MDS had a big second quarter following the sale of its diagnostic business and the life sciences company is also encouraged by signs of a turnaround in its MDS Pharma Services unit’s late stage business.

The Toronto-based company reported net income ballooned to $736 million or $5.34 a share compared with $14 million or 10 cents in the second quarter a year ago. Earnings included a gain of $792 million from its diagnostics unit sale. The overall company’s revenue jumped 13% to $273 million compared with $242 million in the year ago quarter.

In its second quarter, MDS’ revenues from the company’s late stage segment grew 22% to $55 million. The company’s early-stage segment was down 12% compared with the year ago quarter, partly due to U.S. Food and Drug Administration (FDA) issues at its Montreal site. MDS stated it expected to have the majority its independent audits completed by the end of the year, at a cost of $61 million to the company.

Second quarter revenues from the company’s analytical technologies division rose 54%, compared with the same period last year. Those earnings included results of its Molecular Devices acquisition in March 2007.

“I am pleased that we continued to make solid progress executing our strategy,” said Stephen DeFalco, president and chief executive officer of MDS. “I am encouraged by the steady improvement.

In February 2005, MDS agreed to conduct a review of all it bioequivalence studies done at its Ville St. Laurent, Quebec site. The review covered a five-year period from January 2000 through December 2004. This was done in response to FDA concerns about the company’s bioanalytical testing operations after a routine inspection in 2003.

MDS Pharma Services also recorded a $26 million charge to restructure and streamline its business. It will use these funds to “optimize” its global network through site consolidations, workforce reductions, and operational enhancements.