HQH Update for FY Ending 9/30/06
(See bottom of post for top-10 holdings.)
Excerpt from management’s letter to shareholders:
>>
During the fiscal year, significant positive contributors to return included long term holdings Gilead and IDEXX Laboratories, Inc. as well as several more recent acquisitions including Align Technology, Inc., Medarex, Inc., Noven Pharmaceuticals, Inc. and Nuvelo, Inc.
Two negative contributors to return stand out, Nitromed, Inc. and Impax Laboratories, Inc. Nitromed, Inc. developed the first drug ever approved by the FDA for intended use principally in African Americans. Unfortunately, sales of this drug have not met our expectations or those of the investment community. Impax Laboratories, Inc., a manufacturer of differentiated generic products, has what we believe is an interesting pipeline of products, but has been beset with accounting/audit issues and was down sharply for the year.
During the twelve-month period ended September 30, 2006, within the public portfolio, the Fund established positions in several companies including American Medical Systems Holdings, Inc., DJ Orthopedics, Inc., Genentech, Inc., Pfizer, Inc., and United Therapeutics Corp. During the same twelve-month period, the Fund exited its positions in several companies including Affymetrix, Inc., Alkermes, Inc., Millennium Pharmaceuticals, Inc., Nuvelo, Inc., and OSI Pharmaceuticals, Inc.
During the same twelve-month period, within the venture portfolio, the Fund established a position in Cougar Biotechnology, Inc. and made a follow-on investment in Xanthus Life Sciences, Inc. The Fund increased its investment in Ceres, Inc. by participating in a cashless exercise of warrants. The Fund also exited its venture position in Corus Pharma, Inc. when it was acquired by Gilead Sciences, Inc.
We continue to believe that the healthcare sector provides significant opportunity for investment. As the population continues to age, healthcare expenditures increase as patients get older. In addition, increased incidence of diabetes, obesity and other disease continues to demand more therapies in which the Fund should be able to continue to invest.
<<
Top-10 Fund Holdings as of 9/30/06
Gilead Sciences, Inc. 3.37 %
Genzyme Corp. 3.05 %
Concentric Medical, Inc. 2.65 %
Conor Medsystems, Inc. 2.46 %
Cubist Pharmaceuticals, Inc. 2.45 %
Teva Pharmaceutical Industries, Ltd. 2.41 %
Align Technology, Inc. 2.21 %
MGI Pharma, Inc. 2.09 %
Forest Laboratories, Inc. 2.07 %
DJ Orthopedics, Inc. 1.84%
Market Data 
Markets 
AI
