IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE J&S EPPERS 2005 REVOCABLE ) TRUST, JOHN EPPERS, THE ) GABRIELLE EPPERS SUT-TR, ) and, PHILLIP JACKSON, ) derivatively on behalf of ) ARROWHEAD ) PHARMACEUTICALS, INC., )

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

NOTICE OF PENDENCY OF PROPOSED SETTLEMENT OF

STOCKHOLDER DERIVATIVE ACTION, SETTLEMENT HEARING

The Delaware Court of Chancery authorized this Notice. This is not a

solicitation from a lawyer.

TO: All current stockholders of Arrowhead Pharmaceuticals, Inc. ( Arrowhead or

the Company ) and their transferees, successors or assigns (the Stockholders ).

PLEASE READ THIS NOTICE CAREFULLY

ENTIRETY. YOUR RIGHTS WILL BE AFFECTED BY THIS

This Notice relates to the proposed settlement (the Settlement ) of the above- captioned stockholder derivative action (the

Action ) pending in the Court of Chancery of the State of Delaware (the Court ).1 Pursuant to the Settlement, the Parties have reached an agreement to settle the Action upon

the terms and subject to the conditions set forth in the Agreement.

WHAT IS THE PURPOSE OF THIS NOTICE?

1. The purpose of this Notice is to inform Arrowhead Stockholders of the existence of this Action and how they are affected by the litigation.

It is also being sent to inform Arrowhead Stockholders of the terms of the proposed Settlement, and of a hearing to be held by the Court to consider the fairness, reasonableness, and adequacy of the Settlement (the Settlement Hearing ).

See Paragraph 16 below for details about the Settlement Hearing, including the date and location of the hearing.

2. The Court directed that this Notice be mailed to you because Arrowhead s records

indicate that you are a Stockholder of Arrowhead. The Court has directed us to send you this Notice because you have a right to know about your options before the Court rules on the proposed Settlement. Additionally, you have the right to understand

how this Action generally affects your legal rights.

3. The issuance of this Notice is not an expression by the Court of any findings of

fact or any opinion concerning the merits of any claim in the Action, and the Court has not yet decided whether to approve the Settlement.

WHAT IS THE CASE ABOUT?

4. On February 1, 2021, Plaintiffs filed a Verified Stockholder Derivative Complaint (the Complaint ) in the Court of Chancery of

the State of Delaware, purportedly on behalf of Arrowhead and against the Director Defendants. The Complaint alleges that the Director Defendants breached their fiduciary duty of loyalty by granting and accepting allegedly excessive and unfair

compensation in each of 2019, 2020, and 2021.

5. Since the filing of the Action, the Parties have engaged in arm s-length negotiations, through counsel, to attempt to reach a settlement of the claims asserted by Plaintiffs in the Action.

6. In order to avoid the uncertainty of litigation, possible appeals, and further legal

expenses, the Parties desire to end the Action, and to compromise and settle the Action in its entirety.

WHAT ARE THE TERMS OF THE

7. Pursuant to the Settlement, the Parties have agreed that Arrowhead will amend its compensation practices and

procedures for the Company s non-employee directors.

8. For the five-year period following

the Effective Date of the Agreement, Arrowhead will adopt the following practices and procedures applicable to establishing the annual compensation package for the Company s non-employee directors:

executive officers. Additionally, any final deliberations or voting on

the compensation of non-employee directors (including any changes to the annual compensation package) shall be made at a different Board (or committee) meeting than any final deliberations or voting on the

compensation of executive officers (including any changes to the annual compensation package).

9. Any compensation plan for Arrowhead s non-employee directors that is approved by a majority

vote of the Company s stockholders (with the Company s non-employee directors abstaining) (a Stockholder-Approved Plan ) shall override the terms set forth in Paragraph 8 above, to the

extent that any of the terms of the Stockholder-Approved Plan are inconsistent with the terms set forth in Paragraph 8 above. Any proxy statement seeking stockholder approval of a Stockholder- Approved Plan shall describe (i) the claims in the

Action and the time period that the claims covered (i.e., the 2019, 2020, and 2021 compensation years); and (ii) that the Plaintiffs, Director Defendants, and the Company reached a settlement of the Action limiting non-employee director compensation for a five-year period to the 60th percentile of the mean per-director compensation package paid by each of the Peer Companies.

WHAT ARE THE PARTIES REASONS FOR THE SETTLEMENT?

10. Plaintiffs and Plaintiffs Counsel thoroughly considered the facts and law underlying the claims asserted in the Action.

Plaintiffs agreement to settle the Action is not intended to be and shall not be construed as an admission or concession concerning the relative strength or merit of the claims. However, Plaintiffs and Plaintiffs Counsel also recognize

the significant risk, expense, and length of continued proceedings necessary to prosecute the Action through trial and possible appeals, and took these factors into account.

11. In light of the changes to Arrowhead s practices and procedures for non-employee director

compensation, and on the basis of information available to them, including publicly available information, Plaintiffs and Plaintiffs Counsel have determined that the proposed Settlement is fair, reasonable, adequate, and in the best interests

of Arrowhead. The Settlement provides the needed changes to the Company s non-employee director compensation practices and procedures without the risk that continued litigation could result in obtaining

similar or lesser relief after continued extensive and expensive litigation, including trial and possible appeals, the outcome of which is inherently uncertain.

12. The Director Defendants have vigorously denied, and continue to vigorously deny, all

allegations of wrongdoing, fault, liability or cognizable damage to Arrowhead, and believe that they acted properly at all times. The Director Defendants have agreed to the Settlement solely because they consider it desirable that the claims against

them in the Action be settled and dismissed with prejudice in order to, among other things, (i) avoid the substantial expense, inconvenience and distraction of continued litigation, and (ii) avoid any possibility of a finding of liability,

however remote, and finally put to rest the claims asserted against the Director Defendants in the Action.

WHAT CLAIMS WILL THE

13. If the Settlement is approved, the Court will enter a Final Order and Judgment (the Judgment ).

Pursuant to the Judgment, upon the Effective Date of the Settlement (as defined in the Agreement), the Action will be dismissed with prejudice and the following releases will occur:

Release by Plaintiffs and Plaintiffs Counsel. Plaintiffs, on behalf of themselves, their

representatives, employees, agents, heirs, associates, partners, parents, affiliates, predecessors, successors, assigns, beneficiaries, trusts, trustees, executors, administrators, estates, investment vehicles, employers, insurers, sureties,

attorneys, consultants, accountants, financial, legal or other advisors, as well as any corporation, partnership, trust, or other

entity or organization that is under their control, and Plaintiffs Counsel (together,

the Releasors ) will irrevocably waive, release, acquit, and forever discharge the Company and the Director Defendants, and derivatively on behalf of the Company, from and against any and all claims which are or were alleged, asserted,

set forth, or claimed in the Action, or which arise out of, or are based upon, any of the allegations, transactions, facts, matters, events, disclosures, occurrences, statements, acts or omissions alleged in or referred to in the Action and that

could have been alleged, asserted, set forth, or claimed in the Action or in any other action, court (whether state or federal), tribunal, forum or proceeding; provided, however, that it is understood that Released Claims and any release provided by

this Settlement shall not include any claims to enforce the Settlement.. The Releasors acknowledge that they may discover facts in addition to or different from those that they now know or believe to be true with respect to the subject matter of

this release, but that it is their intention to fully and finally settle and release any and all claims released hereby, known or unknown, suspected or unsuspected, which now exist, heretofore existed, or may hereafter exist, and without regard to

subsequent discovery or existence of such additional or different fact. The Releasors acknowledge that the release of unknown claims was separately bargained for, constitutes separate consideration for, and was a key element of the Agreement and was

relied upon by the Company and the Director Defendants in entering into the Agreement.

Release of Unknown Claims. Without limiting the generality of the

foregoing, Plaintiffs and Plaintiffs Counsel expressly acknowledge and agree that the release contemplated by the above paragraph shall extend to claims that the Releasors do not know or suspect to exist at the time of the release, which, if

known, might have affected the decision to enter into the release or the Agreement. Plaintiffs and Plaintiffs Counsel acknowledge that they may hereafter discover facts in addition to or different from those which they know or believe to be

true, but that it is their intention to hereby to fully, finally and forever settle and release any and all claims released hereby, whether known or unknown, suspected or unsuspected, which now exist, or heretofore existed, or may hereafter exist,

and without regard to the subsequent discovery or existence of such additional or different facts. Plaintiffs and Plaintiffs Counsel shall be deemed toto have knowingly, voluntarily, intentionally and expressly waived and relinquished any and

all rights and benefits conferred by California Civil Code Section 1542 or any and all provisions, rights and benefits conferred by any law of any state or territory of the United States or foreign county or principle of common law, or any

other law, that is similar, comparable or equivalent to Section 1542, providing that:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR

RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

The Parties agree and acknowledge that this waiver is an essential term of the Agreement, without which the consideration given herein would

not have been given by the Parties.

14. Pending final determination by the Court of whether the Settlement should be approved, all

proceedings in the Action other than proceedings necessary to carry out or enforce the terms and conditions of the Agreement, have been stayed by the Court. By order of the Court, pending final determination of whether the Settlement should be

approved, Plaintiffs and all other Arrowhead Stockholders are barred and enjoined from commencing, instituting or prosecuting any of the Released Claims against any of the Released Parties.

HOW WILL PLAINTIFFS COUNSEL BE PAID?

15. Defendants acknowledge and agree that Plaintiffs Counsel is entitled to a fee award. Subject to the Agreement and any Order of the

Court, Arrowhead has agreed that it will not oppose any such application for fees and expenses, provided that the award of attorneys fees and expenses shall not exceed five hundred and five thousand dollars ($505,000.00) in the aggregate.

Except as otherwise provided in the Agreement, each of the Parties shall bear his, her, or its own fees and costs and neither Arrowhead nor any other Released Person shall have any obligations with respect to Plaintiffs Counsel s fees and

expenses beyond the Fee and Expense Amount. Any failure of the Court to approve a request for the Fee and Expense Amount in whole or in part shall not affect the remainder of the Settlement.

16. No fees or expenses shall be paid to Plaintiffs Counsel pursuant to the Settlement

in the absence of approval by the Court of a complete release of all Released Persons.

WHEN WILL THE SETTLEMENT HEARING BE HELD? DO I

HAVE A RIGHT TO APPEAR AT THE SETTLEMENT HEARING?

17. The Court will consider the Settlement and all matters related to the

Settlement at the Settlement Hearing. The Settlement Hearing will be held before The Honorable Paul A. Fioravanti, Vice Chancellor, on January 7, 2022, at 1:30 p.m., at the Court of Chancery of the State of Delaware, Court of Chancery Courthouse, in

the Leonard L. Williams Justice Center, 500 North King Street, Wilmington, Delaware 19801. At the Settlement Hearing, the Court will, among other things: (a) determine whether the proposed Settlement on the terms and conditions provided for in

the Agreement is fair, reasonable and adequate to Arrowhead, and should be approved by the Court; (c) determine whether the Judgment (as defined in Paragraph 13 above), should be entered dismissing the Action with prejudice; (d) hear and

consider any objections to the Settlement; and (e) consider any such other matters as the Court deems appropriate. The Court reserves the right to approve the Settlement and/or any other matter related to the Settlement at or after the Settlement

Hearing without further notice.

18. The Court will consider any submission made in accordance with the provisions below even

if an Objector does not attend the hearing. Participation in the Settlement is not conditioned on attendance at the Settlement Hearing.

19. Any Arrowhead Stockholder may object to the Settlement. Objections must be in writing and must be filed, together with copies of all other

papers and briefs supporting the objection, with the Register in Chancery at the address set forth below on or before December 2022, 2021. Objections and all supporting papers must also be served on representative counsel for Plaintiffs and the