Johnson & Johnson JNJ, +5.64% opened the second-quarter earnings of large-cap pharmaceutical companies on a positive note, reporting better-than expected earnings and increasing its full-year forecast amid strong growth in their medical-technology business.

The healthcare giant reported a net profit of $5.14 Billion, or 1.96 cents per share. This is up from $4.8 Billion, or 1.00 cents per share a year ago. The adjusted earnings per share came in at $2.80, which was higher than the FactSet consensus estimate of $2.62. Sales increased 6.3% to $24.53 billion, exceeding the FactSet consensus of $24.63 billion.

The company expects to earn between $10.70 and $10.80 in adjusted earnings per share for the full year, up from previously $10.60 or $10.70.

J&J has decided to focus on just two areas, pharmaceuticals, and med-tech, in order to separate its consumer health division. Kenvue Inc. KVUE, +2.88% , still belongs to J&J, but has gone public and announced its own earnings for the second quarter on Thursday.

J&J has announced that it will divide Kenvue’s shares via an exchange offer. J&J shareholders can choose to exchange all, part or none of their Kenvue stock, said J&J Chief Financial Officer Joseph Wolk on a Thursday call with analysts. Wolk stated that the offer could be made “in the next few days”.

J&J’s medtech segment, including orthopedic, surgical, and vision products, reported nearly 10% adjusted sales growth. J&J CEO Joaquin Duato stated on a conference call with analysts that the growth was fueled by clearing a backlog from pandemic-era procedures. This trend has affected insurance giants like UnitedHealth Group Inc. . Global Procedure Growth has benefitted products such as those focused on hearts, hips, and knees, the company reported. The company’s medtech business has grown since it acquired the cardiovascular medtech company Abiomed late last year.

J&J’s pharmaceutical business is experiencing a loss of exclusivity over its blockbuster ulcerative-colitis drug Stelara. The drug generated $2.8 billion worldwide in the second quarter. Amgen Inc. AmGN, +1.07%, and Alvotech Alvotech +1.02% will launch Stelara Biosimilars in early 2020, but there is no competition expected for the drug before that time, Erik Haas said, J&J’s Worldwide Vice President for Litigation.

COVID-19 sales for the company were $285m in the second quarter. This is down 48% compared to a year ago. The company will look to its promising pipeline of products, such as an investigational treatment to treat plaque psoriasis to fuel growth.

The company continues to be plagued by litigation over J&J talc products, such as baby powder. Plaintiffs claim that these products cause cancer. Two days earlier, a Californian jury had awarded $18,8 million to a California man who claimed that he developed mesothelioma after being exposed to J&J’s baby powder. Haas, who spoke on Thursday’s call, said that the company intends to appeal the verdict. The ruling will not affect the bankruptcy proceedings of LTL Management LLC. This J&J subsidiary is managing the talc litigation liability. LTL re-filed for Chapter 11 bankruptcy in April as part of the company’s effort to resolve legal claims.

Haas stated on Thursday that lawyers representing approximately 60,000 claimants support the bankruptcy terms. Lawyers representing roughly 40,000 claimants continue to be opposed. Haas stated that the company “remains committed to its position” that its talc is safe. This has been confirmed by numerous independent scientific studies and tests over decades.

J&J filed a lawsuit earlier this week challenging the Medicare drug price negotiation provisions of the Inflation Reduction Act from last year. They joined several other large pharmaceutical companies and trade associations in fighting these negotiations in court. Duato stated that while the company is concerned with the “government-price-setting environment” created by the IRA, it’s still too early to estimate the impact on the business. Some rules and procedures are still in flux.

J&J stock has fallen 4.8% year-to-date, while S&P 500 , SPX, +0.56%, has gained 18.5%.