What's Going On With Ampliphi Biosciences Corp (NYSEMKT:APHB)?

Ampliphi Biosciences Corp (NYSEMKT:APHB) is a real rollercoaster of a stock right now. The company has put out a number of pertinent updates over the last few weeks and hasn't really moved on any of them – until this week. At the Wednesday close, Ampliphi traded for around $1.80 a share. The company opened on Thursday at $2.30 and subsequently ran towards daily highs at more than $4.70 a piece. By the close, a correction had brought this to just shy of $3 a share; a decline, but still a decent run on the midweek pricing. Fast-forward to the Friday morning open, however, and Ampliphi will kick off the session at $1.25, having lost nearly 60% overnight.What is behind all this up-and-down action?Let's take a look.For those not familiar with this company, it is a biotech entity that has just recently announced a strategic shift towards the development of what are called bacteriophages. We will look at these in a little more detail shortly, but to quickly cover what's happened over the last month or so, the company announced and initiated a reverse split (1 for 10), announced some feedback from the FDA on a phase 2 trial and development proposal, highlighted this feedback in a press release detailing a meeting with the agency (which caught the eye of Adam Feuerstein) and then announced the above-described pivot in focus. It's not an entire pivot, we should clarify, but it is a resource re-focus towards a specific part of the company's operations.So, in light of this re-focus, what’s the deal?As mentioned, the company is now focused on the development of bacteriophages with the goal of developing treatments that can't overcome the bacterial resistance shift. Most readers will already be aware of the fact that bacterial resistance is becoming a huge problem, and many of the individuals that people infections and are resistant to currently available treatments will die with little to no treatment options available to them. There is a big push towards overcoming this issue right now, and Ampliphi is attempting to join this push (and intent, benefit from it) with its latest efforts. Bacteriophages are seen as potentially playing a big role in the space. They are basically tiny invaders that bury into a bacteria-infected cell and stop the cell from reproducing, stopping the spread of the bacteria in question.Normally, at this point, we would go into the development candidates that are going to underpin Ampliphi's strategic efforts. However, in this instance, there's just not that much to talk about. There is a deep pipeline asset associated with cystic fibrosis, but this is no longer a priority. There is some suggestion that a continuation of its staphylococcus program could form the basis of its development efforts going forward, but again, this is as yet unconfirmed. In short, we're going to have to wait to see what the company has up its sleeve.So what has caused the action of late?The company just announced that it is set to raise just shy of $10 million net as part of an equity offering. It is going to do so through the issuing of 6.9 million shares, at $1.50 a share. The offering will close out on May 10.For us, there are two sides to this announcement.The first, is that the raise is a necessary step towards the above-described shift in operational focus and that it comes about as part of an overall operational reorganization. If Ampliphi is going to get one of its products to market, it's going to need cash, and this is the first of a number of tranches we are likely to see over the coming few years.The second is that it's dilutive to current shareholders.The question is, does the first outweigh the second in terms of value impact?Again, it's hard to tell at this stage, but we are erring on the side of positivity. This is a growth space, and a fresh team at Ampliphi is – as we see it – laying the groundwork (the necessary groundwork) for forward growth. If management can stay the course, and continue to keep markets updated as to the progress of said course, then we don't see any reason why Ampliphi can't appreciate as 2017 matures.We will be updating our subscribers as soon as we know more. For the latest updates on APHB, sign up below!Disclosure: We have no position in APHB and have not been compensated for this article.