Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Sep. 30, 2016	Dec. 12, 2016	Mar. 31, 2016
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY
Trading Symbol	ARWR
Entity Registrant Name	ARROWHEAD PHARMACEUTICALS, INC.
Entity Central Index Key	0000879407
Current Fiscal Year End Date	--09-30
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		74,173,484
Entity Public Float			$ 290

Consolidated Balance Sheets - USD ($)	Sep. 30, 2016	Sep. 30, 2015
CURRENT ASSETS
Cash and cash equivalents	$ 85,366,448	$ 81,214,354
Trade receivable	75,000
Prepaid expenses	1,289,923	3,293,285
Other current assets	3,771,172	823,620
Short term investments		17,539,902
TOTAL CURRENT ASSETS	90,502,543	102,871,161
Property and equipment, net	15,386,761	4,526,848
Intangible assets, net	22,164,868	24,824,116
Other assets	122,333	45,789
TOTAL ASSETS	128,176,505	132,267,914
CURRENT LIABILITIES
Accounts payable	12,232,906	5,031,706
Accrued expenses	4,587,467	5,376,119
Accrued payroll and benefits	3,969,706	3,824,062
Deferred rent	440,580
Deferred revenue	2,569,792	103,125
Derivative liabilities	1,602,626	1,301,604
Capital lease obligation		217,548
Note Payable	194,310
Other current liabilities	46,407	46,407
TOTAL CURRENT LIABILITIES	25,643,794	15,900,571
LONG-TERM LIABILITIES
Capital lease obligation, net of current portion		540,792
Contingent consideration obligations	0	5,862,464
Deferred rent, net of current portion	2,274,997	142,453
Deferred revenue, net of current portion	2,500,000
Note Payable, net of current portion	2,533,455
Other non-current liabilities	200,000	200,000
TOTAL LONG-TERM LIABILITIES	7,508,452	6,745,709
Commitments and contingencies (Note 7)
Arrowhead Pharmaceuticals, Inc. stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 15,652 shares issued and outstanding as of September 30, 2016 and September 30, 2015	16	16
Common stock, $0.001 par value; 145,000,000 shares authorized; 69,746,685 and 59,544,677 shares issued and outstanding as of September 30, 2016 and September 30, 2015, respectively	162,116	151,914
Additional paid-in capital	493,844,909	426,873,358
Accumulated other comprehensive income (loss)	7,449	(136,425)
Accumulated deficit	(398,435,043)	(316,712,041)
Total Arrowhead Pharmaceuticals, Inc. stockholders' equity	95,579,447	110,176,822
Noncontrolling interest	(555,188)	(555,188)
TOTAL STOCKHOLDERS’ EQUITY	95,024,259	109,621,634
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 128,176,505	$ 132,267,914

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2016	Sep. 30, 2015
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	15,652	15,652
Preferred stock, shares outstanding	15,652	15,652
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	145,000,000	145,000,000
Common stock, shares issued	69,746,685	59,544,677
Common stock, shares outstanding	69,746,685	59,544,677

Consolidated Statements of Operations (unaudited) - USD ($)	12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
REVENUE	$ 158,333	$ 382,000	$ 175,000
OPERATING EXPENSES
Research and development	41,454,452	47,267,361	23,138,050
Acquired in-process research and development		10,142,786
Salaries and payroll-related costs	19,461,656	16,554,008	12,829,355
General and administrative expenses	9,940,737	7,931,184	5,894,008
Stock-based compensation	11,595,816	10,232,897	5,696,173
Depreciation and amortization	3,260,045	2,336,207	1,345,655
Impairment expense	2,050,817		2,172,387
Contingent consideration - fair value adjustments	(5,862,464)	1,891,533	2,375,658
TOTAL OPERATING EXPENSES	81,901,059	96,355,976	53,451,286
OPERATING LOSS	(81,742,726)	(95,973,976)	(53,276,286)
OTHER INCOME (EXPENSE)
Equity in income (loss) of unconsolidated affiliates			(78,874)
Gain (loss) on sale of fixed assets, net		19,195	(58,878)
Interest income (expense), net	265,794	729,158	645,493
Change in value of derivatives	(301,022)	2,869,267	(6,033,659)
Other income (expense)	57,352	417,874	82,092
TOTAL OTHER INCOME (EXPENSE)	22,124	4,035,494	(5,443,826)
LOSS BEFORE INCOME TAXES	(81,720,602)	(91,938,482)	(58,720,112)
Provision for income taxes	(2,400)	(2,400)	(5,300)
NET LOSS	(81,723,002)	(91,940,882)	(58,725,412)
Net loss attributable to non-controlling interests			95,222
NET LOSS ATTRIBUTABLE TO ARROWHEAD	$ (81,723,002)	$ (91,940,882)	$ (58,630,190)
NET LOSS PER SHARE ATTRIBUTABLE TO ARROWHEAD SHAREHOLDERS - BASIC & DILUTED	$ (1.34)	$ (1.60)	$ (1.25)
Weighted average shares outstanding - basic and diluted	61,050,880	57,358,442	46,933,030
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Foreign Currency Translation Adjustments	$ 143,874	$ (136,425)
COMPREHENSIVE LOSS	$ (81,579,128)	$ (92,077,307)	$ (58,630,190)

Consolidated Statement of Stockholders' Equity - USD ($)	Total	Common stock issued for cash at $5.86	Common stock issued for cash at $18.95	Preferred stock issued for cash at $1,000 per share	Common Stock Issued to Galloway	Common stock issued for cash at $5.90 per share	Novartis	Amgen	Preferred Stock	Preferred Stock Preferred stock issued for cash at $1,000 per share	Common Stock	Common Stock Common stock issued for cash at $5.86	Common Stock Common stock issued for cash at $18.95	Common Stock Common Stock Issued to Galloway	Common Stock Common stock issued for cash at $5.90 per share	Common Stock Novartis	Common Stock Amgen	Additional Paid In Capital	Additional Paid In Capital Common stock issued for cash at $5.86	Additional Paid In Capital Common stock issued for cash at $18.95	Additional Paid In Capital Preferred stock issued for cash at $1,000 per share	Additional Paid In Capital Common Stock Issued to Galloway	Additional Paid In Capital Common stock issued for cash at $5.90 per share	Additional Paid In Capital Novartis	Additional Paid In Capital Amgen	Accumulated Other Comprehensive Income (loss)	Accumulated Deficit	Noncontrolling Interest
Beginning Balance, Amount at Sep. 30, 2013	$ 25,734,789								$ 10		$ 124,859							$ 193,514,766									$ (166,140,969)	$ (1,763,877)
Beginning Balance, Shares at Sep. 30, 2013									9,900		32,489,444
Exercise of warrants, Amount	10,148,044										$ 2,911							10,145,133
Exercise of warrants, Shares											2,911,919
Exercise of stock options, Amount	2,730,000										$ 455							2,729,545
Exercise of stock options, Shares											454,863
Stock-based compensation	5,696,173																	5,696,173
Stock issuances		$ 14,060,112	$ 112,581,559	$ 46,000,000	$ 500,000					$ 46		$ 3,072	$ 6,325	$ 132					$ 14,057,040	$ 112,575,234	$ 45,999,954	$ 499,868
Stock issuances, Shares										46,000		3,071,672	6,325,000	131,579
Settlements related to derivative liability	5,956,079																	5,956,079
Preferred stock converted to common stock, Amount									$ (38)		$ 9,272							(9,234)
Preferred stock converted to common stock, Shares									(37,600)		9,272,459
Deconsolidation of Calando Pharmaceuticals, Inc.	1,303,911																											1,303,911
Net loss	(58,725,412)																										(58,630,190)	(95,222)
Ending Balance, Amount at Sep. 30, 2014	165,985,255								$ 18		$ 147,026							391,164,558									(224,771,159)	(555,188)
Ending Balance, Shares at Sep. 30, 2014									18,300		54,656,936
Exercise of warrants, Amount	401,876										$ 81							401,795
Exercise of warrants, Shares											79,828
Exercise of stock options, Amount	101,870										$ 29							101,841
Exercise of stock options, Shares											28,758
Stock-based compensation	10,232,897																	10,232,897
Exercise of exchange rights, Amount	3,072										$ 5							3,067
Exercise of exchange rights, Shares											5,250
Preferred stock converted to common stock, Amount									$ (2)		$ 1,316							(1,314)
Preferred stock converted to common stock, Shares									(2,648)		1,316,215
Common stock- Restricted Stock Units vesting, Amount	(26,029)										$ 136							(26,165)
Common stock- Restricted Stock Units vesting, Shares											136,307
Stock issuances							$ 25,000,000									$ 3,321								$ 24,996,679
Stock issuances, Shares																3,321,383
Foreign Currency Translation Adjustments	(136,425)																									$ (136,425)
Net loss	(91,940,882)																										(91,940,882)
Ending Balance, Amount at Sep. 30, 2015	109,621,634								$ 16		$ 151,914							426,873,358								(136,425)	(316,712,041)	(555,188)
Ending Balance, Shares at Sep. 30, 2015									15,652		59,544,677
Exercise of warrants, Amount	3,691,398										$ 853							3,690,545
Exercise of warrants, Shares											852,532
Exercise of stock options, Amount	$ 133,869										$ 37							133,832
Exercise of stock options, Shares	37,187										37,187
Stock-based compensation	$ 11,595,816																	11,595,816
Stock issuances						$ 43,231,435		$ 9,000,000							$ 7,627		$ 1,257						$ 43,223,808		$ 8,998,743
Stock issuances, Shares															7,627,119		1,256,983
Common stock- Restricted Stock Units vesting, Amount	(670,765)										$ 428							(671,193)
Common stock- Restricted Stock Units vesting, Shares											428,187
Foreign Currency Translation Adjustments	143,874																									143,874
Net loss	(81,723,002)																										(81,723,002)
Ending Balance, Amount at Sep. 30, 2016	$ 95,024,259								$ 16		$ 162,116							$ 493,844,909								$ 7,449	$ (398,435,043)	$ (555,188)
Ending Balance, Shares at Sep. 30, 2016									15,652		69,746,685

Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Common stock issued for cash at $5.86
Stock issued, price per share			$ 5.86
Common stock issued for cash at $18.95
Stock issued, price per share			18.95
Preferred stock issued for cash at $1,000 per share
Stock issued, price per share			$ 1,000
Common stock issued for cash at $5.90 per share
Stock issued, price per share	$ 5.90
Novartis
Stock issued, price per share		$ 7.53
Amgen
Stock issued, price per share	$ 7.16

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (81,723,002)	$ (91,940,882)	$ (58,725,412)
Net loss attributable to non-controlling interests			95,222
NET LOSS ATTRIBUTABLE TO ARROWHEAD	(81,723,002)	(91,940,882)	(58,630,190)
(Gain) loss on disposal of fixed assets		(19,195)	58,878
Change in value of derivatives	301,022	(2,869,267)	6,033,659
Contingent consideration - fair value adjustments	(5,862,464)	1,891,533	2,375,658
Noncash impairment expense	2,050,817		2,172,387
Acquired in-process research and development		10,142,786
Stock-based compensation	11,595,816	10,232,897	5,696,173
Depreciation and amortization	3,260,045	2,336,207	1,345,655
Amortization of note premiums	231,902	1,110,524	793,887
Gain on debt extinguishment			(84,721)
Noncash gain on equity investment			(87,197)
Non-controlling interest			(95,222)
Changes in operating assets and liabilities:
Accounts receivable	(75,000)		75,000
Prepaid expenses and Other Current Assets	(1,020,734)	(3,485,421)	(54,966)
Deferred revenue	5,000,000
Accounts payable	2,554,802	2,497,804	1,412,275
Accrued expenses	(871,833)	4,435,784	3,478,094
Other	131,143	(40,385)	94,257
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(64,427,486)	(65,707,615)	(35,416,373)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(3,860,237)	(1,970,612)	(1,717,362)
Proceeds from sale of fixed assets		500	10,000
Purchase of marketable securities			(46,365,528)
Proceeds from sale of marketable securities	17,308,000	26,090,950	11,591,120
Cash paid for acquisitions		(10,000,000)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	13,447,763	14,120,838	(36,481,770)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital leases and notes payable	(217,549)	(213,991)	(225,406)
Payments of taxes for net share settled restricted stock unit issuances	(634,187)
Proceeds from the issuance of common stock	52,231,433		172,641,671
Proceeds from the exercise of warrants and stock options	3,752,120	504,512	12,878,044
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	55,131,817	290,521	185,294,309
NET INCREASE (DECREASE) IN CASH	4,152,094	(51,296,256)	113,396,166
CASH AT BEGINNING OF PERIOD	81,214,354	132,510,610	19,114,444
CASH AT END OF PERIOD	85,366,448	81,214,354	132,510,610
Supplementary disclosures:
Interest paid	(11,287)	(14,429)	(25,635)
Property and Equipment purchased through tenant improvement allowance financing	(4,849,360)
Property and Equipment expenditures included in accounts payable and accrued expenses	(4,801,930)
Income Tax Credits Refunded	1,365,288
Income Taxes Paid	$ (2,400)	(2,400)	(5,862)
Galloway Limited
Supplementary disclosures:
Common stock issued to Galloway Limited in settlement of services agreement			$ (500,000)
Novartis
Supplementary disclosures:
Common Stock issued to Novartis for asset acquisition		$ (25,000,000)

Organization and Significant Accounting Policies	12 Months Ended
Organization and Significant Accounting Policies	Sep. 30, 2016
Accounting Policies [Abstract]
Organization and Significant Accounting Policies	NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Nature of Business and Recent Developments Arrowhead develops novel drugs to treat intractable diseases by silencing the genes that cause them. Using a broad portfolio of RNA chemistries and efficient modes of delivery, Arrowhead therapies trigger the RNA interference mechanism to induce rapid, deep and durable knockdown of target genes. RNA interference (RNAi) is a mechanism present in living cells that inhibits the expression of a specific gene, thereby affecting the production of a specific protein. Arrowhead’s RNAi-based therapeutics leverage this natural pathway of gene silencing. The company's pipeline includes ARO-HBV for chronic hepatitis B virus, ARO-AAT for liver disease associated with alpha-1 antitrypsin deficiency (AATD), ARO-F12 for hereditary angioedema and thromboembolic disorders, ARO-HIF2 for renal cell carcinoma, and ARO-AMG1 for an undisclosed genetically validate cardiovascular target under a license and collaboration agreement with Amgen, Inc., a Delaware corporation (“Amgen”). ARO-LPA for cardiovascular disease was recently out-licensed to Amgen. In April 2016, the Company changed its name from Arrowhead Research Corporation to Arrowhead Pharmaceuticals, Inc., to better reflect the Company’s focus on advancing products through clinical development to bring innovative new medicines to patients. During fiscal year 2016, the Company continued to develop its clinical candidates, ARC-520 and ARC-521, for the treatment of chronic hepatitis B infection as well as its second clinical candidate, ARC-AAT, an RNAi therapeutic designed to treat liver disease associated with AATD. However, in November 2016, the Company announced that it would be discontinuing these clinical programs, and redeploying its resources and focus toward utilizing the Company’s new proprietary subcutaneous and extra-hepatic delivery systems. Each of these clinical candidates utilized the intravenously administered DPC_iv, or EX1, delivery vehicle. The decision to discontinue development of EX1-containing programs was based primarily on two factors. First, during ongoing discussions with regulatory agencies and outside experts, it became apparent that there would be substantial delays in all clinical programs that utilize EX1, while the Company further explored the cause of deaths in a non-clinical toxicology study in non-human primates. Second, the Company has made substantial advances in RNA chemistry and targeting resulting in large potency gains for subcutaneous administered and extra-hepatic RNAi-based development programs. In preclinical studies with the subcutaneous platform, the Company has obtained depth and duration of target gene knockdown approaching that of intravenously administered EX1-containing candidates, at lower doses and with good safety margins. ARO-HBV and ARO-AAT are the Company’s subcutaneous administered preclinical candidates for chronic hepatitis B virus and liver disease associated with AATD, respectively. Because of the discontinuation of its existing clinical programs, the Company has also reduced its workforce by approximately 30%, while maintaining resourcing necessary to support current and potential future partner-based programs and the Company’s pipeline. Liquidity The Consolidated Financial Statements have been prepared in conformity with the accounting principles generally accepted in the United States of America, which contemplate the continuation of the Company as a going concern. Historically, the Company’s primary source of financing has been through the sale of its securities. Research and development activities have required significant capital investment since the Company’s inception. The Company expects its operations to continue to require cash investment to pursue its research and development goals, including clinical trials and related drug manufacturing. At September 30, 2016, the Company had $85.4 million in cash to fund operations. During the year ended September 30, 2016, the Company’s cash position increased by $4.2 million, which was primarily the result of net proceeds of $43.2 million related to the issuance of Common Stock as part of its August 2016 equity financing, $17.3 million of maturities of fixed income investments, and $9 million related to the issuance of Common Stock as part of the Company’s Common Stock Purchase Agreement with Amgen. The August 2016 equity financing and the Common Stock Purchase Agreement with Amgen, Inc. are discussed in further detail in Note 6 and Note 2, respectively. These inflows were partially offset by cash outflows related to operating activities of $64.4 million. On November 18, 2016, the Company and Amgen received Hart-Scott-Rodino clearance with regard to the Second Collaboration and License Agreement discussed in Note 2 below. Based on the terms of this agreement, and the Common Stock Purchase Agreement, the Company issued 1,745,810 shares of Common Stock to Amgen, and received proceeds of approximately $12.5 million. Additionally, the Company received a $30 million upfront payment due under the Second Collaboration and License Agreement discussed above. Summary of Significant Accounting Policies Principles of Consolidation—The consolidated financial statements include the accounts of Arrowhead and its Subsidiaries. Arrowhead’s primary operating subsidiary is Arrowhead Madison, which is located in Madison, Wisconsin, where the Company’s research and development facility is located. All significant intercompany accounts and transactions are eliminated in consolidation. Basis of Presentation and Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Additionally, certain reclassifications have been made to prior period financial statements to conform to the current period presentation. Cash and Cash Equivalents—The Company considers all liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Company had no restricted cash at September 30, 2016 and September 30, 2015. Concentration of Credit Risk—The Company maintains several bank accounts at two financial institutions for its operations. These accounts are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per institution. Management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which these deposits are held. Investments—The Company may invest excess cash balances in short-term and long-term marketable debt securities. Investments may consist of certificates of deposits, money market accounts, government-sponsored enterprise securities, corporate bonds and/or commercial paper. The Company accounts for its investment in marketable securities in accordance with FASB ASC 320, Investments – Debt and Equity Securities. This statement requires certain securities to be classified into three categories: Held-to-maturity—Debt securities that the entity has the positive intent and ability to hold to maturity are reported at amortized cost. Trading Securities—Debt and equity securities that are bought and held primarily for the purpose of selling in the near term are reported at fair value, with unrealized gains and losses included in earnings. Available-for-Sale—Debt and equity securities not classified as either securities held-to-maturity or trading securities are reported at fair value with unrealized gains or losses excluded from earnings and reported as a separate component of shareholders’ equity. The Company classifies its investments in marketable debt securities based on the facts and circumstances present at the time of purchase of the securities. During the year ended September 30, 2016, all of the Company’s investments were classified as held-to-maturity, and they all matured during the period. Held-to-maturity investments are measured and recorded at amortized cost on the Company’s Consolidated Balance Sheet. Discounts and premiums to par value of the debt securities are amortized to interest income/expense over the term of the security. No gains or losses on investment securities are realized until they are sold or a decline in fair value is determined to be other-than-temporary. Property and Equipment—Property and equipment are recorded at cost, which may equal fair market value in the case of property and equipment acquired in conjunction with a business acquisition. Depreciation of property and equipment is recorded using the straight-line method over the respective useful lives of the assets ranging from three to seven years. Leasehold improvements are amortized over the lesser of the expected useful life or the remaining lease term. Long-lived assets, including property and equipment are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. Intangible Assets Subject to Amortization—Intangible assets subject to amortization include certain patents and license agreements. Intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. In-Process Research & Development (IPR&D)—IPR&D assets represent capitalized on-going research projects that were acquired through business combinations. Such assets are initially measured at their acquisition date fair values. The amounts capitalized are being accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of R&D efforts associated with the project. Upon successful completion of a project, Arrowhead will make a determination as to the then remaining useful life of the intangible asset and begin amortization. Arrowhead tests its indefinite-lived assets for impairment at least annually, through a two-step process. The first step is a qualitative assessment to determine if it is more likely than not that the indefinite lived assets are impaired. Arrowhead considers relevant events and circumstances that could affect the inputs used to determine the fair value of the intangible assets. If the qualitative assessment indicates that it is more likely than not that the intangible assets are impaired, a second step is performed which is a quantitative test to determine the fair value of the intangible asset. If the carrying amount of the intangible assets exceeds its fair value, an impairment loss is recorded in the amount of that excess. If circumstances determine that it is appropriate, the Company may also elect to bypass step one, and proceed directly to the second step. Contingent Consideration - The consideration for the Company’s acquisitions often includes future payments that are contingent upon the occurrence of a particular event. For example, milestone payments might be based on the achievement of various regulatory approvals or future sales milestones, and royalty payments might be based on drug product sales levels. The Company records a contingent consideration obligation for such contingent payments at fair value on the acquisition date. The Company estimates the fair value of contingent consideration obligations through valuation models designed to estimate the probability of such contingent payments based on various assumptions and incorporating estimated success rates. Estimated payments are discounted using present value techniques to arrive at an estimated fair value at the balance sheet date. Changes in the fair value of the contingent consideration obligations are recognized within the Company’s Consolidated Statements of Operations and Comprehensive Loss. Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates, changes in the amount or timing of expected expenditures associated with product development, changes in the amount or timing of cash flows from products upon commercialization, changes in the assumed achievement or timing of any development milestones, changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval. These fair value measurements are based on significant inputs not observable in the market. Substantial 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 the Company records in any given period. Revenue Recognition— Revenue from product sales is recorded when persuasive evidence of an arrangement exists, title has passed and delivery has occurred, a price is fixed and determinable, and collection is reasonably assured. The Company may generate revenue from technology licenses, collaborative research and development arrangements, research grants and product sales. Revenue under technology licenses and collaborative agreements typically consists of nonrefundable and/or guaranteed technology license fees, collaborative research funding, manufacturing and development services and various milestone and future product royalty or profit-sharing payments. These agreements are generally referred to as multiple element arrangements. The Company applies the accounting standard on revenue recognition for multiple element arrangements. The fair value of deliverables under the arrangement may be derived using a best estimate of selling price if vendor specific objective evidence and third-party evidence is not available. Deliverables under the arrangement will be separate units of accounting if a delivered item has value to the customer on a standalone basis, if the arrangement includes a general right of return for the delivered item, and if delivery or performance of the undelivered item is considered probable and substantially in the control of the vendor. The Company recognizes upfront license payments as revenue upon delivery of the license only if the license has standalone value from any undelivered performance obligations and that value can be determined. The undelivered performance obligations typically include manufacturing or development services or research and/or steering committee services. If the fair value of the undelivered performance obligations can be determined, then these obligations would be accounted for separately. If the license is not considered to have standalone value, then the license and other undelivered performance obligations would be accounted for as a single unit of accounting. In this case, the license payments and payments for performance obligations are recognized as revenue over the estimated period of when the performance obligations are performed or deferred indefinitely until the undelivered performance obligation is determined. Whenever the Company determines that an arrangement should be accounted for as a single unit of accounting, the Company determines the period over which the performance obligations will be performed and revenue will be recognized. Revenue is recognized using a proportional performance or straight-line method. The proportional performance method is used when the level of effort required to complete performance obligations under an arrangement can be reasonably estimated. The amount of revenue recognized under the proportional performance method is determined by multiplying the total payments under the contract, excluding royalties and payments contingent upon achievement of milestones, by the ratio of the level of effort performed to date to the estimated total level of effort required to complete performance obligations under the arrangement. If the Company cannot reasonably estimate the level of effort to complete performance obligations under an arrangement, the Company recognizes revenue under the arrangement on a straight-line basis over the period the Company is expected to complete its performance obligations. Under either method, revenue is limited to the lesser of the cumulative amount of payments received or the cumulative amount of revenue earned, as calculated under either method, as of the period ending date. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations under an arrangement. Many of the Company’s collaboration agreements entitle the Company to additional payments upon the achievement of development, regulatory and sales performance-based milestones. If the achievement of a milestone is considered probable at the inception of the collaboration, the related milestone payment is included with other collaboration consideration, such as upfront fees and research funding, in the Company’s revenue calculation. Typically these milestones are not considered probable at the inception of the collaboration. As such, milestones will typically be recognized in one of two ways depending on the timing of when the milestone is achieved. If the milestone is achieved during the performance period, the Company will only recognize revenue to the extent of the proportional performance achieved at that date, or the proportion of the straight-line basis achieved at that date, and the remainder will be recorded as deferred revenue to be amortized over the remaining performance period. If the milestone is achieved after the performance period has completed and all performance obligations have been delivered, the Company will recognize the milestone payment as revenue in its entirety in the period the milestone was achieved. Deferred revenue will be classified as part of Current or Long-Term Liabilities in the accompanying Consolidated Balance Sheets based on the Company’s estimate of the portion of the performance obligations regarding that revenue will be completed within the next 12 months divided by the total performance period estimate. This estimate is based on the Company’s current operating plan and, if the Company’s operating plan should change in the future, the Company may recognize a different amount of deferred revenue over the next 12-month period. Allowance for Doubtful Accounts—The Company accrues an allowance for doubtful accounts based on estimates of uncollectible revenues by analyzing historical collections, accounts receivable aging and other factors. Accounts receivable are written off when all collection attempts have failed. Research and Development—Costs and expenses that can be clearly identified as research and development are charged to expense as incurred in accordance with FASB ASC 730-10. Included in research and development costs are operating costs, facilities, supplies, external services, clinical trial and manufacturing costs, overhead directly related to the Company’s research and development operations, and costs to acquire technology licenses. Earnings (Loss) per Share—Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares primarily consist of stock options and restricted stock units issued to employees and warrants to purchase Common Stock of the Company. All outstanding stock options, restricted stock units and warrants for the years ended September 30, 2016 and 2015 have been excluded from the calculation of Diluted earnings (loss) per share due to their anti-dilutive effect. Stock-Based Compensation—The Company accounts for share-based compensation arrangements in accordance with FASB ASC 718, which requires the measurement and recognition of compensation expense for all share-based payment awards to be based on estimated fair values. The Company uses the Black-Scholes option valuation model to estimate the fair value of its stock options at the date of grant. The Black-Scholes option valuation model requires the input of subjective assumptions to calculate the value of stock options. For restricted stock units, the value of the award is based on the Company’s stock price at the grant date. For performance-based restricted stock unit awards, the value of the award is based on the Company’s stock price at the grant date, with consideration given to the probability of the performance condition being achieved. The Company uses historical data and other information to estimate the expected price volatility for stock option awards and the expected forfeiture rate for all awards. Expense is recognized over the vesting period for all awards, and commences at the grant date for time-based awards and upon the Company’s determination that the achievement of such performance conditions is probable for performance-based awards. This determination requires significant judgment by management. Derivative Assets and Liabilities – The Company accounts for warrants and other derivative financial instruments as either equity or assets/liabilities based upon the characteristics and provisions of each instrument. Warrants classified as equity are recorded as Additional Paid-In Capital on the Company’s Consolidated Balance Sheet. Some of the Company’s warrants were determined to be ineligible for equity classification due to provisions that may result in an adjustment to their exercise price. Warrants classified as derivative liabilities and other derivative financial instruments that require separate accounting as assets or liabilities are recorded on the Company’s Consolidated Balance Sheet at their fair value on the date of issuance and are revalued on each subsequent balance sheet date until such instruments are exercised or expire, with any changes in the fair value between reporting periods recorded as Other Income or Expense. The Company estimates the fair value of these assets/liabilities using option pricing models that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life and risk-free interest rate. Income Taxes—The Company accounts for income taxes under the liability method, which requires the recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized. The provision for income taxes, if any, represents the tax payable for the period and the change in deferred income tax assets and liabilities during the period. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09 Revenue from Contracts with Customers (Topic 606), which will supersede nearly all existing revenue recognition guidance under GAAP. ASU No. 2014-09 provides that an entity recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption and will become effective for the Company in the first quarter of 2018. In April 2016, the FASB issued an amendment to ASU No. 2014-09 with update ASU 2016-10 which provided more specific guidance around the idenitification of performance obligations and licensing arrangements. The Company is evaluating the potential effects of the adoption of this update on its financial statements. In March 2016, the FASB issued ASU No. 2016-02, Leases. Under ASU 2016-02, lessees will be required to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). For income statement purposes, a dual model was retained, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). ASU 2016-02 becomes effective for the Company in the first quarter of fiscal 2020. The Company expects the adoption of this update to have a material effect on the classification and disclosure of its leased facilities in Madison, Wisconsin. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 eliminates additional paid in capital ("APIC") pools and requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. The accounting for an employee's use of shares to satisfy the employer's statutory income tax withholding obligation and the accounting for forfeitures is also changing. ASU 2016-09 becomes effective for the Company in the first quarter of 2018. The Company early adopted ASU 2016-09 during the three months ended March 31, 2016, and the adoption of this update is not expected to have a material effect on its Consolidated Financial Statements. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. This ASU amends Accounting Standards Codification (“ASC”) 230 and is intended to provide guidance and clarification in regards to the classification of eight types of receipts and payments in the statement of cash flows, including debt repayment or extinguishment costs, settlement of zero-coupon bonds, proceeds from the settlement of insurance claims, distributions received from equity method investees and cash receipts from beneficial interest in securitization transactions. The guidance will be effective for the Company as of October 1, 2018, and the adoption of this update is not expected to have a material effect on its Consolidated Financial Statements.

Collaboration and License Agreements – Amgen, Inc	12 Months Ended
Collaboration and License Agreements – Amgen, Inc	Sep. 30, 2016
Collaboration And License Agreements [Abstract]
Collaboration and License Agreements – Amgen, Inc	NOTE 2. COLLABORATION AND LICENSE AGREEMENTS – AMGEN, INC. On September 28, 2016, the Company entered into two Collaboration and License agreements, and a Common Stock Purchase Agreement with Amgen Inc., a Delaware corporation (“Amgen”). Under one of the license agreements (the “Second Collaboration and License Agreement”), Amgen will receive a worldwide, exclusive license to Arrowhead’s novel, RNAi ARO-LPA program. These RNAi molecules are designed to reduce elevated lipoprotein(a), which is a genetically validated, independent risk factor for atherosclerotic cardiovascular disease. Under the other license agreement (the “First Collaboration and License Agreement”), Amgen received an option to a worldwide, exclusive license for ARO-AMG1, an RNAi therapy for an undisclosed genetically validated cardiovascular target. In both agreements, Amgen will be wholly responsible for clinical development and commercialization. Under the Common Stock Purchase Agreement, the Company has sold 3,002,793 shares of Common Stock to Amgen at a price of $7.16 per share, which represents the 30-day volume-weighted average price of the Common Stock on the NASDAQ stock market over the 30 trading days preceding execution. The Common Stock was delivered in two closings per the terms of the agreement. The first tranche of 1,256,983 shares of Common Stock was issued on September 29, 2016, and the Company received proceeds of approximately $9 million. The second tranche of 1,745,810 shares was subject to Hart-Scott-Rodino clearance which was reached on November 18, 2016. The Company received proceeds of approximately $12.5 million from this tranche of shares. Subject to Amgen’s exercise of the Option, as defined in the First Collaboration and License Agreement, Amgen has agreed to purchase, and the Company has agreed to sell, an additional $5 million worth of shares of Common Stock based on a 30 trading day formula surrounding the date of the Option exercise. Under the terms of the agreements taken together, the Company will receive $35 million in upfront payments, $21.5 million in the form of an equity investment by Amgen in the Company’s Common Stock, and up to $617 million in option payments, and development, regulatory and sales milestone payments. The Company is further eligible to receive single-digit royalties for sales of products under the ARO-AMG1 agreement and up to low double-digit royalties for sales of products under the ARO-LPA agreement. Under the terms of the First Collaboration and License Agreement, the Company is granting a worldwide, exclusive license to ARO-AMG1, an undisclosed genetically validated cardiovascular target. The collaboration between the Company and Amgen is governed by a joint steering committee comprised of an equal number of representatives from each party. The Company is also responsible for developing, optimizing and manufacturing the candidate through certain preclinical efficacy and toxicology studies to determine whether the candidate the Company has developed meets the required criteria as defined in the agreement (the “Arrowhead Deliverable”). If this is achieved, Amgen will then have the option to an exclusive license for the intellectual property generated through the Company’s development efforts, and will likely assume all development, regulatory and commercialization efforts for the candidate upon the option exercise. The Company has determined that the significant deliverables under the First Collaboration and License Agreement include the license, the joint research committee and the development and manufacturing activities toward achieving the Arrowhead Deliverable. The Company also determined that, pursuant to the accounting guidance governing revenue recognition on multiple element arrangements, the license and collective undelivered activities and services do not have standalone value due to the specialized nature of the activities and services to be provided by the Company. Therefore, the deliverables are not separable and, accordingly, the license and undelivered services are being treated as a single unit of accounting. When multiple deliverables are accounted for as a single unit of accounting, the Company bases its revenue recognition pattern on the final deliverable. The Company will recognize revenue on a straight-line basis from October 1, 2016, through September 30, 2018. The due date for achieving the Arrowhead Deliverable, as defined in the agreement, is September 28, 2018. The Company received the upfront payment of $5 million due under this agreement in September 2016. It has been be initially recorded as deferred revenue in the Company’s Consolidated Balance Sheets, and will be amortized over the period discussed above. Under the terms of the Second Collaboration and License Agreement, the Company is granting a worldwide, exclusive license to ARO-LPA. The collaboration between the Company and Amgen is governed by a joint research committee comprised of an equal number of representatives from each party, however Amgen has the final decision making authority regarding ARO-LPA in this committee. The Company is also responsible for assisting Amgen in the oversight of certain development and manufacturing activities, most of which are to be covered at Amgen’s cost. The Company has determined that the significant deliverables under the Second Collaboration and License Agreement include the license and the oversight of certain of the development and manufacturing activities. The Company also determined that, pursuant to the accounting guidance governing revenue recognition on multiple element arrangements, the license and collective undelivered activities and services do not have standalone value due to the specialized nature of the activities and services to be provided by the Company. Therefore, the deliverables are not separable and, accordingly, the license and undelivered services are being treated as a single unit of accounting. When multiple deliverables are accounted for as a single unit of accounting, the Company bases its revenue recognition pattern on the final deliverable. The Company will recognize revenue on a straight-line basis from November 18, 2016 (the Hart-Scott-Rodino clearance date), through October 31, 2017, which is the date where the significant development and manufacturing related deliverables are anticipated to be completed. The Company received the upfront payment of $30 million due under this agreement in November 2016. It will be initially recorded as deferred revenue, and amortized over the period discussed above.

Property and Equipment

12 Months Ended

Sep. 30, 2016

Property Plant And Equipment [Abstract]

Property and Equipment

NOTE 3. PROPERTY AND EQUIPMENT

The following table summarizes the Company’s major classes of property and equipment:


	September 30, 2016			September 30, 2015
Computers, office equipment and furniture	$	442,915		$	404,964
Research equipment		7,490,400			6,354,584
Software		80,841			110,428
Leasehold improvements		11,885,365			3,117,537
Total gross fixed assets		19,899,521			9,987,513
Less: Accumulated depreciation and amortization		(4,512,760	)		(5,460,665	)
Property and equipment, net	$	15,386,761		$	4,526,848

During the year ended September 30, 2016, the Company’s leasehold improvements increased as the Company has moved into a larger research facility in Madison, Wisconsin. The lease terms of this facility are discussed in Note 7 – Commitments and Contingencies. Additionally, during the year ended September 30, 2016, the Company recognized a $1.1 million impairment expense related to leasehold improvements at its previous research facility in Madison, Wisconsin. This amount represented the entire net book value remaining for the leasehold improvements associated with the previous facility, and was recognized during the year ended September 30, 2016.

Investments

12 Months Ended

Sep. 30, 2016

Investments All Other Investments [Abstract]

Investments

NOTE 4. INVESTMENTS

The Company had invested a portion of its excess cash balances in short-term and long-term debt securities. During the year ended September 30, 2016, the Company’s investments all matured, and the Company has not invested any excess cash at September 30, 2016. The Company may also invest excess cash balances in certificates of deposit, money market accounts, U.S. Treasuries, U.S. government agency obligations, corporate debt securities, and/or commercial paper. The Company has historically accounted for its investments in accordance with FASB ASC 320, Investments – Debt and Equity Securities. All investments historically have been classified as held-to-maturity securities.

The following tables summarize the Company’s short-term investments as of September 30, 2016, and September 30, 2015.

As of September 30, 2016

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Fair Value

Commercial notes (due within one year)

—

	As of September 30, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial notes (due within one year)	$	17,539,902	$	—	$	(304,942	)	$	17,234,960

Intangible Assets

12 Months Ended

Sep. 30, 2016

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets

NOTE 5. INTANGIBLE ASSETS

Intangible assets consist of in-process research and development (“IPR&D”) not subject to amortization, and patents and license agreements subject to amortization, which were capitalized as a part of an asset acquisition.

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. These assets include IPR&D capitalized as part of a business combination from the acquisition of the Roche RNAi business in 2011. In November 2016, the Company announced the discontinuation of its clinical trial efforts for ARC-520, ARC-AAT and ARC-521. Given this development, the Company has impaired the IPR&D asset previously recorded during the year ended September 30, 2016.

Intangible assets subject to amortization include patents and a license agreement capitalized as part of the Novartis RNAi asset acquisition in March 2015 and license agreements capitalized from the acquisition of the Roche RNAi business in 2011. The license agreement associated with the Novartis RNAi asset acquisition is being amortized over the estimated life remaining at the time of acquisition, which was 21 years, and the accumulated amortization of the asset is approximately $234,975. The license agreements associated with the acquisition of the Roche RNAi business were amortized over the estimated life remaining at the time of acquisition, which was 4 years, and the accumulated amortization of the assets is approximately $230,000. These assets have been fully amortized as of September 30, 2016. The patents associated with the Novartis RNAi asset acquisition are being amortized over the estimated life remaining at the time of acquisition, which was 14 years, and the accumulated amortization of the assets is approximately $2,457,371. Amortization expense for the years ended September 30, 2016, 2015 and 2014 was $1,714,313, $1,046,571 and $54,653, respectively. Amortization expense is expected to be approximately $1,700,429 for fiscal year 2017, $1,700,429 in 2018, $1,700,429 in 2019, $1,700,429 in 2020, $1,700,429 in 2021, $1,700,429 in 2022, and $11,962,294 thereafter.

The following table provides details on the Company’s intangible asset balances:

	Intangible assets not subject to amortization			Intangible assets subject to amortization			Total Intangible assets
Balance at September 30, 2015	$	944,935		$	23,879,181		$	24,824,116
Impairment		(944,935	)		-			(944,935	)
Amortization		-			(1,714,313	)		(1,714,313	)
Balance at September 30, 2016	$	-		$	22,164,868		$	22,164,868

Stockholders' Equity

12 Months Ended

Sep. 30, 2016

Equity [Abstract]

Stockholders' Equity

NOTE 6. STOCKHOLDERS’ EQUITY

At September 30, 2016, 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 per share, and 5,000,000 shares of Preferred Stock, par value $0.001 per share.

At September 30, 2016, 69,746,685 shares of Common Stock were outstanding. Additionally, 15,652 shares of Series C Preferred Stock were outstanding, which are convertible into 2,670,990 shares of Common Stock. At September 30, 2016, 8,696,623 shares of Common Stock were reserved for issuance upon exercise of options and vesting of restricted stock units granted or available for grant under Arrowhead’s 2004 Equity Incentive Plan and 2013 Incentive Plan, as well as for inducement grants made to new employees.

The Preferred Stock is convertible to Common Stock by its holder at its stated conversion price, though it is not convertible to the extent the holder would beneficially own more than 9.99% of the number of shares of outstanding Common Stock immediately after the conversion. The holders of Preferred Stock are eligible to vote with the Common Stock of the Company on an as-converted basis, but only to the extent they are eligible for conversion without exceeding the 9.99% ownership limitation. The Preferred Stock does not carry a coupon, but it is entitled to receive dividends on a pari passu basis with Common Stock, when and if declared. In any liquidation or dissolution of the Company, the holders of Preferred Stock are entitled to participate in the distribution of the assets, to the extent legally available for distribution, on a pari passu basis with the Common Stock.

On March 3, 2015, the Company issued 3,321,383 shares of Common Stock as part of the Company’s entry into an Asset Purchase and Exclusive License Agreement (the “RNAi Purchase Agreement”) with Novartis Institutes for BioMedical Research, Inc., a Delaware corporation (“Novartis”), pursuant to which the Company acquired Novartis’ RNAi assets and rights thereunder.

On August 8, 2016 the Company sold 7,627,119 shares of Common Stock to certain institutional investors at a price of $5.90 per share. The aggregate purchase price paid by the investors for the Common Stock was $45.0 million, and the Company received net proceeds of approximately $43.2 million, after advisory fees and offering expenses.

On September 28, 2016 the Company sold 1,256,983 shares of Common Stock to Amgen, Inc. at a price of $7.16 per share as part of the Common Stock Purchase Agreement executed with Amgen and discussed further in Note 2 – Collaboration and License Agreements – Amgen, Inc. The Company received proceeds of $9 million. On November 18, 2016, a second tranche of 1,745,810 shares were also sold to Amgen at a price of $7.16 per share as part of the Common Stock Purchase Agreement. The Company received proceeds of $12.5 million in November 2016.

The following table summarizes information about warrants outstanding at September 30, 2016:

Exercise prices		Number of Warrants		Remaining Life in Years
$	70.60		94,897		0.6
$	4.16		1,000		0.2
$	2.12		75,000		1.4
$	1.83		277,284		1.2
$	7.14		80,000		1.7
Total warrants outstanding			528,181

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
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Reference 15: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Commitments and Contingencies

12 Months Ended

Sep. 30, 2016

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 7. COMMITMENTS AND CONTINGENCIES

Leases

The Company leases approximately 8,500 square feet of office space for its corporate headquarters in Pasadena, California. The lease will expire in September 2019. Rental costs are approximately $26,000 per month, increasing approximately 3% annually.

On January 8, 2016, the Company entered into a new lease for a Madison, Wisconsin research facility. The 10-year lease between with University Research Park, Inc. is for approximately 60,000 square feet of office and laboratory space located at 502 South Rosa Road, Madison, Wisconsin. This lease will replace the Company’s research facility lease, also with University Research Park, Inc. for property located at 465 Science Drive, Madison Wisconsin. The larger facility is designed to accommodate increased research and development space needed for the Company’s pipeline of current and future drug candidates.

The initial term of the lease commenced on January 1, 2016, with occupancy occurring October 2016. The lease payments and payments against a note payable for a tenant improvement allowance, which begin on October 1, 2016, will total approximately $15.2 million over the initial 10-year term. The Company also estimates payments for the Company’s pro rata share of certain real estate taxes, operating expenses and common area maintenance expenses to be approximately $0.6 million for the first year of the lease, and these payments will continue throughout the initial 10-year term. The Company has paid or accrued for approximately $7.0 million for leasehold improvements at September 30, 2016, net of tenant improvement allowances, and the work on the facility has been substantially completed in October 2016. The primary tenant improvement allowance of $2.1 million is accounted for as deferred rent and the secondary tenant improvement allowance of $2.7 million is accounted for as a note payable on the Company’s Consolidated Balance Sheet. Pursuant to the lease, within six months of the expiration of the initial 10-year term, the Company has the option to extend the lease for up to two additional five-year terms, with certain annual increases in base rent.

Additionally, on January 8, 2016 and in conjunction with signing the new lease agreement as discussed above, the Company entered into an amendment to the Company’s research facility lease for property located at 465 Science Drive, Madison, Wisconsin with University Research Park, Inc. to terminate the lease agreement for this property, effective on October 31, 2016.

Monthly rental expense under the previous facility which was in effect through September 30, 2016 was approximately $26,000. Other monthly rental expenses include common area maintenance and real estate taxes totaling approximately $20,000 per month. Utilities costs are approximately $18,000 per month. Total monthly costs are approximately $83,000 per month, including monthly payments recorded under a capital lease of approximately $19,000.

The Company leased additional research facility space in Middleton, Wisconsin, and this space is leased through December 2016. Monthly rental expense for the additional space is approximately $14,000. Other monthly rental expenses include common area maintenance and real estate taxes totaling approximately $4,000 per month.

Facility rent expense for the years ended September 30, 2016, 2015 and 2014 was $839,000, $744,000 and $554,000, respectively.

As of September 30, 2016, future minimum lease payments due in fiscal years under operating leases are as follows:

2017	$	1,559,259
2018		1,531,765
2019		1,435,409
2020		1,044,431
2021		1,070,496
2022 and thereafter		5,766,495
Total	$	12,407,855

Note Payable

As part of the Company’s lease for its new research facility in Madison, Wisconsin discussed above, the Company entered into a $2.7 million promissory note payable with its landlord to finance certain tenant improvements made to the new facility. The note will be amortized over the 10-year term of the lease, commencing on October 1, 2016. The note will bear interest at a rate of 7.1% and shall be payable in equal monthly installments of principal and interest.

As of September 30, 2016, future principal payments due in fiscal years under the note payable are as follows:

2017	$	194,310
2018		208,506
2019		223,820
2020		240,258
2021		257,903
2022 and thereafter		1,602,968
Total	$	2,727,765

Litigation

The Company and certain of its officers and directors were named as defendants in a putative consolidated class action in the United States District Court for the Central District of California regarding certain public statements in connection with the Company’s hepatitis B drug research. The consolidated class action, initially filed as Wang v. Arrowhead Research Corp., et al., No. 2:14-cv-07890 (C.D. Cal., filed Oct. 10, 2014), and Eskinazi v. Arrowhead Research Corp., et al., No. 2:14-cv-07911 (C.D. Cal., filed Oct. 13, 2014), asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and sought damages in an unspecified amount. Additionally, three putative stockholder derivative actions captioned Weisman v. Anzalone et al., No. 2:14-cv-08982 (C.D. Cal., filed Nov. 20, 2014), Bernstein (Backus) v. Anzalone, et al., No. 2:14-cv-09247 (C.D. Cal., filed Dec. 2, 2014); and Johnson v. Anzalone, et al., No. 2:15-cv-00446 (C.D. Cal., filed Jan. 22, 2015), were filed in the United States District Court for the Central District of California, alleging breach of fiduciary duty by the Company’s Board of Directors in connection with the facts underlying the securities claims. An additional consolidated derivative action asserting similar claims is pending in Los Angeles County Superior Court, initially filed as Bacchus v. Anzalone, et al., (L.A. Super., filed Mar. 5, 2015); and Jackson v. Anzalone, et al. (L.A. Super., filed Mar. 16, 2015). Each of these suits seeks damages in unspecified amounts and some seek various forms of injunctive relief. On October 7, 2016, the federal district court dismissed the consolidated class action with prejudice. On October 10, 2016 the plaintiffs appealed the consolidated class action to the United States Court of Appeals for the Ninth Circuit. The Weisman and Johnson derivative actions have been dismissed without prejudice. The Bernstein derivative action remains pending. The Company believes it has meritorious defenses and intends to vigorously defend itself in each of these matters. The Company makes provisions for liabilities when it is both probable that a liability has been incurred and the amount can be reasonably estimated. No such liability has been recorded related to these matters. The Company does not expect these matters to have a material effect on its Consolidated Financial Statements. With regard to legal fees, such as attorney fees related to these matters or any other legal matters, the Company’s recognizes such costs as incurred.

The Company and two of its former executives were named as defendants in a complaint filed on November 11, 2014 and captioned William Marsh Rice University vs. Unidym, Inc. and Arrowhead Research Corporation, No. 2014-66088, in the United States District Court for the Southern District of Texas relating to alleged breaches of a license agreement between Rice University and the Company’s former subsidiary, Unidym, Inc. The Company and the plaintiff settled the matter under an agreement in which the Company paid a confidential settlement amount and the plaintiff permanently dismissed its claims. The amount of the settlement was recorded during the three months ended March 31, 2016 and did not have a material effect on the Company’s Consolidated Financial Statements.

The Company and certain executive officers were named as defendants in related putative securities class actions filed on November 15, 2016 and December 2, 2016 in the Central District of California and respectively captioned Meller v. Arrowhead Pharmaceuticals, Inc., et al., No. 2:16-cv-08505, and Siegel v. Arrowhead Pharmaceuticals, Inc., et al., No. 2:16-cv-8954. The plaintiff brings claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 regarding certain public statements in connection with the Company’s drug research programs and seek damages in an unspecified amount. The Company believes it has meritorious defenses and intends to vigorously defend itself in these matters. The Company makes provisions for liabilities when it is both probable that a liability has been incurred and the amount can be reasonably estimated. No such liability has been recorded related to these matters. The Company cannot predict the ultimate outcome of this matter and cannot accurately estimate any potential liability the Company may incur or the impact of the results of this matter on the Company. With regard to legal fees, such as attorney fees related to these matters or any other legal matters, the Company’s recognizes such costs as incurred.

Purchase Commitments

In the normal course of business, we enter into various purchase commitments for the manufacture of drug components, for toxicology studies, and for clinical studies. As of September 30, 2016, these future commitments were estimated at approximately $10.4 million, of which approximately $10.4 million is expected to be incurred in fiscal 2017, and $0 is expected to be incurred beyond fiscal 2017. The reduction in amount and timing of these commitments is due to the Company’s discontinuation of its clinical trials for ARC-520, ARC-AAT and ARC-521.

Technology License Commitments

The Company has licensed from third parties the rights to use certain technologies for its research and development activities, as well as in any products the Company may develop using these licensed technologies. These agreements and other similar agreements often require milestone and royalty payments. Milestone payments, for example, may be required as the research and development process progresses through various stages of development, such as when clinical candidates enter or progress through clinical trials, upon NDA and upon certain sales level milestones. These milestone payments could amount to the mid to upper double-digit millions of dollars. During the year ended September 30, 2016, 2015, and 2014, we reached milestones amounting to $3.0 million, $1.0 million and $1.0 million, respectively, based on progress achieved on our clinical candidates. In certain agreements, the Company may be required to make mid to high single-digit percentage royalty payments based on a percentage of the sales of the relevant products.

Stock-Based Compensation

12 Months Ended

Sep. 30, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

NOTE 8. STOCK-BASED COMPENSATION

Arrowhead has two plans that provide for equity-based compensation. Under the 2004 Equity Incentive Plan and 2013 Incentive Plan, as of September 30, 2016, 2,514,518 and 5,604,151 shares, respectively, of Arrowhead’s Common Stock are reserved for the grant of stock options, stock appreciation rights, restricted stock awards and performance unit/share award to employees, consultants and others. No further grants may be made under the 2004 Equity Incentive Plan. As of September 30, 2016, there were options granted and outstanding to purchase 2,514,518 and 3,632,060 shares of Common Stock under the 2004 Equity Incentive Plan and the 2013 Incentive Plan, respectively, and there were 1,323,334 restricted stock units granted and outstanding under the 2013 Incentive Plan. Also, as of September 30, 2016, there were 544,622 shares reserved for options and 33,333 restricted stock units issued as inducement grants to new employees outside of equity compensation plans. During the year ended September 30, 2016, no options or restricted stock units were granted under the 2004 Equity Incentive Plan, 1,402,000 options and 838,517 restricted stock units were granted under the 2013 Incentive Plan, and no options or restricted stock units were granted as inducement awards to new employees outside of equity incentive plans.

The following table summarizes 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, 2015		5,435,640	$	6.71
Granted		1,402,000		6.12
Cancelled		(109,253)		9.63
Exercised		(37,187)		3.60
Balance At September 30, 2016		6,691,200	$	6.56		7.3 years	$	12,794,064
Exercisable At September 30, 2016		3,850,419	$	6.22		6.5 years	$	9,265,570

Stock-based compensation expense related to stock options for the years ended September 30, 2016, 2015 and 2014 was $6,361,396, $4,760,831, and $3,144,776, respectively. The Company does not recognize an income tax benefit as the Company is currently operating at a loss and an actual income tax benefit may not be realized. For non-qualified stock options, the loss creates a timing difference, resulting in a deferred tax asset, which is fully reserved by a valuation allowance.

The grant date fair value of the options granted by the Company for the years ended September 30, 2016, 2015 and 2014 was estimated at $6,426,207, $7,338,395 and $9,267,048, respectively.

The intrinsic value of the options exercised during the years ended September 30, 2016, 2015 and 2014 was $142,690, $128,391 and $4,360,850, respectively.

As of September 30, 2016, the pre-tax compensation expense for all outstanding unvested stock options in the amount of approximately $11,915,534 will be recognized in the Company’s results of operations over a weighted average period of 2.4 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 the Company’s 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:

	Years ended September 30,
	2016	2015	2014
Dividend yield	—	—	—
Risk-free interest rate	1.05 – 1.89%	1.46 – 1.89%	1.8 – 2.4%
Volatility	89%	75%	69%
Expected life (in years)	6.25	6 - 6.25	6.25 – 9.47
Weighted average grant date fair value per share of options granted	$4.58	$4.24	$8.92

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

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

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

Restricted Stock Units

Restricted stock units (RSUs), including time-based and performance-based awards, were granted under the Company’s 2013 Incentive Plan and as inducement grants granted outside of the Plan. During the year ended September 30, 2016, the Company issued 838,517 restricted stock units to certain members of management. Of the restricted stock units granted during the year ended September 30, 2016, 0 were granted outside of the Plan as an inducement grant to a new employee. At vesting, each RSU will be exchanged for one share of the Company’s Common Stock. Restricted stock unit awards generally vest subject to the satisfaction of service requirements or the satisfaction of both service requirements and achievement of certain performance targets.

The following table summarizes the activity of the Company’s Restricted Stock Units:

	Number of RSUs			Weighted- Average Grant Date Fair Value
Unvested at September 30, 2015		934,167		$	9.18
Granted		838,517			6.15
Vested		(416,017	)		11.08
Forfeited		—			—
Unvested at September 30, 2016		1,356,667		$	6.72

During the years ended September 30, 2016, 2015 and 2014, the Company recorded $5,234,420, $4,489,931 and $2,551,397 of expense, respectively. Such expense is included in stock-based compensation expense in the Company’s Consolidated Statement of Operations and Comprehensive Loss.

For restricted stock units, the grant date fair value of the award is based on the Company’s closing stock price at the grant date, with consideration given to the probability of achieving performance conditions for performance based awards.

As of September 30, 2016, the pre-tax compensation expense for all unvested restricted stock units in the amount of approximately $2,567,761 will be recognized in the Company’s results of operations over a weighted average period of 1.4 years.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References + Details

Fair Value Measurements

12 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

NOTE 9. FAIR VALUE MEASUREMENTS

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 September 30, 2016 and September 30, 2015 for assets and liabilities measured at fair value on a recurring basis:

September 30, 2016:

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	85,366,448	$	—	$	—	$	85,366,448
Derivative liabilities	$	—	$	—	$	1,602,626	$	1,602,626
Acquisition-related contingent consideration obligations	$	—	$	—	$	—	$	—

September 30, 2015:

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	81,214,354	$	—	$	—	$	81,214,354
Derivative liabilities	$	—	$	—	$	1,301,604	$	1,301,604
Acquisition-related contingent consideration obligations	$	—	$	—	$	5,862,464	$	5,862,464

As part of a financing in December 2012, Arrowhead issued warrants to purchase up to 912,543 shares of Common Stock (the “2012 Warrants”) of which 265,161 warrants were outstanding at September 30, 2016. Further, as part of a financing in January 2013, Arrowhead issued warrants to purchase up to 833,530 shares of Common Stock (the “2013 Warrants” and, together with the 2012 Warrants, the “Warrants”) of which 12,123 warrants were outstanding at September 30, 2016. Each of the Warrants contains a mechanism to adjust the strike price upon the issuance of certain dilutive equity securities. If during the terms of the Warrants, the Company issues Common Stock at a price lower than the exercise price for the Warrants, the exercise price would be reduced to the amount equal to the issuance price of the Common Stock. As a result of these features, the 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 non-operating gain or loss as change in value of derivatives in the Company’s Consolidated Statement of Operations and Comprehensive Loss. During the years ended September 30, 2016, 2015 and 2014 the Company recorded a non-cash gain/(loss) from the change in fair value of the derivative liability of $(293,072), $2,684,712 and $(5,821,796), respectively. Additionally, as part of an equity financing in June 2010, Arrowhead issued warrants to purchase up to 329,649 shares of Common Stock (the “2010 Warrants”), of which warrants to exercise 24,324 shares remained unexercised and were cancelled at their expiration during fiscal 2016.

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

2012 Warrants	September 30, 2016	September 30, 2015	September 30, 2014
Risk-free interest rate	0.68%	0.6%	1.07%
Expected life	1.2 Years	2.2 Years	3.2 Years
Dividend yield	—	—	—
Volatility	89%	75%	69%

2013 Warrants	September 30, 2016	September 30, 2015	September 30, 2014
Risk-free interest rate	0.68%	0.6%	1.07%
Expected life	1.3 Years	2.3 Years	3.3 Years
Dividend yield	—	—	—
Volatility	89%	75%	69%

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

Value at September 30, 2015	$	1,272,802
Issuance of instruments		—
Change in value		293,072
Net settlements		—
Value at September 30, 2016	$	1,565,874

In conjunction with the financing of Ablaris in fiscal 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 Arrowhead shares of Common Stock based upon a predefined ratio. The exchange rights have a seven-year term and a current exchange ratio of 0.01. Exchange rights for 675,000 Ablaris shares were sold in fiscal 2011, and 500,000 remain outstanding at September 30, 2016. 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 non-operating gain or loss in the Company’s Consolidated Statement of Operations and Comprehensive Loss. During the years ended September 30, 2016, 2015 and 2014, the Company recorded a non-cash gain/(loss) from the change in fair value of the derivative liability of $(7,950), $184,555 and $(211,860), respectively.

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

	September 30, 2016	September 30, 2015	September 30, 2014
Risk-free interest rate	0.68%	1.00%	1.07%
Expected life	1.5 Years	2.5 Years	3.3 Years
Dividend yield	—	—	—
Volatility	89%	75%	100%

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

Value at September 30, 2015	$	28,802
Issuance of instruments		—
Change in value		7,950
Net settlements		—
Value at September 30, 2016	$	36,752

The derivative assets/liabilities are estimated using option pricing models that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life and risk-free interest rate. Changes in the assumptions used could have a material impact on the resulting fair value. The primary input affecting the value of the Company’s derivatives liabilities is the Company’s stock price. Other inputs have a comparatively insignificant effect.

As of September 30, 2016, the Company has a liability for contingent consideration related to its acquisition of the Roche RNAi business completed in 2011. 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 the Company’s 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, the Company utilizes data regarding similar milestone events from several sources, including industry studies and its 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 the Company records in any given period. Changes in the fair value of the contingent consideration obligations are recorded in the Company’s Consolidated Statement of Operations and Comprehensive Loss.

The following is a reconciliation of contingent consideration fair value.

Value at September 30, 2015	$	5,862,464
Purchase price contingent consideration		—
Contingent consideration payments		—
Change in fair value of contingent consideration		(5,862,464	)
Value at September 30, 2016	$	—

The fair value of contingent consideration obligations is estimated through valuation models designed to estimate the probability of such contingent payments based on various assumptions and incorporating estimated success rates. Estimated payments are discounted using present value techniques to arrive at estimated fair value at the balance sheet date. Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates, changes in the amount or timing of expected expenditures associated with product development, changes in the amount or timing of cash flows from products upon commercialization, changes in the assumed achievement or timing of any development milestones, changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval. Each of these assumptions can have a significant impact on the calculation of contingent consideration. In November 2016, the Company announced the discontinuation of its clinical trial efforts for ARC-520, ARC-AAT and ARC-521. Given this development, the Company has assessed the fair value of its contingent consideration obligation to be $0 at September 30, 2016.

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 other long-term liabilities 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 + Details

Income Taxes

12 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 10. - INCOME TAXES

The Company utilizes the guidance issued by the FASB for accounting for income taxes which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.

Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities.

Components of the net deferred tax asset (liability) at September 30, 2016 and 2015 are as follows:

		2016		2015
Deferred tax assets:
Accrued compensation	$	1,691,050		$	1,513,021
Stock compensation		7,224,958			6,571,774
Capitalized research and development		2,957,528			-
Fair value adjustments		-			2,850,125
Net operating losses		125,120,957			88,965,968
Intangible Assets		5,544,091			5,551,705
Total deferred tax assets		142,538,584			105,452,593
Valuation allowance		(128,695,371	)		(95,085,045	)
Deferred tax liabilities:
State taxes		(13,804,268	)		(10,282,834	)
Fixed assets		(38,945	)		(84,714	)
Total deferred tax liability		(13,843,213	)		(10,367,548	)
Net deferred tax assets (liabilities)	$	—		$	—

The Company has concluded, in accordance with the applicable accounting standards, that it is more likely than not that the Company may not realize the benefit of all of its deferred tax assets. Accordingly, management has provided a 100% valuation allowance against its deferred tax assets until such time as management believes that its projections of future profits as well as expected future tax rates make the realization of these deferred tax assets more-likely-than-not. Significant judgment is required in the evaluation of deferred tax benefits and differences in future results from our estimates could result in material differences in the realization of these assets. The Company has recorded a full valuation allowance related to all of its deferred tax assets. The Company has performed an assessment of positive and negative evidence regarding the realization of the net deferred tax asset in accordance with FASB ASC 740-10, “Accounting for Income Taxes.” This assessment included the evaluation of scheduled reversals of deferred tax liabilities, the availability of carry forwards and estimates of projected future taxable income. The Company’s net deferred tax liability is related to indefinite lived assets which are not considered as a source of future taxable income when determining the need for a valuation allowance.

As of September 30, 2015, the Company had available gross federal net operating loss (NOL) carry forwards of $185.1 million and gross state NOL carry forwards of $285.4 million. Gross federal NOL carry forwards for 2016 are estimated at $78.7 million, and gross state NOL carry forwards for 2016 are estimated at $133.9 million. The NOLs expire at various dates through 2036.

The provision for income taxes for the years ended September 30, 2016 and 2015 are as follows:

	2016		2015
Federal:
Current		—		—
Deferred		—		—
Total Federal		—		—
State: