The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Barry Cohen, InvestorPlace Health Care Writer

NEW YORK (

InvestorPlace

) -- It's true that a rising tide can lift all boats.

At the same time, a sinking ship can suck the innocent down in its vortex. That's exactly what might happen to a number of pharmaceutical companies who had high hopes for their Alzheimer's treatments.

Pfizer

(PFE) - Get Report

,

Johnson & Johnson

(JNJ) - Get Report

,

Bristol-Myers Squibb

(BMY) - Get Report

,

Elan

(ELN)

and a host of other companies are following a treatment strategy that suffered a big blow recently. Each of them is developing drugs based on the assumption that the buildup of amyloid in the brain causes Alzheimer's. But the death knell for this approach might have been sounded when

Eli Lilly

(LLY) - Get Report

released results of a follow-up study at the recent Alzheimer's Association International Conference in Paris.

The study showed that seven months after study participants stopped taking the Alzheimer's drug semagacestat that Lilly was developing, the worsening of their cognitive symptoms had failed to reverse.

Also See:

Is Big Pharma resistant to antibiotics?

Semagacestat was the Alzheimer's treatment furthest in development when Lilly announced in 2010 that some analyses of its late-stage clinical trial data indicated patients in the experimental treatment group fared

worse

on cognitive symptoms than those taking a placebo. Patients taking the compound also seemed have an increased rate of skin cancer. Based on that information, Lilly stopped the trial and dumped semagacestat.

This latest revelation raises serious questions about the efficacy and safety of the many others in the same class of drug, gamma secretase inhibitors, still being developed. Although some being studied act somewhat differently than semagacestat, the new data raises the hurdle for future development of the compounds, according to Eric Siemers, Lilly's senior medical director for Alzheimer's disease.

Also See:

6 Consumer Stocks to Sell

Despite this warning, Bristol-Myers is plowing ahead with the development of its secretase inhibitor. The company recently said its compound showed similar side effects and brain functioning as those taking a placebo, although the mid-stage test wasn't big enough to show whether the drug works, according to researchers.

>> Get your financial news on the go with TheStreet's iPad app.

The lead author on the Bristol study and director of the Memory and Aging Program at Butler Hospital in Providence, R.I., Stephen Salloway, said semagacestat was "not very selective for gamma secretase, so it has a lot of off-target effects."

The disappointing news on the treatment front comes on the heels of a survey showing Alzheimer's is the second-most feared disease after cancer, and many people say they would seek testing for themselves or a loved one even if they did not have symptoms.

Also See:

3 Big-Name Stocks That May Be Bankrupt Soon

The telephone survey of more than 2,500 adults age 18 and older in the U.S. and in Europe was conducted by researchers at the Harvard School of Public Health and Alzheimer Europe.

Hope for a simple way to screen people for the disease well before symptoms develop got a boost at the Paris meeting from Australian researchers. They presented results showing that an experimental blood test did a good job of indicating how much of the telltale Alzheimer's plaque lurks in people's brains.

If the test proves accurate in larger studies, it could offer a way to check people having memory problems to see who needs more definitive testing for the disease.

Also See:

Barry Cohen is long BMY and PFE.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.