By now, everyone in the pharma world has heard that Pfizer's (PFE 2.40%) repeated attempts to acquire British and Swedish pharma AstraZeneca (AZN 0.28%) have come to a screeching halt. After AstraZeneca rebuffed Pfizer's "final offer" last week, it automatically triggered a minimum three month "cooling off period" under U.K. bid rules. 

With Pfizer's prospects for getting even bigger looking rather dismal now, we are probably going to see a radical restructuring take place that could have ripple effects throughout the industry for years to come. Here is a Foolish look at what this restructuring might look like, and how it could drive the acquisition of a smaller pharma with a rich clinical pipeline down the line.

Pfizer is going to restructure 
Pfizer's CEO, Ian Read, has stated multiple times that he is exploring ways to unlock value in the pharma behemoth in the face of falling revenues due to the loss of patent exclusivity for a diversity of top products. One idea Mr. Read and analysts have floated is to break the company up into two to three separate entities.  

What would these companies look like? The prevailing idea on the Street now is that we will likely see a "Value" business consisting of the company's drugs that have already come off of patent protection and those set to lose exclusivity by December 2015. In short, Pfizer's value segment would include noteworthy drugs like Lipitor and Celebrex. Once Pfizer has neatly packaged these falling stars into a single unit, they could either sell it to a generic rival like Teva Pharmaceuticals, or possibly form a joint venture.

The idea is to cut costs and subsequently maximize the remaining value of these drugs at the same time. In my view, it would make the most sense to sell the entire unit lock, stock, and barrel. In that way, Pfizer would no longer have to service these brands and would thereby improve margins. Perhaps most importantly, however, a divestiture would allow the company's brain trust to focus solely on the next segment. 

The second segment would be called "Innovation," headed by Pfizer's newly approved products and late to mid-stage clinical candidates. In terms of newly launched products, Pfizer's JAK inhibitor, Xeljanz, is expected to be a major driver of top-line growth, with potential peak sales coming close to $5 billion, if the drug can pick up additional approvals. The problem is that Xeljanz has been running into problems for indications like psoriasis, suggesting it may not become the megablockbuster Pfizer desperately needs moving forward. 

As such, Pfizer's hopes for top-line growth in the Innovation unit may rest heavily on its late-state clinical pipeline. That being said, there are only two clinical candidates that hold truly outstanding commercial potential --  namely its experimental treatment for high cholesterol called bococizumab, and palbociclib as a potential treatment for breast cancer. Again, though, problems abound in both of these cases. 

Both drugs are likely to face stiff competition from other large pharmas, and palbociclib's mid-stage trial results may not warrant an early regulatory filing, as previously believed. Indeed, AstraZeneca's top management specifically noted the weakness across Pfizer's pipeline as a major problem hindering a merger. 

Foolish wrap-up
Pfizer's break up could be imminent now that the megamerger with AstraZeneca has been put on hold and few, if any, alternative candidates could logistically handle such a deal. In the wake of the failed deal, we now know that Pfizer was hoping to perform a so-called "tax inversion," moving its headquarters to the U.K to get a lower effective tax rate. And that Pfizer was specifically targeting AstraZeneca's clinical candidates in oncology.

Looking ahead, I think we'll first see a restructuring that ultimately downsizes the company in a major way by selling off its former stars. Armed with even more cash but a leaner corporate profile, we could then see Pfizer go after smaller biotechs with deep clinical pipelines. Isis Pharmaceuticals , with its first-in-class pipeline, immediately comes to mind as a potential takeover target. What's really intriguing is that such a deal would effectively be a back-door way to get at some of AstraZeneca's oncology candidates, given the existing licensing agreements between AstraZeneca and Isis.

In sum, Pfizer is going to have to make major changes soon to create long-term value for shareholders. So don't expect the AstraZeneca acquisition drama to be the last major piece of news coming from the pharma giant this year.