Baron Funds, an investment management company, released its “Baron Health Care Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund rose 5.39% (Institutional Shares) in the quarter, compared to a 5.05% gain for the Russell 3000 Health Care Index (benchmark) and an 8.18% gain for the Russell 3000 Index (the Index). The Fund performed similarly to the Benchmark this quarter. Solid stock selection was primarily offset by negative effects from active sub-industry allocations and cash holdings during a rising market. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, Baron Health Care Fund highlighted stocks such as Roivant Sciences Ltd. (NASDAQ:ROIV). Roivant Sciences Ltd. (NASDAQ:ROIV) is a commercial-stage biopharmaceutical company. The one-month return of Roivant Sciences Ltd. (NASDAQ:ROIV) was 21.59%, and its shares gained 68.10% of their value over the last 52 weeks. On November 3, 2025, Roivant Sciences Ltd. (NASDAQ:ROIV) stock closed at $19.60 per share, with a market capitalization of $13.384 billion.
Baron Health Care Fund stated the following regarding Roivant Sciences Ltd. (NASDAQ:ROIV) in its third quarter 2025 investor letter:
“We bought shares of Roivant Sciences Ltd. (NASDAQ:ROIV), a biotechnology company which builds subsidiaries or “Vants” to develop specific pipeline drugs. The company’s Vants are set up to be highly focused and very nimble. Roivant has proven the model with success with Telavant, a Roivant subsidiary that developed a TL1A antibody for inflammatory bowel disease and which was sold to Roche in 2023 for $7.1 billion. In our view, the most interesting current Vants include Immunovant Inc., Priovant, and Genevant. Immunovant (publicly traded as IMVT and Roivant owns 51% of the company on a fully diluted basis) is developing IMVT-1402, an FcRn antibody that will compete with argenx’s Vyvgart. We think IMVT-1402 has the potential to be first-in-class in Graves disease and difficult to-treat rheumatoid arthritis, which could drive substantial upside. Most recently, Priovant reported positive Phase 3 results for brepocitinib in dermatomyositis, setting it up to become a blockbuster oral drug in this hard-to-treat condition. We think brepocitinib will likely also work in its Phase 3 non-invasive uveitis study. Genevant conducts research on lipid nanoparticle (LNP) drug delivery technology, and together with Arbutus (another Roivant subsidiary) owns foundational intellectual property in this area. Genevant and Arbutus are involved in litigation with Moderna and BioNTech around their use of LNP in covid vaccines. We think Genevant has a reasonable argument against Moderna and await results from the jury trial next spring. If successful, this could result in a multi-billion-dollar award which would further bolster Roivant’s balance sheet ($4.5 billion of cash) that the company can use to continue to support its pipeline and ongoing business development. Overall, we expect several data readouts in the coming years to de-risk multiple blockbuster opportunities, further proving the Roivant business model and generating upside.”
Roivant Sciences Ltd. (NASDAQ:ROIV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 54 hedge fund portfolios held Roivant Sciences Ltd. (NASDAQ:ROIV) at the end of the second quarter, up from 53 in the previous quarter. While we acknowledge the risk and potential of Roivant Sciences Ltd. (NASDAQ:ROIV) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Roivant Sciences Ltd. (NASDAQ:ROIV) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Roivant Sciences Ltd. (NASDAQ:ROIV) and shared the list of best growth stocks under $25 to buy. In addition, please check out our hedge fund investor letters Q3 2025 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.
