The Philosophy: Magnitude Over Direction
Every biotech catalyst — a PDUFA date, a Phase 3 readout, an AdCom vote — creates a moment where the stock will move. The question institutional traders ask isn't simply "up or down?" It's: "how much powder is in this keg?"
A first-in-class drug with novel mechanism data going into an FDA decision is a fundamentally different volatility event than a supplemental approval for a line extension. Both are "catalysts." One might move a stock 50%. The other might move it 5%. Knowing which is which is the edge.
Bio-Score quantifies this. It assigns every biotech catalyst a score from 0 to 150+, where higher scores predict larger absolute stock moves around the catalyst event. A Bio-Score of 168 doesn't tell you to buy or sell. It tells you: this event will move the stock significantly, and you should be paying attention.
Bio-Score predicts volatility magnitude, not direction. A score of 150 means "this stock will move big" — it could be +45% or -65%. The value isn't in guessing the outcome. It's in knowing when the move is coming and how large it's likely to be.
The Bio-Score Scale
The algorithm outputs a continuous score. The higher the number, the greater the predicted volatility magnitude for the catalyst event. Here's how to read the scale:
The 150 threshold is where catalysts cross into "powder keg" territory. Historically, events scoring above 150 have been associated with overnight moves of 40% or more in either direction. These are the catalysts worth building a position around — or avoiding entirely if you're holding the stock without conviction.
The Three Factors
Bio-Score is built on three proprietary factors. Each measures a different dimension of why a catalyst event might produce outsized volatility. The factor names are public; the specific weights and sub-calculations are proprietary.
Event Tier
Not all catalyst types are equal. A PDUFA decision on a first-in-class drug carries fundamentally different volatility potential than a Phase 1 interim update. The tier system classifies event types by their historical impact magnitude.
Materiality
How much does this catalyst matter to the company? A flagship drug that represents 80% of a biotech's pipeline value creates a materially different volatility profile than a secondary indication expansion for an established product.
Urgency
How close is the catalyst? Urgency applies exponential time decay — a PDUFA date two days out is a powder keg. The same PDUFA six months out is informational. The algorithm penalizes distant events and amplifies imminent ones.
These three factors combine into a single score. The interaction effects matter — a Tier 1 event (like a PDUFA) with high materiality (flagship drug) and high urgency (happening this week) will score dramatically higher than any single factor alone would suggest.
Time Decay & Urgency
One of Bio-Score's most important mechanics is how it handles time. A catalyst isn't equally actionable six months out vs. two days out. The algorithm uses continuous exponential urgency decay to reflect this reality.
As a catalyst date approaches, the urgency component increases exponentially — not linearly. This means scores can jump meaningfully in the final days before an event, even if no new information has emerged. The market recognizes imminent catalysts differently than distant ones, and Bio-Score captures that behavior.
Conversely, once a catalyst date passes, the score applies a steep expired penalty. A PDUFA that was scored at 168 yesterday but resolved today drops dramatically, because the volatility event has occurred. This keeps the feed forward-looking and prevents stale catalysts from cluttering the signal.
Case Studies: Bio-Score in Action
The proof is in the tape. Here are three real catalyst events where Bio-Score's magnitude prediction aligned with the actual outcome — regardless of whether the stock went up or down.
XENE — Xenon Pharmaceuticals
VNDA — Vanda Pharmaceuticals
CARA — Cara Therapeutics
XENE scored 168 and moved +46%. VNDA scored 150 and moved +45-51%. CARA scored 150 and dropped -65.6%. Three different outcomes, three different directions — but all three confirmed massive volatility magnitude. That's what Bio-Score measures: the size of the powder keg, not which way the fuse burns.
What Bio-Score Isn't
It's not a buy or sell signal. Bio-Score doesn't tell you to go long or short. It tells you the magnitude of the expected move, which is one input into your trading decision — not the whole decision.
It's not investment advice. BioCatalysts.AI is a data intelligence platform. We provide the score, the data, and the context. Your conviction, position sizing, and risk management are yours.
It's not guaranteed. Backtested correlation of 0.86–0.91 between Bio-Score and absolute overnight move magnitude is strong, but no algorithm predicts every outcome. Markets are complex. Use Bio-Score as one tool in your toolkit, not the only one.
It's not direction. We'll keep saying it because it's that important. A high Bio-Score means big volatility is expected. Whether it's up or down depends on the outcome of the catalyst event, analyst expectations, market conditions, and factors no algorithm can fully capture.
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