LINE FORMS FOR PROP. 71 MONEY.

Byline: Brent Hopkins Staff Writer

With California officially in the biomedical business after Tuesday's passage of Prop. 71, the business and scientific communities cheered the prospect of billions of dollars in investment on Wednesday.

Voters approved the measure by 59 percent, paving the way for $3 billion in bond-funded grants for research on embryonic stem cells. With local academic centers providing the intellectual capital and the state proffering the dollars, backers believe the area could quickly become a powerhouse in the suddenly hot sector of the industry.

``Prop. 71 could position Los Angeles County to become what Silicon Valley was for technology,'' said Brendan Huffman, public policy director for the Los Angeles Area Chamber of Commerce, one of the first business groups to back the controversial proposition. ``The research is here so the investment puts all the spotlight on the area.''

Proponents of the program said it will create between 5,000 and 22,000 jobs within the state each year during its 10-year lifespan and bring in billions of dollars in sales tax and royalty revenue. With federal funding limited by President George W. Bush to only existing embryonic stem cell lines, backers say California will now set up entirely new facilities to handle the research, extending the fiscal impact beyond just biomed but into industries as varied as construction, medical supply and law. The proposition requires the formation of a governing board within 45 days, so the proposition's effects should begin to take hold quickly.

``It's going to make California the global hub for stem cell research,'' said Fiona Hutton, spokeswoman for the Yes on 71 campaign, based in Studio City. ``You'll see new biotech clusters emerging and new jobs created. In terms of economic benefit, there's new tax revenues, royalty revenues that arise from the discovery and potential reduction in health care costs.''

At the UCLA AIDS Institute, another supporter of the proposition, roughly 100 faculty members currently work on adult stem cell and animal stem cell research. Additional grant money would allow them to begin examining embryonic stem cells according to Jerome Zack, a professor of medicine and the institute's associate director.

``In theory, this will bring new talent into the state since there's no funding anywhere else,'' Zack said. ``I think there's a pretty good chance that there will be research coming out which will create licensing and patenting opportunities. That should feed back into the state coffers if it can be used down the road.''

Though much of the funding will go to embryonic research, those involved in adult stem cell work may stand to benefit, as well. At NeoStem Inc., an Agoura Hills-based company that has focused on that less controversial area, Vice President Edward Garnett welcomed the opportunity to cash in on the new source of funding.

``We're always willing to take money, but we have to see how the board is set up and what the oversight is,'' said Garnett, who handles sales and marketing for the company. ``We hope we're part of it. We know the players, they know us, so we're waiting to see what happens next and go from there.''

Brent Hopkins, [phone]

brent.hopkins(at)dailynews.com