Baron Funds, an investment management company, released its “Baron Health Care Fund” fourth quarter 2024 investor letter. The Fund performed roughly in line with the Benchmark, during a challenging quarter for the larger health care industry. A copy of the letter can be downloaded here. The fund declined 9.58% (Institutional Shares) in the quarter compared to a 9.75% decline for the Russell 3000 Health Care Index (benchmark) and a 2.63% gain for the Russell 3000 Index (the Index). For the full year 2024, the fund appreciated 1.55% compared to 3.48% and 23.81% gains for the indexes. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Baron Health Care Fund emphasized stocks such as Wave Life Sciences Ltd. (NASDAQ:WVE). Wave Life Sciences Ltd. (NASDAQ:WVE) is a clinical-stage biotechnology company. The one-month return of Wave Life Sciences Ltd. (NASDAQ:WVE) was -5.40%, and its shares gained 176.44% of their value over the last 52 weeks. On February 18, 2025, Wave Life Sciences Ltd. (NASDAQ:WVE) stock closed at $11.03 per share with a market capitalization of $1.65 billion.
Baron Health Care Fund stated the following regarding Wave Life Sciences Ltd. (NASDAQ:WVE) in its Q4 2024 investor letter:
“We initiated a position in Wave Life Sciences Ltd. (NASDAQ:WVE), which develops RNA-based drugs to treat a variety of conditions. Wave’s platform is based on their decade-plus research into stereochemistry and their novel phosphoryl guanidine (PN) oligonucleotide backbone, which enables them to develop RNA-based drugs that are more stable and better at getting into the target cell. We are most excited about Wave’s exon-skipping drugs to treat Duchenne Muscular Dystrophy (DMD), their INHBE RNAi obesity drug, and their new RNA-editing platform. Although DMD has become a competitive space, we think Wave has the most potent exon-skipping platform with WVE-N531 recently demonstrating 9.0% muscle-adjusted and 5.5% unadjusted dystrophin expression after 24 weeks. We think this supports approval in exon 53-skipping-amenable patients and also suggests that Wave’s other DMD exon-skipping drugs in earlier stages of development will have similarly potent results. In 2025, we are also expecting first clinical data for WVE-007, Wave’s INHBE RNAi drug for obesity and other metabolic disorders. As evidenced by the GLP-1 drug class, this is a huge potential market and the preclinical data for INHBE suggests this is an orthogonal mechanism that could drive impressive results as a twice-yearly injection. We are also excited about Wave’s new RNA-editing platform, which recently demonstrated impressive results in Alpha-1-antitrypsin deficiency (A1AT). Although the A1AT drug is outlicensed to GlaxoSmithKline, we think this platform offers an elegant, convenient, and safe way to treat genetic diseases and has a wide range of applications.”
A biotechnology laboratory filled with computers and equipment to support research.
Wave Life Sciences Ltd. (NASDAQ:WVE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held Wave Life Sciences Ltd. (NASDAQ:WVE) at the end of the third quarter which was 30 in the previous quarter. While we acknowledge the potential of Wave Life Sciences Ltd. (NASDAQ:WVE) 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 Wave Life Sciences Ltd. (NASDAQ:WVE) and shared the list of small cap stocks to buy with the highest upside potential. In addition, please check out our hedge fund investor letters Q4 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.