Baron Health Care Fund

Eli Lilly and Company (LLY) is a multinational pharmaceutical company developing drugs in diabetes, oncology, immunology, and neuroscience. The company is currently best known for developing and selling incretin analogue GIP/GLP-1 medications for diabetes and obesity. 
We are investors in Lilly given its focus on industry-leading growth categories like diabetes, obesity, and oncology. Leading GLP-1 drugs Mounjaro and Zepbound offer superb blood sugar control for diabetics, can drive 20%-plus weight loss in obese patients, and improve cardiovascular outcomes in both diabetic and non-diabetic obese patients. We think GLP-1 drugs will become the standard of care for both diabetes and obesity, representing a $150 billion-plus market. 

Mettler-Toledo International Inc. (MTD) is a leading provider of precision instruments and services for customers in the life sciences, food, and chemical industries, among others.  
Mettler-Toledo has a track record of consistent growth. The company has strong brand recognition, customer diversification, pricing power, and margin expansion opportunities. We think the business has attractive financial characteristics, including high returns on capital, minimal capital requirements, and solid free cash flow generation, which it uses to repurchase its stock. We believe the management team is an excellent steward of capital and skilled at developing sales and marketing initiatives to enhance growth.

Johnson & Johnson (JNJ) is a leading global healthcare company focused on innovative medicine and medical technologies. Founded in 1886, it develops treatments for complex diseases (oncology, immunology) and medical devices for surgery and vision. They are widely known for their commitment to global health. 
Johnson & Johnson has been actively optimizing its portfolio by separating and spinning off lower-growth, less attractive businesses while investing in higher-growth, innovative segments. This has resulted in a portfolio with accelerating growth, which we believe supports a higher valuation multiple. The business is growing 5–7% in the near term and could accelerate to double-digit revenue growth by the end of the decade, driven by multiple catalysts in the company’s Innovative Medicine segment and stable growth in MedTech.

Teva Pharmaceutical Industries Ltd. (TEVA) is a global pharmaceutical company best known for their generic medicines, and is increasingly expanding its innovative therapies.
We believe Teva’s branded portfolio and pipeline are underappreciated. Innovative drugs now drive ~50% of profits and are the key growth engine. Austedo is seeing strong uptake in tardive dyskinesia, Ajovy is gaining share in the chronic migraine market, and Uzedy has launched well in schizophrenia, with long-acting olanzapine upcoming. We are optimistic about the acquisition of ecopipam for pediatric Tourette’s. Pipeline assets include duvakitug for inflammatory bowel disease, DARI for asthma, and TEV-408 for vitiligo and celiac disease, targeting underserved markets.

Thermo Fisher Scientific Inc. (TMO) is the world's largest life sciences tools company. Thermo Fisher provides analytical instruments, laboratory equipment, software, services, consumables, and reagents for life sciences research, manufacturing, analysis, discovery, and diagnostics.
Thermo Fisher's $240 billion addressable market is growing 4% to 6% per year due to favorable demographics, scientific advances, new technology, and increased regulations. Long-term, management expects to grow revenue on an organic basis by 7% to 9% annually, driven by share gains and exposure to high-growth segments of the market. Competitive advantages include industry-leading scale, commercial infrastructure, e-commerce platform, supply chain capabilities, and R&D investment. The market is fragmented, offering opportunities to create shareholder value through M&A.

Argenx SE (ARGX) is a biotechnology company launching Vyvgart (efgartigimod) in myasthenia gravis and chronic inflammatory demyelinating polyneuropathy, while developing the drug for additional autoantibody-driven autoimmune conditions. 
Efgartigimod has potentially broad applicability in ameliorating overactive antibody-based diseases. Efgartigimod is a true "pipeline in a product," where the product itself is the platform, as it has the potential to be used against a diverse range of diseases—something that is rarely achieved in the biotechnology space. We expect the share price to increase as argenx proves its product’s effectiveness in multiple autoantibody disorders.

AstraZeneca PLC (AZN) is a global biopharmaceutical company with a strategy based on pipeline-driven transformation and a focus on three main therapy areas based on its core competencies: oncology, cardiovascular and metabolic diseases, and respiratory illnesses.
We think AstraZeneca’s focused strategy could potentially produce a best-in-class growth profile. The company is a leader in economically attractive markets, particularly oncology, and has an opportunity to participate in emerging transformative markets, such as China's modernizing health care system. Current growth comes from multiple avenues as AstraZeneca is one of the rare companies to have pipeline optionality, new product cycles, and no existential loss of exclusivity risk for a key asset.

Roivant Sciences Ltd. (ROIV) is a biotech company developing novel drugs across multiple therapeutic areas. It in-licenses or acquires deprioritized assets from larger pharmaceutical companies, housing each in standalone entities while centralizing capital allocation and shared resources at the parent level.
We’re excited about Priovant/Pfizer’s brepocitinib, launching in dermatomyositis and showing promise in cutaneous sarcoidosis, non-infectious uveitis, and other autoimmune diseases. We think it has promise in a range of oter autoimmune conditions. Immunovant (IMVT) is developing a next-gen FcRn inhibitor for Graves’ disease, which could potentially unlock a multi-billion-dollar market. Both teams have strong track records in in-licensing underappreciated assets, and we look forward to mosliciguat data in PH-ILD later this year.

Gilead Sciences, Inc (GILD) is a biotech company best known for developing and commercializing drugs that treat and prevent HIV. In addition, they developed and sell drugs that treat HCV and oncology. 
We believe Gilead Sciences has a leading HIV franchise and a next-generation pipeline to sustain its leadership. The pipeline includes a weekly oral lenacapavir + islatravir combination (partnered with Merck & Co.) and a wholly owned weekly regimen featuring a novel INSTI designed to raise the barrier to resistance. We are also bullish on the company’s Yeztugo launch for HIV prevention. Compared with daily oral Descovy, Yeztugo’s twice-yearly injection could significantly improve adherence.

Vertex Pharmaceuticals Incorporated (VRTX) is the leader in cystic fibrosis (CF) treatment. Vertex has four approved and marketed drugs, each for treatment of differing subsets of CF. These drugs represent paradigm shifts for CF patients hoping to extend their lives beyond their 30s or 40s.
We believe Vertex can grow revenue and earnings in the double digits as it expands its CF franchise to reach more patients with different mutations across new geographies. Vertex is also preparing to launch a non-opioid medication to treat acute pain. Additionally, we are optimistic about Vertex's pipeline drugs for APOL1, a genetic kidney disorder, and IgAN, an autoimmune kidney condition. Longer-term success will depend on its development of a novel pipeline targeting sickle cell anemia and similar diseases as well as cell therapies for type 1 diabetes.