Genocea Biosciences' (GNCA) CEO Chip Clark on Q4 2015 Results - Earnings Call Transcript

| About: Genocea Biosciences, (GNCA)

Genocea Biosciences, Inc. (NASDAQ:GNCA)

Q4 2015 Earnings Conference Call

February 11, 2016 09:00 AM ET

Executives

Maren Killackey - IR

Chip Clark - CEO

Jonathan Poole - CFO

Seth Hetherington - CMO

Jessica Baker Flechtner - Genocea's Head of Research

Analysts

Mark Firm - Cowen

Ed Tenthoff - Piper Jaffray

Stephen Willey - Stifel

Alan Carr - Needham & Company

Andrew Peter - UBS

Christopher James - FBR & Company

Operator

Good morning and welcome to the Genocea Fourth Quarter and Yearend 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following the formal remarks, we'll open the call up for your questions. Please be advised that this call is being recorded at the company's request.

At this time, I'd like to turn the call over to Maren Killackey of Stern Investor Relations. Please proceed.

Maren Killackey

Thank you, operator. Good morning. This is Maren Killackey with Stern Investor Relations and welcome to Genocea's fourth quarter and yearend 2015 financial and operating results conference call. This morning we issued a press which outlines the topics that we plan to discuss today, this release is available at www.genocea.com under the Investor Relations tab. Today on our call, Chip Clark, President and CEO, will review the company's recent business and clinical highlights; and then Jonathan Poole, CFO, will review the financial results. Seth Hetherington, CMO and Jessica Baker Flechtner, Genocea's Head of Research are both with us today for the Q&A.

Before we begin, I would like to remind everyone that statements made during this conference call relating to Genocea's expected future performance, future business prospects or future events or plans, may include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. All such forward looking statements are intended to be subject to the Safe Harbor protection provided by the Reform Act. Actual outcomes and results could differ materially from those forecasted due to the impact of many factors beyond the control of Genocea. Genocea expressly disclaims any duty to provide updates to its forward-looking statements, whether as a result of new information, future events or otherwise. Participants are directed to the risk factors set forth in Genocea's 2014 Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission.

With that, let me pass the call over to Chip.

Chip Clark

Thanks Maren and good morning everyone. Genocea made important progress in 2015, we strengthened and advanced GEN-003, expanded into immuno-oncology and put Genocea on a strong financial footing to deliver important milestones in 2016. I'll begin today's call by reviewing our early October GEN-003 results. The implications for the product profile and how we’ve set up an exciting 2016 for GEN-003. I'll then review the immuno-oncology initiatives we unveiled late last year. After that, Jonathan will review our financials and then we will open up the call for your questions.

So let’s jump in on GEN-003, our first in class treatment for patients with genital herpes infections. We believe October's results strengthen GEN-003's value proposition for patients and solidify the path for next year's phase 3 programs start. Let me remind you what we saw. In the planned six month readout from our Phase 2 dose optimization trial, GEN-003 demonstrated durable efficacy across multiple potential phase 3 end points and a sustained impact on viral activity as measured by viral shedding. Looking at viral shedding first because it was the primary end point, the best performing dose of 60 micrograms per protein and 75 micrograms of adjuvant demonstrated a statistically significant 58% reduction in the viral shedding rate six months after dosing. Remember that in our first unmanned Phase 1 2H file the top viral shedding reduction at the same time point was 40%. So we think we've found a better dose.

Turning to potential Phase 3 endpoints, the proportion of patients receiving GEN-003 who were lesion free six months after dosing ranged from 30% to 50% across dose groups, which is similar to Phase 3 results achieved by oral antiviral therapies in a daily suppressive therapy regimen. As a reminder only roughly 10% of placebo patients in those Phase 3 trials remained lesion free at six months. Another way of looking at durable clinical efficacy is the median time to first clinical recurrence per dose group. In this measure GEN-003 dose groups ranged from 152 days to at least 180 days. In other words it took 152 days for half the patients in one dose group to experience their first genital lesion after dosing and then at least one dose group, the median patient had not yet experienced an outbreak at the time of the planned analysis.

Interestingly, although the placebo arm in this trial rolled into active drug after the post dose 3 observation period, even within that first 28 day period, more than 30% of placebo patients experienced their first outbreak. In the Kaplan-Meier analysis this shows clear separation from actives which gives us great confidence heading into our next trial. In yet another analysis GEN-003 demonstrated sustained and statistically significant reductions in the rate of genital lesions from baseline in five of six dose groups ranging from 43% to 69%. The ongoing Phase 2 trial continues to show that GEN-003 is safe and well tolerated by patients, with no FAEs related to the vaccine.

So what does all of this mean for the GEN-003 value proposition? Simply put it supports our belief that GEN-003 could become the cornerstone treatment for patients with genital herpes infections given the magnitude and durability of effect. Patients in this trial have the prevailing treatment paradigm of episodic antiviral therapy in which patients take antivirals when they experience visible lesions only available to them.

So we believe GEN-003 is already providing compelling evidence that it improves upon this paradigm. For patients taking episodic antivirals then GEN-003 is demonstrating durable clinical efficacy and reduced viral shedding which could lead to fewer outbreaks and less risk of disease transmission. And for the patients treating currently with chronic suppressive therapy, we believe that GEN-003 offers similar efficacy via a novel mechanism of action and a more convenient dosing regimen without the daily disease reminder of a pill and therefore the potentials to drive greater interest and treatment compliance.

Based on market research conducted with GEN-003's profile from the previous Phase 1 2H trial we believed that profile supported a revenue forecast of greater than $1 billion in the US alone, and our new results further cement our confidence in this.

And what does this mean for our clinical development path. We plan to hold an FDA end of Phase 2 meeting in the fourth quarter this year. Leading into this meeting we will have the following important data readouts. First the 12 month readout from the ongoing Phase 2 dose optimization trial will be in the first quarter of this year. We will see if GEN-003's improved efficacy through six months is sustained through 12. I'll remind you that we have a strong foundation of clinically and commercially meaningful efficacy from the recent six months data and our extensive [ph] opportunity to measure GEN-003 manufacture their commercial scale against potential Phase 3 endpoints of percent lesion free of six months after dosing and time to first recurrence.

Additionally, we expect to start a Phase 2B antiviral combination study in the middle of this year. Clinical efficacy data from this trial would be available in the first half of 2017. If GEN-003 is additive to the effect of chronic suppressive oral antiviral therapy this would further strengthen GEN-003's compelling value proposition to patients and physicians.

With that let me turn to our growing investment in immuno-oncology where we are applying our Atlas platform to cancer vaccine target discovery and development. We believe that our efforts in infectious disease headlined by GEN-003 show that the most clinically compelling vaccines in immuno-therapies require the best target antigens. As we say at Genocea, targets matter, we believe that the cancer field recognizes this. Check point inhibitors have shown that unleashing T-cells can have profound anti-tumor effects in some patients.

Key questions that remain are, what are the right T-cell antigens? In other words what are the T-cells binding to, to achieve these profound clinical effects? Making this point a target therapy such as TCRs are showing that in limited instances when we have good T-cell targets. Directing T-cells to such targets can also have profound effects. So the immuno- oncology field needs a way to find the right targets of T-cell responses to make new vaccines and immuno-therapies. Our infectious disease experience with Atlas shows that it can work here. And not only might Atlas work but it may be a better way to identify T-cell antigens than the prevailing predictive algorithms. Atlas makes no assumptions about which cancer antigens are meaningful and which are not.

It instead takes a panoramic view of the actual T-cell responses of humans to any possible T-cell target in the cancer. And tie these responses to clinical outcomes. So we believe finding T-cell antigens in this way is better than predicting T-cell antigens. Atlas takes the guesswork out of T-cell's target discovery.

When applied to common tumor associated antigens Atlas could discover better targets for inclusion in general cancer vaccines for large diverse populations. When applied to an individual's response, to their own cancer and neo-antigens, Atlas could enable better personalized cancer vaccines. Further evidence of this may come through the collaboration with Memorial Sloan Kettering Cancer Center we announced in November. We are screening the T-cell responses of melanoma and non-small cell lung cancer patients, treated with checkpoint inhibitors against the complete repertoire of their own patient specific putative cancer neo-antigens.

The goals of the collaboration are to identify signatures of protective T-cell responses in cancer patients that associate with tumor regression or prolonged survival after check point inhibitor therapy and to discover new T-cell cancer vaccine antigens. Another way comes from our extended collaboration with Dana Farber focused on patients on check point inhibitor therapy, but looking at common tumor associated antigens. In November at the Citi Annual meeting we presented initial findings from this collaboration that support the potential of ATLAS to profile T-cell responses from cancer patients receiving checkpoint inhibitors. We looked up the T-cell responses of 10 checkpoint inhibitors patients to 23 known tumor associated antigens and analyzed the immune responses of both responders and non-responders to checkpoint inhibitor therapy.

Although this research was not powered to draw firm conclusions, ATLAS successfully identified the cancer antigens to which either or both CD4+ or CD8+ T-cells became activated. Also the analysis revealed a pattern indicating a greater threat of T-cells activations for responders and non-responders. This study also revealed preliminary evidence that different characteristics of T-cells responses emerged when comparing patients who respond and those who not. So, in sum this is really demonstrating the power of ATLAS in the context of cancer therapy.

Also in the cancer field in November, we announced a new program focused on Epstein-Barr virus EBV. EBV causes infectious mononucleosis and has also been linked to cancers with high unmet needs post-transplant lymphoproliferative disease, non-Hodgkin’s lymphoma, nasopharyngeal carcinoma and gastric carcinoma.

The ATLAS platform is highly suited to the creation of a new immunotherapy for EBV given that T-cell responses are understood to be crucial for protection against EBV. Furthermore, EBV is part of the herpesvirus family in which we obviously have deep experience through our development of GEN-003. We look forward for announcing further data from these ongoing immuno-oncology efforts in 2016 with the ambition of commencing clinical trials with the cancer vaccine in 2017.

Let me now turn the call over to Jonathan.

Jonathan Poole

Thanks Chip. Let me first focus on our strong balance sheet. In today's press release we reported cash, cash equivalents and investments of $106.4 million at the end of the year, compared to $112.5 million as of September 30 and $47.1 million at the end of 2014. We expect these funding will be sufficient to fund our operations into the second half of 2017 when we expect to be entering Phase 3 trials for GEN-003.

During the fourth quarter of 2015, we amended our existing debt facility with Hercules. As a result of this amended we drew down a further $5 million taking our total outstanding debt to $17 million. We also extended the interest-only period of this debt facility by further 12 months, with repayments now starting in July 2017. We have two further tranches of $5 million under the facility, each potentially available to us through December 2016. One available now as our option and one contingent on continued progress of our GEN-003 and immuno-oncology programs.

They’re an addition to the potential financial flexibility from this undrawn capacity in our debt facility, we have opportunity to drive funding when business development relating to our ARLAS T-cell [indiscernible] platform, preclinical and clinical assets.

Now moving to R&D. R&D expenses for the quarter decreased $2.1 million to $6.5 million in the same period in 2014. This reflects lower clinical and manufacturing costs for the GEN-003 and GEN-004 due to timing of clinical trial related activities including the suspension of developments of GEN-004 in the fourth quarter of 2015.

These lever costs were partially offset by higher personnel and lab related costs related to our cancer vaccine programs and preclinical pipeline. In the full year R&D expenses were $28 million compared to $23.7 million for the same period in 2014. Once again reflecting higher personnel and lab related cost, both of which supported the continued advancement of our clinical programs alongside our research of preclinical activities. G&A expenses for this fourth quarter were $3.8 million compared to $2.6 million for the same period in 2014. The increase reflects higher consulting, personnel and depreciation expense all of which support Genoceas’ expanding R&D operations.

In the full year general expenses were $14 million compared to $9.7 million in 2014, the increase reflecting a full year public company operations and similar costs drivers to the quarter-on-quarter increase. Net loss was $10.3 million for the quarter compared to a net loss of $11.7 million in the same period in 2014. For the full year, the net loss was $42.5 million compared to $35.3 million in 2014. With that let me hand the call back over to Chip to wrap up.

Chip Clark

Thanks Jonathon. 2016 will be a rich year for Gen-003 clinical milestones, with 12 months data from the ongoing Phase 2 trial expected this quarter with our logic and clinical efficacies from our Phase 2 B study in the middle and second half of 2016 respectively and an end-of-Phase 2 meeting with the FDA in the fourth quarter. We are really excited about the promise of ATLAS in immuno-oncology and expect to announce data this year from our two ongoing collaborations with Memorial Sloan Kettering and Dana Farber.

Finally, we remained well funded into the second half of 2017 enabling us to deliver these multiple clinical and research milestones from a position of strength and continue to benefits strategically from full control over the rights to our assets.

With that we will now open up the call for your questions, operator.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Our first question comes from Mark Firm with Cowen. Your line is open.

Mark Firm

First, when we think about this 12 months data side, that’s going to [indiscernible] pretty soon. What are you looking for and how much efficacy would you need to see to justify not wanting to pursue a six months boosting strategy, but rather go to more of a 12 months boosting strategy?

Chip Clark

Yes, thanks Mark. I’ll just -- before turning this over to Seth, I’ll remind you that in our mind six months is already a great efficacy profile. So Seth maybe you can speak generally to how we’ll think about this.

Seth Hetherington

Sure. It depends on a number of factors, the most important, which is what’s happening to the virology at the 12 months’ timeframe. Should we see a return toward baseline then that would indicate that those just would be reasonable to give at 12 months? It’s unlikely that we’re going to see anything significant as in a very large return to baseline, it’s just doesn’t seem -- likely knowing what we know from the first study and what we know in general about the immunology of vaccines. So I think it’s a different call, I can’t give you specific number, it involves to tell out the data, but again we have great confidence. As Chip mentioned that we’ve already surpassed the six months’ time-point and now it’s just a question of, do you give a dose at 12 months of it’s even later than that.

Mark Firm

Great, thanks. And then on this antiviral combination stated, you want to start in the middle of the year. The oral antiviral work fairly well essentially over a short-term and then maybe the efficacy deteriorates overtime with poor compliance and things like that. So how quickly do you think you could show and an additive effects. I mean is there something that we’re going to have to wait maybe 12 months to really see an additive?

Chip Clark

Yes, Mark. When we say that we expect the efficacy in 2017, it’s because we’re -- the first significant look we think will be at that six month timeframe. And remember from our discussion of our six month efficacy. The oral antivirals, patients taking chronic suppressive therapy have similar between 50% and 70% of patients reporting outbreak at that, within that timeframe. So we think that that is likely sufficient time to show separation, but of course as we do in all of our clinical studies, we’re following patients for six and 12 months.

Operator

Our next question comes from Ed Tenthoff of Piper Jaffray. Your line is open.

Ed Tenthoff

I guess, I have a question just about GEN-004, it’s an asset that you guys are having the portfolio and the pipeline, maybe when you’re not talking about as much. What are the potential strategic alternatives here or is this something that really will be dramatically decreased in investment in preference of 003 in the immunology efforts?

Seth Hetherington

Ed, its Seth, thanks to your question. So the two ways to answer your question. One is that yes, we are investing or preferring to invest in GEN-003 and in the immuno-oncology today, because we think that there is compelling reason to do so. GEN-003 is a de-risk highly attractive assets, immuno-oncology has potential near-term promise. We do think that there is strategic value in GEN-004, but recognizing that even though key opinion leaders are enthusiastic about what we’ve demonstrated thus far, the next clinical trial will take years to conduct.

And so in that context, that’s why we have guided our investors to think of GEN-004 today as pure upside. Meaning that, we’re not going to put significant capital behind it today. And that if we were to find ways to advance it, it will be through some other meaning such as Grant Funding or Partnerships. And if we were to do so that would be pure upside from investor perspective.

Operator

Our next question comes from Stephen Willey with Stifel. Your line is open.

Stephen Willey

You talked about the virology in 12 months as been kind of part of the decision making process in terms of dosing schedule. But I guess how much is the immunology data also driving that decision make process in terms of whether or not decided to dose at six or 12 [indiscernible]?

Chip Clark

Thanks Steve, I’ll ask Seth to take that question.

Seth Hetherington

Yes, very good question. We are at the forefront of understanding the immunology of T-cell vaccines, because we’ve got the very first T-cell vaccine to show efficacy in chronic infection. Consequently, we look at the immunology portion on the program as being research, exploratory very important of great interest to researchers in the field, but not something as yet that we can identify as a driver for dosing decisions. It all rest with the virology, which really, truly unrealized all the clinical endpoints for GEN-003 and also secondarily for the exploratory work we’re doing in clinical endpoints in Phase 2 programs.

Stephen Willey

Yes, thanks Seth and maybe Jess, could you characterize what we already know about durability after one month from an immunological perspective which I think gives further color to Seth’s answer.

Jessica Baker Flechtner

Yes from our Phase 1 2A study we found that we had durability of respond to upto12 months for every parameter that we could measure which includes T-cell responses, include antibody tethers and include neutralizing antibody types. And so we think we're on a very good track to see similar outcomes for the study but the data are still being generated.

Chip Clark

Yes, so really, Steve, since we already think we have such durability through a variety of immunological markers and since we believe it's highly likely we would see that again, that's really why it's the totality of the data that as Seth said focuses principally on the clinical and virological markers and safety of course as well, that are going to inform how we make this decision.

Stephen Willey

Okay, that's helpful, and then I guess with respect to the data that emerges out of the combination antiviral study in the first half of '17. Would that be a gating factor just in terms of Phase 3 initiation or is that a study that you would maybe initiate depending on data I guess after placebo controlled studies whereby you're just looking at GEN-003 versus placebo.

Chip Clark

We think it's an important study to conduct because we want to be able to show to patients and payers and obviously clinicians how GEN-003 works with antivirals in a variety of circumstances, but it's not a critical path study. The critical path is the 2B study that is ongoing beyond the Phase 2 meeting next in Q4 and then the work we do with the agency and of course in the background on the manufacturing side to be ready for Phase 3 in the second half of next year.

Stephen Willey

Okay just going to be as a follow up to the prior question regarding the potential additive benefit on top of oral antivirals. Any kind of estimation at this point as to what that, how big that study may need to be, just given your assumptions of what we know in terms of patient recurrence occurring on the back trap of oral antivirals alone.

Seth Hetherington

This is Seth, Steve. We are still in the process to design that study. We’ve not given any guidance on what the size of it is, that is all I can say at this time.

Stephen Willey

And maybe just one quick housekeeping question for Jonathan, are any of the remaining draws on the debt facility data dependent. Because I think that there was one draw that was I think GEN-004 dependent, if I remember correctly.

Jonathan Poole

That's correct, and the previous is going to end up pre amended facility, the amendments that we are finalized in December preserves two draws of $5 million each, one of which is currently available at our option through middle of December 2016 and the second draw is contingent on a continued progress in GEN-003 and immuno-oncology, so one is contingent, one is not.

Operator

Our next question comes from Alan Carr with Needham & Company, your line is open.

Alan Carr

You all changed a little bit of your Phase 2 strategy a little bit earlier this year around the conducting of dose regimen trial, I’m wonder if you can comment on that and how it impacts your Phase 3 plans. And then also regarding the pipeline, the latest presentation, you have a next generation HSB to IND in 2017, wonder if you could talk a bit about that and then any updates on Chlamydia which is another one that might be right behind, thanks.

Chip Clark

Thanks Alan, so let me address your questions here. Regarding the dose regimen study I think the key point is to understand that we were always looking for ways to optimize our clinical development plan and we’re certainly cognizant of the external environment and we’re just looking for ways to rub nickels together to extend our cash as much as possible. And in that context and given the clinical logic as well we've moved the dose regimen study into Phase 3. It's important for us to look at dose regimen, but we did not see it as gating for the end of Phase 2 meeting.

And let me ask Seth to just briefly describe how we would look at those regimen in Phase 3.

Seth Hetherington

Right, and keep in mind that all this is contingent upon our discussion with the FDA at the end of Phase 2 meeting, but as we see it currently the dose regimen study becomes a larger [indiscernible] study with non-inferiority analysis. Basically what that means is that we would have a traditional Phase 3 study alongside of this that would compare our current regimen against placebo and then the second Phase 3 study as we can see that would be a non-priority trial looking among the different dose regimens linking the two together and that they both have the same current regimen of three doses.

This allows us great flexibility in supporting what number of doses we have, we go for on our labeling, it also provide us with a much better data sticky base for the Residential PLA [ph].

So, really in essence Alan, we think we’re pushing burn out into later years and we are positioning ourselves we believe to get a better more robust read on which in fact the best dose recommend all without effecting either the start of phase 3 three or the projected BLA filing. So it seems in that context to be a no-brainer.

You asked for a description of -- an update on the next GEN herpes program as well as Chlamydia. And so I'll ask Jess to just give you a high level description of the strategy for each of them.

Jessica Baker Flechtner

Thank you. I think for both programs we continue to believe that ATLAS has really found an intriguing target that we cannot buy though those HSB 2 and to Chlamydia. For the next generation HSB 2 program we’re looking to see if we can improve on the already great data that we have in GEN-003 or generate a prophylactic vaccine that would prevent infection. And so we have a team currently working on those studies today to identify if we have new combinations of antigen or adjuvant and antigen that can be applied.

For the Chlamydia program we have prioritized a set of target that we are pursuing in animal modeling stage right now and we have a very strong team who are developing what might be the vaccine for treatment of Chlamydia and that IND will be -- is expected to be later after probably 2018.

Alan Carr

Okay, the next generation HSB, so there is a possibility here you may have a follow on to GEN-003 that would be a treatment or you might go after prophylaxis, I guess could you?

Chip Clark

There are two I think important opportunities, I think that’s a clearer understanding of both the need for herpes prophylaxis vaccine. I mean that’s why most recently GSK took a program into Phase 3, unsuccessfully obviously for that indication and the success of HPV vaccine is prophylaxis vaccine, it indicates that there is an emerging opportunity for vaccinating older populations prophylactically against STDs.

And as Jess said there is the potential that we would have a follow on to GEN-003, in clearly GEN-003 as Jess said is very strong and so there is a very high hurdle to bring such a follow on candidate forward but you can envision and I am probably baiting myself a little bit, but remember MERCK having first mevacor and zocor in the Saturn market, they opened the market with a great satin and then they came in five or six years later with the best in class product and just completely crushed everybody until Pfizer came into our market. So, there is plenty of precedence for doing this thing and just more broadly we think we are positioned well to have a strong herpes franchise given now the expertise we’ve developed, preclinical and clinically all of course supported by the availability of ATLAS to find these decisive T cell antigens.

Operator

Our next question comes from Andrew Peter with UBS. Your line is open.

Andrew Peter

So a couple of here, so I guess the first one another question on the combination with antiviral. Just want to understand a bit, you’ve done extensive market research, how does the either clinician, patient response change when you are able to combine with antiviral, does that change your uptick or just general market assumptions. And the looking at kind the end of Phase 2 meeting with FDA, what are the base sales that you are going be looking for in terms of the feedback or guidance from FDA there. Is it on kind of Phase 3 end point size of the trial, how confident are you kind going into that meeting? I guess its all pending data, but what are really the things you are going be looking for? Thanks.

Chip Clark

Thanks Andrew for the questions. I'll want to take those in the reverse order. So, I'll ask Seth to characterize the key objectives for the end of Phase 2 meeting.

Seth Hetherington

The objectives of the end of Phase 2 meeting for us are very typical objectives that you would have for any end of Phase 2 meeting. The first thing we would do would be to obviously review of the current status of our clinical trials and [indiscernible] over the FDA that we are in fact ready to go into Phase 3 that we’ve explored our dose significantly, that we have plans for dose regiment explorations and then we have acceptable safety. We’re very confident that we will get passed our first hurdle. We've been in conversation with the FDA all throughout the program and there is no reason to think that we will not be ready to be entering Phase 3.

We really said we want to reach there. First of all what is the primary endpoint, we will have a proposal based on our Phase 3 program. Again we think this will be a relatively easy conversation with the FDA, because we are doing a thorough review of the different potential [indiscernible] points in Phase 2.

Whatever the endpoint is, I’m confident that we can hit it. Because as we’ve said before virology is at the bottom of all the clinical endpoint, you can control the replication of the virus, you can improve the situation of the patient. The other, the third point will be about the safety database that we require. Again we’ve had very good safety data and a very good profile so far for GEN-003.

There is no reason to think, this will be a difficult conversation. One thing we’ve said all along, is that this is a therapeutic vaccine. So consequently, the size of the database would be much smaller than what we would anticipate for a prophylactic vaccine, which generally on average is about 10,000 sometime it’s more patients. We’re looking in the 3,000 to 5,000 patient range and we’ve planned for that accordingly in our Phase 3 program.

Chip Clark

So before I turn to the combination question, Andrew, does that answer your question about the end of Phase 2 meeting?

Andrew Peter

It does. Thank you.

Chip Clark

Great. So regarding combination usage, I think the way we think about it is that based on the market research that we’ve conducted. There is I think both an expectation that the GEN-003 profile as it exists today, make it a viable first line therapy. This is why we call it a potential cornerstone therapy for the treatment of genital herpes infections. I think that there is also a presumption from patients and physicians that there will be some additive effect, when you combined with oral antivirus. Is it, it’s reasonable to assume that, just given that their mechanisms of action are so different. We still of course need to demonstrate this.

So I think that showing efficacy, showing additive effects in the chronic suppressive therapy is going to be important, but I don’t think that having that changes our forecast for the product. Now remember, we’re already dosing patients on top of episodic therapy, so I think we’ve already demonstrated a compelling value proposition benefit versus that. So that’s generally how we think about the combination. Does that answer your question?

Operator

[Operator Instructions] Our next question comes from Christopher James with FBR & Company. Your line is open.

Christopher James

I guess maybe going back to the chronic versus episodic therapy. Can you remind us, the proportion of patients that fall into both categories? And then based on your market research and your assumptions for, are you greater than 1 billion revenue. How is the breakout look between those two groups? And then finally do you anticipate a different of booster timing for chronic versus episodic therapy?

Chip Clark

Yes. Let’s Jonathan to take the first two and then I’ll ask Seth to open on booster timing.

Jonathan Poole

So on market research in terms of overall market size just that they’re around 11 million patients in the U.S., who have been diagnose with genital herpes infections. Around 7 million of those, we understand are currently treated and those treatment paradigms as you said episodic chronic therapy. We suggest that roughly two-thirds of the 7 million treating episodically around a third treating chronically. And Chip, already I think highlighted the value proposition that GEN-003 brings to each of those patient segments.

Chip Clark

So Chris does that answer your question, and if it does well.

Christopher James

Pretty much, we should think about bet the revenue assumption is breaking out two-third, one-third. Is that fair to assume?

Chip Clark

Broadly. So I think maybe the way and which we have previously discussed the segmentation for the revenue assumptions. Is that, we’re within the treated patient segments people that are better and worse controlled on therapy? And so you can imagine that some people have, continue to have more outbreaks than other, was taking the therapy of that choice. So within those patient segments we sub-segmented them into very joint treatment. And we would expect that the people that are continue to have worse outbreaks taking that therapy of choice the, segments is where we have the highest penetration.

Jonathan Poole

So Chris your second question was does the booster dose regimen differ, identifying time whether a patient takes episodic therapy or chronic daily suppressive therapy. Is that correct?

Christopher James

That is correct.

Jonathan Poole

Right. Well in the booster does is going to be time to give the patient, the greatest benefit for both suppressing the virus and reliving clinical outbreaks. So the answer -- short answer is no, it will be the same no matter how you use any virus in the background.

Christopher James

Got it. Thank you.

Operator

I'm showing no further questions I will now turn the call back over to Chip Clark for closing remarks.

Chip Clark

Thank you all for your time today, we look forward to keeping you informed about what I've already described as a very exciting 2016 for Genocea.

Operator

Thank you ladies and gentlemen for joining us today, you may all disconnect and have a wonderful day.

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