UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-07381
T. Rowe Price Health Sciences Fund, Inc.
(Exact name of registrant as specified in charter)
100 East Pratt Street, Baltimore, MD 21202
(Address of principal executive offices)
David Oestreicher
100 East Pratt Street, Baltimore, MD 21202
(Name and address of agent for service)
Registrant’s telephone number, including area code: (410) 345-2000
Date of fiscal year end: December 31
Date of reporting period: June 30, 2024
Item 1. Reports to Shareholders
(a) Report pursuant to Rule 30e-1
Semi-Annual Shareholder Report
June 30, 2024
This semi-annual shareholder report contains important information about Health Sciences Fund (the "fund") for the period of January 1, 2024 to June 30, 2024. You can find the fund’s prospectus, financial information on Form N‑CSR (which includes required tax information for dividends), holdings, proxy voting information, and other information atwww.troweprice.com/prospectus. You can also request this information without charge by contacting T. Rowe Price at 1‑800‑638‑5660 or info@troweprice.com or contacting your intermediary.
What were the fund costs for the last six months? (based on a hypothetical $10,000 investment)
| | Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment |
|---|
| Health Sciences Fund - Investor Class | $41 | 0.80% |
What are some fund statistics?
| Total Net Assets (000s) | $14,901,989 |
| Number of Portfolio Holdings | 272 |
| |
| Portfolio Turnover Rate | 32.9% |
What did the fund invest in?
Industry Allocation (as a % of Net Assets)
| Other Biotechnology | 23.7% |
| Major Pharmaceuticals | 20.8 |
| Payors | 14.2 |
| Implants | 12.7 |
| Life Sciences | 10.4 |
| Major Biotechnology | 7.0 |
| Other Products & Devices | 5.3 |
| Providers | 2.0 |
| Other Services | 1.7 |
| Other | 2.2 |
Top Ten Holdings (as a % of Net Assets)
| Eli Lilly | 12.1% |
| UnitedHealth Group | 6.5 |
| Intuitive Surgical | 4.8 |
| Thermo Fisher Scientific | 4.4 |
| Merck | 4.0 |
| Elevance Health | 3.7 |
| Stryker | 3.6 |
| Danaher | 3.4 |
| Regeneron Pharmaceuticals | 3.2 |
| Vertex Pharmaceuticals | 2.6 |
If you invest directly with T. Rowe Price, you can elect to receive future shareholder reports or other important documents through electronic delivery by enrolling at www.troweprice.com/paperless. If you invest through a financial intermediary such as an investment advisor, a bank, retirement plan sponsor or a brokerage firm, please contact that organization and ask if it can provide electronic delivery.
Health Sciences Fund
Investor Class (PRHSX)
T. Rowe Price Investment Services, Inc.
100 East Pratt Street
Baltimore, MD 21202
Semi-Annual Shareholder Report
June 30, 2024
This semi-annual shareholder report contains important information about Health Sciences Fund (the "fund") for the period of January 1, 2024 to June 30, 2024. You can find the fund’s prospectus, financial information on Form N‑CSR (which includes required tax information for dividends), holdings, proxy voting information, and other information atwww.troweprice.com/prospectus. You can also request this information without charge by contacting T. Rowe Price at 1‑800‑638‑5660 or info@troweprice.com or contacting your intermediary.
What were the fund costs for the last six months? (based on a hypothetical $10,000 investment)
| | Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment |
|---|
| Health Sciences Fund - I Class | $35 | 0.67% |
What are some fund statistics?
| Total Net Assets (000s) | $14,901,989 |
| Number of Portfolio Holdings | 272 |
| |
| Portfolio Turnover Rate | 32.9% |
What did the fund invest in?
Industry Allocation (as a % of Net Assets)
| Other Biotechnology | 23.7% |
| Major Pharmaceuticals | 20.8 |
| Payors | 14.2 |
| Implants | 12.7 |
| Life Sciences | 10.4 |
| Major Biotechnology | 7.0 |
| Other Products & Devices | 5.3 |
| Providers | 2.0 |
| Other Services | 1.7 |
| Other | 2.2 |
Top Ten Holdings (as a % of Net Assets)
| Eli Lilly | 12.1% |
| UnitedHealth Group | 6.5 |
| Intuitive Surgical | 4.8 |
| Thermo Fisher Scientific | 4.4 |
| Merck | 4.0 |
| Elevance Health | 3.7 |
| Stryker | 3.6 |
| Danaher | 3.4 |
| Regeneron Pharmaceuticals | 3.2 |
| Vertex Pharmaceuticals | 2.6 |
If you invest directly with T. Rowe Price, you can elect to receive future shareholder reports or other important documents through electronic delivery by enrolling at www.troweprice.com/paperless. If you invest through a financial intermediary such as an investment advisor, a bank, retirement plan sponsor or a brokerage firm, please contact that organization and ask if it can provide electronic delivery.
Health Sciences Fund
I Class (THISX)
T. Rowe Price Investment Services, Inc.
100 East Pratt Street
Baltimore, MD 21202
Item 1. (b) Notice pursuant to Rule 30e-3.
Not applicable.
Item 2. Code of Ethics.
A code of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions is filed as an exhibit to the registrant’s annual Form N-CSR. No substantive amendments were approved or waivers were granted to this code of ethics during the registrant’s most recent fiscal half-year.
Item 3. Audit Committee Financial Expert.
Disclosure required in registrant’s annual Form N-CSR.
Item 4. Principal Accountant Fees and Services.
Disclosure required in registrant’s annual Form N-CSR.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) Not applicable. The complete schedule of investments is included in Item 7 of this Form N-CSR.
(b) Not applicable.
Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies.
(a – b) Report pursuant to Regulation S-X.
Financial
Highlights
Portfolio
of
Investments
Financial
Statements
and
Notes
Additional
Fund
Information
Financial
Statements
and
Other
Information
For
more
insights
from
T.
Rowe
Price
investment
professionals,
go
to
troweprice.com
.
T.
ROWE
PRICE
PRHSX
Health
Sciences
Fund
–
.
THISX
Health
Sciences
Fund–
.
I Class
T.
ROWE
PRICE
Health
Sciences
Fund
(Unaudited)
For
a
share
outstanding
throughout
each
period
Investor
Class
6
Months
.
Ended
6/30/24
..
Year
..
..
Ended
.
12/31/23
12/31/22
12/31/21
12/31/20
12/31/19
NET
ASSET
VALUE
Beginning
of
period
$
87.90
$
89.82
$
104.08
$
98.85
$
81.43
$
67.01
Investment
activities
Net
investment
income
(loss)
(1)(2)
—
(3)
(0.08)
(0.09)
(0.22)
(0.04)
—
(3)
Net
realized
and
unrealized
gain/
loss
6.98
2.74
(12.58)
13.21
24.54
19.45
Total
from
investment
activities
6.98
2.66
(12.67)
12.99
24.50
19.45
Distributions
Net
investment
income
—
—
—
—
—
(0.05)
Net
realized
gain
—
(4.58)
(1.59)
(7.76)
(7.08)
(4.98)
Total
distributions
—
(4.58)
(1.59)
(7.76)
(7.08)
(5.03)
NET
ASSET
VALUE
End
of
period
$
94.88
$
87.90
$
89.82
$
104.08
$
98.85
$
81.43
T.
ROWE
PRICE
Health
Sciences
Fund
(Unaudited)
For
a
share
outstanding
throughout
each
period
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Investor
Class
6
Months
.
Ended
6/30/24
..
Year
..
..
Ended
.
12/31/23
12/31/22
12/31/21
12/31/20
12/31/19
Ratios/Supplemental
Data
Total
return
(2)(4)
7.94%
3.08%
(12.19)%
13.27%
30.12%
29.11%
Ratios
to
average
net
assets:
(2)
Gross
expenses
before
waivers/
payments
by
Price
Associates
0.80%
(5)
0.80%
0.80%
0.75%
0.76%
0.76%
Net
expenses
after
waivers/
payments
by
Price
Associates
0.80%
(5)
0.80%
0.80%
0.75%
0.76%
0.76%
Net
investment
income
(loss)
0.00%
(5)
(0.09)%
(0.10)%
(0.21)%
(0.05)%
0.00%
Portfolio
turnover
rate
32.9%
48.4%
28.8%
33.8%
41.7%
38.8%
Net
assets,
end
of
period
(in
millions)
$9,014
$9,105
$10,235
$17,213
$15,753
$12,649
0%
0%
0%
0%
0%
0%
(1)
Per
share
amounts
calculated
using
average
shares
outstanding
method.
(2)
Includes
the
impact
of
expense-related
arrangements
with
Price
Associates.
(3)
Amounts
round
to
less
than
$0.01
per
share.
(4)
Total
return
reflects
the
rate
that
an
investor
would
have
earned
on
an
investment
in
the
fund
during
each
period,
assuming
reinvestment
of
all
distributions,
and
payment
of
no
redemption
or
account
fees,
if
applicable.
Total
return
is
not
annualized
for
periods
less
than
one
year.
(5)
Annualized
T.
ROWE
PRICE
Health
Sciences
Fund
(Unaudited)
For
a
share
outstanding
throughout
each
period
I
Class
6
Months
.
Ended
6/30/24
..
Year
..
..
Ended
.
12/31/23
12/31/22
12/31/21
12/31/20
12/31/19
NET
ASSET
VALUE
Beginning
of
period
$
88.12
$
89.91
$
104.05
$
98.87
$
81.42
$
67.00
Investment
activities
Net
investment
income
(loss)
(1)(2)
0.06
0.04
0.05
(0.11)
0.05
0.08
Net
realized
and
unrealized
gain/
loss
6.99
2.75
(12.60)
13.22
24.57
19.46
Total
from
investment
activities
7.05
2.79
(12.55)
13.11
24.62
19.54
Distributions
Net
investment
income
—
—
—
—
—
(0.14)
Net
realized
gain
—
(4.58)
(1.59)
(7.93)
(7.17)
(4.98)
Total
distributions
—
(4.58)
(1.59)
(7.93)
(7.17)
(5.12)
NET
ASSET
VALUE
End
of
period
$
95.17
$
88.12
$
89.91
$
104.05
$
98.87
$
81.42
T.
ROWE
PRICE
Health
Sciences
Fund
(Unaudited)
For
a
share
outstanding
throughout
each
period
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
I
Class
6
Months
.
Ended
6/30/24
..
Year
..
..
Ended
.
12/31/23
12/31/22
12/31/21
12/31/20
12/31/19
Ratios/Supplemental
Data
Total
return
(2)(3)
8.00%
3.22%
(12.08)%
13.40%
30.27%
29.25%
Ratios
to
average
net
assets:
(2)
Gross
expenses
before
waivers/
payments
by
Price
Associates
0.67%
(4)
0.67%
0.67%
0.65%
0.65%
0.65%
Net
expenses
after
waivers/
payments
by
Price
Associates
0.67%
(4)
0.67%
0.67%
0.65%
0.65%
0.65%
Net
investment
income
(loss)
0.14%
(4)
0.04%
0.05%
(0.10)%
0.06%
0.11%
Portfolio
turnover
rate
32.9%
48.4%
28.8%
33.8%
41.7%
38.8%
Net
assets,
end
of
period
(in
millions)
$5,888
$5,607
$5,938
$2,295
$1,679
$1,155
0%
0%
0%
0%
0%
0%
(1)
Per
share
amounts
calculated
using
average
shares
outstanding
method.
(2)
Includes
the
impact
of
expense-related
arrangements
with
Price
Associates.
(3)
Total
return
reflects
the
rate
that
an
investor
would
have
earned
on
an
investment
in
the
fund
during
each
period,
assuming
reinvestment
of
all
distributions,
and
payment
of
no
redemption
or
account
fees,
if
applicable.
Total
return
is
not
annualized
for
periods
less
than
one
year.
(4)
Annualized
T.
ROWE
PRICE
Health
Sciences
Fund
June
30,
2024
(Unaudited)
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
COMMON
STOCKS
95.9%
BIOTECHNOLOGY
26.1%
International-Biotechnology
0.2%
Ideaya
Biosciences (1)
690,085
24,229
24,229
Major
Biotechnology
6.5%
Amgen
1,130,657
353,274
Biogen (1)
251,422
58,284
Celldex
Therapeutics (1)
1,106,747
40,961
Exact
Sciences (1)
704,149
29,750
Exact
Sciences
CMO
Milestone,
Acquisition
Date:
1/6/21,
Cost $— (1)(2)(3)
3,726,272
2,124
Exact
Sciences
FDA
Milestone,
Acquisition
Date:
1/6/21,
Cost $— (1)(2)(3)
1,863,136
1,062
Neurocrine
Biosciences (1)
746,944
102,832
Vertex
Pharmaceuticals (1)
810,943
380,105
968,392
Other
Biotechnology
19.4%
ACADIA
Pharmaceuticals (1)
130,208
2,116
Affinivax
Expense
Fund,
Acquisition
Date:
9/12/22,
Cost $12 (1)
(2)(3)
12,445
12
Affinivax
Milestone
Event,
Acquisition
Date:
9/12/22,
Cost $3,454 (1)(2)(3)
7,349,672
4,410
Affinivax
Next
Gen.
Prod.
Milestone
Event,
Acquisition
Date:
9/12/22,
Cost $3,454 (1)(2)(3)
7,349,672
1,691
Agios
Pharmaceuticals (1)
1,272,675
54,878
Akero
Therapeutics (1)
722,363
16,947
Alector (1)
553,592
2,513
Allogene
Therapeutics (1)
4,271,720
9,953
Alnylam
Pharmaceuticals (1)
1,335,120
324,434
AnaptysBio (1)
231,954
5,813
Apellis
Pharmaceuticals (1)
477,173
18,304
Apogee
Therapeutics (1)
555,743
21,869
Arcellx (1)
578,571
31,931
Ardelyx (1)
1,102,722
8,171
Arvinas (1)
526,828
14,024
Ascendis
Pharma,
ADR (1)
600,787
81,935
Aura
Biosciences (1)
380,592
2,877
Avidity
Biosciences (1)
3,037,724
124,091
BeiGene,
ADR (1)
648,105
92,465
Bicycle
Therapeutics,
ADR (1)
540,454
10,939
T.
ROWE
PRICE
Health
Sciences
Fund
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
Bicycle
Therapeutics
PIPE,
ADR,
Acquisition
Date:
5/23/24,
Cost $17,281 (1)(3)
806,752
15,512
Biohaven (1)
1,713,707
59,483
BioMarin
Pharmaceutical (1)
654,117
53,854
Blueprint
Medicines (1)
1,794,139
193,372
Cargo
Therapeutics (1)
1,699,233
27,901
Centessa
Pharmaceuticals,
ADR (1)
1,885,304
17,024
Crinetics
Pharmaceuticals (1)
1,018,842
45,634
Cytokinetics (1)
364,268
19,736
Day
One
Biopharmaceuticals (1)
54,089
745
Denali
Therapeutics (1)
1,101,938
25,587
Disc
Medicine (1)
230,122
10,372
Dyne
Therapeutics (1)
892,923
31,511
Entrada
Therapeutics (1)
302,983
4,318
Generation
Bio (1)
1,930,181
5,443
Ginkgo
Bioworks,
Earn
Out
Shares
$15.00,
Acquisition
Date:
9/17/21,
Cost $— (1)(3)
212,706
4
Ginkgo
Bioworks,
Earn
Out
Shares
$17.50,
Acquisition
Date:
9/17/21,
Cost $— (1)(3)
212,706
3
Ginkgo
Bioworks,
Earn
Out
Shares
$20.00,
Acquisition
Date:
9/17/21,
Cost $— (1)(3)
212,706
2
Gyroscope
Therapeutics,
Milestone
Payment
1,
Acquisition
Date:
2/18/22,
Cost $5,684 (1)(2)(3)
5,683,928
—
Gyroscope
Therapeutics,
Milestone
Payment
2,
Acquisition
Date:
2/18/22,
Cost $3,788 (1)(2)(3)
3,788,007
—
Gyroscope
Therapeutics,
Milestone
Payment
3,
Acquisition
Date:
2/18/22,
Cost $3,788 (1)(2)(3)
3,788,007
—
IGM
Biosciences (1)
919,815
6,319
Immatics (1)
1,543,315
17,933
Immuneering,
Class
A (1)
558,381
715
Immunocore
Holdings,
ADR (1)
1,357,411
46,003
Immunome (1)
1,504,760
18,208
Insmed (1)
2,606,288
174,621
Ionis
Pharmaceuticals (1)
1,137,342
54,206
Iovance
Biotherapeutics (1)
1,595,062
12,792
Krystal
Biotech (1)
342,325
62,865
Kymera
Therapeutics (1)
1,228,800
36,680
Legend
Biotech,
ADR (1)
821,920
36,403
Longboard
Pharmaceuticals (1)
1,028,920
27,812
Lyell
Immunopharma (1)
5,920,907
8,585
Monte
Rosa
Therapeutics (1)
868,208
3,247
MoonLake
Immunotherapeutics (1)
1,230,361
54,099
Morphic
Holding (1)
621,518
21,175
Novocure (1)
1,550,229
26,555
T.
ROWE
PRICE
Health
Sciences
Fund
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
Pliant
Therapeutics (1)
463,466
4,982
Prelude
Therapeutics (1)
619,654
2,361
ProfoundBio,
Escrow
Fund
Payment,
EC,
Acquisition
Date:
5/24/24,
Cost $704 (1)(2)(3)
704,486
669
ProfoundBio,
Expense
Fund
Payment,
EC,
Acquisition
Date:
5/24/24,
Cost $2 (1)(2)(3)
2,348
2
Protagonist
Therapeutics (1)
909,055
31,499
Prothena (1)
575,791
11,884
Rapport
Therapeutics,
Acquisition
Date:
8/7/23
-
3/19/24,
Cost $8,828 (1)(3)
614,732
14,299
RAPT
Therapeutics (1)
59,137
180
Regeneron
Pharmaceuticals (1)
448,588
471,480
Relay
Therapeutics (1)
1,214,260
7,917
Repligen (1)
249,744
31,483
Replimune
Group (1)
1,458,946
13,131
Replimune
Group
PIPE,
Acquisition
Date:
6/13/24,
Cost $1,456 (1)(3)
165,120
1,412
REVOLUTION
Medicines (1)
1,474,309
57,218
REVOLUTION
Medicines,
Warrants,
11/14/28 (1)
198,505
14
Rocket
Pharmaceuticals (1)
1,027,618
22,125
Sage
Therapeutics (1)
283,986
3,084
Sana
Biotechnology (1)
2,263,360
12,358
Sarepta
Therapeutics (1)
100,754
15,919
Scholar
Rock,
Warrants,
12/31/25,
Acquisition
Date:
6/17/22,
Cost $— (1)(3)
151,540
448
Scholar
Rock
Holding (1)
1,699,961
14,161
SpringWorks
Therapeutics (1)
1,018,878
38,381
Spyre
Therapeutics (1)
207,880
4,887
Structure
Therapeutics,
ADR (1)
1,116,078
43,828
Ultragenyx
Pharmaceutical (1)
900,881
37,026
Vaxcyte (1)
841,878
63,570
Voyager
Therapeutics (1)
682,605
5,399
Xencor (1)
874,134
16,547
Zai
Lab,
ADR (1)
1,268,126
21,977
Zentalis
Pharmaceuticals (1)
581,724
2,379
2,898,712
Total
Biotechnology
3,891,333
LIFE
SCIENCES
9.2%
Life
Sciences
9.2%
Agilent
Technologies
820,863
106,408
Bio-Techne
1,134,808
81,309
Bruker
305,128
19,470
Danaher
2,042,519
510,323
T.
ROWE
PRICE
Health
Sciences
Fund
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
Ginkgo
Bioworks
Holdings,
Class
A (1)
1,528,986
511
Pacific
Biosciences
of
California (1)
1,161,008
1,591
SomaLogic,
Warrants,
8/31/26 (1)
90,179
2
Thermo
Fisher
Scientific
1,192,710
659,569
Total
Life
Sciences
1,379,183
MISCELLANEOUS
0.0%
Miscellaneous
0.0%
Orchestra
BioMed
Holdings (1)
378,361
3,084
Total
Miscellaneous
3,084
PHARMACEUTICALS
21.1%
Major
Pharmaceuticals
20.5%
AstraZeneca,
ADR
4,822,225
376,085
Daiichi
Sankyo
(JPY)
999,400
34,733
Eli
Lilly
1,985,003
1,797,182
Merck
4,758,502
589,103
Novo
Nordisk,
ADR
1,784,735
254,753
3,051,856
Specialty
Pharmaceuticals
0.6%
Madrigal
Pharmaceuticals (1)
323,878
90,738
90,738
Total
Pharmaceuticals
3,142,594
PRODUCTS
&
DEVICES
17.3%
Capital
Equipment
0.2%
PROCEPT
BioRobotics (1)
398,010
24,314
24,314
Implants
12.4%
Becton
Dickinson
&
Company
704,394
164,624
Boston
Scientific (1)
3,014,502
232,147
Edwards
Lifesciences (1)
2,181,305
201,487
Intuitive
Surgical (1)
1,599,196
711,402
Stryker
1,561,559
531,321
Verily
Life
Sciences,
Series
B,
Acquisition
Date:
1/23/19,
Cost $13,998 (1)(2)(3)
113,564
11,077
1,852,058
Other
Products
&
Devices
4.7%
10X
Genomics,
Class
A (1)
1,305,182
25,386
Argenx,
ADR (1)
757,900
325,927
Dexcom (1)
676,860
76,742
Hologic (1)
844,768
62,724
Inspire
Medical
Systems (1)
148,240
19,839
T.
ROWE
PRICE
Health
Sciences
Fund
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
Insulet (1)
152,449
30,764
Lantheus
Holdings (1)
251,047
20,157
Pax
Labs,
Class
A,
Acquisition
Date:
4/18/19,
Cost $31,622 (1)
(2)(3)
8,397,988
3,359
Penumbra (1)
727,875
130,996
Saluda
Medical,
Warrants,
1/20/27,
Acquisition
Date:
1/20/22,
Cost $— (1)(2)(3)
103,592
204
696,098
Total
Products
&
Devices
2,572,470
SERVICES
17.8%
Distribution
0.9%
Cardinal
Health
376,549
37,022
Cencora
108,569
24,461
McKesson
113,776
66,450
127,933
Information
0.0%
GeneDx
Holdings (1)
30,145
788
GeneDx
Holdings,
Warrants,
7/22/26 (1)
206,747
6
794
Other
Services
1.2%
Guardant
Health (1)
191,097
5,519
ICON (1)
291,060
91,239
Tempus
Labs,
Series
D,
Acquisition
Date:
3/16/18
-
6/21/24,
Cost $45,685 (1)(3)
2,277,302
79,705
176,463
Payors
13.9%
Centene (1)
654,152
43,370
Cigna
Group
762,356
252,012
Elevance
Health
1,026,468
556,202
Humana
275,804
103,054
Molina
Healthcare (1)
513,505
152,665
UnitedHealth
Group
1,889,798
962,399
2,069,702
Providers
1.8%
agilon
health (1)
409,560
2,679
HCA
Healthcare
487,111
156,499
Surgery
Partners (1)
220,230
5,239
T.
ROWE
PRICE
Health
Sciences
Fund
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
Tenet
Healthcare (1)
842,847
112,124
276,541
Total
Services
2,651,433
Total
Miscellaneous
Common
Stocks
4.4%
(4)
657,942
Total
Common
Stocks
(Cost
$6,985,121)
14,298,039
CONVERTIBLE
BONDS
0.2%
Galvanize
Therapeutics,
0.00%,
2/13/27,
Acquisition
Date:
2/28/24,
Cost $6,173 (1)(2)(3)
6,172,900
6,173
Immunocore
Holdings,
2.50%,
2/1/30 (5)
15,469,000
12,907
Kardium,
10.00%,
12/31/26,
Acquisition
Date:
5/31/24,
Cost $5,292 (1)(2)(3)(6)
5,291,700
5,292
Total
Convertible
Bonds
(Cost
$26,934)
24,372
CONVERTIBLE
PREFERRED
STOCKS
3.7%
BIOTECHNOLOGY
1.9%
Other
Biotechnology
1.9%
Arbor
Bio,
Series
B,
Acquisition
Date:
10/29/21,
Cost $8,828 (1)
(2)(3)
532,759
8,828
Avalyn
Pharma,
Series
C-1,
Acquisition
Date:
9/22/23,
Cost $6,178 (1)(2)(3)
8,436,161
6,178
Bluejay
Therapeutics,
Series
C,
Acquisition
Date:
5/1/24,
Cost $16,506 (1)(2)(3)(6)
2,529,000
16,506
Bluejay
Therapeutics,
Series
C-1,
Acquisition
Date:
5/1/24,
Cost $1,135 (1)(2)(3)(6)
173,971
1,135
Chroma
Medicine,
Series
A,
Acquisition
Date:
10/12/21,
Cost $11,040 (1)(2)(3)
5,207,526
13,540
Chroma
Medicine,
Series
B,
Acquisition
Date:
2/8/23,
Cost $4,412 (1)(2)(3)
1,697,072
4,412
Delfi
Diagnostics,
Series
A,
Acquisition
Date:
1/12/21
-
4/7/22,
Cost $7,107 (1)(2)(3)
3,426,868
16,605
Delfi
Diagnostics,
Series
B,
Acquisition
Date:
6/10/22,
Cost $8,980 (1)(2)(3)
1,853,138
8,980
Eikon
Therapeutics,
Series
B,
Acquisition
Date:
12/3/21,
Cost $18,022 (1)(2)(3)
1,018,820
21,904
Eikon
Therapeutics,
Series
C,
Acquisition
Date:
5/18/23,
Cost $4,262 (1)(2)(3)
198,249
4,262
EndeavorBio,
Series
B,
Acquisition
Date:
1/21/22,
Cost $8,808 (1)(2)(3)
1,867,734
12,186
EndeavorBio,
Series
C,
Acquisition
Date:
4/22/24,
Cost $3,195 (1)(2)(3)
489,761
3,195
T.
ROWE
PRICE
Health
Sciences
Fund
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
FOG
Pharma,
Series
C,
Acquisition
Date:
1/11/21
-
8/2/21,
Cost $6,251 (1)(2)(3)
431,391
3,662
FOG
Pharma,
Series
D,
Acquisition
Date:
11/17/22,
Cost $6,622 (1)(2)(3)
615,203
4,517
FOG
Pharma,
Series
E,
Acquisition
Date:
2/29/24,
Cost $1,941 (1)(2)(3)
311,589
1,941
Generate
Bio,
Series
B,
Acquisition
Date:
9/2/21,
Cost $22,096 (1)(2)(3)
1,864,632
22,096
Generate
Bio,
Series
C,
Acquisition
Date:
5/9/23,
Cost $4,412 (1)(2)(3)
372,360
4,412
Genesis
Therapeutics,
Series
A,
Acquisition
Date:
11/24/20,
Cost $4,236 (1)(2)(3)
829,412
4,236
Genesis
Therapeutics,
Series
B,
Acquisition
Date:
8/10/23,
Cost $10,152 (1)(2)(3)
1,987,585
10,152
Insitro,
Series
B,
Acquisition
Date:
5/21/20,
Cost $5,505 (1)(2)
(3)
883,580
16,162
Insitro,
Series
C,
Acquisition
Date:
4/7/21,
Cost $10,762 (1)(2)
(3)
588,382
10,762
Kartos
Therapeutics,
Series
C,
Acquisition
Date:
8/22/23,
Cost $10,592 (1)(2)(3)
1,873,841
10,593
Laronde,
Series
B,
Acquisition
Date:
7/28/21,
Cost $32,757 (1)
(2)(3)
1,169,887
4,914
Obsidian
Therapeutics,
Series
C,
Acquisition
Date:
3/27/24,
Cost $8,821 (1)(2)(3)
4,647,794
8,821
Odyssey
Therapeutics,
Series
B,
Acquisition
Date:
5/13/22,
Cost $7,048 (1)(2)(3)
1,115,915
5,803
Odyssey
Therapeutics,
Series
C,
Acquisition
Date:
10/25/23,
Cost $530 (1)(2)(3)
105,905
530
Ring
Therapeutics,
Series
B,
Acquisition
Date:
4/12/21,
Cost $9,004 (1)(2)(3)
978,705
9,004
Ring
Therapeutics,
Series
C,
Acquisition
Date:
10/7/22,
Cost $4,414 (1)(2)(3)
479,818
4,414
SalioGen
Therapeutics,
Series
B,
Acquisition
Date:
12/10/21,
Cost $11,024 (1)(2)(3)
104,129
6,062
Scribe
Therapeutics,
Series
B,
Acquisition
Date:
3/17/21,
Cost $6,219 (1)(2)(3)
1,027,755
6,219
Sionna
Therapeutics,
Series
B,
Acquisition
Date:
2/2/22,
Cost $5,284 (1)(2)(3)
541,277
5,284
Sionna
Therapeutics,
Series
C,
Acquisition
Date:
3/4/24,
Cost $1,764 (1)(2)(3)
180,663
1,764
Tessera
Therapeutics,
Series
C,
Acquisition
Date:
2/25/22,
Cost $7,915 (1)(2)(3)
387,032
7,915
Treeline
Biosciences,
Series
A,
Acquisition
Date:
4/9/21
-
9/26/22,
Cost $18,552 (1)(2)(3)
2,370,150
18,552
Total
Biotechnology
285,546
T.
ROWE
PRICE
Health
Sciences
Fund
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
CONSUMER
NONDURABLES
0.2%
Biotechnology
0.1%
Nutcracker
Therapeutics,
Series
C,
Acquisition
Date:
8/27/21,
Cost $11,050 (1)(2)(3)
1,027,785
11,050
11,050
Health
Care
Services
0.1%
Capsule,
Series
1-D,
Acquisition
Date:
4/7/21,
Cost $12,364 (1)
(2)(3)
853,213
1,945
Capsule,
Series
E,
Acquisition
Date:
1/10/23,
Cost $2,658 (1)
(2)(3)
906,656
2,067
Color
Health,
Series
D,
Acquisition
Date:
12/17/20,
Cost $11,180 (1)(2)(3)
296,922
5,256
Color
Health,
Series
D-1,
Acquisition
Date:
1/13/20,
Cost $9,358 (1)(2)(3)
438,696
5,260
Color
Health,
Series
E,
Acquisition
Date:
10/26/21,
Cost $4,414 (1)(2)(3)
44,149
1,744
16,272
Total
Consumer
Nondurables
27,322
LIFE
SCIENCES
0.8%
Life
Sciences
0.8%
Cellanome,
Series
A,
Acquisition
Date:
12/30/21,
Cost $11,023 (1)(2)(3)(6)
1,993,387
14,930
Chromacode,
Series
D-1,
Acquisition
Date:
2/28/22,
Cost $2,202 (1)(2)(3)
3,137,582
659
Chromacode,
Series
D-2,
Acquisition
Date:
2/28/22,
Cost $2,202 (1)(2)(3)
3,137,581
1,443
Clear
Labs,
Series
C,
Acquisition
Date:
5/13/21,
Cost $13,294 (1)(2)(3)
3,830,773
2,375
DNA
Script,
Series
C,
Acquisition
Date:
12/16/21,
Cost $21,371
(EUR) (1)(2)(3)
25,201
7,786
Element
Biosciences,
Series
C,
Acquisition
Date:
6/21/21,
Cost $17,704 (1)(2)(3)
861,217
8,345
Element
Biosciences,
Series
D,
Acquisition
Date:
6/28/24,
Cost $2,207 (1)(2)(3)
281,354
2,207
Element
Biosciences,
Series
D-1,
Acquisition
Date:
6/28/24,
Cost $2,207 (1)(2)(3)
281,354
2,207
Inscripta,
Series
E,
Acquisition
Date:
3/30/21,
Cost $12,829 (1)
(2)(3)
1,452,941
2,717
Lumicks
Tech,
Series
D,
Acquisition
Date:
4/14/21,
Cost $8,875 (1)(2)(3)
4,954
4,495
National
Resilience,
Series
B,
Acquisition
Date:
10/23/20,
Cost $16,458 (1)(2)(3)
1,204,832
55,988
T.
ROWE
PRICE
Health
Sciences
Fund
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
National
Resilience,
Series
C,
Acquisition
Date:
6/9/21,
Cost $18,956 (1)(2)(3)
426,855
19,836
Total
Life
Sciences
122,988
PRODUCTS
&
DEVICES
0.3%
Capital
Equipment
0.1%
Reflexion
Medical,
Series
C,
Acquisition
Date:
4/3/18,
Cost $4,243 (1)(2)(3)
2,507,885
4,314
Reflexion
Medical,
Series
D,
Acquisition
Date:
4/3/20,
Cost $2,142 (1)(2)(3)
1,123,437
1,966
Reflexion
Medical,
Series
E,
Acquisition
Date:
3/1/22,
Cost $4,403 (1)(2)(3)
1,857,286
3,343
Reflexion
Medical,
Series
F,
Acquisition
Date:
11/13/23,
Cost $2,690 (1)(2)(3)
1,794,104
2,368
11,991
Implants
0.1%
Kardium,
Series
D-5,
Acquisition
Date:
11/29/18,
Cost $8,574 (1)(2)(3)(6)
8,849,057
7,522
Kardium,
Series
D-6,
Acquisition
Date:
1/8/21,
Cost $12,516 (1)
(2)(3)(6)
12,320,393
10,472
17,994
Other
Products
&
Devices
0.1%
Saluda
Medical,
Series
D,
Acquisition
Date:
1/20/22,
Cost $8,809 (1)(2)(3)
690,617
7,348
Saluda
Medical,
Series
E,
Acquisition
Date:
4/6/23,
Cost $4,353 (1)(2)(3)
539,186
5,214
12,562
Total
Products
&
Devices
42,547
SERVICES
0.5%
Information
0.0%
Cleerly,
Series
C,
Acquisition
Date:
7/8/22,
Cost $6,904 (1)(2)
(3)
586,029
5,257
5,257
Other
Services
0.4%
Caris
Life
Sciences,
Series
C,
Acquisition
Date:
8/14/20,
Cost $10,374 (1)(2)(3)
3,758,668
13,682
Caris
Life
Sciences,
Series
D,
Acquisition
Date:
5/11/21,
Cost $18,471 (1)(2)(3)
2,280,334
8,300
Freenome
Holdings,
Series
B,
Acquisition
Date:
6/24/19,
Cost $7,103 (1)(2)(3)
1,558,570
8,650
Freenome
Holdings,
Series
C,
Acquisition
Date:
8/14/20,
Cost $6,139 (1)(2)(3)
928,231
5,152
T.
ROWE
PRICE
Health
Sciences
Fund
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
Freenome
Holdings,
Series
D,
Acquisition
Date:
11/22/21,
Cost $3,971 (1)(2)(3)
526,504
2,933
Freenome
Holdings,
Series
F,
Acquisition
Date:
1/26/24,
Cost $1,322 (1)(2)(3)
178,707
992
PrognomIQ,
Series
A-4,
Acquisition
Date:
11/15/19,
Cost $1,356 (1)(2)(3)(6)
593,540
1,816
PrognomIQ,
Series
A-5,
Acquisition
Date:
5/12/20,
Cost $1,174 (1)(2)(3)(6)
513,797
1,572
PrognomIQ,
Series
B,
Acquisition
Date:
9/11/20,
Cost $8,533 (1)(2)(3)(6)
3,734,140
11,426
PrognomIQ,
Series
C,
Acquisition
Date:
2/16/22,
Cost $3,498 (1)(2)(3)(6)
1,143,244
3,498
58,021
Providers
0.1%
Honor
Technology,
Series
D,
Acquisition
Date:
10/16/20,
Cost $7,539 (1)(2)(3)
3,130,941
5,354
Honor
Technology,
Series
E,
Acquisition
Date:
9/29/21,
Cost $6,626 (1)(2)(3)
2,095,807
3,584
8,938
Total
Services
72,216
Total
Convertible
Preferred
Stocks
(Cost
$605,466)
550,619
PREFERRED
STOCKS
0.2%
LIFE
SCIENCES
0.2%
Life
Sciences
0.2%
Sartorius
(EUR)
101,906
23,855
Total
Life
Sciences
23,855
Total
Preferred
Stocks
(Cost
$14,477)
23,855
SHORT-TERM
INVESTMENTS
0.1%
Money
Market
Funds
0.1%
T.
Rowe
Price
Government
Reserve
Fund,
5.38% (6)(7)
12,862,939
12,863
Total
Short-Term
Investments
(Cost
$12,863)
12,863
Total
Investments
in
Securities
100.1%
of
Net
Assets
(Cost
$7,644,861)
$
14,909,748
T.
ROWE
PRICE
Health
Sciences
Fund
‡
Shares/Par
are
denominated
in
U.S.
dollars
unless
otherwise
noted.
(1)
Non-income
producing
(2)
See
Note
2.
Level
3
in
fair
value
hierarchy.
(3)
Security
cannot
be
offered
for
public
resale
without
first
being
registered
under
the
Securities
Act
of
1933
and
related
rules
("restricted
security").
Acquisition
date
represents
the
day
on
which
an
enforceable
right
to
acquire
such
security
is
obtained
and
is
presented
along
with
related
cost
in
the
security
description.
The
fund
may
have
registration
rights
for
certain
restricted
securities.
Any
costs
related
to
such
registration
are
generally
borne
by
the
issuer.
The
aggregate
value
of
restricted
securities
(excluding
144A
holdings)
at
period
end
amounts
to
$698,079
and
represents
4.7%
of
net
assets.
(4)
The
identity
of
certain
securities
has
been
concealed
to
protect
the
fund
while
it
completes
a
purchase
or
selling
program
for
the
securities.
(5)
Security
was
purchased
pursuant
to
Rule
144A
under
the
Securities
Act
of
1933
and
may
be
resold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers.
Total
value
of
such
securities
at
period-end
amounts
to
$12,907
and
represents
0.1%
of
net
assets.
(6)
Affiliated
Companies
(7)
Seven-day
yield
ADR
American
Depositary
Receipts
EC
Escrow
CUSIP;
represents
a
beneficial
interest
in
a
residual
pool
of
assets;
the
amount
and
timing
of
future
distributions,
if
any,
is
uncertain;
when
presented,
interest
rate
and
maturity
date
are
those
of
the
original
security.
EUR
Euro
JPY
Japanese
Yen
PIPE
Private
Investment
in
Public
Equity
T.
ROWE
PRICE
Health
Sciences
Fund
AFFILIATED
COMPANIES
($000s)
The
fund
may
invest
in
certain
securities
that
are
considered
affiliated
companies.
As
defined
by
the
1940
Act,
an
affiliated
company
is
one
in
which
the
fund
owns
5%
or
more
of
the
outstanding
voting
securities,
or
a
company
that
is
under
common
ownership
or
control.
The
following
securities
were
considered
affiliated
companies
for
all
or
some
portion
of
the
six
months
ended
June
30,
2024.
Net
realized
gain
(loss),
investment
income,
change
in
net
unrealized
gain/loss,
and
purchase
and
sales
cost
reflect
all
activity
for
the
period
then
ended.
Affiliate
Net
Realized
Gain
(Loss)
Change
in
Net
Unrealized
Gain/Loss
Investment
Income
Bluejay
Therapeutics,
Series
C
$
—
$
—
$
—
Bluejay
Therapeutics,
Series
C-1
—
—
—
Cellanome,
Series
A
—
—
—
Kardium,
10.00%
,
12/31/26
—
—
51
Kardium,
Series
D-5
—
—
—
Kardium,
Series
D-6
—
—
—
PrognomIQ,
Series
A-4
—
—
—
PrognomIQ,
Series
A-5
—
—
—
PrognomIQ,
Series
B
—
—
—
PrognomIQ,
Series
C
—
—
—
T.
Rowe
Price
Government
Reserve
Fund,
5.38%
—
—
448
Totals
$
—#
$
—
$
499+
T.
ROWE
PRICE
Health
Sciences
Fund
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
AFFILIATED
COMPANIES
(CONTINUED)
($000s)
Supplementary
Investment
Schedule
Affiliate
Value
12/31/23
Purchase
Cost
Sales
Cost
Value
06/30/24
Bluejay
Therapeutics,
Series
C
$
—
$
16,506
$
—
$
16,506
Bluejay
Therapeutics,
Series
C-1
—
1,135
—
1,135
Cellanome,
Series
A
14,930
—
—
14,930
Kardium,
10.00%,
12/31/26
—
5,292
—
5,292
Kardium,
Series
D-5
7,522
—
—
7,522
Kardium,
Series
D-6
10,472
—
—
10,472
PrognomIQ,
Series
A-4
1,816
—
—
1,816
PrognomIQ,
Series
A-5
1,572
—
—
1,572
PrognomIQ,
Series
B
11,426
—
—
11,426
PrognomIQ,
Series
C
3,498
—
—
3,498
T.
Rowe
Price
Government
Reserve
Fund,
5.38%
196,318
¤
¤
12,863
Total
$
87,032^
#
Capital
gain
distributions
from
underlying
Price
funds
represented
$0
of
the
net
realized
gain
(loss).
+
Investment
income
comprised
$499
of
dividend
income
and
$0
of
interest
income.
¤
Purchase
and
sale
information
not
shown
for
cash
management
funds.
^
The
cost
basis
of
investments
in
affiliated
companies
was
$82,470.
T.
ROWE
PRICE
Health
Sciences
Fund
June
30,
2024
(Unaudited)
Statement
of
Assets
and
Liabilities
($000s,
except
shares
and
per
share
amounts)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Assets
Investments
in
securities,
at
value
(cost
$7,644,861)
$
14,909,748
Receivable
for
investment
securities
sold
34,262
Dividends
and
interest
receivable
6,634
Receivable
for
shares
sold
5,196
Cash
410
Foreign
currency
(cost
$318)
316
Other
assets
5,141
Total
assets
14,961,707
Liabilities
Payable
for
investment
securities
purchased
41,317
Payable
for
shares
redeemed
9,020
Investment
management
fees
payable
7,715
Due
to
affiliates
534
Payable
to
directors
12
Other
liabilities
1,120
Total
liabilities
59,718
NET
ASSETS
$
14,901,989
Net
Assets
Consist
of:
Total
distributable
earnings
(loss)
$
8,459,719
Paid-in
capital
applicable
to
156,877,009
shares
of
$0.0001
par
value
capital
stock
outstanding;
1,000,000,000
shares
authorized
6,442,270
NET
ASSETS
$
14,901,989
NET
ASSET
VALUE
PER
SHARE
Investor
Class
(Net
assets:
$9,013,844;
Shares
outstanding:
95,004,675)
$
94.88
I
Class
(Net
assets:
$5,888,145;
Shares
outstanding:
61,872,334)
$
95.17
T.
ROWE
PRICE
Health
Sciences
Fund
(Unaudited)
6
Months
Ended
6/30/24
Investment
Income
(Loss)
Income
Dividend
(net
of
foreign
taxes
of
$76)
$
59,449
.
Interest
217
Other
18
Total
income
59,684
Expenses
Investment
management
47,214
Shareholder
servicing
Investor
Class
$
6,890
I
Class
741
7,631
Prospectus
and
shareholder
reports
Investor
Class
99
I
Class
16
115
Custody
and
accounting
225
Registration
50
Legal
and
audit
37
Directors
25
Miscellaneous
261
Total
expenses
55,558
Net
investment
income
4,126
T.
ROWE
PRICE
Health
Sciences
Fund
(Unaudited)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
6
Months
Ended
6/30/24
Realized
and
Unrealized
Gain
/
Loss
–
Net
realized
gain
(loss)
Securities
1,133,221
Foreign
currency
transactions
(55)
Net
realized
gain
1,133,166
Change
in
net
unrealized
gain
/
loss
Securities
6,492
Other
assets
and
liabilities
denominated
in
foreign
currencies
(253)
Change
in
net
unrealized
gain
/
loss
6,239
Net
realized
and
unrealized
gain
/
loss
1,139,405
INCREASE
IN
NET
ASSETS
FROM
OPERATIONS
$
1,143,531
T.
ROWE
PRICE
Health
Sciences
Fund
(Unaudited)
Statement
of
Changes
in
Net
Assets
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
6
Months
Ended
6/30/24
Year
Ended
12/31/23
Increase
(Decrease)
in
Net
Assets
Operations
Net
investment
income
(loss)
$
4,126
$
(6,121)
Net
realized
gain
1,133,166
1,038,740
Change
in
net
unrealized
gain
/
loss
6,239
(615,923)
Increase
in
net
assets
from
operations
1,143,531
416,696
Distributions
to
shareholders
Net
earnings
Investor
Class
–
(456,959)
I
Class
–
(280,130)
Decrease
in
net
assets
from
distributions
–
(737,089)
Capital
share
transactions
*
Shares
sold
Investor
Class
292,008
677,319
I
Class
319,277
390,889
Distributions
reinvested
Investor
Class
–
438,273
I
Class
–
261,418
Shares
redeemed
Investor
Class
(1,081,631)
(2,038,395)
I
Class
(482,856)
(870,442)
Decrease
in
net
assets
from
capital
share
transactions
(953,202)
(1,140,938)
Net
Assets
Increase
(decrease)
during
period
190,329
(1,461,331)
Beginning
of
period
14,711,660
16,172,991
End
of
period
$
14,901,989
$
14,711,660
*Share
information
(000s)
Shares
sold
Investor
Class
3,169
7,655
I
Class
3,455
4,410
Distributions
reinvested
Investor
Class
–
5,101
I
Class
–
3,035
Shares
redeemed
Investor
Class
(11,745)
(23,128)
I
Class
(5,214)
(9,858)
Decrease
in
shares
outstanding
(10,335)
(12,785)
T.
ROWE
PRICE
Health
Sciences
Fund
Unaudited
NOTES
TO
FINANCIAL
STATEMENTS
T.
Rowe
Price
Health
Sciences
Fund,
Inc. (the
fund) is
registered
under
the
Investment
Company
Act
of
1940
(the
1940
Act)
as a
diversified, open-
end
management
investment
company. The
fund
seeks
long-term
capital
appreciation.
The
fund
has two classes
of
shares:
the
Health
Sciences
Fund
(Investor
Class)
and
the
Health
Sciences
Fund–I
Class
(I
Class).
I
Class
shares
require
a
$500,000
initial
investment
minimum,
although
the
minimum
generally
is
waived
or
reduced
for
financial
intermediaries,
eligible
retirement
plans,
and
certain
other
accounts. Each
class
has
exclusive
voting
rights
on
matters
related
solely
to
that
class;
separate
voting
rights
on
matters
that
relate
to
both
classes;
and,
in
all
other
respects,
the
same
rights
and
obligations
as
the
other
class.
NOTE
1
-
SIGNIFICANT
ACCOUNTING
POLICIES
Basis
of
Preparation
The fund
is
an
investment
company
and
follows
accounting
and
reporting
guidance
in
the
Financial
Accounting
Standards
Board
(FASB)
Accounting
Standards
Codification
Topic
946
(ASC
946).
The
accompanying
financial
statements
were
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
(GAAP),
including,
but
not
limited
to,
ASC
946.
GAAP
requires
the
use
of
estimates
made
by
management.
Management
believes
that
estimates
and
valuations
are
appropriate;
however,
actual
results
may
differ
from
those
estimates,
and
the
valuations
reflected
in
the
accompanying
financial
statements
may
differ
from
the
value
ultimately
realized
upon
sale
or
maturity.
Investment
Transactions,
Investment
Income,
and
Distributions
Investment
transactions
are
accounted
for
on
the
trade
date
basis.
Income
and
expenses
are
recorded
on
the
accrual
basis.
Realized
gains
and
losses
are
reported
on
the
identified
cost
basis. Premiums
and
discounts
on
debt
securities
are
amortized
for
financial
reporting
purposes. Income
tax-related
interest
and
penalties,
if
incurred,
are
recorded
as
income
tax
expense. Dividends
received
from other
investment
companies are
reflected
as
dividend income;
capital
gain
distributions
are
reflected
as
realized
gain/loss. Dividend
income and
capital
gain
distributions
are
recorded
on
the
ex-dividend
date. Non-cash
dividends,
if
any,
are
recorded
at
the
fair
market
value
of
the
asset
received. Proceeds
from
litigation
payments,
if
any,
are
included
in
either
net
realized
gain
(loss)
or
change
in
net
unrealized
gain/loss
from
securities. Distributions
to
shareholders
T.
ROWE
PRICE
Health
Sciences
Fund
are
recorded
on
the
ex-dividend
date. Income
distributions,
if
any,
are
declared
and
paid
by
each
class annually. A
capital
gain
distribution,
if
any, may
also
be
declared
and
paid
by
the
fund
annually.
Currency
Translation
Assets,
including
investments,
and
liabilities
denominated
in
foreign
currencies
are
translated
into
U.S.
dollar
values
each
day
at
the
prevailing
exchange
rate,
using
the
mean
of
the
bid
and
asked
prices
of
such
currencies
against
U.S.
dollars
as
provided
by
an
outside
pricing
service.
Purchases
and
sales
of
securities,
income,
and
expenses
are
translated
into
U.S.
dollars
at
the
prevailing
exchange
rate
on
the
respective
date
of
such
transaction.
The
effect
of
changes
in
foreign
currency
exchange
rates
on
realized
and
unrealized
security
gains
and
losses
is
not
bifurcated
from
the
portion
attributable
to
changes
in
market
prices.
Class
Accounting
Shareholder
servicing,
prospectus,
and
shareholder
report
expenses
incurred
by
each
class
are
charged
directly
to
the
class
to
which
they
relate.
Expenses
common
to
all
classes,
investment
income,
and
realized
and
unrealized
gains
and
losses
are
allocated
to
the
classes
based
upon
the
relative
daily
net
assets
of
each
class.
Capital
Transactions
Each
investor’s
interest
in
the
net
assets
of the
fund
is
represented
by
fund
shares. The
fund’s
net
asset
value
(NAV)
per
share
is
computed
at
the
close
of
the
New
York
Stock
Exchange
(NYSE),
normally
4
p.m.
ET,
each
day
the
NYSE
is
open
for
business.
However,
the
NAV
per
share
may
be
calculated
at
a
time
other
than
the
normal
close
of
the
NYSE
if
trading
on
the
NYSE
is
restricted,
if
the
NYSE
closes
earlier,
or
as
may
be
permitted
by
the
SEC.
Purchases
and
redemptions
of
fund
shares
are
transacted
at
the
next-computed
NAV
per
share,
after
receipt
of
the
transaction
order
by
T.
Rowe
Price
Associates,
Inc.,
or
its
agents.
Indemnification
In
the
normal
course
of
business, the
fund
may
provide
indemnification
in
connection
with
its
officers
and
directors,
service
providers,
and/or
private
company
investments. The
fund’s
maximum
exposure
under
these
arrangements
is
unknown;
however,
the
risk
of
material
loss
is
currently
considered
to
be
remote.
T.
ROWE
PRICE
Health
Sciences
Fund
NOTE
2
-
VALUATION
Fair
Value
The
fund’s
financial
instruments
are
valued
at
the
close
of
the
NYSE
and
are
reported
at
fair
value,
which
GAAP
defines
as
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
at
the
measurement
date. The fund’s
Board
of
Directors
(the
Board)
has
designated
T.
Rowe
Price
Associates,
Inc.
as
the
fund’s
valuation
designee
(Valuation
Designee).
Subject
to
oversight
by
the
Board,
the
Valuation
Designee
performs
the
following
functions
in
performing
fair
value
determinations:
assesses
and
manages
valuation
risks;
establishes
and
applies
fair
value
methodologies;
tests
fair
value
methodologies;
and
evaluates
pricing
vendors
and
pricing
agents.
The
duties
and
responsibilities
of
the
Valuation
Designee
are
performed
by
its
Valuation
Committee. The
Valuation
Designee provides
periodic
reporting
to
the
Board
on
valuation
matters.
Various
valuation
techniques
and
inputs
are
used
to
determine
the
fair
value
of
financial
instruments.
GAAP
establishes
the
following
fair
value
hierarchy
that
categorizes
the
inputs
used
to
measure
fair
value:
Level
1
–
quoted
prices
(unadjusted)
in
active
markets
for
identical
financial
instruments
that
the
fund
can
access
at
the
reporting
date
Level
2
–
inputs
other
than
Level
1
quoted
prices
that
are
observable,
either
directly
or
indirectly
(including,
but
not
limited
to,
quoted
prices
for
similar
financial
instruments
in
active
markets,
quoted
prices
for
identical
or
similar
financial
instruments
in
inactive
markets,
interest
rates
and
yield
curves,
implied
volatilities,
and
credit
spreads)
Level
3
–
unobservable
inputs
(including
the Valuation
Designee’s assumptions
in
determining
fair
value)
Observable
inputs
are
developed
using
market
data,
such
as
publicly
available
information
about
actual
events
or
transactions,
and
reflect
the
assumptions
that
market
participants
would
use
to
price
the
financial
instrument.
Unobservable
inputs
are
those
for
which
market
data
are
not
available
and
are
developed
using
the
best
information
available
about
the
assumptions
that
market
participants
would
use
to
price
the
financial
instrument.
GAAP
requires
valuation
techniques
to
maximize
the
use
of
relevant
observable
inputs
and
minimize
the
use
of
unobservable
inputs.
When
multiple
inputs
are
used
to
derive
fair
value,
the
financial
instrument
is
assigned
to
the
level
within
the
fair
value
hierarchy
based
on
the
lowest-level
input
that
is
significant
to
the
fair
value
of
the
financial
T.
ROWE
PRICE
Health
Sciences
Fund
instrument.
Input
levels
are
not
necessarily
an
indication
of
the
risk
or
liquidity
associated
with
financial
instruments
at
that
level
but
rather
the
degree
of
judgment
used
in
determining
those
values.
Valuation
Techniques
Equity
securities,
including
exchange-traded
funds, listed
or
regularly
traded
on
a
securities
exchange
or
in
the
over-the-
counter
(OTC)
market
are
valued
at
the
last
quoted
sale
price
or,
for
certain
markets,
the
official
closing
price
at
the
time
the
valuations
are
made.
OTC
Bulletin
Board
securities
are
valued
at
the
mean
of
the
closing
bid
and
asked
prices.
A
security
that
is
listed
or
traded
on
more
than
one
exchange
is
valued
at
the
quotation
on
the
exchange
determined
to
be
the
primary
market
for
such
security.
Listed
securities
not
traded
on
a
particular
day
are
valued
at
the
mean
of
the
closing
bid
and
asked
prices
for
domestic
securities
and
the
last
quoted
sale
or
closing
price
for
international
securities.
The
last
quoted
prices
of
non-U.S.
equity
securities
may
be
adjusted
to
reflect
the
fair
value
of
such
securities
at
the
close
of
the
NYSE,
if
the Valuation
Designee
determines
that
developments
between
the
close
of
a
foreign
market
and
the
close
of
the
NYSE
will
affect
the
value
of
some
or
all
of
the
fund’s portfolio
securities.
Each
business
day,
the
Valuation
Designee uses
information
from
outside
pricing
services
to
evaluate
the
quoted
prices
of
portfolio
securities
and,
if
appropriate,
decide whether
it
is
necessary
to
adjust
quoted
prices
to
reflect
fair
value
by
reviewing
a
variety
of
factors,
including
developments
in
foreign
markets,
the
performance
of
U.S.
securities
markets,
and
the
performance
of
instruments
trading
in
U.S.
markets
that
represent
foreign
securities
and
baskets
of
foreign
securities. The Valuation
Designee
uses
outside
pricing
services
to
provide
it
with
quoted
prices
and
information
to
evaluate
or
adjust
those
prices.
The Valuation
Designee
cannot
predict
how
often
it
will
use
quoted
prices
and
how
often
it
will
determine
it
necessary
to
adjust
those
prices
to
reflect
fair
value.
Debt
securities
generally
are
traded
in
the over-the-counter
(OTC)
market
and
are
valued
at
prices
furnished
by
independent
pricing
services
or
by
broker
dealers
who
make
markets
in
such
securities.
When
valuing
securities,
the
independent
pricing
services
consider
factors
such
as,
but
not
limited
to,
the
yield
or
price
of
bonds
of
comparable
quality,
coupon,
maturity,
and
type,
as
well
as
prices
quoted
by
dealers
who
make
markets
in
such
securities.
Investments
in
mutual
funds
are
valued
at
the
mutual
fund’s
closing
NAV
per
share
on
the
day
of
valuation.
Assets
and
liabilities
other
than
financial
instruments,
including
short-term
receivables
and
payables,
are
carried
at
cost,
or
estimated
realizable
value,
if
less,
which
approximates
fair
value.
T.
ROWE
PRICE
Health
Sciences
Fund
Investments
for
which
market
quotations are
not
readily
available
or
deemed
unreliable
are
valued
at
fair
value
as
determined
in
good
faith
by
the
Valuation
Designee.
The
Valuation
Designee
has
adopted
methodologies
for
determining
the
fair
value
of
investments
for
which
market
quotations
are
not
readily
available
or
deemed
unreliable,
including
the
use
of
other
pricing
sources.
Factors
used
in
determining
fair
value
vary
by
type
of
investment
and
may
include
market
or
investment
specific
considerations.
The
Valuation
Designee typically
will
afford
greatest
weight
to
actual
prices
in
arm’s
length
transactions,
to
the
extent
they
represent
orderly
transactions
between
market
participants,
transaction
information
can
be
reliably
obtained,
and
prices
are
deemed
representative
of
fair
value.
However,
the
Valuation
Designee may
also
consider
other
valuation
methods
such
as
market-based
valuation
multiples;
a
discount
or
premium
from
market
value
of
a
similar,
freely
traded
security
of
the
same
issuer;
discounted
cash
flows;
yield
to
maturity;
or
some
combination.
Fair
value
determinations
are
reviewed
on
a
regular
basis.
Because
any
fair
value
determination
involves
a
significant
amount
of
judgment,
there
is
a
degree
of
subjectivity
inherent
in
such
pricing
decisions. Fair
value
prices
determined
by
the
Valuation
Designee could
differ
from
those
of
other
market
participants,
and
it
is
possible
that
the
fair
value
determined
for
a
security
may
be
materially
different
from
the
value
that
could
be
realized
upon
the
sale
of
that
security.
Valuation
Inputs
The
following
table
summarizes
the
fund’s
financial
instruments,
based
on
the
inputs
used
to
determine
their
fair
values
on
June
30,
2024
(for
further
detail
by
category,
please
refer
to
the
accompanying
Portfolio
of
Investments):
($000s)
Level
1
Level
2
Level
3
Total
Value
Assets
Common
Stocks
$
14,026,661
$
246,768
$
24,610
$
14,298,039
Convertible
Bonds
—
12,907
11,465
24,372
Convertible
Preferred
Stocks
—
—
550,619
550,619
Preferred
Stocks
—
23,855
—
23,855
Short-Term
Investments
12,863
—
—
12,863
Total
$
14,039,524
$
283,530
$
586,694
$
14,909,748
T.
ROWE
PRICE
Health
Sciences
Fund
Following
is
a
reconciliation
of
the
fund’s
Level
3
holdings
for
the
six
months ended
June
30,
2024.
Gain
(loss)
reflects
both
realized
and
change
in
unrealized
gain/loss
on
Level
3
holdings
during
the
period,
if
any,
and
is
included
on
the
accompanying
Statement
of
Operations.
The
change
in
unrealized
gain/loss
on
Level
3
instruments
held
at
June
30,
2024,
totaled $(52,447,000) for
the
six
months ended
June
30,
2024.
o
In
accordance
with
GAAP,
the
following
table
provides
quantitative
information
about
significant
unobservable
inputs
used
to
determine
the
fair
valuations
of
the
fund’s
Level
3
assets,
by
class
of
financial
instrument.
Because
the
Valuation
Designee
considers
a
wide
variety
of
factors
and
inputs,
both
observable
and
unobservable,
in
determining
fair
values,
the
unobservable
inputs
presented
do
not
reflect
all
inputs
significant
to
the
fair
value
determination.
($000s)
Beginning
Balance
12/31/23
Gain
(Loss)
During
Period
Total
Purchases
Total
Sales
Ending
Balance
6/30/24
Investment
in
Securities
Common
Stocks
$
31,697
$
274
$
707
$
(8,068)
$
24,610
Convertible
Bonds
—
—
11,465
—
11,465
Convertible
Preferred
Stocks
654,058
(104,239)
44,395
(43,595)
550,619
Total
$
685,755
$
(103,965)
$
56,567
$
(51,663)
$
586,694
T.
ROWE
PRICE
Health
Sciences
Fund
Investments
in
Securities
Value
(000s)
Valuation
Technique(s)+
Significant
Unobservable
Input(s)
Value
or
Range
of
Input(s)
Weighted
Average
of
Input(s)*
Impact
to
Valuation
from
an
Increase
in
Input**
Common
Stocks
$
24,610
Recent
comparable
transaction
price(s)
—#
—#
—#
—#
Discount
for
uncertainty
5%
-
100%
46%
Decrease
Market
comparable
Enterprise
value
to
sales
multiple
1.7x
–
7.9x
6.1x
Increase
Sales
growth
rate
20%
20%
Increase
Enterprise
value
to
gross
profit
multiple
4.7x
4.7x
Increase
Discount
for
lack
of
marketability
10%
10%
Decrease
Expected
present
value
Discount
rate
for
cost
of
equity
7%
7%
Decrease
Discount
for
regulatory
uncertainty
29%
29%
Decrease
Options
pricing
model
Private
company
valuation
—#
—#
—#
Risk-free
rate
4%
4%
Increase
Volatility
33%
33%
Increase
Convertible
Bonds
$
11,465
Recent
comparable
transaction
price(s)
—#
—#
—#
—#
T.
ROWE
PRICE
Health
Sciences
Fund
Investments
in
Securities
Value
(000s)
Valuation
Technique(s)+
Significant
Unobservable
Input(s)
Value
or
Range
of
Input(s)
Weighted
Average
of
Input(s)*
Impact
to
Valuation
from
an
Increase
in
Input**
Convertible
Preferred
Stocks
$
550,619
Recent
comparable
transaction
price(s)
—#
—#
—#
—#
Conversion
ratio
—#
—#
—#
Discount
for
dilution
12%
12%
Decrease
Discount
for
uncertainty
25%
-100%
41%
Decrease
Market
comparable
Premium
for
liquidation
preference
—#
—#
—#
Conversion
ration
—#
—#
—#
Premium
to
public
company
multiples
59%
-
147%
102%
Increase
Enterprise
value
to
sales
multiple
1.6x
–
8.7x
6.6x
Increase
Projected
enterprise
value
to
sales
multiple
3.6x
–
8.7x
7.2x
Increase
Sales
growth
rate
7%
-
124%
63%
Increase
Enterprise
value
to
gross
profit
multiple
4.9x
–
21.6x
15.8x
Increase
Projected
enterprise
value
to
gross
profit
multiple
6.8x
–
21.6x
16.7x
Increase
Gross
profit
growth
rate
23%
-
171%
95%
Increase
T.
ROWE
PRICE
Health
Sciences
Fund
Investments
in
Securities
Value
(000s)
Valuation
Technique(s)+
Significant
Unobservable
Input(s)
Value
or
Range
of
Input(s)
Weighted
Average
of
Input(s)*
Impact
to
Valuation
from
an
Increase
in
Input**
Enterprise
value
to
EBITDA
multiple
11.5x
–
16.1x
13.8x
Increase
EBITDA
growth
rate
56%
56%
Increase
Projected
enterprise
value
to
EBITDA
multiple
37.6x
37.6x
Increase
Probability
for
potential
outcome
10%
-
70%
35%
Increase
Discount
to
public
company
multiples
43%
-
52%
48%
Decrease
Discount
rate
for
cost
of
capital
10%
-
30%
16%
Decrease
Discount
for
uncertainty
45%
-
100%
86%
Decrease
Discount
for
lack
of
marketability
10%
10%
Decrease
Options
pricing
model
Private
company
valuation
—#
—#
—#
Risk-free
rate
4%
4%
Increase
Volatility
41%
41%
Increase
T.
ROWE
PRICE
Health
Sciences
Fund
+
Valuation
techniques
may
change
in
order
to
reflect the
Valuation
Designee’s
judgment
of
current
market
participant
assumptions.
*
Unobservable
inputs
were
weighted
by
the
relative
fair
value
of
the
instruments.
**
Represents
the
directional
change
in
the
fair
value
of
the
Level
3
investment(s)
that
would
have
resulted
from
an
increase
in
the
corresponding
input
at
period
end.
A
decrease
in
the
unobservable
input
would
have
had
the
opposite
effect.
Significant
increases
and
decreases
in
these
inputs
in
isolation
could
result
in
significantly
higher
or
lower
fair
value
measurements.
#
No
quantitative
unobservable
inputs
significant
to
the
valuation
technique
were
created
by
the
Valuation
Designee.
NOTE
3
-
OTHER
INVESTMENT
TRANSACTIONS
Consistent
with
its
investment
objective, the
fund
engages
in
the
following
practices
to
manage
exposure
to
certain
risks
and/or
to
enhance
performance.
The
investment
objective,
policies,
program,
and
risk
factors
of the
fund
are
described
more
fully
in the
fund’s prospectus
and
Statement
of
Additional
Information.
Restricted
Securities
The
fund
invests
in
securities
that
are
subject
to
legal
or
contractual
restrictions
on
resale.
Prompt
sale
of
such
securities
at
an
acceptable
price
may
be
difficult
and
may
involve
substantial
delays
and
additional
costs.
Other
Purchases
and
sales
of
portfolio
securities
other
than
in-kind
transactions,
if
any,
and short-term securities
aggregated $4,899,436,000 and
$5,693,865,000,
respectively,
for
the
six
months ended
June
30,
2024.
NOTE
4
-
FEDERAL
INCOME
TAXES
Generally,
no
provision
for
federal
income
taxes
is
required
since
the
fund
intends
to continue
to
qualify
as
a
regulated
investment
company
under
Subchapter
M
of
the
Internal
Revenue
Code
and
distribute
to
shareholders
all
of
its taxable
income
and
gains.
Distributions
determined
in
accordance
with
federal
income
tax
regulations
may
differ
in
amount
or
character
from
net
investment
income
and
realized
gains
for
financial
reporting
purposes.
Financial
reporting
records
are
adjusted
for
permanent
book/tax
differences
to
reflect
tax
character
but
are
not
adjusted
for
temporary
differences.
The
amount
and
character
of
tax-basis
distributions
and
composition
of
net
assets
are
finalized
at
fiscal
year-end;
accordingly,
tax-basis
balances
have
not
been
determined
as
of
the
date
of
this
report.
T.
ROWE
PRICE
Health
Sciences
Fund
At
June
30,
2024,
the
cost
of
investments
(including
derivatives,
if
any)
for
federal
income
tax
purposes
was
$7,847,662,000.
Net
unrealized
gain
aggregated
$7,062,186,000
at
period-end,
of
which
$7,824,297,000
related
to
appreciated
investments
and
$762,111,000
related
to
depreciated
investments.
NOTE
5
-
FOREIGN TAXES
The
fund
is
subject
to
foreign
income
taxes
imposed
by
certain
countries
in
which
it
invests.
Additionally,
capital
gains
realized
upon
disposition
of
securities
issued
in
or
by
certain
foreign
countries
are
subject
to
capital
gains
tax
imposed
by
those
countries.
All
taxes
are
computed
in
accordance
with
the
applicable
foreign
tax
law,
and,
to
the
extent
permitted,
capital
losses
are
used
to
offset
capital
gains.
Taxes
attributable
to
income
are
accrued
by
the
fund
as
a
reduction
of
income.
Current
and
deferred
tax
expense
attributable
to
capital
gains
is
reflected
as
a
component
of
realized
or
change
in
unrealized
gain/
loss
on
securities
in
the
accompanying
financial
statements.
To
the
extent
that
the
fund
has
country
specific
capital
loss
carryforwards,
such
carryforwards
are
applied
against
net
unrealized
gains
when
determining
the
deferred
tax
liability.
Any
deferred
tax
liability
incurred
by
the
fund
is
included
in
either
Other
liabilities
or
Deferred
tax
liability
on
the
accompanying
Statement
of
Assets
and
Liabilities.
NOTE
6
-
RELATED
PARTY
TRANSACTIONS
The
fund
is
managed
by
T.
Rowe
Price
Associates,
Inc.
(Price
Associates),
a
wholly
owned
subsidiary
of
T.
Rowe
Price
Group,
Inc.
(Price
Group). The
investment
management
agreement
between
the
fund
and
Price
Associates
provides
for
an
annual
investment
management
fee,
which
is
computed
daily
and
paid
monthly.
The
fee
consists
of
an
individual
fund
fee
equal
to
0.35%
of
the fund’s
average
daily
net
assets,
and
a
group
fee.
The
group
fee
rate
is
calculated
based
on
the
combined
net
assets
of
certain
mutual
funds
sponsored
by
Price
Associates
(the
group)
applied
to
a
graduated
fee
schedule,
with
rates
ranging
from
0.48%
for
the
first
$1
billion
of
assets
to
0.260%
for
assets
in
excess
of
$845
billion.
The
fund’s
group
fee
is
determined
by
applying
the
group
fee
rate
to
the
fund’s
average
daily
net
assets.
At June
30,
2024,
the
effective
annual
group
fee
rate
was
0.29%. Effective
May
1,
2021,
Price
Associates
has
contractually
agreed,
at
least
through
February
28,
2027,
to
waive
a
portion
of
its
management
fee
so
that
an
individual
fund
fee
of 0.2975%
is
applied
to
the
fund’s
average
daily
net
assets
that
are
equal
to
or
greater
than $25 billion.
T.
ROWE
PRICE
Health
Sciences
Fund
Thereafter,
this
agreement
will
automatically
renew
for
one-year
terms
unless
terminated
by
the
fund’s
Board.
Any
fees
waived
under
this
agreement
are
not
subject
to
reimbursement
to
Price
Associates
by
the
fund. No
management
fees
were
waived
under
this
arrangement
for
the
six
months ended
June
30,
2024.
The Investor
Class is
subject
to
a
contractual
expense
limitation
through
the
expense
limitation
date
indicated
in
the
table
below.
This
agreement
will
continue
through
the
expense
limitation
date
indicated
in
the
table
below,
and
may
be
renewed,
revised,
or
revoked
only
with
approval
of
the
fund’s
Board.
During
the
limitation
period,
Price
Associates
is required
to
waive
or
pay
any
expenses
(excluding
interest;
expenses
related
to
borrowings,
taxes,
and
brokerage;
non-recurring,
extraordinary
expenses;
and
acquired
fund
fees
and
expenses)
that
would
otherwise
cause
the class's ratio
of
annualized
total
expenses
to
average
net
assets
(net
expense
ratio)
to
exceed
its
expense
limitation.
The
class
is
required
to
repay
Price
Associates
for
expenses
previously
waived/paid
to
the
extent
the
class's net
assets
grow
or
expenses
decline
sufficiently
to
allow
repayment
without
causing
the class's net
expense
ratio
(after
the
repayment
is
taken
into
account)
to
exceed
the
lesser
of:
(1)
the
expense
limitation
in
place
at
the
time
such
amounts
were
waived;
or
(2)
the class's
current
expense
limitation.
However,
no
repayment
will
be
made
more
than
three
years
after
the
date
of
a
payment
or
waiver.
The
I
Class
is
also
subject
to
an
operating
expense
limitation
(I
Class
Limit)
pursuant
to
which
Price
Associates
is
contractually
required
to
pay
all
operating
expenses
of
the
I
Class,
excluding
management
fees;
interest;
expenses
related
to
borrowings,
taxes,
and
brokerage; non-recurring,
extraordinary expenses; and
acquired
fund
fees
and
expenses, to
the
extent
such
operating
expenses,
on
an
annualized
basis,
exceed
the
I
Class
Limit. This
agreement
will
continue
through
the
expense
limitation
date
indicated
in
the
table
below,
and
may
be
renewed,
revised,
or
revoked
only
with
approval
of
the
fund’s
Board.
The
I
Class
is
required
to
repay
Price
Associates
for
expenses
previously
paid
to
the
extent
the
class’s
net
assets
grow
or
expenses
decline
sufficiently
to
allow
repayment
without
causing
the
class’s
operating
expenses
(after
the
repayment
is
taken
into
account)
to
exceed
the
lesser
of:
(1)
the
I
Class
Limit
in
place
at
the
time
such
amounts
were
paid;
or
(2)
the
current
I
Class
Limit.
However,
no
repayment
will
be
made
more
than
three
years
after
the
date
of
a
payment
or
waiver.
T.
ROWE
PRICE
Health
Sciences
Fund
In
addition,
the
fund
has
entered
into
service
agreements
with
Price
Associates
and
two
wholly
owned
subsidiaries
of
Price
Associates,
each
an
affiliate
of
the
fund
(collectively,
Price).
Price
Associates
provides
certain
accounting
and
administrative
services
to
the
fund.
T.
Rowe
Price
Services,
Inc.
provides
shareholder
and
administrative
services
in
its
capacity
as
the
fund’s
transfer
and
dividend-disbursing
agent.
T.
Rowe
Price
Retirement
Plan
Services,
Inc.
provides
subaccounting
and
recordkeeping
services
for
certain
retirement
accounts
invested
in
the
Investor
Class.
For
the
six
months
ended
June
30,
2024,
expenses
incurred
pursuant
to
these
service
agreements
were
$60,000
for
Price
Associates;
$3,239,000
for
T.
Rowe
Price
Services,
Inc.;
and
$230,000
for
T.
Rowe
Price
Retirement
Plan
Services,
Inc.
All
amounts
due
to
and
due
from
Price,
exclusive
of
investment
management
fees
payable,
are
presented
net
on
the
accompanying
Statement
of
Assets
and
Liabilities.
T.
Rowe
Price
Investment
Services,
Inc.
(Investment
Services)
serves
as
distributor
to
the
fund.
Pursuant
to
an
underwriting
agreement,
no
compensation
for
any
distribution
services
provided
is
paid
to
Investment
Services
by
the
fund
(except
for
12b-1
fees
under
a
Board-approved
Rule
12b-1
plan).
Additionally,
the
fund
is
one
of
several
mutual
funds
in
which
certain
college
savings
plans
managed
by
Price
Associates invests.
As
approved
by
the
fund’s
Board
of
Directors,
shareholder
servicing
costs
associated
with
each
college
savings
plan
are
borne
by
the
fund
in
proportion
to
the
average
daily
value
of
its
shares
owned
by
the
college
savings
plan.
Price
has
agreed
to waive/reimburse
shareholder
servicing
costs in
excess
of
0.05%
of
the
fund’s
average
daily
value
of
its
shares
owned
by
the
college
savings
plan.
Any
amounts
waived/
paid
by
Price
under
this
voluntary
agreement
are
not
subject
to
repayment
by
the
fund.
Price
may
amend
or
terminate
this
voluntary
arrangement
at
any
time
without
prior
notice.
For
the
six
months ended
June
30,
2024,
the
fund
was
reimbursed $9,000 for
shareholder
servicing
costs
related
to
the
college
savings
plans, which
is
net
of
a
reimbursement
by
Price
of
$16,000.
All
amounts
due
to
and
due
from
Price,
exclusive
of
investment
management
fees
payable,
are
Investor
Class
I
Class
Expense
limitation/I
Class
Limit
0.99%
0.05%
Expense
limitation
date
04/30/26
04/30/26
(Waived)/repaid
during
the
period
($000s)
$—
$—
T.
ROWE
PRICE
Health
Sciences
Fund
presented
net
on
the
accompanying
Statement
of
Assets
and
Liabilities. At
June
30,
2024,
approximately
1%
of
the
outstanding
shares
of
the
I
Class
were
held
by
college
savings
plans.
The fund
may
invest
its
cash
reserves
in
certain
open-end
management
investment
companies
managed
by
Price
Associates
and
considered
affiliates
of
the
fund:
the
T.
Rowe
Price
Government
Reserve
Fund
or
the
T.
Rowe
Price
Treasury
Reserve
Fund,
organized
as
money
market
funds
(together,
the
Price
Reserve
Funds).
The
Price
Reserve
Funds
are
offered
as
short-term
investment
options
to
mutual
funds,
trusts,
and
other
accounts
managed
by
Price
Associates
or
its
affiliates
and
are
not
available
for
direct
purchase
by
members
of
the
public.
Cash
collateral
from
securities
lending,
if
any,
is
invested
in
the
T.
Rowe
Price
Government
Reserve Fund. The
Price
Reserve
Funds
pay
no
investment
management
fees.
As
of
June
30,
2024,
T.
Rowe
Price
Group,
Inc.,
or
its
wholly
owned
subsidiaries,
owned
187,835
shares
of
the
I
Class,
representing
less
than
1%
of
the
I
Class's
net
assets.
The fund may
participate
in
securities
purchase
and
sale
transactions
with
other
funds
or
accounts
advised
by
Price
Associates
(cross
trades),
in
accordance
with
procedures
adopted
by the
fund’s
Board
and
Securities
and
Exchange
Commission
rules,
which
require,
among
other
things,
that
such
purchase
and
sale
cross
trades
be
effected
at
the
independent
current
market
price
of
the
security.
During
the
six
months
ended
June
30,
2024,
the
fund
had
no
purchases
or
sales
cross
trades
with
other
funds
or
accounts
advised
by
Price
Associates.
NOTE
7
-
OTHER
MATTERS
Unpredictable environmental,
political,
social
and
economic
events,
including
but
not
limited
to,
environmental
or
natural
disasters,
war
and
conflict
(including
Russia’s
military
invasion
of
Ukraine
and
the
conflict
in
Israel,
Gaza
and
surrounding
areas),
terrorism,
geopolitical
developments
(including
trading
and
tariff
arrangements,
sanctions
and
cybersecurity
attacks),
and
public
health
epidemics
(including
the
global
outbreak
of
COVID-19)
and
similar
public
health
threats,
may
significantly
affect
the
economy
and
the
markets
and
issuers
in
which
a
fund
invests.
The
extent
and
duration
of
such
events
and
resulting
market
disruptions
cannot
be
predicted.
These
and
other
similar
events
may
cause
instability
across
global
markets,
including
reduced
liquidity
and
disruptions
in
trading
markets,
while
some
events
may
affect
certain
geographic
T.
ROWE
PRICE
Health
Sciences
Fund
regions,
countries,
sectors,
and
industries
more
significantly
than
others,
and
exacerbate
other
pre-existing
political,
social,
and
economic
risks.
The
fund’s
performance
could
be
negatively
impacted
if
the
value
of
a
portfolio
holding
were
harmed
by
these
or
such
events.
Management
actively
monitors
the
risks
and
financial
impacts
arising
from
such
events.
T.
ROWE
PRICE
Health
Sciences
Fund
APPROVAL
OF
INVESTMENT
MANAGEMENT
AGREEMENT
Each
year,
the
fund’s
Board
of
Directors
(Board)
considers
the
continuation
of
the
investment
management
agreement
(Advisory
Contract)
between
the
fund
and
its
investment
adviser,
T.
Rowe
Price
Associates,
Inc.
(Adviser).
In
that
regard,
at
a
meeting
held
on
March
11–12,
2024
(Meeting),
the
Board,
including
all
of
the
fund’s
independent
directors
present
in
person
at
the
Meeting,
approved
the
continuation
of
the
fund’s
Advisory
Contract.
At
the
Meeting,
the
Board
considered
the
factors
and
reached
the
conclusions
described
below
relating
to
the
selection
of
the
Adviser
and
the
approval
of
the
Advisory
Contract.
The
independent
directors
were
assisted
in
their
evaluation
of
the
Advisory
Contract
by
independent
legal
counsel
from
whom
they
received
separate
legal
advice
and
with
whom
they
met
separately.
In
providing
information
to
the
Board,
the
Adviser
was
guided
by
a
detailed
set
of
requests
for
information
submitted
by
independent
legal
counsel
on
behalf
of
the
independent
directors.
In
considering
and
approving
the
continuation
of
the
Advisory
Contract,
the
Board
considered
the
information
it
believed
was
relevant,
including,
but
not
limited
to,
the
information
discussed
below.
The
Board
considered
not
only
the
specific
information
presented
in
connection
with
the
Meeting,
but
also
the
knowledge
gained
over
time
through
interaction
with
the
Adviser
about
various
topics.
The
Board
meets
regularly
and,
at
each
of
its
meetings,
covers
an
extensive
agenda
of
topics
and
materials
and
considers
factors
that
are
relevant
to
its
annual
consideration
of
the
renewal
of
the
T.
Rowe
Price
funds’
advisory
contracts,
including
performance
and
the
services
and
support
provided
to
the
funds
and
their
shareholders.
Services
Provided
by
the
Adviser
The
Board
considered
the
nature,
quality,
and
extent
of
the
services
provided
to
the
fund
by
the
Adviser.
These
services
included,
but
were
not
limited
to,
directing
the
fund’s
investments
in
accordance
with
its
investment
program
and
the
overall
management
of
the
fund’s
portfolio,
as
well
as
a
variety
of
related
activities
such
as
financial,
investment
operations,
and
administrative
services;
compliance;
maintaining
the
fund’s
records
and
registrations;
and
shareholder
communications.
The
Board
also
reviewed
the
background
and
experience
of
the
Adviser’s
senior
management
team
and
investment
personnel
involved
in
the
management
of
the
fund,
as
well
as
the
Adviser’s
compliance
record.
The
Board
concluded
that
the
information
it
considered
with
respect
to
the
nature,
quality,
and
extent
of
the
services
provided
by
the
Adviser,
as
well
as
the
other
factors
considered
at
the
Meeting,
supported
the
Board’s
approval
of
the
continuation
of
the
Advisory
Contract.
T.
ROWE
PRICE
Health
Sciences
Fund
Investment
Performance
of
the
Fund
The
Board
took
into
account
discussions
with
the
Adviser
and
detailed
reports
that
it
regularly
receives
throughout
the
year
on
relative
and
absolute
performance
for
the
T.
Rowe
Price
funds.
In
connection
with
the
Meeting,
the
Board
reviewed
information
provided
by
the
Adviser
that
compared
the
fund’s
total
returns,
as
well
as
a
wide
variety
of
other
previously
agreed-upon
performance
measures
and
market
data,
against
relevant
benchmark
indexes
and
peer
groups
of
funds
with
similar
investment
programs
for
various
periods
through
December
31,
2023.
Additionally,
the
Board
reviewed
the
fund’s
relative
performance
information
as
of
September
30,
2023,
which
ranked
the
returns
of
the
fund’s
Investor
Class
for
various
periods
against
a
universe
of
funds
with
similar
investment
programs
selected
by
Broadridge,
an
independent
provider
of
mutual
fund
data.
In
the
course
of
its
deliberations,
the
Board
considered
performance
information
provided
throughout
the
year
and
in
connection
with
the
Advisory
Contract
review
at
the
Meeting,
as
well
as
information
provided
during
investment
review
meetings
conducted
with
portfolio
managers
and
senior
investment
personnel
during
the
course
of
the
year
regarding
the
fund’s
performance.
The
Board
also
considered
relevant
factors,
such
as
overall
market
conditions
and
trends
that
could
adversely
impact
the
fund’s
performance,
the
length
of
the
fund’s
performance
track
record,
and
how
closely
the
fund’s
strategies
align
with
its
benchmarks
and
peer
groups.
The
Board
concluded
that
the
information
it
considered
with
respect
to
the
fund’s
performance,
as
well
as
the
other
factors
considered
at
the
Meeting,
supported
the
Board’s
approval
of
the
continuation
of
the
Advisory
Contract.
Costs,
Benefits,
Profits,
and
Economies
of
Scale
The
Board
reviewed
detailed
information
regarding
the
revenues
received
by
the
Adviser
under
the
Advisory
Contract
and
other
direct
and
indirect
benefits
that
the
Adviser
(and
its
affiliates)
may
have
realized
from
its
relationship
with
the
fund.
In
considering
soft-dollar
arrangements
pursuant
to
which
research
may
be
received
from
broker-dealers
that
execute
the
fund’s
portfolio
transactions,
the
Board
noted
that
during
2023
the
Adviser
paid
the
costs
of
research
services
for
all
client
accounts
that
it
advises,
including
the
T.
Rowe
Price
funds.
However,
effective
January
1,
2024,
the
Adviser
will
begin
using
brokerage
commissions
in
connection
with
certain
T.
Rowe
Price
funds’
securities
transactions
to
pay
for
research
when
permissible.
The
Board
received
information
on
the
estimated
costs
incurred
and
profits
realized
by
the
Adviser
from
managing
the
T.
Rowe
Price
funds.
The
Board
also
reviewed
estimates
of
the
profits
realized
from
managing
the
fund
in
particular,
and
the
Board
concluded
that
the
Adviser’s
profits
were
reasonable
in
light
of
the
services
provided
to
the
fund.
APPROVAL
OF
INVESTMENT
MANAGEMENT
AGREEMENT
(continued)
T.
ROWE
PRICE
Health
Sciences
Fund
The
Board
also
considered
whether
the
fund
benefits
under
the
fee
levels
set
forth
in
the
Advisory
Contract
or
otherwise
from
any
economies
of
scale
realized
by
the
Adviser.
Under
the
Advisory
Contract,
the
fund
pays
a
fee
to
the
Adviser
for
investment
management
services
composed
of
two
components—a
group
fee
rate
based
on
the
combined
average
net
assets
of
most
of
the
T.
Rowe
Price
funds
(including
the
fund)
that
declines
at
certain
asset
levels
and
an
individual
fund
fee
rate
based
on
the
fund’s
average
daily
net
assets—and
the
fund
pays
its
own
expenses
of
operations.
The
group
fee
rate
decreases
as
total
T.
Rowe
Price
fund
assets
grow,
which
reduces
the
management
fee
rate
for
any
fund
that
has
a
group
fee
component
to
its
management
fee,
and
reflects
that
certain
resources
utilized
to
operate
the
fund
are
shared
with
other
T.
Rowe
Price
funds,
thus
allowing
shareholders
of
those
funds
to
share
potential
economies
of
scale.
The
fund’s
individual
fund
fee
contains
a
breakpoint
that
reduces
the
individual
fund
fee
rate
once
the
fund’s
assets
reach
a
certain
level
and
provides
additional
opportunities
for
sharing
potential
economies
of
scale.
The
fund’s
shareholders
also
benefit
from
potential
economies
of
scale
through
a
decline
in
certain
operating
expenses
as
the
fund
grows
in
size.
However,
the
fund
is
also
subject
to
contractual
expense
limitations
that
require
the
Adviser
to
waive
its
fees
and/or
bear
any
expenses
that
would
otherwise
cause
the
expenses
of
a
share
class
of
the
fund
to
exceed
a
certain
percentage
based
on
the
class’s
net
assets.
The
expense
limitations
mitigate
the
potential
for
an
increase
in
operating
expenses
above
a
certain
level
that
could
impact
shareholders.
In
addition,
the
Board
noted
that
the
fund
potentially
shares
in
indirect
economies
of
scale
through
the
Adviser’s
ongoing
investments
in
its
business
in
support
of
the
T.
Rowe
Price
funds,
including
investments
in
trading
systems,
technology,
and
regulatory
support
enhancements,
and
the
ability
to
possibly
negotiate
lower
fee
arrangements
with
third-party
service
providers.
The
Board
concluded
that
the
advisory
fee
structure
for
the
fund
provides
for
a
reasonable
sharing
of
benefits
from
any
economies
of
scale
with
the
fund’s
investors.
Fees
and
Expenses
The
Board
was
provided
with
information
regarding
industry
trends
in
management
fees
and
expenses.
Among
other
things,
the
Board
reviewed
data
for
peer
groups
that
were
compiled
by
Broadridge,
which
compared:
(i)
contractual
management
fees,
actual
management
fees,
nonmanagement
expenses,
and
total
expenses
of
the
Investor
Class
of
the
fund
with
a
group
of
competitor
funds
selected
by
Broadridge
(Expense
Group)
and
(ii)
actual
management
fees,
nonmanagement
expenses,
and
total
expenses
of
the
Investor
Class
of
the
fund
with
a
broader
set
of
funds
within
the
Lipper
investment
classification
(Expense
Universe).
The
Board
considered
the
fund’s
contractual
management
fee
rate,
actual
management
fee
APPROVAL
OF
INVESTMENT
MANAGEMENT
AGREEMENT
(continued)
T.
ROWE
PRICE
Health
Sciences
Fund
rate
(which
reflects
the
management
fees
actually
received
from
the
fund
by
the
Adviser
after
any
applicable
waivers,
reductions,
or
reimbursements),
operating
expenses,
and
total
expenses
(which
reflect
the
net
total
expense
ratio
of
the
fund
after
any
waivers,
reductions,
or
reimbursements)
in
comparison
with
the
information
for
the
Broadridge
peer
groups.
Broadridge
generally
constructed
the
peer
groups
by
seeking
the
most
comparable
funds
based
on
similar
investment
classifications
and
objectives,
expense
structure,
asset
size,
and
operating
components
and
attributes
and
ranked
funds
into
quintiles,
with
the
first
quintile
representing
the
funds
with
the
lowest
relative
expenses
and
the
fifth
quintile
representing
the
funds
with
the
highest
relative
expenses.
The
information
provided
to
the
Board
indicated
that
the
fund’s
contractual
management
fee
ranked
in
the
second
quintile
(Expense
Group),
the
fund’s
actual
management
fee
rate
ranked
in
the
second
quintile
(Expense
Group
and
Expense
Universe),
and
the
fund’s
total
expenses
ranked
in
the
second
quintile
(Expense
Group
and
Expense
Universe).
The
Board
also
reviewed
the
fee
schedules
for
other
investment
portfolios
with
similar
mandates
that
are
advised
or
subadvised
by
the
Adviser
and
its
affiliates,
including
separately
managed
accounts
for
institutional
and
individual
investors;
subadvised
funds;
and
other
sponsored
investment
portfolios,
including
collective
investment
trusts
and
pooled
vehicles
organized
and
offered
to
investors
outside
the
United
States.
Management
provided
the
Board
with
information
about
the
Adviser’s
responsibilities
and
services
provided
to
subadvisory
and
other
institutional
account
clients,
including
information
about
how
the
requirements
and
economics
of
the
institutional
business
are
fundamentally
different
from
those
of
the
proprietary
mutual
fund
business.
The
Board
considered
information
showing
that
the
Adviser’s
mutual
fund
business
is
generally
more
complex
from
a
business
and
compliance
perspective
than
its
institutional
account
business
and
considered
various
relevant
factors,
such
as
the
broader
scope
of
operations
and
oversight,
more
extensive
shareholder
communication
infrastructure,
greater
asset
flows,
heightened
business
risks,
and
differences
in
applicable
laws
and
regulations
associated
with
the
Adviser’s
proprietary
mutual
fund
business.
In
assessing
the
reasonableness
of
the
fund’s
management
fee
rate,
the
Board
considered
the
differences
in
the
nature
of
the
services
required
for
the
Adviser
to
manage
its
mutual
fund
business
versus
managing
a
discrete
pool
of
assets
as
a
subadviser
to
another
institution’s
mutual
fund
or
for
an
institutional
account
and
that
the
Adviser
generally
performs
significant
additional
services
and
assumes
greater
risk
in
managing
the
fund
and
other
T.
Rowe
Price
funds
than
it
does
for
institutional
account
clients,
including
subadvised
funds.
On
the
basis
of
the
information
provided
and
the
factors
considered,
the
Board
concluded
that
the
fees
paid
by
the
fund
under
the
Advisory
Contract
are
reasonable.
APPROVAL
OF
INVESTMENT
MANAGEMENT
AGREEMENT
(continued)
T.
ROWE
PRICE
Health
Sciences
Fund
Approval
of
the
Advisory
Contract
As
noted,
the
Board
approved
the
continuation
of
the
Advisory
Contract.
No
single
factor
was
considered
in
isolation
or
to
be
determinative
to
the
decision.
Rather,
the
Board
concluded,
in
light
of
a
weighting
and
balancing
of
all
factors
considered,
that
it
was
in
the
best
interests
of
the
fund
and
its
shareholders
for
the
Board
to
approve
the
continuation
of
the
Advisory
Contract
(including
the
fees
to
be
charged
for
services
thereunder).
APPROVAL
OF
INVESTMENT
MANAGEMENT
AGREEMENT
(continued)
100
East
Pratt
Street
Baltimore,
MD
21202
T.
Rowe
Price
Investment
Services,
Inc.
Call
1-800-225-5132
to
request
a
prospectus
or
summary
prospectus;
each
includes
investment
objectives,
risks,
fees,
expenses,
and
other
information
that
you
should
read
and
consider
carefully
before
investing.
F114-051
8/24
Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies.
Not applicable.
Item 9. Proxy Disclosures for Open-End Management Investment Companies.
Not applicable.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.
Remuneration paid to Directors is included in Item 7 of this Form N-CSR and/or the Statement of Additional Information.
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.
If applicable, see Item 7.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 13. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 15. Submission of Matters to a Vote of Security Holders.
There has been no change to the procedures by which shareholders may recommend nominees to the registrant’s board of directors.
Item 16. Controls and Procedures.
(a) The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of this filing and have concluded that the registrant’s disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized, and reported timely.
(b) The registrant’s principal executive officer and principal financial officer are aware of no change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 18. Recovery of Erroneously Awarded Compensation.
Not applicable.
Item 19. Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | | | |
| T. Rowe Price Health Sciences Fund |
| | |
| By | | /s/ David Oestreicher | | |
| | David Oestreicher | | |
| | Principal Executive Officer | | |
| | |
| Date | | August 20, 2024 | | |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | | | |
| By | | /s/ David Oestreicher | | |
| | David Oestreicher | | |
| | Principal Executive Officer | | |
| | |
| Date | | August 20, 2024 | | |
| | | | |
| By | | /s/ Alan S. Dupski | | |
| | Alan S. Dupski | | |
| | Principal Financial Officer | | |
| | |
| Date | | August 20, 2024 | | |
