SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

Filed by the Registrant þ

Filed by a Party other than the Registrant o

Check the appropriate box:

VIACELL, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing proxy statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

245 First Street

Cambridge, MA 02142

Telephone: (617) 914-3400

Fax: (617) 577-9018

April 29, 2005

Dear Stockholder:

      You are cordially invited to attend the 2005 Annual Meeting of Stockholders of ViaCell, Inc. (the “Company”) on June 9, 2005 at 9:30 a.m. at 245 First Street (15th Floor), Cambridge, Massachusetts. The accompanying formal Notice of Annual Meeting of Stockholders and proxy statement contain the items of business expected to be considered and acted upon at the meeting, including the election of three nominees to the Board, to serve for three years and until their successors are duly elected and qualified.

      We hope you will be able to attend this year’s Annual Meeting, but if you cannot, it is important that your shares be represented at the meeting. Thus, whether or not you plan to attend the Annual Meeting, we urge you to sign and return the enclosed proxy card so that your shares will be represented at the meeting. If you so desire, you can withdraw your proxy and vote in person at the meeting.

      We welcome the opportunity to share our thoughts about the Company with our stockholders at this year’s Annual Meeting and look forward to your questions and comments.

245 First Street

Cambridge, MA 02142

Telephone: (617) 914-3400

Fax: (617) 577-9018

NOTICE OF ANNUAL MEETING

OF STOCKHOLDERS

To Be Held June 9, 2005

       Notice is hereby given that the 2005 Annual Meeting of Stockholders of ViaCell, Inc. (the “Company” or “ViaCell”), a Delaware corporation, will be held at 9:30 a.m. local time on June 9, 2005 at 245 First Street (15th Floor), Cambridge, Massachusetts, to consider and act upon the following items of business:

      The above matters are more fully described in the accompanying proxy statement.

      Only stockholders of record of the Company at the close of business on April 22, 2005 will be entitled to receive notice of and to vote at the meeting or any adjournment (the “Meeting” or the “Annual Meeting”). A list of all stockholders of record as of April 22, 2005 will be open for inspection for any purpose germane to the meeting for ten days before the meeting during ordinary business hours at our principal executive offices at 245 First Street, Cambridge, MA 02142 and at the Annual Meeting.

      A copy of the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, containing financial data and a summary of operations for 2004, is being mailed to the stockholders with this proxy statement.

April 29, 2005

All stockholders are invited to attend the meeting. Whether or not you plan to attend the meeting, please complete, date, sign and mail the enclosed proxy card promptly so that your shares may be represented at this meeting and to ensure a quorum. No postage is required if mailed in the United States using the accompanying envelope. If you attend the meeting, you may withdraw your proxy and vote your shares. Proxies can also be revoked by submitting a new proxy with a later date or by delivering written instructions to the secretary of ViaCell.

When completing your proxy card, please sign your name as it appears printed. If signing as an attorney, executor, administrator, trustee or guardian, please give your full title. A proxy executed by a corporation must be signed by an authorized officer.

TABLE OF CONTENTS

245 First Street

Cambridge, MA 02142

Telephone: (617) 914-3400

Fax: (617) 577-9018

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

To Be Held June 9, 2005

SOLICITATION OF PROXIES

      This proxy statement and accompanying form of proxy is furnished in connection with the 2005 Annual Meeting of Stockholders of ViaCell, Inc.

      These proxy materials are furnished in connection with the solicitation of proxies by the Board of ViaCell, Inc. a Delaware corporation (the “Company”) for the Annual Meeting of Stockholders (the “Annual Meeting” or “Meeting”) to be held at 245 First Street (15th Floor), Cambridge, Massachusetts on June 9, 2005 at 9:30 a.m. local time and at any adjournments of the meeting.

      The enclosed proxy is solicited by our Board (the “Board”) for the purposes set forth in the Notice of Annual Meeting of Stockholders of the Company. This proxy statement and accompanying proxy are first being sent or given to stockholders on or about April 29, 2005. The authority granted by an executed proxy may be revoked at any time before its exercise by filing with our Secretary a written revocation or a duly executed proxy bearing a later date or by voting in person at the meeting.

      The solicitation is being made by mail, and we may also use our officers, part-time employees and consultants to solicit proxies from stockholders either in person or by telephone, facsimile, e-mail or letter without additional compensation. We will pay the cost for solicitation of proxies, including preparation, assembly and mailing the proxy statement and proxy. Such costs normally include charges from brokers and other custodians, nominees and fiduciaries for the distribution of proxy materials to the beneficial owners of our stock. We estimate that the costs will total approximately $85,000.

      Pursuant to vote of the Board, each stockholder of record at the close of business on April 22, 2005 (the “Record Date”), is entitled to notice of and vote at the Annual Meeting. As of the close of business on the Record Date, we had 37,760,631 shares of common stock, $0.01 par value, outstanding, each of which is entitled to one vote. Consistent with Delaware law and as provided under our By-laws, the holders of shares representing a majority of the votes entitled to be cast on a particular matter, present in person or represented by proxy, constitutes a quorum as to such matter.

      Abstentions and “broker non-votes” (i.e., shares represented at the Annual Meeting held by brokers or nominees as to which (i) instructions have not been received from the beneficial owners or persons entitled to vote and (ii) the broker or nominee does not have the discretionary voting power on a particular matter) are only treated as shares that are present and entitled to vote on the matter for purposes of determining the presence of a quorum. Abstentions and broker non-votes are not treated as a vote for or a vote against any of the proposals to which such abstentions or broker non-votes apply.

      Proxies returned to us or our transfer agent, EquiServe Trust Company, N.A. (“Transfer Agent”), and properly executed will be voted in accordance with stockholders’ instructions. You specify your choice by appropriately marking the enclosed proxy card. Brokers holding shares for the account of their clients may vote such shares in the manner directed by their clients.

      Any proxy card that is timely signed and returned with no other markings will be voted in accordance with the recommendation of our Board. The proxies also give our Board discretionary authority to vote the

shares represented thereby on any matter which was not known as of the date of this proxy statement and is properly presented for action at the Annual Meeting.

      The execution of a proxy will in no way affect your right to attend the Annual Meeting and vote in person. You have the right to revoke your proxy prior to the Annual Meeting by giving notice to our Secretary, Marc Rubenstein. You may also complete and submit a new proxy card prior to the Annual Meeting or you may revoke a previously submitted proxy at the Annual Meeting by giving notice to our Secretary at the Annual Meeting.

      For convenience in voting your shares on the enclosed proxy card, we have enclosed a postage-paid return envelope to our Transfer Agent who will assist in tabulating the stockholder vote.

PROPOSAL 1

ELECTION OF DIRECTORS

      Our board currently has eight members. Our directors are divided into three classes serving staggered three-year overlapping terms, with one class of directors elected at each annual meeting of stockholders.

      Three nominees have been nominated for election to a term of office expiring in 2008: Barbara Bierer, Denise Pollard-Knight and James Tullis. Unless the enclosed proxy withholds authority to vote for these directors or is a broker non-vote, the shares represented by such proxy will be voted for the election of Dr. Bierer, Dr. Pollard-Knight and Mr. Tullis. If any of these nominees is unable to serve, which is not expected, the shares represented by the enclosed proxy will be voted for such other candidate as may be nominated by the Board.

      Directors will be elected by a plurality of the votes cast by the stockholders entitled to vote on the election of directors at the meeting.

      The table below provides information about the nominees for director and all other persons whose term of office as a director will continue after the meeting.

GENERAL INFORMATION RELATING TO THE BOARD

Organization and Meetings

      The Board held ten regular meetings in 2004. The Board has a standing Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. Each of the directors participated in 75% or more of the aggregate number of meetings of the Board and of the committees on which he or she is a member, except Jan van Heek. The Board does not have a policy requiring attendance by the directors at the Company’s Annual Meeting and attendance has varied, depending on whether the Board has a meeting scheduled for the Company’s offices on that day. All of our directors attended the Company’s 2004 Annual Meeting. Beginning in 2005, as required under new Nasdaq listing standards, our independent directors will meet in regularly scheduled executive sessions at which only independent directors are present.

      The members of our Board’s Audit Committee are Mr. Kailian, Dr. Pollard-Knight and Mr. van Heek, Mr. Kailian is the chairman of the committee, and our board has identified him as our Audit Committee financial expert. The Audit Committee assists our Board with its oversight responsibilities regarding the integrity of our financial statements; our compliance with legal and regulatory requirements; the independent auditors’ qualifications and independence; and the performance of our internal audit function, if any, and independent auditors. Our Audit Committee held six meetings in 2004. We believe that all of the members of our Audit Committee meet the requirements for independence under the current requirements of the Sarbanes-Oxley Act of 2002, the Nasdaq National Market and SEC rules and regulations. A current copy of the charter of the committee is attached to this Proxy Statement as Appendix A and is available in the Corporate Governance section of the Investor Information section of our website at www.viacellinc.com.

      The members of our Board’s Compensation Committee are Mr. Hastings, Mr. Tullis and Mr. van Heek; Mr. Hastings is the chairman of the committee. The Compensation Committee provides assistance to the Board by designing, recommending to the Board for approval and evaluating the compensation plans, policies and programs of ViaCell, especially those regarding executive compensation; reviewing and approving the compensation of our Chief Executive Officer and other officers and directors; and assisting the Board in producing an annual report on executive compensation for inclusion in our proxy materials in accordance with applicable rules and regulations. Our Compensation Committee held six meetings in 2004. We believe that all of the members of our Compensation Committee meet the requirements for independence under, and the functioning of our Compensation Committee complies with, any applicable requirements of the Sarbanes-Oxley Act of 2002, the Nasdaq National Market and SEC rules and

regulations. A current copy of the charter of the committee is available in the Corporate Governance section of the Investor Information section of our website at www.viacellinc.com.

      The members of our Nominating and Corporate Governance Committee are Mr. Kailian and Mr. Hastings; Mr. Kailian is the chairman of the committee. Our Nominating and Corporate Governance Committee was formed in April 2004 and did not meet in 2004. The Nominating and Corporate Governance Committee will assist the Board with its responsibilities regarding the identification of individuals qualified to become Board members; the selection of the director nominees for the next annual meeting of stockholders; and the selection of director candidates to fill any vacancies on the Board. The committee will also assist the Board in addressing matters regarding corporate governance. Our Nominating and Corporate Governance Committee believes that nominees for directors must meet certain minimum qualifications. Such qualifications include being able to read and understand basic financial statements, being highly knowledgeable and accomplished in the area of expertise that the Committee is looking to have represented by that board seat, and having the highest personal integrity and ethics. The Nominating and Corporate Governance Committee also intends to consider such factors as having sufficient time to devote to the affairs of ViaCell, demonstrated ability to exercise sound business judgment and having the commitment to rigorously represent the long-term interests of our stockholders. However, the Nominating and Corporate Governance Committee retains the right to modify these qualifications from time to time. Candidates for director nominees are reviewed in the context of the current composition of the Board of Directors, the operating requirements of ViaCell and the long-term interests of stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee considers diversity, age, skills, and such other factors as it deems appropriate given the current needs of the Board of Directors and ViaCell, to maintain a balance of knowledge, experience and capability. In the case of incumbent directors whose terms of office are set to expire, the Nominating and Corporate Governance Committee reviews such directors’ overall service to ViaCell during their term, including the number of meetings attended, level of participation, quality of performance, and any other relationships and transactions that might impair such directors’ independence. We believe all of the members of our Nominating and Corporate Governance Committee meet the requirements for independence under the applicable requirements of the Sarbanes-Oxley Act of 2002, the Nasdaq National Market and SEC rules and regulations. A current copy of the charter of the committee is available is available in the Corporate Governance section of the Investor Information section of our website at www.viacellinc.com.

Consideration of Director Nominees

      Each nominee for election at the Annual Meeting was reviewed and recommended to the Board by our Nominating and Corporate Governance Committee and approved by the full Board of Directors.

Process for Selecting Nominees

      The Nominating and Corporate Governance Committee considered the present needs of the Board of Directors and determined that it would seek a nominee with a strong scientific background, particularly in fields directly relevant to the Company’s core technologies. This would enhance, for instance, the Board’s expertise and ability to advise the Company regarding the Company’s research and development activities and strategies. The Nominating and Corporate Governance Committee conducted inquiries into the backgrounds and qualifications of potential candidates. Dr. Bierer was identified by the Committee as a candidate and offered the Board’s nomination based on her credentials in the fields of stem cell transplantation and immunology, and was known to the Company and the Board through her work as a member of the Company’s Medical and Scientific Advisory Board.

Stockholder Nominations

      The Nominating and Corporate Governance Committee will consider stockholder nominations for candidates for membership on the Board when properly submitted in accordance with the Company’s By-

laws. The Nominating and Corporate Governance Committee does not have a formal policy with regard to the consideration of director candidates recommended by stockholders. The Company completed its initial public offering in January 2005, and no director candidates have ever been previously nominated by a stockholder. If the committee were to receive a recommendation for a director candidate from a stockholder, however, the committee expects that it would evaluate such a candidate in the same manner as it evaluates all other nominees.

      The Company’s By-laws provide that nominations for the election of directors may be made by any stockholder entitled to vote in the election of directors. A stockholder may nominate a person for election as a director at a meeting only if written notice of such stockholder’s intent to make such nomination has been given to the Company’s Secretary pursuant to the By-laws as described in “Stockholder Proposals for the Year 2006 Annual Meeting” in this proxy statement. Each notice must set forth: (i) the name, age, business address and, if known, residence address of each such nominee, (ii) the principal occupation or employment of such nominee, (iii) the number of shares of stock of the Company which are beneficially owned by such nominee, (iv) a description of all arrangements or understandings between the stockholder and such nominee and any other person or persons (naming such person or persons) pursuant to which the nominations are to be made by the stockholder, and (v) any other information concerning the nominee that must be disclosed as to nominees in proxy solicitations pursuant to proxy rules and regulations under the Securities Exchange Act of 1934, as amended, including such person’s written consent to be named as a nominee and to serve as a director if elected. The Company may require any proposed nominee to furnish such other information as may reasonably be required by the corporation to determine the eligibility of such proposed nominee to serve as a director of the Company.

Stockholder Communications with the Board

      On January 26, 2005 we completed our initial public offering and to date have not adopted a formal process for stockholder communications with the Board. During the upcoming year the Nominating and Corporate Governance Committee will give consideration to the adoption of a formal process for stockholder communications with the Board and, if adopted, we will post it to our website.

Section 16(a) Beneficial Ownership Reporting Compliance

      No officer or director of the Company was required to file Forms 3, 4 or 5 for transactions in our common stock during the year 2004 because our common stock was not registered under the Securities Exchange Act of 1934 until January 2005.

Director Compensation

      Each director who is not an employee of the Company will be eligible to receive compensation from us for his or her services as a member of our board or any of its standing committees. Each such non-employee director will be entitled to receive an option to purchase 20,000 shares of our common stock upon such director’s initial election to our Board (such options vesting as to 25% on the issuance thereof and 25% on every anniversary thereafter), an annual retainer of $10,000, and an option to purchase 10,000 shares of our common stock following each annual stockholders meeting. Each non-employee director will also receive $2,000 for each board meeting attended (or $1,000 for each such meeting attended by telephone conference call) and $1,000 for each committee meeting attended ($2,000, if chairperson of the committee). Mr. Kailian who is not an employee of the Company and is not affiliated with a stockholder of the Company and serves as chairperson of our board, receives an annual retainer of between $62,000 and $112,000 in cash. As chairman of the board, the chairman is also entitled to receive $2,000 for each board meeting attended. We reimburse all of our board members for expenses incurred in attending board and committee meetings.

      Mr. Hastings and Mr. Tullis were paid $5,394 and $19,296 in cash, respectively, to reimburse their costs for their board services in 2004. Mr. Hastings was paid an additional $24,000 in cash as compensation for his board service in 2004. Mr. van Heek was paid a total of $13,500 in cash and was

granted options to purchase 15,000 shares of our common stock at $5.00 per share for his services in 2004. Mr. Kailian was paid $100,000 for his service as chairman of the board and, upon his election as chairperson of the Board, was granted a stock option to purchase 160,000 shares of common stock at $5.00 per share vesting quarterly in 16 equal installments. Dr. Pollard-Knight, Dr. Gadicke, Mr. Tullis and Dr. Daley each received in April 2004 options to purchase 20,000 shares of our common stock at $5.00 per share (such options vested as to 25% on the issuance thereof and will vest an additional 25% on every anniversary thereafter) for their service in 2004.

      In addition, in connection with his work as a member of our medical and scientific advisory board, in August 2003, we continued Dr. Daley’s consulting arrangement with us. Under this arrangement, we have agreed to pay him a $20,000 per year annual retainer, plus $5,000 for every full advisory board meeting attended ($500 if attended by telephone). He also received options to purchase 30,000 shares of our common stock at an exercise price per share of $5.00, all of which are vested fully. In 2004, Dr. Daley was paid $23,000 under this consulting arrangement.

Compensation Committee Interlocks and Insider Participation

      During 2004, our Compensation Committee consisted of Mr. Hastings, Dr. Gadicke and Mr. Tullis, with Mr. van Heek replacing Dr. Gadicke in April 2004. None of these individuals has been an officer or employee of ours at any time. Also, none of our executive officers serves, nor served in 2004, on the Board or Compensation Committee of a company with an executive officer serving on our Board or Compensation Committee. Please also refer to the section of this Proxy Statement entitled “Certain Relationships and Related Party Transactions.”

Executive Compensation

      The table below summarizes the compensation paid to or earned by our chief executive officer and our six other most highly compensated executive officers during 2003 and 2004. We refer to these seven people as the “named executive officers.”

Summary Compensation Table

Stock Options

      The table below provides information regarding stock option grants by us to Mr. Dance and Dr. Wnendt, who were the only named executive officers in 2004 to receive such grants. All options were granted under our equity incentive plan. Since there was no public trading market for our common stock during the 2004 fiscal year, the exercise prices of these granted options were based on our Compensation Committee’s or our Board’s determination of the fair market value of the underlying shares as of the dates of grant. The percentage of options granted is based on options to purchase an aggregate of 891,000 shares of our common stock granted by us in 2004 to our employees, including the named executive officers.

Option Grants in Fiscal Year 2004

      The table below provides information regarding unexercised stock options held on December 31, 2004 by each of the named executive officers. No stock options were exercised by named executive officers during our last fiscal year. Our common stock was not publicly traded as of December 31, 2004. Accordingly, as permitted by the SEC rules, we have calculated the value of unexercised in-the-money options at fiscal year-end based on the difference between the option exercise price and our initial public offering price of $7.00 per share of common stock.

Option Exercises and Year-End Option Values

Employment and Severance Arrangements

      All of our current employees have entered into agreements with us that contain restrictions and covenants. These provisions include covenants relating to the protection of our confidential information, the assignment of inventions and restrictions on soliciting our clients, employees or independent contractors. None of our employees are employed for a specified term, and each employee’s employment with us is subject to termination at any time by either party for any reason, with or without cause. We have entered into employment agreements with Mr. Beer and letter agreements with our other named executive officers.

      Under Mr. Beer’s employment agreement, dated May 2, 2000, he serves as our Chief Executive Officer for automatically renewed one-year terms each June 1st, until terminated by either party upon three months’ notice. His agreement provides for a base salary of $250,000 per year, subject to yearly adjustment, and performance-based bonuses granted at amounts determined by the Board in its discretion. Under the agreement, we granted Mr. Beer at commencement of his employment an option to purchase 900,000 shares of our common stock at $0.30 per share, two-thirds of which began vesting in 48 equal, monthly installments on the grant date, with the remaining one-third to vest in equal annual installments on each of the eighth, ninth and tenth anniversary dates of the grant date. If we terminate Mr. Beer without cause or if he terminates his employment for good reason, he is entitled to his then current base salary plus benefits for twelve months following the date of termination.

      Under Dr. Adams’ letter agreement, dated June 7, 2001, he serves as our Senior Vice President, Business Development with a base salary of $200,000 per year, subject to yearly adjustment, and performance-based bonuses granted at amounts determined by the Board in its discretion. Under the agreement, we granted Dr. Adams an option to purchase 100,000 shares of our common stock at $0.95 per share, vesting quarterly over four years. If we terminate Dr. Adams without cause or if he terminates his employment for good reason, he is entitled to his then current base salary for six months following the date of the termination.

      Mr. Bogle’s letter agreement, dated July 1, 2002, provided for his employment as our President, ViaCell Commercial Operations with a base salary of $225,000 per year, subject to yearly adjustment, and performance-based bonuses granted at amounts determined by the Board in its discretion. Under the agreement, we granted Mr. Bogle an option to purchase 250,000 shares of our common stock at $5.00 per share, vesting quarterly over four years, and an option to purchase 50,000 shares of our common stock at $5.00 per share, vesting upon the achievement of certain milestones. Mr. Bogle’s employment with us terminated on March 31, 2004, and under the terms of a mutual release and early separation agreement entered into on February 18, 2004, we made severance payments to Mr. Bogle for a six month period, at the Company’s regular payment periods, in amounts equal to his base rate of pay at the time of his termination, and during such six-month period his stock options remained exercisable. Our obligation to make further severance payments, and his right to exercise his stock options, has expired.

      Under Dr. Wnendt’s letter agreement, dated December 29, 2004, he serves as our Senior Vice President, Research & Development, at an annual base salary of $230,000, plus potential performance-based bonuses of up to $75,000 annually based on the achievement of corporate and individual goals. Prior to his assuming this position in October 2004, we employed Dr. Wnendt in our German office as Senior Vice President, European Operations and Executive Officer, and his letter agreement confirms that he remains entitled to his 2004 guaranteed bonus of €30,625. Dr. Wnendt received an option to purchase 80,000 shares of our common stock at $5.00 per share, vesting quarterly over four years. Dr. Wnendt is also entitled to a relocation package, sponsorship and payment of all costs associated with his visa and immigration matters and a full payment for his US individual plan health insurance while his family remains in Germany. If we terminate Mr. Wnendt without cause or if he terminates his employment for good reason, each as defined in the letter agreement, he is entitled to his then current base salary plus benefits for twelve months following the date of termination.

      Under Dr. Gunter’s letter agreement, dated May 14, 2001, he serves as our Senior Vice President, Clinical and Regulatory Affairs/ Government Relations, with a base salary of $210,000 per year, subject to yearly adjustment, and performance-based bonuses granted at amounts determined by the Board in its

discretion. Under the agreement, we granted Dr. Gunter an option to purchase 120,000 shares of our common stock at $0.95 per share, vesting quarterly over four years, and an option to purchase up to an additional 40,000 shares of our common stock at $0.95 per share, vesting upon the achievement of certain milestones. If we terminate Dr. Gunter without cause or if he terminates his employment for good reason, he is entitled to his then current base salary for six months following the date of the termination.

      Mr. Sacher’s employment agreement, dated October 26, 2002, provided for his employment as our Chief Financial Officer with a base salary of $210,000 per year, subject to yearly adjustment, and performance-based bonuses to be granted in amounts in our Board’ discretion. Under the agreement, we granted Mr. Sacher options to purchase 125,000 shares of our common stock at $5.00 per share vesting quarterly over four years. We also granted Mr. Sacher options to purchase 75,000 shares of our common stock at $5.00 per share, vesting on the grant date’s fourth, fifth, sixth and seventh anniversaries, subject to accelerated vesting of up to 55,000 of such shares upon achievement of certain milestones. Mr. Sacher’s employment with us terminated on February 2, 2004, and under the terms of a mutual release and early separation agreement dated January 2, 2004, we made severance payments to Mr. Sacher for a 12-month period between February 2, 2004 and February 2, 2005 at the Company’s regular payroll periods in an amount equal to his base salary at the time of his termination, and during such 12-month period his options continued to vest as if he were employed with us. All of Mr. Sacher’s unexercised options (whether vested or unvested) terminated on February 2, 2005.

      Under Mr. Dance’s letter agreement, dated March 11, 2004, he serves as our Senior Vice President, Finance and Chief Financial Officer at an annual starting base salary of $235,000, plus potential bonuses at a target of $50,000 payable annually based on achievement of both corporate and individual goals. The letter agreement provides for a lump sum bonus towards relocation expenses of $30,000. Under the letter agreement, Mr. Dance is entitled to an option to purchase 125,000 shares of our common stock at $5.00 per share, vesting quarterly over four years beginning on the last day of the first quarter after Mr. Dance’s effective date of employment. In addition, Mr. Dance is entitled to a performance based option to purchase 100,000 shares of common stock at $5.00 per share, 25% of which will vest in equal annual installments on each of the fourth, fifth, sixth and seventh anniversary dates of the date of grant, provided, however, that 25,000 of such shares will become fully vested on each of the first and second anniversaries of our initial public offering. If at any time within 24 months after the lock up period imposed by the underwriters in connection with our January 2005 initial public offering, the average closing price of our common stock over a period of 30 consecutive trading days as reported by any exchange on which our common stock is traded equals or exceeds $26.00 per share, or if at any time within 36 months after the expiration of such lock up period such average closing price equals or exceeds $34.00 per share, then 50,000 of the 100,000 shares under the performance based option will fully vest and become exercisable. If we terminate Mr. Dance without cause or if he terminates his employment for good reason, he is entitled to his then current base salary plus benefits for twelve months following the date of termination. If we terminate Mr. Dance within twelve months of a change in control without cause or if Mr. Dance voluntarily resigns for good reason, in addition to being entitled to his base salary and benefits for a period of twelve months, all options granted to Mr. Dance as of that date will become fully vested and exercisable. In the event of a change of control, 100,000 shares of common stock under the performance based option granted to Mr. Dance will fully vest and become exercisable.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Employment, Consulting and Director Agreements

      In December 2000, we entered into a consulting agreement with Dr. Daley, one of our directors, regarding his service on our Medical and Scientific Advisory Board. Please refer to the section above entitled “Management — Director Compensation.”

      We have entered into an employment agreement with Mr. Beer and letter agreements with our other executive officers. For information regarding these agreements, please refer to the section entitled “Management — Employment and Severance Arrangements.”

      We compensate non-employee directors for their services on our board and its committees. Please refer to the section above entitled “Management — Director Compensation.”

PRINCIPAL STOCKHOLDERS

      The table below provides information about the beneficial ownership of our capital stock as of April 22, 2005 by (1) each person we know to beneficially own more than five percent of our outstanding capital stock, (2) each of our directors, (3) each of the named executive officers and (4) all directors and executive officers as a group. Except as indicated in the table or footnotes and pursuant to community property laws, each stockholders named in the table has sole voting and investment power with respect to the shares opposite that stockholder’s name. Beneficial ownership is determined in accordance with the rules of the SEC; the information does not necessarily indicate beneficial ownership for any other purpose.

      The “Percentage of Shares Outstanding” column below is based on 37,760,631 shares outstanding as of April 22, 2005, which includes 241,481 shares issued in escrow which will be released to certain former stockholders of Kourion Therapeutics AG if there is a change of control of our company prior to September 30, 2006. Options and warrants to purchase shares of our common or preferred stock that are currently exercisable or exercisable within 60 days after April 22, 2005, are deemed to be outstanding and beneficially owned by the person holding those options for the purpose of computing that person’s percentage ownership, but are not treated as outstanding for the purpose of computing any other person’s percentage ownership.

Also includes 10,000 options currently exercisable or exercisable within 60 days of April 22, 2005.

Also includes 10,000 options currently exercisable or exercisable within 60 days of April 22, 2005.

Also includes 10,000 options currently exercisable or exercisable within 60 days of April 22, 2005.

AUDIT COMMITTEE REPORT

      The Audit Committee of the Board consists of three independent directors all of whom, our Board has determined, satisfy the applicable listing standards of Nasdaq National Market and SEC rules and regulations. The Board has adopted a written charter for the Audit Committee, the current version of which is included as Appendix A to this proxy statement.

      In the course of its oversight of our financial reporting process, the Audit Committee of the Board has (1) reviewed and discussed with management our audited consolidated financial statements for the fiscal year ended December 31, 2004, (2) discussed with PricewaterhouseCoopers, LLP, our independent auditors, the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, and (3) received the written disclosures and the letter from the auditors required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees and discussed with the auditors their independence.

      Based on the foregoing review and discussions, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2004 for filing with the Securities and Exchange Commission.

INDEPENDENT PUBLIC ACCOUNTANTS

      PricewaterhouseCoopers, LLP, independent accountants, has audited our financial statements for the past two fiscal years and will do so for 2005. Our Audit Committee has appointed PricewaterhouseCoopers to serve as our independent auditors for our fiscal year ending December 31, 2005. Representatives of PricewaterhouseCoopers are expected to attend the Annual Meeting to respond to appropriate questions, and will have the opportunity to make a statement if they desire. The following table presents fees paid by the Company for professional services rendered by PricewaterhouseCoopers, LLP, our independent accountants, for the fiscal years 2003 and 2004.

      Audit Fees for 2003 were for review of ViaCell’s annual consolidated financial statements and for services that are normally provided by PricewaterhouseCoopers in connection with statutory and regulatory filings. Audit fees for 2004 were for review of ViaCell’s annual consolidated financial statements and the interim consolidated financial statements included in ViaCell’s registration statement on Form S-1 filed in connection with ViaCell’s initial public offering and its Annual Report on Form 10-K for fiscal year 2004. 2004 audit fees also included other services associated with our Form S-1 registration statement, including comfort letters, consents and assistance in responding to SEC comment letters. Finally, 2004 audit fees included services that are normally provided by PricewaterhouseCoopers in connection with statutory and regulatory filings.

      Tax Fees were for professional services for international tax compliance, tax advice and tax planning with respect to our Singapore subsidiary.

      The Audit Committee has concluded that the provision of the non-audit services listed above is compatible with maintaining the independence of PricewaterhouseCoopers, LLP.

      The Audit Committee has not established any pre-approval procedures, but instead reviews each proposed engagement to determine whether the provision of services is compatible with maintaining the independence of the independent auditors. Pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. During fiscal years 2003 and 2004, the Company was not subject to the requirements of the Sarbanes-Oxley Act of 2002 requiring audit committee approval of fees paid to independent auditors, and the Audit Committee did not specifically pre-approve the fees listed above.

COMPENSATION COMMITTEE REPORT

      A primary objective of the Compensation Committee is to establish compensation policies designed to help ViaCell attract, retain and reward executive officers who will contribute to the long-term success of the company. The Compensation Committee meets to discuss and take action each year on executive compensation, including annual base salaries, bonus awards and stock option grants. The committee’s goal is to provide total compensation that is competitive in the marketplace, recognizes meaningful differences in individual performance and offers the opportunity to earn above average rewards when merited by individual and corporate performance. Bonus awards are primarily based on corporate performance, with actual awards varying according to each individual’s impact on that performance. Stock option grants are an important component of the executive compensation program. By providing executive officers with an equity interest in ViaCell, stock options are intended to link a meaningful portion of an executive’s compensation with the performance of ViaCell’s common stock.

      This report is submitted by the Compensation Committee and addresses the compensation policies for 2004 relating to Mr. Beer, in his capacity as Chief Executive Officer of the Company, and the other executive officers of ViaCell.

      Annual compensation for ViaCell’s executive officers, including the named executive officers, consists of three principal elements: base salary, cash bonus and stock option grants.

      The minimum base salaries of Messrs. Beer, Adams, Dance, Gunter and Wnendt and other executive officers of the Company are established in their employment agreements. Subject to these minimums, salary levels of the Company’s executive officers are reviewed annually and typically have been increased.

      In setting the annual base salaries for ViaCell’s executive officers for 2005, the Compensation Committee reviewed the aggregate salary and bonus compensation for individuals in comparable positions with other public and private biotechnology and pharmaceutical companies of a similar size to the Company. The Committee reviewed publicly available survey and proxy statement data, as well as data available through subscription services, collected, organized and presented to the Committee by management. The Committee attempted to provide its executive officers with cash compensation competitive, generally, between the 20th and 50th percentile for total annual cash compensation paid by comparable companies. It was felt this range was appropriate for a company of ViaCell’s size and profile.

      In setting an executive officer’s annual base salary, the Compensation Committee also reviews and evaluates the performance of the department or activity for which that executive has responsibility, the impact of that department or activity on ViaCell and the skills and experience required for the job, coupled with a comparison of these elements with similar elements for other executives both inside and outside ViaCell. Further adjustments are made to each individual executive’s base salary based on the executive’s performance review for the prior year.

      For 2005, increases in the base salary for the Company’s executive officers ranged from 4-6% over the base salary paid for the prior year. Target bonus levels for executive officers for 2005 ranged from 20-25% of base salary, depending on the person’s seniority level and perceived impact of such person’s position on the Company’s overall performance. In the case of Stephan Wnendt, his target bonus was set at 32% of base salary in light of the relatively greater portion of his compensation weighted to bonus negotiated in his initial engagement by the Company as part of ViaCell’s acquisition of Kourion Therapeutics.

      The extent to which the executive officers are paid any portion or all of their target bonus for 2005, will be based primarily upon achievement of corporate performance goals and partly upon personal performance set for that year. The corporate goals established by the Committee for 2005 include achieving during 2005 certain quantitative operational and financial targets, the Company’s initial public offering, pre-defined clinical and research and development milestones and business development goals, with each set of goals accounting for a defined percentage component of the bonus. The personal

performance of each executive in 2005 will be measured against pre-defined criteria established between the CEO and the executive at the end of the previous year’s performance evaluation cycle.

      The Committee awarded bonuses to the named executive officers for performance during 2004 at its February 18, 2005 meeting. The amounts awarded were based primarily upon overall corporate performance for that year and partly upon personal contribution to that performance and personal merit. The Committee concluded that the Company had achieved overall a 62% level of achievement with respect to corporate performance goals for that year. This was a weighted average of the extent to which, in the Committee’s judgment, the Company had performed in meeting milestone-defined clinical, research and development and quantitatively-measured operating goals set by the Committee earlier in the year.

      Executive officer compensation also includes long-term incentives afforded by options to purchase shares of ViaCell common stock. The Compensation Committee awards stock options under ViaCell’s equity incentive plan to ViaCell’s executive officers. The purposes of ViaCell’s stock option programs are to (i) highlight and reinforce the mutuality of long-term interests between employees and stockholders and (ii) assist in the attraction and retention of critically important executives, managers and individual contributors who are essential to ViaCell’s growth and development.

      ViaCell’s stock programs generally include vesting periods to optimize the retention value of these options and to orient ViaCell’s executive officers to longer term success.

      The number of shares of ViaCell common stock subject to stock option grants is generally intended to reflect the significance of the executive’s current and anticipated contributions to ViaCell. The value realized from exercisable options is dependent upon the extent to which ViaCell’s performance is reflected in the price of its common stock at any particular point in time. However, the decision as to whether such value will be realized through the exercise of an option in any particular year is primarily determined by each individual within the limits of the option’s vesting schedule and not by the Compensation Committee. Typically, the Company’s option grants have a vesting schedule of 25% annual vesting over four years.

      For performance during 2004, the Compensation Committee in February 2005 recommended, subject to approval by the Board of Directors, that Messrs. Adams and Gunter each be granted options to purchase 25,000 shares of common stock, vesting one-fourth immediately, and the remainder in equal annual installments over three years commencing in February 2006. This was in recognition of the fact that, unlike the CEO and the other named executive officers, Messrs. Adams and Gunter no longer possessed unvested equity awards. Consequently, the Committee wanted to provide these officers with incentive-based equity compensation going forward.

      Mr. Beer’s minimum base salary is set by his employment agreement. As discussed above, Mr. Beer’s base salary and annual bonus target, like those of the Company’s other executive officers, are reviewed annually by the Committee and are adjusted based on analysis of practices at comparable companies and assessment of Mr. Beer’s level of performance during the previous year. Mr. Beer’s actual bonus payment is typically based entirely on overall corporate performance, though the Committee can take into account personal performance or establish pre-defined personal goals.

      For 2005, Mr. Beer’s base annual salary was increased by 3% from $340,000 to $350,000. Mr. Beer’s target bonus level for 2005 was set at 60% of base salary, reflecting the Committee’s preference that a significant component of Mr. Beer’s compensation be in the form of pay-at-risk compensation, contingent upon corporate performance.

      Mr. Beer’s bonus award earned for 2004 was approximately $114,000, based primarily upon the aforementioned 62% level of achievement generally with respect to corporate goals.

      Section 162(m) of the Internal Revenue Code of 1986, as amended, generally disallows a tax deduction to a public company for certain compensation over $1 million paid to its chief executive officer and its four other most highly compensated executive officers. However, qualifying performance-based compensation will not be subject to the deduction limit if certain requirements are met. The Compensation Committee reviews the potential effect of Section 162(m) periodically and generally seeks to structure the long-term incentive compensation granted to ViaCell’s executive officers in a manner that is intended to avoid disallowance of deductions under Section 162(m). Nevertheless, there can be no assurance that the compensation attributable to awards granted will be treated as qualified performance based compensation under Section 162(m). In addition, the Compensation Committee reserves the right to use its judgment to authorize compensation payments that may be subject to the limit when the Compensation Committee believes that such payments are appropriate and in the best interests of ViaCell and its stockholders, after taking into consideration changing business conditions and the performance of its employees.

STOCK PERFORMANCE GRAPH

      Our common stock was not registered pursuant to Section 12 of the Exchange Act in 2004. We plan to furnish a stock performance graph in the proxy statement for our annual meeting in 2006.

CORPORATE GOVERNANCE MATTERS

      We have adopted a Code of Business Conduct and Ethics for our directors, officers (including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions) and employees. Our Code of Business Conduct and Ethics is available in the Corporate Governance section of the Investor Information section of our website at www.viacellinc.com. We intend to disclose any amendments to, or waivers from, our Code of Business Conduct and Ethics on our website. Stockholders may request a free copy of the Code of Business Conduct and Ethics by writing to us at ViaCell, Inc., 245 First Street, Cambridge, Massachusetts 02142, Attention: Investor Relations.

STOCKHOLDER PROPOSALS FOR THE YEAR 2006 ANNUAL MEETING

      Assuming our 2006 Annual Meeting of Stockholders is not more than 30 days before or 30 days after June 9, 2006, if you wish to bring business other than the nomination of directors before the 2006 Annual Meeting, you must provide the Secretary of the Company at 245 First Street, Cambridge, MA 02142 with written notice by March 11, 2006 (the 90th day prior to the anniversary of the 2005 Annual Meeting). If the 2006 Annual Meeting is held on any other date, you must provide our Secretary with written notice by the close of business on the 10th day following the earlier of the day upon which the 2006 Annual Meeting date is first publicly announced or the day upon which notice of such date is first mailed to our stockholders.

      If you intend to bring such a proposal at the 2006 Annual Meeting, and you would like us to consider the inclusion of your proposal in our proxy statement for the meeting, you must provide written notice of such proposal to our Secretary on or before February 9, 2006 (the date 120 days before the anniversary of the 2005 Annual Meeting), assuming that the Company’s 2006 Annual Meeting is not held within thirty days before or thirty days after June 9, 2006.

      Our by-laws also provide that notice of a nomination by a stockholder with respect to the election of directors at an annual meeting must contain the information specified in the by-laws. Any stockholder proposals that comply with rule 14a-8 of the proxy rules under the Securities Exchange Act of 1934 will be considered to comply with our by-laws and eligible for inclusion in the Company’s proxy materials.

OTHER MATTERS

      The Board does not know of any business to come before the meeting other than the matters described in the notice. If other business is properly presented for consideration at the meeting, the enclosed proxy authorizes the persons named therein to vote the shares in their discretion.

Appendix A

Charter of the Audit Committee

of the

Board of Directors

of

VIACELL, INC.

      1. Purpose. The purpose of the Audit Committee (the “Committee”) shall be to (a) appoint, oversee and replace, if necessary, the independent auditor, (b) assist the Board of Directors of the Company (the “Board”) in the oversight of (i) the preparation of the financial statements of ViaCell, Inc. (the “Company”), (ii) the Company’s compliance with legal and regulatory requirements, (iii) the independent auditor’s qualifications and independence, and (iv) the performance of the Company’s internal audit function and independent auditor; and (c) prepare the report that the rules of the U.S. Securities and Exchange Commission (the “SEC”) require be included in the Company’s annual proxy statement.

      2. Composition of the Audit Committee. The Committee shall consist of not less than three board members appointed by the Board. Committee members may be removed by the Board in its discretion. The membership of the Committee shall satisfy the independence and other compositional requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and The Nasdaq Stock Market, Inc. (“Nasdaq”) as such requirements are interpreted by the Board in its business judgment, and the Board shall annually review the Committee’s compliance with such requirements. Members of the Committee shall at the time of their appointment be versed in reading and understanding financial statements.

      3. Meetings of the Audit Committee. The Committee shall hold regularly scheduled meetings and such special meetings as circumstances dictate. It shall meet separately, at least quarterly, with management, with the internal auditors (or other personnel responsible for the internal audit function), and with the independent auditor to discuss results of examinations, or discuss any matters that the Committee or any of these persons or firms believe should be discussed privately. All Committee members are expected to use their best efforts to attend each meeting, in person or via tele-conference. The Committee will invite members of management, auditors or others to attend meetings and provide pertinent information as necessary. The Committee shall report regularly to the Board.

      4. Responsibilities of the Audit Committee. The function of the Committee is oversight. While the Committee has the responsibilities set forth in this Charter, it is not the responsibility of the Committee to plan or conduct audits, to determine that the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles (“GAAP”), or to assure compliance with laws, regulations or any internal rules or policies of the Company. This is the responsibility of management. The independent auditor is responsible for performing independent audits of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and for issuing reports thereon.

      The Committee has direct and sole responsibility for the appointment, compensation, retention, oversight and replacement, if necessary, of the independent auditor, including the resolution of disagreements between management and the auditor regarding financial reporting. Each member of the Committee shall be entitled to rely on (i) the integrity of those persons and organizations within and outside the Company that it receives information from and (ii) the accuracy of the financial and other information provided to the Committee by such persons or organizations absent actual knowledge to the contrary (which shall be promptly reported to the Board).

      5. Duties and Proceedings of the Audit Committee. The Committee shall assist the Board in fulfilling its oversight responsibilities by accomplishing the following:

      6. Authority and Resources of the Audit Committee. The Committee has the authority to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of the Company. The Committee has the authority to retain independent legal, accounting or other experts and advisors that it determines necessary to carry out its duties. It also has authority to determine compensation for such advisors as well as for the independent auditor. The Committee may determine

appropriate funding needs for its own ordinary administrative expenses that are necessary and appropriate to carrying out its duties.

      7. Limitations on Scope. The Committee members shall serve on the Committee subject to the understanding on their part and the part of the Company’s management, the independent auditor and the internal auditors that:

VIAC-PS-05

FORM OF PROXY CARD

VIACELL, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS JUNE 9, 2005

     The undersigned stockholder of ViaCell, Inc. (the “Company”) hereby appoints Marc D. Beer, Stephen G. Dance and Marc Rubenstein, and each of them acting singly, the attorneys and proxies of the undersigned, with full power of substitution, to vote, on behalf of the undersigned, all of the shares of common stock of the Company held of record by the undersigned on April 22, 2005, at the Annual Meeting of Stockholders of the Company to be held on June 9, 2005, and at all adjournments thereof, hereby revoking any proxy heretofore given with respect to such shares.

     THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED STOCKHOLDER(S). IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR ALL PROPOSALS. IN THEIR DISCRETION, THE PROXIES ARE ALSO AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.

PLEASE SIGN AND MAIL THIS PROXY TODAY USING THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
(Continued and to be signed on reverse side.)

 

(REVERSE SIDE OF PROXY CARD)

Please date, sign and mail your
proxy card back as soon as possible!

Annual Meeting of Stockholders
ViaCell, Inc.
June 9, 2005

ý Please mark your votes as in this example

Note:	Please sign exactly as name appears on stock certificate. When shares are held by joint tenants, both should sign. When signing as executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person.

 

 

 

 

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