<PAGE>

================================================================================

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     FOR THE TRANSITION PERIOD __________ TO __________

                        COMMISSION FILE NUMBER: 000-31745

                          THIRD WAVE TECHNOLOGIES, INC.
             (Exact name of Registrant as specified in its charter)

<TABLE>
<S>                                                          <C>
                DELAWARE                                         39-1791034
      (State or other jurisdiction                            (I.R.S. Employer
    of incorporation or organization)                        Identification No.)
</TABLE>

<TABLE>
<S>                                                               <C>
      502 S. ROSA ROAD, MADISON, WI                                 53719
(Address of principal executive offices)                          (Zip Code)
</TABLE>

                                 (888) 898-2357
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check whether the Registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of Exchange Act. (Check one):

Large Accelerated Filer [ ]   Accelerated Filer [X]   Non-Accelerated Filer [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). [ ] Yes [X] No

The number of shares outstanding of the registrant's Common Stock, $.001 par
value, as of May 7, 2007, was 42,277,120.

================================================================================

<PAGE>

                          THIRD WAVE TECHNOLOGIES, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 2007

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                        PAGE NO.
                                                                        --------
<S>                                                                     <C>
PART I FINANCIAL INFORMATION.........................................      3
   Item 1. Consolidated Financial Statements.........................      3
      Consolidated Balance Sheets (Unaudited) as of March 31, 2007
      and December 31, 2006..........................................      3
      Consolidated Statements of Operations (Unaudited) for the Three
      Months Ended March 31, 2007 and 2006...........................      4
      Consolidated Statements of Cash Flows (Unaudited) for the Three
      Months Ended March 31, 2007 and 2006...........................      5
      Notes to Consolidated Financial Statements (Unaudited).........      6

   Item 2. Management's Discussion and Analysis of Financial
           Condition and Results of Operations.......................     11

   Item 3. Quantitative and Qualitative Disclosures About Market
           Risk......................................................     17

   Item 4. Controls and Procedures...................................     17

PART II OTHER INFORMATION............................................     17
   Item 1. Legal Proceedings.........................................     17

   Item 2. Unregistered Sales of Equity Securities and Use of
           Proceeds..................................................     18

   Item 3. Defaults Upon Senior Securities...........................     18

   Item 4. Submission Of Matters To A Vote Of Security Holders.......     18

   Item 5. Other Information.........................................     18

   Item 6. Exhibits..................................................     18

SIGNATURES...........................................................     19

EXHIBITS.............................................................     20
</TABLE>


                                       2

<PAGE>

                         PART I - FINANCIAL INFORMATION
                    ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
                          THIRD WAVE TECHNOLOGIES, INC.
                           Consolidated Balance Sheets
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                   MARCH 31,      DECEMBER 31,
                                                                                      2007            2006
                                                                                 -------------   -------------
<S>                                                                              <C>             <C>
                                     ASSETS
Current assets:
   Cash and cash equivalents                                                     $  45,535,913   $  42,428,841
   Short-term investments                                                            1,575,000       1,770,000
   Accounts receivables, net of allowance for doubtful accounts of $200,000 at
      March 31, 2007 and December 31, 2006, respectively                             4,453,014       4,756,497
   Inventories                                                                       3,799,023       3,513,909
   Prepaid expenses and other                                                        1,423,188         463,139
                                                                                 -------------   -------------
Total current assets                                                                56,786,138      52,932,386
Equipment and leasehold improvements:
   Machinery and equipment                                                          16,780,816      16,623,560
   Leasehold improvements                                                            2,362,879       2,362,676
                                                                                 -------------   -------------
                                                                                    19,143,695      18,986,236
   Less accumulated depreciation                                                    15,154,572      14,763,932
                                                                                 -------------   -------------
                                                                                     3,989,123       4,222,304
                                                                                 -------------   -------------
Intangible assets, net of accumulated amortization                                   1,734,511       2,135,884
Goodwill                                                                               489,873         489,873
Capitalized license fees, net of accumulated amortization                            2,320,588       2,624,580
Other assets                                                                         2,304,660       1,828,949
                                                                                 -------------   -------------
Total assets                                                                     $  67,624,893   $  64,233,976
                                                                                 =============   =============
                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                              $   7,119,356   $   7,095,860
   Accrued payroll and related liabilities                                           1,704,987       3,856,999
   Other accrued liabilities                                                         1,157,402       1,446,500
   Deferred revenue                                                                         --         109,052
   Capital lease obligations due within one year                                       110,991         124,220
   Long-term debt due within one year                                                  355,086         368,269
                                                                                 -------------   -------------
Total current liabilities                                                           10,447,822      13,000,900
Long-term debt                                                                      15,321,134      15,182,478
Deferred revenue - long-term                                                                --          36,330
Capital lease obligations - long-term                                                   78,149          99,446
Other liabilities                                                                    4,385,499       4,776,272
Minority interest in subsidiary                                                        372,574         465,134
Shareholders' equity:
   Participating preferred stock, Series A, $.001 par value, 10,000,000 shares
      authorized, no shares issued and outstanding                                          --              --
   Common stock, $.001 par value, 100,000,000 shares authorized, 42,404,431
      shares issued, 42,186,431 shares outstanding at March 31, 2007 and
      42,135,713 shares issued and 41,917,713 shares outstanding at December
      31, 2006                                                                          42,404          42,136
   Additional paid-in capital                                                      210,912,495     209,355,204
   Unearned stock-based compensation                                                    (1,791)         (6,354)
   Treasury stock - 218,000 shares acquired at an average price of $4.02 per
      share                                                                           (877,159)       (877,159)
   Foreign currency translation adjustment                                             (84,257)       (102,186)
   Accumulated deficit                                                            (172,971,977)   (177,738,225)
                                                                                 -------------   -------------
Total shareholders' equity                                                          37,019,715      30,673,416
                                                                                 -------------   -------------
Total liabilities and shareholders' equity                                       $  67,624,893   $  64,233,976
                                                                                 =============   =============
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       3
<PAGE>

                          THIRD WAVE TECHNOLOGIES, INC.
                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                           Three Months
                                                         Ended March 31,
                                                    -------------------------
                                                        2007          2006
                                                    -----------   -----------
<S>                                                 <C>           <C>
Revenues:
   Clinical product sales                           $ 5,973,160   $ 4,709,787
   Research product sales                               568,952     2,995,688
   License and royalty revenue                          170,955        27,263
   Grant revenue                                             --       141,882
                                                    -----------   -----------
Total revenues                                        6,713,067     7,874,620
                                                    -----------   -----------
Operating expenses:
   Cost of goods sold
      Product cost of goods sold                      1,311,571     1,469,650
      Intangible and long-term asset amortization       705,365       693,391
                                                    -----------   -----------
                                                      2,016,936     2,163,041
   Research and development                           5,109,089     2,302,013
   Selling and marketing                              2,602,781     3,028,635
   General and administrative                         2,885,747     4,060,595
   Litigation                                           406,481     1,001,934
                                                    -----------   -----------
Total operating expenses                             13,021,034    12,556,218
                                                    -----------   -----------
Loss from operations                                 (6,307,967)   (4,681,598)
Other income (expense):
   Interest income                                      531,275       373,182
   Interest expense                                    (301,239)      (55,846)
   Other                                             10,747,947       (19,185)
                                                    -----------   -----------
Total other income (expense)                         10,977,983       298,151
Income (loss) before minority interest                4,670,016    (4,383,447)
Minority interest in subsidiary                          96,232            --
                                                    -----------   -----------
Net income (loss)                                   $ 4,766,248   $(4,383,447)
                                                    ===========   ===========

Net income (loss) per share - basic                 $      0.11   $     (0.11)
Net income (loss) per share - diluted               $      0.11   $     (0.11)
Weighted average shares outstanding - basic          42,025,463    41,310,561
Weighted average shares outstanding - diluted        43,884,463    41,310,561
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       4

<PAGE>

                          THIRD WAVE TECHNOLOGIES, INC.
                      Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                  Three Months
                                                                 Ended March 31,
                                                            -------------------------
                                                                2007          2006
                                                            -----------   -----------
<S>                                                         <C>           <C>
OPERATING ACTIVITIES:
Net income (loss)                                           $ 4,766,248   $(4,383,447)
Adjustments to reconcile net income (loss) to net
   cash provided by (used in) operating activities:
   Minority interest in net loss of subsidiary                  (96,232)           --
   Depreciation and amortization                                436,701       407,082
   Amortization of intangible assets                            401,373       376,188
   Amortization of licensed technology                          303,992       317,203
   Noncash stock compensation                                   615,822       966,546
   Interest accretion related to convertible note payable       223,228            --
   Loss on disposal of equipment                                 11,834         9,691
   Changes in operating assets and liabilities:
      Accounts receivable                                       262,523       302,888
      Inventories                                              (285,351)   (1,100,935)
      Prepaid expenses and other assets                      (1,409,653)     (621,138)
      Accounts payable                                          268,395       157,505
      Accrued expenses and other liabilities                 (2,388,717)       70,205
      Deferred revenue                                         (145,382)      (23,447)
                                                            -----------   -----------
Net cash provided by (used in) operating activities           2,964,781    (3,521,659)
INVESTING ACTIVITIES:
Purchases of equipment and leasehold improvements              (214,462)     (182,733)
Proceeds on sale of equipment                                       524            --
Purchases of licensed technology                               (244,900)     (333,212)
Purchases of short-term investments                            (575,000)           --
Sales and maturities of short-term investments                  770,000            --
Change in restricted cash balance                                    --       805,184
                                                            -----------   -----------
Net cash provided by (used in) investing activities            (263,838)      289,239
FINANCING ACTIVITIES:
Payments on long-term debt                                      (97,755)      (91,984)
Payments on capital lease obligations                           (34,526)      (31,123)
Proceeds from issuance of common stock, net                     502,225       240,173
                                                            -----------   -----------
Net cash provided by financing activities                       369,944       117,066
                                                            -----------   -----------
Effect of exchange rate changes on cash                          36,185            --
                                                            -----------   -----------
Net increase (decrease) in cash and cash equivalents          3,107,072    (3,115,354)
                                                            -----------   -----------
Cash and cash equivalents at beginning of period             42,428,841    27,681,704
                                                            -----------   -----------
Cash and cash equivalents at end of period                  $45,535,913   $24,566,350
                                                            -----------   -----------
</TABLE>

Noncash investing and financing activities:

-    During the three months ended March 31, 2007, the Company issued 79,441
     shares of common stock as partial payment of amounts earned by employees
     under the 2006 Incentive Plan.

-    During the three months ended March 31, 2006 the Company entered into
     capital lease obligations of $19,479.

-    During the three months ended March 31, 2006 the Company entered into a
     license agreement under which the Company will pay 1,000,000 Euros over two
     years. The estimated present value of the license is $1,122,338.

          See accompanying notes to consolidated financial statements.


                                       5

<PAGE>

                          THIRD WAVE TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2007
                                   (Unaudited)

(1) Basis of Presentation

The accompanying unaudited consolidated financial statements of Third Wave
Technologies, Inc. have been prepared in accordance with accounting principles
generally accepted in the United States (GAAP) for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by GAAP for complete financial statements. In the opinion of management, all
adjustments, consisting of normal recurring adjustments, considered necessary
for a fair presentation have been included. Interim results are not necessarily
indicative of results that may be expected for the year ending December 31,
2007.

The balance sheet at December 31, 2006 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by GAAP for complete financial statements.

The accompanying unaudited consolidated financial statements should be read in
conjunction with the audited financial statements and footnotes thereto included
in our Form 10-K for the fiscal year ended December 31, 2006 filed with the
Securities and Exchange Commission (SEC).

(2) Settlement

In September 2004, the Company filed a suit against Stratagene alleging patent
infringement of two patents concerning the proprietary Invader chemistry. The
case was tried before a jury in August 2005, and the jury found that Stratagene
willfully infringed the Company's patents and that the patents were valid and
awarded $5.29 million in damages. The Court subsequently tripled that judgment
and awarded the Company interest and attorneys fees of $4.2 million. Stratagene
appealed the verdict to the Court of Appeals for the Federal Circuit in
Washington, D.C.

On January 29, 2007, the Company and Stratagene entered into an out-of-court
settlement regarding this litigation. Under the terms of the settlement
Stratagene paid the Company $10.75 million in cash to satisfy the outstanding
judgment and dropped its appeal in its entirety. The parties also agreed to
dismiss all litigation, including the suit filed by Stratagene against Third
Wave in the District of Delaware.

(3) Net Income (Loss) Per Share

In accordance with GAAP, basic net income (loss) per share has been computed
using the weighted-average number of shares of common stock outstanding during
the respective periods. Diluted net income (loss) per share takes into account
the weighted average shares from options that could potentially dilute basic net
income per share in the future. Shares associated with stock options are
excluded for the three months ended March 31, 2006 because they are
anti-dilutive.

The following table presents the calculation of basic and diluted net income
(loss) per share:

<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED
                                                           MARCH 31,
                                                   -------------------------
                                                       2007          2006
                                                   -----------   -----------
<S>                                                <C>           <C>
Numerator:
   Net income (loss)                               $ 4,766,248   $(4,383,447)
                                                   ===========   ===========
Denominator:
   Weighted average shares outstanding - basic      42,025,463    41,310,561
   Dilutive securities - stock options               1,859,000           N/A
                                                   -----------   -----------
   Weighted average shares outstanding - diluted    43,884,463    41,310,561
Basic net income (loss)  per share                 $      0.11   $     (0.11)
Dilutive net income (loss) per share               $      0.11   $     (0.11)
</TABLE>

(4) Stock-Based Compensation

The Company has Incentive Stock Option Plans for its employees and Nonqualified
Stock Option Plans (collectively, the Plans) for employees and non-employees
under which an aggregate of 13,213,183 stock options and stock purchase rights
(including restricted stock units (RSUs)) may be granted. Options under the
Plans have a maximum life of ten years. Options vest at various intervals, as
determined by the compensation committee of the Board of Directors at the date
of grant. At March 31, 2007, approximately 2.5 million shares were available for
future grant under the Plans.


                                        6

<PAGE>

Stock Options

The following table summarizes the stock option activity under the Plans for the
three months ended March 31, 2007:

<TABLE>
<CAPTION>
                                                                         WEIGHTED
                                                                         AVERAGE      AGGREGATE
                                        NUMBER OF   WEIGHTED AVERAGE   CONTRACTUAL    INTRINSIC
                                         SHARES      EXERCISE PRICE        LIFE         VALUE
                                        ---------   ----------------   -----------   -----------
<S>                                     <C>         <C>                <C>           <C>
Outstanding at December 31,2006         7,787,607         $4.12
   Granted                                 19,829          5.34
   Exercised                             (189,278)         2.65
   Forfeited                              (18,825)         6.78
                                        ---------         -----
Outstanding at March 31, 2007           7,599,333         $4.15            6.1       $10,859,359
Options exercisable at March 31, 2007   5,599,711         $4.37            5.6       $ 7,736,770
</TABLE>

The weighted average fair value of stock options granted in the three months
ended March 31, 2007 and 2006 was $3.29 and $1.88, respectively, using the
Black-Scholes option-pricing model.

The calculations were made for the three months ended March 31, 2007 and 2006
using the following assumptions:

<TABLE>
<CAPTION>
                          2007   2006
                          ----   ----
<S>                       <C>    <C>
Expected term (years)       5      5
Risk-free interest rate   4.5%   4.7%
Expected volatility        69%    77%
Expected dividend yield     0%     0%
Forfeiture rate            25%    25%
</TABLE>

The expected volatility is based on the historical volatility of the Company's
stock. The Company uses historical option activity to estimate the forfeiture
rate, expected term of the options and the option exercise and employee
termination behavior. The Company considers all employees to have similar
exercise behavior and therefore has not identified separate homogeneous groups
for valuation. The expected term of the options represents the period of time
the options granted are expected to be outstanding. The risk-free interest rate
for periods within the contractual term of the options is based on the U.S.
Treasury constant maturity interest rate which has a term that is consistent
with the expected life of the stock options.

As of March 31, 2007, there was approximately $3.2 million of total unrecognized
compensation cost related to the stock options granted under the Plans. The
intrinsic value of the shares acquired upon exercise of stock options in the
three months ended March 31, 2007 and 2006 was $0.5 million and $0.2 million,
respectively.

Restricted Stock Units

The Company's stock plan also permits the granting of restricted stock units to
eligible employees and non-employee directors. Restricted stock units are
payable in shares of Company stock upon vesting. The restricted stock units vest
at various intervals as determined by the compensation committee of the Board of
Directors at the date of grant. The following table presents a summary of the
Company's nonvested restricted stock units granted to employees as of March 31,
2007.

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED
                                                               MARCH 31, 2007
                                                        ----------------------------
                                                        NUMBER OF   WEIGHTED AVERAGE
                                                          SHARES       FAIR VALUE
                                                        ---------   ----------------
<S>                                                     <C>         <C>
Nonvested restricted stock units at December 31, 2006    109,079          $2.84
   Granted                                                83,789           0.29
   Vested                                                (79,441)            --
   Forfeited                                              (1,300)          2.84
                                                         -------          -----
Nonvested restricted stock units at March 31, 2007       112,127          $2.95
                                                         =======          =====
</TABLE>

As of March 31, 2007, there was approximately $0.3 million of total unrecognized
compensation cost related to the nonvested restricted stock units granted under
the plan. The expense is expected to be recognized over the vesting period.
Compensation expense


                                        7

<PAGE>

related to restricted stock units was approximately $20,000 in the three months
ended March 31, 2007. The aggregate intrinsic value of the restricted stock
units outstanding at March 31, 2007 was $0.6 million.

Employee Stock Purchase Plan

The Company also has an Employee Stock Purchase Plan (Purchase Plan) under which
an aggregate of 1,256,800 common shares may be issued. All employees are
eligible to participate in the Purchase Plan. Eligible employees may make
contributions through payroll deductions of up to 10% of their compensation. The
price of common stock purchased under the Purchase Plan is 85% of the lower of
the fair market value of the common stock at the beginning or end of the
offering period. There were no shares sold to employees in the three months
ended March 31, 2007 and 2006, respectively. At March 31, 2007, approximately
306,000 shares were available for issuance under the Purchase Plan.

(5) Inventories

Inventories are carried at the lower of cost or market using the first-in,
first-out (FIFO) method for determining cost.

Inventories consist of the following:

<TABLE>
<CAPTION>
                                             MARCH 31,   DECEMBER 31,
                                               2007          2006
                                            ----------   ------------
<S>                                         <C>          <C>
Raw materials                               $2,434,091    $2,283,852
Finished goods                               1,269,049     1,367,177
Work in process                                821,693       517,880
Reserve for excess and obsolete inventory     (725,810)     (655,000)
                                            ----------    ----------
Total inventories                           $3,799,023    $3,513,909
                                            ==========    ==========
</TABLE>

(6) Stock-based Compensation

Included in operating expenses are the following stock-based compensation
charges, net of forfeitures related to terminated employees:

<TABLE>
<CAPTION>
                                     THREE MONTHS ENDED
                                         MARCH 31,
                                    -------------------
                                      2007       2006
                                    --------   --------
<S>                                 <C>        <C>
Cost of goods sold                  $ 23,723   $ 40,913
Research and development             124,433    155,790
Selling and marketing                122,713    198,946
General and administrative           344,953    570,897
                                    --------   --------
   Total stock-based compensation   $615,822   $966,546
                                    --------   --------
</TABLE>

(7) Comprehensive Income (Loss)

The components of comprehensive income (loss) are as follows:

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED
                                                      MARCH 31,
                                              ------------------------
                                                 2007          2006
                                              ----------   -----------
<S>                                           <C>          <C>
Net income (loss)                             $4,766,248   $(4,383,447)
Other comprehensive income (loss):
   Foreign currency translation adjustments       17,929            36
                                              ----------   -----------
Comprehensive income (loss)                   $4,784,177   $(4,383,411)
                                              ==========   ===========
</TABLE>

(8) Amortizable Intangible Assets

Amortizable intangible assets consist of the following:

<TABLE>
<CAPTION>
                                            MARCH 31, 2007              DECEMBER 31, 2006
                                      --------------------------   --------------------------
                                         GROSS                        GROSS
                                        CARRYING     ACCUMULATED     CARRYING     ACCUMULATED
                                         AMOUNT     AMORTIZATION      AMOUNT     AMORTIZATION
                                      -----------   ------------   -----------   ------------
<S>                                   <C>           <C>            <C>           <C>
Costs of settling patent litigation   $10,533,248    $9,772,568    $10,533,248    $9,396,380

Technology license                        915,828        30,528        915,828         7,632
Trademark                                  91,583         3,052         91,583           763
Customer agreements                        38,000        38,000         38,000        38,000
                                      -----------    ----------    -----------    ----------
   Total                              $11,578,659    $9,844,148    $11,578,659    $9,442,775
                                      ===========    ==========    ===========    ==========
</TABLE>


                                        8

<PAGE>

(9) Restructuring and Impairment of Long Lived Assets

During the third quarter of 2002, we announced a restructuring plan designed to
simplify product development and manufacturing operations and reduce operating
expenses. The restructuring charges recorded were determined based upon plans
submitted by the Company's management and approved by the Board of Directors
using information available at the time. The restructuring charge included $2.5
million for the consolidation of facilities, $500,000 for prepayment penalties
mainly under capital lease arrangements, an impairment charge of $7.2 million
for abandoned leasehold improvements and equipment to be sold and $900,000 of
other costs related to the restructuring. The Company also recorded a $1.1
million charge within cost of goods sold related to inventory that was
considered obsolete based upon the restructuring plan.

The facilities charge contained estimates based on the Company's potential to
sublease a portion of its corporate office. The Company has offered the
corporate office space for sublease, but has been unable to sublease the space.
Accordingly, the Company decreased its estimate of the amount of sublease income
it expects to receive. The estimated lease and operating expenses were also
reduced, based on a portion of the office space being utilized and revisions to
the building lease.

The following table shows the changes in the restructuring accrual since
December 31, 2006. The remaining restructuring balance of $0.6 million is for
rent payments on a non-cancelable lease, net of estimated sublease income, which
will continue to be paid over the lease term through 2011. The current portion
of the accrual is included in other accrued liabilities on the balance sheets
and the remainder is included in other long-term liabilities.

<TABLE>
<S>                                                  <C>
Accrued restructuring balance at December 31, 2006   $631,260
Payments made                                         (31,390)
                                                     --------
Accrued restructuring balance at March 31, 2007      $599,870
                                                     ========
</TABLE>

(10) Other Long-term Liabilities

Other long-term liabilities consist of the long-term portion of the following
items:

<TABLE>
<CAPTION>
                            MARCH 31,   DECEMBER 31,
                              2007          2006
                           ----------   ------------
<S>                        <C>          <C>
License payments           $  949,446    $1,048,260
Long-term Incentive Plan    1,693,767     1,885,989
Restructuring                 474,564       505,681
Rent                        1,067,722     1,103,313
Other                         200,000       233,029
                           ----------    ----------
                           $4,385,499    $4,776,272
                           ==========    ==========
</TABLE>

(11) Income Taxes

On July 13, 2006, the Financial Accounting Standards Board ("FASB") issued
Financial Interpretation ("FIN") No. 48, Accounting for Uncertainty in Income
Taxes - An Interpretation of FASB Statement No. 109. FIN No. 48 clarifies the
accounting for uncertainty in income taxes recognized in an entity's financial
statements in accordance with SFAS No. 109, Accounting for Income Taxes, and
prescribes a recognition threshold and measurement attributes for financial
statement disclosure of tax positions taken or expected to be taken on a tax
return. Under FIN No. 48, the impact of an uncertain income tax position on the
income tax return must be recognized at the largest amount that is
more-likely-than-not to be sustained upon audit by the relevant taxing
authority. An uncertain income tax position will not be recognized if it has
less than a 50% likelihood of being sustained. Additionally, FIN No. 48 provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure and transition. FIN No. 48 is effective for fiscal
years beginning after December 15, 2006.

The Company adopted the provisions of FIN No. 48 on January 1, 2007. The total
amount of unrecognized tax benefits as of the date of adoption was not
significant. As such, there are no unrecognized tax benefits included in the
balance sheet that would, if recognized, affect the effective tax rate.


                                        9

<PAGE>

The Company's practice is to recognize interest and/or penalties related to
income tax matters in income tax expense. The Company had no accruals for
interest and penalties on the Company's Balance Sheets at December 31, 2006 and
at March 31, 2007, and has not recognized any interest or penalties in the
Statement of Operations for the first quarter of 2007.

The Company is subject to taxation in the U.S. and various state jurisdictions.
All of the Company's tax years are subject to examination by the U.S. and state
tax authorities due to the carryforward of unutilized net operating losses and
research and development credits.

The adoption of FIN No. 48 did not impact the Company's financial condition,
results of operations or cash flows. At March 31, 2007, the Company had deferred
tax assets of $63.2 million. The deferred tax assets are primarily composed of
federal and state tax net operating loss carryforwards and federal and state
research and development credit carryforwards. Due to uncertainties surrounding
the Company's ability to generate future taxable income to realize these assets,
a full valuation allowance has been established to offset the Company's net
deferred tax asset. Additionally, the future utilization of the Company's net
operating loss and research and development credit carryforwards to offset
future taxable income may be subject to a substantial annual limitation as a
result of ownership changes that may have occurred previously or that could
occur in the future. Any carryforwards that will expire prior to utilization as
a result of such limitations will be removed from deferred tax assets with a
corresponding reduction of the valuation allowance. Due to the existence of the
valuation allowance, future changes in our unrecognized tax benefits will not
impact the Company's effective tax rate.

(12) Reclassifications

Certain reclassifications have been made to the 2006 financial statements to
conform to the 2007 presentation.


                                       10

<PAGE>

                          THIRD WAVE TECHNOLOGIES, INC.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results of
Operations as of March 31, 2007 and for the three months ended March 31, 2007
and 2006 should be read in conjunction with our Form 10-K for the fiscal year
ended December 31, 2006 filed with the SEC. In this Form 10-Q, the terms "we,"
"us," "our," "Company," and "Third Wave" each refer to Third Wave Technologies,
Inc. The following discussion of our financial condition and results of our
operations should be read in conjunction with our Financial Statements,
including the Notes thereto, included elsewhere in this Form 10-Q.

OVERVIEW

Third Wave Technologies, Inc. is a leading molecular diagnostics company. We
believe our proprietary Invader chemistry, a novel, molecular chemistry, is
easier to use and more accurate than competing technologies. These and other
advantages conferred by our chemistry are enabling us to provide clinicians and
researchers with superior molecular solutions.

More than 180 clinical laboratory customers are using Third Wave's molecular
diagnostic reagents. Other customers include pharmaceutical and biotechnology
companies, academic research centers and major health care providers.

In August 2005, we received clearance from the U.S. Food and Drug Administration
(the FDA) for our Invader UGT1A1 Molecular Assay. The Invader UGT1A1 Molecular
Assay is cleared for use to identify patients who may be at increased risk of
adverse reaction to the chemotherapy drug Camptosar(R) (irinotecan) by detecting
and identifying specific mutations in the UGT1A1 gene that have been associated
with that risk. Camptosar, marketed in the U.S. by Pfizer, Inc., is used to
treat colorectal cancer and was relabeled in 2005 to include dosing
recommendations based on a patient's genetic profile. In December 2006, we
submitted a cystic fibrosis product to the FDA. We also market a growing number
of products, including analyte specific reagents (ASRs). These ASRs allow
certified clinical reference laboratories to create assays to perform hepatitis
C virus genotyping, inherited disorders testing (e.g., Factor V Leiden), and a
host of other mutations associated with genetic predispositions and other
diseases. We have developed or plan to develop a menu of molecular diagnostic
products for clinical applications that include genetic testing,
pharmacogenetics, and women's health. We also have a number of other Invader
products including those for research, agricultural and other applications.

The FDA is considering new guidelines for the use of ASRs. The enactment of new
guidelines or potential adverse market perceptions of using ASRs when FDA
cleared tests are available may present risks to our ability to continue to
successfully market and sell our ASR products.

Currently, one of our key strategic initiatives is the commercialization of our
Human Papillomavirus (HPV) offering. In August 2006, we began clinical trials
for two HPV premarket approval submissions to the FDA. We expect to spend
between $12 million and $15 million on these submissions over three years. If
for any reason these trials are not successful or are substantially delayed or
for any other reason we are unable to successfully commercialize our HPV
offering, our business and prospects would likely be materially adversely
impacted. Additionally, we anticipate significant competition in the HPV market
as additional large competitors have announced plans to enter the market in the
near future. This competition may have a significant impact on the success of
our commercialization of our HPV offering.

In January 2007, Digene Corporation initiated legal proceedings against us over
our HPV products. See Part II, Item 1 -- Legal Proceedings. Should the outcome
of this action be unfavorable, the Company's business, financial condition,
results of operations and cash flows could be materially adversely affected.

Our financial results may vary significantly from quarter to quarter due to
fluctuations in the demand for our products, timing of new product introductions
and deliveries made during the quarter, the timing of research, development and
grant revenues and increases in spending, including expenses related to our
product development submissions for FDA clearances or approvals and intellectual
property litigation.


                                       11

<PAGE>

CRITICAL ACCOUNTING POLICIES

Management's discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with GAAP. We review the accounting policies we use in
reporting our financial results on a regular basis. The preparation of these
financial statements requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses and related
disclosures of contingent assets and liabilities. On an ongoing basis, we
evaluate our estimates, including those related to accounts receivable,
inventories, equipment and leasehold improvements and intangible assets. We base
our estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources. Results may differ from these
estimates due to actual outcomes being different from those on which we based
our assumptions. These estimates and judgments are reviewed by management on an
ongoing basis, and by the Audit Committee at the end of each quarter prior to
the public release of our financial results. We believe the following critical
accounting policies affect our more significant judgments and estimates used in
the preparation of our consolidated financial statements.

REVENUE RECOGNITION

Revenue from product sales is recognized upon delivery which is generally when
the title passes to the customer, provided that the Company has completed all
performance obligations and the customer has accepted the products. Customers
have no contractual rights of return or refunds associated with product sales.
Consideration received in multiple element arrangements is allocated to the
separate units based upon their relative fair values. The multiple element
arrangements involve contracts with customers in which the Company is selling
reagent products and leasing equipment to the customer for use during the term
of the contract. Based upon the guidance in paragraph 9 of EITF No. 00-21
"Revenue Arrangements with Multiple Deliverables", both the reagents and
equipment have value to the customer on a standalone basis, there is objective
and reliable evidence of fair value for both the reagents and equipment and
there are no rights of return. The Company has sold both the reagents and
equipment separately, and therefore is able to determine a fair value for each.
The respective fair values are used to allocate the proceeds received to each of
the elements for purposes of recognizing revenue.

Grant revenues consist primarily of research grants from agencies of the federal
government the revenue from which is recognized as research is performed.
Payments received which are related to future performance are deferred and
recorded as revenue when earned. Grant payments designated to purchase specific
assets to be used in the performance of a contract are recognized as revenue
over the shorter of the useful life of the asset acquired or the contract.

License and royalty revenue include amounts earned from third parties for
licenses of the Company's intellectual property and are recognized when earned
under the terms of the related agreements. License revenues are generally
recognized upon receipt unless the Company has continuing performance
obligations, in which case the license revenue is recognized ratably over the
period of expected performance.

RESTRUCTURING AND OTHER CHARGES

The restructuring and other charges resulting from the restructuring plan in the
third quarter of 2002 have been recorded in accordance with EITF Issue No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity (including Certain Costs Incurred in a Restructuring)",
Staff Accounting Bulletin No. 100, "Restructuring and Impairment Charges," and
Statement of Financial Accounting Standards (SFAS) No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." The restructuring charge was
comprised primarily of costs to consolidate facilities, impairment charges for
abandoned leasehold improvements and equipment to be sold or abandoned,
prepayment penalties related mainly to capital lease obligations on equipment to
be sold or abandoned, and other costs related to the restructuring. The
remaining accrued restructuring balance is for rent payments on a non-cancelable
lease, net of estimated sublease income. In calculating the cost to consolidate
the facilities, we estimated the future lease and operating costs to be paid
until the leases are terminated and the amount, if any, of sublease receipts for
each location. This required us to estimate the timing and costs of each lease
to be terminated, the amount of operating costs, and the timing and rate at
which we might be able to sublease the site. To form our estimates for these
costs, we performed an assessment of the affected facilities and considered the
current market conditions for each site. Our assumptions on the lease payments,
operating costs until terminated, and the offsetting sublease receipts may turn
out to be incorrect and our actual cost may be materially different from our
estimates.


                                       12

<PAGE>

LONG-LIVED ASSETS--IMPAIRMENT

Equipment, leasehold improvements and amortizable identifiable intangible assets
are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. For assets held and used, if
the sum of the expected undiscounted cash flows is less than the carrying value
of the related asset or group of assets, a loss is recognized for the difference
between the fair value and carrying value of the asset or group of assets. For
assets removed from service and held for sale, we estimate the fair market value
of such assets and record an adjustment if the fair value less costs to sell is
lower than the carrying value.

Goodwill and intangible assets deemed to have indefinite lives are not
amortized, but are subject to annual impairment tests under SFAS No. 142,
"Goodwill and Other Intangible Assets." The annual impairment test is completed
in the quarter ended September 30.

STOCK-BASED COMPENSATION EXPENSE

We have adopted SFAS No. 123(R) to account for share-based payments to
employees. As a result, we recognize expense for all share-based payments to
employees, including grants of employee stock options and RSUs, based on their
fair values.

INVENTORIES--SLOW MOVING AND OBSOLESCENCE

Significant management judgment is required to determine the reserve for
obsolete or excess inventory. Inventory on hand may exceed future demand either
because of process improvements or technology advancements, the amount on hand
is more than can be used to meet future need, or estimates of shelf lives may
change. We currently consider all inventory that we expect will have no activity
within one year or within the period defined by the expiration date of the
product, as well as any additional specifically identified inventory to be
subject to a provision for excess inventory (including inventory that we
determine to be obsolete based on criteria such as changing manufacturing
processes and technologies). At March 31, 2007, our inventory reserves were
approximately $726,000, or 16% of our $4.5 million total gross inventories.

NEW ACCOUNTING PRONOUNCEMENTS

On July 13, 2006, the Financial Accounting Standards Board (FASB) issued
Financial Interpretation (FIN) No. 48, Accounting for Uncertainty in Income
Taxes - An Interpretation of FASB Statement No. 109. FIN No. 48 clarifies the
accounting for uncertainty in income taxes recognized in an entity's financial
statements in accordance with SFAS No. 109, Accounting for Income Taxes, and
prescribes a recognition threshold and measurement attributes for financial
statement disclosure of tax positions taken or expected to be taken on a tax
return. Under FIN No. 48, the impact of an uncertain income tax position on the
income tax return must be recognized at the largest amount that is
more-likely-than-not to be sustained upon audit by the relevant taxing
authority. An uncertain income tax position will not be recognized if it has
less than a 50% likelihood of being sustained. Additionally, FIN No. 48 provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure and transition. FIN No. 48 is effective for fiscal
years beginning after December 15, 2006.

The Company adopted the provisions of FIN No. 48 on January 1, 2007. The total
amount of unrecognized tax benefits as of the date of adoption was not
significant. As such, there are no unrecognized tax benefits included in the
balance sheet that would, if recognized, affect the effective tax rate.

The Company's practice is to recognize interest and/or penalties related to
income tax matters in income tax expense. The Company had no accruals for
interest and penalties on the Company's Balance Sheets at December 31, 2006 and
at March 31, 2007, and has not recognized any interest or penalties in the
Statement of Operations for the first quarter of 2007.

The Company is subject to taxation in the U.S. and various state jurisdictions.
All of the Company's tax years are subject to examination by the U.S. and state
tax authorities due to the carryforward of unutilized net operating losses and
research and development credits.

The adoption of FIN No. 48 did not impact the Company's financial condition,
results of operations or cash flows. At March 31, 2007, the Company had deferred
tax assets of $63.2 million. The deferred tax assets are primarily composed of
federal and state tax net operating loss carryforwards and federal and state
research and development credit carryforwards. Due to uncertainties surrounding
the Company's ability to generate future taxable income to realize these assets,
a full valuation allowance has been established to offset the Company's net
deferred tax asset. Additionally, the future utilization of the Company's net
operating loss and research and development credit carryforwards to offset
future taxable income may be subject to a substantial annual limitation as a
result of ownership changes that may have occurred previously or that could
occur in the future. Any carryforwards


                                       13

<PAGE>

that will expire prior to utilization as a result of such limitations will be
removed from deferred tax assets with a corresponding reduction of the valuation
allowance. Due to the existence of the valuation allowance, future changes in
our unrecognized tax benefits will not impact the Company's effective tax rate.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2007 and 2006

NET INCOME (LOSS). Net income for the three months ended March 31, 2007 improved
to $4.8 million from a net loss of $4.4 million for the corresponding period of
2006. The increase in net income was due to the impact of the $10.7 million of
other income from the settlement of patent litigation with Stratagene
Corporation partially offset by an increase in operating loss.

REVENUES. Revenues for the three months ended March 31, 2007 of $6.7 million
represented a decrease of $1.2 million, compared to revenues of $7.9 million for
the corresponding period of 2006. Following is a discussion of changes in
revenues:

Clinical molecular diagnostic product revenue increased to $6.0 million in the
quarter ended March 31, 2007 from $4.7 million in the quarter ended March 31,
2006.

Research product revenues decreased to $0.6 million in the three months ended
March 31, 2007 from $3.0 million in the three months ended March 31, 2006. The
three months ended March 31, 2006 was the last quarter in which we received
substantial Japanese research revenue.

Significant Customers. In the three months ended March 31, 2007, we generated
$2.5 million, or 38% of our revenue, from sales to a small number of large
clinical testing laboratories compared to $2.1 million, or 26% of our revenue,
in the same period of 2006.

COST OF GOODS SOLD. Cost of goods sold consists of materials used in the
manufacture of product, depreciation on manufacturing capital equipment,
salaries and related expenses for management and personnel associated with our
manufacturing and quality control departments and amortization of licenses and
other intangible assets. For the three months ended March 31, 2007, cost of
goods sold decreased to $2.0 million, compared to $2.2 million for the
corresponding period of 2006. The decrease in the three month period was
primarily due to the decrease in sales volume.

RESEARCH AND DEVELOPMENT EXPENSES. Our research activities are focused on moving
our technology into broader markets. Our development activities are focused on
new products to expand our molecular diagnostics menu. Research and development
expenses consist primarily of salaries and related personnel costs, material
costs for assays and product development, fees paid to consultants, depreciation
and facilities costs and other expenses related to the design, development,
testing, (including clinical trials to validate the performance of our products)
and enhancement of our products, and acquisition of technologies used in our
products. Research and development costs are expensed as they are incurred.
Research and development expenses for the three months ended March 31, 2007 were
$5.1 million, compared to $2.3 million for the three months ended March 31,
2006. The increase in research and development expenses was primarily due to an
increase in personnel and product development expense (including clinical trial
costs incurred by us in pursuit of FDA premarket approval for our HPV
offerings). We will continue to invest in research and development, and
expenditures in this area will increase as we expand our product development
efforts. In addition, as the Company moves towards consideration of FDA cleared
or approved products, there will be increased expenses attributed to these
activities.

SELLING AND MARKETING EXPENSES. Selling and marketing expenses consist primarily
of salaries and related personnel costs for our sales and marketing management
and field sales force, commissions, office support and related costs, and travel
and entertainment. Selling and marketing expenses for the three months ended
March 31, 2007 were $2.6 million, a decrease of $0.4 million, compared to $3.0
million for the corresponding period of 2006. The decrease in selling and
marketing expenses was due to a decrease in personnel related expenses, compared
to the same periods in 2006.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses consist
primarily of salaries and related expenses for executive, finance and other
administrative personnel, legal and professional fees, office support and
depreciation. General and administrative expenses decreased to $2.9 million in
the three months ended March 31, 2007, from $4.1 million for the corresponding
period in 2006. The decrease in general and administrative expense was due to a
decrease in personnel related expense, legal fees related to our patents and
stock based compensation expense compared to the same period in 2006. We
anticipate that general and administrative expense for the year will be at the
same level as prior year.

LITIGATION EXPENSE. Litigation expense consists of legal fees and other costs
associated with patent infringement and other lawsuits. Litigation expense
decreased to $0.4 million in the three months ended March 31, 2007 from $1.0
million in the


                                       14

<PAGE>

corresponding period in 2006. The decreases were the result of the decreased
litigation activity due to the resolution of the lawsuits with Innogenetics,
Chiron Corporation, Bayer Corporation, and Digene Corporation. We anticipate
litigation expense to increase throughout 2007 due to the lawsuit with Digene
Corporation (see Part II, Item 1: Legal Proceedings).

INTEREST INCOME. Interest income for the three months ended March 31, 2007 and
2006 was $0.5 million and $0.4 million, respectively.

INTEREST EXPENSE. Interest expense for the three months ended March 31, 2007 was
$0.3 million compared to $56,000 in the corresponding period in 2006. The
increase in interest expense was due to the interest accretion on the
convertible note payable entered into in December 2006.

OTHER INCOME (EXPENSE). Other income for the three months ended March 31, 2007
was $10.7 million compared to expense of $19,000 for the same period in 2006.
Other income included $10.75 million from the settlement of patent litigation
with Stratagene Corporation.

MINORITY INTEREST. Minority interest for the three months ended March 31, 2007
was $96,000. Minority interest represents Third Wave Japan's minority investors'
share of the equity and earnings of the subsidiary.

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have financed our operations primarily through private
placements of equity securities, research grants from federal and state
government agencies, payments from strategic collaborators, equipment loans,
capital leases, product sales, convertible notes and an initial public offering.
As of March 31, 2007, we had cash and cash equivalents and short-term
investments of $47.1 million.

In April 2006 we raised $5.1 million from the sale of a minority equity
investment in our Japan subsidiary. The proceeds from the equity investment are
required to be used in the operations of our Japan subsidiary.

In December 2006 we sold $20,000,000 (at maturity) of Convertible Senior
Subordinated Zero-Coupon Promissory Notes (the "Notes") to an investor for total
proceeds of $14,881,878 (the "Purchase Price"). The Notes will mature on
December 19, 2011. The Notes do not bear cash interest but accrue original issue
discount on the Purchase Price at the rate of 6.00% per year compounded
semiannually (the Purchase Price plus such accrued original issue discount, the
"Accreted Value"). So long as the Notes remain outstanding, we may not incur
indebtedness other than certain Permitted Indebtedness, as such term is defined
in the Notes.

The Notes are convertible at the holder's option into shares of Third Wave
common stock at a rate of 124.01565 shares per $1,000 of principal at maturity
($744 of Purchase Price) or a total of 2,480,313 shares. Pursuant to the
securities purchase agreement under which we sold the Notes, in January 2007 we
filed a registration statement with the Securities and Exchange Commission for
resale of the shares of common stock issuable upon conversion of the Notes.

After December 19, 2008, if Third Wave common stock closes above $9.00 (150% of
the initial conversion price) for 20 consecutive trading days, we may force the
conversion of the Notes so long as there is an effective registration statement
covering the Common Stock in place. At any time after December 19, 2009, we may
redeem the Notes for an amount equal to their Accreted Value. If either an event
of default occurs under the Notes (which would include failure to make any
payments due under the Notes and certain defaults under other indebtedness) or a
change of control occurs with respect to Third Wave, the holders of the Notes
may put the Notes to Third Wave for a purchase price equal to 110% of their
Accreted Value.

The Company has three notes payable to a bank in the original amounts of
$200,000, $270,000 and $800,000. These notes have respective final maturity
dates of July 1, 2007, October 1, 2009 and July 1, 2008, bear annual interest at
4.25%, 4.93% and 5.2%, respectively, and require monthly principal and interest
payments. The borrowings under the notes payable are secured by short-term
investments consisting of certificates of deposit in the aggregate amount of
$575,000. The Company has an available and unused $1,000,000 letter of credit
with the same bank that expires on September 1, 2007.

Net cash provided by operations for the three months ended March 31, 2007 was
$3.0 million, compared to net cash used of $3.5 million in the corresponding
period in 2006. The change was primarily due to the proceeds received from the
settlement of patent litigation with Stratagene Corporation.

Net cash used in investing activities for the three months ended March 31, 2007
was $0.3 million, compared to net cash provided of


                                       15

<PAGE>

$0.3 million in the corresponding period in 2006. Investing activities included
capital expenditures of $0.2 million in the three months ended March 31, 2007
and 2006. Investing activities in the three months ended March 31, 2007 included
the payment on license fee arrangements of $0.2 million compared to $0.3 million
in 2006. In addition, net cash provided by investing activities included $0.2
million from the maturity of short term investments in the three months ended
March 31, 2007. Investing activities in the three months ended March 31, 2006
also included a change in the restricted cash balance of $0.8 million.

Net cash provided by financing activities was $0.4 million in the three months
ended March 31, 2007 compared to $0.1 million in 2006. Cash provided by
financing activities in the three months ending March 31, 2007 consisted of
proceeds from the sale of common stock under the Company's employee stock
purchase plan and stock option plans of $0.5 million compared to $0.2 million in
the corresponding period of 2006. In the three months ended March 31, 2007 and
2006, $0.1 million was used to repay debt. Additionally, in the three months
ended March 31, 2007 and 2006, $35,000 and $31,000 was used for capital lease
obligations, respectively.

We believe that current cash reserves together with our ability to generate cash
through operations, financing activities and other sources will be sufficient to
support short-term and long-term liquidity requirements for current operations
(including annual capital expenditures). However, we cannot assure you that our
business or operations will not change in a manner that would consume available
resources more rapidly than anticipated.

We also cannot assure you that we will not require substantial additional
funding before we can achieve profitable operations. Our capital requirements
depend on numerous factors, including the following:

     -    our progress with our research and development programs;

     -    the need to pursue FDA clearances or approvals of our products;

     -    our level of success in selling our products and technologies;

     -    our ability to establish and maintain successful collaborative
          relationships;

     -    the costs we incur in securing intellectual property rights, whether
          through patents, licenses or otherwise;

     -    the costs we incur in enforcing and defending our patent claims and
          other intellectual property rights;

     -    the need to respond to competitive pressures;

     -    the possible acquisition of complementary products, businesses or
          technologies; and

     -    the timing of capital expenditures

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the
Securities Act of 1933, as amended. When used in this Form 10-Q the words
"believe," "anticipates," "intends," "plans," "estimates," and similar
expressions are forward-looking statements. Such forward-looking statements
contained in this Form 10-Q are based on current expectations. Forward-looking
statements may address the following subjects: results of operations; customer
growth and retention; development of technologies; losses or earnings; operating
expenses, including, without limitation, marketing expense, litigation expense,
and technology and development expense; and revenue growth. We caution investors
that there can be no assurance that actual results, outcomes or business
conditions will not differ materially from those projected or suggested in such
forward-looking statements as a result of various factors, including, among
others, our limited operating history, unpredictability of future revenues and
operating results, competitive pressures and also the potential risks and
uncertainties discussed under the heading "Overview" in the Management's
Discussion and Analysis of Financial Condition and Results of Operations section
of this Form 10-Q and in the "Risk Factors" and Management's Discussion and
Analysis of Financial Condition and Results of Operations sections of our annual
report on Form 10-K for the fiscal year ended December 31, 2006 filed with the
SEC, which factors are specifically incorporated herein by this reference. You
should also carefully consider the factors set forth in other reports or
documents that we file from time to time with the SEC. Except as required by
law, we undertake no obligation to update any forward-looking statements. We
expressly disclaim any obligation or undertaking to release publicly any updates
or


                                       16

<PAGE>

revisions to any forward-looking statements contained herein to reflect any
change in our expectations with regard thereto or any change in events,
conditions, or circumstances on which any such statements are based.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk is currently confined to changes in foreign exchange
and interest rates. Our exposure to market risk was discussed in the
Quantitative and Qualitative Disclosures About Market Risk section of our annual
report on Form 10-K for the fiscal year ended December 31, 2006 filed with the
SEC. There have been no material changes to such exposures during the first
quarter of 2007.

ITEM 4. CONTROLS AND PROCEDURES

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, the
Company's management, including our Chief Executive Officer and Chief Financial
Officer, conducted an evaluation as of the end of the period covered by this
report, of the effectiveness of the Company's disclosure controls and procedures
as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. Based on
that evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures were effective
as of the end of the period covered by this report. There have been no
significant changes during the period covered by this report in the Company's
internal control over financial reporting that have materially affected, or are
reasonably likely to materially affect, internal controls over financial
reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may be involved in litigation relating to claims arising
out of our operations in the usual course of business.

     In September 2004, we filed a suit against Stratagene Corporation in the
United States District Court for the Western District of Wisconsin. The
complaint alleged patent infringement of two of our patents concerning our
proprietary Invader technology by Stratagene's sale of its QPCR and QRTPCR Full
Velocity products. The case was tried before a jury in August 2005, and the jury
found that Stratagene willfully infringed our patents and that our patents were
valid. The jury awarded us $5.29 million in damages. The Court subsequently
entered a permanent injunction barring Stratagene from making, selling or
offering to sell its FullVelocity QPCR and QRT-PCR products and any other
products that practice our patented Invader methods. In December 2005, the Court
tripled the damages award to $15.9 million and ruled that Stratagene must pay
attorney fees of $4.2 million. In January 2006, the Court awarded additional
interest on the damages award in the amount of $485,716, increasing the total
damages amount to $16.4 million. Stratagene appealed the verdict to the Court of
Appeals for the Federal Circuit in Washington, D.C. Also in January 2006,
Stratagene posted a $21 million civil bond to stay payment of the judgment
during its appeal. The Court of Appeals heard argument in the appeal on December
7, 2006. On January 29, 2007, we entered into an out-of-court settlement with
Stratagene regarding this litigation. Under the terms of the settlement
Stratagene agreed to pay us $10.75 million in cash to satisfy the outstanding
judgment and dropped its appeal in its entirety. Stratagene made this payment to
us in the first quarter of 2007. As discussed below, the parties also agreed to
dismiss all litigation, including the suit filed by Stratagene against Third
Wave in the District of Delaware.

     In May 2005, Stratagene Corporation filed suit against us in the United
States District Court for the District of Delaware. The complaint alleged patent
infringement of claims of two Stratagene patents relating to our Invader Plus
chemistry. The complaint was served on us in September 2005 and the Court set a
trial date of April 7, 2008. As part of the out-of-court settlement we entered
into with Stratagene, discussed above, Stratagene dismissed this suit without
prejudice on February 13, 2007. Under the terms of the settlement Stratagene and
Third Wave agreed to resolve any infringement claims that may arise between the
parties in the future as well as any disputes relating to their settlement
agreement through binding arbitration. The parties also agreed to grant each
other covenants-not-to sue under specified conditions in exchange for the
payment of royalties and other fees.

     In September 2005, Innogenetics filed suit against us in the United States
District Court for the Western District of Wisconsin. The complaint alleged that
our HCVg ASRs infringe a patent owned by Innogenetics relating to the detection
of the hepatitis C virus. In February 2006, we reached an agreement with
Innogenetics that resolved the litigation. In connection with the agreement,
Third Wave acquired a non-exclusive license to Innogenetics' patent for the
United States. The agreement includes certain opt-out rights for Third Wave, as
well as an option to extend both the term and global reach of the license.

     In October 2005, we filed a declaratory judgment suit in the United States
District Court for the Western District of Wisconsin against Chiron Corporation
and Bayer Corporation seeking a ruling that our HCVg ASRs do not infringe any
valid claims of Chiron's


                                       17

<PAGE>

hepatitis C related patents. In February 2006, we reached an agreement with
Chiron and Bayer to dismiss the suit without prejudice. No licenses were granted
or taken under the agreement and no payment of any monies was made to any of the
companies.

     Also in October 2005, we filed a declaratory judgment suit in the United
States District Court for the Western District of Wisconsin against Digene
Corporation seeking a ruling that our HPV ASRs do not infringe any valid claims
of Digene's human papillomavirus related patents. In January 2006, we reached an
agreement with Digene to dismiss the suit without prejudice. We also agreed that
neither party would file a suit against the other relating to the Digene human
papillomavirus patents for one year. After this period expired, on January 11,
2007, Digene Corporation filed suit against us in the United States Court for
the Western District of Wisconsin. The complaint alleges patent infringement of
unidentified claims of a single patent related to HPV type 52 by the Company's
HPV ASR product. We filed our response to Digene's complaint on February 28,
2007, which, in addition to denying the alleged infringement, also asserted that
certain Digene sales practices violate certain anti-trust laws. The litigation
is currently in the discovery phase with a claim construction hearing scheduled
for June 22, 2007 and trial scheduled to begin on February 19, 2008.

     While no assurance can be given regarding the outcome of the above matters,
based on information currently available, the Company believes that the
resolution of these matters will not have a material adverse effect on the
financial position or results of future operations of the Company. However,
because of the nature and inherent uncertainties of litigation, should the
outcome of any of the actions be unfavorable, the Company's business, financial
condition, results of operations and cash flows could be materially adversely
affected.

ITEM 1A. RISK FACTORS

There have been no material changes in our risk factors from those disclosed in
our Form 10-K for the fiscal year ended December 31, 2006 filed with the SEC.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. - None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES - None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. - None.

ITEM 5. OTHER INFORMATION.

        On April 24, 2007, the Company's board of directors adopted a revised
        Code of Business Conduct that applies to all employees, officers,
        directors and agents. Sections of the Code of Business Conduct that were
        revised include the sections that cover conflicts of interest,
        compliance with law and reporting of violations. A copy of the revised
        Code of Business Conduct is available on our website at www.twt.com.

ITEM 6. EXHIBITS.

The exhibits required to be filed as a part of this Report are listed in the
Exhibit Index.


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<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                        THIRD WAVE TECHNOLOGIES, INC.


Date: May 7, 2007                       /s/ Kevin T. Conroy
                                        ----------------------------------------
                                        Kevin T. Conroy, Chief Executive Officer


Date: May 7, 2007                       /s/ Maneesh K. Arora
                                        ----------------------------------------
                                        Maneesh K. Arora, Chief Financial
                                        Officer


                                       19

<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
  NO.                         DESCRIPTION                           INCORPORATED BY REFERENCE TO
-------   --------------------------------------------------   -------------------------------------
<S>       <C>                                                  <C>
  10.1    Employment Agreement between Cindy Ahn and Third     Exhibit 10.24 to the Registrant's
          Wave Technologies, Inc. dated March 12, 2007         Quarterly Report on Form 10-K for the
                                                               fiscal year ended December 31, 2006

  10.2    Employment Agreement between John Bellano and        Exhibit 10.25 to the Registrant's
          Third Wave Technologies, Inc. dated March 12, 2007   Quarterly Report on Form 10-K for the
                                                               fiscal year ended December 31, 2006

  10.3    Employment Agreement between Jorge Garces and        Exhibit 10.26 to the Registrant's
          Third Wave Technologies, Inc. dated March 12, 2007   Quarterly Report on Form 10-K for the
                                                               fiscal year ended December 31, 2006

  10.4    Employment Agreement between Greg Hamilton and       Exhibit 10.27 to the Registrant's
          Third Wave Technologies, Inc. dated March 12, 2007   Quarterly Report on Form 10-K for the
                                                               fiscal year ended December 31, 2006

  10.5    Third Wave Technologies, Inc. 2007 Incentive Plan    Exhibit 10.29 to the Registrant's
                                                               Quarterly Report on Form 10-K for the
                                                               fiscal year ended December 31, 2006

  10.6    Third Wave Technologies, Inc. Long Term Incentive    Exhibit 10.30 to the Registrant's
          Plan No. 4                                           Quarterly Report on Form 10-K for the
                                                               fiscal year ended December 31, 2006

  31.1    CEO's Certification Pursuant to Section 302 of the
          Sarbanes Oxley Act of 2002

  31.2    CFO's Certification pursuant to Section 302 of the
          Sarbanes Oxley Act of 2002

    32    CEO and CFO Certification pursuant to 18 U.S.C.
          Section 1350, of Chapter 63 of Title 18 of the
          United States Code
</TABLE>


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