ImmunoMod, a pharmaceutical startup, is launching human trials for a potential Type 1 diabetes drug after receiving orphan drug status from the U.S. Food and Drug Administration.

The trials will be conducted at the Children’s Hospital of Philadelphia.

Orphan drug status is designed to encourage development of treatments for diseases that affect fewer than 200,000 people. Companies also receive tax incentives and extended market exclusivity for those drugs.

ImmunoMod, a spin-off of the Medical University of South Carolina, was launched in 2006 by Lyndon Key and Inderjit Singh. Both are pediatric physicians at MUSC. Businessman Bob Faith, who is chairman and chief executive officer of Greystar Real Estate Partners, also helped launch the firm.

Faith has a particular interest in the company. His daughter is afflicted with Type 1 diabetes.

ImmunoMod is seeking to develop treatments for Type 1 and Type 2 diabetes as well as auto-immune disorders.

“Dr. Singh and I have long been committed to developing a sustainable and safe therapeutic for the prevention, treatment and cure of early-stage Type 1 diabetes,” Key said in a statement. “We are grateful for the FDA’s grant and hopeful that this therapeutic will provide a better option for the nearly 20,000 Americans, primarily children, who are diagnosed annually with juvenile diabetes.”

According to the company, its treatment could protect pancreatic beta cells, which create insulin, from being destroyed.

In 2000, Key won FDA approval for a drug to treat osteopetrosis.