PGIM Jennison Health Sciences Fund released its first quarter 2025 investor letter. A copy of the letter can be downloaded here. The S&P 1500 Health Care Index returned 5.5% in the first quarter, outperforming the S&P 500’s -4.3% return. Biotechnology and healthcare providers and services surpassed the Index in performance during this quarter. Pharmaceuticals, healthcare technology, and medtech also saw gains but lagged the Index. Conversely, life sciences tools and services declined over the same period. During the quarter, the Fund experienced a loss in value, underperforming the Index. Stock selection in biotechnology was the primary cause of the fund’s relative underperformance. Stock selection in pharmaceuticals was another area of relative weakness. Whereas stock selection in health care providers, biotechnology, and underweight to life sciences tools & services contributed to better relative results. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first quarter 2025 investor letter, PGIM Jennison Health Sciences Fund highlighted stocks such as Vaxcyte, Inc. (NASDAQ:PCVX). Vaxcyte, Inc. (NASDAQ:PCVX) is a clinical-stage biotechnology vaccine company that focuses on developing novel protein vaccines to prevent or treat bacterial infectious diseases. The one-month return of Vaxcyte, Inc. (NASDAQ:PCVX) was -13.98%, and its shares lost 60.46% of their value over the last 52 weeks. On July 7, 2025, Vaxcyte, Inc. (NASDAQ:PCVX) stock closed at $32.00 per share, with a market capitalization of $4.128 billion.
PGIM Jennison Health Sciences Fund stated the following regarding Vaxcyte, Inc. (NASDAQ:PCVX) in its first quarter 2025 investor letter:
“Vaxcyte, Inc. (NASDAQ:PCVX) is a clinical stage biomedical technology (biotech) company with a strong vaccine platform. The companies lead assets, the 24-valent VAX-24 and 31-valent VAX-31 pneumococcal vaccines, are in development for both infants and adults. Pneumococcal vaccines are currently a $7B/year market that is expected to grow to $10B+/year in the coming years. The company has previously presented very good VAX-24 data and unbeatable VAX-31 data in adults. The stock sold off at the end of March for two reasons. First, at the end of the month the company presented their first VAX-24 data in infants. The street’s bar was that they could miss on up to 3 serotypes, but the company ended up missing on 4. We do not believe that this would have any impact on ultimately commercial potential, given the dominant vaccine PCV20 missed on 6 in its trial. Second and more importantly, Peter Marks, the head of the Center for Biologics Evaluation and Research (CBER) at the FDA, who was a champion of vaccines, was pushed out of his position as Robert F. Kennedy Jr. came in to lead the Department of Health & Human Services (HHS). This created a precarious position for vaccine names in general. Both of these happening on the same day led to a significant decline in PCVX shares. We believe these headwinds are temporary. The company ended the year with a strong $3.1B cash position, enough to weather the storm. We believe the company is likely to take VAX-31 ahead in infants over VAX-24, similar to what they are doing in adults, and we expect to see stronger results from VAX 31.”
A research scientist in a laboratory holding a vial of a biotechnology drug.
Vaxcyte, Inc. (NASDAQ:PCVX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held Vaxcyte, Inc. (NASDAQ:PCVX) at the end of the first quarter, compared to 50 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 undervalued AI stock set for massive gains.
In another article, we covered Vaxcyte, Inc. (NASDAQ:PCVX) and shared the list of stocks expected to beat the market by 20 percentage points this year. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of PCVX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
