The T. Rowe Price Health Care ETF (TMED ) led all T. Rowe Price funds last week, posting a 3.4% return. The gains came as TMED’s top holding, Eli Lilly and Co. (LLY), announced plans to acquire three vaccine developers for up to $3.83 billion.
Key Takeaways:
- TMED posted a 3.37% return last week, the top gain among all T. Rowe Price ETFs, driven by top holding Eli Lilly.
- Lilly announced plans to acquire three vaccine developers for up to $3.83 billion, targeting diseases tied to neurological and cancer risks.
- At 16.22% of TMED’s portfolio, Lilly’s moves have an outsized effect on how the actively managed fund performs.
Lilly makes up 16.2% of the TMED portfolio, according to ETF Database, showing the level of conviction TMED’s active managers have placed in the company.
All three deals, announced Tuesday, target vaccine developers working on diseases linked to serious long-term health risks. Those include neurological disorders, certain cancers, and hard-to-treat bacterial infections, according to a Lilly press release.
“These acquisitions reflect a deliberate strategy to prevent disease at its source rather than treat its consequences,” said Daniel M. Skovronsky, chief scientific and product officer and president of Lilly Research Laboratories.
The largest deal carries a price tag of up to $1.55 billion. It brings in Vaccine Company, Inc., which is developing a vaccine for the Epstein-Barr virus. Studies have linked that virus to multiple sclerosis and several forms of cancer, according to the press release.
Lilly also agreed to pay up to $1.5 billion for Curevo Inc. Curevo’s lead vaccine targets shingles. In Phase 2 trials, it cut side effects by more than half versus the standard of care, according to Lilly.
A third acquisition, at up to $780 million, also adds LimmaTech Biologics AG. LimmaTech is developing a vaccine against Staphylococcus aureus, also known as staph. Staph is the leading cause of surgical-site infections, according to the announcement.
LimmaTech’s pipeline also includes candidates targeting pathogens linked to infertility, according to the press release. These conditions disproportionately affect women.
Lilly's Stake Anchors TMED's Active Strategy
TMED’s active structure lets managers take position sizes that reflect their fundamental research rather than follow an index. They can place more of the fund’s assets in high-conviction names, giving shareholders direct exposure to a company’s moves. Index-based healthcare funds spread exposure broadly across the entire category to represent the overall sector, both good and bad.
Since launching in June 2025, the fund has maintained an expense ratio of only 0.44%. Its year-to-date return stands at 4.29%. It holds $21.6 million in assets and drew $1.52 million in net inflows last month, according to ETF Database.
See more: 10 T. Rowe Price ETFs Cross $1 Billion in AUM
Beyond Lilly, the fund’s top holdings also include UnitedHealth Group Inc. (UNH) at 8.06%, Gilead Sciences, Inc. (GILD) at 4.43%, Thermo Fisher Scientific Inc. (TMO) at 3.94%, and Abbott Laboratories (ABT) at 3.52%, according to ETF Database.
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