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The holder is inflicted with the intensifying (Toxic) poison status at the end of the turn. The effect remains even if the item is removed. Prevented by Safeguard, but not by Substitute. If the holder was not already poisoned, they do not lose HP until the following turn.
At first glance, Toxic Orb may seem to have a detrimental effect on all Pokemon and should not be considered for competitive play, but there are certain strategies that make effective use of it. Pokemon with the Poison Heal ability, such as Breloom, regain 12.5% of their maximum HP each turn when poisoned. Toxic Orb allows it to reliably poison itself and heal twice as much HP every turn as Leftovers would.
Pokemon with the Guts or Quick Feet ability have Attack and Speed boosted, respectively when they are inflicted with a status condition. Toxic Orb can be used to activate these abilities. Both Flame Orb and Toxic Orb have their own advantages and disadvantages. While the burn from Flame Orb inflicts more damage initially than the Toxic poison from Toxic Orb, this poison damage builds up very quickly. Toxic's damage equals that of burn after 3 turns, and after that, Toxic does more. This makes Flame Orb the superior choice for Pokemon that are expected to stay in for a single make-or-break sweep, whereas Toxic Orb is preferable for hit and run attackers. For physically based Quick Feet Pokemon, Toxic Orb gets the nod, as Quick Feet does not negate the Attack drop from Burn like Guts does.
Toxic Orb is a very specific item, and should only be considered for use on a small selection of Pokemon.