Under the terms of the agreement, Pfizer will make a cash tender offer for all of the outstanding common stock of Coley for $8.00 per share, representing an enterprise value of $164 million. The transaction is subject to customary closing conditions, including approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the acquisition by Pfizer of a majority of Coley's shares. Shareholders holding approximately 27% of the Coley shares have entered into agreements to tender their shares in the offer.

"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. 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," said Jeffrey B. Kindler, chairman and chief executive officer, Pfizer Inc.

Coley is a pioneer in a new class of drug candidates called TLR Therapeutics which work by stimulating or blocking important immune system receptors, called Toll-like receptors (TLRs), which, in turn, direct the immune system to fight disease. Coley has discovered proprietary clinical stage drug candidates targeting TLRs 7, 8 and 9.

"As a pioneer in the field of TLR-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," stated Robert L. Bratzler, President and Chief Executive Officer, Coley Pharmaceutical Group. "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 acquisition is expected to close early in 2008. Lazard Frères and Co, LLC, and Covington & Burling, LLP advised Pfizer on this transaction. JPMorgan and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. advised Coley Pharmaceutical Group.

More information on both companies and the Coley TLR Therapeutics technology can be found at www.pfizer.com and www.coleypharma.com.

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