The deal will transform Sosei into a fully fledged pharmaceutical company in its home market from its current focus on drug-discovery for larger overseas companies, Chief Executive Chris Cargill said.

"It shortcuts what would have been probably a five-to-ten year organic build out," Cargill said of the deal, which is to be funded with cash and bank loans.

The purchase takes over the non-Chinese Asian operations of Idorsia, a company that was spun out of the 2017 acquisition of Swiss-based Actelion by Johnson & Johnson.

It gives Sosei rights to Pivlaz, a treatment for complications following brain hemorrhages, already approved in Japan, as well as insomnia medication Daridorexant, expected to be filed with regulators later this year.

Those two drugs are expected to deliver 35 billion yen in peak sales in the coming years, Cargill added.

Sosei previously expanded through the purchases of UK-based biotechs Arakis in 2005 and Heptares Therapeutics in 2015.

The Idorsia deal closed on Thursday with payment due within a week, according to a Sosei statement. The two companies' Japan operations are to be merged within 12 months.

($1 = 139.4600 yen)

(Reporting by Rocky Swift, Kantaro Komiya and Satoshi Sugiyama; Editing by Kim Coghill and Barbara Lewis)