Baron Funds, an investment management company, released its “Baron Health Care Fund” first quarter 2023 investor letter. A copy of the same can be downloaded here. The first quarter was difficult for the fund, as it failed to participate in the broader market rally and declined 3.69% compared to the 3.27% decline for the benchmark Russell 3000 Health Care Index and a 7.50% increase for the S&P 500 Index. In addition, please check the fund’s top five holdings to know its best picks in 2023.

Baron Health Care Fund highlighted stocks like Prometheus Biosciences, Inc. (NASDAQ:RXDX) in the first quarter 2023 investor letter. Headquartered in San Diego, California, Prometheus Biosciences, Inc. (NASDAQ:RXDX) is a clinical-stage biotechnology company. On May 17, 2023, Prometheus Biosciences, Inc. (NASDAQ:RXDX) stock closed at $192.94 per share. One-month return of Prometheus Biosciences, Inc. (NASDAQ:RXDX) was -0.47%, and its shares gained 564.85% of their value over the last 52 weeks. Prometheus Biosciences, Inc. (NASDAQ:RXDX) has a market capitalization of $9.225 billion.

Baron Health Care Fund made the following comment about Prometheus Biosciences, Inc. (NASDAQ:RXDX) in its Q1 2023 investor letter:

"We added to our position in Prometheus Biosciences, Inc. (NASDAQ:RXDX), a clinical stage biotechnology company. Prometheus’ lead product candidate, PRA023, is a monoclonal antibody that has been shown to block a target called TL1A that is associated with intestinal inflammation and fibrosis. In December 2022, the company reported promising Phase 2 clinical trial results, suggesting potential for PRA023 to be a novel treatment for ulcerative colitis and Crohn’s disease. The company plans to advance PRA023 into Phase 3 clinical trials for ulcerative colitis and Crohn’s disease in 2023. The company is also studying PRA023 as a treatment for Systemic-Sclerosis-associated Interstitial Lung Disease and plans to announce a fourth potential indication for PRA023 in 2023. We believe PRA023 has blockbuster potential. Prometheus also has a pipeline of earlier stage product candidates. On April 16, Merck issued a press release announcing its agreement to acquire Prometheus for $200 per share in cash."

Sergey Nivens/Shutterstock.com

Prometheus Biosciences, Inc. (NASDAQ:RXDX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held Prometheus Biosciences, Inc. (NASDAQ:RXDX) at the end of the fourth quarter which was 25 in the previous quarter.

We discussed Prometheus Biosciences, Inc. (NASDAQ:RXDX) in another article and shared the list of best mid-cap healthcare stocks to buy. In addition, please check out our hedge fund investor letters Q1 2023 page for more investor letters from hedge funds and other leading investors.