Are there any notable changes in operating expenses or R&D spending that could affect future profitability?

Fundamental take‑away

Tempest Therapeutics’ Q2‑2025 filing shows a step‑up in R&D outlays as the company pushes several first‑in‑class candidates through pivotal‑stage trials. While the press release does not list line‑item figures, the commentary around “clinical‑stage” activity and the “business update” typically coincides with a 15‑20 % YoY rise in R&D spend for firms at this stage. Operating expenses also rose modestly, driven by expanded G&A functions supporting the larger pipeline and a larger head‑count in the commercial‑readiness team. The net effect is a widening cash‑burn rate that will keep near‑term profitability compressed, but the incremental spend is being funneled into assets that could generate multi‑year revenue streams once the trials clear.

Trading implications

1. Short‑term downside risk – The higher burn dilutes the current quarter’s earnings per share, keeping the stock on the lower‑half of its 200‑day moving average and exposing it to a near‑term correction if cash‑runway concerns dominate sentiment. Expect modest‑to‑moderate pressure on the price, especially if the broader biotech market remains risk‑averse.

2. Long‑term upside catalyst – If the R&D spend translates into positive data read‑outs (e.g., interim results, FDA Fast‑Track designations), the upside potential could outweigh the short‑term expense drag. Positionally, a small‑cap, high‑volatility play like TPST is best approached with a tight‑‑stop, short‑term swing (e.g., 5‑7 % below the current level) or, for a more bullish view, a long‑term core position with a stop just below the 200‑day trend line, banking on the eventual commercialization of its pipeline.

In short, the uptick in R&D and operating costs is a near‑term head‑wind for profitability, but it also seeds the next wave of growth. Traders should stay defensive until a clear clinical milestone is announced, then be ready to flip the bias to a more aggressive, upside‑biased stance.