UPDATE 2-Obama announces $5 bln for new medical research

(Adds more quotes, details)

* $1 billion to go to cancer genome research

* 12,000 grants awards available

* Money to create “tens of thousands” of jobs

By Deborah Charles

WASHINGTON, Sept 30 (Reuters) - U.S. President Barack Obama announced a plan on Wednesday to spend $5 billion on medical and scientific research, medical supplies and upgrading laboratory capacity, which he said would create tens of thousands of new jobs.

The funds from the $787 billion economic stimulus package will pay for “cutting-edge medical research in every state across America,” the White House said in a statement.

It said $1 billion will go to research into the genetic causes of cancer and potential targeted treatments.

“This kind of investment will also lead to new jobs: tens of thousands of jobs conducting research, manufacturing and supplying medical equipment, and building and modernizing laboratories and research facilities,” Obama said in a speech at the National Institutes of Health outside Washington.

“The more than 12,000 grant awards ... are part of an overall $100 billion Recovery Act investment in science and technology to lay the foundation for the innovation economy of the future,” the White House statement added.

Health and Human Services Secretary Kathleen Sebelius said the awards would speed progress toward medicines, treatments and cures to help Americans live longer, healthier lives.

The awards will take the form of grants, meaning that institutions and researchers will have to apply for them.

More than $1 billion will go to genomic research -- studying the DNA map to find causes of diseases, especially cancer, and potential new treatments.

“We are about to see a quantum leap in our understanding of cancer,” NIH Director Dr. Francis Collins said in a statement.

He said cancer “occurs when glitches in the DNA cause a good cell to go bad”.

“This ambitious effort promises to open new windows into the biology of all cancers, transform approaches to cancer research and raise the curtain on a more personalized era of cancer care,” added Collins, who as head of the National Human Genome Research Institute led efforts to sequence the human genome.

Some of the most successful cancer drugs, such as Novartis AG's NOVN.VX Gleevec and Herceptin and Avastin, made by Genentech, now owned by Roche AG ROG.VX, target specific mutated genes.

The investment includes $175 million for The Cancer Genome Atlas project to collect 20,000 tissue samples from people with more than 20 different types of cancer. The plan is to sequence all the genes and make the information quickly and freely available to researchers.