Baron Funds, an investment management company, released its “Baron Health Care Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund appreciated 5.81%% (Institutional Shares) in the quarter compared to a 6.74% gain for the Russell 3000 Health Care Index (benchmark) and a 6.23% gain for the Russell 3000 Index (the Index). Since inception, the fund appreciated 13.02% on an annualized basis compared to an 11.47% gain for the benchmark and a 14.03% gain for the index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Health Care Fund highlighted stocks like Vaxcyte, Inc. (NASDAQ:PCVX) in the Q3 2024 investor letter. Vaxcyte, Inc. (NASDAQ:PCVX) is a clinical-stage biotechnology vaccine company focuses on developing novel protein vaccines to prevent or treat bacterial infectious diseases. The one-month return of Vaxcyte, Inc. (NASDAQ:PCVX) was -4.26%, and its shares gained 122.49% of their value over the last 52 weeks. On October 31, 2024, Vaxcyte, Inc. (NASDAQ:PCVX) stock closed at $106.35 per share with a market capitalization of $13.164 billion.
Baron Health Care Fund stated the following regarding Vaxcyte, Inc. (NASDAQ:PCVX) in its Q3 2024 investor letter:
“We purchased Vaxcyte, Inc. (NASDAQ:PCVX), a biopharmaceutical company with a next-generation vaccine platform. Vaxcyte recently showed data suggesting that their pneumococcal vaccine is better than the current vaccines on the market today. Pneumococcal vaccines are one of the largest vaccine categories today, with approximately $8 billion in worldwide sales. The vaccines are recommended for children under 5 or adults over 65 to prevent pneumococcal infection. The incumbents’ technology has hit a ceiling where their vaccines require too much protein carrier, which causes immune interference and lowered response to the pneumococcal antigen. As Pfizer and Merck have tried to add more serotypes to their vaccines, they’ve lost efficacy on some of the historically relevant serotypes. Vaxcyte’s platform allows a lower protein carrier/antigen ratio so the company can include more serotypes while minimizing carrier suppression. Vaxcyte recently reported impressive Phase 1/2 data for their VAX31 vaccine in adults. VAX31 looked at least as good as Pfizer’s standard of care PCV20 vaccine on the existing 20 serotypes (and was statistically superior on several serotypes) and added strong immune coverage of 11 additional serotypes. VAX31 now covers 95% of circulating strains in U.S. adults and 98% in the EU. They will now run Phase 3 studies in adults and start a Phase 1/2 for VAX31 in children. We think that the pneumococcal vaccine market will be $10 billion-plus in 2030, that VAX31 can capture significant share, and that this will be a durable business.”
A research scientist in a laboratory holding a vial of a biotechnology drug.
Vaxcyte, Inc. (NASDAQ:PCVX) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held Vaxcyte, Inc. (NASDAQ:PCVX) at the end of the second quarter which was 39 in the previous quarter. While we acknowledge the potential of Vaxcyte, Inc. (NASDAQ:PCVX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Vaxcyte, Inc. (NASDAQ:PCVX) and shared the list of largest biotech hedge funds and their top stock picks. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.