Baron Health Care Fund Amgen impact

What happened: Baron Capital's Q1 2026 investor letter revealed that Baron Health Care Fund (BHCFX) underperformed its benchmark, declining 6.97% compared to a 4.88% decline. This was primarily driven by the fund's omission of Amgen (AMGN), which outperformed the market, rising 11.5%. Additionally, the fund's holdings in Merck (MRK) and Argenx (ARGX) faced headwinds due to concerns over patent expirations and clinical trial setbacks, respectively.

Market impact: The healthcare sector saw a shift in leadership, with Amgen's strong performance driving the sector's outperformance. Meanwhile, Merck and Argenx's struggles highlighted investor concerns over drug pipelines and regulatory risks. This narrative affected other companies with similar profiles, such as those heavily reliant on a few blockbuster drugs or with late-stage clinical assets.

What to watch next: Investors should closely monitor Amgen's upcoming earnings on May 10, 2026, to see if the company can maintain its momentum. Additionally, Merck's earnings on April 28, 2026, will provide insight into the company's plans to mitigate the impact of patent expirations. Lastly, Argenx's share price will be sensitive to updates on its clinical pipeline, with the next significant catalyst being data from its Phase 3 trial for efgartigimod, expected in late 2026.