By Bhanvi Satija and Patrick Wingrove

(Reuters) – Johnson & Johnson on Thursday expressed optimism for strong growth this year, saying it expected it to exceed profit estimates with joint replacements and other surgeries following a easing of COVID-19 and inflation, as its shares rose 6%.

J&J (NYSE: ) also told investors that it is counting on strong demand for its cancer drugs, with protections for its blockbuster arthritis drug providing a boost to its pharmaceutical portfolio.

Shares of the healthcare group rose 6.2% to $168.61 in afternoon trading. Shares of other medical device makers such as Medtronic (NYSE: ) and Abbott Laboratories (NYSE: ), which also posted encouraging results, gained more than 3%.

J&J said it now expects adjusted 2023 profit of $10.70 to $10.80 per share, up from estimates of $10.65 per share and its prior forecast of $10.60 to $10.70 per share.

The drug and equipment maker reported better-than-expected earnings of $2.80 per share in the second quarter, while analysts were expecting $2.62.

Chief Financial Officer Joseph Wolk told Reuters earlier this year it was “responsibly cautious” in its guidance, but growth across the business gave J&J the confidence to raise its full-year outlook.

“The qualifiers are now closed, and if you look at our entire portfolio – the strength is just strong across the board,” Wolk said in an interview. He said that despite the concerns of the previous quarter, inflation was stable.

J&J is trying to fuel growth in its pandemic-hit medical devices business by betting heavily on new cancer drugs and countering a potential slump in sales of its Stelara arthritis drug when biosimilars arrive by 2025.

The company’s medical device unit had sales of $7.79 billion in the second quarter, topping estimates of $7.55 billion.

The volume of procedures such as hip and knee replacements and the level of medical staff needed to deliver them is expected to remain “stable” for the rest of the year, J&J said, adding that COVID-19 has led to surgery delays and health care personnel shortages.

Stifel analyst Rick Wise said in a note that the performance of J&J’s medical device unit is a positive early indicator of the future for other companies in the sector.

The company said it expects pharmaceutical sales to grow further in the second half of 2023.

Wolk told Reuters that J&J’s patent litigation settlement with Amgen (O: ) on arthritis drug Stelara, which met expectations with second-quarter sales of $2.8 billion, boosted confidence about achieving its target of $57 billion in pharmaceuticals sales by 2025.

J&J has also tied up with Alvotec and Teva Pharmaceutical (NYSE: ) over its version of Stelara, delaying any competition until 2025, with company executive Eric Haas telling investors that no other biosimilar is expected before then.

Refinitiv data shows that quarterly sales of its multiple myeloma drug, Darzalex, also fell in line with Wall Street’s estimate of $2.43 billion.

Meanwhile, J&J said it would continue efforts to separate its consumer health unit Kenview, which sells popular self-care and skin care brands such as Tylenol and Neutrogena and went public in May.

J&J will “split” its shares of Kenview through an exchange offer as part of its separation plan, Wolk said, “effectively enabling us to acquire potentially multiple shares without a significant cash outlay.” It currently holds around 90% stake, according to Refinitiv.

Haas, J&J’s vice president for litigation, also told investors that it would “aggressively” defend itself amid ongoing litigation and bankruptcy proceedings for its related subsidiary, amid ongoing proceedings over talc products, including its baby powder.

J&J is facing more than 38,000 lawsuits alleging that the products were contaminated with asbestos and caused cancer, although it has denied this claim. It is in bankruptcy court for a second time attempting to resolve the issue through an $8.9 billion settlement.