Edgar Filing: H&Q HEALTHCARE INVESTORS

	UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549	OMB APPROVAL
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	FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number			811-06565
H&Q Healthcare Investors
(Exact name of registrant as specified in charter)
30 Rowes Wharf, Boston, MA					02110
(Address of principal executive offices)					(Zip code)

(Name and address of agent for service)

Registrant's telephone number, including area code:				617-772-8500

Date of fiscal year end:	9/30/05

Date of reporting period:		12/31/04

Item 1. Schedule of Investments

H&Q HEALTHCARE INVESTORS
SCHEDULE OF INVESTMENTS
December 31, 2004
(Unaudited)

SHARES		VALUE
	CONVERTIBLE SECURITIES - 12.7% of Net Assets
	Convertible Preferred (Restricted) - 12.6% (see table below)
	Drug Discovery Technologies - 2.5%
2,380,953	Agilix Corporation Series B*^	$	571,429
850,436	Avalon Pharmaceuticals Series B*	1,020,523
375,000	Ceres, Inc. Series C*	2,250,000
27,443	Ceres, Inc. Series C-1*#	164,658
277,967	Ceres, Inc. Series D*#	1,667,802
1,398,732	Galileo Pharmaceuticals, Inc. Series F-1*	489,556
1,212,709	Idun Pharmaceuticals, Inc. Series A-1*^	2,486,053
462,963	Idun Pharmaceuticals, Inc. Series B-1*^	740,741
1,750,000	Triad Therapeutics, Inc. Series A*^	1,750
525,000	Triad Therapeutics, Inc. Series B*^	525
1,200,000	Triad Therapeutics, Inc. Series C*^	24,000
300,000	Zyomyx, Inc. Series A New*	30,000
300	Zyomyx, Inc. Series B New*	30
	Emerging Biopharmaceuticals - 3.4%
952,381	Agensys, Inc. Series C*	3,000,000
2,586,207	Corus Pharma, Inc. Series C*	3,000,000
1,818,182	Raven biotechnologies Series B*^	1,509,091
2,809,157	Raven biotechnologies Series C*^	2,331,600
47,407	Therion Biologics Corporation Series A*	85,333
240,000	Therion Biologics Corporation Series B*#	432,000
407,712	Therion Biologics Corporation Series C*	733,882
36,092	Therion Biologics Corporation Sinking Fund*	361
2,100,000	Xanthus Life Sciences, Inc. Series B*^	2,100,000
	Healthcare Services - 3.7%
1,577,144	CardioNet, Inc. Series C*^	5,520,004
484,829	CytoLogix Corporation Series A*^	399,984
227,130	CytoLogix Corporation Series B*#^	187,382
160,000	I-trax, Inc. Series A*	3,184,000
5,384,615	PHT Corporation Series D*^	4,200,000
1,204,495	PHT Corporation Series E*^	939,506
	Medical Devices and Diagnostics - 3.0%
4,852,940	Concentric Medical, Inc. Series B*^	4,173,527
1,744,186	Concentric Medical, Inc. Series C*^	1,500,000
222,222	EPR, Inc. Series A*	2,222
160,000	Masimo Corporation Series D*	1,760,000
1,632,653	OmniSonics Medical Technologies, Inc. Series B*^	2,181,224
1,547,988	OmniSonics Medical Technologies, Inc. Series C*^	1,800,000
652,173	TherOx Series H*	247,826
		$	48,735,010

PRINCIPAL AMOUNT
		Convertible Bonds and Notes (Restricted) - 0.1%
		Healthcare Services - 0.04%
$	168,337	CytoLogix Corporation^ 6.75% Cvt. Note, Ŧ (see table below)	$	168,337
		Medical Devices and Diagnostics - 0.05%
200,272		TherOx 6.0% Bridge Note, due 2006# (see table below)	200,272
			$	368,609
		TOTAL CONVERTIBLE SECURITIES (Cost $68,450,111)	$	49,103,619
SHARES
		COMMON STOCKS - 77.0%

		Biopharmaceuticals - 30.0%
263,891		Amgen, Inc.*	$	16,928,608
153,900		Celgene Corporation*	4,082,967
286,000		Chiron Corporation	9,532,380
1,021,657		Cubist Pharmaceuticals, Inc.*	12,086,202
450,000		Endo Pharmaceuticals Holdings*	9,459,000
207,000		Genzyme Corporation*	12,020,490
214,000		Gilead Sciences, Inc.*	7,487,860
138,000		Imclone Systems, Inc.*	6,359,040
290,000		King Pharmaceuticals, Inc.	3,596,000
329,000		MedImmune, Inc.*	8,919,190
180,000		Millennium Pharmaceuticals, Inc.*	2,181,600
217,800		NPS Pharmaceuticals, Inc.*	3,981,384
188,000		Neurocrine Biosciences, Inc.*	9,268,400
224,400		Pfizer, Inc.	6,034,116
252,800		Pozen, Inc.*	1,837,856
464,900		Vivus, Inc.*	2,068,805
			115,843,898
		Drug Delivery - 3.3%
208,824		Connetics Corporation*	5,072,335
750,533		DepoMed, Inc.*	4,052,878
258,920		Penwest Pharmaceuticals Co.*	3,096,683
66,000		Penwest Pharmaceuticals Co. (Restricted)* (see table below)	670,956
			12,892,852
		Drug Discovery Technologies - 3.5%
833,200		deCODE Genetics, Inc.*	6,507,292
857,143		Senomyx, Inc.*	7,097,144
300,000		Zyomyx, Inc. (Restricted)* (see table below)	3,000
			13,607,436
		Emerging Biopharmaceuticals - 17.3%
565,000		ACADIA Pharmaceuticals, Inc.*	3,825,050
632,100		Adolor Corporation*	6,270,432
633,041		Ariad Pharmaceuticals, Inc.*	4,703,495
418,400		Cytokinetics, Inc.*	4,288,600
221,100		DOV Pharmaceutical, Inc.*	3,990,855
548,102		Dyax Corporation*	3,957,296
732,600		Exelixis, Inc.*	6,959,700
717,400		Guilford Pharmaceuticals, Inc.*	3,551,130
568,600		Kosan Biosciences, Inc.*	3,940,398
182,120		Momenta Pharmaceuticals, Inc.*	1,285,767
510,880		Myogen, Inc.*	4,122,802
102,176		Myogen, Inc., Warrants*	27,588
417,750		Neurogen Corporation*	3,910,140
139,200		Nuvelo, Inc.*	1,371,120
506,292		Seattle Genetics, Inc.*	3,306,087
200,609		Telik, Inc.*	3,839,848
77,026		Tercica, Inc.*	771,030
157,887		Theravance, Inc.*	2,826,177
265,654		Theravance, Inc. (Restricted)* (see table below)	3,804,165
226,760		Therion Biologics Corporation (Restricted)*# (see table below)	2,268
33,332		Therion Biologics Corporation (Restricted) C-2 Units*# (see table below)	59,998
			66,813,946
		Generic Pharmaceuticals - 11.0%
164,700		Barr Pharmaceuticals, Inc.*	7,500,438
623,067		Impax Laboratories, Inc.*	9,894,304
308,250		IVAX Corporation*	4,876,515
228,000		Par Pharmaceutical Companies, Inc.*	9,434,640
355,200		Teva Pharmaceutical Industries, Ltd. ADR	10,606,272
			42,312,169
		Healthcare Services - 2.7%
26,125		DakoCytomation, Inc. (Restricted)< (see table below)	271,961
260,000		Provident Senior Living Trust (Restricted) Θ (see table below)	3,900,000
306,208		Syntiro Healthcare Services (Restricted)* (see table below)	3,062
754,500		WebMD Corporation*	6,156,720
			10,331,743

	Medical Devices and Diagnostics - 9.0%
200,000	Boston Scientific Corporation	7,110,000
949,200	Conor Medsystems, Inc. (Restricted)* (see table below)	9,859,815
142,326	IDEXX Laboratories, Inc.*	7,769,577
160,000	Masimo Corporation (Restricted)* (see table below)	1,600
1,020,000	Orthovita, Inc.*	4,273,800
208,529	Songbird Hearing, Inc. (Restricted)* (see table below)	2,085
546,875	VNUS Medical Technologies, Inc. (Restricted)* (see table below)	5,915,000
		34,931,877

	TOTAL COMMON STOCKS (Cost $234,371,888)	$	296,733,921

PRINCIPAL AMOUNT
		SHORT-TERM INVESTMENTS - 11.2%
$	5,000,000	American Express Credit Corp.; 2.26, due 1/4/05%	4,999,058
4,000,000		American Express Credit Corp.; 2.21, due 1/10/05%	3,997,790
14,000,000		General Electric Capital Corp.; 2.1 due 1/3/05%	13,998,367
1,608,000		State Street Repo; .75, due 1/3/05%	1,608,000
11,000,000		U. S. Treasury Bills; 2.01, due 1/6/05%	10,996,929
7,600,000		U. S. Treasury Bills; 1.81, due 1/20/05%	7,592,764

		TOTAL SHORT-TERM INVESTMENTS (Cost $43,192,908)	$	43,192,908

		TOTAL INVESTMENTS - 100.9% (Cost $346,014,907)	$	389,030,448

		LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.9%)	(3,475,442)
		NET ASSETS - 100%	$	385,555,006

* Non income-producing security

# With warrants attached

< Foreign security

Ŧ Variable maturity

^ Affiliated issuers in which the Fund holds 5% or more of the voting securities (Total Market Value of $30,835,153)

Θ Real Estate Investment Trust

ADR American Depository Receipt

At December 31, 2004, the total cost of securities for Federal income tax purposed was $346,294,248.

The net unrealized gain on securities held by the Fund was $43,015,541, including gross unrealized gain of $83,935,877

and gross unrealized loss of $40,920,336.

The following table details the acquisition date, cost, carrying value per unit, and value of the Fund’s venture capital and other restricted securities at December 31, 2004, as determined by the Trustees of the Fund.

Security	Acquisition Date	Cost		Carrying Value per Unit		Value

Agensys, Inc.
Series C Cvt. Pfd.	2/14/02	$	3,005,073	$	3.15	$	3,000,000

Agilix Corporation^
Series B Cvt. Pfd.	11/8/01	3,014,260		0.24		571,429

Avalon Pharmaceuticals
Series B Cvt. Pfd.	10/22/01	3,008,325		1.20		1,020,523

CardioNet, Inc.^
Series C Cvt. Pfd.	5/3/01 - 3/25/03	5,549,183		3.50		5,520,004

Ceres, Inc.
Series C Cvt. Pfd.	12/23/98	1,502,620		6.00		2,250,000
Series C-1 Cvt. Pfd.#	3/31/01	111,488		6.00		164,658
Series D Cvt. Pfd.#	3/14/01	1,668,122		6.00		1,667,802

Concentric Medical, Inc.^
Series B Cvt. Pfd.	5/7/02 - 1/24/03	3,329,210		0.86		4,173,527
Series C Cvt. Pfd.	12/19/03	1,500,000		0.86		1,500,000

Conor MedSystems, Inc.
Restricted Common	10/23/2003-8/6/04	2,403,660		10.39		9,859,815

Corus Pharma, Inc.
Series C Cvt. Pfd.	4/8/04	3,002,196		1.16		3,000,000

CytoLogix Corporation^
Series A Cvt. Pfd.	1/13/98-7/21/99	1,622,894		0.83		399,984
Series B Cvt. Pfd.*#	1/11/01	760,284		0.82		187,382
Cvt. Note #	5/29/02	168,337		1.00		168,337

DakoCytomation, Inc.
Restricted Common	6/14/04	1,102,920		10.41		271,961

EPR, Inc.
Series A Cvt. Pfd.	3/9/94	1,000,409		0.01		2,222

Galileo Pharmaceuticals, Inc.
Series F-1 Cvt. Pfd.	8/18/00	3,002,895		0.35		489,556

Idun Pharmaceuticals, Inc.^
Series A-1 Cvt. Pfd.	11/26/02	3,001,966		2.05		2,486,053
Series B-1 Cvt. Pfd.	5/24/04	741,719		1.60		740,741

I-trax, Inc.
Series A Cvt. Pfd.	3/18/04	4,003,650		25.00		3,184,000

Masimo Corporation
Series D Cvt. Pfd.	8/14/96	1,120,040		11.00		1,760,000
Restricted Common	3/31/98	0		0.01		1,600

OmniSonics Medical Technologies, Inc.^
Series B Cvt. Pfd.	5/24/01	2,409,023		1.34		2,181,224
Series C Cvt. Pfd.	10/1/03	1,800,336		1.16		1,800,000

Penwest Pharmaceuticals Co. à
Restricted Common	12/10/04	739,200		10.17		670,956

PHT Corporation^
Series D Cvt. Pfd.	7/23/01	4,205,754		0.78	4,200,000
Series E Cvt. Pfd.	9/12/03 - 10/14/04	707,755		0.78	939,506

Provident Senior Living Trust
Restricted Common	7/26/04	3,900,871		15.00	3,900,000

Raven biotechnologies, Inc.^
Series B Cvt. Pfd.	12/12/00	3,001,725		0.83	1,509,091
Series C Cvt. Pfd.	11/26/02	2,331,600		0.83	2,331,600

Songbird Hearing, Inc.
Restricted Common	12/14/00	3,004,861		0.01	2,085

Syntiro Heathcare Services
Restricted Common	2/5/97	1,200,325		0.01	3,062

Theravance, Inc.
Restricted Common	2/5/99-8/28/00	3,603,204		14.31	3,804,165

Therion Biologics Corporation
Series A Cvt. Pfd.	8/20/96-10/16/96	444,850		1.80	85,333
Series B Cvt. Pfd.#	6/22/99	900,914		1.80	432,000
Series C Cvt. Pfd.	9/26/01-10/15/01	1,529,348		1.80	733,882
Sinking Fund Cvt. Pfd.	10/18/94-8/20/96	721,291		0.01	361
C-2 Units #	8/13/03	59,998		1.80	59,998
Restricted Common	7/12/90-1/25/96	511,365		0.01	2,268

TherOx, Inc.
Series H Cvt. Pfd.	9/11/00	3,002,209		0.38	247,826
Bridge Note #	1/28/04	200,272		1.00	200,272

Triad Therapeutics, Inc.^
Series A Cvt. Pfd.	6/8/99	1,751,170		0.00	1,750
Series B Cvt. Pfd.	1/10/03	1,053,135		0.00	525
Series C Cvt. Pfd.	12/20/00-11/25/02	920,659		0.02	24,000

VNUS Medical Technologies, Inc.
Series E Cvt. Pfd.	8/20/01	4,200,003		10.82	5,915,000

Xanthus Life Sciences, Inc.
Series B Cvt. Pfd.	12/5/03	2,101,320		1.00	2,100,000

Zyomyx, Inc.
New Common	2/19/99 - 7/22/04	3,602,065		0.01	3,000
Series A New Cvt. Pfd.	1/12/04	299,700		0.10	30,000
Series B New Cvt. Pfd.	2/19/99-1/12/04	468		0.10	30
		$	92,822,671		$	73,597,529	±

# With warrants attached

^ Affiliated issuers in which the Fund holds 5% or more of the voting securities

à During the period from October 25, 2004 to December 10, 2004 the Fund purchased non-restricted common of the same issuer at prices ranging from $10.33 to $11.20.

± Represents 19% of the Fund’s net asset as of December 31, 2004

Item 2. Controls and Procedures.

(a) Disclose the conclusions of the registrant's principal executive and principal financial officers, or persons performing similar functions, regarding the effectiveness of the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)).

IN THE OPINION OF THE PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER, BASED ON THEIR EVALUATION, THE REGISTRANT'S DISCLOSURE CONTROLS AND PROCEDURES ARE ADEQUATELY DESIGNED AND ARE OPERATING EFFECTIVELY TO ENSURE (i) THAT MATERIAL INFORMATION RELATING TO THE REGISTRANT, INCLUDING ITS CONSOLIDATED SUBSIDIARIES, IS MADE KNOWN TO THEM BY OTHERS WITHIN THOSE ENTITIES, PARTICULARLY DURING THE PERIOD IN WHICH THIS REPORT IS BEING PREPARED; AND (ii) THAT INFORMATION REQUIRED TO BE DISCLOSED BY THE REGISTRANT ON FORM N-Q IS RECORDED, PROCESSED, SUMMARIZED AND REPORTED WITHIN THE TIME PERIODS SPECIFIED IN THE SECURITIES AND EXCHANGE COMMISSION'S RULES AND FORMS.

(b) Disclose any change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

THERE WERE NO CHANGES IN THE REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL REPORTING THAT OCCURRED DURING THE REGISTRANT'S MOST RECENT FISCAL QUARTER THAT HAVE MATERIALLY AFFECTED OR ARE REASONABLY LIKELY TO MATERIALLY AFFECT, THE REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL REPORTING.

Item 3. Exhibits.

Separate certifications for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)). Filed herewith.

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.

(Registrant)		H&Q Healthcare Investors

By (Signature and Title)*			/s/ Daniel Omstead, President

Date	March 1, 2005

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.

(Registrant)		H&Q Healthcare Investors

By (Signature and Title)*			/s/ Kathleen Eckert, Treasurer

Date	March 1, 2005

*Print the name and title of each signing officer under his or her signature.