Arrowhead Research
Corporation (Nasdaq:ARWR) announced that its Unidym, Inc. subsidiary, a
leader in carbon nanotube (CNT) technology, and Continental Carbon Company ("CCC"),
a global leader in carbon blacks, conductive blacks and carbon nanotubes, have
entered into a partnership for CCC to take over Unidym's bulk CNT materials
business.
Under the agreement, CCC will form a new subsidiary, Continental Carbon Nanotechnologies,
Inc. ("CCNI"), that will exclusively supply Unidym with proprietary electronics-grade
CNTs for its core markets and sell high quality CNTs directly into other, non-competing
markets.
The transfer of assets will take place in two steps: the first involves the
transfer of certain assets related to the materials business, including manufacturing
equipment and select inventory; and the second will include the transfer of
certain intellectual property and third party agreements necessary for the materials
business as well as a supply agreement for CCNI to provide proprietary CNTs
to Unidym. The upfront and royalty payments associated with the second closing
are not yet finalized, but will be in addition to an earn-out of up to $26,500,000
based on meeting certain sales milestones. CCC will also have a three-year option
to acquire shares of Unidym equivalent to 10% of the subsidiary's outstanding
shares on a fully diluted basis.
The agreement is the latest in a series of steps taken by Unidym to accelerate
the development of its CNT technology for application to the electronics industry
and reduce its cost structure. It is intended to provide Unidym and its partners
with a reliable and scalable source of high quality CNTs by leveraging CCC's
deep experience manufacturing large quantities of carbon materials. In addition,
it will allow Unidym to capture additional value from its extensive CNT patent
portfolio by enabling CCNI to focus on end-markets that are not core to Unidym's
business.
"This agreement is part of Unidym's efforts to better focus its
operational strategy by establishing high quality partnerships," stated
Dr. Christopher Anzalone, Arrowhead's President and CEO. "Working
with CCC enables Unidym to focus on its core competencies while establishing
ready access to large quantities of proprietary high quality CNTs manufactured
by a leader in carbon materials. We believe this will accelerate Unidym's
ability to penetrate the touch-screen and LCD markets and, longer term, its
entrance into such diverse industries as solar energy and printable electronics.
The partnership will also allow Unidym to monetize its CNT patents via markets
that are not core to its electronics business."
Mark Tilley, CEO of Unidym, stated, "Continental Carbon's global
manufacturing operations and expertise will be an integral component of our
go-to-market strategy. We expect that demand from the touch panel, LCD and solar
markets will require a significant ramp-up of CNT capacity in the coming years."
Kim Pan, President of Continental Carbon, said, "We are pleased to join
forces with Unidym and look forward to expanding the market for CNTs. We will
work exclusively with Unidym to support Unidym's transparent conductive
films business, and expect to pursue several applications for these extraordinary
materials beyond Unidym's core markets."