Takeovers and positive clinical results often drive big moves in biotech stocks. For example, Medarex, a human antibody specialist with 40 drugs in trials, traded at $8.40 a share in mid-July when Bristol-Myers Squibb (BMY) announced it would pay $16 for the company. (The deal closed in early September.) Shares of Human Genome Sciences (HGSI) have rocketed to $19 from $2 this year, mostly on a July announcement of positive trial results for a new treatment for lupus, an autoimmune disease that causes inflammation and tissue damage.

Stock screening software isn t useful for sorting biotechs by the value of their drug development pipelines, either to investors or corporate suitors. This column tends to pass over small, profitless biotechs because their lack of income tends to eliminate them from most screens. Bernstein Research, a unit of giant investment manager AllianceBernstein, recently used brain power rather than computer power to search more than 13,000 biotechs for companies that seem poised for a takeout or a breakout. I ve listed their top three finds below, partly to make up for my neglect of the group and partly because Monday s stock news was dominated by takeovers. The Dow Jones Industrial Average jumped 131 points to close at 9796 after Abbott Laboratories (ABT) said it will buy the drug business of Belgian chemical maker Solvay (SVYSY) for $6.6 billion, and Xerox (XRX) announced a purchase of Affiliated Computer Services (ACS) for $6.4 billion.

Geoffrey Porges, Bernstein s head biotech analyst, focused his search on the 140 or so firms that trade on North American or European exchanges and have stock market values between $250 million and $5 billion. He zeroed in on 77 research-based companies with novel compounds that might eventually be sold in the U.S. or other big markets and key drugs in late-stage trials. From these, he selected takeout candidates by judging whether their existing partnerships would preclude or allow for a new, lucrative deal. He decided which are breakout candidates by determining whether key trial results are likely in coming months. The results include 28 takeout candidates, 10 breakout candidates and three stocks with takeout and breakout potential, which are listed below.

One caveat: Porges wrote Friday that he has no specific knowledge of takeover discussions, and that the list isn t meant to give specific recommendations, but to suggest a set of possible candidates in response to the inevitable question of Who's next? for investors to examine more closely and position themselves accordingly.

Abraxis BioScience

Market Value: $1.42 billion

Los Angeles-based Abraxis BioSciences (ABII) owns Abraxane, a breast cancer drug that studies suggest is better tolerated than Bristol-Myers Squibb s Taxol. Abraxane received regulatory approval for the treatment of breast cancer in 2005, and is now in late-stage trials comparing it to Taxol for the treatment of a specific lung cancer. The company is trading at barely more than half its value of a year ago. A buyer would secure not only Abraxane, but the nanoparticle albumin-bound, or nab technology on which it s based, an asset that could potentially improve the effectiveness of more drugs. Abraxis is forecast to produce $331 million in sales this year, with no profits.

Protalix BioTherapeutics

Market Value: $620 million

Israel s Protalix BioTherapeutics (PLX) has developed a plant-based enzyme replacement to treat Gaucher s disease, a condition in which an enzyme deficiency causes fatty material to accumulate in organs. Late-stage results for the treatment are pending, but a suitor might be more interested in the underlying technology. Protalix has developed a method for genetically engineering tobacco and carrot cells to produce recombinant proteins, which can be used to treat disease. A plant source for these proteins could prove cheaper and safer than current animal sources. Protalix has neither earnings nor sales.

Optimer Pharmaceuticals

Market Value: $474 million

Based in San Diego, Optimer Pharmaceutical (OPTR) has developed OPT-80, a treatment for clostridium difficile, an infection often acquired in hospitals that can lead to colitis. Nearly a year ago, Opt-80 proved superior in final-stage trials to Vancocin, which is currently used to treat the same disease and which captures yearly sales of about $250 million in the U.S. The company is currently assembling a U.S. sales force and plans to license the drug in Europe, where a similar trial is in final stages. Optimer is also close to filing for regulatory approval for another drug, which treats infectious diarrhea.