Summary

• The PGIM Jennison Health Sciences Fund Z returned -5.52% year-to-date, slightly underperforming the S&P 1500 Health Care Index which declined -4.82% in the first quarter of 2026.
• Biotechnology was a particular source of strength, supported by one of the most active Merger & Acquisitions environments in recent memory, with approximately $46.8 billion deployed across 19 transactions.
• Merck & Co Inc. outperformed as the market appreciated how much of the Keytruda patent cliff the company has already mitigated through disciplined business development and internal pipeline execution.
• Eli Lilly and Company underperformed in March as investors were cautious about the approval of orforglipron under the Trump Administration's new ultra-fast review process.
• Danaher Corporation expects an improvement in growth in the life sciences segment to happen over the course of 2026 as the severe destocking cycle that depressed consumables appears to have run its course.

Performance Recap

U.S. equity markets in 1Q26 were dominated by geopolitical escalation and energy driven inflation risk, leading to weak quarterly performance. The Iran conflict, and resulting disruptions to the Strait of Hormuz, sharply constrained global oil supply, driving a surge