Phase 3 failure probability is the model's estimate of the chance that an active Phase 3 clinical trial will miss its primary endpoint at readout. The base rate per Hay et al. 2014 is roughly 42%; Framler Bayesian-updates this with enrollment velocity, endpoint amendments, mechanism evidence from PubMed, and sponsor cash runway.
Hay et al. 2014 showed Phase 3 trial success rates anchor around 58% (so failure rate ~42% as a base). We Bayesian-update this base rate with live signals: enrollment velocity, endpoint amendments, mechanism evidence from PubMed, sponsor cash runway. Output: P(failure) per active Phase 3 + days to readout. Phase 3 failures move stocks 30-50% overnight, so timing matters as much as probability.