Zylox-Tonbridge Announces Annual Financial Results for 2023, Demonstrating Robust Growth and Improved Profitability

HANGZHOU, CHINA, March 21, 2024 – Zylox-Tonbridge Medical Technology Co., Ltd. (2190. HK), a leading medical device company in the peripheral and neurovascular interventional market in China, announced its annual financial results for 2023. The report underlines a year of remarkable revenue growth and profitability, with revenues soaring to 530 million RMB ($75 million), marking a 58.0% YOY increase. The gross profit increased 52.4% to 380 million RMB ($54 million), with the company maintaining a solid gross margin of 72.9%. With robust revenue growth and enhanced operational efficiency, Zylox-Tonbridge posted an adjusted Non-IFRS net profit of 7.03 million RMB.

With the launch of a series of cutting-edge products, Zylox-Tonbridge has positioned itself as a leading player in the neurovascular and peripheral vascular intervention market in China. To date, the company has achieved marketing approvals for 39 products from the National Medical Products Administration (NMPA). Leveraging the Volume Based Procurement (VBP ) initiatives, Zylox-Tonbridge has witnessed significant revenue increases in its neurovascular and peripheral vascular intervention businesses, by 63.6% to 380 million RMB and 43.7% to 140 million RMB, respectively.

In 2023, Zylox-Tonbridge's commercial reach extended to 19 overseas countries. In addition to the EU market, the company has ventured into promising regions such as the Middle East and South America. The company's international business has resulted in an impressive 83.1% increase in sales revenue, totaling 14.27 million RMB.

Dr. Jonathon Zhong Zhao, Chairman and CEO of Zylox-Tonbridge, stated, "The past year has been transformative for Zylox-Tonbridge. Our dedicated efforts in product innovation, along with improved operational efficiency and strategic focus on leveraging VBP opportunities enabled us to accelerate our growth and profitability. These achievements have not only established a solid foundation for our future but also sustained our commitment to providing high-quality and affordable innovative medical devices to patients worldwide."

Differentiated and Comprehensive product Portfolio Fuels Long-term Growth

In 2023, the company's product portfolio reached another milestone of success. As of the date of the announcement, the company had developed a comprehensive portfolio of 64 products, including 39 products approved in China, 8 products received the CE mark, and a series of products approved in overseas countries across the Middle East and South America.

The recent approvals of the ZYLOX® Penguin Venous Stent System and the ZYLOX® Phoenix Peripheral Detachable Fibered Coil Embolization System mark a significant milestone, reinforcing Zylox-Tonbridge's advantages in the field of peripheral venous treatment in the Chinese market. Driven by clinical demand-focused R&D capabilities and a streamlined development process, the company has successfully launched a series of upgraded products, including Clot Retriever Device II, UberVana Drug-coated PTA Balloon Catheter, to meet physicians’ evolving needs and offer patients more comprehensive solutions.

In addition to its in-house research and development, the company also partners with global innovators to develop advanced medical technologies and enrich its product pipeline. Through strategic cooperation with Avinger, Zylox-Tonbridge is expected to commercialize a series of OCT imaging-guided catheter-based devices in the China market by 2025. Furthermore, Zylox-Tonbridge aims to support Avinger's global expansion by leveraging its robust manufacturing capabilities. This collaboration is not just a stride in fueling the company's long-term growth trajectory, but also a leap towards offering innovative medical solutions to more patients worldwide.

Highlighted operational efficiency results in increasing profitability

In 2023, the company achieved notable reductions in its R&D, sales, and management expense ratios by 20.4, 10.9, and 11.1 percentage points respectively from the previous year, propelling a sustained increase in profitability.

As VBPs become increasingly normalized, Zylox-Tonbridge has leveraged the opportunities to increase market penetration. The company’s Phoenix Neurovascular Embolization Coils have successfully won bids in multiple rounds of VBPs, achieving rapid volume growth, reaching approximately 10% as of the end of 2023. The successful bidding of several key products in multiple VBPs, including SilverSnake Intracranial Support Catheter, UltraFree® DCB, and Thrombite™ CRD, underscores the company's strong commercialization ability and operational efficiency. As the industry landscape evolves, the company is poised to reinforce its advantages during this transformative period by seizing the opportunity.

As a result of the in-house innovative technology platforms and integrated research and development process, the Company's R&D expense ratios have impressively decreased from 69.9% in 2022 to 49.5%. Moreover, Zylox-Tonbridge has sustained its commitment to stable and efficient manufacturing, leading to its high-quality products being recognized by the market.

The company's international business continues its rapid expansion. In 2023, its overseas revenue hit 14.27 million RMB, representing a YOY increase of 83.1%. The company's warehouse and logistics center in Italy has begun operating to better serve local physicians and patients. Zylox-Tonbridge also completed patient enrollment for the ZENFlex™ Peripheral Stent System post-market clinical trial in the EU, demonstrating the clinical value of its self-developed products overseas. With several products approved in the Middle East and South America, the company has been exploring potential markets and advancing global business initiatives.

Looking forward, Zylox-Tonbridge plans to continue expanding its innovative product portfolio as well as improving operational efficiency, which will broaden its competitive edge and solidify its position as a leading vascular interventional medical device platform.