A pharma giant just made a $100 million move into a disease that's been called 'one of the next epidemic-level chronic diseases'

Bristol-Myers Squibb, the drug company whose stock has been hit hard by a failure in the competitive cancer immunotherapy space, is going to develop an entirely different kind of drug.

On Thursday, BMS agreed to pay Japanese company Nitto Denko $100 million to license a drug that's being studied to treat advanced liver fibrosis, a condition that's related to liver conditions like hepatitis C and a fatty liver disease called NASH.

The drug, called ND-L02-s0201, is currently in Phase 1 trials, meaning it still has a few more trials to complete before it can go to the FDA for approval.

NASH, short for nonalcoholic fatty liver disease, is a type of liver disease in which liver fat builds up in people. People with obesity, type 2 diabetes, and insulin resistance are all at an elevated risk of developing the disease, though much about its causes remains unknown.

"We ... are pleased to partner with Nitto Denko to advance the development of therapies for patients living with advanced NASH and cirrhosis due to NASH who currently have limited treatment options," BMS' chief scientific officer Francis Cuss said in a statement.

NASH has become more common in recent years, and is often called a "silent" disease since most people don't know they have it until it leads to problems like cirrhosis and liver failure. It affects up to 100 million Americans.

It's become a hot area for biotech investments. Notably, Botox-maker Allergan spent $1.65 billion in September to acquire Tobira Therapeutics, a company with two NASH drugs in development. The deal was worth six times Tobira's closing price at the time.

"With the increasing rates of diabetes, obesity, and other metabolic conditions in the US and in developed nations globally, NASH is set to become one of the next epidemic-level chronic diseases we face as a society," Allergan CEO Brent Saunders said in a September statement.

There aren't any approved treatments for NASH, but the NIH has non-drug recommendations that include avoiding alcohol, eating healthy, losing weight (if the person is overweight) and exercising more as ways that can cut down on liver fat and even, in some cases, reverse the course of the disease.

This isn't BMS' first foray into the fibrosis space - it has four other drugs already in development.

BMS' stock has been down in the past few months after in August the company announced that its cancer immunotherapy Opdivo didn't hit a key endpoint in a first-line lung cancer trial. In a trial that was designed differently, its competitor Keytruda was able to hit that endpoint and has since received FDA approval to treat lung cancer patients that haven't been treated yet.

Visit Markets Insider for constantly updated market quotes for individual stocks, ETFs, indices, commodities and currencies traded around the world. Go Now!