The Scots-born musician's difficulties were discussed by his pal Mark Gable, the frontman of fellow Australian band Choirboys who said it appeared the 61-year-old was "unable to perform any more".
Speculation about his health led to suggestions the band were on the brink of retirement, but US music publication Billboard has now reported that "there's no truth to the rumour".
Although there has been no official confirmation, Billboard reported on its website that insiders had dismissed the idea the band would call it a day.
The band has previously survived the death of its singer when Scottish-born frontman Bon Scott died in 1980 after a night of heavy drinking in London, to be replaced by Brian Johnson.
Gable said in an interview with ABC Radio: "Malcolm is sick. From what I understand, and it's even been confirmed in part by his son Ross, that it would appear Malcolm is unable to perform any more.
"It's not just that he is unwell, it's that it is quite serious.
"It will constitute that he definitely won't be able to perform live.
"He will probably not be able to record."
Johnson said there were plans for the group to meet up in the near future but was unable to make any firm commitments.
In an interview he appeared to suggest the group's farewell could be on the cards when he said a 40th anniversary tour would be, "a wonderful way to say bye bye".