	0.7% to 1.0%	1.4% to 1.7%
Volatility	69%	100%
Expected life (in years)	5.5 to 6.25	6.25
Weighted average grant date fair value per share of options granted	$1.51	$3.71

The dividend yield is zero as the Company currently does not pay a dividend.

The risk-free interest rate is based on the U.S. Treasury bond.

Volatility is estimated based on volatility average of the Company’s Common Stock price.

- Definition

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

+ References + Details

Fair Value Measurements & Derivative Instruments

3 Months Ended

Dec. 31, 2012

Fair Value Measurements & Derivative Instruments

NOTE 10. FAIR VALUE MEASUREMENTS & DERIVATIVE INSTRUMENTS

The Company measures its financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. Additionally, the Company is required to provide disclosure and categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation. Level 1 provides the most reliable measure of fair value while Level 3 generally requires significant management judgment. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The fair value hierarchy is defined as follows:

Level 1—Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly.

Level 3—Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date.

The following table summarizes fair value measurements at December 31, 2012 and September 30, 2012 for assets and liabilities measured at fair value on a recurring basis:

December 31, 2012:


	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	2,931,032	$	—	$	—	$	2,931,032
Marketable securities	$	56,008	$	—	$	—	$	56,008
Derivative assets	$	—	$	—	$	—	$	—
Derivative liabilities	$	—	$	—	$	1,490,584	$	1,490,584
Contingent consideration	$	—	$	—	$	173,621	$	173,621

September 30, 2012:


	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	3,377,288	$	—	$	—	$	3,377,288
Marketable securities	$	106,500	$	—	$	—	$	106,500
Derivative assets	$	—	$	—	$	250,250	$	250,250
Derivative liabilities	$	—	$	—	$	647,213	$	647,213
Contingent consideration	$	—	$	—	$	173,621	$	173,621

As part of the sale of proceeds from the sale of Unidym in January 2011, Arrowhead received a bond from Wisepower in the face amount of $2.5 million. The bond is convertible to Wisepower common stock at a price of $2.00 per share. The conversion feature is subject to derivative accounting as prescribed under ASC 815. Accordingly, the fair value of the conversion feature on the date of issuance was estimated using an option pricing model and recorded on the Company’s consolidated balance sheet as a derivative asset. The fair value of the conversion feature is estimated at the end of each reporting period and the change in the fair value of the conversion feature is recorded as a nonoperating gain/loss as change in value of derivatives in Company’s Consolidated Statement of Operations. A portion of the bond is owed to a third party, as such the company records a derivative asset for the entire conversion feature and records a derivative liability for the portion related to the third party. The original fair value of the derivative relating to the third party was $26,310; the fair value at September 30, 2012 was $10,645, and the fair value at December 31, 2012 was $0. The Company has concluded that there is no value in the conversion feature of the bond, and has reduced the value of the derivative asset to zero at December 31, 2012. The loss from the change in value of the derivative asset, net of the derivative liability, for the three months ended December 31, 2012 was $239,605, and is reflected in the change in value of derivatives in the Company’s consolidated statement of operations.

During the three months ended December 31, 2012, the Company recorded a loss from the change in fair value of the derivative asset of $250,250. The assumptions used in valuing the derivative asset were as follows:


	December 31, 2012	September 30, 2012
Risk free interest rate	NA	0.23%
Expected life	0 Years	1.3 Years
Dividend yield	none	none
Volatility	72%	72%

The following is a reconciliation of the derivative asset:


Value at September 30, 2011		161,125
Receipt of instruments		—
Increase in value		89,125
Net settlements		—

Value at September 30, 2012		250,250
Receipt of instruments		—
Change in value		(250,250	)
Net settlements		—

Value at December 31, 2012	$	—

As part of the equity financing on June 17, 2010, Arrowhead issued warrants to acquire up to 329,649 shares of Common Stock (the “2010 Warrants”), of which 322,150 warrants were outstanding at December 31, 2012, which contain a mechanism to adjust the strike price upon the issuance of certain dilutive equity securities. If during the term of the 2010 Warrants, the Company issues Common Stock at a price lower than the exercise price of the 2010 Warrants, the exercise price of the 2010 Warrants would be reduced to the amount equal to the issuance price of the Common Stock. Similarly, as part of a financing on December 12, 2012, Arrowhead issued warrants to acquire up to 912,543 shares of Common Stock (the “2012 Warrants”) which contain a mechanism to adjust the strike price upon the issuance of certain dilutive equity securities. If during the term of the 2012 Warrants, the Company issues Common Stock at a price lower than the exercise price of the 2012 Warrants, the exercise price of the 2012 Warrants would be reduced to the amount equal to the issuance price of the Common Stock.

As a result of these features, the 2010 Warrants and the 2012 Warrants are subject to derivative accounting as prescribed under ASC 815. Accordingly, the fair value of the Warrants on the date of issuance was estimated using an option pricing model and recorded on the Company’s consolidated balance sheet as a derivative liability. The fair value of the Warrants is estimated at the end of each reporting period and the change in the fair value of the Warrants is recorded as a nonoperating gain or loss in the Company’s consolidated statement of operations. During the three months ended December 31, 2012, the Company recorded a non-cash gain from the change in fair value of the derivative liability of $274,451. The assumptions used in valuing the derivative liabilities were as follows:


2010 Warrants	December 31, 2012	September 30, 2012
Risk free interest rate	0.36%	0.31%
Expected life	3.0 Years	3.2 Years
Dividend yield	none	none
Volatility	69%	100%

2012 Warrants	December 31, 2012	September 30, 2012
Risk free interest rate	0.72%	N/A
Expected life	5.0 Years	N/A
Dividend yield	none	N/A
Volatility	69%	N/A

The following is a reconciliation of the derivative liability related to these warrants:


Value at September 30, 2011	$	907,233
Issuance of instruments		—
Change in value		(281,038	)
Net settlements		—

Value at September 30, 2011	$	626,195
Issuance of instruments		1,137,896
Change in value		(274,451	)
Net settlements		—

Value at December 31, 2012	$	1,489,640

In conjunction with the financing of Ablaris during the year ended September 30, 2011, Arrowhead sold exchange rights to certain investors whereby the investors have the right to exchange their shares of Ablaris for a prescribed number of shares of Arrowhead Common Stock based upon a predefined ratio. The exchange rights have a seven-year term. During the first year, the exchange right allows the holder to exchange one Ablaris share for 0.06 Arrowhead shares (as adjusted for a subsequent reverse stock split). This ratio declines to 0.04 in the second year, 0.03 in the third year and 0.02 in the fourth year. In the fifth year and beyond the exchange ratio is 0.01. Exchange rights for 675,000 Ablaris shares were sold during the year ended September 30, 2011, and remain outstanding. The exchange rights are subject to derivative accounting as prescribed under ASC 815. Accordingly, the fair value of the exchange rights on the date of issuance was estimated using an option pricing model and recorded on the Company’s consolidated balance sheet as a derivative liability. The fair value of the exchange rights is estimated at the end of each reporting period and the change in the fair value of the exchange rights is recorded as a nonoperating gain or loss in the Company’s Consolidated Statement of Operations. During the three months ended December 31, 2012, the Company recorded a non-cash gain from the change in fair value of the derivative liability of $9,428. The assumptions used in valuing the derivative liability were as follows:


	December 31, 2012	September 30, 2012
Risk free interest rate	0.72%	0.62%
Expected life	5.0 Years	5.3 Years
Dividend yield	none	none
Volatility	69%	100%

The following is a reconciliation of the derivative liability related to these exchange rights:


Value at September 30, 2010	$	—
Issuance of instruments		100,650
Change in value		(69,758	)

Value at September 30, 2011	$	30,892
Issuance of instruments		—
Change in value		(20,520	)
Net settlements		—

Value at September 30, 2012	$	10,372
Issuance of instruments		—
Change in value		(9,428	)
Net settlements		—

Value at September 30, 2012	$	944

During the year ended September 30, 2012, contingent consideration was recorded upon the acquisitions of Roche Madison, Inc. and Alvos Therapeutics, Inc., totaling $173,621. The fair value measurement of the contingent consideration obligations is determined using Level 3 inputs. The fair value of contingent consideration obligations is based on a discounted cash flow model using a probability-weighted income approach. The measurement is based upon unobservable inputs supported by little or no market activity based on our own assumptions and experience. Estimating timing to complete the development, and obtain approval of products is difficult, and there are inherent uncertainties in developing a product candidate, such as obtaining U.S. Food and Drug Administration (FDA) and other regulatory approvals. In determining the probability of regulatory approval and commercial success, we utilize data regarding similar milestone events from several sources, including industry studies and our own experience. These fair value measurements represent Level 3 measurements as they are based on significant inputs not observable in the market. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense we record in any given period. Changes in the fair value of the contingent consideration obligations are recorded in our consolidated statement of operations. There were no changes in contingent consideration fair value.


Value at September 30, 2011	$	—
Purchase price contingent consideration		173,621
Contingent consideration payments		—
Change in fair value of contingent consideration		—

Value at September 30, 2012	$	173,621
Purchase price contingent consideration		—
Contingent consideration payments		—
Change in fair value of contingent consideration		—

Value at December 31, 2012	$	173,621

The carrying amounts of the Company’s other financial instruments, which include accounts receivable, accounts payable, and accrued expenses approximate their respective fair values due to the relatively short-term nature of these instruments. The carrying value of the Company’s debt obligations approximates fair value based on market interest rates.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13537-108611

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13504-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Related Party Transactions

3 Months Ended

Dec. 31, 2012

Related Party Transactions

NOTE 11. RELATED PARTY TRANSACTIONS

Christopher Anzalone, Arrowhead’s President and CEO, owns 1,395,900 shares of Nanotope, Inc. common stock or approximately 14.2% of Nanotope’s outstanding voting securities. Dr. Anzalone does not hold options, warrants or any other rights to acquire securities of Nanotope. Dr. Anzalone has the right to appoint a representative to the board of directors of Nanotope. Dr. Anzalone currently serves on the Nanotope board in a seat reserved for Nanotope’s CEO, and another individual holds the seat designated by Dr. Anzalone. Dr. Anzalone has served as President and Chief Executive Officer of Nanotope since its formation and continues to serve in these capacities. Dr. Anzalone has not received any compensation for his work on behalf of Nanotope since joining the Company on December 1, 2007. Dr. Anzalone has also waived his right to any unpaid compensation accrued for work done on behalf of Nanotope before he joined the Company.

In August 2010, the Company retained Mr. Vincent Anzalone, the brother of Arrowhead’s Chief Executive Officer, as a consultant for the Company, focusing on business development and market analysis, with a monthly remuneration of $10,000 per month. Mr. Vincent Anzalone was paid $120,000 during the fiscal years ended September 30, 2012, and 2011. Mr. Vincent Anzalone was hired by the Company on October 1, 2012, at which point his consulting remuneration ended.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39603-107864

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39622-107864

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39678-107864

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(k))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39691-107864

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph b
-Article 3A

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph k
-Article 4

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 57
-Paragraph 1-4
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Subsequent Events

3 Months Ended

Dec. 31, 2012

Subsequent Events

NOTE 12. SUBSEQUENT EVENTS

On January 24, 2013, the Company entered into an agreement to sell its $2.5 million note receivable from Wisepower (“The Wisepower Note”). As consideration for selling the Wisepower Note the Company received approximately $1.6 million worth of Wisepower common stock. Additionally, the terms of the agreement require that the Company receive additional shares of Wisepower stock on March 29, 2013, at which time the Company would deliver the Wisepower Note to the Purchaser. Total value of stock received for the note is expected to be approximately $2.5 million.

In January 2013, the Company sold 1,667,051 units at a price of $2.12 per unit. Each unit consisted of one share of common stock and a warrant to purchase 0.5 shares of common stock at an exercise price of $2.14. Gross proceeds from the offering were $3.5 million excluding offering fees and expenses.

Organization and Basis of Presentation (Policies)	3 Months Ended
Organization and Basis of Presentation (Policies)	Dec. 31, 2012
Nature of Business and Going Concern	Nature of Business and Going Concern Arrowhead Research Corporation is a clinical stage targeted therapeutics company with development programs in oncology, obesity, and chronic hepatitis B virus infection. Our novel delivery technologies have the potential to enable revolutionary new classes of drugs, such as RNAi interference and peptide drug conjugates, for a broad range of unmet medical needs. Our pipeline of targeted therapeutics are designed to have increased effectiveness through guided delivery and decreased toxicity through reduction of side effects associated with unwanted exposure in healthy cells and tissues.
Liquidity	Liquidity Arrowhead has historically financed its operations through the sale of securities of Arrowhead and its Subsidiaries. Development activities have required significant capital investment since the Company’s inception and we expect our current operations to continue to require cash investment in fiscal 2013 and beyond to continue development. At December 31, 2012, the Company had $2.9 million in cash to fund operations. During the quarter ended December 31, 2012, the Company’s cash position decreased by $0.5 million. The Company received $3.3 million from the issuance of equity, net of fees. Cash collections from licensing revenue was $0.3 million. The company had cash outflow of $4.1 million related to its continuing operating activities. In September 2011, the Company entered into an equity line facility whereby it has the ability to draw capital up to $15 million, subject to certain provisions, including maintaining a minimum stock price of $2.00 per share. During fiscal 2012, the Company drew $1 million from this facility. During fiscal 2013, the Company has not made any draws on this facility. In December 2012, the Company sold 1.8 million units at a price of $2.26 per unit in a public offering. Each unit consisted of one share of Common Stock and a warrant to purchase 0.5 share of Common Stock. The exercise price of these warrants is $2.12. Proceeds net of expenses from the offering were $3.9 million, which included a $500,000 promissory note due February 1, 2013. In January 2013, the Company sold 1.7 million units at a price of $2.12 per unit in a public offering. Each unit consisted of one share of Common Stock and a warrant to purchase 0.5 share of Common Stock, exercisable at $2.14. Proceeds net of expenses from the offering were $3.3 million.
Going Concern	Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has experienced negative cash flows from operations since inception and has an accumulated deficit of approximately $140 million. The Company has funded its activities to date almost exclusively from equity financings. The Company plans to fund its development activities as cash resources allow. However, the company is dependent on additional equity financing and/or the signing of collaboration/partnership arrangements to supply cash for future development. The Company cannot be certain that such funding will be available on acceptable terms or available at all. To the extent that the Company raises additional funds by issuing equity securities, its stockholders may experience significant dilution. If the Company is unable to raise funds when required or on acceptable terms, it may have to delay, scale back, or discontinue the development and/or commercialization of one or more product candidates, or relinquish or otherwise dispose of rights to technologies, product candidates, or products that it would otherwise seek to develop or commercialize itself and possibly cease operations. In addition to the normal risks associated with a new business venture, there can be no assurance that the Company’s research and development will be successfully completed or that any product will be approved or commercially viable. The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, dependence on collaborative arrangements, development by the Company or its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, and compliance with Food and Drug Administration (“FDA”) and other governmental regulations and approval requirements. These matters raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements were prepared under the assumption that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of that uncertainty. Although the Company has sources of liquidity, as described above, the Company anticipates that further equity financings, and/or asset sales and license agreements will be necessary to continue to fund operations in the future.
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results for a full year. The September 30, 2012 balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. This financial information should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2012. The consolidated financial statements of the Company include the accounts of Arrowhead and its wholly-owned and majority-owned Subsidiaries. Prior to April 2008, Arrowhead’s Subsidiaries included Insert Therapeutics, Inc. (“Insert”), which was merged with Calando in April 2008. The merged entity is majority-owned by Arrowhead and continues to operate under the name of Calando. Arrowhead sold its interests in Unidym and Tego in 2011 and 2009, respectively. Unidym and Tego results are included in the Income (Loss) from Discontinued Operations. Income (Loss) from Discontinued Operations also includes Aonex Technologies, Inc. (“Aonex”), sold in 2008 and Nanotechnica, Inc. (“Nanotechnica”), dissolved in 2005. All significant intercompany accounts and transactions are eliminated in consolidation, and noncontrolling interests are accounted for in the Company’s financial statements. Certain reclassifications have been made to prior period financial statements to conform to the current period presentation.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Actual results could differ from those estimates.

Acquisitions (Tables)

3 Months Ended

Dec. 31, 2012

Roche Madison Inc. [Member]

Summary of Estimated Fair Values at Date of Acquisition

The following table summarizes the estimated fair values at the date of acquisition:


Current assets	$	432,709
Property and equipment		7,215,206
Intangible assets		1,174,935
Other noncurrent assets		6,264
Current liabilities		(414,122	)
Noncurrent liabilities		(1,570,072	)
Gain on purchase		(1,576,106	)

Total purchase consideration	$	5,268,814

Purchase Consideration

The purchase consideration was composed of the following:


Promissory note due Roche	$	50,000
Contingent consideration		84,935
Shares issued to Roche		5,133,879

Total purchase consideration	$	5,268,814

Alvos acquisition [Member]

Summary of Estimated Fair Values at Date of Acquisition

The following table summarizes the estimated fair values at the date of acquisition:


Current assets	$	29,332
In-process R&D		2,172,387
Current liabilities		(113,033	)

Total purchase consideration	$	2,088,686

Purchase Consideration

The purchase consideration was comprised of shares of Arrowhead Common Stock issued to the former shareholders of Alvos Therapeutics, Inc.


Shares issued		315,457
Price per share	$	6.34

Share consideration	$	2,000,000
Contingent consideration		88,686

Total purchase consideration	$	2,088,686

Intangible Assets (Tables)

3 Months Ended

Dec. 31, 2012

Schedule of Intangible Asset

The below table provides details on our intangible asset balances:


	Intangible assets not subject to amortization		Intangible assets subject to amortization			Total Intangible assets
Balance at September 30, 2011	$	0	$	1,731,211		$	1,731,211
Additions—Madison acquisition		944,935		230,000			1,174,935
Additions—Alvos acquisition		2,172,387		0			2,172,387
Amortization		0		(293,964	)		(293,964	)

Balance at September 30, 2012	$	3,117,322	$	1,667.247		$	4,784,569
Amortization		0		(74,115	)		(74,115	)

Balance at December 31, 2012	$	3,117,322	$	1,593.132		$	4,710,454

Stockholders' Equity (Tables)

3 Months Ended

Dec. 31, 2012

Summary of Information About Warrants

The following table summarizes information about warrants outstanding at December 31, 2012:


Exercise prices	Number of Warrants		Remaining Life in Years
$70.60		94,897		4.4
$20.00		386,400		0.6
$5.00		1,155,023		1.9
$5.09		461,024		1.9
$1.38		322,150		3.0
$4.16		1,000		4.0
$3.25		1,695,654		3.6
$2.20		912,543		5.0
$2.83		109,505		3.6

Total warrants outstanding		5,138,195

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References + Details

Leases (Tables)

3 Months Ended

Dec. 31, 2012

Future Minimum Lease Payments Under Capitalized Leases

As of December 31, 2012, future minimum lease payments due in fiscal years under capitalized leases are as follows:


2013	$	192,634
2014		256,846
2015		256,846
2016		256,846
2017		256,846
2018		256,846
2019 and thereafter		107,019
Less interest		(139,720	)

Principal		1,444,161
Less current portion		(216,419	)

Noncurrent portion	$	1,227,743

Future Minimum Lease Payments Under Operating Leases

As of December 31, 2012, future minimum lease payments due in fiscal years under operating leases are as follows:


2013	$	270,056
2014		434,229
2015		445,921
2016		457,961
2017		470,154
2018		359,370
2019 and thereafter		125,415

Total	$	2,563,106

Stock-Based Compensation (Tables)

3 Months Ended

Dec. 31, 2012

Summarize Information About Stock Options

The following tables summarize information about stock options:


	Number of Options Outstanding			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
Balance At September 30, 2011		729,096			9.03
Granted		1,229,500			4.40
Cancelled		(42,919	)		11.77
Exercised		(4,883	)		5.20

Balance At September 30, 2012		1,910,794		$	6.01
Granted		(4,000	)		2.54
Cancelled		0			0
Exercised		0			0
Balance At December 31, 2012		1,914,794		$	6.00		7.9 years	$	—

Exercisable At December 31, 2012		887,102		$	7.61		7.2 years	$	—

Assumptions Used to Value Stock Options

The assumptions used to value stock options are as follows:


	Three months ended December 31,
	2012	2011
Dividend yield	—	—
Risk-free interest rate	0.7% to 1.0%	1.4% to 1.7%
Volatility	69%	100%
Expected life (in years)	5.5 to 6.25	6.25
Weighted average grant date fair value per share of options granted	$1.51	$3.71

Fair Value Measurements & Derivative Instruments (Tables)

3 Months Ended

Dec. 31, 2012

Fair Value Measurements for Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes fair value measurements at December 31, 2012 and September 30, 2012 for assets and liabilities measured at fair value on a recurring basis:

December 31, 2012:


	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	2,931,032	$	—	$	—	$	2,931,032
Marketable securities	$	56,008	$	—	$	—	$	56,008
Derivative assets	$	—	$	—	$	—	$	—
Derivative liabilities	$	—	$	—	$	1,490,584	$	1,490,584
Contingent consideration	$	—	$	—	$	173,621	$	173,621

September 30, 2012:


	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	3,377,288	$	—	$	—	$	3,377,288
Marketable securities	$	106,500	$	—	$	—	$	106,500
Derivative assets	$	—	$	—	$	250,250	$	250,250
Derivative liabilities	$	—	$	—	$	647,213	$	647,213
Contingent consideration	$	—	$	—	$	173,621	$	173,621

Assumptions Used in Valuing Derivative Assets

The assumptions used in valuing the derivative asset were as follows:


	December 31, 2012	September 30, 2012
Risk free interest rate	NA	0.23%
Expected life	0 Years	1.3 Years
Dividend yield	none	none
Volatility	72%	72%

Reconciliation of Derivative Asset

The following is a reconciliation of the derivative asset:


Value at September 30, 2011		161,125
Receipt of instruments		—
Increase in value		89,125
Net settlements		—

Value at September 30, 2012		250,250
Receipt of instruments		—
Change in value		(250,250	)
Net settlements		—

Value at December 31, 2012	$	—

Change in Fair Value of Contingent Consideration Obligations

There were no changes in contingent consideration fair value.


Value at September 30, 2011	$	—
Purchase price contingent consideration		173,621
Contingent consideration payments		—
Change in fair value of contingent consideration		—

Value at September 30, 2012	$	173,621
Purchase price contingent consideration		—
Contingent consideration payments		—
Change in fair value of contingent consideration		—

Value at December 31, 2012	$	173,621

Warrants [Member]

Assumptions Used in Valuing Derivative Liability

The assumptions used in valuing the derivative liabilities were as follows:


2010 Warrants	December 31, 2012	September 30, 2012
Risk free interest rate	0.36%	0.31%
Expected life	3.0 Years	3.2 Years
Dividend yield	none	none
Volatility	69%	100%

2012 Warrants	December 31, 2012	September 30, 2012
Risk free interest rate	0.72%	N/A
Expected life	5.0 Years	N/A
Dividend yield	none	N/A
Volatility	69%	N/A

Reconciliation of Derivative Liability

The following is a reconciliation of the derivative liability related to these warrants:


Value at September 30, 2011	$	907,233
Issuance of instruments		—
Change in value		(281,038	)
Net settlements		—

Value at September 30, 2011	$	626,195
Issuance of instruments		1,137,896
Change in value		(274,451	)
Net settlements		—

Value at December 31, 2012	$	1,489,640

Exchange rights [Member]

Assumptions Used in Valuing Derivative Liability

The assumptions used in valuing the derivative liability were as follows:


	December 31, 2012	September 30, 2012
Risk free interest rate	0.72%	0.62%
Expected life	5.0 Years	5.3 Years
Dividend yield	none	none
Volatility	69%	100%

Reconciliation of Derivative Liability

The following is a reconciliation of the derivative liability related to these exchange rights:


Value at September 30, 2010	$	—
Issuance of instruments		100,650
Change in value		(69,758	)

Value at September 30, 2011	$	30,892
Issuance of instruments		—
Change in value		(20,520	)
Net settlements		—

Value at September 30, 2012	$	10,372
Issuance of instruments		—
Change in value		(9,428	)
Net settlements		—

Value at September 30, 2012	$	944

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

+ References + Details

Statement of Cash Flow (Parenthetical) (Detail) - USD ($)	1 Months Ended
	Apr. 05, 2012	Oct. 21, 2011	Sep. 30, 2010	Mar. 31, 2010	Feb. 28, 2010	Nov. 30, 2009	Sep. 30, 2009	Sep. 28, 2009	Sep. 22, 2009	Jun. 25, 2009	Jun. 11, 2009	Aug. 08, 2008	Apr. 29, 2008	Apr. 23, 2008	Apr. 20, 2007	Mar. 31, 2006	Mar. 23, 2005
Purchase of common shares														200,000
Common stock, shares issued														7,054
Stock purchased by cash														$ 200,000
Warrants exercised				24,788
Stock issued against warrants				12,870
Roche [Member]
Shares exchanged as part of acquisition		1,288,158
Issue of promissory note to Roche		$ 50,000
Alvos acquisition [Member]
Shares exchanged as part of acquisition	315,457
Insert Therapeutics, Inc [Member]
Purchase of common shares																	7,375,000
Common stock, shares issued																	50,226
Common stock value																	$ 2,000,000
Calando Pharmaceuticals, Inc. [Member]
Purchase of common shares					200,000	2,850,000										964,000
Common stock, shares issued					8,000	114,000										20,838
Common stock value						$ 706,800										$ 1,077,333
Value of common stock purchased																1,928,000
Stock purchased by cash																$ 850,667
Warrants issued					2,400	24,000
Warrants purchased					60,000	600,000
Common stock exercise value					$ 5.00
Calando Pharmaceuticals, Inc. [Member] \| Series A Preferred Stock [Member]
Purchase of common shares			1,562.5
Warrants issued			390,625
Common stock exercise value			$ 5.00
Carbon Nanotechnologies, Inc [Member] \| Series E Preferred Stock [Member]
Common stock, shares issued															143,122
Common stock value															$ 5,400,000
MASA Energy LLC [Member]
Common stock, shares issued													10,504
Common stock value													$ 310,000
Value of common stock purchased													560,000
Stock purchased by cash													$ 250,000
Nanoconduction, Inc [Member]
Common stock, shares issued												11,411
Common stock value												$ 250,000
Unidym, Inc. [Member]
Common stock, shares issued								64,227
Common stock value								$ 398,209
Unidym, Inc. [Member] \| Series A Preferred Stock [Member]
Common stock, shares issued									9,149		132,462
Common stock value									$ 46,662		$ 688,802
Preferred stock, shares								5,574
Unidym, Inc. [Member] \| Series C Preferred Stock [Member]
Common stock, shares issued						15,317				194,444
Common stock value						$ 47,485				$ 972,222
Preferred stock, shares								636,699
Unidym, Inc. [Member] \| Series C One Preferred Stock [Member]
Common stock, shares issued							27,777
Common stock value							$ 186,111

Organization and Basis of Presentation - Additional Information (Detail)	1 Months Ended		3 Months Ended		116 Months Ended
	Jan. 31, 2013 USD ($) $ / shares $ / Warrant shares	Dec. 31, 2012 USD ($) $ / shares $ / Warrant shares	Dec. 31, 2012 USD ($) $ / shares $ / Warrant shares	Dec. 31, 2011 USD ($)	Dec. 31, 2012 USD ($) $ / shares $ / Warrant shares	Sep. 30, 2012 USD ($)	Sep. 30, 2011 USD ($)
Schedule of Investments [Line Items]
Cash for fund operations		$ 2,931,032	$ 2,931,032	$ 6,773,126	$ 2,931,032	$ 3,377,288	$ 7,507,389
Cash position decreased during year			(446,256)	(734,263)	2,931,032
Cash from issuance of equity		$ 3,900,000	3,300,000
Proceeds from revenue			300,000
Cash outflow from continuing operations			$ (3,837,586)	$ (2,705,356)	$ (79,715,382)
Minimum stock price required to maintain under equity line facility \| $ / shares		$ 2.00	$ 2.00		$ 2.00
Proceeds from equity line facility			$ 1,000,000
Shares issued under public offering \| shares		1,800,000
Shares issued under public offering, price per share \| $ / shares		$ 2.26	$ 2.26		$ 2.26
Unit sold, description		Each unit consisted of one share of Common Stock and a warrant to purchase
Warrant to purchase share of Common Stock \| shares		0.5	0.5		0.5
Exercise price of warrant \| $ / Warrant		2.12	2.12		2.12
Promissory note		$ 500,000	$ 500,000		$ 500,000
Promissory note, maturity date		Feb. 01, 2013	Nov. 26, 2013
Accumulated deficit		$ (139,611,839)	$ (139,611,839)		$ (139,611,839)	$ (134,997,680)
Subsequent Events [Member]
Schedule of Investments [Line Items]
Cash from issuance of equity	$ 3,300,000
Shares issued under public offering \| shares	1,667,051
Shares issued under public offering, price per share \| $ / shares	$ 2.12
Unit sold, description	Each unit consisted of one share of Common Stock and a warrant to purchase
Warrant to purchase share of Common Stock \| shares	0.5
Exercise price of warrant \| $ / Warrant	2.14
Wisepower [Member]
Schedule of Investments [Line Items]
Drawing Limit under Equity Line Facility							$ 15,000,000

Acquisitions - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended
	Nov. 17, 2011	Dec. 31, 2012	Sep. 30, 2012	Oct. 21, 2011
Business Acquisition [Line Items]
Reverse stock split ratio		Company effected a 1 for 10 reverse stock split
Obligation to pay royalties		Later of (i) the expiration of the last to expire patent right related to such product candidate that was transferred in the Transaction and (ii) ten years after the first commercial sale of such product candidate.
Net present value of contingent consideration		$ 84,935
Contingent consideration		(173,621)	$ (173,621)
Roche [Member]
Business Acquisition [Line Items]
Issue of promissory note to Roche		$ 50,000		$ 50,000
Issue of Common Stock		901,702
Reverse stock split ratio	1-for-10
Issuance of additional shares of Common Stock		239,894
Applicable out-license term		90 days
Percentage of royalty liability		3.00%
Gain on purchase		$ 1,576,106
Contingent consideration		84,935
Roche [Member] \| Minimum [Member]
Business Acquisition [Line Items]
Cash payments to Roche		2,500,000
Roche [Member] \| Maximum [Member]
Business Acquisition [Line Items]
Cash payments to Roche		$ 6,000,000
Alvos acquisition [Member]
Business Acquisition [Line Items]
Issue of Common Stock		315,457
Issue of additional shares of Common Stock, Value		$ 23,500,000
Contingent consideration		$ 88,686

Acquisitions - Summary of Estimated Fair Values at Date of Acquisition (Detail)	3 Months Ended
	Dec. 31, 2012 USD ($)
Roche [Member]
Business Acquisition [Line Items]
Current assets	$ 432,709
Property and equipment	7,215,206
Intangible assets	1,174,935
Other noncurrent assets	6,264
Current liabilities	(414,122)
Noncurrent liabilities	(1,570,072)
Gain on purchase	(1,576,106)
Total purchase consideration	5,268,814
Alvos acquisition [Member]
Business Acquisition [Line Items]
Current assets	29,332
In-process R&D	2,172,387
Current liabilities	(113,033)
Total purchase consideration	$ 2,088,686

Acquisitions - Purchase Consideration (Detail) - USD ($)	Dec. 31, 2012	Sep. 30, 2012	Aug. 10, 2012	Oct. 21, 2011
Business Acquisition [Line Items]
Price per share			$ 2.76
Contingent consideration	$ (173,621)	$ (173,621)
Roche [Member]
Business Acquisition [Line Items]
Shares issued	5,133,879
Promissory note due Roche	50,000			$ 50,000
Contingent consideration	84,935
Total purchase consideration	5,268,814
Alvos acquisition [Member]
Business Acquisition [Line Items]
Shares issued	$ 315,457
Price per share	$ 6.34
Share consideration	$ 2,000,000
Contingent consideration	88,686
Total purchase consideration	$ 2,088,686

- Definition

Fair value, as of the acquisition date, of potential payments under the contingent consideration arrangement including cash and shares.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 35
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6910684&loc=d3e4570-128470

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 25
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=6911189&loc=d3e6411-128476

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 30
-Paragraph 18
-URI http://asc.fasb.org/extlink&oid=18499824&loc=d3e4237-128469

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 30
-Paragraph 19
-URI http://asc.fasb.org/extlink&oid=18499824&loc=d3e4243-128469

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 40
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6910732&loc=d3e4805-128471

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 25
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6911189&loc=d3e6408-128476

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 25
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6946367&loc=d3e3642-128468

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 25
-Paragraph 27
-URI http://asc.fasb.org/extlink&oid=6946367&loc=d3e3629-128468

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 1
-Subparagraph (b)(3),(c)(1)
-URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6927-128479

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 25
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6911189&loc=d3e6405-128476

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 68
-Subparagraph g(1)
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 29, 30, 41, 42, 64
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141
-Paragraph 51
-Subparagraph f
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 65
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

- Definition

The acquisition-date fair value of the equity interests of the acquirer, including the number of instruments or interests issued or issuable in consideration for the business combination.

+ References + Details

- Definition

This element represents the acquisition-date fair value of the total consideration transferred which consists of the sum of the acquisition-date fair values of the assets transferred by the acquirer, the liabilities incurred by the acquirer to former owners of the acquiree, and the equity interests issued by the acquirer.

+ References + Details

Intangible Assets - Additional Information (Detail)	3 Months Ended
Intangible Assets - Additional Information (Detail)	Dec. 31, 2012 USD ($)
Expected Amortization Expense [Line Items]
Amortization period of intangible assets	12 years
Amortization of license agreements in 2013	$ 222,000
Amortization of license agreements in 2014	300,000
Amortization of license agreements in 2015	300,000
Amortization of license agreements in 2016	250,000
Amortization of license agreements in 2017	240,000
Amortization of license agreements, thereafter	$ 280,000
Licensing agreements [Member]
Expected Amortization Expense [Line Items]
Amortization period of intangible assets	4 years
Minimum [Member] \| Patents [Member]
Expected Amortization Expense [Line Items]
Amortization period of intangible assets	3 years
Maximum [Member] \| Patents [Member]
Expected Amortization Expense [Line Items]
Amortization period of intangible assets	20 years

Intangible Assets - Schedule of Intangible Asset (Detail) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Intangible assets not subject to amortization, beginning balance	$ 3,117,322	$ 0
Intangible assets not subject to amortization, Amortization	0	0
Intangible assets not subject to amortization, ending balance	3,117,322	3,117,322
Intangible assets subject to amortization, beginning balance	1,667,247	1,731,211
Amortization	(74,115)	(293,964)
Intangible assets subject to amortization, ending balance	1,593,132	1,667,247
Total Intangible assets, beginning balance		1,731,211
Total Intangible assets, Amortization	(74,115)	(293,964)
Total Intangible assets, ending balance	$ 4,710,454	4,784,569
Madison acquisition [Member]
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Intangible assets not subject to amortization, Additions		944,935
Intangible assets subject to amortization, Additions		230,000
Total Intangible assets, Additions		1,174,935
Alvos acquisition [Member]
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Intangible assets not subject to amortization, Additions		2,172,387
Intangible assets subject to amortization, Additions		0
Total Intangible assets, Additions		$ 2,172,387

Investment in Subsidiaries - Additional Information (Detail) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2012	Sep. 30, 2011	Jan. 31, 2011
Schedule of Investments [Line Items]
Ownership percentage in subsidiary	100.00%
Aggregate purchase price of preferred shares		$ (1,618,509)
Preferred Stock B and C [Member]
Schedule of Investments [Line Items]
Investment in preferred stock			$ 9,100,000
Calando Pharmaceuticals, Inc. [Member]
Schedule of Investments [Line Items]
Cash investment in subsidiary			1,000,000
Investment in subsidiary through conversion of intercompany debt			$ 8,100,000
Amount owed by subsidiary	$ 3,500,000
Stated percentage of notes and advances	800000000.00%
Percentage of outstanding shares	7900.00%
Percentage of investment ownership	76.00%
Ablaris Therapeutics, Inc. [Member]
Schedule of Investments [Line Items]
Investment in preferred stock		1,300,000
Percentage of outstanding shares	64.00%
Percentage of investment ownership	64.00%
Aggregate purchase price of preferred shares		2,900,000
Investment in preferred stock by outsider		$ 1,600,000
Leonardo Biosystems, Inc. [Member]
Schedule of Investments [Line Items]
Amount owed by subsidiary	$ 575,000
Percentage of outstanding shares	3.00%

Discontinued Operations - Additional Information (Detail) - USD ($)	1 Months Ended		3 Months Ended
	Jan. 31, 2011	Dec. 31, 2009	Dec. 31, 2012
Discontinued Operations [Line Items]
Non cash consideration received in sale of interest in subsidiary	$ 2,500,000
Contingent amount to be received under discontinued business	140,000,000
Period of revenue milestones considered for contingent payment			10 years
Upfront consideration of discontinued operation		$ 350,000
Reimbursements of patent and license expenses		$ 80,000
Convertible bond [Member]
Discontinued Operations [Line Items]
Convertible bond, face value	$ 2,500,000
Convertible bond, conversion date			Jan. 17, 2012
Convertible bond, redeemable date			Jan. 17, 2013
Convertible bond, due date			Jan. 17, 2014

Notes Payable - Additional Information (Detail) - USD ($)	1 Months Ended		3 Months Ended
	Dec. 31, 2012	Oct. 31, 2011	Dec. 31, 2012	Sep. 30, 2012	Nov. 26, 2008
Class of Stock [Line Items]
Unsecured Convertible Promissory Note Agreements					$ 2,500,000
Investment in Notes offering					200,000
Additional investment in Notes offering					600,000
Principal amount of Note not converted into shares					$ 500,000
Offering Note matured date	Feb. 01, 2013		Nov. 26, 2013
New Note terms			Two times principal payment upon certain events
New note interest rate	10.00%		10.00%
Offering Note maturity amount	$ 1,000,000		$ 1,000,000
Offering Note discount	164,671		164,671
Note payable	$ 50,000	$ 50,000	$ 50,000	$ 839,421
Long-term debt instrument due date		Oct. 17, 2014
Series A Preferred Stock [Member] \| Calando [Member]
Class of Stock [Line Items]
Conversion of Notes and accrued interest in to share			2,950

Stockholders' Equity - Additional Information (Detail) - USD ($)	1 Months Ended			3 Months Ended		12 Months Ended				116 Months Ended
	Aug. 10, 2012	Feb. 29, 2012	Oct. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2005	Dec. 31, 2012	Oct. 24, 2011	Oct. 21, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Capital stock authorized for issuance				150,000,000						150,000,000
Common stock, shares authorized				145,000,000		145,000,000				145,000,000
Common stock, par value				$ 0.001		$ 0.001				$ 0.001		$ 0.001
Preferred stock, shares authorized				5,000,000		5,000,000				5,000,000
Preferred stock, par value				$ 0.001		$ 0.001				$ 0.001
Common stock, shares outstanding				15,644,158		13,579,185				15,644,158
Preferred stock, shares outstanding				0		0				0
Issuance and sold of Common Stock	2,260,869
Sale of stock, price per share	$ 2.76
Aggregate purchase price of preferred shares							$ (1,618,509)
Warrant to purchase common stock	0.75
Proceeds from issuance of common stock and warrants, net	$ 6,200,000			$ 3,332,467	$ 1,463,833					$ 109,585,478
Common stock exercise price	$ 3.25
Reverse stock split				Company effected a 1 for 10 reverse stock split
2000 Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share reserve for issuance				2,369,960						2,369,960
2004 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share reserve for issuance				2,369,960						2,369,960
Series A Preferred Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Preferred stock, par value											$ 0.001
Sale of stock, price per share											$ 1,000
Aggregate purchase price of preferred shares			$ 1,015,000
Number of shares converted in common stock				1,015
Preferred stock converted to common stock, shares		275,782
Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance and sold of Common Stock				1,825,079		15,511	8,656	225,189	1,250
Sale of stock, price per share				$ 2.26						$ 2.26		$ 3.70
Aggregate purchase price on issuance of common stock to be received			$ 2,497,500
Warrant to purchase common stock				0.50
Proceeds from issuance of common stock and warrants, net				$ 4,100,000
Common stock exercise price				$ 2.20
Limited liability company [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum equity commitment amount under agreement						$ 15,000,000
Equity commitment agreement period						36 months
Cash drawn from facility						$ 1,000,000
Subscription Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance and sold of Common Stock			675,000
Subscription Agreement [Member] \| Series A Preferred Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance and sold of Common Stock			1,015

Stockholders' Equity - Summary of Information About Warrants (Detail)	Dec. 31, 2012 $ / Warrant shares
Class of Warrant or Right [Line Items]
Exercise prices \| $ / Warrant	2.12
Number of Warrants \| shares	5,138,195
Warrant 1 [Member]
Class of Warrant or Right [Line Items]
Exercise prices \| $ / Warrant	70.60
Number of Warrants \| shares	94,897
Remaining Life in Years	4 years 4 months 24 days
Warrant 2 [Member]
Class of Warrant or Right [Line Items]
Exercise prices \| $ / Warrant	20.00
Number of Warrants \| shares	386,400
Remaining Life in Years	7 months 6 days
Warrant 3 [Member]
Class of Warrant or Right [Line Items]
Exercise prices \| $ / Warrant	5.00
Number of Warrants \| shares	1,155,023
Remaining Life in Years	1 year 10 months 24 days
Warrant 4 [Member]
Class of Warrant or Right [Line Items]
Exercise prices \| $ / Warrant	5.09
Number of Warrants \| shares	461,024
Remaining Life in Years	1 year 10 months 24 days
Warrant 5 [Member]
Class of Warrant or Right [Line Items]
Exercise prices \| $ / Warrant	1.38
Number of Warrants \| shares	322,150
Remaining Life in Years	3 years
Warrant 6 [Member]
Class of Warrant or Right [Line Items]
Exercise prices \| $ / Warrant	4.16
Number of Warrants \| shares	1,000
Remaining Life in Years	4 years
Warrant 7 [Member]
Class of Warrant or Right [Line Items]
Exercise prices \| $ / Warrant	3.25
Number of Warrants \| shares	1,695,654
Remaining Life in Years	3 years 7 months 6 days
Warrant 8 [Member]
Class of Warrant or Right [Line Items]
Exercise prices \| $ / Warrant	2.20
Number of Warrants \| shares	912,543
Remaining Life in Years	5 years
Warrant 9 [Member]
Class of Warrant or Right [Line Items]
Exercise prices \| $ / Warrant	2.83
Number of Warrants \| shares	109,505
Remaining Life in Years	3 years 7 months 6 days

Leases - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended		116 Months Ended
Leases - Additional Information (Detail) - USD ($)	Aug. 31, 2012	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
Component of Operating Other Cost and Expense [Line Items]
Rental expense	$ 13,000			$ 4,270,000
Lease term	5 years
Percentage of increase in annual rental cost	3.00%
Rental expenses include common area maintenance and real estate taxes		$ 13,000
Utilities costs per month		16,000
Increase in total monthly expenditures		72,000
Facility and equipment rent expense		145,000	$ 90,000
Roche [Member]
Component of Operating Other Cost and Expense [Line Items]
Rental expense		22,000
Monthly payments under capital lease		$ 21,000

Leases - Future Minimum Lease Payments Under Capitalized Leases (Detail) - USD ($)	Dec. 31, 2012	Sep. 30, 2012
Future Minimum Lease Payments Under Capital Leases And Operating Leases For Continuing Operations [Line Items]
2013	$ 192,634
2014	256,846
2015	256,846
2016	256,846
2017	256,846
2018	256,846
2019 and thereafter	107,019
Less interest	(139,720)
Principal	1,444,161
Less current portion	(216,419)	$ (214,801)
Noncurrent portion	$ 1,227,743	$ 1,282,458

Leases - Future Minimum Lease Payments Under Operating Leases (Detail)	Dec. 31, 2012 USD ($)
Future Minimum Lease Payments Under Capital Leases And Operating Leases For Continuing Operations [Line Items]
2013	$ 270,056
2014	434,229
2015	445,921
2016	457,961
2017	470,154
2018	359,370
2019 and thereafter	125,415
Total	$ 2,563,106

Stock-Based Compensation - Additional Information (Detail) - USD ($)	3 Months Ended		12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Sep. 30, 2012	Sep. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted and outstanding to purchase	1,914,794		1,910,794	729,096
Options granted	(4,000)		1,229,500
Stock-based compensation expense	$ 395,674	$ 251,878
Fair value of the options granted	6,023	1,392,584
Intrinsic value of the options exercised	0	0
Arrowhead [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Pre-tax compensation expense	$ 3,356,689
Weighted average period to recognize pre-tax compensation expense	2 years 10 months 24 days
Calando Pharmaceuticals, Inc. [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of the options granted	$ 0	$ 33,690
Pre-tax compensation expense	$ 53,624
Weighted average period to recognize pre-tax compensation expense	2 years 6 months
2000 Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserve for issuance	153,200
Options granted and outstanding to purchase	152,900
2004 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserve for issuance	1,965,860
Options granted and outstanding to purchase	1,510,694
Options granted outside of Equity Incentive plans	251,200
Options granted	4,000

Stock-Based Compensation - Summarize Information About Stock Options (Detail) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Options Outstanding, beginning balance	1,910,794	729,096
Number of Options Outstanding, Granted	(4,000)	1,229,500
Number of Options Outstanding, Cancelled	0	(42,919)
Number of Options Outstanding, Exercised	0	(4,883)
Number of Options Outstanding, ending balance	1,914,794	1,910,794
Weighted-Average Exercise Price Per Share, beginning balance	$ 6.01	$ 9.03
Number of Options Outstanding, Exercisable	887,102
Weighted-Average Exercise Price Per Share, Granted	$ 2.54	4.40
Weighted-Average Exercise Price Per Share, Cancelled	0.00	11.77
Weighted-Average Exercise Price Per Share, Exercised	0.00	5.20
Weighted-Average Exercise Price Per Share, ending balance	6.00	$ 6.01
Weighted-Average Exercise Price, Exercisable	$ 7.61
Weighted-Average Remaining Contractual Term	7 years 10 months 24 days
Weighted-Average Remaining Contractual Term, Exercisable	7 years 2 months 12 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value, Exercisable

Stock-Based Compensation - Assumptions Used to Value Stock Options (Detail) - $ / shares	3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield
Volatility	69.00%	100.00%
Expected life (in years)		6 years 3 months
Weighted average grant date fair value per share of options granted	$ 1.51	$ 3.71
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate, minimum	0.70%	1.40%
Expected life (in years)	5 years 6 months
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate, maximum	1.00%	1.70%
Expected life (in years)	6 years 3 months

Fair Value Measurements & Derivative Instruments - Fair Value Measurements for Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($)	Dec. 31, 2012	Sep. 30, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	$ 30,011	$ 280,261
Contingent consideration	173,621	173,621
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	2,931,032	3,377,288
Marketable securities	56,008	106,500
Derivative assets		250,250
Derivative liabilities	1,490,584	647,213
Contingent consideration	173,621	173,621
Level 1 [Member] \| Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	2,931,032	3,377,288
Marketable securities	56,008	106,500
Derivative assets
Derivative liabilities
Contingent consideration
Level 2 [Member] \| Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents
Marketable securities
Derivative assets
Derivative liabilities
Contingent consideration
Level 3 [Member] \| Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents
Marketable securities
Derivative assets		250,250
Derivative liabilities	1,490,584	647,213
Contingent consideration	$ 173,621	$ 173,621

Fair Value Measurements & Derivative Instruments - Additional Information (Detail)	1 Months Ended	3 Months Ended
	Jan. 31, 2011 USD ($) $ / shares	Dec. 31, 2012 USD ($) shares	Dec. 12, 2012 shares	Sep. 30, 2012 USD ($)	Jun. 17, 2010 shares
Fair Value Measurements Disclosure [Line Items]
Loss from change in value of the derivative asset, net of the derivative liability		$ 239,605
Derivative asset		$ 30,011		$ 280,261
Warrants issued to acquire Common Stock \| shares			912,543		329,649
Warrants outstanding \| shares		322,150
Non-cash gain (loss) from change in fair value of the derivative liability		$ 274,451
Duration of exchange rights		7 years
Contingent consideration		$ 173,621		173,621
Unidym, Inc. [Member]
Fair Value Measurements Disclosure [Line Items]
Non cash consideration received in sale of interest in subsidiary, bonds	$ 2,500,000
Bond convertible conversion price per share \| $ / shares	$ 2.00
Fair value of derivative relating to third party	$ 26,310	0		$ 10,645
Derivative asset		0
Loss from change in fair value of the derivative asset		250,250
Ablaris Therapeutics, Inc. [Member]
Fair Value Measurements Disclosure [Line Items]
Non-cash gain (loss) from change in fair value of the derivative liability		$ 9,428
Exchange right convertible conversion ratio for first year		0.06
Exchange right convertible conversion ratio for second year		0.04
Exchange right convertible conversion ratio for third year		0.03
Exchange right convertible conversion ratio for fourth year		0.02
Exchange right convertible conversion ratio for fifth year and beyond		0.01
Number of exchange rights sold \| shares		675,000

Fair Value Measurements & Derivative Instruments - Assumptions Used in Valuing Derivative Assets (Detail) - Derivative asset [Member]	3 Months Ended	12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk free interest rate		0.23%
Expected life	0 years	1 year 3 months 18 days
Dividend yield
Volatility	72.00%	72.00%

Fair Value Measurements & Derivative Instruments - Reconciliation of Derivative Asset (Detail) - Derivative asset [Member] - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Value, Beginning balance	$ 250,250	$ 161,125
Receipt of instruments
Change in value	(250,250)	89,125
Net settlements
Value, Ending balance		$ 250,250

Fair Value Measurements & Derivative Instruments - Assumptions Used in Valuing Derivative Liability (Detail)	3 Months Ended	12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012
2010 Warrants [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk free interest rate	0.36%	0.31%
Expected life	3 years	3 years 2 months 12 days
Dividend yield
Volatility	69.00%	100.00%
2012 Warrants [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk free interest rate	0.72%
Expected life	5 years
Dividend yield
Volatility	69.00%
Exchange rights [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk free interest rate	0.72%	0.62%
Expected life	5 years	5 years 3 months 18 days
Dividend yield
Volatility	69.00%	100.00%

Fair Value Measurements & Derivative Instruments - Reconciliation of Derivative Liability (Detail) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Sep. 30, 2011
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Change in value	$ 274,451
Exchange rights [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Value, Beginning balance	10,372	$ 30,892
Issuance of instruments			100,650
Change in value	(9,428)	(20,520)	(69,758)
Net settlements
Value, Ending balance	944	10,372	30,892
Warrants [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Value, Beginning balance	626,195	907,233
Issuance of instruments	1,137,896
Change in value	(274,451)	(281,038)
Net settlements
Value, Ending balance	$ 1,489,640	$ 626,195	$ 907,233

Fair Value Measurements & Derivative Investments - Change in Fair Value of Contingent Consideration Obligations (Detail) - USD ($)	Dec. 31, 2012	Sep. 30, 2012
Business Acquisition, Contingent Consideration [Line Items]
Purchase price contingent consideration		$ 173,621
Contingent consideration payments
Change in fair value of contingent consideration

Related Party Transactions - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended	12 Months Ended
	Aug. 31, 2010	Dec. 31, 2012	Sep. 30, 2012	Sep. 30, 2011
Related Party Transaction [Line Items]
Monthly remuneration of employee	$ 10,000
Remuneration of Mr. Vincent Anzalone			$ 120,000	$ 120,000
Nanotope, Inc. [Member]
Related Party Transaction [Line Items]
Shares owned by Arrowhead's President and CEO		1,395,900
Percentage of outstanding voting securities owned by Arrowhead's President and CEO		14.20%

Subsequent Events - Additional Information (Detail)	1 Months Ended		3 Months Ended
Subsequent Events - Additional Information (Detail)	Jan. 31, 2013 USD ($) $ / shares $ / Warrant shares	Dec. 31, 2012 USD ($) $ / shares $ / Warrant shares	Dec. 31, 2012 USD ($) $ / shares $ / Warrant shares	Mar. 29, 2013 USD ($)	Jan. 24, 2013 USD ($)	Sep. 30, 2012 USD ($)
Subsequent Event [Line Items]
Common stock value		$ 110,420	$ 110,420			$ 108,354
Shares issued under public offering \| shares		1,800,000
Shares issued under public offering, price per share \| $ / shares		$ 2.26	$ 2.26
Unit sold, description		Each unit consisted of one share of Common Stock and a warrant to purchase
Warrant to purchase share of Common Stock \| shares		0.5	0.5
Exercise price of warrant \| $ / Warrant		2.12	2.12
Gross proceeds from offering		$ 3,900,000	$ 3,300,000
Subsequent Events [Member]
Subsequent Event [Line Items]
Note receivable					$ 2,500,000
Common stock value				$ 2,500,000	$ 1,600,000
Shares issued under public offering \| shares	1,667,051
Shares issued under public offering, price per share \| $ / shares	$ 2.12
Unit sold, description	Each unit consisted of one share of Common Stock and a warrant to purchase
Warrant to purchase share of Common Stock \| shares	0.5
Exercise price of warrant \| $ / Warrant	2.14
Gross proceeds from offering	$ 3,300,000

Label	Element	Value
Accumulated Deficit During Development Stage [Member]
Profit Loss	us-gaap_ProfitLoss	$ (95,238)
Stock Issuance Cost Charged To Additional Paid In Capital [Member]
Adjustments To Additional Paid In Capital Stock Issued Issuance Costs	us-gaap_AdjustmentsToAdditionalPaidInCapitalStockIssuedIssuanceCosts	168,000
Stock Issuance Cost Charged To Additional Paid In Capital [Member] \| Additional Paid In Capital [Member]
Adjustments To Additional Paid In Capital Stock Issued Issuance Costs	us-gaap_AdjustmentsToAdditionalPaidInCapitalStockIssuedIssuanceCosts	168,000
Issued For Cash At Ten Dollar Per Unit [Member]
Stock Issued During Period Value New Issues	us-gaap_StockIssuedDuringPeriodValueNewIssues	$ 1,680,000
Issued For Cash At Ten Dollar Per Unit [Member] \| Common Stock [Member]
Stock Issued During Period Shares New Issues	us-gaap_StockIssuedDuringPeriodSharesNewIssues	168,000
Stock Issued During Period Value New Issues	us-gaap_StockIssuedDuringPeriodValueNewIssues	$ 1,680
Issued For Cash At Ten Dollar Per Unit [Member] \| Additional Paid In Capital [Member]
Stock Issued During Period Value New Issues	us-gaap_StockIssuedDuringPeriodValueNewIssues	1,678,320
Issued For Cash At Zero Point Zero One Dollars Per Unit [Member]
Stock Issued During Period Value New Issues	us-gaap_StockIssuedDuringPeriodValueNewIssues	$ 3,000
Issued For Cash At Zero Point Zero One Dollars Per Unit [Member] \| Common Stock [Member]
Stock Issued During Period Shares New Issues	us-gaap_StockIssuedDuringPeriodSharesNewIssues	300,000
Stock Issued During Period Value New Issues	us-gaap_StockIssuedDuringPeriodValueNewIssues	$ 3,000