Local drug developer GI Innovation said Thursday its Merkel cell cancer drug GI-101, used to treat a rare type of skin cancer, has received orphan drug designation from the United States Food and Drug Administration.

The designation is given to drugs that treat rare diseases that affect less than 100,000 people. The status gives tax cuts during clinical trials, and waives certain restrictions and fees. It also allows market monopolization for seven years after the drug is launched.

Merkel cell cancer appears between the dermis and epidermis of the skin and mostly affects those over 50. The five-year survival rate is less than 20 percent.

GI Innovation said it hopes the designation will accelerate clinical trials for its Merkel cell cancer drug.

“We have been discussing with the Memorial Sloan Kettering Cancer Center in the US and key opinion leaders across the US for more than a year to provide treatment options for rare disease patients for whom there is no appropriate treatment," said GI Innovation Chief Strategy Officer Jang Myoung-ho. “This FDA designation will give momentum to our MCC clinical development,” he added.

GI Innovation’s Merkel cell cancer drug is currently going through its first and second global clinical trials, and has received 7 billion won ($4.2 million) in funding from the Korea Drug Development Fund.

"With the rapid growth of the rare drug market, pharmaceutical biocompanies around the world are fiercely competing to approve rare drugs," said GI Innovation CEO BG Rhee. “Through the recent designation of GI-101 as an orphan drug for MCC, we will continue to pay attention to unmet medical demands and to develop new drugs.”