(Corrects spelling of Alnylam in the headline and the last paragraph)
Oct 18 (Reuters) - Drug developer Alnylam Pharmaceuticals Inc entered into an agreement with privately held Vir Biotechnology on Wednesday to develop a new class of RNAi-based treatments for infectious diseases, including chronic hepatitis B.
The company's shares rose as much as 8 percent but pared gains to trade at $119.98 before the bell.
RNAi-based therapies aim to silence certain genes to curb the production of disease-causing proteins and have limited side -effects.
Alnylam said it would receive an upfront payment, comprising cash and Vir's shares under the deal terms, and would be eligible for more than $1 billion in potential milestone payments among other things.
The company also said it would terminate development of its hepatitis B drug and would work on a new treatment along with Vir for the disease, apart from collaborating on therapies for four other infectious diseases.
Last month, Alnylam said its RNAi-based drug succeeded a key study to treat a rare genetic disease, validating the new treatment and bringing it closer to the market. (Reporting by Divya Grover in Bengaluru; Editing by Anil D'Silva)