These huge drops in stock price are becoming a little too common for developmental-stage-drug companies. The latest victim was Nastech Pharmaceutical (NASDAQ:NSTK), which got a few broken bones after Procter & Gamble (NYSE:PG) decided to end its partnership to develop a nasal spray to treat osteoporosis.

P&G joins Merck (NYSE:MRK) on the list of Nastech's former partners, bringing a bit of skepticism to the smaller firm's development platform. But in this case, the split may be less about the drug's effectiveness, and more about P&G's belief that the product isn't commercially viable under the two companies' agreement.

Nastech plans to go ahead with a phase 2 study of the drug in the beginning of next year, using bone marrow density as an endpoint. A previous phase 2 study showed promising results in easier-to-measure blood markers, which suggest that bone is being formed and not reabsorbed. If things go well, Nastech will run a phase 3 non-inferiority trial against Eli Lilly's (NYSE:LLY) Forteo.

The biggest problem for Nastech is probably a lack of cash, now that P&G isn't funding the development. It will get $5.5 million in the fourth quarter, thanks to termination of the agreement; not as large as the $47.5 million that DepoMed (NASDAQ:DEPO) has made off of recently returned drugs, but a nice breakup gift from P&G.

With only $58 million in the bank at the end of last quarter, Nastech is going to have to make some tough decisions on which of its four unpartnered clinical stage programs it's going to advance. But even if it has to cut back on R&D a little, it still has a few other shots on goal from partnered programs with Amylin Pharmaceuticals (NASDAQ:AMLN) and Novo Nordisk (NYSE:NVO).

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Eli Lilly is a selection of the Income Investor newsletter. The Fool has a disclosure policy.