DAFNA Capital Management employs fundamental analysis and event-driven strategies to make long and short investments in publicly traded biotechnology and medical device companies. This investment strategy capitalizes on our core expertise in the discovery, development, and clinical use of drugs and devices and exploits market inefficiencies resulting from the complexity of those companies’ technologies and the clinical marketplace.

 

Our fundamental research is primarily performed by rigorously evaluating the likelihood of future outcomes of key events. Such significant events include clinical trial results, regulatory decisions, unexpected side effects, additional indications for a drug or device, market adoption, and strategic partnerships.

 

This fundamental analysis is combined with significant attention to risk reduction. Risk reduction is achieved by a disciplined structured investment process. At the individual company level, risk reduction is achieved by rigorous and comprehensive data analysis and quantitative analytic tools. At the portfolio level, DAFNA Capital Management invests in a substantial number of companies, diversifies itself according to a matrix of parameters, avoids leverage, and attempts to balance the long and short positions according to various market size, business model, and other financial and trading parameters. Significant attention is paid to the liquidity implications of each position. Each portfolio is reviewed daily by DAFNA Capital Management to confirm that its risk profile matches its investment objectives.

 

We focus predominantly on preventive, diagnostic and therapeutic interventions that are at the frontiers of science and are leading the effort to improve clinical care in their specific niche of medicine. The majority of our investments are in small/mid capitalization companies with a focused pipeline or business and are based in the United States or other developed countries.