Tekla Life Sciences Investors
SCHEDULE OF INVESTMENTS
June 30, 2020
(Unaudited)
| SHARES | CONVERTIBLE PREFERRED AND WARRANTS (Restricted)(a) (b) - 3.7% of Net Assets | VALUE | ||||||
| Biotechnology – 2.8% | ||||||||
| 140,000 | Amphivena Therapeutics, Inc. Series B, 6.00% | $ | 2,100,000 | |||||
| 225,416 | Amphivena Therapeutics, Inc. Series C, 6.00% | 808,848 | ||||||
| 848,333 | Arkuda Therapeutics, Inc. Series A, 6.00% | 2,018,184 | ||||||
| 398,616 | Decipher Biosciences, Inc. Series II, 8.00% | 865,395 | ||||||
| 396,284 | Decipher Biosciences, Inc. Series III, 8.00% | 860,333 | ||||||
| 30,646 | Decipher Biosciences, Inc. Series IV, 8.00% | 66,532 | ||||||
| 62,205 | Dynacure Series C (c) | 1,483,008 | ||||||
| 41,470 | Dynacure Series C Warrants (expiration 04/21/25, exercise price $23.05) (c) | 0 | ||||||
| 645,834 | Hotspot Therapeutics, Inc. Series B, 6.00% | 1,550,002 | ||||||
| 117,704 | Oculis SA, Series B2, 6.00% (c) | 1,034,359 | ||||||
| 1,153,847 | Rainier Therapeutics, Inc. Series A, 6.00% | 115 | ||||||
| 668,449 | Rainier Therapeutics, Inc. Series B, 6.00% | 67 | ||||||
| 2,229,766 | Rallybio Holdings, LLC Series B | 3,100,044 | ||||||
| 13,886,887 | ||||||||
| Health Care Equipment & Supplies – 0.3% | ||||||||
| 362,887 | IO Light Holdings, Inc. Series A2 | 1,397,369 | ||||||
| Pharmaceuticals – 0.6% | ||||||||
| 2,719,854 | Curasen Therapeutics, Inc. Series A | 2,999,999 | ||||||
| TOTAL CONVERTIBLE PREFERRED AND WARRANTS (Cost $19,983,861) | 18,284,255 | |||||||
| PRINCIPAL AMOUNT | CONVERTIBLE NOTES (Restricted) (a) (b) - 0.1% of Net Assets | |||||||
| Biotechnology – 0.1% | ||||||||
| $ | 652,728 | Rainier Therapeutics, Inc. Promissory Notes, 8.00% due 12/31/20 | 320,669 | |||||
| TOTAL CONVERTIBLE NOTES (Cost $652,745) | 320,669 | |||||||
| SHARES | COMMON STOCKS AND WARRANTS - 93.5% of Net Assets | |||||||
| Biotechnology – 73.7% | ||||||||
| 52,739 | AC Immune SA (a) (c) | 354,933 | ||||||
| 86,352 | ACADIA Pharmaceuticals, Inc. (a) | 4,185,481 | ||||||
| 7,425 | Adynxx, Inc. (a) | 4,603 | ||||||
| 112,353 | Alexion Pharmaceuticals, Inc. (a) | 12,610,501 | ||||||
| 60,092 | Alkermes plc (a) | 1,166,085 | ||||||
| 22,188 | Allakos, Inc. (a) | 1,594,430 | ||||||
| 76,107 | Allogene Therapeutics, Inc. (a) | 3,258,902 | ||||||
| 47,732 | Alnylam Pharmaceuticals, Inc. (a) | 7,069,586 | ||||||
| 291,970 | Amarin Corp. plc (a) (d) | 2,020,432 | ||||||
| 161,932 | Amgen, Inc. | 38,193,281 | ||||||
| 80,553 | Amicus Therapeutics, Inc. (a) | 1,214,739 | ||||||
| 36,239 | AnaptysBio, Inc. (a) | 809,579 | ||||||
| 59,588 | Apellis Pharmaceuticals, Inc. (a) | 1,946,144 | ||||||
| 32,461 | ARCA biopharma, Inc. (a) | 214,892 | ||||||
The accompanying notes are an integral part of this Schedule of Investments.
Tekla Life Sciences Investors
SCHEDULE OF INVESTMENTS
June 30, 2020
(Unaudited, continued)
| SHARES | Biotechnology – continued | VALUE | ||||||
| 18,027 | ARCA biopharma, Inc. Warrants (expiration 06/11/22, exercise price $1.10) (a) (b) | $ | 43,806 | |||||
| 289,336 | Ardelyx, Inc. (a) | 2,002,205 | ||||||
| 32,556 | Arena Pharmaceuticals, Inc. (a) | 2,049,400 | ||||||
| 15,551 | Argenx SE (a) (d) | 3,502,552 | ||||||
| 33,666 | Arrowhead Pharmaceuticals, Inc. (a) | 1,454,035 | ||||||
| 21,452 | Ascendis Pharma A/S (a) (d) | 3,172,751 | ||||||
| 48,919 | Atreca, Inc. (a) | 1,040,996 | ||||||
| 57,772 | Avrobio, Inc. (a) | 1,008,121 | ||||||
| 26,592 | BeiGene Ltd. (a) (d) | 5,009,933 | ||||||
| 6,000 | Bellicum Pharmaceuticals, Inc. (a) | 44,580 | ||||||
| 66,309 | Biogen, Inc. (a) | 17,740,973 | ||||||
| 10,482 | Biohaven Pharmaceutical Holding Co., Ltd. (a) | 766,339 | ||||||
| 89,320 | BioMarin Pharmaceutical, Inc. (a) | 11,016,729 | ||||||
| 33,924 | bluebird bio, Inc. (a) | 2,070,721 | ||||||
| 40,964 | Blueprint Medicines Corp. (a) | 3,195,192 | ||||||
| 12,201 | Bridgebio Pharma, Inc. (a) | 397,875 | ||||||
| 47,437 | Cellectis S.A. (a) (d) | 844,379 | ||||||
| 195,256 | Cidara Therapeutics, Inc. (a) | 720,495 | ||||||
| 76,742 | Coherus BioSciences, Inc. (a) | 1,370,612 | ||||||
| 119,535 | Corbus Pharmaceuticals Holdings, Inc. (a) | 1,002,899 | ||||||
| 23,648 | CRISPR Therapeutics AG (a) (c) | 1,737,891 | ||||||
| 32,636 | CymaBay Therapeutics, Inc. (a) | 113,900 | ||||||
| 19,036 | Deciphera Pharmaceuticals, Inc. (a) | 1,136,830 | ||||||
| 49,733 | Editas Medicine, Inc. (a) | 1,471,102 | ||||||
| 6,118 | Eidos Therapeutics, Inc. (a) | 291,645 | ||||||
| 71,778 | Epizyme, Inc. (a) | 1,152,755 | ||||||
| 14,732 | Esperion Therapeutics, Inc. (a) | 755,899 | ||||||
| 13,715 | Exact Sciences Corp. (a) | 1,192,382 | ||||||
| 229,508 | Exelixis, Inc. (a) | 5,448,520 | ||||||
| 65,428 | Fate Therapeutics, Inc. (a) | 2,244,835 | ||||||
| 67,921 | FibroGen, Inc. (a) | 2,752,838 | ||||||
| 145,858 | Galera Therapeutics, Inc. (a) | 1,041,426 | ||||||
| 5,138 | Genmab A/S (a) (d) | 174,127 | ||||||
| 456,668 | Gilead Sciences, Inc. | 35,136,036 | ||||||
| 27,069 | Global Blood Therapeutics, Inc. (a) | 1,708,866 | ||||||
| 21,774 | Halozyme Therapeutics, Inc. (a) | 583,761 | ||||||
| 101,774 | Incyte Corp. (a) | 10,581,443 | ||||||
| 63,948 | Inovio Pharmaceuticals, Inc. (a) (e) | 1,723,399 | ||||||
| 37,238 | Insmed, Inc. (a) | 1,025,535 | ||||||
| 14,034 | Intellia Therapeutics, Inc. (a) | 294,995 | ||||||
| 18,630 | Intercept Pharmaceuticals, Inc. (a) | 892,563 | ||||||
| 75,143 | Ionis Pharmaceuticals, Inc. (a) | 4,430,431 | ||||||
| 101,017 | Iovance Biotherapeutics, Inc. (a) | 2,772,917 | ||||||
| 9,455 | Karuna Therapeutics, Inc. (a) | 1,053,854 | ||||||
| 11,225 | Ligand Pharmaceuticals, Inc. (a) | 1,255,516 | ||||||
| 114,141 | Magenta Therapeutics, Inc. (a) | 857,199 | ||||||
| 174,465 | Moderna, Inc. (a) (e) | 11,202,398 | ||||||
| 18,261 | Molecular Templates, Inc. (a) | 251,819 | ||||||
| 28,193 | Momenta Pharmaceuticals, Inc. (a) | 937,981 | ||||||
The accompanying notes are an integral part of this Schedule of Investments.
Tekla Life Sciences Investors
SCHEDULE OF INVESTMENTS
June 30, 2020
(Unaudited, continued)
| SHARES | Biotechnology – continued | VALUE | ||||||
| 80,164 | Nektar Therapeutics (a) | $ | 1,856,598 | |||||
| 70,393 | Neurocrine Biosciences, Inc. (a) | 8,587,946 | ||||||
| 44,550 | NexGel, Inc. (a) (b) | 138 | ||||||
| 17,900 | Novavax, Inc. (a) | 1,491,965 | ||||||
| 111,820 | Ovid Therapeutics, Inc. (a) | 824,113 | ||||||
| 374,819 | Pieris Pharmaceuticals, Inc. (a) | 1,161,939 | ||||||
| 23,821 | Pieris Pharmaceuticals, Inc., Series A Warrants (expiration 06/08/21, exercise price $3.00) (a) (b) | 24,536 | ||||||
| 11,911 | Pieris Pharmaceuticals, Inc., Series B Warrants (expiration 06/08/21, exercise price $2.00) (a) (b) | 16,199 | ||||||
| 42,810 | Portola Pharmaceuticals, Inc. (a) | 770,152 | ||||||
| 18,973 | Principia Biopharma, Inc. (a) | 1,134,396 | ||||||
| 42,892 | PTC Therapeutics, Inc. (a) | 2,176,340 | ||||||
| 23,629 | Puma Biotechnology, Inc. (a) | 246,450 | ||||||
| 57,499 | Regeneron Pharmaceuticals, Inc. (a) | 35,859,251 | ||||||
| 89,062 | Rocket Pharmaceuticals, Inc. (a) | 1,864,068 | ||||||
| 59,709 | Rubius Therapeutics, Inc. (a) | 357,060 | ||||||
| 33,741 | Sage Therapeutics, Inc. (a) | 1,402,951 | ||||||
| 45,979 | Sangamo Therapeutics, Inc. (a) | 411,972 | ||||||
| 51,660 | Sarepta Therapeutics, Inc. (a) | 8,283,164 | ||||||
| 87,198 | Seattle Genetics, Inc. (a) | 14,816,684 | ||||||
| 193,471 | Sutro Biopharma, Inc. (a) | 1,501,335 | ||||||
| 131,785 | Trillium Therapeutics, Inc. (a) (c) | 1,066,141 | ||||||
| 29,770 | Ultragenyx Pharmaceutical, Inc. (a) | 2,328,609 | ||||||
| 23,142 | uniQure N.V. (a) (c) | 1,042,778 | ||||||
| 20,511 | United Therapeutics Corp. (a) | 2,481,831 | ||||||
| 375,000 | Vectivbio Holding AG (Restricted) (a) (b) | 296,250 | ||||||
| 135,144 | Vertex Pharmaceuticals, Inc. (a) | 39,233,655 | ||||||
| 46,595 | Xencor, Inc. (a) | 1,509,212 | ||||||
| 23,842 | Y-mAbs Therapeutics, Inc. (a) | 1,029,974 | ||||||
| 11,502 | Zai Lab Ltd. (a) (d) | 944,659 | ||||||
| 28,012 | Zymeworks, Inc. (a) (c) | 1,010,393 | ||||||
| 361,051,803 | ||||||||
| Drug Discovery Technologies(a) – 0.1% | ||||||||
| 51,160 | ImmunoGen, Inc. | 235,336 | ||||||
| Health Care Equipment & Supplies(a) – 2.1% | ||||||||
| 8,700 | Axonics Modulation Technologies, Inc. | 305,457 | ||||||
| 130,000 | Cercacor Laboratories, Inc. (Restricted) (b) | 1,108,905 | ||||||
| 25,531 | Guardant Health, Inc. | 2,071,330 | ||||||
| 8,329 | IDEXX Laboratories, Inc. | 2,749,903 | ||||||
| 5,042 | Inogen, Inc. | 179,092 | ||||||
| 47,475 | NovoCure Ltd. | 2,815,267 | ||||||
| 161,189 | Quotient Ltd. | 1,192,799 | ||||||
| 10,422,753 | ||||||||
| Health Care Providers & Services(a) – 0.1% | ||||||||
| 148,148 | InnovaCare, Inc. Escrow Shares (Restricted) (b) | 105,363 | ||||||
The accompanying notes are an integral part of this Schedule of Investments.
Tekla Life Sciences Investors
SCHEDULE OF INVESTMENTS
June 30, 2020
(Unaudited, continued)
| SHARES | Health Care Providers & Services(a) – continued | VALUE | ||||||
| 5,822 | Medpace Holdings, Inc. | $ | 541,562 | |||||
| 646,925 | ||||||||
| Healthcare Services(a) – 0.3% | ||||||||
| 24,811 | Syneos Health, Inc. | 1,445,241 | ||||||
| Life Sciences Tools & Services – 6.6% | ||||||||
| 16,541 | Bio-Techne Corp. | 4,367,982 | ||||||
| 62,293 | Illumina, Inc. (a) | 23,070,213 | ||||||
| 151,480 | Pacific Biosciences of California, Inc. (a) | 522,606 | ||||||
| 45,069 | PRA Health Sciences, Inc. (a) | 4,384,763 | ||||||
| 32,345,564 | ||||||||
| Pharmaceuticals – 10.6% | ||||||||
| 16,387 | Acceleron Pharma, Inc. (a) | 1,561,189 | ||||||
| 20,403 | Aerie Pharmaceuticals, Inc. (a) | 301,148 | ||||||
| 79,542 | Aerpio Pharmaceuticals, Inc. (a) | 99,428 | ||||||
| 63,808 | Agios Pharmaceuticals, Inc. (a) | 3,412,452 | ||||||
| 30,700 | Aurinia Pharmaceuticals, Inc. (a) (c) | 498,875 | ||||||
| 95,101 | Avadel Pharmaceuticals plc (a) (d) | 768,416 | ||||||
| 9,784 | Axsome Therapeutics, Inc. (a) | 805,028 | ||||||
| 18,008 | Bristol-Myers Squibb Co. | 1,058,870 | ||||||
| 399,550 | Bristol-Myers Squibb Co., CVR 03/31/21 (a) (f) | 1,430,389 | ||||||
| 165,330 | Clearside Biomedical, Inc. (a) | 310,820 | ||||||
| 29,100 | Endo International plc (a) (c) | 99,813 | ||||||
| 8,605 | GW Pharmaceuticals plc (a) (d) | 1,056,006 | ||||||
| 40,585 | Heron Therapeutics, Inc. (a) | 597,005 | ||||||
| 154,224 | Horizon Therapeutics plc (a) | 8,571,770 | ||||||
| 155,963 | Immunomedics, Inc. (a) | 5,527,329 | ||||||
| 34,082 | Intra-Cellular Therapies, Inc. (a) | 874,885 | ||||||
| 25,203 | Jazz Pharmaceuticals plc (a) | 2,780,899 | ||||||
| 7,187 | Kodiak Sciences, Inc. (a) | 388,960 | ||||||
| 4,060 | Madrigal Pharmaceuticals, Inc. (a) | 459,795 | ||||||
| 162,481 | Menlo Therapeutics, Inc. (a) | 281,092 | ||||||
| 63,994 | Milestone Pharmaceuticals, Inc. (a) | 241,897 | ||||||
| 27,127 | Mirati Therapeutics, Inc. (a) | 3,097,090 | ||||||
| 294,349 | Mylan N.V. (a) | 4,733,132 | ||||||
| 5,870 | MyoKardia, Inc. (a) | 567,159 | ||||||
| 18,002 | Reata Pharmaceuticals, Inc. (a) | 2,808,672 | ||||||
| 26,600 | Revance Therapeutics, Inc. (a) | 649,572 | ||||||
| 58,272 | Sanofi (c) (d) | 2,974,786 | ||||||
| 34,880 | Spectrum Pharmaceuticals, Inc. (a) | 117,894 | ||||||
| 14,218 | Tetraphase Pharmaceuticals, Inc. (a) | 35,829 | ||||||
| 73,516 | Theravance Biopharma, Inc. (a) (c) | 1,543,101 | ||||||
| 15,943 | Tricida, Inc. (a) | 438,114 | ||||||
| 1,766 | Turning Point Therapeutics, Inc. (a) | 114,066 | ||||||
| 929,053 | Verona Pharma plc (a) (c) | 575,595 | ||||||
| 106,335 | Verona Pharma plc (a) (d) | 496,584 | ||||||
| 371,622 | Verona Pharma plc Warrants (expiration 04/27/22, exercise price $2.37) (a) (b) (c) | 16,992 | ||||||
| 40,580 | WaVe Life Sciences Ltd. (a) | 422,438 | ||||||
The accompanying notes are an integral part of this Schedule of Investments.
Tekla Life Sciences Investors
SCHEDULE OF INVESTMENTS
June 30, 2020
(Unaudited, continued)
| SHARES | Pharmaceuticals – continued | VALUE | ||||||
| 71,950 | Zogenix, Inc. (a) | $ | 1,943,370 | |||||
| 51,660,460 | ||||||||
| TOTAL COMMON STOCKS AND WARRANTS (Cost $319,722,930) | 457,808,082 | |||||||
| PRINCIPAL AMOUNT | SHORT-TERM INVESTMENT - 1.3% of Net Assets | |||||||
| $ | 6,343,000 | Repurchase Agreement, Fixed Income Clearing Corp., repurchase value $6,343,000, 0.00%, dated 06/30/20, due 07/01/20 (collateralized by U.S. Treasury Note 0.625%, due 04/15/23, market value $6,469,883) | 6,343,000 | |||||
| TOTAL SHORT-TERM INVESTMENT (Cost $6,343,000) | 6,343,000 | |||||||
| TOTAL
INVESTMENTS BEFORE MILESTONE INTERESTS - 98.6% (Cost $346,702,536) | 482,756,006 | |||||||
| INTERESTS | MILESTONE INTERESTS (Restricted)(a) (b) - 1.5% of Net Assets | |||||||
| Biotechnology – 0.3% | ||||||||
| 1 | Therachon Milestone Interest | 1,513,821 | ||||||
| Health Care Equipment & Supplies – 0.0% | ||||||||
| 1 | Therox Milestone Interest | 3,407 | ||||||
| Pharmaceuticals – 1.2% | ||||||||
| 1 | Afferent Milestone Interest | 262,942 | ||||||
| 1 | Ethismos Research Milestone Interest | 0 | ||||||
| 1 | Impact Biomedicines Milestone Interest | 3,454,657 | ||||||
| 1 | Neurovance Milestone Interest | 2,067,478 | ||||||
| 5,785,077 | ||||||||
| TOTAL MILESTONE INTERESTS | ||||||||
| (Cost $4,994,233) | 7,302,305 | |||||||
NUMBER OF | ||||||||
| NOTIONAL AMOUNT ($) | CALL OPTION CONTRACTS WRITTEN - 0.0% of Net Assets | |||||||
| 201/(603,000) | Inovio Pharmaceuticals, Inc. Jul20 30 Call | (23,316 | ) | |||||
| 403/(2,901,600) | Moderna, Inc. Jul20 72 Call | (112,840 | ) | |||||
| 121/(907,500) | Moderna, Inc. Jul20 75 Call | (26,378 | ) | |||||
| TOTAL CALL OPTION CONTRACTS WRITTEN | ||||||||
| (Premiums received $267,037) | (162,534 | ) | ||||||
The accompanying notes are an integral part of this Schedule of Investments.
Tekla Life Sciences Investors
SCHEDULE OF INVESTMENTS
June 30, 2020
(Unaudited, continued)
| VALUE | ||||||||
| TOTAL INVESTMENTS - 100.1% | ||||||||
| (Cost $351,429,732) | $ | 489,895,777 | ||||||
| OTHER LIABILITIES IN EXCESS OF ASSETS – (0.1)% | (234,796 | ) | ||||||
| NET ASSETS - 100% | $ | 489,660,981 |
| (a) | Non-income producing security. |
| (b) | Security fair valued using significant unobservable inputs. See Investment Valuation and Fair Value Measurements. |
| (c) | Foreign security. |
| (d) | American Depository Receipt |
| (e) | A portion of security is pledged as collateral for call options written. |
| (f) | Contingent Value Right |
The accompanying notes are an integral part of this Schedule of Investments.
TEKLA LIFE
SCIENCES INVESTORS
NOTES TO SCHEDULE OF INVESTMENTS
June 30, 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 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 June 30, 2020, the cost of securities for Federal income tax purposes was $351,429,770. The net unrealized gain on securities held by the Fund was $138,466,007, including gross unrealized gain of $190,137,731 and gross unrealized loss of $51,671,724.
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.
For the period ended June 30, 2020, the total amount of transfers between Level 3 and Level 1 was $979,998. The one investment was transferred due to an initial public offering and the value is being supported by the market price. There were no other transfers between levels.
TEKLA LIFE
SCIENCES INVESTORS
NOTES TO SCHEDULE OF INVESTMENTS
June 30, 2020
(continued)
(unaudited)
The following is a summary of the levels used as of June 30, 2020 to value the Fund’s net assets.
| Assets at Value | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Convertible Preferred and Warrants | ||||||||||||||||
| Biotechnology | $ | - | $ | - | $ | 13,886,887 | $ | 13,886,887 | ||||||||
| Health Care Equipment & Supplies | - | - | 1,397,369 | 1,397,369 | ||||||||||||
| Pharmaceuticals | - | - | 2,999,999 | 2,999,999 | ||||||||||||
| Convertible Notes | ||||||||||||||||
| Biotechnology | - | - | 320,669 | 320,669 | ||||||||||||
| Common Stocks and Warrants | ||||||||||||||||
| Biotechnology | 360,670,874 | - | 380,929 | 361,051,803 | ||||||||||||
| Drug Discovery Technologies | 235,336 | - | - | 235,336 | ||||||||||||
| Health Care Equipment & Supplies | 9,313,848 | - | 1,108,905 | 10,422,753 | ||||||||||||
| Health Care Providers & Services | 541,562 | - | 105,363 | 646,925 | ||||||||||||
| Healthcare Services | 1,445,241 | - | - | 1,445,241 | ||||||||||||
| Life Sciences Tools & Services | 32,345,564 | - | - | 32,345,564 | ||||||||||||
| Pharmaceuticals | 51,643,468 | - | 16,992 | 51,660,460 | ||||||||||||
| Short-term Investment | - | 6,343,000 | - | 6,343,000 | ||||||||||||
| Milestone Interests | ||||||||||||||||
| Biotechnology | - | - | 1,513,821 | 1,513,821 | ||||||||||||
| Health Care Equipment & Supplies | - | - | 3,407 | 3,407 | ||||||||||||
| Pharmaceuticals | - | - | 5,785,077 | 5,785,077 | ||||||||||||
| Other Assets | - | - | 283,931 | 283,931 | ||||||||||||
| Total | $ | 456,195,893 | $ | 6,343,000 | $ | 27,803,349 | $ | 490,342,242 | ||||||||
| Other Financial Instruments | ||||||||||||||||
| Liabilities | ||||||||||||||||
| Call Options Contracts Written | $ | (162,534 | ) | $ | - | $ | - | $ | (162,534 | ) | ||||||
| Total | $ | (162,534 | ) | $ | - | $ | - | $ | (162,534 | ) | ||||||
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, 2019 | Net realized gain (loss) and change in unrealized appreciation (depreciation) | Cost of purchases and conversions | Proceeds from sales and conversions | Net transfers into (out of) Level 3 | Balance as of June 30, 2020 | ||||||||||||||||||
| Convertible Preferred and Warrants | ||||||||||||||||||||||||
| Biotechnology | $ | 8,100,496 | $ | (688,196 | ) | $ | 7,454,585 | $ | - | $ | (979,998) | $ | 13,886,887 | |||||||||||
| Health Care Equipment & Supplies | 792,748 | (41,757 | ) | 1,395,215 | (748,837 | ) | - | 1,397,369 | ||||||||||||||||
| Pharmaceuticals | 1,499,999 | - | 1,500,000 | - | - | 2,999,999 | ||||||||||||||||||
| Convertible Notes | ||||||||||||||||||||||||
| Biotechnology | 597,977 | (332,114 | ) | 54,806 | - | - | 320,669 | |||||||||||||||||
| Health Care Equipment & Supplies | 1,682,975 | (1,337,196 | ) | - | (345,779 | ) | - | - | ||||||||||||||||
| Common Stock and Warrants | ||||||||||||||||||||||||
| Biotechnology | 374,616 | 9,968 | - | (3,655 | ) | - | 380,929 | |||||||||||||||||
| Health Care Equipment & Supplies | 678,730 | 430,175 | - | - | - | 1,108,905 | ||||||||||||||||||
| Health Care Providers & Services | 1,359,525 | (734,769 | ) | 135,770 | (655,163 | ) | - | 105,363 | ||||||||||||||||
| Pharmaceuticals | 822 | 16,170 | - | - | - | 16,992 | ||||||||||||||||||
| Milestone Interests | ||||||||||||||||||||||||
| Biotechnology | 1,444,178 | 69,643 | - | - | - | 1,513,821 | ||||||||||||||||||
| Health Care Equipment & Supplies | 4,567 | (2 | ) | - | (1,158 | ) | - | 3,407 | ||||||||||||||||
| Pharmaceuticals | 5,543,707 | 241,370 | - | - | - | 5,785,077 | ||||||||||||||||||
| Other Assets | 391,097 | - | 29,562 | (136,728 | ) | - | 283,931 | |||||||||||||||||
| $ | 22,471,437 | $ | (2,366,708 | ) | $ | 10,569,938 | $ | (1,891,320 | ) | $ | (979,998 | ) | $ | 27,803,349 | ||||||||||
Tekla Life Sciences Investors
NOTES TO SCHEDULE OF INVESTMENTS
June 30, 2020
Continued
(Unaudited)
|
Net change in unrealized appreciation (depreciation) from investments still held as of June 30, 2020 |
$138,692 |
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 June 30, 2020 | Valuation Technique | Unobservable Input | Range (Weighted Average) | ||||||||
| Private Companies and Other Restricted Securities | $ | 1,210,576 | Income approach, Black-Scholes | Discount for lack of marketability | 20.00%-50.00% (32.94%) | ||||||
| 8,961,390 | Probability weighted expected return model | Discount rate Price to sales multiple | 41.37%-44.04% (33.25%) 5.78x-11.11x (6.26x) | ||||||||
| 9,939,784 | Market approach, recent transaction | (a) | N/A | ||||||||
| 7,691,599 | Probability adjusted value | Probability of events Timing of events | 10.00%-100.00% (53.51%) 0.25-16.75 (3.60) years | ||||||||
| $ | 27,803,349 | ||||||||||
| (a) | The valuation technique used as a basis to approximate fair value of these investments is based upon subsequent financing rounds. There is no quantitative information to provide as these methods of measure are investment specific. |
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 6% of the Fund’s net assets at June 30, 2020.
At June 30, 2020, the Fund had a commitment of $2,979,772 relating to additional investments in three 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 June 30, 2020. 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 | $ | 161,872 | $ | 262,942.00 | $ | 262,942 | |||||||
| Amphivena Therapeutics, Inc. | ||||||||||||||
| Series B Cvt. Pfd | 07/17/17 | 2,101,222 | 15.00 | 2,100,000 | ||||||||||
| Series C Cvt. Pfd | 12/10/18 | 808,848 | 3.59 | 808,848 | ||||||||||
| Arkuda Therapeutics, Inc. Series A Cvt. Pfd | 05/16/19, 04/02/20 | 2,018,184 | 2.38 | 2,018,184 | ||||||||||
| Cercacor Laboratories, Inc. Common | 03/31/98 | † | 0 | 8.53 | 1,108,905 | |||||||||
| Curasen Therapeutics, Inc Series A Cvt. Pfd | 09/18/18, 01/07/20 | 2,999,999 | 1.10 | 2,999,999 | ||||||||||
| Decipher Biosciences, Inc. | ||||||||||||||
| Series II Cvt. Pfd | 03/29/19 | 1,846,968 | 2.17 | 865,395 | ||||||||||
| Series III Cvt. Pfd | 03/29/19 | 417,862 | 2.17 | 860,333 | ||||||||||
| Series IV Cvt. Pfd | 05/14/20 | 66,532 | 2.17 | 66,532 | ||||||||||
| Dynacure | ||||||||||||||
| Series C Cvt. Pfd | 04/21/20 | 1,433,840 | 23.84 | 1,483,008 | ||||||||||
Tekla Life Sciences Investors
NOTES TO SCHEDULE OF INVESTMENTS
June 30, 2020
Continued
(Unaudited)
| Acquisition | Carrying Value | |||||||||||||
| Security (#) | Date | Cost | per Unit | Value | ||||||||||
| Dynacure (continued) | ||||||||||||||
| Series C Warrants (expiration 04/21/25) | 04/21/20 | $ | 0 | $ | 0.00 | 0 | ||||||||
| Ethismos Research Milestone Interest | 10/31/17 | 0 | 0.00 | 0 | ||||||||||
| Hotspot Therapeutics, Inc. Series B Cvt. Pfd | 04/22/20 | 1,550,002 | 2.40 | 1,550,002 | ||||||||||
| Impact Biomedicines Milestone Interest | 07/20/10 | 0 | 3,454,657.00 | 3,454,657 | ||||||||||
| InnovaCare, Inc. Escrow Shares Common | 12/21/12 | † | 95,673 | 0.71 | 105,363 | |||||||||
| IO Light Holdings, Inc. Series A2 Cvt. Pfd | 04/30/20 | † | 1,394,759 | 3.85 | 1,397,369 | |||||||||
| Neurovance Milestone Interest | 03/20/17 | 3,417,500 | 2,067,478.00 | 2,067,478 | ||||||||||
| Oculis SA, Series B2 Cvt. Pfd | 01/16/19 | 990,902 | 8.79 | 1,034,359 | ||||||||||
| Rainier Therapeutics, Inc. | ||||||||||||||
| Series A Cvt. Pfd | 01/19/16, 10/24/16 | 750,652 | 0.00 | †† | 115 | |||||||||
| Series B Cvt. Pfd | 03/03/17 | 500,091 | 0.00 | †† | 67 | |||||||||
| Cvt. Promissory Notes | 01/30/19 | 189,677 | 0.00 | 0 | ||||||||||
| Cvt. Promissory Notes | 03/28/19 | 189,677 | 0.00 | 0 | ||||||||||
| Cvt. Promissory Notes | 07/16/19 | 218,639 | 117.30 | 256,449 | ||||||||||
| Cvt. Promissory Notes | 10/07/19 | 54,752 | 117.30 | 64,220 | ||||||||||
| Rallybio Holdings, LLC Series B Cvt. Pfd | 03/27/20 | 3,104,000 | 1.39 | 3,100,044 | ||||||||||
| Therachon Milestone Interest | 07/01/19 | 1,409,779 | 1,513,821.00 | 1,513,821 | ||||||||||
| Therox Milestone Interest | 06/18/19 | 5,082 | 3,407.00 | 3,407 | ||||||||||
| Vectivbio Holding AG Common | 07/01/19 | † | 292,594 | 0.79 | 296,250 | |||||||||
| $ | 26,019,106 | $ | 27,417,747 | |||||||||||
| (#) | 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. | ||||