Appears to cause physical damage, about the same as arrows, possibly 2 less attack like Viper Star. When a target is injured by the arrow it will be poisoned for 33 turns (4 seconds per turn). Poison damage starts at 3 HP for 4 turns, followed by 9 turns with 2 HP and 20 turns with 1 HP each, which adds up to 50 HP over a period of 2 minutes and 12 seconds. You can make 7 of them by casting the Poisoned Arrow spell.
An article from Tibianews, published 21. october 2007, suggests that the attack rate for Poison Arrow is 22. Previously it has been believed that the attack rate is 20.