Covidien is looking to sell its pharmaceuticals unit for as much as $4 billion, a source familiar with the situation said on Tuesday.

JPMorgan Chase is advising Covidien on the matter, said the source, who declined to be named because the information was not public.

Covidien may decide to keep the drugs unit if the auction fails to generate high-enough offers, the source said.

The maker of surgical products, drugs and medical supplies had been in talks with another healthcare company for the drugs business, but those talks failed, according to a report by Bloomberg.

Neither Covidien nor JPMorgan Chase was immediately available for comment.

In April, Covidien, based in Mansfield, Mass.,  reported a higher-than-expected second-quarter profit, helped by strong demand for its medical devices, and raised its full-year revenue growth forecast.

Shares of Covidien have gained 19.4 per cent so far this year. The stock closed at $54.31, up $1.03, on the New York Stock exchange. – Reuters