AmpliPhi Biosciences Corp (NYSEAMERICAN: APHB) seemed like it was going to have a great day in the market today. By 9:00 or so, the stock was up more than 17% on positive feedback from the FDA. Now, In just a few minutes after hitting the 17%+ mark, the stock started to fall. So, what’s the deal? Today, we’ll talk about:
- The FDA feedback;
- why the stock is falling;
- what we’re seeing from APHB; and
- what we’ll be watching for ahead.
APHB Announces Positive FDA Feedback
As mentioned above, AmpliPhi Biosciences was having a good start early on after announcing that FDA news. The company said that the FDA is in general agreement with the design of two proposed randomized clinical trials of AB-PA01 for the treatment of hospital-acquired and ventilator-associated pneumonia (HAP/VAP) due to P. aeruginosa and for P. aeruginosa bacteria. APHB also said that no further pre-clinical or clinical data would be required to proceed with these trials.
In the release, the company said that based on the feedback, it intends on seeking non-dilutive financing and explore other opportunities to conduct the trials (soon, you will find that non-dilutive isn’t the case). In a statement, Paul C. Grint, M.D., CEO at APHB, had the following to offer:
We are delighted with the FDA’s response to our development plans for AB-PA01, AmpliPhi’s bacteriophage product candidate targeting Pseudomonas aeruginosa infections, and the FDA’s concurrence on the proposed design of two randomized controlled clinical trials, in hospital-acquired and ventilator-associated pneumonia and P. aeruginosa bacteremia… Resistant P. aeruginosa is designated as ‘Priority 1: Critical’ pathogen on the World Health Organization’s Priority Pathogens List and as ‘Serious Threat’ by the U.S. Centers for Disease Control and Prevention.
Additionally, I am strongly encouraged to see the FDA’s dedication to addressing the challenges of antimicrobial resistance and promoting the development of new products, including bacteriophage therapeutics, as stated by the FDA’s Commissioner, Scott Gottlieb, at the unveiling of the FDA’s 2019 Strategic Approach for Combating AMR on September 14, 2018.
Why The Stock Is Falling
Shortly after the press release hit the wire, an SEC filing hit the wire as well, and the filing had to do with a dilutive fund raise, not the non-dilutive financing the company said it was seeking. In the filing, the company said it would be offering 12.2 million shares of common stock. Of course, if APHB is going to issue 12.2 million shares, it is a dilutive move that takes value directly out of the pockets of shareholders.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of AmpliPhi Biosciences, the news started off great and the stock rocketed in the pre-market as a result. However, after the SEC filing hit the wire, investors were concerned and the stock started to drop dramatically. Of course, our partners at Trade Ideas were the first to alert us to the movement in both directions. At the moment (9:15), APHB is trading at $0.95 per share after a loss of $0.035 per share or 3.55% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on APHB. In particular, we’re interested in following the story surrounding the company’s continued work to develop AB-PAo1 and the use of the funding it is generating through the dilutive offering mentioned above. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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