I was honored to be present at the White House ceremony last week as President Barack Obama lifted the ban on federal funding for embryonic stem-cell research. His long-awaited executive order marks a critical milepost in the race to develop biologic cures. Indeed, it comes just weeks after American scientists announced a huge stem-cell breakthrough.

Using stem-cell lines, researchers developed a therapy that reverses some symptoms of multiple sclerosis. The results were all the more remarkable given that none of the patients in the study had responded to standard treatments. Essentially, doctors used stem-cell transplants to "reset" patients' immune systems. The technique also shows promise in combating lupus and diabetes.

This breakthrough highlights the importance of President Obama's decision. Lifting the ban will expand the development of similar biomedical advances that may lead to treatments and possibly even cures for devastating diseases such as cancer, AIDS and Parkinson's.

The biotechnology community strongly supports Obama's action to remove the ban. But this is just a first step toward moving from the promise of research to therapies and cures for patients. Public funding only supports the initial stages of research. It is private capital that finances the "transitional" research needed to turn in-lab advances into usable medicines.

The biotechnology industry spends an enormous amount on research and development. In 2005, companies spent $20 billion on R&D with the bulk of the funds coming from private investors. These funds finance critical steps in moving from basic research to final therapies and treatments, which include rigorous FDA review and testing in addition to several rounds of clinical trials. Even after the original research has been completed, it can take 10 to 12 more years and over $1 billion in investment to bring a new therapy successfully to patients.

Many firms go years before making money. Nektar Therapeutics, for instance, was in the red for the first 14 years of its existence despite raising more than $1.2 billion in funding and having several products on the market. Today, Nektar is developing promising treatments for cancer, HIV and other ailments.

That's why the president and Congress must protect incentives for private investment into stem-cell research and the continued development of cures and therapies. This requires public policies that balance the need to increase access to today's medicines with the need to develop tomorrow's cures.

One early test will come as Congress considers reforming our nation's patent laws. The recently introduced Patent Reform Act would weaken intellectual property rights by softening penalties for those who violate them. If patent laws are watered down, investors will redirect their money toward industry sectors that provide more certainty and a faster rate of return.

Meanwhile, the push for price controls on biotech treatments is no less dangerous than the campaign against patents. Obama has proposed requiring biotechnology and pharmaceutical companies to give bigger discounts, or rebates, to Medicaid.

Increasing the rebate via price controls would undermine investor confidence in biotechnology. Government-set prices likely wouldn't be high enough to allow biotechnology firms to recoup their investment dollars that fund research into treatments and cures.

About 15 years ago, just the threat of price controls did major damage to the biotech industry. When Congress started considering health-care legislation that included rigid price controls on pharmaceuticals, venture capitalists pulled out of the medical research industry en masse, fearing dramatic reductions in profit potential.

Price controls are particularly damaging to small biotech companies, which often have yet to bring a product to market and rely on continued investor confidence to keep their research programs afloat. Many of these capital-intensive companies are already struggling as the current economic climate chokes funding. Since September 2008, more than 28 companies have shelved promising drug development programs in therapeutic areas including Alzheimer's, MS, diabetes and cancer.

Obama's work isn't done. It is imperative that he keeps America's patent system strong — and resists the calls for price controls — to make the hope of stem cell research a reality for patients.

James C. Greenwood is president and CEO of the Biotechnology Industry Organization, which represents more than 1,200 biotechnology companies and related organizations.