Alexza Pharmaceuticals Inc said it has entered into a marketing partnership with privately held Grupo Ferrer International for its drug to treat agitation in patients with schizophrenia or bipolar disorder.

Under the agreement, Alexza will receive an upfront payment of $10 million and milestone payments from the Barcelona-based medical device company, based on regulatory approvals and other conditions, Alexza said.

Alexza's experimental drug, Adasuve, is an anti-agitation therapeutic that is delivered via the company's Staccato inhaler and absorbed into the blood stream in less than a second.

Last October, the U.S. Food and Drug Administration (FDA) declined to approve the drug citing adverse respiratory events from three early-stage pulmonary safety studies.

According to the deal, Grupo Ferrer will sell Adasuve in its designated territories.

Alexza said it will be responsible for filing the marketing application for Adasuve with the European Medicines Agency later in the year while Grupo Ferrer will file all subsequent regulatory filings in countries in its territories.

The European company will also be responsible for any required pricing and reimbursement filings and approvals.

Mountain View, California-based Alexza's shares, which have more than halved since last October, closed at $1.16 on Wednesday on Nasdaq.