Form N-CSR T. Rowe Price Health For: Dec 31
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E-mailUNITED 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)
1307 Point Street, Baltimore, MD 21231
(Address of principal executive offices)
David Oestreicher
1307 Point Street, Baltimore, MD 21231
(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: December 31, 2025
Item 1. Reports to Shareholders
(a) Report pursuant to Rule 30e-1
Item 1. (b) Notice pursuant to Rule 30e-3.
Not applicable.
Item 2. Code of Ethics.
The registrant has adopted 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. A copy of this code of ethics is filed as an exhibit to this Form N-CSR. No substantive amendments were approved or waivers were granted to this code of ethics during the period covered by this report.
Item 3. Audit Committee Financial Expert.
The registrant’s Board of Directors has determined that Mr. Paul F. McBride qualifies as an audit committee financial expert, as defined in Item 3 of Form N-CSR. Mr. McBride is considered independent for purposes of Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a) – (d) Aggregate fees billed for the last two fiscal years for professional services rendered to, or on behalf of, the registrant by the registrant’s principal accountant were as follows:
| 2025 |
2024 |
|||||||||
| Audit Fees |
$ | 46,217 | $ | 46,029 | ||||||
| Audit-Related Fees |
- | - | ||||||||
| Tax Fees |
125 | - | ||||||||
| All Other Fees |
- | - | ||||||||
Audit fees include amounts related to the audit of the registrant’s annual financial statements and services normally provided by the accountant in connection with statutory and regulatory filings. Audit-related fees include amounts reasonably related to the performance of the audit of the registrant’s financial statements and specifically include the issuance of a report on internal controls and, if applicable, agreed-upon procedures related to fund acquisitions. Tax fees include amounts related to services for tax compliance, tax planning, and tax advice. The nature of these services specifically includes the review of distribution calculations and the preparation of Federal, state, and excise tax returns. All other fees include the registrant’s pro-rata share of amounts for agreed-upon procedures in conjunction with service contract approvals by the registrant’s Board of Directors/Trustees.
(e)(1) The registrant’s audit committee has adopted a policy whereby audit and non-audit services performed by the registrant’s principal accountant for the registrant, its investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant require pre-approval in advance at regularly scheduled audit committee meetings. If such a service is required between regularly scheduled audit committee meetings, pre-approval may be authorized by one audit committee member with ratification at the next scheduled audit committee meeting. Waiver of pre-approval for audit or non-audit services requiring fees of a de minimis amount is not permitted.
(2) No services included in (b) – (d) above were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Less than 50 percent of the hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees.
(g) The aggregate fees billed for the most recent fiscal year and the preceding fiscal year by the registrant’s principal accountant for non-audit services rendered to the registrant, its investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant were $1,862,000 and $1,262,000, respectively.
(h) All non-audit services rendered in (g) above were pre-approved by the registrant’s audit committee. Accordingly, these services were considered by the registrant’s audit committee in maintaining the principal accountant’s independence.
(i) Not applicable.
(j) Not applicable.
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
December
31,
2025
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
Financial
Highlights
2
For
a
share
outstanding
throughout
each
period
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Investor
Class
..
Year
..
..
Ended
.
12/31/25
12/31/24
12/31/23
12/31/22
12/31/21
NET
ASSET
VALUE
Beginning
of
period
$
79
.53
$
87
.90
$
89
.82
$
104
.08
$
98
.85
Investment
activities
Net
investment
loss
(1)(2)
(
0
.13
)
(
0
.11
)
(
0
.08
)
(
0
.09
)
(
0
.22
)
Net
realized
and
unrealized
gain/loss
14
.24
1
.99
2
.74
(
12
.58
)
13
.21
Total
from
investment
activities
14
.11
1
.88
2
.66
(
12
.67
)
12
.99
Distributions
Net
investment
income
(
0
.11
)
(
0
.01
)
—
—
—
Net
realized
gain
(
9
.99
)
(
10
.24
)
(
4
.58
)
(
1
.59
)
(
7
.76
)
Total
distributions
(
10
.10
)
(
10
.25
)
(
4
.58
)
(
1
.59
)
(
7
.76
)
NET
ASSET
VALUE
End
of
period
$
83
.54
$
79
.53
$
87
.90
$
89
.82
$
104
.08
Ratios/Supplemental
Data
Total
return
(2)(3)
17
.72
%
1
.82
%
3
.08
%
(
12
.19
)
%
13
.27
%
Ratios
to
average
net
assets:
(2)
Gross
expenses
before
waivers/payments
by
Price
Associates
0
.83
%
0
.80
%
0
.80
%
0
.80
%
0
.75
%
Net
expenses
after
waivers/
payments
by
Price
Associates
0
.83
%
0
.80
%
0
.80
%
0
.80
%
0
.75
%
Net
investment
loss
(
0
.16
)
%
(
0
.12
)
%
(
0
.09
)
%
(
0
.10
)
%
(
0
.21
)
%
Portfolio
turnover
rate
61
.6
%
52
.4
%
48
.4
%
28
.8
%
33
.8
%
Net
assets,
end
of
period
(in
millions)
$6,851
$7,727
$9,105
$10,235
$17,213
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.
T.
ROWE
PRICE
Health
Sciences
Fund
Financial
Highlights
3
For
a
share
outstanding
throughout
each
period
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
I
Class
..
Year
..
..
Ended
.
12/31/25
12/31/24
12/31/23
12/31/22
12/31/21
NET
ASSET
VALUE
Beginning
of
period
$
79
.71
$
88
.12
$
89
.91
$
104
.05
$
98
.87
Investment
activities
Net
investment
income
(loss)
(1)(2)
(
0
.01
)
0
.01
0
.04
0
.05
(
0
.11
)
Net
realized
and
unrealized
gain/loss
14
.29
1
.98
2
.75
(
12
.60
)
13
.22
Total
from
investment
activities
14
.28
1
.99
2
.79
(
12
.55
)
13
.11
Distributions
Net
investment
income
(
0
.27
)
(
0
.16
)
—
—
—
Net
realized
gain
(
9
.99
)
(
10
.24
)
(
4
.58
)
(
1
.59
)
(
7
.93
)
Total
distributions
(
10
.26
)
(
10
.40
)
(
4
.58
)
(
1
.59
)
(
7
.93
)
NET
ASSET
VALUE
End
of
period
$
83
.73
$
79
.71
$
88
.12
$
89
.91
$
104
.05
Ratios/Supplemental
Data
Total
return
(2)(3)
17
.89
%
1
.94
%
3
.22
%
(
12
.08
)
%
13
.40
%
Ratios
to
average
net
assets:
(2)
Gross
expenses
before
waivers/payments
by
Price
Associates
0
.68
%
0
.67
%
0
.67
%
0
.67
%
0
.65
%
Net
expenses
after
waivers/
payments
by
Price
Associates
0
.68
%
0
.67
%
0
.67
%
0
.67
%
0
.65
%
Net
investment
income
(loss)
(
0
.02
)
%
0
.01
%
0
.04
%
0
.05
%
(
0
.10
)
%
Portfolio
turnover
rate
61
.6
%
52
.4
%
48
.4
%
28
.8
%
33
.8
%
Net
assets,
end
of
period
(in
millions)
$5,218
$5,287
$5,607
$5,938
$2,295
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.
T.
ROWE
PRICE
Health
Sciences
Fund
December
31,
2025
4
Portfolio
of
Investments
‡
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
COMMON
STOCKS
95.6%
BIOTECHNOLOGY
33.5%
International-Biotechnology
0.1%
Ideaya
Biosciences (1)
264,685
9,150
9,150
Major
Biotechnology
5.4%
Alkermes (1)
279,307
7,815
Celldex
Therapeutics (1)
359,422
9,762
Exact
Sciences
CMO
Milestone,
Acquisition
Date:
1/6/21,
Cost $— (1)(2)(3)
3,726,272
—
Exact
Sciences
FDA
Milestone,
Acquisition
Date:
1/6/21,
Cost $— (1)(2)(3)
1,863,136
—
Gilead
Sciences
2,131,780
261,655
Neurocrine
Biosciences (1)
222,974
31,624
Royalty
Pharma,
Class
A
710,236
27,443
United
Therapeutics (1)
229,995
112,065
Vertex
Pharmaceuticals (1)
443,695
201,154
651,518
Other
Biotechnology
28.0%
Abivax,
ADR (1)
386,162
52,076
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
—
Affinivax
Next
Gen.
Prod.
Milestone
Event,
Acquisition
Date:
9/12/22,
Cost $3,454 (1)(2)(3)
7,349,672
—
Agios
Pharmaceuticals (1)
346,220
9,424
Allogene
Therapeutics (1)
2,147,980
2,943
Alnylam
Pharmaceuticals (1)
690,581
274,609
Annexon (1)
204,248
1,025
Apogee
Therapeutics (1)
637,936
48,151
Arcellx (1)
381,990
24,906
Ascendis
Pharma,
ADR (1)
707,119
150,786
Aura
Biosciences (1)
255,721
1,394
Beam
Therapeutics (1)
1,101,691
30,539
BeOne
Medicines,
ADR (1)
83,096
25,245
BeOne
Medicines,
Class
H
(HKD) (1)
6,617,296
152,305
Bicara
Therapeutics (1)
826,367
13,908
Bicycle
Therapeutics,
ADR (1)
854,795
6,052
Biohaven (1)
775,801
8,759
BridgeBio
Oncology
Therapeutics (1)
623,141
7,802
Bridgebio
Pharma (1)
866,177
66,254
T.
ROWE
PRICE
Health
Sciences
Fund
5
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
Cabaletta,
Warrants,
9/20/26,
Acquisition
Date:
6/11/25,
Cost $— (1)(3)
1,694,355
—
Cabaletta
Bio (1)
931,483
2,040
Centessa
Pharmaceuticals,
ADR (1)
2,194,434
54,883
CG
oncology (1)
1,001,152
41,568
Climb
Bio (1)
1,494,439
5,978
Crescent
Biopharma (1)
255,639
3,032
Crinetics
Pharmaceuticals (1)
1,171,967
54,555
Cytokinetics (1)
833,722
52,975
Denali
Therapeutics (1)
1,027,763
16,968
Disc
Medicine (1)
394,643
31,339
Entrada
Therapeutics (1)
171,368
1,762
Generation
Bio (1)
111,481
633
Ginkgo
Bioworks,
Earn
Out
Shares
$15.00,
Acquisition
Date:
9/17/21,
Cost $— (1)(2)(3)
5,317
—
Ginkgo
Bioworks,
Earn
Out
Shares
$17.50,
Acquisition
Date:
9/17/21,
Cost $— (1)(2)(3)
5,317
—
Ginkgo
Bioworks,
Earn
Out
Shares
$20.00,
Acquisition
Date:
9/17/21,
Cost $— (1)(2)(3)
5,317
—
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
—
Immunocore
Holdings,
ADR (1)
743,926
25,822
Immunome (1)
2,171,072
46,635
Incyte (1)
566,083
55,912
Insmed (1)
1,292,574
224,960
Ionis
Pharmaceuticals (1)
1,019,711
80,669
Iovance
Biotherapeutics (1)
575,611
1,571
Janux
Therapeutics (1)
72,899
1,006
Krystal
Biotech (1)
318,084
78,420
Kymera
Therapeutics (1)
1,234,213
96,034
Kyverna
Therapeutics (1)
1,320,654
12,414
MBX
Biosciences (1)
615,715
19,420
Monte
Rosa
Therapeutics (1)
1,186,156
18,599
MoonLake
Immunotherapeutics (1)
742,022
9,780
Natera (1)
566,806
129,850
Nuvalent,
Class
A (1)
544,976
54,819
Odyssey
Therapeutics,
Warrants,
6/16/32,
Acquisition
Date:
6/16/25,
Cost $— (1)(2)(3)
133,346
—
ORIC
Pharmaceuticals (1)
940,154
7,690
Oruka
Therapeutics (1)
462,775
14,027
T.
ROWE
PRICE
Health
Sciences
Fund
6
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
Pharvaris (1)
722,194
20,041
Praxis
Precision
Medicines (1)
227,181
66,959
Prelude
Therapeutics (1)
516,220
1,497
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
—
Protagonist
Therapeutics (1)
955,194
83,427
Rapport
Therapeutics (1)
643,434
19,522
Regeneron
Pharmaceuticals
399,214
308,141
Relay
Therapeutics (1)
1,104,939
9,348
Repligen (1)
199,643
32,713
Replimune
Group (1)
1,470,920
14,297
Revolution
Medicines (1)
1,431,908
114,051
Revolution
Medicines,
Warrants,
11/14/28 (1)
198,505
187
Rhythm
Pharmaceuticals (1)
309,295
33,107
Ring
Therapeutics,
Acquisition
Date:
4/12/21
-
10/7/22,
Cost $13,418 (1)(2)(3)
291,704
1,342
Rocket
Pharmaceuticals (1)
537,262
1,886
Roivant
Sciences (1)
3,315,138
71,938
Scholar
Rock
Holding (1)
1,673,013
73,696
Sensorion
(EUR) (1)
10,026,597
3,953
Sionna
Therapeutics (1)
633,011
26,042
Soleno
Therapeutics (1)
112,291
5,199
Spyre
Therapeutics (1)
896,465
29,368
Structure
Therapeutics,
ADR (1)
1,053,266
73,255
Summit
Therapeutics (1)
7,286,202
127,436
Tarsus
Pharmaceuticals (1)
374,184
30,638
Tenax
Therapeutics,
Warrants,
8/29/29,
Acquisition
Date:
8/6/24,
Cost $— (1)(3)(4)
1,103,045
2,906
Treeline
Biosciences,
Warrants,
8/21/35,
Acquisition
Date:
8/21/25,
Cost $— (1)(2)(3)
44,917
327
Ultragenyx
Pharmaceutical (1)
452,583
10,409
UroGen
Pharma (1)
459,055
10,751
Vaxcyte (1)
455,345
21,010
Vera
Therapeutics (1)
1,968,700
99,695
Viridian
Therapeutics (1)
630,615
19,625
Voyager
Therapeutics (1)
273,538
1,075
WaVe
Life
Sciences (1)
1,529,350
25,999
Xencor (1)
437,762
6,702
Zai
Lab,
ADR (1)
455,856
8,041
3,374,803
Total
Biotechnology
4,035,471
T.
ROWE
PRICE
Health
Sciences
Fund
7
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
CONSUMER
NONDURABLES
0.2%
Pharmaceuticals
0.2%
Tenax
Therapeutics,
Warrants,
Acquisition
Date:
8/6/24,
Cost $6,266 (1)(3)(4)
2,095,785
24,256
Total
Consumer
Nondurables
24,256
LIFE
SCIENCES
7.7%
Life
Sciences
7.7%
Bio-Techne
384,090
22,588
Chromacode,
Acquisition
Date:
2/28/22,
Cost $4,393 (1)(2)(3)
626
3
Danaher
1,438,619
329,329
Ginkgo
Bioworks
Holdings (1)
25,388
211
Revvity
295,443
28,584
SomaLogic,
Warrants,
8/31/26 (1)
90,179
—
Thermo
Fisher
Scientific
890,534
516,020
Waters (1)
78,891
29,965
Total
Life
Sciences
926,700
MISCELLANEOUS
0.0%
Miscellaneous
0.0%
Orchestra
BioMed
Holdings (1)
258,756
1,074
Total
Miscellaneous
1,074
PHARMACEUTICALS
20.6%
Major
Pharmaceuticals
20.3%
AbbVie
1,454,646
332,372
AstraZeneca,
ADR
3,719,491
341,933
Chugai
Pharmaceutical
(JPY)
1,076,100
56,454
Eli
Lilly
1,391,823
1,495,764
Merck
2,083,252
219,283
UCB
(EUR)
13,964
3,891
2,449,697
Specialty
Pharmaceuticals
0.3%
Blue
Marlin
Therapeutics,
Acquisition
Date:
12/18/25,
Cost $— (1)(2)(3)
1,803
—
Madrigal
Pharmaceuticals (1)
62,028
36,122
Mirum
Pharmaceuticals
PIPE,
Acquisition
Date:
12/8/25,
Cost $4,924 (1)(3)(5)
71,899
5,111
41,233
Total
Pharmaceuticals
2,490,930
T.
ROWE
PRICE
Health
Sciences
Fund
8
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
PRODUCTS
&
DEVICES
16.9%
Capital
Equipment
0.1%
PROCEPT
BioRobotics (1)
360,472
11,340
11,340
Implants
10.2%
Boston
Scientific (1)
2,028,190
193,388
Edwards
Lifesciences (1)
558,468
47,609
Intuitive
Surgical (1)
955,225
541,001
Sonova
Holding
(CHF)
88,044
22,774
Stryker
1,208,979
424,920
Verily
Life
Sciences,
Series
B,
Acquisition
Date:
1/23/19,
Cost $13,998 (1)(2)(3)
113,564
3,748
1,233,440
Other
Products
&
Devices
6.6%
Argenx,
ADR (1)
556,828
468,265
Celcuity (1)
575,794
57,430
IDEXX
Laboratories (1)
132,942
89,939
Pax
Labs,
Class
A,
Acquisition
Date:
4/18/19,
Cost $31,622 (1)
(2)(3)
8,397,988
2,603
Penumbra (1)
536,111
166,682
Saluda
Medical,
CDI
(AUD) (1)
3,958,452
3,765
Saluda
Medical,
CDI,
Acquisition
Date:
1/20/22
-
11/4/25,
Cost $14,874
(AUD) (1)(3)
3,715,230
3,533
Saluda
Medical,
Warrants,
3/14/35,
Acquisition
Date:
1/20/22,
Cost $0 (1)(2)(3)
2
—
792,217
Total
Products
&
Devices
2,036,997
SERVICES
12.1%
Distribution
2.2%
Cardinal
Health
327,179
67,235
Cencora
215,573
72,810
CVS
Health
1,304,302
103,510
McKesson
30,627
25,123
268,678
Information
0.2%
GeneDx
Holdings (1)
146,500
19,054
GeneDx
Holdings,
Warrants,
7/22/26 (1)
206,747
10
19,064
Other
Services
1.4%
Caris
Life
Sciences (1)
1,916,953
51,719
Guardant
Health (1)
1,100,084
112,363
T.
ROWE
PRICE
Health
Sciences
Fund
9
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
Perceptive
Capital
Solutions
SPAC/Freenome
Holdings
PIPE,
(1)(5)
438,178
5,138
PrognomIQ,
Class
A,
Acquisition
Date:
11/15/19
-
4/22/25,
Cost $14,562 (1)(2)(3)
606,647
91
169,311
Payors
5.5%
Alignment
Healthcare (1)
1,402,808
27,705
Centene (1)
570,183
23,463
Cigna
Group
343,518
94,546
Elevance
Health
304,760
106,834
Molina
Healthcare (1)
92,264
16,012
UnitedHealth
Group
1,204,526
397,626
666,186
Providers
2.8%
BrightSpring
Health
Services (1)
2,533,854
94,893
Encompass
Health
154,676
16,417
HCA
Healthcare
236,913
110,605
Tenet
Healthcare (1)
593,568
117,954
339,869
Total
Services
1,463,108
Total
Miscellaneous
Common
Stocks
4.6% (6)
557,056
Total
Common
Stocks
(Cost
$5,227,971)
11,535,592
CONVERTIBLE
BONDS
0.1%
BIOTECHNOLOGY
0.1%
Other
Biotechnology
0.1%
Delfi
Diagnostics,
0.00%,
1/29/27,
Acquisition
Date:
12/1/25,
Cost $1,732 (1)(2)(3)
1,732,158
1,732
Immunocore
Holdings,
2.50%,
2/1/30
15,469,000
13,997
Total
Biotechnology
15,729
PRODUCTS
&
DEVICES
0.0%
Capital
Equipment
0.0%
RefleXion
Medical,
0.00%,
7/24/26,
Acquisition
Date:
7/28/25,
Cost $239 (1)(2)(3)
239,698
379
RefleXion
Medical,
15.00%,
7/11/26,
Acquisition
Date:
8/13/25,
Cost $240 (2)(3)
239,698
376
T.
ROWE
PRICE
Health
Sciences
Fund
10
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
RefleXion
Medical,
15.00%,
7/11/26,
Acquisition
Date:
8/27/25,
Cost $240 (2)(3)
239,698
374
Total
Products
&
Devices
1,129
Total
Convertible
Bonds
(Cost
$17,920)
16,858
CONVERTIBLE
PREFERRED
STOCKS
4.1%
BIOTECHNOLOGY
2.5%
Other
Biotechnology
2.5%
Aktis
Oncology,
Series
B,
Acquisition
Date:
9/20/24,
Cost $11,031 (1)(2)(3)
2,757,866
11,031
Arbor
Bio,
Series
B,
Acquisition
Date:
10/29/21,
Cost $8,828 (1)
(2)(3)
532,759
2,834
Arsenal
Biosciences,
Series
C,
Acquisition
Date:
7/9/24,
Cost $13,459 (1)(2)(3)
724,394
13,459
Avalyn
Pharma,
Series
C-1,
Acquisition
Date:
9/22/23,
Cost $6,178 (1)(2)(3)
8,436,161
6,718
Avalyn
Pharma,
Series
D,
Acquisition
Date:
4/25/25,
Cost $1,327 (1)(2)(3)
1,666,360
1,327
Bluejay
Therapeutics,
Series
C,
Acquisition
Date:
5/1/24,
Cost $16,506 (1)(2)(3)(4)
2,529,000
31,006
Bluejay
Therapeutics,
Series
C-1,
Acquisition
Date:
5/1/24,
Cost $1,135 (1)(2)(3)(4)
173,971
2,133
Chroma
Medicine,
Series
I,
Acquisition
Date:
10/12/21
-
12/4/24,
Cost $17,211 (1)(2)(3)
7,683,800
7,684
Delfi
Diagnostics,
Series
A,
Acquisition
Date:
1/12/21
-
4/7/22,
Cost $7,107 (1)(2)(3)
3,426,868
13,399
Delfi
Diagnostics,
Series
B,
Acquisition
Date:
6/10/22,
Cost $8,980 (1)(2)(3)
1,853,138
7,246
Eikon
Therapeutics,
Series
B,
Acquisition
Date:
12/3/21,
Cost $13,496 (1)(2)(3)
762,996
4,459
Eikon
Therapeutics,
Series
B-1,
Acquisition
Date:
12/3/21
-
2/14/25,
Cost $4,525 (1)(2)(3)
774,266
4,525
Eikon
Therapeutics,
Series
C,
Acquisition
Date:
5/18/23,
Cost $3,382 (1)(2)(3)
157,292
919
Eikon
Therapeutics,
Series
C-1,
Acquisition
Date:
5/18/23
-
2/14/25,
Cost $881 (1)(2)(3)
150,661
881
Eikon
Therapeutics,
Series
D,
Acquisition
Date:
2/14/25,
Cost $5,406 (1)(2)(3)
924,929
5,406
Endeavor
Bio,
Series
B,
Acquisition
Date:
1/21/22,
Cost $8,808 (1)(2)(3)
1,867,734
12,186
Endeavor
Bio,
Series
C,
Acquisition
Date:
4/22/24,
Cost $3,195 (1)(2)(3)
489,761
3,195
FOG
Pharma,
Series
C,
Acquisition
Date:
1/11/21
-
8/2/21,
Cost $6,251 (1)(2)(3)
431,391
3,650
T.
ROWE
PRICE
Health
Sciences
Fund
11
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
FOG
Pharma,
Series
D,
Acquisition
Date:
11/17/22,
Cost $6,622 (1)(2)(3)
615,203
4,503
FOG
Pharma,
Series
E,
Acquisition
Date:
2/29/24
-
1/22/25,
Cost $3,881 (1)(2)(3)
623,217
3,869
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
Kailera
Therapeutics,
Series
B,
Acquisition
Date:
10/31/25,
Cost $8,774 (1)(2)(3)
626,703
8,774
Kartos
Therapeutics,
Series
C,
Acquisition
Date:
8/22/23,
Cost $10,593 (1)(2)(3)
1,873,841
10,593
Kartos
Therapeutics,
Series
D,
Acquisition
Date:
2/26/25,
Cost $2,904 (1)(2)(3)
513,724
2,904
Laronde,
Series
B,
Acquisition
Date:
7/28/21,
Cost $32,757 (1)
(2)(3)
1,169,887
1,685
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
1,763
Odyssey
Therapeutics,
Series
C,
Acquisition
Date:
10/25/23,
Cost $530 (1)(2)(3)
105,905
159
Odyssey
Therapeutics,
Series
D,
Acquisition
Date:
6/16/25,
Cost $669 (1)(2)(3)
444,487
669
Scribe
Therapeutics,
Series
B,
Acquisition
Date:
3/17/21,
Cost $6,219 (1)(2)(3)
1,027,755
6,219
Tessera
Therapeutics,
Series
C,
Acquisition
Date:
2/25/22,
Cost $7,915 (1)(2)(3)
674,174
3,492
Tessera
Therapeutics,
Series
D,
Acquisition
Date:
3/7/25,
Cost $1,979 (1)(2)(3)
381,989
1,979
Third
Arc
Bio,
Series
A,
Acquisition
Date:
7/16/24
-
4/24/25,
Cost $8,825 (1)(2)(3)
4,194,043
8,825
Treeline
Biosciences,
Series
A,
Acquisition
Date:
4/9/21
-
9/26/22,
Cost $18,552 (1)(2)(3)
2,370,150
17,271
Treeline
Biosciences,
Series
A-1,
Acquisition
Date:
10/2/24,
Cost $23,629 (1)(2)(3)
2,744,291
19,998
T.
ROWE
PRICE
Health
Sciences
Fund
12
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
Treeline
Biosciences,
Series
A-2,
Acquisition
Date:
8/21/25,
Cost $2,578 (1)(2)(3)
299,448
2,182
Total
Biotechnology
303,584
CONSUMER
NONDURABLES
0.1%
Biotechnology
0.0%
Arbor
Bio,
Series
C,
Acquisition
Date:
10/21/24,
Cost $1,324 (1)
(2)(3)
322,096
1,714
Nutcracker
Therapeutics,
Series
C,
Acquisition
Date:
8/27/21,
Cost $11,050 (1)(2)(3)
1,027,785
—
1,714
Health
Care
Services
0.1%
Capsule,
Series
1-D,
Acquisition
Date:
4/7/21,
Cost $12,364 (1)
(2)(3)
853,213
1,553
Capsule,
Series
E,
Acquisition
Date:
1/10/23,
Cost $2,658 (1)
(2)(3)
906,656
1,650
Color
Health,
Series
D,
Acquisition
Date:
12/17/20,
Cost $11,180 (1)(2)(3)
296,922
5,698
Color
Health,
Series
D-1,
Acquisition
Date:
1/13/20,
Cost $9,358 (1)(2)(3)
438,696
5,914
Color
Health,
Series
E,
Acquisition
Date:
10/26/21,
Cost $4,414 (1)(2)(3)
44,149
1,810
16,625
Total
Consumer
Nondurables
18,339
FINANCIAL
0.1%
Investment
Dealers
0.1%
Seaport
Therapeutics,
Series
B,
Acquisition
Date:
10/18/24,
Cost $11,030 (1)(2)(3)
2,322,209
11,030
Total
Financial
11,030
LIFE
SCIENCES
0.6%
Life
Sciences
0.6%
Cellanome,
Series
A,
Acquisition
Date:
12/30/21,
Cost $11,023 (1)(2)(3)
1,993,387
17,342
Chromacode,
Series
AA,
Acquisition
Date:
5/22/25,
Cost $178 (1)(2)(3)
36,845
178
Clear
Labs,
Series
C,
Acquisition
Date:
5/13/21,
Cost $13,294 (1)(2)(3)
3,830,773
12,120
Clear
Labs,
Series
D,
Acquisition
Date:
12/12/24,
Cost $1,183 (1)(2)(3)
379,601
1,183
DNA
Script,
Series
C,
Acquisition
Date:
12/16/21,
Cost $21,371
(EUR) (1)(2)(3)
25,201
3,517
Element
Biosciences,
Series
C,
Acquisition
Date:
6/21/21,
Cost $17,704 (1)(2)(3)
861,217
5,908
T.
ROWE
PRICE
Health
Sciences
Fund
13
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
Element
Biosciences,
Series
D,
Acquisition
Date:
6/28/24,
Cost $2,207 (1)(2)(3)
281,354
1,561
Element
Biosciences,
Series
D-1,
Acquisition
Date:
6/28/24,
Cost $2,207 (1)(2)(3)
281,354
1,562
Lumicks
Tech,
Series
D,
Acquisition
Date:
4/14/21,
Cost $8,875 (1)(2)(3)
4,954
2,670
Manus
Bio,
Series
One-6,
Acquisition
Date:
3/30/21,
Cost $12,829 (1)(2)(3)
1,223,104
3,669
National
Resilience,
Series
B,
Acquisition
Date:
10/23/20,
Cost $16,458 (1)(2)(3)
1,204,832
19,362
National
Resilience,
Series
C,
Acquisition
Date:
6/9/21,
Cost $18,957 (1)(2)(3)
426,855
6,860
Total
Life
Sciences
75,932
PRODUCTS
&
DEVICES
0.5%
Capital
Equipment
0.0%
Reflexion
Medical,
Series
C,
Acquisition
Date:
4/3/18,
Cost $4,243 (1)(2)(3)
2,507,885
1,028
Reflexion
Medical,
Series
D,
Acquisition
Date:
4/3/20,
Cost $2,142 (1)(2)(3)
1,123,437
517
Reflexion
Medical,
Series
E,
Acquisition
Date:
3/1/22,
Cost $4,403 (1)(2)(3)
1,857,286
1,058
Reflexion
Medical,
Series
F,
Acquisition
Date:
11/13/23,
Cost $2,690 (1)(2)(3)
1,794,104
646
3,249
Implants
0.3%
Kardium,
Series
D-5,
Acquisition
Date:
11/29/18,
Cost $8,574 (1)(2)(3)
8,849,057
7,249
Kardium,
Series
D-6,
Acquisition
Date:
1/8/21,
Cost $12,516 (1)
(2)(3)
12,320,393
10,194
Kardium,
Series
D-7,
Acquisition
Date:
6/9/25,
Cost $5,850 (1)
(2)(3)
12,050,573
7,799
Kardium,
Series
D-8,
Acquisition
Date:
6/6/25,
Cost $4,393 (1)
(2)(3)
6,786,958
4,393
29,635
Other
Products
&
Devices
0.2%
Galvanize
Therapeutics,
Series
C,
Acquisition
Date:
7/7/25,
Cost $4,218 (1)(2)(3)(4)
7,962,282
4,219
Galvanize
Therapeutics,
Series
C-1,
Acquisition
Date:
7/7/25,
Cost $2,659 (1)(2)(3)(4)
7,721,685
4,091
Galvanize
Therapeutics,
Series
C-2,
Acquisition
Date:
7/7/25,
Cost $8,988 (1)(2)(3)(4)
26,100,000
13,828
22,138
Total
Products
&
Devices
55,022
T.
ROWE
PRICE
Health
Sciences
Fund
14
Shares/Par
$
Value
(Cost
and
value
in
$000s)
‡
SERVICES
0.3%
Information
0.1%
Cleerly,
Series
C,
Acquisition
Date:
7/8/22,
Cost $6,904 (1)(2)
(3)
586,029
10,285
10,285
Other
Services
0.1%
Freenome
Holdings,
Series
B,
Acquisition
Date:
6/24/19,
Cost $7,103 (1)(3)
1,558,570
5,404
Freenome
Holdings,
Series
C,
Acquisition
Date:
8/14/20,
Cost $6,139 (1)(3)
928,231
3,219
Freenome
Holdings,
Series
D,
Acquisition
Date:
11/22/21,
Cost $3,971 (1)(3)
526,504
1,826
Freenome
Holdings,
Series
F,
Acquisition
Date:
1/26/24,
Cost $1,322 (1)(3)
178,707
620
11,069
Providers
0.1%
Honor
Technology,
Series
D,
Acquisition
Date:
10/16/20,
Cost $7,539 (1)(2)(3)
3,130,941
4,196
Honor
Technology,
Series
E,
Acquisition
Date:
9/29/21,
Cost $6,626 (1)(2)(3)
2,095,807
2,808
7,004
Total
Services
28,358
Total
Convertible
Preferred
Stocks
(Cost
$637,109)
492,265
PREFERRED
STOCKS
0.2%
LIFE
SCIENCES
0.2%
Life
Sciences
0.2%
Sartorius
(EUR)
94,120
27,103
Total
Life
Sciences
27,103
Total
Preferred
Stocks
(Cost
$16,221)
27,103
SHORT-TERM
INVESTMENTS
0.2%
Money
Market
Funds
0.2%
T.
Rowe
Price
Government
Reserve
Fund,
3.77% (4)(7)
16,957,277
16,957
Total
Short-Term
Investments
(Cost
$16,957)
16,957
Total
Investments
in
Securities
100.2%
of
Net
Assets
(Cost
$5,916,178)
$
12,088,775
T.
ROWE
PRICE
Health
Sciences
Fund
15
‡
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
$539,727
and
represents
4.5%
of
net
assets.
(4)
Affiliated
Companies
(5)
All
or
a
portion
of
the
position
represents
an
unfunded
commitment;
a
liability
to
fund
the
commitment
has
been
recognized.
The
fund's
total
unfunded
commitments
at
December
31,
2025,
were
$9,306
and
were
valued
at
$10,249
(0.1%
of
net
assets).
(6)
The
identity
of
certain
securities
has
been
concealed
to
protect
the
fund
while
it
completes
a
purchase
or
selling
program
for
the
securities.
(7)
Seven-day
yield
ADR
American
Depositary
Receipts
AUD
Australian
Dollar
CDI
CHESS
or
CREST
Depositary
Interest
CHF
Swiss
Franc
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
HKD
Hong
Kong
Dollar
JPY
Japanese
Yen
PIPE
Private
Investment
in
Public
Equity
SPAC
Special
Purpose
Acquisition
Company
T.
ROWE
PRICE
Health
Sciences
Fund
16
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
year
ended
December
31,
2025.
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
$
—
$
14,500
$
—
Bluejay
Therapeutics,
Series
C-1
—
998
—
Chroma
Medicine,
Series
I
—
—
—
Galvanize
Therapeutics,
Series
C
—
1
—
Galvanize
Therapeutics,
Series
C-1
—
1,432
—
Galvanize
Therapeutics,
Series
C-2
—
4,840
—
Kardium,
Series
D-5
—
(273)
—
Kardium,
Series
D-6
—
(278)
—
Kardium,
Series
D-7
—
1,949
—
Kardium,
Series
D-8
—
—
—
Tenax
Therapeutics,
Warrants
—
11,945
—
Tenax
Therapeutics,
Warrants,
8/29/29
—
1,638
—
Third
Arc
Bio,
Series
A
—
—
—
T.
Rowe
Price
Government
Reserve
Fund,
3.77%
—
—
1,769
Affiliates
not
held
at
period
end
40,951
—
209
Totals
$
40,951#
$
36,752
$
1,978+
T.
ROWE
PRICE
Health
Sciences
Fund
17
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
AFFILIATED
COMPANIES
(CONTINUED)
($000s)
Supplementary
Investment
Schedule
Affiliate
Value
12/31/24
Purchase
Cost
Sales
Cost
Value
12/31/25
Bluejay
Therapeutics,
Series
C
$
16,506
$
—
$
—
$
31,006
Bluejay
Therapeutics,
Series
C-1
1,135
—
—
2,133
Chroma
Medicine,
Series
I
7,684
—
—
*
Galvanize
Therapeutics,
Series
C
—
4,218
—
4,219
Galvanize
Therapeutics,
Series
C-1
—
2,659
—
4,091
Galvanize
Therapeutics,
Series
C-2
—
8,988
—
13,828
Kardium,
10.00%,
12/31/26
5,292
—
5,292
—
Kardium,
Series
D-5
7,522
—
—
*
Kardium,
Series
D-6
10,472
—
—
*
Kardium,
Series
D-7
—
5,850
—
*
Kardium,
Series
D-8
—
4,393
—
*
Metsera ^^
13,241
47,904
61,145
—
Tenax
Therapeutics,
Warrants
12,311
—
—
24,256
Tenax
Therapeutics,
Warrants,
8/29/29
1,268
—
—
2,906
Third
Arc
Bio,
Series
A
*
4,413
—
*
T.
Rowe
Price
Government
Reserve
Fund,
3.77%
5,859
¤
¤
16,957
Total
$
99,396^
#
Capital
gain
distributions
from
underlying
Price
funds
represented
$0
of
the
net
realized
gain
(loss).
+
Investment
income
comprised
$1,978
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
$56,729.
^^
Includes
previously
reported
affiliates
Metsera,
Series
B
acquired
through
a
corporate
action.
*
On
the
date
indicated,
issuer
was
held
but
not
considered
an
affiliated
company.
T.
ROWE
PRICE
Health
Sciences
Fund
December
31,
2025
Statement
of
Assets
and
Liabilities
18
($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
$5,916,178)
$
12,088,775
Dividends
and
interest
receivable
4,346
Receivable
for
shares
sold
3,330
Receivable
for
investment
securities
sold
1,231
Foreign
currency
(cost
$1)
1
Other
assets
5,350
Total
assets
12,103,033
Liabilities
Payable
for
investment
securities
purchased
13,034
Payable
for
shares
redeemed
12,187
Investment
management
fees
payable
6,581
Due
to
affiliates
730
Payable
to
directors
8
Other
liabilities
1,235
Total
liabilities
33,775
NET
ASSETS
$
12,069,258
Net
Assets
Consist
of:
Total
distributable
earnings
(loss)
$
6,506,618
Paid-in
capital
applicable
to
144,325,281
shares
of
$0.0001
par
value
capital
stock
outstanding;
1,000,000,000
shares
authorized
5,562,640
NET
ASSETS
$
12,069,258
NET
ASSET
VALUE
PER
SHARE
Investor
Class
(Net
assets:
$6,851,059;
Shares
outstanding:
82,007,253)
$
83.54
I
Class
(Net
assets:
$5,218,199;
Shares
outstanding:
62,318,028)
$
83.73
T.
ROWE
PRICE
Health
Sciences
Fund
Statement
of
Operations
19
($000s)
Year
Ended
12/31/25
Investment
Income
(Loss)
Income
Dividend
(net
of
foreign
taxes
of
$1,504)
$
76,997
.
Interest
1,838
Other
23
Total
income
78,858
Expenses
Investment
management
75,074
Shareholder
servicing
Investor
Class
$
12,069
I
Class
1,663
13,732
Prospectus
and
shareholder
reports
Investor
Class
153
I
Class
37
190
Custody
and
accounting
476
Legal
and
audit
173
Registration
94
Directors
37
Miscellaneous
933
Total
expenses
90,709
Net
investment
loss
(
11,851
)
T.
ROWE
PRICE
Health
Sciences
Fund
Statement
of
Operations
20
($000s)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Year
Ended
12/31/25
Realized
and
Unrealized
Gain
/
Loss
–
Net
realized
gain
(loss)
Securities
1,783,496
Foreign
currency
transactions
65
Net
realized
gain
1,783,561
Change
in
net
unrealized
gain
/
loss
Securities
96,117
Other
assets
and
liabilities
denominated
in
foreign
currencies
572
Change
in
net
unrealized
gain
/
loss
96,689
Net
realized
and
unrealized
gain
/
loss
1,880,250
INCREASE
IN
NET
ASSETS
FROM
OPERATIONS
$
1,868,399
T.
ROWE
PRICE
Health
Sciences
Fund
Statement
of
Changes
in
Net
Assets
21
($000s)
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Year
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Ended
.
.
.
.
.
.
.
.
.
.
.
.
.
.
12/31/25
12/31/24
Increase
(Decrease)
in
Net
Assets
Operations
Net
investment
loss
$
(
11,851
)
$
(
10,239
)
Net
realized
gain
1,783,561
1,559,478
Change
in
net
unrealized
gain
/
loss
96,689
(
1,182,220
)
Increase
in
net
assets
from
operations
1,868,399
367,019
Distributions
to
shareholders
Net
earnings
Investor
Class
(
752,368
)
(
909,837
)
I
Class
(
580,887
)
(
626,783
)
Decrease
in
net
assets
from
distributions
(
1,333,255
)
(
1,536,620
)
Capital
share
transactions
*
Shares
sold
Investor
Class
415,427
598,708
I
Class
340,964
562,868
Distributions
reinvested
Investor
Class
720,438
872,456
I
Class
533,563
580,810
Shares
redeemed
Investor
Class
(
2,322,145
)
(
2,175,504
)
I
Class
(
1,168,124
)
(
967,406
)
Decrease
in
net
assets
from
capital
share
transactions
(
1,479,877
)
(
528,068
)
Net
Assets
Decrease
during
period
(
944,733
)
(
1,697,669
)
Beginning
of
period
13,013,991
14,711,660
End
of
period
$
12,069,258
$
13,013,991
*Share
information
(000s)
Shares
sold
Investor
Class
5,112
6,383
I
Class
4,142
6,002
Distributions
reinvested
Investor
Class
8,604
10,670
I
Class
6,358
7,087
Shares
redeemed
Investor
Class
(
28,872
)
(
23,471
)
I
Class
(
14,509
)
(
10,393
)
Decrease
in
shares
outstanding
(
19,165
)
(
3,722
)
T.
ROWE
PRICE
Health
Sciences
Fund
NOTES
TO
FINANCIAL
STATEMENTS
22
T.
Rowe
Price
Health
Sciences
Fund,
Inc. (the
corporation)
is
registered
under
the
Investment
Company
Act
of
1940
(the
1940
Act).
The
Health
Sciences
Fund,
Inc.
(the
fund)
is a
diversified, open-end
management
investment
company
established
by
the
corporation. The
fund
seeks long-term
capital
appreciation.
The
fund
has two classes
of
shares:
the
Health
Sciences
Fund,
Inc.
(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
23
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.
Eastern
time,
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
24
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
25
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,
decides 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
or how
often
it
will
determine
it
necessary
to
adjust
those
prices
to
reflect
fair
value.
Debt
securities
are
generally 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
26
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
the
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
December
31,
2025
(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
$
11,242,711
$
284,086
$
8,795
$
11,535,592
Convertible
Bonds
—
13,997
2,861
16,858
Convertible
Preferred
Stocks
—
11,069
481,196
492,265
Preferred
Stocks
—
27,103
—
27,103
Short-Term
Investments
16,957
—
—
16,957
Total
$
11,259,668
$
336,255
$
492,852
$
12,088,775
T.
ROWE
PRICE
Health
Sciences
Fund
27
Following
is
a
reconciliation
of
the
fund’s
Level
3
holdings
for
the
year ended
December
31,
2025.
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
December
31,
2025,
totaled $(107,439,000) for
the
year ended
December
31,
2025.
During
the
year,
transfers
out
of
Level
3
were
because
observable
market
data
became
available
for
the
security.
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
12/31/24
Gain
(Loss)
During
Period
Total
Purchases
Total
Sales
Transfer
Out
of
Level
3
Ending
Balance
12/31/25
Investment
in
Securities
Common
Stocks
$
23,959
$
(32,987)
$
17,823
$
—
$
—
$
8,795
Convertible
Bonds
15,871
2,036
2,451
(17,497)
—
2,861
Convertible
Preferred
Stocks
580,500
(64,394)
82,427
(106,268)
(11,069)
481,196
Total
$
620,330
$
(95,345)
$
102,701
$
(123,765)
$
(11,069)
$
492,852
T.
ROWE
PRICE
Health
Sciences
Fund
28
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
$
8,795
Recent
comparable
transaction
price(s)
—#
—#
—#
—#
Discount
for
uncertainty
5%
-
100%
13%
Decrease
Discount
for
dilution
15%
15%
Decrease
Market
comparable
Enterprise
value
to
sales
multiple
2.0x
2.0x
Increase
Enterprise
value
to
gross
profit
multiple
4.9x
4.9x
Increase
Discount
for
uncertainty
100%
100%
Decrease
Discount
for
lack
of
marketability
10%
10%
Decrease
Convertible
Bonds
$
2,861
Recent
comparable
transaction
price(s)
—#
—#
—#
—#
Private
company
valuation
—#
—#
—#
Convertible
Preferred
Stocks
$
481,196
Recent
comparable
transaction
price(s)
—#
—#
—#
—#
Private
company
valuation
—#
—#
—#
Discount
for
uncertainty
50%
50%
Decrease
T.
ROWE
PRICE
Health
Sciences
Fund
29
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**
Discount
for
dilution
15%
15%
Decrease
Market
comparable
Premium
for
liquidation
preference
—#
—#
—#
Probability
for
potential
outcome
10%
–
55%
33%
Increase
Enterprise
value
to
sales
multiple
1.1x
–
11.6x
5.7x
Increase
Sales
growth
rate
0%
-
127%
65%
Increase
Enterprise
value
to
gross
profit
multiple
4.3x
–
6.1x
4.8x
Increase
Enterprise
value
to
EBITDA
multiple
19.6x
19.6x
Increase
Cost
of
capital
25%
-
45%
36%
Decrease
Discount
for
lack
of
recoverability
—#
—#
—#
Discount
to
public
company
multiples
46%
46%
Decrease
Discount
for
uncertainty
100%
100%
Decrease
Discount
for
lack
of
marketability
10%
10%
Decrease
T.
ROWE
PRICE
Health
Sciences
Fund
30
+
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.
Private
Investments
Issued
by
Special
Purpose
Acquisition
Companies
Special purpose
acquisition
companies
(SPACs)
are
shell
companies
that
have
no
operations
but
are
formed
to
raise
capital
with
the
intention
of
merging
with
or
acquiring
a
company
with
the
proceeds
of
the
SPAC’s
initial
public
offering
(IPO).
The
fund
may
enter
into
a
contingent
commitment
with
a
SPAC
to
purchase
private
investments
in
public
equity
(PIPE)
if
and
when
the
SPAC
completes
its
merger
or
acquisition.
The
fund
maintains
liquid
assets
sufficient
to
settle
its
commitment
to
purchase
the
PIPE.
However,
if
the
commitment
expires,
then
no
shares
are
purchased.
Purchased
PIPE
shares
will
be
restricted
from
trading
until
the
registration
statement
for
the
shares
is
declared
effective.
Upon
registration,
the
shares
can
be
freely
sold;
however,
in
certain
circumstances,
the
issuer
may
have
the
right
to
temporarily
suspend
trading
of
the
shares
in
the
first
year
after
the
merger
or
acquisition.
The
securities
issued
by
a
SPAC
may
be
considered
illiquid,
more
difficult
to
value,
and/or
be
subject
to
restrictions
on
resale.
T.
ROWE
PRICE
Health
Sciences
Fund
31
Other
Purchases
and
sales
of
portfolio
securities
other
than
in-kind
transactions,
if
any,
and short-term securities
aggregated $7,348,500,000 and
$10,174,325,000,
respectively,
for
the
year ended
December
31,
2025.
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.
The
fund
files
U.S.
federal,
state,
and
local
tax
returns
as
required.
The
fund’s
tax
returns
are
subject
to
examination
by
the
relevant
tax
authorities
until
expiration
of
the
applicable
statute
of
limitations,
which
is
generally
three
years
after
the
filing
of
the
tax
return
but
which
can
be
extended
to
six
years
in
certain
circumstances.
Tax
returns
for
open
years
have
incorporated
no
uncertain
tax
positions
that
require
a
provision
for
income
taxes.
Capital
accounts
within
the
financial
reporting
records
are
adjusted
for
permanent
book/tax
differences
to
reflect
tax
character
but
are
not
adjusted
for
temporary
differences.
The
permanent
book/tax
adjustments,
if
any,
have
no
impact
on
results
of
operations
or
net
assets.
The
permanent
book/
tax
adjustments
relate
primarily
to
the
current
net
operating
loss,
deemed
distributions
on
shareholder
redemptions
and
the
character
of
income
on
passive
foreign
investment
companies.
The
tax
character
of
distributions
paid
for
the
periods
presented
was
as
follows:
($000s)
December
31,
2025
December
31,
2024
Ordinary
income
(including
short-term
capital
gains,
if
any)
$
23,004
$
10,334
Long-term
capital
gain
1,310,251
1,526,286
Total
distributions
$
1,333,255
$
1,536,620
T.
ROWE
PRICE
Health
Sciences
Fund
32
At
December
31,
2025,
the
tax-basis
cost
of
investments
(including
derivatives,
if
any)
and
gross
unrealized
appreciation
and
depreciation
were as
follows:
At
December
31,
2025,
the
tax-basis
components
of
accumulated
net
earnings
(loss)
were
as
follows:
Temporary
differences
between
book-basis
and
tax-basis
components
of
total
distributable
earnings
(loss)
arise
when
certain
items
of
income,
gain,
or
loss
are
recognized
in
different
periods
for
financial
statement
purposes
versus
for
tax
purposes;
these
differences
will
reverse
in
a
subsequent
reporting
period.
The
temporary
differences
relate
primarily
to
the
deferral
of
losses
from
wash
sales.
The
loss
carryforwards
and
deferrals
primarily
relate
to
late-year
ordinary
loss
deferrals.
The
fund
has
elected
to
defer
certain
losses
to
the
first
day
of
the
following
fiscal
year
for
late-year
ordinary
loss
deferrals.
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
($000s)
Cost
of
investments
$
5,996,756
Unrealized
appreciation
$
6,577,104
Unrealized
depreciation
(484,467)
Net
unrealized
appreciation
(depreciation)
$
6,092,637
($000s)
Undistributed
long-term
capital
gain
$
427,711
Net
unrealized
appreciation
(depreciation)
6,092,637
Loss
carryforwards
and
deferrals
(13,730)
Total
distributable
earnings
(loss)
$
6,506,618
T.
ROWE
PRICE
Health
Sciences
Fund
33
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
0.26%
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 December
31,
2025,
the
effective
annual
group
fee
rate
was
0.28%.
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.
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
year ended
December
31,
2025.
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
T.
ROWE
PRICE
Health
Sciences
Fund
34
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.
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
year
ended
December
31,
2025,
expenses
incurred
pursuant
to
these
service
agreements
were
$125,000
for
Price
Associates;
$6,569,000
for
T.
Rowe
Price
Services,
Inc.;
and
$401,000
Investor
Class
I
Class
Expense
limitation/I
Class
Limit
0.99%
0.05%
Expense
limitation
date
02/29/28
02/29/28
(Waived)/repaid
during
the
period
($000s)
$—
$—
T.
ROWE
PRICE
Health
Sciences
Fund
35
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
year ended
December
31,
2025,
the
fund
was
charged $25,000 for
shareholder
servicing
costs
related
to
the
college
savings
plans, which
is
net
of
a
reimbursement
by
Price
of
$2,000.
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. At
December
31,
2025,
approximately
2%
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.
Effective
November
12,
2025, cash
collateral
from
securities
lending,
if
any,
is
invested
in
the
T.
Rowe
Price
Treasury Reserve Fund.
Prior
to
November
12,
2025,
cash
collateral
from
securities
lending,
if
any,
was
invested
in
the
T.
Rowe
Price
Government
Reserve
Fund. The
Price
Reserve
Funds
pay
no
investment
management
fees.
As
of
December
31,
2025,
T.
Rowe
Price
Group,
Inc.,
or
its
wholly
owned
subsidiaries,
owned
191,125
shares
of
the
I
Class,
representing
less
than
1%
of
the
I
Class's
net
assets.
T.
ROWE
PRICE
Health
Sciences
Fund
36
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
year
ended
December
31,
2025,
the
fund
had
no
purchases
or
sales
cross
trades
with
other
funds
or
accounts
advised
by
Price
Associates.
NOTE
7
-
SEGMENT
REPORTING
Operating segments
are
defined
as
components
of
a
company
that
engage
in
business
activities
and
for
which
discrete
financial
information
is
available
and
regularly
reviewed
by
the
chief
operating
decision
maker
(CODM)
in
deciding
how
to
allocate
resources
and
assess
performance.
The
Management
Committee
of
Price
Associates
acts
as
the
fund’s
CODM.
The
fund
makes
investments
in
accordance
with
its
investment
objective
as
outlined
in
the
Prospectus
and
is
considered
one
reportable
segment
because
the
CODM
allocates
resources
and
assesses
the
operating
results
of
the
fund
on
the
whole.
The
fund’s
revenue
is
derived
from
investments
in
a
portfolio
of
securities.
The
CODM
allocates
resources
and
assesses
performance
based
on
the
operating
results
of
the
fund,
which
is
consistent
with
the
results
presented
in
the
statement
of
operations,
statement
of
changes
in
net
assets
and
financial
highlights.
The
CODM
compares
the
fund’s
performance
to
its
benchmark
index
and
evaluates
the
positioning
of
the
fund
in
relation
to
its
investment
objective.
The
measure
of
segment
assets
is
net
assets
of
the
fund
which
is
disclosed
in
the
statement
of
assets
and
liabilities.
The accounting
policies
of
the
segment
are
the
same
as
those
described
in
the
summary
of
significant
accounting
policies.
The
financial
statements
include
all
details
of
the
segment
assets,
segment
revenue
and
expenses;
and
reflect
the
financial
results
of
the
segment.
NOTE
8
-
OTHER
MATTERS
Unpredictable environmental,
political,
social
and
economic
events,
including
but
not
limited
to,
environmental
or
natural
disasters,
war
and
conflict,
terrorism,
geopolitical
and
regulatory
developments
(including
trading
and
tariff
arrangements),
and
public
health
epidemics
or
threats,
may
significantly
T.
ROWE
PRICE
Health
Sciences
Fund
37
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
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.
T.
ROWE
PRICE
Health
Sciences
Fund
38
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
To
the
Board
of
Directors
and
Shareholders
of
T.
Rowe
Price
Health
Sciences
Fund,
Inc.
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
portfolio
of
investments,
of
T.
Rowe
Price
Health
Sciences
Fund,
Inc.
(the
"Fund")
as
of
December
31,
2025,
the
related
statement
of
operations
for
the
year
ended
December
31,
2025,
the
statement
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2025,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2025
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2025,
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
two
years
in
the
period
ended
December
31,
2025
and
the
financial
highlights
for
each
of
the
five
years
in
the
period
ended
December
31,
2025
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
T.
ROWE
PRICE
Health
Sciences
Fund
39
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2025
by
correspondence
with
the
custodians,
transfer
agent
and
brokers;
when
replies
were
not
received
from
brokers,
we
performed
other
auditing
procedures.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
/s/
PricewaterhouseCoopers
LLP
Baltimore,
Maryland
February
18,
2026
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
T.
Rowe
Price
group
of
investment
companies
since
1973.
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
(continued)
T.
ROWE
PRICE
Health
Sciences
Fund
40
TAX
INFORMATION
(UNAUDITED)
FOR
THE
TAX
YEAR
ENDED 12/31/25
We
are
providing
this
information
as
required
by
the
Internal
Revenue
Code.
The
amounts
shown
may
differ
from
those
elsewhere
in
this
report
because
of
differences
between
tax
and
financial
reporting
requirements.
The
fund’s
distributions
to
shareholders
included
$1,399,281,000
from
long-term
capital
gains,
subject
to
a
long-term
capital
gains
tax
rate
of
not
greater
than
20%.
For
taxable
non-corporate
shareholders,
$74,372,000
of
the
fund's
income
represents
qualified
dividend
income
subject
to
a
long-term
capital
gains
tax
rate
of
not
greater
than
20%.
For
corporate
shareholders,
$60,515,000
of
the
fund's
income
qualifies
for
the
dividends-received
deduction.
1307
Point
Street
Baltimore,
Maryland
21231
T.
Rowe
Price
Investment
Services,
Inc.
Call
1-800-638-5660
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.
F114-050
2/26
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.
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.
| (a)(1) | The registrant’s code of ethics pursuant to Item 2 of Form N-CSR is attached. | |
| (2) | Listing standards relating to recovery of erroneously awarded compensation: not applicable. | |
| (3) | ||
| (b) | ||
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, Inc. | ||||
| By | /s/ David Oestreicher |
|||
| David Oestreicher | ||||
| Principal Executive Officer | ||||
| Date | February 18, 2026 | |||
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 | February 18, 2026 |
|||
| By | /s/ Alan S. Dupski |
|||
| Alan S. Dupski | ||||
| Principal Financial Officer | ||||
| Date | February 18, 2026 |
|||
ATTACHMENTS / EXHIBITS
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS
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