Coley zooms on Pfizer buyout plan; Schering-Plough climbs; AMD down after Mubadala stock purchase

By Sheri Kasprzak

New York, Nov. 16 - Coley Pharmaceutical Group, Inc.'s shares jumped by 160.33% on Friday on news that Pfizer Inc. will acquire the pharmaceutical company in a $164 million transaction.

The astonishing 166.6% premium to Coley's last closing stock price set some tongues wagging.

"That seems a bit excessive to me," said one sell-side trader. "Having said that, I suppose their strategy is that the benefits are worth the cost."

An analyst agreed that Pfizer would be likely to pay a high price for the technology.

"They've worked with Coley, they know that their technologies are important to their business so they're willing to pay a big premium for it," he said.

Those benefits, according to Pfizer chief executive officer Jeffrey B. Kindler, include beefing up the pharmaceutical giant's vaccine business.

"This acquisition is an important component of Pfizer's vaccine strategy and reflects our commitment to research new and more effective vaccines to prevent infectious diseases and to treat cancers and other debilitating conditions," Kindler said in a statement released Friday morning.

"Coley's innovative product candidate portfolio and technology have the potential to significantly enhance future vaccine and immunotherapeutic approaches to a broad range of diseases, including Alzheimer's, asthma, infectious disease and oncology, where we already have strong collaborative research in place."

In another pharmaceutical deal, shares of Schering-Plough Corp. were up on news that the company's merger with Organon Biosciences NV received anti-trust approval from the Federal Trade Commission.

Elsewhere, Advanced Micro Devices received a $622 million investment from a subsidiary of investment firm Mubadala Development Co. from the purchase of stock.

Pfizer to buy Coley

Moving to the particulars of Pfizer's purchase of Coley Pharmaceuticals, Pfizer will tender for all of Coley's outstanding shares at $8.00 each, a 166.6% premium to the company's $3.00 closing stock price on Thursday.

Already, shareholders of 27% of Coley's shares have tendered their shares.

"As a pioneer in the field of [toll-like receptors]-based vaccine adjuvants and immunomodulators, Coley is delighted to enter into this agreement with Pfizer, a partner who has demonstrated that they share our vision," said Robert Bratzler, Coley's CEO, in a news release.

"We believe this transaction is a strong testament to the therapeutic potential of targeting TLR pathways and reflects Pfizer's commitment to discovering and advancing TLR therapeutic candidates that may be capable of directing the immune system to treat a wide range of diseases."

The deal is set to close in early 2008.

Shares of Coley ended the day up $4.81 to end at $7.81 (Nasdaq: COLY).

Meanwhile, Pfizer's stock closed up by 10 cents to close at $23.39 after slipping earlier in the session. The stock lost 2 cents in after-hours trading (NYSE: PFE).

Schering-Plough gets government OK on Organon merger

Moving to another pharmaceutical name, Schering-Plough received the nod from the U.S. Federal Trade Commission to proceed with its acquisition of Organon biosciences from Akzo Nobel.

Schering-Plough's stock closed up 2.22%, or 65 cents, to end at $29.98 (NYSE: SGP).

Organon is made up of Organon, the human pharmaceutical business; and Intervet, the company' animal health business; and also includes Nobilon, its human vaccine development unit; and Diosynth, the third-party manufacturing unit of Organon.

The merger is expected to close by the end of 2007.

AMD gets investment from Mubadala sub

In other news Friday, AMD said it received an investment from a subsidiary of Mubadala Development Co.

The Mubadala subsidiary invested $622 million in AMD and received 49 million shares of AMD at $12.70 each.

AMD said in a statement that it will use the proceeds for the acceleration of its long-term growth strategy by investing in research and development, for product innovations and for manufacturing.

Shares of AMD closed down 7 cents on Friday to end at $12.63 (NYSE: AMD).

"We proudly welcome Mubadala, a world-class investor, to the AMD shareholder family," said AMD CEO Hector Ruiz, in a statement

"This investment strengthens AMD's ability to deliver customer-centric innovation and choice to the marketplace, creating greater value for all our shareholders."

"AMD is a great fit for Mubadala's investment approach - a spirited competitor and innovator led by a strong and visionary management team," said Mubadala CEO Khaldoon Khalifa Al Mubarak, in a news release.

"We see significant opportunities for long-term growth and value creation."

Sunnyvale, Calif.-based AMD provides processing solutions for the computing, graphics and consumer electronics markets.

ManTech to buy McDonald Bradley

ManTech International Corp. will buy McDonald Bradley, Inc. in a $76.5 million cash transaction.

Shares of ManTech were up 43 cents to end at $39.72 (Nasdaq: MANT).

McDonald Bradley is an IT provider to government clients and ManTech is a contractor with the Department of Homeland Security.

"We are extremely excited to become part of ManTech as our corporate cultures, business focus and customer bases have much in common," said Ken Bartee, CEO of McDonald Bradley, in a statement.

"After considering various strategic alternatives, we felt that the timing, the opportunity and ManTech's track record of strong operating performance opens a new horizon for the company, our employees and customers. ManTech's large public company status will offer expanded professional development opportunities while its deep resources will make it easier to expand our role with customers as together we will drive the leading-edge technology solutions that support their mission well into the future."

"McDonald Bradley is in line with our M&A strategy and deepens our capabilities in the high-end defense, intelligence and homeland security markets, and expand our presence into new markets," said George Pedersen, ManTech's CEO.

Assuming all approvals are met, the merger is expected to close at the end of 2007.

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