Eli Lilly and Co. got a boost of confidence last week that its project to launch the first effective Alzheimer’s treatment is on the right track—though it still faces hugely long odds.

A study published July 11 in the journal Nature gave strong support to the theory that Alzheimer’s is caused by the buildup of plaques in the brain made up of a protein called beta amyloid.

Lilly’s experimental drug solanezumab binds to amyloid and removes it from the brain. The Indianapolis-based drugmaker hopes the reduction of amyloid levels stops or even reverses the progress of Alzheimer’s.

That's a common theory to explain Alzheimer's, but it's not the only one. In the 1990s, researchers noticed that the accumulation of another protein, called tau, tracked more closely with a patient's mental decline than did amyloid.

Alzheimer's disease slowly saps the brain’s memory and eventually its ability to make the body perform the most basic tasks. The World Health Organization estimates that 18 million people worldwide suffer from Alzheimer’s, with that number expected to hit 34 million by 2025.

Such a massive unmet need is why Wall Street analysts think the first effective Alzheimer’s treatment could garner as much as $10 billion in annual sales.

Racing Lilly to launch the first successful drug are New York-based Pfizer Inc., New Jersey-based Johnson & Johnson and Ireland-based Elan Corp. They could announce clinical results of their drug bapineuzumab, which is also designed to reduce amyloid in the brain, as early as August but perhaps not until October.

Indianapolis-based Lilly is expected to release results from two Phase 3 trials of solanezumab this fall. A negative outcome could send Lilly’s already sluggish shares down another 10 percent, according to ISI Group analyst Mark Schoenebaum. But an unqualified success could spike Lilly shares 50 percent.

"It would be the single-biggest-day pharma stock move I'd ever seen," Schoenebaum told The Wall Street Journal. Schonebaum gives solanebzumab a 15-percent chance of success. Other Wall Street analysts give it a 1-in-10 shot.

Lilly shares have risen 2 percent since the Nature study was published, trading as high as $43.71 on Monday. The study showed that a rare gene mutation discovered in Icelanders protected their brains from the buildup of amyloid plaques—and from the onset of Alzheimer’s. The gene mutation even appeared to override another genetic mutation that is a strong risk factor for Alzheimer’s.

Richard Mohs, head of Lilly’s early clinical development in neurosciences, was quoted in The New York Times as saying he was “very encouraged by these study results.” Mohs added that developing drugs to combat amyloid is “a logical path for the development of effective therapies that may slow disease progression."

Still, one big challenge for Lilly and other companies developing drugs to combat amyloid is that the buildup of the plaques and the damage they cause appear to start two decades before any dementia sets in, according to a new study in The New England Journal of Medicine.

That means that the more than 2,000 patients in Lilly’s ongoing trials of solanezumab might be too far gone for a drug to help them now. The Nature study of Icelanders shows only that having a genetic protection against amyloid for one’s entire life spares a person from Alzheimer’s.

Lilly’s challenge is to show that 18 months or less of amyloid-reducing treatment can also make a difference.

Identifying patients earlier led Lilly to acquire and commercialize Amyvid, an imaging agent that helps make amyloid plaques visible in brain scans of living patients. Before, the plaques could be identified only during autopsies.