MOUNTAIN VIEW, Calif. (AP) — Alexza Pharmaceuticals Inc. has licensed its Staccato nicotine technology aimed at smoking cessation to Cypress Bioscience Inc. for $5 million upfront, plus future payments.

The Staccato nicotine technology is an electronic smoking device that delivers nicotine through inhalation. It delivers nicotine by mimicking a cigarette without the health consequences of smoking cigarettes.

Under the deal, Cypress will pay $5 million upfront plus a technology transfer fee of $1 million when certain milestones are met. Also Alexza will have a carried interest of 10 percent on the net proceeds of any sale or license by Cypress of the Staccato nicotine assets.

Cypress, based in San Diego, will be responsible for preclinical, clinical and regulatory aspects of the system’s development, along with commercialization. It expects to start early-stage trials of the technology in late 2011.