He was towards the end of a six-month internship with Pollen, a product design company based in New York, when the call came from London’s Royal Society of Arts for submissions to its annual Student Design Awards. Among the various briefs was a challenge to “revitalise” the laryngoscope, an instrument used since the mid-1800s to examine the vocal cords and help administer general anaesthesia during surgery.
“I had never done anything medical, so it was a standing start,” McGrath recalls. “I was attracted to the brief because I wasn’t sure whether many other students would choose it.”
Despite such diffident beginnings, his project went on to win and became the foundation for a company called Aircraft Medical, which was sold last week for $110 million (£72m) to New York-listed Medtronic.
The all-cash deal signals a payday for Aircraft Medical’s private investors, who include the likes of former HBOS chairman Lord Dennis Stevenson, the late STUC general secretary Campbell Christie and the Marquis of Linlithgow. The company, which employs 30 people at its Dalgety Bay manufacturing facility in Fife, has also received support from the Audi Design Foundation, the Princes Trust, the Wellcome Trust, Scottish Enterprise and RBS.
McGrath owned nearly half of the shares and has therefore collected his own windfall, but he prefers to talk about Aircraft Medical’s potential once integrated into Medtronic, where he will remain as an adviser.
“This has not been a money-driven thing – it has not been a financial exercise,” he explains. “It started as a student project, and it became a passion. This is just another milestone in what I am sure will be a much bigger story.”
McGrath’s was the world’s first laryngoscope with a built-in video camera system, giving doctors and anesthesiologists a better view of the airway. Today there are a number of video laryngoscopes on the market, which can lead to the kind of patent disputes that at one point threatened to put Aircraft Medical out of business.
After graduating from university, Benbecula-born McGrath returned to Scotland in 2001 to set up his business in Edinburgh. Aircraft Medical’s first product, the McGrath Series 5, was unveiled to the industry after three further years of development, and achieved its first commercial sales in 2006.
It was around that same time that a US rival, Verathon, began bringing patent infringement lawsuits against Aircraft Medical. It started in Verathon’s home state of Washington and moved on to Texas before then making its way into Europe.
It took about six years to settle all the disputes, which were found for varying reasons in Aircraft Medical’s favour. However, McGrath admits it was a big drain on the young company, which came “very close to the line” on more than one occasion. It turned its first profit in 2009 but then fell back into the red amid mounting legal fees and the fall-out from the global recession.
The company reportedly returned to the black in 2013, though Aircraft Medical has never publicly disclosed either its sales or profit figures. “The lawsuits may have taken money from us and distracted us, but they also gave us the resolve to fight and win,” McGrath says.
“In starting a business, you have to be good at keeping positive and keeping a positive story around your business. What we had was very powerful, and that was demonstrated by this litigation being brought against us.”
Aircraft Medical’s second-generation platform, the McGrath MAC, gained traction in 2011 following a multi-national distribution deal with Ireland’s Covidien. Designed to improve intubation in both routine and more difficult patients, the McGrath MAC makes it easier to get a breathing tube down the throat of a surgical patient under general anaesthesia.
Together with the end of the legal battles, the link-up with Covidien has led to “record sales”, says McGrath: “The use of our product has been doubling each year for the last several years.” Following the acquisition of Covidien by Medtronic earlier this year, the US medical giant’s subsequent move on Aircraft Medical was a natural progression. McGrath says he always envisioned his company becoming part of a larger organisation that could successfully exploit the global applications for his laryngoscope design.
In the future, the 37-year-old concedes he will eventually move on to other projects and ventures, though he has yet to settle on a specific path.
“I have got an open mind, but at the moment I don’t have much time to think about other things,” McGrath says. “Right now my mind is really focused on Aircraft Medical and Medtronic and the integration to make it the success I believe it can be. I am intrigued to see how it is going to develop from here.”
Born: Benbecula, 1977
Education: Kingussie High School, Northumbria University
First Job: I opened a school shop and started trading – that was my first enterprise, but my first job with a pay packet was working for my dad on a construction site as a labourer.
Ambition at school: I didn’t have any big plans when I was younger.
Can’t live without: My wife and our three kids and our dog, but if you’re talking about objects, it would be my pen and blank pieces of paper.
Kindle or book: Books, real books.
Favourite city: Berlin
Preferred mode of transport: I have an electric skateboard that I go on. That is very fun.
What inspires you: Hard work and achievement, and that can be people who just work hard to make ends meet and are happy.