The company conducting the first government-approved tests in people of a therapy developed using human embryonic stem cells abruptly announced Monday that it was halting the study, stunning advocates of the highly contentious field.

Geron Corp. of Menlo Park, Calif., said the move, which stops one of the most controversial and closely watched medical experiments in the history of biomedical research, was the result of a business decision to focus exclusively on developing cancer therapies.

“In the current environment of capital scarcity and uncertain economic conditions, we intend to focus our resources on advancing our . . . two novel and promising oncology drug candidates,” John A. Scarlett, Geron’s chief executive officer, said in a statement. “This would not be possible if we continue to fund the stem cell programs at the current levels.”

The company also announced that it was eliminating 66 full-time positions, representing 38 percent of its workforce.

Another company continues to test a second embryonic stem cell therapy in people. But Geron’s announcement marked a major setback and disappointment, researchers and advocates said.

“While stem cells are proving invaluable for research, translating the promising science into new therapies is a slow, painstaking process with many setbacks,” said George Q. Daley, a leading stem cell researcher at Harvard Medical School. “A safe first trial would have paved the way for many others to follow.”

The announcement Monday was a particular blow to advocates of research into spinal cord injuries and patients suffering from paralysis. The study was testing the treatment on partially paralyzed patients.

“I’m disgusted. It makes me sick,” said Daniel Heumann, who is on the board of the Christopher and Dana Reeve Foundation. “To get people’s hopes up and then do this for financial reasons is despicable. They’re treating us like lab rats.”

Human embryonic stem cell research has been the focus of intense excitement and acrimonious public debate, but it has so far shown promise only in animal and laboratory studies. The Geron study was the first government-sanctioned attempt to test a therapy using the cells in people.

Although the company will not treat any additional patients, researchers will continue to follow the four patients treated so far, “accruing data and updating FDA and the medical community on their progress,” Geron said. The company is also “seeking partners with the technical and financial resources to enable further development” of its stem cell therapy, it said.

Many scientists think embryonic stem cells could represent one of the most important advances in medicine. Because the cells can morph into virtually any cell or tissue, researchers hope they will eventually produce cures for a host of ailments, including heart disease, cancer, Alzheimer’s and paralysis.

But the field is fraught with political, moral and ethical controversies. Days-old embryos have been destroyed to obtain the cells, which critics consider immoral. After many delays, the Food and Drug Administration last year approved two experiments testing therapies created from embryonic stem cells in humans, including a study testing Geron’s experimental treatment on 10 patients partially paralyzed by spinal cord injuries. Both studies were designed primarily to determine whether the approach is safe.

The studies have been seen by supporters and opponents of embryonic stem cell research as potentially pivotal to the future of the research. Some worried that not enough basic studies and tests had been done in animals before injecting cells into recently paralyzed patients. Others wondered whether patients who are struggling to come to terms with a devastating injury can make the risky decision to volunteer for the study within two weeks of such a trauma, one of the terms of participation.

In October 2010, doctors in Atlanta injected millions of cells made from embryonic stem cells into the spine of a 21-year-old Alabama nursing student who had been partially paralyzed in a car accident less than two weeks earlier. Subsequently, three other patients with similar injuries have been treated. The only results Geron has released indicate that none of the patients has suffered any significant adverse effects.

Supporters of the research said they were disappointed by the announcement Monday.

“This trial was a difficult but important one and will help future cell transplantation clinical trials move forward in important ways,” said Keith Tansey of the Shepherd Center in Atlanta, where two of the patients were treated.

Other scientists said that although they were disappointed, they were not entirely surprised.

“The first use of a novel untested therapeutic approach is always associated with some risk, and companies are understandably risk-averse,” said Arnold Kriegstein of the University of California at San Francisco. “However, other clinical stem cell trials with other disease targets are already starting, and the field is too promising not to move forward.”

Researchers are eagerly watching the second trial, which began in July when a team at the UCLA Jules Stein Eye Institute in Los Angeles performed two delicate 30-minute procedures. They infused 50,000 retinal pigmented epithelial cells made from embryonic stem cells into one eye in each of two patients in the hopes that the cells would replace those ravaged by two incurable eye ailments. The only results from that trial released by Advanced Cell Technology of Santa Monica, Calif., indicate that no safety problems have arisen.

Opponents of the research pointed to the announcement Monday as evidence of doubts about the research. The decision “may also indicate that it is not as promising as previously described, both in terms of commercial development as well as safety and efficacy,” said David Prentice of the Family Research Council.

Proponents dismissed such arguments.

“The fact that they launched the trial and that derivatives of embryonic stem cells have so far seemed safe are major advances,” said Sean Morrison of the University of Texas Southwestern Medical Center. “This setback reflects the economics of cell therapy, not any issue specific to embryonic stem cells.”