(Reuters) - Bristol-Myers Squibb Co said on Thursday it agreed to pay Japan's Nitto Denko Corp $100 million up front for the right to its early-stage drug for liver fibrosis due to fatty liver disease NASH or hepatitis C.

Fibrotic diseases are characterized by inflammation and subsequent formation of excess collagen in an organ or tissue, compromising function, and culminating in organ failure.

Under the deal, Nitto is eligible to receive clinical and regulatory milestone payments and royalties, and Bristol-Myers has the option to get exclusive licenses for Nitto's other experimental drugs for lung fibrosis and other organ fibrosis.

Bristol-Myers has been sharpening its focus on fibrosis. In July 2015, it struck a collaboration with the Medical University of South Carolina, to better understand scleroderma, renal fibrosis and idiopathic pulmonary fibrosis.

It also has the option to buy privately held Promedior Inc and Swedish biotechnology company Galecto Biotech, both of which are fibrosis drug developers.

(Reporting by Natalie Grover in Bengaluru; Editing by Saumyadeb Chakrabarty)