If the only thing drugmakers had to do to be successful was push their compounds into late-stage testing, then millions of biotech investors would be rich. Shares of drugmaker Elan (NYSE:ELN) have climbed more than 20% in the past two days after the company announced that it and partner Wyeth (NYSE:WYE) were moving their lead Alzheimer's disease treatment into phase 3 testing.

The drug candidate, AAB-001, is in the middle of a phase 2 study that should be completed sometime in 2008. In an effort to move the drug forward, Elan and Wyeth took an interim look at the study's results to see if they warranted moving into a phase 3 study. The decision was made to begin phase 3 testing of AAB-001 in the second half of this year.

Announcing data from an ongoing trial could compromise the enrollment and participation of patients in the study and upcoming phase 3 clinical trial. Because of this, Elan didn't release any of the interim data or comment on it except to say that the decision to move forward with AAB-001's development was based on "the seriousness of the disease and the totality of what the companies have learned from their immunotherapy programs."

The market for Alzheimer's disease treatments is a multibillion-dollar opportunity for drug companies. But it seems a little excessive for Elan to gain more than $1.5 billion worth of market capitalization on the continuation of a drug's development when no clinical trial data or other information is known about the compound except that a phase 3 study will be commencing.

Elan is burning through cash at a rapid pace -- nearly $93 million in the first quarter alone. However, the nice thing about its Alzheimer's disease program is that Elan shares the development expenses (but also the potential revenue if approved) from AAB-001 and the other compounds in this partnership with Wyeth.

It's easy to try and read too much into the continuation of a drug's development. Without the hard data on AAB-001's efficacy and safety in human clinical trials, it's tough to refer to the excessive investor enthusiasm over the advancement of this compound as anything more than speculation, which can be a recipe for drug stock investing disaster.

Looking for more Foolish drug stock coverage? Check out the Fool's market-beating Rule Breakers newsletter. You can check out all our recommendations, as well as get access to our message boards and exclusive content, with a 30-day free trial.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.