Sam Isaly, founder of biotech’s largest and most powerful biotech hedge fund, is stepping down from his leadership role at OrbiMed Advisors following a barrage of sexual harassment allegations published by STAT.
OrbiMed put out a statement on Thursday night asserting that Isaly is retiring “pursuant to years-long succession planning discussions.” However as recently as Monday, when STAT interviewed Isaly about the allegations against him, he said there was “no planned date” for his retirement.
Isaly’s abrupt departure comes hours after STAT sought comments from the firm about still more allegations of misconduct from another former employee at OrbiMed. Also Thursday, a third wealthy OrbiMed client said it would press the firm for more information about the allegations against Isaly.
Isaly did not comment on the sexual harassment allegations in his retirement announcement. Instead, he issued a statement saying, “I am extremely proud of what my distinguished partners and I have accomplished at OrbiMed and the difference we have made in the lives of patients worldwide.”
The firm’s leadership will be taken over by a management committee composed of partners Sven Borho, Carl Gordon, and Jonathan Silverstein. Four of the women who spoke to STAT in recent weeks about Isaly’s behavior said they had complained to Silverstein about Isaly’s pervasive harassment and got sympathy, but no action.
In an interview with STAT on Monday, Silverstein said he didn’t remember specific complaints, though he did recall some employees telling him they didn’t like Isaly.
In the latest claims, Yanping Ren, who worked part-time at OrbiMed for 18 months as an intern, said Isaly routinely made vulgar and demeaning remarks to women in the workplace, including commenting on their bodies. She said she encountered women crying in an office bathroom at least once a month in her time at the firm. Their tears were “always related to something that happened in the office,” Ren said.
“It was so normal in the company,” Ren said. “It was like a fact of life that everyone had to accept. Sam just did what he could get away with.”
Ren’s story echoes allegations, first published in STAT on Tuesday, made by five former OrbiMed employees who worked at the company between 2000 and 2015. Each said Isaly regularly sexually harassed OrbiMed’s female employees, particularly executive assistants. Two of the former employees said he repeatedly exposed female colleagues to pornography in the office. One said Isaly played a prank on her with a sex toy.
Isaly denied the allegations, and OrbiMed has promised to conduct an internal investigation into the claims.
As news of the allegations has spread, some of the fund’s clients said they would re-evaluate their relationships with Isaly, an investing legend who wielded substantial influence on Wall Street.
California’s pension fund for teachers, a $220 billion operation referred to as CalSTRS, said on Tuesday that it would be “reaching out” to OrbiMed to assess the allegations.
CalSTRS said in a statement that it “expects that investment managers and partners within our portfolio to conduct all aspects of their business operations and practices ethically and responsibly. We engage with our relationships regularly and monitor any allegations of questionable practices.”
California’s public employee pension fund, CalPERS, which invests in OrbiMed, also said this week that it would bring the allegations against Isaly to the attention of its external fund manager, which oversees that investment. And the $400 billion investment firm Eaton Vance, another OrbiMed client, said it was reviewing the allegations against Isaly, “which we take very seriously.”
STAT contacted seven additional investors in OrbiMed on Tuesday and Wednesday, including TIAA, which manages nearly $1 trillion worth of assets, and the University of California. All either did not respond or declined to comment.
Ren, the former intern, worked about 20 hours a week at OrbiMed, roughly half of which were spent with Isaly, she said. That meant enduring his constant puerile jokes and demeaning statements, Ren said.
Ren was the only female intern in OrbiMed’s male-dominated office in 2008 and 2009, she said. All the firm’s investment professionals in the Manhattan headquarters were men, and the vast majority of OrbiMed’s female employees worked as executive assistants, she said.
OrbiMed was Ren’s first job in finance. She was a junior at New York University when she started at the firm, taking an internship she learned about through Beta Alpha Psi, an honor society for finance and accounting students.
Ren, who is now 29, said she was shocked by Isaly’s boorish behavior — and by the fact that it went unchecked. At the time, OrbiMed had no human resources department, no employee handbook, and no sexual harassment policy.
But with no experience to compare it to, Ren was left to assume that a career in finance meant dealing with men like Isaly, she said.
“In college, you kind of hear about how crazy the workplace can be,” she said. “So I thought, ‘Oh this is just how it is.’”
But her next job, at a health care fund called Vatera, was diametrically different from OrbiMed, Ren said. At Vatera she found a professional, respectful workplace — and her boss was a woman.
OrbiMed did not respond to questions about Ren’s account.
OrbiMed “takes gender equality seriously and wishes to encourage a supportive work environment and equal opportunity for all employees,” the firm said in a statement following STAT’s first story detailing sexual harassment allegations against Isaly.
“When I read that statement, I found it quite funny,” Ren said, “because it’s so far from the truth.”
With an all-male management committee, including at least one man who dismissed and downplayed/lied about complaints, taking over, there is zero reason to believe any significant changes will be made.
Great reporting, STAT! Isaly’s gone, but what do all of the LP’s in OrbiMed do with the fact that the remaining partners ignored and enabled the kind of behavior described by the brave people who came forward? And then there’s the interview with Kirsten Kearns, Jonathan Silverstein and Carter Neild where they were clearly lying through their teeth. Kearns should be fired immediately (head of HR, for heaven’s sake!). Shameful. This firm should be blackballed. Morals before returns.
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