Shares for San Diego’s Cadence Pharmaceuticals Inc. shot up 34 percent — to a two year high — following a favorable ruling from the U.S. District Court for the District of Delaware in a patent lawsuit against Exela Pharma Sciences Inc.

Shares closed at $7.88 on Nov. 15, up $2 — placing the company’s market capitalization at $678 million.

Cadence’s stock slumped in July when there was concern that patents for its pain relief drug, Ofirmev, could be ruled invalid and it might face competition from generic drug manufacturers. The lawsuit, filed in 2011, contended that Lenoir, N.C.-based Exela Pharma had violated two of Cadence’s patents. The court found that a new generic drug application from Exela infringes on these patents — which will likely allow Cadence patent exclusivity through 2021.

Ofirmev, which was approved by the Food and Drug Administration in 2010 and launched in January 2011, is the company’s first and only commercially available product. The company had sales of $50 million for Ofirmev in 2012, expected sales of $110 million in 2013 and analysts project it to reach sales of $516 million by 2020.

"We continue to gain market share and posted year-over-year sales growth of more than 100 percent in each quarter of 2013," Cadence CEO Ted Schroeder said in a statement. "We remain confident in our franchise, and look forward to updating investors further on our progress."

— Meghana Keshavan