faers drug launch safety curve
What it checks
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.
Mechanism
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.
Signal rule
Per sponsor ticker, identify each new drug (drug_name first appearance in FAERS). Sum severity_score in the first 90 days post-launch. Fire SHORT (T+1, at day 90 post-launch) when launch-period severity sum >= 1.5-2.0× the sponsor's own peer-baseline (or absolute sum >= 50 when no peer-baseline yet). Hold 30/60 days.
Data dependencies
daily_pricesAdjusted-close OHLCV for every US-listed ticker; primary price feed.
faers_adverse_eventsWorker data table — see services/worker schema.
Expected edge
- Paper alpha
- untested — internal
- Paper window
- 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
faers severity spike shortHealthcare / FDAA 7-day rolling severity-score sum (death=5, life_threatening=4, hospitalization=3, disability=2, other=1) z-scored vs the trailing 365 days predicts label-change risk / black-box warning / product recall on the sponsor. FAERS reports take 1-3 days to land in the public API and the news cycle picks them up 1-2 weeks later, leaving a 3-10 day window for the short.
clinicaltrials phaseiii readoutEventPhase 3 completion dates are forecastable; pre-readout long-vol premium.
Explore faers drug launch safety curve on alphactor.ai
See which tickers this family is currently firing on, with live signals and rankings.