“Restaurants. Good restaurants.” The surge in upscale eateries opening in New Haven, said Jon Soderstrom, Ph.D., managing director of the Office of Cooperative Research (OCR), is one way of gauging Yale’s efforts to build up the local biotechnology industry. When a decade ago Yale made its commitment to create new business ventures based on laboratory discoveries, city gourmets could point to fewer than a handful of top-flight restaurants. Today diners have more than a score to choose from, and Yale’s head of technology transfer thinks much of the credit belongs to biotech.

“Biotechnology has made a substantial difference in the economic climate of the city,” said Soderstrom. Investment in new and existing Yale ventures reached its highest level yet during the 2007 fiscal year that ended on June 30.

According to OCR’s year-end report, outside investors provided close to $70 million in fiscal 2007 to launch seven companies based on Yale discoveries. Bioscience companies already in the region secured around $400 million in new cash for operations. That’s on top of more than $1.5 billion in private biotechnology investment to date, a portion of it going to the 25 new companies established by the OCR.

Among the newly launched companies was BioRelix, which will develop antibiotics based on discoveries about bacterial RNA targets made in the laboratory of Ronald R. Breaker, Ph.D., the Henry Ford II Professor of Molecular, Cellular and Developmental Biology and professor of molecular biophysics and biochemistry. The company received nearly $26 million from investors. Existing company Achillion Pharmaceuticals received $52 million from its initial public offering, part of which will fund development of an antiretroviral therapeutic based on work done by Yung-Chi “Tommy” Cheng, Ph.D., the Henry Bronson Professor of Pharmacology.

Achillion is one of numerous young companies based in 300 George Street, a former telephone company office building now converted to laboratory space. The building’s nine floors are nearly full, and private developers are planning to construct a new building nearby for biotechnology companies.

Venture capital firm CHL Medical Partners has already invested more than $25 million in eight Yale spinoff companies. CHL partner Jeff Collinson, a 1963 Yale College graduate, recalls that before OCR began its push few laboratory facilities existed for fledgling companies and his firm had to look outside the region for experienced executives and skilled labor. Now, he said, “biotechs have good laboratory facilities ready to move to New Haven and there’s a pretty good labor pool to recruit from, so it’s much easier to get a company started.”

Said Paul R. Pescatello, J.D., Ph.D., president and CEO of CURE, an organization supporting bioscience in Connecticut: “I travel to meetings around the world. My sense is that qualitatively Yale is regarded as highly as any academic medical center in the world” for developing biotechnology enterprises. But quantitatively the region lags, he said, behind Cambridge, South San Francisco, San Diego and other areas with more prominent biotechnology sectors. Those areas, he said, have “other engines” to generate new ventures, while New Haven relies almost solely on Yale.

Soderstrom agreed: “New Haven is an emerging phenomenon. We’re a work in progress. But 10 years ago it was hard to get venture capitalists to come to New Haven. Today they’re here all the time.” And new restaurants keep opening.