Zylox-Tonbridge Announces Financial Results for 2022: Revenue Increases by 87.8% YOY to RMB 334 million and Gross Profit Reaches RMB 253 million

On March 29, 2023, Zylox-Tonbridge Medical Technology Co., Ltd. (2190. HK, hereinafter referred to as the "Company") released its annual financial results for 2022. During the reporting period, the Company's operating revenue increased by 87.8% YOY to RMB 334 million. In particular, the neurovascular intervention business maintained rapid growth, with revenue rising 107.9% YOY to RMB 233 million. Revenue from the peripheral-vascular intervention business also showed a YOY gain of 53.4% to RMB 101 million.

In 2022, the gross profit margin climbed to 75.6%. Gross profit for the year rose to RMB 253 million, representing a YOY rise of 91.6%. The substantial increases in both operating revenue and gross profit have driven a YOY drop of 43.1% in net loss besides the continued investment in R&D activities. As of the end of 2022, the Company's capital reserve stood at RMB 2.69 billion.

Zylox-Tonbridge also delivered an outstanding performance in terms of R&D and commercialization. As of the date of the results announcement, the Company owned a portfolio of 57 products and product candidates, of which 25 had received marketing approval from the China National Medical Products Administration (NMPA), an increase of 11 from the end of 2021. By actively participating in the volume-based procurement (VBP) bidding, the Company has rapidly increased its market penetration by covering over 3,300 hospitals in 31 provinces and municipalities across China. At the same time, the medical device provider has established a sales and marketing team in Europe, with revenue from ex-China markets growing by 125.2% YOY in 2022.

"2022 was a challenging year. With efficient product development, strong team execution, and improving operational capabilities, the Company has achieved substantial growth in financial performance by leveraging market opportunities," said Dr. Jonathon Zhong Zhao, Chairman and CEO of Zylox-Tonbridge. "We plan to continue developing innovative products with significant clinical value while, at the same time, enhancing our efficiency in all aspects of the business, to provide patients with high-quality and affordable solutions."

Strong R&D capabilities lead to the expansion of new therapeutic areas

With the launch and commercialization of several new products in 2022, Zylox-Tonbridge once again made great progress in R&D, driving its expansion into new therapeutic areas and positioning the firm to become a leading peripheral vascular devices platform in China.

Zylox-Tonbridge's self-developed Carotid Rx PTA Balloon Catheter is the first in its Carotid Artery Stenosis product line to receive marketing approval from NMPA. Relying on the firm's leading balloon forming and manufacturing platform for its development, the solution received significant attention in the marketplace as soon as it was launched. Marketing approval for the Endovenous Radiofrequency Ablation (RFA) System as well as the ZYLOX Octoplus® Vena Cava Filter is a testament to the success of the Company's expansion into the domain of peripheral venous vascular diseases treatment.

The results announcement shows that Zylox-Tonbridge completed patient enrollment for clinical trials of 5 products in 2022, including the Flow Diverter and Peripheral Detachable Embolization Coils. Currently, the Company has 13 products in the clinical stage and 11 in the registration stage. With the coming launch of several core products in the future one or two years, including Flow Diverter, Peripheral Venous Stent System, and Vascular Closure, the Company is accelerating sustainable growth driven by its strong R&D capability.

Increasing penetration in the domestic market while accelerating global expansion

Last year, with a flexible, effective market strategy alongside the team's efficient execution, Zylox-Tonbridge further grew its sales network in tandem with an expansion of its market penetration.

To date, Zylox-Tonbridge has established an extensive distribution network covering over 3,300 hospitals in 31 provinces and municipalities across China. The firm has increased its market share in third- and fourth-tier cities by actively participating in the national and provincial VBP programs that ensure faster product availability and sales. Most notably, the Company's neurovascular embolization coils won the bid as first place in the competing group during the provincial VBPs in Jiangsu, Fujian, and 21-province alliance last year. In the future, the medical device supplier plans to rapidly increase its market share and grow its influence by further leveraging the opportunities presented by the VBP programs.

With a deep commitment to Europe, Zylox-Tonbridge has established a sales and marketing team in Europe during the third quarter of 2022, to better serve local customers and increase brand awareness across the region. During the reporting period, the Company's neurovascular embolization coils product has submitted applications for the CE Mark and FDA 510K registration. With innovative product design and comprehensive solutions, Zylox-Tonbridge is gaining increasing recognition among customers outside of its home market of China, with revenue from ex-China markets gaining 125.2%YOY in 2022.

Focus on long-term growth strategy with improving efficiency

In 2022, Zylox-Tonbridge further enhanced its efficiency in R&D, manufacturing, and commercialization with an ongoing commitment to achieving long-term, quality-driven growth.

Relying on multiple innovative technology platforms across business units as well as integrated R&D and manufacturing processes, Zylox-Tonbridge has improved cost efficiency and product quality while maintaining its strong R&D capability. To better respond to increasing market demand, the Company is expanding larger-scale manufacturing facilities in Hangzhou and Zhuhai. In November 2022, the firm held an inauguration ceremony for its new research and manufacturing base in Zhuhai. The 58,000 square meter facility will include multiple production lines, with substantial capacity for intracranial stent systems and embolization coils.

Following the launch and commercialization of several new medical devices in 2022, Zylox-Tonbridge is enhancing its competence in offering a comprehensive range of medical device solutions and is well on track to becoming a leading vascular interventional medical device platform. The firm plans to continue expanding its innovative product portfolio as well as improving R&D and manufacturing capabilities as part of its efforts to benefit patients by providing them with quality and affordable solutions.