Valeant Pharmaceuticals International Inc is in talks to sell its Salix stomach-drug business to Japan's Takeda Pharmaceutical Co Ltd, according to people familiar with the matter.

The deal could raise as much as US$10 billion for the indebted drugmaker, the people said, asking not to be identified because the discussions are private. There is no guarantee that the discussions will lead to a deal, they said.

Valeant is working with investment bank Morgan Stanley on the sale, the people said. Another bidder may also be interested in the Salix business, they added.

News of the talks was first reported by the Wall Street Journal.

The proceeds from the sale would likely be used to pay down the majority of Valeant's roughly US$12 billion in bank loans. Valeant, which has a market value of US$6 billion, has an overall debt pile of about US$30 billion.

In a statement released late Tuesday afternoon, Valeant confirmed that it is holding a number of divestiture talks.

“We are currently in discussions with third parties for various divestitures including but not limited to Salix. The discussions may or may not lead to a definitive agreement,” the Laval, Que.-based company said.

Valeant’s new chief executive officer, Joseph Papa, has committed to selling around US$8 billion in non-core assets to help pay down debt which it accumulated over the course of a series of large acquisitions, including its 2015 purchase of Salix Pharmaceuticals for US$14.5 billion.

Valeant has been struggling to revive its dwindling share price since late last year, when controversy around its drug pricing practices sent shares plunging. Its stock is down around 90 per cent since its 2015 highs.

Salix makes treatments for disorders such as irritable bowel syndrome and diarrhea.

Takeda tried earlier this year to buy Salix as part of a joint bid with private equity firm TPG but the approach, which came a few weeks before Papa took over as chief executive, was rejected by the board. They wanted to give Papa time to map out a course for the company.

Takeda told Reuters in September that it was scouting for multibillion-dollar acquisitions in the United States and other overseas markets as it seeks to boost its core therapy areas, including gastrointestinal medicine.

With files from BNN.