When you own a company, you want to feel warm and fuzzy each time you look at the daily price. Up a few points and you smile at your foresight. Down a notch and you do not unduly worry -- after all, you've made the right decision, and others will see that soon.

So what do you do when you look at your screen and see the price down 25% before trading has even begun? The warm and fuzzy feeling has given way to a knot in the pit of your stomach, and if you have overexposed yourself to that one stock, then perhaps even a bead of sweat appears on the brow.

After getting over the initial shock, the next reaction is to take a deep breath, clear the wooziness, and engage the brain.

First let us see why the market has taken a sudden dislike to your latest baby. Last week, Bristol-Myers Squibb (NYSE:BMY) announced it was pulling out of its partnership with Flamel Technologies (NASDAQ:FLML), a Motley Fool Hidden Gems pick, to develop Basulin, one of Flamel's leading products. On Friday, the stock tanked, falling more than 25% and recovering only slightly through the day to hold at down 23%.

One hundred million was wiped off Flamel's market cap in a matter of a few hours. Was Basulin that important to Flamel? The Bristol-Myers Squibb deal did promise total royalty payments of more than $145 million over five years. However, it was the validation of Flamel's nanoparticulate drug-delivery technology, Medusa, that promised much more in the long term.

So the fact that Bristol-Myers Squibb decided to discontinue the partnership to "focus on other developments in its pipeline" definitely is not the validation investors were looking for. It is even more alarming than in the case of Basulin. Bristol-Myers Squibb is the second company that looked at the product and dumped it. Initially, Novo Nordisk A/S (NYSE:NVO) was a partner until it also found it did not like it as much as it had hoped.

Right now, if Flamel were a one-trick pony that has already unseated two riders, I would not bet on the Basulin/Medusa combo winning the Kentucky Derby anytime soon.

Still, Flamel's CEO has said he still has high hopes for this product and is looking for a new partner for Basulin/Medusa development.

However, Flamel is not a one-trick pony, and despite this stumble from one of its thoroughbreds, it does not necessarily make it a bad training stable overnight. Medusa is still being developed by other partners for other treatments, although Flamel has not disclosed the names because of confidentiality agreements.

At the same time as the company announced the setback, it sugarcoated the pill (coincidentally, of course) with news of one new deal on its other horse, the micropump formulation.

Leaving aside that Basulin is not yet consigned to the scrap heap, look again at Flamel's offerings and decide what kind of value it is now, priced at about $14 a share. That's the Foolish way to react to the market's "wisdom."

Tom Gardner will be offering up his analysis to Hidden Gems members soon. Sign up for a free trial, and keep your eyes on the Hidden Gems Flamel discussion folder.

Fool contributors Carl Wherrett and John Yelovich own Flamel but none of the other companies mentioned. You can reach them by email .