NEW YORK — The founder of biotech’s largest and most powerful hedge fund has for years perpetuated a toxic culture of sexual harassment, former employees told STAT, routinely subjecting young female assistants to pornography in the workplace, lewd jokes, and pervasive sexist comments.
Five people who once worked at investing giant OrbiMed Advisors said Sam Isaly, the firm’s 72-year-old managing partner, kept a set of breast implants on his desk, palpating them like stress balls during idle conversation. He wantonly demeaned and verbally abused female employees, they said.
One woman said on several occasions, she glimpsed hardcore pornography playing on the large screens that dominated the trading room floor of the $15 billion fund.
Four women said they repeatedly complained about Isaly’s behavior to senior executives at OrbiMed, getting sympathy, but no action. Though their jobs paid well and came with many perks, the boorish environment eventually drove each to quit, the women said.
“I’m scarred,” Delilah Burke, who was Isaly’s assistant for about 18 months beginning in 2009, said in an interview with STAT. “I still have anxiety from that job — now, years later.”
Isaly denied allegations of sexual harassment and pornography in the workplace in a 90-minute interview with STAT on Monday at OrbiMed’s headquarters.
Moments after this story was published Tuesday evening, OrbiMed issued a statement saying, “The incidents cited are concerning and OrbiMed has retained the services of an outside independent law firm to investigate the matter. OrbiMed takes gender equality seriously and wishes to encourage a supportive work environment and equal opportunity for all employees.”
Earlier Tuesday, shortly before the story was published, OrbiMed partner Carter Neild had emailed STAT: “If this article proceeds I hope that you will be fair and focus on the person responsible, not the entire firm.”
During the Monday interview, surrounded by three colleagues and a crisis-management consultant, Isaly was by turns playful, withdrawn, and agitated, maintaining throughout that he had done nothing wrong. He paused after each question before saying “no” or “not to my recollection.”
At one point, he interrupted a long string of questions directed at him about specific sexual harassment allegations: “Hey, there’s a lot of Sam in this,” Isaly said with a smile. “What’s going on?”
The firm’s head of human relations, Kirsten Kearns, sat in on the interview. At first, she said there had never been complaints about Isaly. Later, Kearns said that the firm had investigated claims against Isaly and had concluded none rose to the level of “a sexually egregious behavior.”
None of the five former employees who spoke with STAT alleged that Isaly touched them physically in a sexual way.
Both Neild and Jonathan Silverstein, another OrbiMed partner who sat in on the interview, said they had never received complaints about Isaly’s behavior, though Silverstein acknowledged that employees had told him of their dislike for Isaly. Neild pointed out that the location of his office made him less likely to hear about any derogatory comments or abusive demands Isaly may have addressed to his assistants.
The partners dismissed some of the allegations as normal workplace behavior that the women may have misconstrued. For instance, they said the breast implants on Isaly’s desk were mementos from OrbiMed’s investment in Sientra, the medical technology firm that manufactured them. When STAT asked about complaints, voiced by four women, that Isaly demanded they cut up and feed him rare steak in front of colleagues or clients — a move they said that made them deeply uncomfortable — the partners brushed it off, saying many in the office have on occasion helped Isaly eat, as he is disabled and at times requires assistance.
“My female student intern assisted me with cottage cheese yesterday,” Isaly said by way of example.
The allegations against Isaly come amid a nationwide public reckoning that has exposed the abuses of powerful men in media, politics, and the arts. The $3 trillion hedge fund industry, often criticized for its lack of gender diversity, has until now escaped similar accusations.
The five former employees who spoke to STAT worked at OrbiMed between 2000 and 2015. All four women were executive assistants; the fifth, a man, was an investment professional. Burke spoke on the record. The other four spoke on condition of anonymity, saying they had signed nondisclosure agreements and feared reprisals from Isaly, who has sweeping influence in the world of finance, where OrbiMed commands enormous respect.
Last week, OrbiMed sent a courier to Burke’s door to deliver a printed copy of her nondisclosure agreement and a letter reminding her of its contents.
STAT reached out directly to each of the former employees; none of them initiated contact with STAT.
Isaly is a renowned investor in biotech with a golden touch in stock picking. For two decades, he has been covered fawningly by publications including Forbes and Barron’s and has regularly appeared on CNBC and Bloomberg Television to dispense his wisdom with a gravelly voice and playful smile. Just a few months ago, the Daily Mail dubbed his annual financial returns the “Holy Grail” among investors, and he’s a headline speaker at an upcoming CNBC conference, billed as “one of the world’s most recognized health care fund managers.”
His public persona is that of dogged striver, a man who overcame a high school wrestling injury that left him partially paralyzed to build a powerhouse firm with offices in Asia and the Middle East in addition to its opulent New York headquarters, which occupies the 54th floor of a Manhattan highrise with sweeping views of the East River.
OrbiMed boasts on its website of nurturing a “collegial culture” and a “collaborative, diverse, team-oriented environment” — a declaration emblazoned over what appears to be a photo of an all-male board meeting.
But of the 50 partners and investment professionals currently listed on OrbiMed’s website, 47 are men. Only one of the three women works at the firm’s New York headquarters. The heads of human resources and investor relations are also women, but the majority of the firm’s female workforce is made up of executive assistants, all of whom are young, former employees said.
“The website is a bit misleading when it comes to diversity,” said Kearns, adding that OrbiMed’s workforce is 30 percent women. She said she did not know what percentage of those women work as assistants.
Isaly, who has a controlling stake in OrbiMed, has unchecked authority within the organization, former employees said. Until five years ago, the firm had no human resources department, no employee handbook, and no sexual harassment policy, Kearns said.
And the assistants, young and replaceable compared with investment professionals, said they felt they had no recourse as Isaly routinely sexualized the workplace and harassed them, seeming to delight in their resulting discomfort.
“We were there to look pretty,” one of the women said. “We were like second-class citizens.”
To-do lists sprinkled with dirty jokes.
Burke, now 37, said her first jarring experience at OrbiMed came within months of starting. Leaving her desk and entering the firm’s hectic trading floor, she found that one of the big-screen monitors had been switched away from financial news and was instead playing hardcore pornography, she said, an apparent prank to the dozen male traders doing their work below it.
“At first I was like, ‘Oh, the trading room is just insane,’” she said. But things quickly escalated.
Two days after this incident, Burke said Isaly called her into his office under the pretense of needing an important document. When she came around his desk, one of his monitors was playing a pornographic video, she said, and he beamed at her stunned reaction.
Dismayed, she began chronicling Isaly’s behavior by sending notes to herself on her personal email account. In 10 of those contemporaneous emails, shared with STAT, she recounts in terse shorthand indignities including “hooker joke” and “dirty pic.”
Isaly would embed pornographic images or videos in seemingly innocent emails on an almost daily basis, she said. Then he’d laugh at her revulsion upon discovering them, she said.
Isaly denied ever showing pornography in the workplace.
He would sprinkle his to-do lists for her with dirty jokes and cryptic setups that would expose Burke to something lewd on the internet, she said. For example, on April 15, 2010, his daily list of tasks included “look up ‘kit kat shuffle,’” Burke said. She ignored the command, knowing from experience where it would likely lead. Had she followed Isaly’s instructions, she would have found that the phrase is a euphemism for masturbation.
The incessant harassment began to take a personal toll, Burke said. Isaly would call and text on nights and weekends with repetitive questions and demands, delivered in his familiar mix of business speak and abusive humor, she said.
Burke grew more and more anxious as the months wore on. Eventually, she said, she couldn’t sleep unless she’d hidden her Blackberry under her bed, where its chirping couldn’t disturb her.
A person who has heard Burke talk about these incidents over the years confirmed to STAT that she has long been troubled by them.
Burke said she complained about Isaly’s behavior to OrbiMed executives at least once a month. Because the firm didn’t have a human resources department at the time, she said she went first to Don Bennett, the head accountant, who carried out some HR duties. Later she complained to Silverstein, a well-liked partner at the firm. Each time, she said, she received sympathy, and sometimes there was a promise to talk to Isaly about his behavior. But nothing changed, she said.
Bennett, who worked at the firm for more than a decade, has since died. In the interview with STAT, Silverstein, a six-time member of Forbes’s Midas List of the top venture capitalists, said he had no recollection of any complaints about Isaly’s behavior.
“I recall people saying they didn’t like Sam,” Silverstein said after a long pause, “but I don’t recall them — I don’t recall specific incidents.”
Neild, the partner who emailed to ask STAT to focus on “the person responsible,” said in the interview he had never heard complaints about Isaly’s behavior but went out of his way to note that the location of his desk could be a factor.
“I’m across the [office], so I probably would interact less frequently with people that work for [Isaly] or support him,” Neild said. “As you come around the corner, people like Jonathan are closer and would just have more opportunity to interact with people or get to know people.”
For Burke, the final indignity came on Aug. 12, 2010. She said Isaly called her into his office and asked her to retrieve a file from his briefcase. When she opened it, she found a flesh-colored vibrator sitting atop his effects, she said. The next sound was Isaly’s booming laughter from across the office, she said.
“The vibrator thing is when I quit,” Burke said. “It was just, ‘You’re disgusting. I’m leaving. This is it.’”
Isaly said he had no recollection of the incident.
The four other former OrbiMed employees, all interviewed separately, shared similar stories about abusive behavior by Isaly — and the apparent indifference of senior partners. They said the partners were well-aware of Isaly’s behavior and that they themselves sought to limit their dealings with him in recent years, wary of his propensity for making off-color jokes in front of clients.
One former assistant said partners would routinely delete calendar invitations to Isaly, hoping that he would not attend meetings. Three former assistants said partners would go out of their way to limit his involvement in the planning of a deal, keeping him in the dark until only his yes-or-no final decision was needed.
The partners often spoke about looking forward to Isaly’s retirement, former employees said.
“If [Isaly] sleeps in his office all day, that’s a good day at OrbiMed,” a former assistant said.
In the interview with STAT, Silverstein and Neild said they have not deliberately avoided working with Isaly. But the prospect of Isaly stepping down from OrbiMed seemed a sensitive subject among the partners.
Isaly “has talked about his retirement for a while now,” Neild said.
But Isaly was gruff and vague on the topic, saying that “there is no planned date” and that “there is a process in our partnership agreement.”
Neild quickly added: “They’re ongoing discussions.”
“Has there been some intentional or secret effort [to drive him out]? No,” Neild said. “Sam’s fully aware of what we’re up to, but his role has evolved over time.”
Asked about their interactions with Isaly, both Neild and Silverstein distanced themselves from OrbiMed’s founding partner.
“He has become less involved in a lot of aspects of the firm, including something I’m involved with a lot, which is interaction with clients,” Neild said.
Silverstein was more direct: “I’ve never really worked with him.”
A former investment professional at OrbiMed said Isaly’s behavior — and its effects on women in the workplace — were widely known among the firm’s leaders.
“People knew that Sam definitely crossed the line,” he said. “There was a lot of cringing, even at the partner level, but not much got done about it.”
One of the former employees STAT talked to said she had her own ideas as to why: “These men, mostly white men, they make so much money that they’re really above the law in a lot of respects,” she said.
In 2012, OrbiMed hired Kearns to serve as its first official head of HR. Two women said they came to Kearns with complaints about Isaly’s behavior, but nothing came of the meetings.
In the interview with STAT, Kearns first denied that she had received any such complaints about Isaly — but moments later acknowledged them.
“There has been no complaint that could be construed as harassment or sexual harassment made by an employee about Sam,” Kearns said at first. After further questions, she acknowledged that “there have been comments made” about Isaly’s behavior.
After a series of halted sentences, she continued: “People can have complaints, you know, and so have people made complaints to me? Yes. Have we handled them appropriately? Absolutely. But nothing that has escalated to a level of harassment or sexual harassment.”
OrbiMed conducted an “investigation” into those complaints, Kearns said, and “nothing has been deemed a sexually egregious behavior through that process.”
She declined to elaborate.
Assistants at OrbiMed made at least $100,000 a year in salary, plus an annual bonus that could double their compensation, former employees said. Health benefits were generous. High-dollar meals out and trips around the world were frequent.
The firm’s resplendent Manhattan office, decorated with six paintings by the prominent British artist Damien Hirst, has a fully stocked kitchen.
“All the apples you could want to eat,” Isaly said while leading STAT on a tour. “No booze in the refrigerator.”
The pay and perks made quitting a difficult proposition, the former assistants said. Each was young, some were saddled with debt, and all were paying New York City rents. The harassment at OrbiMed was something they had to stomach to keep their jobs and lucrative pay, they said, a sort of tax on ambition.
Until it got to be too much.
“No ethical person would work there for more than a few years,” Burke said. “You make your money, and then you leave.”
The making of a biotech legend
As OrbiMed’s female employees privately endured Isaly’s behavior, publicly, he blossomed into a Wall Street celebrity.
“If you could bottle what drives veteran fund boss Samuel Isaly at the age of 72 to keep making money for investors,” begins a 2017 article in the Daily Mail, “you would make a fortune.”
And he has.
Isaly owns estates in the Poconos and the U.K., as well as an apartment on Manhattan’s Fifth Avenue that overlooks the Metropolitan Museum of Art. His prowess as a Wall Street rainmaker is legendary among investors, who track OrbiMed’s quarterly filings with the Securities and Exchange Commision to see what Isaly’s buying in hopes of gleaning a whiff of his edge.
Isaly is, according to Barron’s, the only U.S. fund manager whose returns beat the S&P 500 for 25 straight years, a run that ended in 2016. He was an early backer of Gilead Sciences, whose share price has more than quintupled in the past decade, and Acerta Pharma, a private firm acquired for $7 billion in 2015.
“OrbiMed is absolutely the top notch fund in the healthcare space,” the blog Wall Street Oasis wrote in 2013. “Every healthcare banker and sell-side analyst daydreams about working there come recruiting season.”
Isaly was born into a prominent Ohio family that made its name in the food business. Isaly’s, a chain of dairies founded by his father and grandfather, invented the Klondike bar and conceived its famous jingle. At its peak, the company operated hundreds of retail stores from Iowa to Pennsylvania, selling chipped ham and skyscraper ice cream cones. The Isalys had a mnemonic acronym to help customers remember the name: I Shall Always Love You, Sweetheart.
Sam Isaly inherited his family’s nose for business. His paralyzing injury, sustained in his senior year of high school, left him without the use of his legs but did not dull his ambition.
After graduating from Princeton in 1967, Isaly went to the London School of Economics on a Fulbright scholarship. He then worked his way up as a pharmaceuticals analyst at major investment banks, including Chase Manhattan, Merrill Lynch, and Legg Mason.
In 1998, Isaly launched OrbiMed with Sven Borho and Carl Gordon, who remain his most trusted colleagues.
Together they built a Wall Street empire. OrbiMed grew beyond the pharmaceutical hedge fund world to invest in private companies and medical technology firms, opening outposts in California, China, India, and Israel. The firm now employs more than 100 people around the world.
At OrbiMed, which has grown nearly tenfold since 2000, success kept the all-male management group from changing how the firm does business, former employees said. And the absence of women in positions of authority played a direct role in fostering a hostile workplace, they said.
A culture of boorishness trickled down from Isaly, the five former employees said, and spilled over into OrbiMed’s office parties. Each former employee cited OrbiMed’s annual holiday celebration, held at Midtown steakhouse Morton’s since at least 2004, as representative of the company’s culture.
At the party, new employees were singled out and placed into two groups: the “heavyweights,” comprised of men, and the “lightweights,” made up of female assistants and interns, former employees said. Shots of liquor and glasses of champagne were passed around, they said, and then waiters brought out the steaks — 48-ounce porterhouses for the heavyweights, smaller portions for the others.
The contestants were instructed to eat as quickly as they could, cheered on by partygoers drunk on the spoils of an open bar, former employees said. Whoever finished first in each weight class collected a cash prize culled from onlookers, a pot that generally totalled around $200, they said.
The former employees said they felt that attendance was mandatory.
“I’ll point out one thing about this,” Isaly said of the eating contest. “The students — the interns — they want to do it. The cash prize is significant to them.”
On at least two occasions, a female contestant threw up as result of the contest, according to two former employees.
Isaly, Silverstein, and Neild said they never witnessed anyone vomit at the party. And each said attending the party was optional.
“I would say it didn’t really feel like hazing,” Silverstein said. “If somebody didn’t want to do it, they didn’t do it.”
“But we did discontinue it” in 2013, Neild interjected.
“We stopped doing it,” he said, “because of the way it could be perceived.”
This article is reproduced with permission from STAT. It was first published on Dec. 5, 2017. Find the original story here.