NPORT-EX 2 NPORT_8309152370197138.htm

 

TEKLA HEALTHCARE INVESTORS

SCHEDULE OF INVESTMENTS

DECEMBER 31, 2020

 

SHARES      VALUE 
    CONVERTIBLE PREFERRED AND WARRANTS (Restricted)(a) (b) - 4.8% of Net Assets    
    Biotechnology – 4.1%    
 326,667   Amphivena Therapeutics, Inc. Series B, 6.00%      $4,900,001 
 525,972   Amphivena Therapeutics, Inc. Series C, 6.00%     1,887,315 
 1,979,443   Arkuda Therapeutics, Inc. Series A, 6.00%  (c)   4,709,095 
 968,076   Decipher Biosciences, Inc. Series II, 8.00%     4,520,915 
 962,412   Decipher Biosciences, Inc. Series III, 8.00%     4,494,464 
 74,428   Decipher Biosciences, Inc. Series IV, 8.00%     347,579 
 235,627   Dynacure Series C  (d)   6,108,256 
 1,437,500   Hotspot Therapeutics, Inc. Series B, 6.00%     3,450,000 
 7,187,500   Invetx, Inc. Series A  (c)   3,450,000 
 277,444   Oculis SA, Series B2, 6.00%, (d)   2,609,282 
 93,333   Priothera Ltd. Series A, 6.00%  (c)   1,140,203 
 2,692,309   Rainier Therapeutics, Inc. Series A, 6.00%     269 
 1,559,715   Rainier Therapeutics, Inc. Series B, 6.00%     156 
 4,963,028   Rallybio Holdings, LLC Series B     6,900,098 
 694,564   Vectivbio Holding AG Series A1 , 6.00%     679,284 
 767,932   Vectivbio Holding AG Series A2, 6.00%     883,890 
         46,080,807 
     Health Care Equipment & Supplies – 0.1%     
 362,887   IO Light Holdings, Inc. Series A2, 8.00%     1,397,369 
     Pharmaceuticals – 0.6%    
 6,346,328   Curasen Therapeutics, Inc. Series A     7,000,000 
           
     TOTAL CONVERTIBLE PREFERRED AND WARRANTS
(Cost $52,895,641)		   54,478,176 

 

PRINCIPAL
AMOUNT		         
    CONVERTIBLE NOTES (Restricted) (b) - 0.1% of Net Assets     
     Biotechnology – 0.1%     
$1,522,783   Rainier Therapeutics, Inc. Promissory Notes, 8.00% due 03/31/21     680,926 
     TOTAL CONVERTIBLE NOTES
(Cost $1,522,801)		   680,926 

 

SHARES         
    COMMON STOCKS AND WARRANTS - 93.1% of Net Assets     
     Biotechnology – 58.5%     
 66,802   AbbVie, Inc.              7,157,834 
 119,074   AC Immune SA (a) (d)   615,613 
 220,013   ACADIA Pharmaceuticals, Inc. (a)   11,761,895 
 183,707   Affimed N.V. (a) (d)   1,069,175 
 236,037   Alexion Pharmaceuticals, Inc. (a)   36,878,421 
 109,838   Alkermes plc (a)   2,191,268 
 87,795   Allakos, Inc. (a)   12,291,300 
 32,954   Allogene Therapeutics, Inc. (a)   831,759 

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

TEKLA HEALTHCARE INVESTORS

SCHEDULE OF INVESTMENTS

DECEMBER 31, 2020

(Unaudited,continued)

 

SHARES      VALUE 
    Biotechnology – continued    
 106,462   Alnylam Pharmaceuticals, Inc. (a)  $13,836,866 
 557,618   Amarin Corp. plc (a) (e)   2,726,752 
 200,046   Amgen, Inc.   45,994,576 
 256,431   Amicus Therapeutics, Inc. (a)   5,920,992 
 113,906   Apellis Pharmaceuticals, Inc. (a)   6,515,423 
 167,685   Arena Pharmaceuticals, Inc. (a)   12,883,239 
 29,426   Argenx SE (a) (e)   8,653,892 
 80,720   Arrowhead Pharmaceuticals, Inc. (a)   6,193,646 
 61,747   Ascendis Pharma A/S (a) (e)   10,298,165 
 117,638   Atreca, Inc. (a)   1,899,854 
 28,280   BeiGene Ltd. (a) (e)   7,307,269 
 129,093   Biogen, Inc. (a)   31,609,712 
 194,727   BioMarin Pharmaceutical, Inc. (a)   17,075,611 
 77,169   Blueprint Medicines Corp. (a)   8,654,503 
 90,668   ChemoCentryx, Inc. (a)   5,614,163 
 368,960   Cogent Biosciences, Inc. (a)   4,143,421 
 259,171   Corbus Pharmaceuticals Holdings, Inc. (a)   323,964 
 52,574   CRISPR Therapeutics AG (a) (d)   8,049,605 
 55,466   CymaBay Therapeutics, Inc. (a)   318,375 
 42,334   Deciphera Pharmaceuticals, Inc. (a)   2,416,001 
 49,666   Denali Therapeutics, Inc. (a)   4,160,024 
 46,619   Dicerna Pharmaceuticals, Inc. (a)   1,027,017 
 13,882   Eidos Therapeutics, Inc. (a)   1,826,594 
 26,244   Esperion Therapeutics, Inc. (a)   682,344 
 42,659   Exact Sciences Corp. (a)   5,651,891 
 556,413   Exelixis, Inc. (a)   11,167,209 
 85,196   Fate Therapeutics, Inc. (a)   7,746,872 
 126,349   FibroGen, Inc. (a)   4,686,284 
 96,639   Forma Therapeutics Holdings, Inc. (a)   3,372,701 
 343,809   Galera Therapeutics, Inc. (a)   3,517,166 
 228,709   Genmab A/S (a) (e)   9,299,308 
 722,509   Gilead Sciences, Inc.   42,093,374 
 286,289   Gritstone Oncology, Inc. (a)   1,127,979 
 73,053   Harpoon Therapeutics, Inc. (a)   1,213,410 
 39,444   Incyte Corp. (a)   3,430,839 
 61,149   Insmed, Inc. (a)   2,035,650 
 33,437   Intercept Pharmaceuticals, Inc. (a)   825,894 
 118,058   Ionis Pharmaceuticals, Inc. (a)   6,674,999 
 170,056   Iovance Biotherapeutics, Inc. (a)   7,890,598 
 490,145   Kadmon Holdings, Inc. (a)   2,034,102 
 56,773   Karuna Therapeutics, Inc. (a)   5,767,569 
 65,743   Karyopharm Therapeutics Inc. (a)   1,017,702 
 178,314   Kura Oncology, Inc. (a)   5,823,735 
 78,290   Magenta Therapeutics, Inc. (a)   613,794 
 148,958   Moderna, Inc. (a)   15,561,642 
 103,609   Molecular Templates, Inc. (a)   972,888 
 108,120   Nektar Therapeutics (a)   1,838,040 
 197,312   Neurocrine Biosciences, Inc. (a)   18,912,355 

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

TEKLA HEALTHCARE INVESTORS

SCHEDULE OF INVESTMENTS

DECEMBER 31, 2020

(Unaudited,continued)

 

SHARES      VALUE 
    Biotechnology – continued    
 103,950   NexGel, Inc.(a) (b)   322 
 44,553   Novavax, Inc. (a)   4,968,105 
 316,238   NuCana plc (a) (e)   1,419,909 
 260,913   Ovid Therapeutics, Inc. (a)   602,709 
 848,209   Pieris Pharmaceuticals, Inc. (a)   2,120,522 
 54,790   Pieris Pharmaceuticals, Inc., Series A Warrants (expiration 06/08/21, exercise price $3.00) (a) (b)   17,533 
 27,394   Pieris Pharmaceuticals, Inc., Series B Warrants (expiration 06/08/21, exercise price $2.00) (a) (b)   18,628 
 51,406   Praxis Precision Medicines, Inc. (a)   2,828,358 
 94,784   Regeneron Pharmaceuticals, Inc. (a)   45,791,098 
 100,790   Sage Therapeutics, Inc. (a)   8,719,343 
 141,601   Sarepta Therapeutics, Inc. (a)   24,141,554 
 78,602   Scholar Rock Holding Corp. (a)   3,814,555 
 189,338   Seagen, Inc. (a)   33,160,657 
 489,532   Sutro Biopharma, Inc. (a)   10,627,740 
 91,345   TG Therapeutics, Inc. (a)   4,751,767 
 569,209   Trillium Therapeutics, Inc. (a) (d)   8,373,064 
 67,710   Ultragenyx Pharmaceutical, Inc. (a)   9,373,095 
 82,238   uniQure N.V. (a) (d)   2,971,259 
 43,002   United Therapeutics Corp. (a)   6,527,274 
 875,000   Vectivbio Holding AG (Restricted) (a) (b)   691,250 
 157,078   Vertex Pharmaceuticals, Inc. (a)   37,123,815 
 74,157   Xencor, Inc. (a)   3,235,470 
 52,706   Y-mAbs Therapeutics, Inc. (a)   2,609,474 
 26,021   Zai Lab Ltd. (a) (e)   3,521,682 
 27,926   Zymeworks, Inc. (a) (d)   1,319,783 
         662,934,240 
     Drug Discovery Technologies (a)– 0.1%     
 117,030   ImmunoGen, Inc.   754,843 
     Health Care Equipment & Supplies  – 8.1%     
 47,543   Abbott Laboratories   5,205,483 
 2,616   ABIOMED, Inc. (a)   848,107 
 58,077   Axonics Modulation Technologies, Inc. (a)   2,899,204 
 13,209   Becton, Dickinson and Co.   3,305,156 
 160,000   Cercacor Laboratories, Inc. (Restricted) (a) (b)   2,110,407 
 65,628   DENTSPLY Sirona, Inc.   3,436,282 
 23,210   DexCom, Inc. (a)   8,581,201 
 24,669   Edwards Lifesciences Corp. (a)   2,250,553 
 81,803   Guardant Health, Inc. (a)   10,542,771 
 10,945   Hologic, Inc. (a)   797,124 
 6,736   IDEXX Laboratories, Inc. (a)   3,367,124 
 11,476   Inogen, Inc. (a)   512,748 
 95,213   Medtronic plc   11,153,251 
 54,132   NovoCure Ltd. (a)   9,367,001 
 44,687   STERIS plc   8,469,974 

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

TEKLA HEALTHCARE INVESTORS

SCHEDULE OF INVESTMENTS

DECEMBER 31, 2020

(Unaudited, continued)

 

SHARES     VALUE 
   Health Care Equipment & Supplies – continued     
34,067  Stryker Corp.  $8,347,778 
69,687  Zimmer Biomet Holdings, Inc.   10,738,070 
       91,932,234 
   Health Care Providers & Services – 2.7%     
17,832  Addus HomeCare Corp. (a)   2,087,949 
4,406  Amedisys, Inc. (a)   1,292,412 
262  Anthem, Inc.   84,126 
3,527  Charles River Laboratories International, Inc. (a)   881,256 
19,058  Cigna Corp.   3,967,494 
34,995  HCA Healthcare, Inc.   5,755,278 
11,647  Humana, Inc.   4,778,415 
222,222  InnovaCare, Inc. Escrow Shares (Restricted) (a) (b)   158,244 
13,049  Medpace Holdings, Inc. (a)   1,816,421 
3,167  Molina Healthcare, Inc. (a)   673,557 
107,595  Owens & Minor, Inc   2,910,445 
16,807  UnitedHealth Group, Inc.   5,893,879 
       30,299,476 
   Health Care Technology (a)– 0.4%     
22,814  Teladoc Health, Inc.   4,561,887 
   Healthcare Services (a)– 1.0%     
12,556  Laboratory Corporation of America Holdings   2,555,774 
132,764  Syneos Health, Inc.   9,045,211 
       11,600,985 
   Life Sciences Tools & Services – 8.9%     
180,760  Adaptive Biotechnologies Corp. (a)   10,688,339 
27,569  Bio-Techne Corp.   8,754,536 
137,115  Illumina, Inc. (a)   50,732,550 
10,514  PerkinElmer, Inc.   1,508,759 
97,365  PRA Health Sciences, Inc. (a)   12,213,466 
16,927  Thermo Fisher Scientific, Inc.   7,884,258 
37,005  Waters Corp. (a)   9,155,777 
       100,937,685 
   Medical Devices and Diagnostics – 1.7%     
116  Align Technology, Inc. (a)   61,988 
24,181  Danaher Corp.   5,371,567 
1,134  Intuitive Surgical, Inc. (a)   927,725 
43,976  Quest Diagnostics, Inc.   5,240,620 
34,946  ResMed, Inc.   7,428,122 
       19,030,022 
   Pharmaceuticals – 11.5%     
46,285  Aerie Pharmaceuticals, Inc. (a)   625,310 
38,840  Arvinas, Inc. (a)   3,298,681 
204,125  Aurinia Pharmaceuticals, Inc. (a) (d)   2,823,049 
21,807  Axsome Therapeutics, Inc. (a)   1,776,616 

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

TEKLA HEALTHCARE INVESTORS

SCHEDULE OF INVESTMENTS

DECEMBER 31, 2020

(Unaudited,continued)

 

SHARES     VALUE 
   Pharmaceuticals – continued     
232,968  Bristol-Myers Squibb Co.   14,451,005 
798,651  Bristol-Myers Squibb Co., CVR 03/31/21 (a) (f)   551,149 
39,129  Eli Lilly & Co.   6,606,540 
465,507  Endo International plc (a) (d)   3,342,340 
90,598  Heron Therapeutics, Inc. (a)   1,917,507 
245,584  Horizon Therapeutics plc (a)   17,964,470 
247,296  Intra-Cellular Therapies, Inc. (a)   7,864,013 
18,800  IQVIA Holdings, Inc. (a)   3,368,396 
42,253  Jazz Pharmaceuticals plc (a) (d)   6,973,858 
36,231  Johnson & Johnson   5,702,035 
9,280  Madrigal Pharmaceuticals, Inc. (a)   1,031,658 
32,830  McKesson Corp.   5,709,794 
37,175  Merck & Co., Inc.   3,040,915 
175,816  Milestone Pharmaceuticals, Inc. (a) (d)   1,177,967 
55,093  Mirati Therapeutics, Inc. (a)   12,100,626 
7,050  Perrigo Co. plc   315,276 
25,779  Reata Pharmaceuticals, Inc. (a)   3,186,800 
146,952  Revance Therapeutics, Inc. (a)   4,164,620 
79,790  Spectrum Pharmaceuticals, Inc. (a)   272,084 
28,747  Tetraphase Pharmaceuticals, Inc. CVR (a) (f)   5,749 
291,666  Teva Pharmaceutical Industries Ltd. (a) (e)   2,814,577 
314,655  Theravance Biopharma, Inc. (a) (d)   5,591,419 
78,303  Turning Point Therapeutics, Inc. (a)   9,541,221 
379,103  VYNE Therapeutics, Inc. (a)   598,983 
12,377  Zoetis, Inc.   2,048,393 
51,696  Zogenix, Inc. (a)   1,033,403 
       129,898,454 
   Special Purpose Acquisition Company – 0.2%     
171,597  Helix Acquisition Corp. (a)   1,858,396 
  

TOTAL COMMON STOCKS AND WARRANTS 

(Cost $750,618,943)

   1,053,808,222 
         
PRINCIPAL
AMOUNT		        
   SHORT-TERM INVESTMENT – 0.9% of Net Assets     
$10,642,000  Repurchase Agreement, Fixed Income Clearing Corp., repurchase value $10,642,000, 0.00%, dated 12/31/20, due 01/04/21 (collateralized by U.S. Treasury Note 2.38%, due 03/15/22, market value $10,854,935)    10,642,000 
  

TOTAL SHORT-TERM INVESTMENT

(Cost $10,642,000)

   10,642,000 

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

TEKLA HEALTHCARE INVESTORS

SCHEDULE OF INVESTMENTS

DECEMBER 31, 2020

(Unaudited,continued)

 

  

TOTAL INVESTMENTS BEFORE MILESTONE INTEREST - 98.9%

(Cost $815,679,385)

  $1,119,609,324 
         
INTERESTS        
   MILESTONE INTERESTS (Restricted)(a) (b) - 1.3% of Net Assets     
   Biotechnology – 0.3%     
                           1  Therachon Milestone Interest   3,525,204 
         
        Health Care Equipment & Supplies – 0.0%     
1  Therox Milestone Interest   2,590 
         
   Pharmaceuticals – 1.0%     
1  Afferent Milestone Interest   654,677 
1  Ethismos Research Milestone Interest   0 
1  Impact Biomedicines Milestone Interest   4,981,499 
1  Neurovance Milestone Interest   5,718,034 
       11,354,210 
  

TOTAL MILESTONE INTERESTS

(Cost $8,580,928)

   14,882,004 
         
NUMBER OF
CONTRACTS
(100 SHARES
EACH)/NOTIONAL
AMOUNT ($)		        
   CALL OPTION CONTRACTS PURCHASED - 0.0% of Net Assets     
190/6,650,000  Biogen, Inc. Mar21 350 Call   100,700 
  

TOTAL CALL OPTION CONTRACTS PURCHASED

(Premiums paid $378,488)

   100,700 
  

TOTAL INVESTMENTS - 100.2%

(Cost $824,638,801)

   1,134,592,028 
   OTHER LIABILITIES IN EXCESS OF ASSETS - (0.2)%   (2,525,010)
   NET ASSETS - 100%  $1,132,067,018 

 

 

(a)   Non-income producing security.
(b)   Security fair valued using significant unobservable inputs. See Investment Valuation and Fair Value Measurements.
(c)   Affiliated issuers in which the Fund holds 5% or more of the voting securities (total market value of $9,299,298).
(d)   Foreign security.
(e)   American Depository Receipt
(f)   Contingent Value Right

 

The accompanying notes are an integral part of this Schedule of Investments.

 

 

 

 

Tekla Healthcare Investors

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

(Unaudited)

 

Investment Valuation

 

Shares of publicly traded companies listed on national securities exchanges or trading in the over-the-counter market are typically valued at the last sale price, as of the close of trading, generally 4 p.m., Eastern Time. The Board of Trustees of the Fund (the Trustees) has established and approved fair valuation policies and procedures with respect to securities for which quoted prices may not be available or which do not reflect fair value. Convertible, corporate and government bonds are valued using a third-party pricing service. Convertible bonds are valued using this pricing service only on days when there is no sale reported. Restricted securities of companies that are publicly traded are typically valued based on the closing market quote on the valuation date adjusted for the impact of the restriction as determined in good faith by the Tekla Capital Management LLC (the Adviser) also using fair valuation policies and procedures approved by the Trustees described below. Non-exchange traded warrants of publicly traded companies are generally valued using the Black-Scholes model, which incorporates both observable and unobservable inputs. Short-term investments with a maturity of 60 days or less are generally valued at amortized cost, which approximates fair value.

 

Convertible preferred shares, warrants or convertible note interests in private companies, milestone interests, and other restricted securities, as well as shares of publicly traded companies for which market quotations are not readily available, such as stocks for which trading has been halted or for which there are no current day sales, or which do not reflect fair value, are typically valued in good faith, based upon the recommendations made by the Adviser pursuant to fair valuation policies and procedures approved by the Trustees.

 

The Adviser has a Valuation Sub-Committee comprised of senior management which reports to the Valuation Committee of the Board at least quarterly. Each fair value determination is based on a consideration of relevant factors, including both observable and unobservable inputs. Observable and unobservable inputs the Adviser considers may include (i) the existence of any contractual restrictions on the disposition of securities; (ii) information obtained from the company, which may include an analysis of the company’s financial statements, products, intended markets or technologies; (iii) the price of the same or similar security negotiated at arm’s length in an issuer’s completed subsequent round of financing; (iv) the price and extent of public trading in similar securities of the issuer or of comparable companies; or (v) a probability and time value adjusted analysis of contractual terms. Where available and appropriate, multiple valuation methodologies are applied to confirm fair value. Significant unobservable inputs identified by the Adviser are often used in the fair value determination. A significant change in any of these inputs may result in a significant change in the fair value measurement. Due to the uncertainty inherent in the valuation process, such estimates of fair value may differ significantly from the values that would have been used had a ready market for the investments existed, and differences could be material. Additionally, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different from the valuations used at the date of this schedule of investments.

 

Federal Income Tax Cost

 

At December 31, 2020, the cost of securities for Federal income tax purposes was $824,638,914. The net unrealized gain on securities held by the Fund was $309,953,114, including gross unrealized gain of $366,622,046 and gross unrealized loss of $56,668,932.

 

 

Other Transactions with Affiliates

 

An affiliate company is a company in which the Fund holds 5% or more of the voting securities. Transactions involving such companies during the period ended December 31, 2020 were as follows:

 

 

 

 

Tekla Healthcare Investors

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

(Unaudited, continued)

 

Affiliated Companies  Beginning
Value as of
September 30, 2020		   Purchases at
Cost		   Proceeds
from Sales		   Net Realized
Gain/(Loss)
on sale of
Affiliated
Companies		   Change in
Unrealized
Appreciation/
Depreciation		   Ending Value
as of
December 31, 2020		 
Arkuda Therapeutics,Inc.  $4,709,095   $-   $-   $-   $-   $4,709,095 
Invetx, Inc.  $3,450,000   $-   $-   $-   $-   $3,450,000 
Priothera Ltd.  $0   $1,098,203   $-   $-   $42,000   $1,140,203 
   $8,159,095   $1,098,203   $-   $-   $42,000   $9,299,298 

 

Affiliated Companies  Shares as of
December 31, 2020		   Principal
Amount as of December 31, 2020		   Dividend/ Interest
Income from
Affiliated
Companies		   Capital Gain
Distributions
from Affiliated
Companies		 
Arkuda Therapeutics, Inc.   1,979,443   $-   $-   $- 
Invetx, Inc.   7,187,500   $-   $-   $- 
Priothera Ltd.   93,333   $-   $-   $- 
    9,260,276   $-   $-   $- 

 

Fair Value Measurements

 

The Fund uses a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels. Level 1 includes quoted prices in active markets for identical investments. Level 2 includes prices determined using other significant observable inputs (including quoted prices for similar investments, interest rates, credit risk, etc.). The independent pricing vendor may value bank loans and debt securities at an evaluated bid price by employing methodologies that utilize actual market transactions, broker-supplied valuations, and/or other methodologies designed to identify the market value for such securities and such securities are considered Level 2 in the fair value hierarchy. Level 3 includes prices determined using significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments). These inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

 

Assets at Value  Level 1   Level 2   Level 3   Total 
Convertible Preferred And Warrants                    
Biotechnology  $-   $-   $46,080,807   $46,080,807 
Health Care Equipment & Supplies    -    -    1,397,369    1,397,369 
Pharmaceuticals   -    -    7,000,000    7,000,000 
Convertible Notes                    
Biotechnology   -    -    680,926    680,926 
Common Stocks And Warrants                    
Biotechnology    662,206,507    -    727,733    662,934,240 
Drug Discovery Technologies   754,843    -    -    754,843 
Health Care Equipment & Supplies    89,821,827    -    2,110,407    91,932,234 
Health Care Providers & Services   30,141,232    -    158,244    30,299,476 
Health Care Technology   4,561,887    -    -    4,561,887 
Healthcare Services   11,600,985    -    -    11,600,985 
Life Sciences Tools & Services   100,937,685    -    -    100,937,685 
Medical Devices And Diagnostics   19,030,022    -    -    19,030,022 
Pharmaceuticals   129,892,705    5,749    -    129,898,454 
Special Purpose Acquisition Company   1,858,396    -    -    1,858,396 
Short-term Investment   -    10,642,000    -    10,642,000 
Milestone Interests                    
Biotechnology   -    -    3,525,204    3,525,204 
Health Care Equipment & Supplies    -    -    2,590    2,590 
Pharmaceuticals   -    -    11,354,210    11,354,210 
Other Assets   -    -    213,785    213,785 
Total  $1,050,806,089   $10,647,749   $73,251,275   $1,134,705,113 
Assets                    
 Options Contracts Purchased  $100,700   $-   $-   $100,700 
Total  $100,700   $-   $-   $100,700 

 

 

 

 

Tekla Healthcare Investors

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

(Unaudited, continued)

 

The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.

 

   Balance as of
September 30,
2020		   Net realized gain
(loss) and change in
unrealized
appreciation
(depreciation)		   Cost of
purchases and
conversions		   Proceeds from
sales and
conversions		   Net
Transfers in
(out of) Level 3		   Balance as of
December 31,
2020		 
Convertible Preferred and Warrants                              
     Biotechnology  $37,238,134   $5,390,790   $3,451,883   $0   $0   $46,080,807 
     Health Care Equipment & Supplies   1,397,369    0    0    0    0    1,397,369 
     Pharmaceuticals   7,000,000    0    0    0    0    7,000,000 
Convertible Notes                              
     Biotechnology   688,948    (8,022)   0    0    0    680,926 
Common Stock and Warrants                              
     Biotechnology   716,501    9,705    1,527    0    0    727,733 
     Health Care Equipment & Supplies   1,639,061    471,346    0    0    0    2,110,407 
     Health Care Providers & Services   158,200    44    0    0    0    158,244 
Milestone Interests                              
     Biotechnology   3,524,221    983    0    0    0    3,525,204 
     Health Care Equipment & Supplies   5,110    (2,520)   0    0    0    2,590 
     Pharmaceuticals   11,347,619    6,591    0    0    0    11,354,210 
     Other Assets   213,710    0    75    0    0    213,785 
   $63,928,873   $5,868,917   $3,453,485   $0   $0   $73,251,275 

 

Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2020 $ 5,868,917 

 

 

 

 

Tekla Healthcare Investors

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

(Unaudited, continued)

 

The following is a quantitative disclosure about significant unobservable inputs used in the determination of the fair value of Level 3 assets.

 

    Fair Value at
December
31,2020		   Valuation
Technique		   Unobservable
Input		   Range
(Weighted Average)		  
Common Stock and Warrants $ 2,146,568   Income approach, Black-Scholes   Discount for lack of marketability   20.00% (20.00%)  
  $ 158,244   Probability adjusted value   Probability of events Timing of events   20.00% (20.00%)  
1.00-3.00 (2.00) years		  
  $ 691,572   Market approach     (a)     N/A    
Convertible Preferred and Warrants $ 172,629   Probability adjusted value   Probability of events Timing of events  

20.00% (20.00%)
0.50 (0.50) years

  
  $ 22,330,858   Market approach   (a)   N/A  
  $ 31,974,689   Recent transaction   (b)   N/A  
Convertible Notes $ 680,926     Probability adjusted value   Probability of events Timing of events  

0.00%-99.00% (35.30%)
0.25-14.50 (2.46) years

  
Milestone Interest $ 14,882,004     Probability adjusted value   Probability of events Timing of events   10.00%-100.00% (58.24%)
0.25-16.25 (3.62) years		  
  $ 0   Market approach     (a)     N/A    
Other Assets $ 213,785     Probability adjusted value   Probability of events Timing of events   20.00%-90.00% (20.41%)
0.25-6.25 (0.28) years		  
  $ 73,251,275            

 

(a)      There is no quantitative information to provide as these methods of measure are investment specific.

(b)     The valuation technique used as a basis to approximate fair value of these investments is based upon subsequent financing rounds.

 

Private Companies and Other Restricted Securities

The following table details the acquisition date, cost, carrying value per unit, and value of the Fund’s private companies and other restricted securities at December 31, 2020. The Fund on its own does not have the right to demand that such securities be registered.

 

The Fund may invest in private companies and other restricted securities if these securities would currently comprise 40% or less of net assets. The value of these securities represented 6.4% of the Fund’s net assets at December 31, 2020.

 

At December 31, 2020, the Fund had a commitment of $8,051,556 relating to additional investments in three private companies.

 

 

 

 

Tekla Healthcare Investors

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

(Unaudited, continued)

 

Security (#)  Acquisition
Date		   ` Cost   Carrying Value
per Unit		   Value 
Afferent Milestone Interest   07/27/16     $377,701    $654,677.00   $654,677 
Amphivena Therapeutics, Inc.                      
Series B Cvt. Pfd   07/17/17      4,902,852    15.00    4,900,001 
Series C Cvt. Pfd   12/10/18      1,887,315    3.59    1,887,315 
Arkuda Therapeutics, Inc.                      
Series A Cvt. Pfd   05/16/19,04/02/20      4,709,095    2.38    4,709,095 
Cercacor Laboratories, Inc. Common   03/31/98 †    0    13.19    2,110,407 
Curasen Therapeutics, Inc. Series A Cvt. Pfd   09/18/18,01/07/20      7,000,000    1.10    7,000,000 
Decipher Biosciences, Inc.                      
Series II Cvt. Pfd   03/29/19      4,485,560    4.67    4,520,915 
Series III Cvt. Pfd   03/29/19      1,014,876    4.67    4,494,464 
Series IV Cvt. Pfd   05/14/20      161,588    4.67    347,579 
Dynacure Series C Cvt. Pfd   04/21/20      5,609,753    25.92    6,108,256 
Ethismos Research Milestone Interest   10/31/17      0    0.00    0 
Hotspot Therapeutics, Inc. Series B Cvt. Pfd   04/22/20      3,450,000    2.40    3,450,000 
Impact Biomedicines Milestone Interest   07/20/10      0    4,981,499.00    4,981,499 
InnovaCare, Inc. Escrow Shares Common   12/21/12 †    143,509    0.71    158,244 
Invetx, Inc.Series A Cvt. Pfd   08/06/20      3,450,000    0.48    3,450,000 
IO Light Holdings, Inc. Series A2 Cvt. Pfd   04/30/20 †    1,394,759    3.85    1,397,369 
Neurovance Milestone Interest   03/30/17 †    4,917,881    5,718,034.00    5,718,034 
Oculis SA, Series B2 Cvt. Pfd   01/16/19      2,335,688    9.40    2,609,282 
Priothera Ltd. Series A Cvt. Pfd   07/10/20      1,098,203    12.22    1,140,203 
Rainier Therapeutics, Inc.                      
Series A Cvt. Pfd   01/19/16,10/24/16      1,751,520    0.00††   269 
Series B Cvt. Pfd   03/03/17      1,166,879    0.00††   156 
Cvt. Promissory Notes   01/30/19      442,574    0.00    0 
Cvt. Promissory Notes   03/28/19      442,575    0.00    0 
Cvt. Promissory Notes   07/16/19      510,150    1.07    544,771 
Cvt. Promissory Notes   10/07/19      127,502    1.07    136,155 
Rallybio Holdings, LLC Series B Cvt. Pfd   03/27/20      6,911,894    1.39    6,900,098 
Therachon Milestone Interest   07/01/19      3,277,735    3,525,204.00    3,525,204 
Therox Milestone Interest   06/18/19      7,611    2,590.00    2,590 
Vectivbio Holding AG                      
Common   07/01/19 †    684,247    0.79    691,250 
Series A1 Cvt. Pfd   09/02/20      680,496    0.98    679,284 
Series A2 Cvt. Pfd   09/02/20      885,163    1.15    883,890 
          $63,827,126        $73,001,007 

 

(#) See Schedule of Investments and corresponding footnotes for more information on each issuer.
† Interest received as part of a corporate action for a previously owned security.
†† Carrying value per unit is greater than $0.00 but less than $0.01.