Tekla Healthcare Investors
SCHEDULE OF INVESTMENTS
December 31, 2021
(Unaudited)
| SHARES | CONVERTIBLE PREFERRED (Restricted)(a) (b) – 5.7% of Net Assets | VALUE | ||||||
| Biotechnology – 3.6% | ||||||||
| 326,667 | Amphivena Therapeutics, Inc. Series B, 6.00% (c) | $ | 33 | |||||
| 525,972 | Amphivena Therapeutics, Inc. Series C, 6.00% (c) | 53 | ||||||
| 82,076 | Arbor Biotechnologies, Series B, 8.00% | 1,359,999 | ||||||
| 2,353,932 | Arkuda Therapeutics, Inc. Series A, 6.00% (c) | 2,800,002 | ||||||
| 602,572 | Dynacure Series C (d) | 5,692,523 | ||||||
| 2,875,000 | Hotspot Therapeutics, Inc. Series B, 6.00% | 9,317,587 | ||||||
| 632,394 | HotSpot Therapeutics, Inc. Series C, 6.00% | 2,049,526 | ||||||
| 1,020,000 | ImmuneID, Inc. Series A, 8.00% | 2,040,000 | ||||||
| 7,187,500 | Invetx, Inc. Series A (c) | 3,450,000 | ||||||
| 277,444 | Oculis SA, Series B2, 6.00% (d) | 2,952,004 | ||||||
| 75,367 | Oculis SA, Series C, 6.00% (d) | 801,905 | ||||||
| 528,339 | Parthenon Therapeutics, Inc. Series A | 2,092,307 | ||||||
| 346,666 | Priothera Ltd. Series A, 6.00% (c) | 3,946,791 | ||||||
| 981,241 | Quell Therapeutics, Series B (d) | 1,854,545 | ||||||
| 147,295 | ReCode Therapeutics, Series B, 5.00% | 1,360,004 | ||||||
| 39,717,279 | ||||||||
| Health Care Equipment & Supplies – 0.1% | ||||||||
| 421,634 | IO Light Holdings, Inc. Series A2 | 1,423,015 | ||||||
| Pharmaceuticals – 2.0% | ||||||||
| 616,645 | Aristea Therapeutics, Inc. Series B, 8.00% | 3,399,996 | ||||||
| 1,295,238 | Biotheryx, Inc. Series E, 8.00% | 6,800,000 | ||||||
| 17,547,740 | Curasen Therapeutics, Inc. Series A (c) | 8,414,141 | ||||||
| 2,773,472 | HiberCell, Inc. Series B | 3,399,999 | ||||||
| 22,014,136 | ||||||||
| TOTAL
CONVERTIBLE PREFERRED (Cost $73,834,872) | 63,154,430 | |||||||
| PRINCIPAL AMOUNT | CONVERTIBLE NOTES (Restricted)(a)(b)(c) – 0.0% | |||||||
| Biotechnology – 0.0% | ||||||||
| $ | 303,323 | Amphivena Therapeutics, Inc., 8.00% | 0 | |||||
| TOTAL
CONVERTIBLE NOTES (Cost $303,323) | 0 | |||||||
| SHARES | COMMON STOCKS AND WARRANTS - 91.4% of Net Assets | |||||||
| Biotechnology – 52.8% | ||||||||
| 66,802 | AbbVie, Inc. | 9,044,991 | ||||||
| 367,414 | Affimed N.V. (a)(d) | 2,028,125 | ||||||
| 90,398 | Alkermes plc (a) | 2,102,657 | ||||||
| 123,013 | Alnylam Pharmaceuticals, Inc. (a) | 20,860,545 | ||||||
| 323,595 | Amgen, Inc. | 72,799,167 | ||||||
| 129,695 | Apellis Pharmaceuticals, Inc. (a) | 6,131,980 | ||||||
| 86,869 | Arcutis Biotherapeutics, Inc. (a) | 1,801,663 | ||||||
| 106,915 | Arena Pharmaceuticals, Inc. (a) | 9,936,680 | ||||||
| 21,958 | Argenx SE ADR (a) | 7,689,472 | ||||||
The accompanying notes are an integral part of this Schedule of Investments.
Tekla Healthcare Investors
SCHEDULE OF INVESTMENTS
December 31, 2021
(Unaudited, continued)
| SHARES | Biotechnology – continued | VALUE | ||||||
| 87,937 | Arrowhead Pharmaceuticals, Inc. (a) | $ | 5,830,223 | |||||
| 43,409 | Ascendis Pharma A/S ADR (a) | 5,839,813 | ||||||
| 37,582 | BeiGene Ltd. ADR (a) | 10,182,091 | ||||||
| 66,310 | Biogen, Inc. (a) | 15,909,095 | ||||||
| 28,433 | Biohaven Pharmaceutical Holding Co., Ltd. (a) | 3,918,352 | ||||||
| 71,154 | BioMarin Pharmaceutical, Inc. (a) | 6,286,456 | ||||||
| 57,580 | BioNTech SE ADR (a) | 14,844,124 | ||||||
| 90,404 | Black Diamond Therapeutics, Inc. (a)(e) | 481,853 | ||||||
| 305,576 | Caribou Biosciences, Inc. (Restricted) (a)(b) | 4,150,028 | ||||||
| 170,000 | Caribou Biosciences, Inc. (a) | 2,565,300 | ||||||
| 51,708 | ChemoCentryx, Inc. (a) | 1,882,688 | ||||||
| 143,592 | Denali Therapeutics, Inc. (a) | 6,404,203 | ||||||
| 43,739 | Fate Therapeutics, Inc. (a) | 2,559,169 | ||||||
| 15,186 | Fusion Pharmaceuticals, Inc. (a)(d) | 63,326 | ||||||
| 200,492 | G1 Therapeutics, Inc. (a)(e) | 2,047,023 | ||||||
| 296,462 | Galera Therapeutics, Inc. (a)(e) | 1,360,761 | ||||||
| 854,746 | Gilead Sciences, Inc. | 62,063,107 | ||||||
| 53,885 | I-Mab ADR (a) | 2,553,610 | ||||||
| 36,800 | Intellia Therapeutics, Inc. (a) | 4,351,232 | ||||||
| 33,437 | Intercept Pharmaceuticals, Inc. (a)(e) | 544,689 | ||||||
| 112,999 | Ionis Pharmaceuticals, Inc. (a) | 3,438,560 | ||||||
| 67,254 | Karuna Therapeutics, Inc. (a) | 8,810,274 | ||||||
| 1,063,799 | Mereo Biopharma Group plc ADR (a) | 1,702,078 | ||||||
| 300,836 | Moderna, Inc. (a)(f) | 76,406,327 | ||||||
| 81,617 | Neurocrine Biosciences, Inc. (a) | 6,951,320 | ||||||
| 2,970 | NexGel, Inc. (a) | 7,752 | ||||||
| 37,188 | Novavax, Inc. (a)(e) | 5,320,487 | ||||||
| 51,406 | Praxis Precision Medicines, Inc. (a) | 1,012,698 | ||||||
| 154,807 | Precision BioSciences, Inc. (a) | 1,145,572 | ||||||
| 389,846 | Pyxis Oncology, Inc. (Restricted) (a) (b) | 3,848,950 | ||||||
| 91,800 | Pyxis Oncology, Inc. (a) | 1,007,046 | ||||||
| 282,694 | Rallybio Corp. (a)(e) | 2,696,901 | ||||||
| 779,418 | Rallybio Corp. (Restricted) (a)(b) | 6,692,083 | ||||||
| 78,356 | Regeneron Pharmaceuticals, Inc. (a) | 49,483,381 | ||||||
| 146,483 | Sarepta Therapeutics, Inc. (a) | 13,190,794 | ||||||
| 68,117 | Scholar Rock Holding Corp. (a) | 1,692,026 | ||||||
| 237,823 | Seagen, Inc. (a) | 36,767,436 | ||||||
| 231,299 | Sutro Biopharma, Inc. (a) | 3,441,729 | ||||||
| 142,714 | Travere Therapeutics, Inc. (a) | 4,429,843 | ||||||
| 138,057 | TScan Therapeutics, Inc. (a) | 621,257 | ||||||
| 80,403 | Ultragenyx Pharmaceutical, Inc. (a) | 6,761,088 | ||||||
| 357,080 | uniQure N.V. (a)(d) | 7,405,839 | ||||||
| 65,800 | United Therapeutics Corp. (a) | 14,218,064 | ||||||
| 567,550 | Vectivbio Holding AG (a) | 2,786,670 | ||||||
| 177,475 | Vertex Pharmaceuticals, Inc. (a) | 38,973,510 | ||||||
| 27,684 | Zai Lab Ltd. ADR (a) | 1,739,939 | ||||||
| 586,784,047 | ||||||||
| Health Care Equipment & Supplies – 7.2% | ||||||||
| 106,073 | Abbott Laboratories | 14,928,714 | ||||||
The accompanying notes are an integral part of this Schedule of Investments.
Tekla Healthcare Investors
SCHEDULE OF INVESTMENTS
December 31, 2021
(Unaudited, continued)
| SHARES | Health Care Equipment & Supplies – continued | VALUE | ||||||
| 160,000 | Cercacor Laboratories, Inc. (Restricted) (a)(b) | $ | 1,550,985 | |||||
| 3,880 | DexCom, Inc. (a) | 2,083,366 | ||||||
| 43,827 | Edwards Lifesciences Corp. (a) | 5,677,788 | ||||||
| 173,673 | Guardant Health, Inc. (a) | 17,370,773 | ||||||
| 10,945 | Hologic, Inc. (a) | 837,949 | ||||||
| 21,513 | IDEXX Laboratories, Inc. (a) | 14,165,450 | ||||||
| 36,792 | Medtronic plc | 3,806,132 | ||||||
| 55,019 | Stryker Corp. | 14,713,181 | ||||||
| 39,439 | Zimmer Biomet Holdings, Inc. | 5,010,331 | ||||||
| 80,144,669 | ||||||||
| Health Care Providers & Services – 6.0% | ||||||||
| 17,832 | Addus HomeCare Corp. (a) | 1,667,470 | ||||||
| 29,482 | AMN Healthcare Services, Inc. (a) | 3,606,533 | ||||||
| 2,644 | Anthem, Inc. | 1,225,600 | ||||||
| 18,681 | Charles River Laboratories International, Inc. (a) | 7,038,627 | ||||||
| 41,860 | Cigna Corp. | 9,612,312 | ||||||
| 34,995 | HCA Healthcare, Inc. | 8,990,916 | ||||||
| 6,740 | Humana, Inc. | 3,126,416 | ||||||
| 222,222 | InnovaCare, Inc. Escrow Shares (Restricted) (a)(b) | 139,711 | ||||||
| 13,049 | Medpace Holdings, Inc. (a) | 2,839,984 | ||||||
| 20,567 | Molina Healthcare, Inc. (a) | 6,541,951 | ||||||
| 107,595 | Owens & Minor, Inc. | 4,680,383 | ||||||
| 33,507 | UnitedHealth Group, Inc. | 16,825,205 | ||||||
| 66,295,108 | ||||||||
| Healthcare Services (a)– 2.1% | ||||||||
| 15,929 | Laboratory Corporation of America Holdings | 5,005,051 | ||||||
| 173,530 | Syneos Health, Inc. | 17,818,061 | ||||||
| 22,823,112 | ||||||||
| Life Sciences Tools & Services – 8.2% | ||||||||
| 216,209 | Adaptive Biotechnologies Corp. (a) | 6,066,824 | ||||||
| 35,350 | ICON plc (a)(e) | 10,947,895 | ||||||
| 126,722 | Illumina, Inc. (a) | 48,210,118 | ||||||
| 10,514 | PerkinElmer, Inc. | 2,113,945 | ||||||
| 31,571 | Thermo Fisher Scientific, Inc. | 21,065,434 | ||||||
| 8,360 | Waters Corp. (a) | 3,114,936 | ||||||
| 91,519,152 | ||||||||
| Medical Devices and Diagnostics – 1.3% | ||||||||
| 126,126 | Boston Scientific Corp. (a) | 5,357,832 | ||||||
| 24,181 | Danaher Corp. | 7,955,791 | ||||||
| 3,402 | Intuitive Surgical, Inc. (a) | 1,222,339 | ||||||
| 14,535,962 | ||||||||
| Pharmaceuticals – 13.6% | ||||||||
| 51,378 | Arvinas, Inc. (a) | 4,220,189 | ||||||
| 160,160 | AstraZeneca plc ADR | 9,329,320 | ||||||
| 104,219 | Aurinia Pharmaceuticals, Inc. (a)(d)(e) | 2,383,489 | ||||||
| 153,223 | Bristol-Myers Squibb Co. | 9,553,454 | ||||||
The accompanying notes are an integral part of this Schedule of Investments.
Tekla Healthcare Investors
SCHEDULE OF INVESTMENTS
December 31, 2021
(Unaudited, continued)
| SHARES | Pharmaceuticals – continued | VALUE | ||||||
| 37,913 | Eli Lilly & Co. | $ | 10,472,329 | |||||
| 465,507 | Endo International plc (a)(d) | 1,750,306 | ||||||
| 432,599 | Horizon Therapeutics plc (a) | 46,616,868 | ||||||
| 134,848 | Intra-Cellular Therapies, Inc. (a) | 7,057,944 | ||||||
| 22,510 | IQVIA Holdings, Inc. (a) | 6,350,971 | ||||||
| 42,253 | Jazz Pharmaceuticals plc (a)(d) | 5,383,032 | ||||||
| 36,231 | Johnson & Johnson | 6,198,037 | ||||||
| 48,115 | McKesson Corp. | 11,959,946 | ||||||
| 71,668 | Merck & Co., Inc. | 5,492,636 | ||||||
| 55,093 | Mirati Therapeutics, Inc. (a) | 8,081,592 | ||||||
| 7,050 | Perrigo Co. plc | 274,245 | ||||||
| 60,450 | Pfizer, Inc. | 3,569,572 | ||||||
| 79,790 | Spectrum Pharmaceuticals, Inc. (a) | 101,333 | ||||||
| 28,747 | Tetraphase Pharmaceuticals, Inc. CVR (a)(b) | 1,725 | ||||||
| 291,666 | Teva Pharmaceutical Industries Ltd. ADR (a) | 2,336,245 | ||||||
| 452,402 | Theravance Biopharma, Inc. (a)(d) | 4,999,042 | ||||||
| 69,000 | Theseus Pharmaceuticals, Inc. (a)(e) | 874,920 | ||||||
| 94,775 | VYNE Therapeutics, Inc. (a)(e) | 96,671 | ||||||
| 12,377 | Zoetis, Inc. | 3,020,359 | ||||||
| 51,696 | Zogenix, Inc. (a) | 840,060 | ||||||
| 150,964,285 | ||||||||
| Special Purpose Acquisition Company (a)– 0.2% | ||||||||
| 171,597 | Helix Acquisition Corp. | 1,697,094 | ||||||
| TOTAL
COMMON STOCKS AND WARRANTS (Cost $721,490,519) | 1,014,763,429 | |||||||
| PRINCIPAL AMOUNT | SHORT-TERM INVESTMENTS - 1.4% of Net Assets | |||||||
| $ | 3,670,000 | Repurchase Agreement, Fixed Income Clearing Corp., repurchase value $3,670,000, 0.00%, dated 12/31/21, due 01/03/22 (collateralized by U.S. Treasury Note 1.38%, due 12/31/28, market value $3,743,432) | 3,670,000 | |||||
| SHARES | ||||||||
| 11,734,255 | State Street Institutional U.S. Government Money Market Fund, Institutional Class, 0.03% (g) | 11,734,255 | ||||||
| TOTAL
SHORT-TERM INVESTMENTS (Cost $15,404,255) | 15,404,255 | |||||||
| TOTAL
INVESTMENTS BEFORE MILESTONE INTERESTS - 98.5% (Cost $811,032,969) | 1,093,322,114 | |||||||
| INTERESTS | MILESTONE INTERESTS (Restricted)(a)(b) - 1.0% of Net Assets | |||||||
| Biotechnology – 0.2% | ||||||||
| 1 | Rainier Therapeutics Milestone Interest | 426,856 | ||||||
| 1 | Therachon Milestone Interest | 1,355,671 | ||||||
| 1,782,527 | ||||||||
The accompanying notes are an integral part of this Schedule of Investments.
Tekla Healthcare Investors
SCHEDULE OF INVESTMENTS
December 31, 2021
(Unaudited, continued)
| INTERESTS | Health Care Equipment & Supplies – 0.0% | VALUE | ||||||
| 1 | Therox Milestone Interest | $ | 1,982 | |||||
| Pharmaceuticals – 0.8% | ||||||||
| 1 | Afferent Milestone Interest | 738,018 | ||||||
| 1 | Ethismos Research Milestone Interest | 0 | ||||||
| 1 | Impact Biomedicines Milestone Interest | 2,370,355 | ||||||
| 1 | Neurovance Milestone Interest | 6,132,136 | ||||||
| 9,240,509 | ||||||||
| TOTAL
MILESTONE INTERESTS (Cost $8,061,450) | 11,025,018 | |||||||
| NUMBER OF CONTRACTS (100 SHARES EACH)/ NOTIONAL AMOUNT ($) |
PUT OPTION CONTRACTS PURCHASED - 1.7% of Net Assets | |||||||
| 610/24,400,000 | Moderna, Inc. Jan22 400 Put | 9,009,700 | ||||||
| 736/27,968,000 | Moderna, Inc. Jan22 380 Put | 9,077,824 | ||||||
| 156/4,056,000 | Moderna, Inc. Jan22 260 Put | 305,292 | ||||||
| TOTAL
PUT OPTION CONTRACTS PURCHASED (Premiums paid $8,511,879) | 18,392,816 | |||||||
| NUMBER OF CONTRACTS (100 SHARES EACH)/ NOTIONAL AMOUNT($) |
CALL OPTION CONTRACTS WRITTEN - 0.0% of Net Assets | |||||||
| 610/(29,280,000 | ) | Moderna, Inc. Jan22 480 Call | (4,270 | ) | ||||
| 736/(33,856,000 | ) | Moderna, Inc. Jan22 460 Call | (5,888 | ) | ||||
| 156/(4,992,000 | ) | Moderna, Inc. Jan22 320 Call | (32,760 | ) | ||||
| TOTAL
CALL OPTION CONTRACTS WRITTEN (Premiums received $(7,619,045)) | (42,918 | ) | ||||||
| TOTAL
INVESTMENTS - 101.2% (Cost $819,987,253) | 1,122,697,030 | |||||||
| OTHER LIABILITIES IN EXCESS OF ASSETS - (1.2)% | (12,769,008 | ) | ||||||
| NET ASSETS - 100% | $ | 1,109,928,022 | ||||||
| (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 $18,611,020). |
| (d) | Foreign security. |
| (e) | All or a portion of this security is on loan as of December 31, 2021. |
| (f) | A portion of security is pledged as collateral for call options written. |
| (g) | This security represents the investment of cash collateral received for securities lending and is a registered investment company advised by State Street Global Advisors. The rate shown is the annualized seven-day yield as of December 31, 2021. |
| ADR | American Depository Receipt |
| CVR | Contingent Value Right |
The accompanying notes are an integral part of this Schedule of Investments.
Tekla hEALTHCARE Investors
NOTES TO SCHEDULE OF INVESTMENTS
December 31, 2021
(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 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, 2021, the cost of securities for Federal income tax purposes was $819,987,253. The net unrealized gain on securities held by the Fund was $302,709,777, including gross unrealized gain of $375,911,353 and gross unrealized loss of $73,201,576.
Securities Lending
The Fund may lend its securities to approved borrowers to earn additional income. The Fund receives cash collateral from the borrower in an amount not less than the market value of the loaned securities. The Fund will invest its cash collateral in State Street Institutional U.S. Government Money Market Fund (SAHXX), which is registered with the Securities and Exchange Commission (SEC) as an investment company. SAHXX invests substantially all of its assets in the State Street U.S. Government Money Market Portfolio. The Fund will receive the benefit of any gains and bear any losses generated by SAHXX with respect to the cash collateral.
The Fund has the right to recall loaned securities on demand. If a borrower fails to return loaned securities when due, then the lending agent is responsible and indemnifies the Fund for the lent securities. The lending agent uses the collateral received from the borrower to purchase replacement securities of the same issue, type, class and series of the loaned securities. If the value of the collateral is less than the purchase cost of replacement securities, the lending agent is responsible for satisfying the shortfall but only to the extent that the shortfall is not due to any decrease in the value of SAHXX.
Tekla hEALTHCARE Investors
NOTES TO SCHEDULE OF INVESTMENTS
December 31, 2021
(Unaudited, continued)
Although the risk of loss on securities lent is mitigated by receiving collateral from the borrower and through lending agent indemnification, the Fund could experience a delay in recovering securities or could experience a lower than expected return if the borrower fails to return the securities on a timely basis. The Fund receives compensation for lending its securities by retaining a portion of the return on the investment of the collateral and compensation from fees earned from borrowers of the securities. Securities lending income received by the Fund is net of fees retained by the securities lending agent. Net income received from SAHXX is a component of securities lending income as recorded by the Fund.
As of December 31, 2021, the Fund loaned securities valued at $10,984,619 and received $11,734,255 of cash collateral.
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, 2021 were as follows:
| Affiliated Companies | Beginning Value as of September 30, 2021 | 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, 2021 | ||||||||||||||||||
| Amphivena Therapeutics, Inc. | $ | 86 | $ | - | $ | - | $ | - | $ | - | $ | 86 | ||||||||||||
| Arkuda Therapeutics, Inc. | 2,800,002 | - | - | - | - | 2,800,002 | ||||||||||||||||||
| Curasen Therapeutics, Inc. | 7,000,000 | 1,414,141 | - | - | - | 8,414,141 | ||||||||||||||||||
| Invetx, Inc. | 3,450,000 | - | - | - | - | 3,450,000 | ||||||||||||||||||
| Priothera Ltd. | 1,081,123 | * | 2,946,771 | - | - | (81,103 | ) | 3,946,791 | ||||||||||||||||
| $ | 14,331,211 | $ | 4,360,912 | $ | - | $ | - | $ | (81,103 | ) | $ | 18,611,020 | ||||||||||||
| Affiliated Companies | Shares as of December 31, 2021 | Principal Amount as of December 31, 2021 | Dividend/ Interest Income from Affiliated Companies | Capital Gain Distributions from Affiliated Companies | ||||||||||||
| Amphivena Therapeutics, Inc. | 852,639 | $ | 303,323 | $ | - | $ | - | |||||||||
| Arkuda Therapeutics, Inc. | 2,353,932 | - | - | - | ||||||||||||
| Curasen Therapeutics, Inc. | 17,547,740 | |||||||||||||||
| Invetx, Inc. | 7,187,500 | - | - | - | ||||||||||||
| Priothera Ltd. | 346,666 | - | - | - | ||||||||||||
| 28,288,477 | $ | 303,323 | $ | - | $ | - | ||||||||||
* Not an affiliate as of September 30, 2021.
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.
Tekla hEALTHCARE Investors
NOTES TO SCHEDULE OF INVESTMENTS
December 31, 2021
(Unaudited, continued)
For the period ended December 31, 2021, the total amount of transfers between Level 3 and Level 1 was $322. The investment was transferred due to an initial public offering and the value is being supported by the market price and transfers between Level 3 and Level 2 was $4,079,999. The investment was transferred due to an initial public offering lockup period and the value is being supported by significant observable inputs. There were no other transfers between levels.
The following is a summary of the levels used as of December 31, 2021 to value the Fund’s investments.
| Assets at Value | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Convertible Preferred | ||||||||||||||||
| Biotechnology | $ | - | $ | - | $ | 39,717,279 | $ | 39,717,279 | ||||||||
| Health Care Equipment & Supplies | - | - | 1,423,015 | 1,423,015 | ||||||||||||
| Pharmaceuticals | - | - | 22,014,136 | 22,014,136 | ||||||||||||
| Convertible Notes | ||||||||||||||||
| Biotechnology | - | - | 0 | 0 | ||||||||||||
| Common Stocks and Warrants | ||||||||||||||||
| Biotechnology | 572,092,986 | 14,691,061 | - | 586,784,047 | ||||||||||||
| Health Care Equipment & Supplies | 78,593,684 | - | 1,550,985 | 80,144,669 | ||||||||||||
| Health Care Providers & Services | 66,155,397 | - | 139,711 | 66,295,108 | ||||||||||||
| Healthcare Services | 22,823,112 | - | - | 22,823,112 | ||||||||||||
| Life Sciences Tools & Services | 91,519,152 | - | - | 91,519,152 | ||||||||||||
| Medical Devices And Diagnostics | 14,535,962 | - | - | 14,535,962 | ||||||||||||
| Pharmaceuticals | 150,962,560 | 1,725 | - | 150,964,285 | ||||||||||||
| Special Purpose Acquisition Company | 1,697,094 | - | - | 1,697,094 | ||||||||||||
| Short-term Investments | 11,734,255 | 3,670,000 | - | 15,404,255 | ||||||||||||
| Milestone Interests | ||||||||||||||||
| Biotechnology | - | - | 1,782,527 | 1,782,527 | ||||||||||||
| Health Care Equipment & Supplies | - | - | 1,982 | 1,982 | ||||||||||||
| Pharmaceuticals | - | - | 9,240,509 | 9,240,509 | ||||||||||||
| Other Assets | - | - | 5,166 | 5,166 | ||||||||||||
| Total | $ | 1,010,114,202 | $ | 18,362,786 | $ | 75,875,310 | $ | 1,104,352,298 | ||||||||
| Other Financial Instruments | ||||||||||||||||
| Assets | ||||||||||||||||
| Put Options Contracts Purchased | $ | 18,392,816 | $ | - | $ | - | $ | 18,392,816 | ||||||||
| Liabilities | ||||||||||||||||
| Call Options Contracts Written | (42,918 | ) | - | - | (42,918 | ) | ||||||||||
| Total | $ | 18,349,898 | $ | - | $ | - | $ | 18,349,898 | ||||||||
Tekla hEALTHCARE Investors
NOTES TO SCHEDULE OF INVESTMENTS
December 31, 2021
(Unaudited, continued)
The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.
| Investments in Securities | Balance as of September 30, 2021 | Net realized gain (loss) and change in unrealized appreciation (depreciation) |
Cost of | Proceeds from sales and conversions | Net transfers in (out of) Level 3 | Balance as of December 31, 2021 | ||||||||||||||||||
| Convertible Preferred | ||||||||||||||||||||||||
| Biotechnology | $ | 31,989,201 | $ | 2,209,146 | $ | 9,598,931 | - | $ | (4,079,999 | ) | $ | 39,717,279 | ||||||||||||
| Health Care Equipment & Supplies | 1,423,015 | - | - | - | - | 1,423,015 | ||||||||||||||||||
| Pharmaceuticals | 20,599,995 | (133 | ) | 1,414,274 | - | - | 22,014,136 | |||||||||||||||||
| Convertible Notes | ||||||||||||||||||||||||
| Biotechnology | 0 | - | - | - | - | 0 | ||||||||||||||||||
| Common Stock | ||||||||||||||||||||||||
| Biotechnology | 322 | - | - | - | (322 | ) | - | |||||||||||||||||
| Health Care Equipment & Supplies | 1,768,200 | (217,215 | ) | - | - | - | 1,550,985 | |||||||||||||||||
| Health Care Providers & Services | 139,911 | (200 | ) | - | - | - | 139,711 | |||||||||||||||||
| Milestone Interests | ||||||||||||||||||||||||
| Biotechnology | 1,758,375 | 24,152 | - | - | - | 1,782,527 | ||||||||||||||||||
| Health Care Equipment & Supplies | 1,982 | - | - | - | - | 1,982 | ||||||||||||||||||
| Pharmaceuticals | 9,289,198 | (48,689 | ) | - | - | - | 9,240,509 | |||||||||||||||||
| Other Assets | 15,966 | - | - | (10,800 | ) | - | 5,166 | |||||||||||||||||
| $ | 66,986,165 | $ | 1,967,061 | $ | 11,013,205 | $ | (10,800 | ) | $ | (4,080,321 | ) | $ | 75,875,310 | |||||||||||
| Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2021 | $ | 1,967,061 |
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, 2021 | Valuation Technique | Unobservable Input | Range (Weighted Average) | |||||||
| Common Stock | $ | 1,550,985 | Income approach | (a) | N/A | |||||
| 139,711 | Probability adjusted value | Probability of events Timing of events | 20.00% (20.00%) 0.25 - 2.25 (1.25) years | |||||||
| Convertible Preferred | 40,847,580 | Market approach | (a) | N/A | ||||||
| 22,306,850 | Recent transactions | (b) | N/A | |||||||
| Milestones Interests | 11,025,018 | Probability adjusted value | Probability of events Timing of events | 10.00%- 100.00% (73.33%) 0.50 - 15.25 (4.14) years | ||||||
| Other Assets | 5,166 | Probability adjusted value | Probability of events Timing of events | 80.00%- 95.00% (80.79%) 0.25 - 6.00 (0.55) years | ||||||
| $ | 75,875,310 | |||||||||
| (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. |
Tekla hEALTHCARE Investors
NOTES TO SCHEDULE OF INVESTMENTS
December 31, 2021
(Unaudited, continued)
Private Companies and Other Restricted Securities
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 8% of the Fund’s net assets at December 31, 2021.
At December 31, 2021, the Fund had a commitment of $6,873,813 relating to additional investments in five private companies.
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, 2021. The Fund on its own does not have the right to demand that such securities be registered.
| Security (#) | Acquisition Date | Cost | Carrying Value per Unit | Value | ||||||||||
| Afferent Milestone Interest | 07/27/16 | $ | 377,701 | $ | 738,018.00 | $ | 738,018 | |||||||
| Amphivena Therapeutics, Inc. | ||||||||||||||
| Series B Cvt. Pfd | 07/17/17 | 4,902,917 | 0.00 | †† | 33 | |||||||||
| Series C Cvt. Pfd | 12/10/18 | 1,887,420 | 0.00 | †† | 53 | |||||||||
| Cvt. Note | 08/25/21 | 303,323 | 0.00 | 0 | ||||||||||
| Arbor Biotechnologies, Series B Cvt. Pfd | 10/29/21 | 1,359,999 | 16.57 | 1,359,999 | ||||||||||
| Aristea Therapeutics, Inc. Series B Cvt. Pfd | 07/27/21 | 3,399,996 | 5.51 | 3,399,996 | ||||||||||
| Arkuda Therapeutics, Inc. Series A Cvt. Pfd | 05/16/19,04/02/20,07/15/21 | 5,600,004 | 1.19 | 2,800,002 | ||||||||||
| Biotheryx, Inc. Series E Cvt. Pfd | 05/19/21 | 6,809,590 | 5.25 | 6,800,000 | ||||||||||
| Caribou Biosciences, Inc. Common | 03/01/21 | 2,906,735 | 13.58 | 4,150,028 | ||||||||||
| Cercacor Laboratories, Inc. Common | 03/31/98 | † | 0 | 9.69 | 1,550,985 | |||||||||
| Curasen Therapeutics, Inc. Series A Cvt. Pfd | 09/18/18, 01/07/20 10/21/21 | 8,414,141 | 0.48 | 8,414,141 | ||||||||||
| Dynacure Series C Cvt. Pfd | 04/21/20,10/28/20 | 5,611,822 | 9.45 | 5,692,523 | ||||||||||
| Ethismos Research Milestone Interest | 10/31/17 | 0 | 0.00 | 0 | ||||||||||
| HiberCell, Inc. Series B Cvt. Pfd | 05/05/21 | 3,406,945 | 1.23 | 3,399,999 | ||||||||||
| Hotspot Therapeutics, Inc. | ||||||||||||||
| Series B Cvt. Pfd | 04/22/20, 06/17/21 | 6,903,492 | 3.24 | 9,317,587 | ||||||||||
| Series C Cvt. Pfd | 11/15/21 | 2,050,294 | 3.24 | 2,049,526 | ||||||||||
| ImmuneID, Inc. Series A, Cvt. Pfd | 04/28/21 | 2,044,520 | 2.00 | 2,040,000 | ||||||||||
| Impact Biomedicines Milestone Interest | 07/20/10 | 0 | 2,370,355.00 | 2,370,355 | ||||||||||
| InnovaCare, Inc. Escrow Shares Common | 12/21/12 | † | 96,109 | 0.63 | 139,711 | |||||||||
| 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 | 3.38 | 1,423,015 | |||||||||
| Neurovance Milestone Interest | 03/20/17 | 4,917,880 | 6,132,136.00 | 6,132,136 | ||||||||||
| Oculis SA | ||||||||||||||
| Series B2 Cvt. Pfd | 01/16/19 | 2,335,688 | 10.64 | 2,952,004 | ||||||||||
| Series C Cvt. Pfd | 04/07/21 | 801,905 | 10.64 | 801,905 | ||||||||||
| Parthenon Therapeutics, Inc. Series A Cvt. Pfd | 08/12/21 | 2,092,307 | 3.96 | 2,092,307 | ||||||||||
| Priothera Ltd. Series A Cvt. Pfd | 10/07/20,10/19/21 | 4,044,974 | 11.39 | 3,946,791 | ||||||||||
| Pyxis Oncology, Inc. Common | 03/05/21 | 4,085,725 | 9.87 | 3,848,950 | ||||||||||
| Quell Therapeutics, Series B Cvt. Pfd | 11/29/21 | 1,871,828 | 1.89 | 1,854,545 | ||||||||||
| Rainier Therapeutics Milestone Interest | 09/28/21 | 395,493 | 426,856.00 | 426,856 | ||||||||||
| Rallybio Corp. Common | 03/27/20 | 6,913,546 | 8.59 | 6,692,083 | ||||||||||
| ReCode Therapeutics, Series B Cvt. Pfd | 10/12/21 | 1,366,546 | 9.23 | 1,360,004 | ||||||||||
| Therachon Milestone Interest | 07/01/19 | 2,362,765 | 1,355,671.00 | 1,355,671 | ||||||||||
| Therox Milestone Interest | 06/18/19 | 7,611 | 1,982.00 | 1,982 | ||||||||||
| $ | 92,116,035 | $ | 90,561,205 | |||||||||||
(#) 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