Friday is here, and the natives are restless. Cord blood storage specialist ViaCell (NASDAQ:VIAC) plans to report its Q4 and full-year 2006 numbers on the other side of the weekend (Tuesday morning, to be precise). It's going to be a nerve-wracking next few days, as investors await news of the firm's latest loss.

What analysts say:

  • Buy, sell, or waffle? Four brave souls track ViaCell's fortunes. The bulls have won a convert since last we checked in, bringing us up to three buy ratings. The fourth analyst still votes to hold.
  • Revenues. Quarterly sales are expected to rocket 25% higher, to $14 million.
  • Earnings. There won't be any of those, but ViaCell's got losses in spades. Analysts predict the per-share loss will double to $0.20.

What management says:
There was bad news and good news for ViaCell this quarter, as the firm announced that disappointing phase 1 trial results had convinced it to cut bait on its umbilical cord blood transplant therapy, "CB001." Where's the good in that? Freed of the costs of conducting clinical trials, ViaCell's already cash flow-positive ViaCord business will now be able to make ViaCell as a whole "become cash flow positive in the first half of 2008."

What management does:
Glory be, and pass the taters! Maybe now, ViaCell can do something about cutting down the number of parentheses in the table below. With gross and operating margins worsening with every passing quarter, things were starting to look bleak indeed.

Margins

6/05

9/05

12/05

3/06

6/06

9/06

Gross

89.3%

88.9%

81.4%

81.4%

81.2%

80.9%

Operating

(25.7%)

(25.8%)

(31.7%)

(35.9%)

(39.1%)

(39.9%)

Net

(44.9%)

(37.0%)

(33.0%)

(34.0%)

(40.2%)

(39.7%)
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
What can a Fool say about ViaCell? It's a cash-generating toll booth business (storing umbilical cord blood for eternity, charging incremental fees along the way) wrapped in what, in my view, is a very expensive biotech call option (the aforementioned stem cell-based wonder-cure). The way I see it, the less progress ViaCell makes in its biotech arm, the better. Let somebody else spend the money necessary to turn stem cells into medical miracles -- and let someone else's investors foot the bill.

For my money, the best thing for ViaCell investors would be if the company gave up on its science experiments entirely, and just operated a high-tech, low-temperature storage warehouse from here on out. (Unfortunately, I doubt management shares this view.)

Competitors

  • Aastrom Biosciences (NASDAQ:ASTM)
  • Celgene (NASDAQ:CELG)
  • Cytori (NASDAQ:CYTX)
  • Genzyme (NASDAQ:GENZ)
  • Osiris Therapeutics (NASDAQ:OSIR)
  • StemCells (NASDAQ:STEM)

Further reading material available in the science lab. Try:

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Fool contributor Rich Smith does not own shares of any company named above.