By Barry S. Cohen, Stock Traders Daily

Uber-loyal investors have to be cheered by the fact that Eli Lilly (LLY) is finally approaching the share price the Indianapolis pharmaceutical giant was trading at five years ago. 

Can the company keep up the momentum it has achieved in the past year -- a 36% gain -- or has it peaked?

We'll certainly learn more about Lilly's prospects this week when it reports third-quarter results on Wednesday, Oct. 24. 

What appears clear is that Lilly will fall well short on both the revenue and earnings sides. Sales for the quarter are expected to decline 8% from a year earlier, while analysts are projecting a decline in earnings from $1.13 to 82 cents. One encouraging sign is that at least the consensus estimate has gone up, from 79 cents, over the past three months. For the full year, analysts are projecting earnings of $3.39 per share on revenue of $22.72 billion, versus more than $24 billion for 2012.

Given the projected revenue and earnings fall offs, it just might be time to back off Lilly stock, although the company is still cheaper on a price-to-earnings basis than some of its Big Pharma brethren such as Novartis (NVS), Johnson & Johnson (JNJ), Merck (MRK) and Pfizer (PFE). And like these companies, Lilly pays a healthy dividend, now yielding 3.6%.

Of course, bailing out on Lilly could prove costly if its drug solanezumab proves to be a solid entry in the huge market for Alzheimer's treatments. The number of Alzheimer's cases globally is expected to double within 20 years as the world's population ages, to as many as 65.7 million people in 2030 and 115 million by 2050, the Geneva-based World Health Organization said in April.

Despite a somewhat sketchy history, solanezumab showed some promise recently in a study for mild Alzheimer's. The drug is unlikely to be the silver bullet being sought to prevent and treat the disease, but its moderate success at least demonstrates Lilly might be on the right path. That's in contrast to competitors Pfizer and J&J, who recently dropped their experimental treatment after disappointing trial results.

Lilly got more good news on the Alzheimer's front last week when solanezumab and another company treatment were among three drugs chosen to be tested in the first large-scale international attempt to prevent the disease in people who are otherwise doomed to get it, according to an article in the New York Times. The other experimental compound is from Roche (RHHBY).

The study is one of three with the same goal that will start early next year. This one involves 160 people from the U.S., the U.K. and Australia with a variety of gene mutations that cause Alzheimer's with absolute certainty, according to the Times.

Clearly, given the difficulty of solving the Alzheimer's puzzle, it's unlikely that the Lilly treatments are going to have any near-term impact on sales and earnings. At the same time, we've seen that even the appearance of progress in drug studies can send traders into a frenzy. Investors have to decide for themselves whether the shortfalls in Lilly's sales and earnings we might see during the next few years are worth the risk of abandoning the stock now and perhaps missing out on an Alzheimer's bonanza.