We believe in the power of deep fundamental research to identify life science companies trading at a significant discount to intrinsic value. We feel the quality of our team, the depth of our research, and our disciplined long-term approach set us apart in pursuing superior risk-adjusted results for our clients.

Investment Approach

1 Finding Growth in Health Care: In addition to the powerful demographic trends affecting the sector, health care is also experiencing acceleration in innovation. The portfolio seeks to invest in growth companies that are addressing unmet medical needs or making the health care system more efficient and affordable.
2 Dedicated Sector Experts: Our dedicated team of analysts has more than 100 years of combined experience investing in health care companies. In this complex and rapidly growing sector, we believe it is critical to have an experienced team that seeks to understand both the science and the business of the companies in which they invest.
3 Deep and Disciplined: We believe the combination of deep fundamental research and disciplined portfolio construction will lead to consistently strong results relative to both the health care sector and the broader equity market. The portfolio seeks to balance across the subsectors of health care and diversify across market-cap segments and geographies.

Working to be consistently good... not occasionally great

Janus Global Life Sciences Composite outperformed the MSCI World Healthcare IndexSM 106 of 120 periods, or 88% of the time

ANNUALIZED MONTHLY ROLLING THREE-YEAR RETURNS*

*Returns based on 10-year time frame ending 12/31/16.

Performance

Past performance cannot guarantee future results. Investing involves risk, including the possible loss of principal and fluctuation of value. Returns greater than one year are annualized. Returns are expressed in U.S. dollars. Composite returns are net of transaction costs and gross of non-reclaimable withholding taxes, if any, and reflect the reinvestment of dividends and other earnings.

The gross performance results presented do not reflect the deduction of investment advisory fees and returns will be reduced by such advisory fees and other contractual expenses as described in the individual contract and Form ADV Part 2A.

Net performance results do not reflect the deduction of investment advisory fees actually charged to the accounts in the composite but they do reflect the deduction of model investment advisory fees based on the maximum fixed fee rate in effect for the respective time period. Actual advisory fees may vary among clients invested in the strategy shown and may be higher or lower than model advisory fees. Composites may include accounts with performance-based fees. Returns for each client will be reduced by such fees and expenses as negotiated in any client contract as discussed in Form ADV Part 2A.

For a complete list of holdings as of the most recently available disclosure period, contact us.

Prior to 2008, net returns shown are net of all fees and expenses.

Manager Comments (For the quarter ended 12/31/2016)

We seek to invest in companies worldwide that are addressing high, unmet medical needs and providing efficient and cost-effective health care solutions. We believe the health care sector, with its rapid growth and high complexity, offers abundant opportunities for differentiated research. We believe understanding both the science and the business behind new therapies is key to driving long-term results.

A leading contributor to quarterly performance was Actelion. The stock benefited from being the object of a bidding war between Sanofi and Johnson & Johnson. As of quarter end, the company was in exclusive negotiations with the latter about a takeover. Actelion is coveted for its dominant position in the pulmonary hypertension market. In recent years, the company has launched two leading drugs in this space, Opsumit and Uptravi.

After having been flat for much of 2016, the stock of AMAG Pharmaceuticals rallied during the quarter. Behind the improving sentiment were record sales during the prior quarter for Makena, AMAG's therapy aimed at delaying premature births. The drug presently enjoys orphan status, which is set to expire in 2018. Some investors expect that this may be extended should changes in how patients receive Makena be approved. At present, the drug is administered via painful intramuscular injections. The company is developing a less-invasive delivery method using smaller subcutaneous injections. The popularity of Makena is, in part, due to its potential to mitigate the high costs of care for premature infants.

Weighing most on performance was Puma Biotechnology. During the period, the company announced that certain side effects for its Neratinib breast cancer therapy were higher than anticipated. Also impacting the stock were investors awaiting data for a possible competing therapy and Puma raising additional capital through an equity offering. The stock had appreciated considerably during the summer, in part, on acquisition rumors. As such an outcome does not appear imminent, some of those gains were given back. Alder BioPharmaceuticals lost ground during the period as European authorities upheld parts of a patent of a competing therapy that Alder had challenged. The ruling could delay the rollout of Alder's migraine drug in Europe, but also raised concerns about other regions, including the U.S. We expect that, at worst, this development would likely lead to Alder having to pay Teva Pharmaceutical a royalty rather than abandoning the migraine market. We remain excited about the eventual release of phase 3 data of Alder's therapy, which is an antibody to prevent migraines.

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