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April 1, 2000
FUND PROFILE
T. ROWE PRICE
Health Sciences Fund
An aggressive stock fund seeking long-term capital growth through investments
in companies expected to benefit from changes in the health care, medicine, or
life sciences fields.
This profile summarizes key information about the fund that is included in the
fund's prospectus. The fund's prospectus includes additional information about
the fund, including a more detailed description of the risks associated with
investing in the fund that you may want to consider before you invest. You may
obtain the prospectus and other information about the fund at no cost by calling
1-800-638-5660, or by visiting our Web site at www.troweprice.com.
TROWEPRICELOGO
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FUND PROFILE
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What is the fund's objective?
The fund seeks long-term capital appreciation.
What is the fund's principal investment strategy?
We will invest at least 65% of total assets in the common stocks of companies
engaged in the research, development, production, or distribution of products
or services related to health care, medicine, or the life sciences
(collectively termed "health sciences"). While the fund can invest in
companies of any size, the majority of fund assets are expected to be
invested in large- and mid-capitalization companies.
We divide the health sciences sector into four main areas: pharmaceuticals,
health care services companies, products and devices providers, and
biotechnology firms. Our allocation among these four areas will vary
depending on the relative potential we see within each area and the outlook
for the overall health sciences sector.
The fund will use fundamental, bottom-up analysis that seeks to identify
high-quality companies and the most compelling investment opportunities. In
general, the fund will follow a growth investment strategy, seeking companies
whose earnings are expected to grow faster than inflation and the economy in
general. When stock valuations seem unusually high, however, a "value"
approach, which gives preference to seemingly undervalued companies, may be
emphasized.
While most assets will be invested in U.S. common stocks, other securities
may also be purchased, including foreign stocks, futures, and options, in
keeping with fund objectives.
The fund may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into more promising opportunities.
Further information about the fund's investments, including a review of
market conditions and fund strategies and their impact on performance, is
available in the annual and semiannual shareholder reports. To obtain free
copies of any of these documents, call 1-800-638-5660.
What are the main risks of investing in the fund?
As with all equity funds, this fund's share price can fall because of
weakness in the broad market, a particular industry, or specific holdings.
The market as a whole can decline for many reasons, including adverse
political or economic developments here or abroad, changes in investor
psychology, or heavy institutional selling. The prospects for an industry or
company may deteriorate because of a variety of factors, including
disappointing earnings or changes in the competitive environment. In
addition, our assessment of companies held in the fund may prove incorrect,
resulting in losses or poor performance even
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FUND PROFILE
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in a rising market. Finally, the fund's investment approach could fall out of
favor with the investing public, resulting in lagging performance versus
other types of stock funds.
This fund will be concentrated in the health services industry and as a
result less diversified than stock funds investing across a number of
different industries. It may invest a considerable portion of assets in
companies in the same business, such as pharmaceuticals, or in related
businesses, such as hospital management and managed care. This approach can
cause the fund's share price to be considerably more volatile than more
diversified portfolios. Sources of risk also include:
. reduced corporate profitability or declines in individual holdings owing to
increased competition or changing legislation and government regulation, less
government funding, or
. product liability and other litigation or the obsolescence of popular
products. Any of these developments could adversely affect the fund's share
price.
The level of risk will be increased to the extent that the fund has
significant exposure to smaller or unseasoned companies (those with less than
a three-year operating history), which may not have established products or
more experienced management.
Growth stocks can have steep declines if their earnings disappoint investors.
The value approach carries the risk that the market will not recognize a
security's intrinsic value for a long time, or that a stock judged to be
undervalued may actually be appropriately priced.
To the extent that the fund invests in foreign stocks, it is also subject to
the risk that some holdings may lose value because of declining foreign
currencies or adverse political or economic events overseas. If the fund uses
futures and options, it is exposed to additional volatility and potential
losses.
As with any mutual fund, there can be no guarantee the fund will achieve its
objective.
. The fund's share price may decline, so when you sell your shares, you may
lose money. An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency.
How can I tell if the fund is appropriate for me?
Consider your investment goals, your time horizon for achieving them, and
your tolerance for risk. If you seek an aggressive approach to capital growth
through investment in health sciences stocks, and can accept the potential
for
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FUND PROFILE
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above-average price fluctuations, the fund could be an appropriate part of
your overall investment strategy. This fund should not represent your
complete investment program or be used for short-term trading purposes.
The fund can be used in both regular and tax-deferred accounts, such as IRAs.
. Equity investors should have a long-term investment horizon and be willing
to wait out bear markets.
How has the fund performed in the past?
The bar chart and the average annual total return table indicate risk by
illustrating how much returns can differ from one year to the next. The
fund's past performance is no guarantee of its future returns.
The fund can also experience short-term performance swings, as shown by the
best and worst calendar quarter returns during the years depicted in the
chart.
LOGO
<TABLE>
<CAPTION>
Calendar Year Total Returns
"96" "97" "98" "99"
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<S> <C> <C> <C> <C>
26.75 19.41 22.37 7.97
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</TABLE>
Quarter ended Total return
Best quarter 12/31/98 19.57%
Worst quarter 9/30/98 -7.05%
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FUND PROFILE
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<TABLE>
Table 1 Average Annual Total Returns
<CAPTION>
Periods ended 3/31/00
Since inception
1 year (12/29/1995)
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<S> <C> <C>
Health Sciences Fund 22.18% 21.09%
S&P 500 Stock Index 17.94 25.32
Lipper Health Biotechnology Fund 18.92 18.69
Index
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</TABLE>
These figures include changes in principal value, reinvested dividends, and
capital gain distributions, if any.
What fees or expenses will I pay?
The fund is 100% no load. There are no fees or charges to buy or sell fund
shares, reinvest dividends, or exchange into other T. Rowe Price funds. There
are no 12b-1 fees.
<TABLE>
Table 2 Fees and Expenses of the Fund
<CAPTION>
Annual fund operating expenses
(expenses that are deducted from fund assets)
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<S> <C>
Management fee 0.67%/ // /
Other expenses 0.49%
Total annual fund operating 1.16%/ // /
expenses
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</TABLE>
Example. The following table gives you a rough idea of how expense ratios
may translate into dollars and helps you to compare the cost of investing in
this fund with that of other funds. Although your actual costs may be higher
or lower, the table shows how much you would pay if operating expenses remain
the same, you invest $10,000, you earn a 5% annual return, and you hold the
investment for the following periods:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
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<S> <C> <C> <C>
$118 $368 $638 $1,409
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</TABLE>
Who manages the fund?
The fund is managed by T. Rowe Price Associates, Inc. Founded in 1937, T.
Rowe Price and its affiliates manage investments for individual and
institutional accounts. The company offers a comprehensive array of stock,
bond, and money market funds directly to the investing public.
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FUND PROFILE
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Kris H. Jenner manages the fund day-to-day and has been chairman of its
Investment Advisory Committee since 2000. He joined T. Rowe Price as an
analyst in 1997 and has been managing investments since 1998. From
1995-1997, while on leave from the general surgery residency program at the
Johns Hopkins Hospital, he was a postdoctoral fellow at the Brigham and
Women's Hospital, Harvard Medical School.
Note: The following questions and answers about buying and selling shares and
services do not apply to employer-sponsored retirement plans. If you are a
participant in one of these plans, please call your plan's toll-free number for
additional information.
How can I purchase shares?
Fill out the New Account Form and return it with your check in the postpaid
envelope. The minimum initial purchase is $2,500 ($1,000 for IRAs and gifts
or transfers to minors). The minimum subsequent investment is $100 ($50 for
IRAs, gifts or transfers to minors, or Automatic Asset Builder). You can also
open an account by bank wire, by exchanging from another T. Rowe Price fund,
or by transferring assets from another financial institution.
How can I sell shares?
You may redeem or sell any portion of your account on any business day.
Simply write to us or call. You can also access your account at any time via
Tele*Access /(R)/ or our Web site. We offer convenient exchange among our
entire family of domestic and international funds. Restrictions may apply in
special circumstances, and some redemption requests need a signature
guarantee. A $5 fee is charged for wire redemptions under $5,000.
When will I receive income and capital gain distributions?
The fund distributes income and net capital gains, if any, at year-end. For
regular accounts, income and short-term gains are taxable at ordinary income
rates, and long-term gains are taxable at the capital gains rate.
Distributions are reinvested automatically in additional shares unless you
choose another option, such as receiving a check. Distributions paid to IRAs
and employer-sponsored retirement plans are automatically reinvested.
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FUND PROFILE
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What services are available?
A wide range, including but not limited to:
. retirement plans for individuals and large and small businesses;
. automated information and transaction services by telephone or computer;
. electronic transfers between fund and bank accounts;
. automatic investing and automatic exchange;
. brokerage services; and
. asset manager accounts.
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202
www.troweprice.com
LOGO
RPS F10-035
T. Rowe Price Investment Services, Inc., Distributor
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