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Lesley Gouldie, CEO and president of Thornhill Research Inc., with the device MOVES SLC, a portable ventilator, in Toronto, on Oct. 19.Tijana Martin/The Globe and Mail

Thornhill Research Inc. was one of Canada’s fastest-growing companies during the pandemic. Now it is one of the fastest shrinking.

Revenue for the Toronto company, which makes innovative portable intensive-care units complete with ventilators, increased about tenfold in 2020 to nearly $100-million and stayed there in 2021. It was enough for Thornhill, which goes by Thornhill Medical, to garner 10th place on The Globe and Mail’s Top Growing Companies list in September.

But in 2022, revenue is set to drop to below $10-million. That doesn’t bother chief executive Lesley Gouldie. “We are light years ahead of where we were from a business development point of view compared to pre-COVID,” she said in an interview.

The pandemic created corporate losers – like foodservice, travel and hospitality providers – and winners such as e-commerce and telehealth companies. Then there were those like Thornhill that made medical equipment the world suddenly needed. Thornhill received a $223.7-million federal government order in 2020 for its portable ICUs, one of the biggest contracts of the $1.15-billion Ottawa committed for ventilators.

It was a rare instance where a Canadian medical device company got a big order at home.

The sudden change in circumstances benefited some Canadian vendors but proved disastrous to others. Ottawa’s Spartan Bioscience Inc. failed to execute on a big government contract to deliver rapid COVID-19-testing systems and filed for creditor protection (it re-emerged with a new name, Genomadix, but lost the contract). Some makers of masks and filter material complained the government abandoned them once the need subsided.

Even Thornhill, which successfully navigated the surge of COVID-19-related demand, had to deal with a hitch: After the government ordered 40,000 ventilators from 15 vendors, only a fraction were used and it cut its order to 27,813. Thornhill ended up delivering 857 of its 1,020-unit order, plus 40 to Ontario.

Still, Thornhill’s pandemic experience has given it a revenue windfall, a proven ability to scale up, and a key reference customer. That should help as Thornhill goes after the big prize: selling its wares to the U.S. Armed Forces.

“The Canadian contract helped them significantly to elevate their reputation,” said retired U.S. Air Force surgeon-general Charles Green, a Thornhill adviser. At the highest level of the U.S. military, “they’re aware of the company and the product and there’s a significant push coming from people who use it.”

Thornhill was spun out of Toronto’s University Health Network in 2004 by anesthesiologist Joseph Fisher. It won a U.S. Navy contract to develop a mobile ICU, creating the battery-operated MOVES SLC, which shrunk down the capabilities and equipment of an ICU to about the size of a golf bag. The 18-kilogram unit could be slung over a shoulder and had suction, patient-monitoring tools, a concentrator that pulled oxygen from the air and an oxygen-conserving ventilator. It was much smaller and lighter than what it replaced but complex, with 1,500 parts. It didn’t require oxygen tanks so it was easier and safer to transport. It entered the market in 2017.

MOVES SLC “takes some of the best design features of breathing systems in modern anesthesia and applies that same technology in a robust format,” says Chris Christodoulou, anesthesia specialty lead with Shared Health Manitoba, which sent 16 of the units ordered by Ottawa to remote communities. “It’s a great device with capabilities that no other device on the market can parallel.”

Ms. Gouldie joined in 2015 as chief commercial officer after holding senior roles with IBM, Thomson Reuters and medical device maker Meditech. The South African-born chartered accountant loved the product and mission to bring better medical care to the battlefield. She became chief executive in 2019.

By 2020, Thornhill was growing fast and had early traction, with 200 MOVES SLC units sold to the U.S. Marines and armed forces in Israel, Australia and Singapore. Its other main product was MADM, a toaster-sized mobile anesthesia delivery unit. Thornhill had about 30 employees and could make 50 units monthly at its manufacturing facility.

In March of that year, the government issued a wartime-like call for Canadian industry to secure a domestic supply of critical medical equipment for COVID-19, including ventilators. By April 1, Thornhill had orders for 1,020 MOVES SLCs. “In 10 days our lives changed,” Ms. Gouldie said.

She made two key moves during that whirlwind period: Thornhill forged a partnership with auto-parts giant Linamar Corp., which would manufacture the devices for Thornhill at its Guelph, Ont., plant and handle supply chain matters. Linamar had started moving into medical technology manufacturing and the relationship, which remains in place, “is mutually beneficial,” Linamar chief executive Linda Hasenfratz said in an interview. “They helped to acquaint us with other partners in the market, and we’ve brought credibility and depth to their manufacturing.”

Also, instead of hiring full-time staff like mad to ramp up operations, Ms. Gouldie brought on a “surge team” of contracted consultants, all of whom she had worked with before and trusted to get the job done. That swelled company ranks to 80 people but meant she wouldn’t be stuck with high fixed labour costs after the contract. (Thornhill now has 67 people.) “It’s not easy to manage a spike of orders then float back down,” Ms. Hasenfratz said. “They’ve done a good job.”

By early 2021, Ms. Gouldie refocused on building the business after the pandemic, hiring Frederick Gerber, a retired U.S. Army medical operations executive in Arlington, Va., as a consultant. Over the next year he mapped out how to sell into the byzantine bureaucracy of the U.S. Armed Forces, a plan that required winning buy-in at several levels – and patience, as military budget cycles last five year.

Thornhill created a military advisory council that included former surgeons general of the U.S. Army and U.S. Navy. The company demonstrated specialists could remotely direct medics to use its units in a simulation. Its products also got real world experience after Thornhill donated six devices to Ukraine this year. In a news release announcing its medical modernization strategy in July, the U.S. Army featured a picture of a MOVES SLC unit.

“We’re at the table with all the right people, we’re doing the right things,” Ms. Gouldie said. “When you’re selling into the military nothing is ever certain until you’ve got their purchase order.”

But the strong feedback so far “gives me a high level of confidence it’s all going to ultimately convert into revenue.”

Mr. Gerber said the U.S. military “loves the product. It’s going to revolutionize the practice of medicine on the modern battlefield. They are going to make a big sale,” larger than the Canadian order. “I am positive of that. It’s just going to take a bit of time to get into that budget cycle.”