The phrase “Alzheimer’s Disease” sets off an almost pavlovian response among investors … we all know that Alzheimer’s is probably the least-understood major disease, and affects a spectacularly huge number of people, and even those who don’t get beyond fifth grade math can do the calculations: more than five million Americans have the disease, and that number continues to rise, people are living longer and already a third of senior citizens who leave this mortal coil have Alzheimer’s or some other form of dementia at the end of their lives. That’s a LOT of potential patients.

And they have almost nowhere to turn — there are a few approved drugs that help some patients with some of the symptoms of Alzheimer’s, particularly memory loss, but they don’t do anything to cure, prevent or reverse the disease. That’s the golden ticket for pharmaceutical companies, but the search for cures has also burned many big pharma companies and sent quite a few little biotechs into death spirals — there’s still plenty of debate about exactly what causes Alzheimer’s, the trials are expensive, and many companies have spent millions of dollars (or hundreds of millions) only to find out that their compound had dangerous side effects, or was ineffective.

Some of the big pharma companies have effectively given up on the disease for now, but there are still a half dozen heavyweights pushing through clinical trials — mostly for BACE inhibitors, which are designed to stop the formation of amyloid plaque (the most likely cause of Alzheimer’s, according to many but certainly not all scientists). Other BACE inhibitors have failed, but hope springs eternal — and there are also, as Doc Gumshoe noted in a brief update a few months ago, more than 1,000 clinical trails going on in Alzheimer’s disease (that includes treatment protocols and devices as well as drugs, but there are a lot of drugs).

Which is a long way of saying that yes, Alzheimer’s is probably the largest underserved market in medicine. And has been for longer than Stock Gumshoe has been around (that’s seven years now). Every time any halfway appealing Alzheimer’s drug enters clinical trials, investors jump on the story … especially when it’s a smaller company (“Pure play” biotechs are always sexier because they offer more ridiculous upside — Merck (MRK), for example, has a Phase III drug in trials now that is generating some hope … but even an anticipated market of perhaps $5-10 billion for their drug by some analysts doesn’t have people lusting after the stock, given Merck’s $160 billion market cap and $44 billion in sales last year).

And the stock being teased as an Alzheimer’s pick today by Alex Daley at Casey Extraordinary Technology is, indeed, a relatively small company with an Alzheimer’s drug in clinical trials. And no, it’s not the tiny one that was teased several times in 2010 and 2011 (that was Anavex Life Sciences, AVXL, which was around $3 when first teased and is now down around 25 cents… their lead drug is now “Anavex Plus” and is a cocktail of their lead compound, Anavex 2-73, mixed with Pfizer’s Aricept (the current far-and-away leader in Alzheimer’s symptom-attacking drugs).

So what is it? Here’s the intro which provides the first couple of clues:

“We’ve just uncovered an amazing story about one man’s recovery from one of the world’s most dreaded… and expensive… diseases. His groundbreaking drug treatment could soon become widely available and dominate a $604 billion medical market.

“And in March 2014, the entire world will find out why. The payoff to you could be astronomical… with triple-digit gains possible in one day….

“It’s no wonder the National Institute on Aging calls this disease a ‘looming health epidemic.’

“And the few drugs on the market that treat this disease—approved more than a decade ago—only target the symptoms of this degenerative brain disease and not the underlying cause.

“Yet, even with their limited effectiveness, their combined sales last year topped $6 billion, according to BCC Research.

“Analysts estimate that a treatment that targets the cause of the disease itself could generate sales of $20 billion or more.

“As you probably know by now, the disease is Alzheimer’s.

“ABC News recently reported that it’s ‘…the only one of the top 10 causes of death in America that cannot be prevented, cured or even slowed down once it begins.’

“But that’s about to change…

“Because in March 2014, one little-known biotech will release its biggest clinical results yet on a groundbreaking new Alzheimer’s treatment that could forever change the course of this terrifying disease.

“It’s the first treatment ever to target the cause of Alzheimer’s… rather than just relieve the symptoms.”

And we get a glowing endorsement from one of the patients who was apparently in the clinical trial:

“One Red Capsule Gives Walter His Memory… And Life… Back….

“Once a day he was given a red capsule—developed by this fledgling biotech—and within the first month, his memory started to return.

“He started to remember little things like where his favorite cup was.

“According to the investigator who’s overseeing the clinical trial, Walter’s improvement was simply ‘incredible.’

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“And over the next 14 months, he became a poster child for success in clinical trials.

“Walter and his wife were elated. Walter called the breakthrough treatment ‘a godsend,’ and his wife called it ‘amazing.'”

So there we have it — the promise from Alex Daley is that he has identified a stock which will report some kind of clinical data next month, and has shown progress in at least some patients, and it’s a smallish company which would presumably feel a strong impact from whatever the results of that clinical trial might be. Big potential market, large near-term catalyst — the kind of stuff that gets traders very excited … especially when you happen to be in the midst of a biotech bull market, as we are now (or a biotech bubble, if you want to be more cynical).

And just to make sure we dot the i’s and cross the t’s, let’s see what other details Daley provides for this secret pick:

“You Could Make Life-Changing Gains From This Breakthrough Alzheimer’s Discovery

“Deutsche Bank estimates the market for this company’s breakthrough Alzheimer’s treatment could be worth $20 billion annually.

“So we’re looking at a tiny biotech—$485 million market cap in early February—that’s set to dominate a $20 billion drug market with a one-of-a-kind, patented breakthrough treatment.

“Even if it only captured a small 20% of this enormous potential ($4 billion), this booming biotech’s possible projected value would be enormous. If the company traded at just 1x its annual sales—well below the typical industry multiples of 2.5x to more than 5x—its shares would trade at about $98.

“As I write you, the stock’s price is hovering around $11.28 per share; that’s a massive 769% potential gain from this tiny biotech that’s extremely undervalued at its current price.”

So who is it? Well, we did haul out the Mighty, Mighty Thinkolator on this one just to be certain of our match … but this is 99% sure to be Prana Biotechnology (PRAN), the current market darling small cap stock in Alzheimer’s. The company has been mentioned in reader comments a few times over the past year, including from some folks who likely enjoyed nice returns as it climbed dramatically last year (it was around $2 a year ago, climbed to $12 last month, and is now back down around $9).

Their basic science is being used to attack both Huntington’s Disease (the clinical trial is called the Reach2HD trial) and Alzheimer’s Disease (the IMAGINE trial). The Huntington’s results last month were apparently good (though there’s some debate), and investors are very eagerly awaiting the IMAGINE results that are expected to come out sometime in March. If I begin to talk about the science, I’ll instantly start to sound uninformed … so I’ll avoid that entirely and just say that this is not the same path that the BACE inhibitor drugs (like Merck’s, etc.) are treading, they’re instead essentially targeting metals in the brain as a cause of neurological disorders.

We have been hosting an incredibly long discussion thread on other biotech stocks that grew organically out of a prior teaser article, and in that thread Prana came up along with several other “hot topic” stocks in biotech — so you can see the comments of some of our more knowledgeable readers there, including from biocqr here, karmaswimswami here (Karma was responding to Frenchy’s question about Prana, here). I imagine all those folks probably know more about the stock than I do.

For outside thoughts on Prana, there’s been a huge surge of interest at SeekingAlpha with both strongly negative and positive opinions — which tends to happen with most biotechs or rapid growers. This piece and this piece recently caught my eye as being pretty well thought-out, though I don’t know if they’ll end up being correct. On the flip side, Adam Feurstein over at TheStreet has been generating piles of hate mail for himself by writing a series of negative or cautionary articles about Prana over the last week (one example here).

So yes, if Prana can cure Alzheimer’s they’ll become a multi-billion-dollar company. But there’s plenty of skepticism out there about whether that can happen or not, and I don’t know whether the FDA’s new guidelines that they’ll accept limited proof of efficacy will have any impact on the multi-year safety studies that would likely be required before approval… but there will be news next month that provides at least a little more ammunition for either the bulls or the bears (or maybe, given the Huntington’s results, both). I’m sure there are at least dozens of folks here who know far more about this stock than I do, so feel free to chime in and share your thoughts with a comment below.