Overview
- Baron Capital’s investor letter, published Monday, reports the fund fell 6.97% in Q1 2026 and lagged the Russell 3000 Health Care Index.
- The fund added Merck to prepare for Keytruda’s 2028 patent loss, pointing to recent acquisitions, new drug launches, and a broad pipeline to offset the cliff.
- Baron bought Guardant Health to capture growth in blood-based cancer tests and colorectal screening, citing a Quest Diagnostics partnership, a 2026 salesforce ramp, and a goal of free‑cash‑flow breakeven by late 2027.
- Welltower remained a bright spot as senior-housing cash flows rose on higher occupancy and rents, with limited new supply supporting a multi‑year growth runway.
- RadNet shares weakened after its $270 million Gleamer deal and investor worries about AI, even though the company beat Q4 results and raised 2026 guidance, and the fund expects AI to lift efficiency and margins.