The Obama administration may overturn a ban on stem cell research.

Colorado’s fledgling bioscience industry could benefit if President-elect Barack Obama lifts a federal funding ban on embryonic stem-cell research, as expected shortly after his inauguration.

President George W. Bush imposed the funding ban in August 2001 — which scientists said had a chilling effect on all stem-cell research in the United States.

Bush believes experiments with human embryos are morally wrong, despite the potential to uncover secrets to cure disease and genetic disorders.

But with the ban likely to be lifted soon, some local researchers are excited about the potential for new breakthroughs — and new money — flowing into the state’s highly touted bioscience sector.

“There’s no doubt this will have a positive effect on federal funding,” said Rick Silva, director of technology transfer for the University of Colorado Denver. “It’s been a tough area of research with the moratorium.”

Obtaining the federal funding, from agencies such as the National Institutes of Health (NIH), will enable local scientists to begin research that could result in new drugs and therapies to cure and prevent disease.

If the research proves to have potential, as its proponents believe, it would be easier for researchers to spin off companies from universities — using the discoveries to attract grants, investment dollars and the venture capital needed to bring products to market.

In recent years, in the absence of federal dollars, states such as California have funded their own stem-cell research.

“It’s stifled the field and put pressure on researchers to move to Europe and Canada,” said Yosef Refaeli, an assistant professor of molecular biologyat National Jewish Health in Denver and the University of Colorado School of Medicine.

Refaeli also is owner and co-founder of Taiga Biotechnologies Inc., which develops cellular, biological and small-molecule approaches to treat cancer and other diseases.

Refaeli’s lab gets $1 million a year in federal funding, but most of his work has involved adult stem cells derived from human blood and tissue.

However, Refaeli said while scientists have made great strides with adult stem cells, the potential of embryonic stem cells remains untapped — largely because of the moratorium.

“They won’t let us experiment, so we don’t have any evidence,” Refaeli said. “If you let scientists do their job, you’ll have the evidence very quickly.”

Some scientists have touted a scientific breakthrough that manipulates skin cells to behave as embryonic cells as one way to benefit science without the controversy.

But Refaeli said skin cells are no substitute for embryonic stem cells because “it’s not the real McCoy.”