The weight-loss market is widely recognized as a lucrative sector, with GLP-1 class drugs sweeping through the industry. According to institutional statistics, the combined global sales of the weight-loss versions of semaglutide and tirzepatide alone surpassed $26 billion in 2025. Yet, in this expansive market, one company possessing the world's first innovative product continues to operate at a loss. What is the story behind this paradox?

This company is none other than Tangjie Medical, a medical device firm racing toward a Hong Kong IPO. After its initial filing lapsed, Tangjie Medical recently submitted a second prospectus to the Hong Kong Stock Exchange, unveiling its latest financial performance. The company's flagship product, the GBS (Gastric Bypass Sleeve) system, is placed in the intestine via gastroscopy, physically isolating chyme from the intestinal mucosa to reduce nutrient absorption and achieve weight loss. This marks the world's first commercially approved intestinal interventional device for treating obesity. According to the prospectus, the GBS product is non-invasive, carries lower risks than traditional bariatric surgery, and offers more durable weight-loss results compared to drugs like semaglutide.

Logically, with robust demand for weight management and a globally pioneering, effective product, Tangjie Medical should be thriving. However, the prospectus reveals the company remains in the red, having previously even faced insolvency. Scrutinizing the data, the company's high gross margins are overshadowed by multiple challenges: heavy reliance on a single product, patient diversion to GLP-1 drugs, and new products still in the R&D pipeline. Whether this innovative device maker can successfully list and carve out a niche against the formidable competition from weight-loss pharmaceuticals has become a focal point of market attention.

From Gastroenterologist to Founder of a World-First Non-Invasive Weight-Loss Device

The prospectus shows that Tangjie Medical's core product, the GBS system, is the first intestinal interventional medical device globally approved for commercialization to treat obesity. Surprisingly, this world-first product was not developed by top-tier researchers but by a former gastroenterologist with an extensive background in medical device sales. The founder, Zuo Yuxing, now 56, earned a bachelor's degree in preventive medicine from Baotou Medical College in July 1995 and subsequently worked as a gastroenterologist at Baotou Jiuyuan District Hospital for six years, later serving as head of the hospital's preventive healthcare department. In 2002, he moved to Beijing to work as a sales manager in medical device sales. By October 2006, he ventured into entrepreneurship, establishing a company in Inner Mongolia to sell MRI equipment.

In August 2016, Zuo co-founded Tangjie Medical with Xu Tianhong, who brought a professional medical R&D background and later transitioned into investment. The GBS product development was then initiated in Hangzhou. Traditional medical weight-loss approaches mainly involve pharmacotherapy and surgical gastric reduction. GBS introduces a novel endoscopic interventional path: without surgical incisions, a sleeve approximately 60 centimeters long is placed via gastroscopy from the duodenum to the proximal jejunum, physically isolating chyme from the mucosa, reducing nutrient absorption, and modulating metabolic hormones to achieve weight loss.

This unique technological path quickly attracted capital. Shortly after its establishment, Tangjie Medical secured angel funding from institutions like Hangzhou Biliangxing and Shenzhen Hongli Gere, followed by nearly annual financing rounds. In January 2025, the company completed the closing of its Series C financing. In February 2026, it made its initial filing to the Hong Kong Stock Exchange. Even after initiating the IPO process, Tangjie Medical conducted a Series C+ round at the same valuation as the previous Series C. This round began in November 2025, bringing in a significant shareholder, Hangzhou High-Tech, with funds settled in March 2026. Subsequently, on March 23 and June 23, 2026, the company introduced state-owned capital or industrial investors from regions including Sichuan Mianyang, Jiangsu Nantong, Jiangsu Wuxi, and Zhejiang. As of the latest filing, Tangjie Medical's valuation stood at RMB 1.495 billion.

Regarding shareholding structure, the latest prospectus shows founder Zuo Yuxing directly holds 25.57% of Tangjie Medical and controls an additional 6.16% through the employee stock platform Zhoushan Aizhong. Xu Tianhong directly holds 4.54%. The prospectus designates Baidu Ventures and Hangzhou High-Tech as sophisticated investors, holding 4.46% and 6.02% stakes respectively. Additionally, Shanghai Fanghe and Hongli Gere each hold more than 4%.

After years of development and clinical trials, the GBS system received approval from China's National Medical Products Administration in January 2024, becoming the first domestically approved medical device for treating obesity via digestive endoscopy. It was formally commercialized in April of the same year, beginning to generate revenue.

Revenue Grows, Losses Persist, and Past Insolvency Challenges

Following commercialization, Tangjie Medical's revenue grew rapidly, but hefty R&D, sales, and administrative expenses have kept the company in a state of sustained losses. At times, it even faced insolvency risks, underscoring the urgent need for listing to raise capital. Data shows revenue for 2024 was RMB 12.709 million, rising to RMB 32.21 million in 2025. However, due to significant period expenses—particularly R&D costs exceeding RMB 40 million and still climbing—the company remains unprofitable. The prospectus indicates losses of RMB 65.957 million and RMB 88.33 million for 2024 and 2025, respectively. In the first half of 2026, revenue nearly doubled year-over-year to RMB 23.69 million, but the net loss widened further to RMB 68.327 million. Even after excluding share-based compensation and listing expenses, losses far exceed revenue levels and continue to expand.

The lengthy R&D period and persistent losses pushed Tangjie Medical into negative equity in 2024 and 2025, with owner's equity recorded at RMB -44.869 million and RMB -7.38 million, respectively. In the first half of 2026, following the completion of the Series C+ round, owner's equity turned positive, reaching RMB 114 million after offsetting accumulated losses. Under cash flow pressure, going public has become a critical financing avenue for Tangjie Medical. After its initial filing lapsed in February 2026, the company promptly resubmitted its application, vying for a Hong Kong listing.

Heavy Dependence on a Single Product, Overseas Commercialization Still Nascent

The prospectus identifies GBS as Tangjie Medical's core product, contributing over 99% of revenue during the reporting periods. In 2024 and 2025, the GBS device was used in 239 and 2,066 commercial implantation procedures, respectively. For the first half of 2026, this figure rose to 1,955 procedures, showing rapid growth. According to Tangjie Medical, 490 hospitals in China have already performed GBS endoscopic implantation procedures, and the company has trained doctors from over 650 hospitals. To date, the GBS product has received regulatory approvals in 11 countries and regions, including Hong Kong, Indonesia, Thailand, Vietnam, and Saudi Arabia.

However, data from the prospectus reveals that nearly all revenue still originates from China, with overseas markets in early commercialization stages and not yet contributing significant revenue. In terms of the profit model, the average hospital terminal price for the GBS product, including tax, is approximately RMB 36,600. Over 99% of Tangjie Medical's revenue comes through distributors, with direct sales accounting for less than 1%, meaning most of the price differential is captured by distributors. Based on GBS sales volume and revenue for 2024 and 2025, the average ex-factory price is about RMB 12,100, with gross margins of 80.9% and 79.1%, respectively. In the first half of 2026, the average ex-factory price rose to around RMB 12,600, and the gross margin improved to 85.0%, up 7.1 percentage points from the same period in 2025. Nevertheless, the long-term competitiveness of the GBS product in the fiercely contested weight-loss market remains to be validated.

Direct Competition with GLP-1 Drugs Puts Pressure on the Device Weight-Loss Sector

Despite the product's differentiated advantages, the GLP-1 class of weight-loss drugs sweeping the market poses direct competition and patient diversion to the endoscopic weight-loss device sector. In the prospectus, Tangjie Medical compares GBS with semaglutide and tirzepatide, two recently popularized GLP-1 weight-loss drugs, noting that GLP-1 products often suffer from high discontinuation rates. Additionally, about two-thirds of patients regain weight within a year of stopping semaglutide. More critically, GLP-1 use is associated with risks such as muscle loss, pancreatitis, and signals of retinopathy. In contrast, the GBS product can maintain weight-loss effects through structured follow-up and lifestyle management, with a generally favorable safety profile.

However, GLP-1 products have advantages that are hard for GBS to replicate. Currently, semaglutide and tirzepatide are primarily administered via injection, which is more convenient than the GBS therapy that requires endoscopic placement. Moreover, pharmaceutical companies like Novo Nordisk are accelerating the commercialization of oral GLP-1 versions and developing products that mitigate muscle loss risks, which could further enhance patient adherence and safety. Additionally, compared to the GBS product's terminal price of RMB 36,600, a single use of semaglutide or tirzepatide is relatively inexpensive, around RMB 1,000, significantly lowering the barrier for weight-loss users.

This has led to some patient diversion in the EBMT (Endoscopic Bariatric and Metabolic Therapies) device market where Tangjie Medical operates. The global EBMT medical device market declined from $162 million in 2024 to $148 million. The prospectus attributes this decline to two factors: the early commercialization stage of EBMT devices, and the increasingly widespread availability, improved accessibility, and optimized pricing of GLP-1 weight-loss drugs like semaglutide and tirzepatide. The convenience and higher initial acceptance of pharmacotherapy compared to endoscopic intervention may, in the short term, divert some potential EBMT patients toward drug treatment.

Still, Tangjie Medical remains optimistic about the sector's long-term prospects: with rising obesity and metabolic disease prevalence, endoscopic weight-loss devices can complement pharmacotherapy, serving patients who are unsuitable for medication or unwilling to undergo surgical procedures. The company anticipates the EBMT market could return to high growth, though this projection carries inherent uncertainty. Around the core GBS product, Tangjie Medical is developing a GBS-Low BMI version for patients with lower Body Mass Index to broaden the applicable population. In addition, the company is researching GBS-SH for patients with MASH (metabolic dysfunction-associated steatohepatitis) combined with obesity, GBS-DM for type 2 diabetes with obesity, and two intragastric balloon products designed to induce satiety by reducing stomach capacity.

However, these products either target more niche markets or face existing competitors, with market potential comparatively less than GBS, alongside uncertainties in R&D and clinical development. For now, Tangjie Medical has secured a leading position in the EBMT market with the world's first commercially approved intestinal interventional device for obesity. But looking at the broader weight-loss landscape, with GLP-1 drugs gaining increasing popularity, whether the company can capture a significant share of the market with its GBS product remains a key question. Having resubmitted its prospectus for a Hong Kong IPO, Tangjie Medical stands at a pivotal juncture. Whether the capital market will endorse the differentiated value of device-based weight loss, and whether the company can withstand drug competition, complete new product launches, and achieve a profitability inflection point, remains to be seen over time.