Faers Drug Launch Safety Curve
In plain terms
When a newly-approved drug racks up an unusually high adverse-event count in its first 90 days, the FDA tends to add a black-box warning or label change. We short the sponsor before that catches up, holding for one to three months.
How it works
The pharmacovigilance literature documents disproportionately high per-Rx adverse-event rates in the first 90 days post-FDA-approval as prescribers explore the new product. Mapping that launch-curve elevated AE rate to a tradable equity short captures the safety-overhang risk before sell-side picks it up.
Data dependencies
- Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
- Faers adverse events
A data feed this strategy reads, refreshed on its normal schedule.
Expected edge
- Reported return
- untested — internal
- Tested over
- T+0 to T+60d
Untested — internal. Olfson-Marcus 2009 documents the safety-curve phenomenon in pharmacovigilance literature; equity passthrough is novel.
Example tickers where this is likely to fire
Illustrative only, the signal fires based on the live data, not a fixed list.
Related families
Pharma stocks drop after a spike in serious side-effect reports for a marketed drug. Short the day after the 7-day rolling severity z-score crosses +2.
When a drug company publicly posts the results of a late-stage (Phase III) trial, bet that its stock drifts down over the following weeks, and hold for about 2 to 8 weeks. The trade waits until the results are actually public before taking any position.
Explore Faers Drug Launch Safety Curve on alphactor.ai
See which tickers this family is currently firing on, with live signals and rankings.