FDA approval or rejection
⚖️ LegalA regulator approves, rejects, or delays a drug or medical device.
Typical size
20-100%+ for small biotech
Timeframe
Instantaneous and permanent
Evidence
3 logged events
Why it moves the price
For a clinical-stage biotech, a single approval can convert a company with no revenue into one with a real product — or render its lead asset worthless.
What separates a good call from a naive one
The most binary catalyst in public markets. Position sizing matters more than direction. The stock already prices an approval probability, so an expected approval can still sell off ('sell the news') while a surprise rejection is catastrophic.
Measured impact
Every logged event is measured against real closing prices: the move from the close before the event, compared with the S&P 500 over the same window.
Next day
+13.49%
- Median
- +3.20%
- Moved up
- 67% of 3
- vs S&P 500
- +13.35%
After 1 week
+18.44%
- Median
- +14.87%
- Moved up
- 100% of 3
- vs S&P 500
- +16.40%
After 1 month
+12.51%
- Median
- +18.95%
- Moved up
- 67% of 3
- vs S&P 500
- +8.93%
The logged evidence is mixed, which is common for context-dependent factors. Based on 3 measured events.
The evidence (3)
Every row is a real event, measured against actual closing prices.
| Date | Stock | What happened | Next day | 1 week | 1 month | vs S&P |
|---|---|---|---|---|---|---|
| Dec 8, 2023 | VRTX | Casgevy approved — the first CRISPR-based therapy cleared in the US Approval was widely expected, so the reaction was muted. | -1.07% | +14.87% | +18.95% | -1.50% |
| Nov 8, 2023 | LLY | Zepbound approved for chronic weight management | +3.20% | +1.82% | -1.94% | +3.13% |
| Jun 7, 2021 | BIIB | FDA approves Aduhelm for Alzheimer's disease Surprise approval after an adverse advisory committee vote. | +38.34% | +38.62% | +20.53% | +38.44% |
Measured from historical closing prices. Past reactions do not guarantee future ones. Not financial advice.