Daily Brief Health Care: Celltrion Inc, Celltrion Healthcare , WuXi XDC Cayman Inc, Concord Biotech Ltd, Shanghai United Imaging Health, Bumrungrad Hospital Pub Co, Basilea Pharmaceutica Ag and more

• Celltrion Inc (068270 KS) and Celltrion Healthcare (091990 KS) will merge later this year. Celltrion Pharm (068760 KS) has been left out for now; it could be merged next year.
• For each share of Celltrion Healthcare (091990 KS) held, shareholders will receive 0.449262 shares of Celltrion Inc (068270 KS).
• There will be implications for the Korea Stock Exchange Kospi Index (KOSPI INDEX) and KOSDAQ 150 Index (KOSDQ150 INDEX) with funding flows and index replacements.

• The swap prices, ₩148,853 for Celltrion Inc and ₩66,874 for Celltrion Healthcare, specified below are not tentative prices but confirmed prices. So, the merger ratio has been determined as 1:0.4492620.
• The key focus now is the appraisal rights exercise. Both offer attractive spreads. Yet, the ₩1T combined ceiling might seem restricted considering potential dissenting Celltrion Inc shareholders exceeding expectations.
• Nonetheless, considering the strong determination of the company towards this merger, we should consider a strategy of approaching this spread aggressively while keeping the cancellation risk in mind.

• Celltrion Inc (068270 KS) will merger with Celltrion Healthcare (091990 KS). Celltrion Healthcare shareholders will receive 0.4492620 Celltrion shares per Celltrion Healthcare share. 
• The merger requires shareholder (approval by at least two-thirds of the votes of the shareholders present representing at least one-third of the outstanding shares) and Fair Trade Commission approval.
• The merger ratio, based on regulations, is attractive compared to historical VWAP exchange ratios and multiples. At last close prices, Celltrion Healthcare shares are trading broadly at terms. 

• WuXi XDC Cayman Inc (1877628D HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO.
• WuXi XDC Cayman (WXDC) is a CRDMO focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
• In this note, we will talk about the not-so-positive aspects of the deal.

• Concord Biotech Ltd (658823Z IN) raised US$188m in its India IPO.
• Concord Biotech (Concord) is an India-based biopharma firm, which develops and manufactures fermentation-based active pharmaceutical ingredients (APIs).
• In this note, we will talk about the trading dynamics.

• CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
• In this insight, we take a look at the potential ADDs/DELs for the CSI 300 and CSI 500 rebalance in December 2023.
• I currently expect 14 ADDs/DELs for CSI 300 and 50 ADDs/DELs for CSI 500. 

• Bumrungrad Hospital Pub Co (BH TB) recorded 23% YoY increase in revenue from hospital operation to THB6 billion in 2Q23, mainly driven by 29% YoY revenue growth from non-Thai patients.
• Revenue from Thai patients increased 14% YoY and contributed 35% of total revenue. Revenues from Thai and Expat exceeded pre-COVID levels since 3Q20 and continued to grow.
• Despite an increase in SG&A expenses, EBITDA increased 40% YoY to THB2 billion in 2Q23, with an EBITDA margin of 38.9% in 2Q23 compared to 34.4% in 2Q22.

Basilea announced strong H123 results, including revenues for Cresemba, and in August submitted a new drug application (NDA) to the US FDA for Zevtera. The company continues to engage in discussions with potential (in-licensing and acquisition) partners with the aim of re-filling the clinical development pipeline to bolster its portfolio of anti-infectives. Total Cresemba- and Zevtera-related revenue was CHF80.5m in H123 and grew by 57.2% from the previous year. We increase our valuation for Basilea to CHF797.8m or CHF66.6 per share (from CHF785.0m or CHF65.7 per share previously), largely driven by reduced net debt, foreign exchange considerations and rolling our model forward.