<PAGE>

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

                                    Form 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934. For the quarterly period ended September 30, 2001.

                                       or

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934. For the transition period from ____________ to ____________.

                        Commission File Number: 000-20931

                          Ventana Medical Systems, Inc.
             (Exact name of registrant as specified in its charter)

                     Delaware                                     94-2976937
         (State or other jurisdiction of                       (I.R.S. employer
         incorporation or organization)                     identification no.)

                3865 North Business                                 85705
                   Center Drive                                  (Zip Code)
                    Tucson, AZ
         (Address of principal executive offices)

       Registrant's telephone number, including area code: (520) 887-2155

                                 Not Applicable
    (Formal name, former address and former fiscal year, if changed from last
                                    report)

         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 ___
                                              ---

                       Applicable Only to Issuers Involved
              in Bankruptcy (Formal name, former address and former
                    fiscal year, if changed from last report)

         Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by the court. Yes ___ No ___

                      Applicable Only to Corporate Issuers

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date.
Common Stock, $0.001 par value --- 16,077,313 shares as of October 31, 2001

<PAGE>

                          Ventana Medical Systems, Inc.


                               INDEX TO FORM 10-Q
                               ------------------

Part I.   Financial Information

        Item 1.   Financial Statements (Unaudited)

                  Condensed Consolidated Balance Sheets
                  September 30, 2001 and December 31, 2000

                  Condensed Consolidated Statements of Operations Three
                  and Nine months ended September 30, 2001 and 2000

                  Condensed Consolidated Statements of Cash Flows Nine months
                  ended September 30, 2001 and 2000

                  Notes to Condensed Consolidated Financial Statements

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

Part II.  Other Information

        Item 1.   Legal Proceedings

        Item 4.   Submission of Matters to a Vote of Security Holders

        Item 6.   Exhibits and Reports on Form 8-K

                  Signature

                                       2

<PAGE>

                          Ventana Medical Systems, Inc.
                      Condensed Consolidated Balance Sheets
                        (in thousands except share data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                              September 30,    December 31,
ASSETS                                                            2001            2000
                                                              -------------    ------------
<S>                                                           <C>              <C>
Current assets:
   Cash and cash equivalents                                  $      20,767    $     38,512
   Accounts receivable                                               16,482          16,682
   Inventories                                                       10,364           8,100
   Prepaid expenses                                                     293             460
   Deferred tax benefit, current portion                              4,817           4,817
   Other current assets                                                 631             492
                                                              -------------    ------------
Total current assets                                                 53,354          69,063
Property and equipment, net                                          37,055          22,329
Intangibles, net                                                     10,677          11,887
Other assets                                                          2,797           2,318
Deferred tax benefit, long term portion                               3,985           3,985
                                                              -------------    ------------
Total assets                                                  $     107,868    $    109,582
                                                              =============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                           $       5,340    $      5,943
   Other current liabilities                                          7,932          13,143
                                                              -------------    ------------
Total current liabilities                                            13,272          19,086
Long term debt                                                        3,028           3,408
Stockholders' equity:
   Common stock - $.001 par value; 50,000,000 shares
     authorized; 16,076,323 and 15,444,122 shares
     issued and outstanding at September 30, 2001 and
     December 31, 2000, respectively                                     16              15
   Additional paid-in capital                                       140,042         134,862
   Accumulated deficit                                              (47,458)        (46,636)
   Accumulated other comprehensive loss                                (432)           (553)
   Treasury stock - 40,000 shares, at cost                             (600)           (600)
                                                              -------------    ------------
Total stockholders' equity                                           91,568          87,088
                                                              -------------    ------------
Total liabilities and stockholders' equity                    $     107,868    $    109,582
                                                              =============    ============
</TABLE>

 See accompanying notes

                                       3

<PAGE>

                          Ventana Medical Systems, Inc.

                 Condensed Consolidated Statements of Operations

                      (in thousands except per share data)

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                          Three Months Ended                  Nine Months Ended
                                                             September 30                        September 30
                                                             ------------                        ------------
                                                         2001             2000              2001              2000
                                                         ----             ----              ----              ----
<S>                                                    <C>              <C>               <C>               <C>
Sales:
  Reagents and other                                   $ 15,735         $ 12,703          $ 44,642          $ 37,008
  Instruments                                             5,922            5,196            17,633            16,740
                                                       --------         --------          --------          --------
    Total net sales                                      21,657           17,899            62,275            53,748
Cost of goods sold                                        6,472            5,786            19,698            30,538
                                                       --------         --------          --------          --------
Gross profit                                             15,185           12,113            42,577            23,210
Operating expenses:
  Research and development                                4,137            2,665            11,293             8,110
  Selling, general and administrative                    10,440            9,816            31,420            32,706
  Nonrecurring expenses                                      --               --                --             4,519
  Amortization of intangibles                               381              381             1,135             1,050
                                                       --------         --------          --------          --------
Income (loss) from operations                               227             (749)           (1,271)          (23,175)
Other income                                                135              508               760               912
                                                       --------         --------          --------          --------
Income (loss) before taxes and cumulative
   effect of accounting change                              362             (241)             (511)          (22,263)
Provision for income taxes                                   72               --               311               350
                                                       --------         --------          --------          --------
Net income (loss) before cumulative effect of
  accounting change                                         290             (241)             (822)          (22,613)
Cumulative effect of accounting change, net
  of applicable income tax benefit of $1,436                 --               --                --            (2,154)
                                                       --------         --------          --------          --------
Net income (loss)                                      $    290         $   (241)         $   (822)         $(24,767)
                                                       ========         ========          ========          ========
Per share data:
  Income (loss) before cummulative effect of
    accounting change:
         --Basic                                       $   0.02         $  (0.02)         $  (0.05)         $  (1.55)
                                                       ========         ========          ========          ========
         --Diluted                                     $   0.02         $  (0.02)         $  (0.05)         $  (1.55)
                                                       ========         ========          ========          ========
  Net income (loss)
         --Basic                                       $   0.02         $  (0.02)         $  (0.05)         $  (1.70)
                                                       ========         ========          ========          ========
         --Diluted                                     $   0.02         $  (0.02)         $  (0.05)         $  (1.70)
                                                       ========         ========          ========          ========
Shares used in computing per share data:
         --Basic                                         16,031           15,186            15,832            14,559
                                                       ========         ========          ========          ========
         --Diluted                                       16,784           15,186            15,832            14,559
                                                       ========         ========          ========          ========
</TABLE>

 See accompanying notes

                                       4

<PAGE>

                          Ventana Medical Systems, Inc.

                 Condensed Consolidated Statements of Cash Flows

                                 (in thousands)

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                       Nine Months Ended
                                                                          September 30
                                                                          ------------
                                                                   2001                  2000
                                                                   ----                  ----
<S>                                                              <C>                   <C>
Operating activities:
Net loss                                                         $   (822)             $(24,767)
Adjustments to reconcile net loss to cash
   used in operating activities:
   Cumulative effect of accounting change                              --                 2,154
   Depreciation and amortization                                    5,011                 4,098
   Change in deferred tax benefit                                      --                 1,255
   Non-cash intangibles and property and equipment charges             --                 7,914
   Changes in operating assets and liabilities                     (8,677)                7,623
                                                                 --------              --------
Net cash used in operating activities                              (4,488)               (1,723)

Investing activities:
Purchase of property and equipment                                (18,179)              (10,798)
Purchase of intangible assets, net                                     --                (2,393)
                                                                 --------              --------
Net cash used in investing activities                             (18,179)              (13,191)

Financing activities:
(Payments) issuance of debt                                          (380)                1,888
Net proceeds from private placement                                    --                46,847
Issuance of common stock                                            5,181                 6,687
                                                                 --------              --------
Net cash provided by financing activities                           4,801                55,422
Effect of exchange rate change on cash                                121                  (266)
                                                                 --------              --------
Net (decrease) increase in cash and cash equivalents              (17,745)               40,242
Cash and cash equivalents, beginning of period                     38,512                 1,787
                                                                 --------              --------
Cash and cash equivalents, end of period                         $ 20,767              $ 42,029
                                                                 ========              ========
</TABLE>

See accompanying notes

                                       5

<PAGE>

                          Ventana Medical Systems, Inc.
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

1.  Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles 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 generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine-month periods ended
September 30, 2001 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2001. For further information, refer to
the consolidated financial statements and footnotes included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2000.

2.  Revenue Recognition

The Company recognizes revenue upon shipment of its products that do not require
installation at the customer's site. During the year ended December 31, 2000,
the Company changed its methods of revenue recognition for its products which do
require installation at the customer's site in accordance with Staff Accounting
Bulletin (SAB) No. 101 Revenue Recognition in Financial Statements. Previously,
the Company had recognized revenue for products upon shipment to the customer,
but prior to installation at the customer's site. The Company had routinely
completed such installation services in the past, but a substantive effort is
required and the Company is the only one who can perform the service. Under the
new accounting method adopted retroactive to January 1, 2000, the Company now
recognizes revenue upon the completion of installation of the product at the
customer's site. For the three and nine months ended September 30, 2001, the
Company recognized revenues of $57,000 and $3,676,000, respectively from
instruments shipped in the prior year. The effect of that revenue was to
increase gross margin by $41,000 and $2,965,000 during the three and nine-month
periods, respectively.

3.  Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 141, Business Combinations, and
No. 142, Goodwill and Other Intangible Assets, effective for fiscal years
beginning after December 15, 2001. Under the new rules, goodwill and intangible
assets deemed to have indefinite lives will no longer be amortized, but will be
subject to annual impairment tests in accordance with the statements. Other
intangible assets will continue to be amortized over their useful lives. The
company is currently reviewing the impact of SFAS Nos. 141 and 142. At the
present time, the Company reviews, on a quarterly basis, the utility of these
assets and recognizes any impairment should the condition exist.

                                       6

<PAGE>

                          Ventana Medical Systems, Inc.
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

3.  Recent Accounting Pronouncements (continued)

The FASB also recently issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," that is applicable to financial statements
issued for fiscal years beginning after December 15, 2001. The FASB's new rules
on asset impairment supersede SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," and portions of
APB Opinion 30, "Reporting the Results of Operations." This Standard provides a
single accounting model for long-lived assets to be disposed of and
significantly changes the criteria that would have to be met to classify an
asset as held-for-sale. Classification as held-for-sale is an important
distinction since such assets are not depreciated and are stated at the lower of
fair value and carrying amount. This Standard also requires expected future
operating losses from discontinued operations to be displayed in the period(s)
in which the losses are incurred, rather than as of the measurement date as
presently required. The provisions of this Standard are not expected to have a
significant effect on the Company's financial position or operating results.

In June 1998, the FASB issued SFAS No. 133 ("SFAS 133"), "Accounting for
Derivative Instruments and Hedging Activities." This statement provides a
comprehensive and consistent standard for the recognition and measurement of
derivatives and hedging activities. In July 1999, the FASB issued SFAS No. 137,
which deferred the effective date of SFAS 133 for one year. In June 2000, the
FASB issued SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities - an amendment to FASB Statement No. 133." This
statement amended certain provisions of SFAS No. 133. The Company adopted SFAS
133 in the first quarter of fiscal 2001 with no effect to the Company's
financial position or results of operations.

4.  Inventories

Inventories consist of the following (in thousands):

                                                  September 30,   December 31,
                                                      2001           2000
                                                      ----           ----

         Raw material and work-in-process           $  4,887       $  3,603
         Finished goods                                5,477          4,497
                                                    --------       --------
                                                    $ 10,364       $  8,100
                                                    ========       ========

                                       7

<PAGE>

                          Ventana Medical Systems, Inc.
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

5.  Comprehensive Income (Loss)

The components of comprehensive loss for the three and nine months ending
September 30, 2001 and 2000 are as follows (in thousands):

<TABLE>
<CAPTION>
                                           Three Months Ended      Nine Months Ended
                                             September 30,           September 30,
                                             -------------           -------------
                                           2001          2000      2001         2000
                                           ----          ----      ----         ----
     <S>                                   <C>         <C>         <C>      <C>

     Net income (loss)                     $ 290       $ (241)     $ (822)  $(24,767)
     Foreign currency translation             80         (302)        121       (266)
                                           -----       ------      ------   --------
     Comprehensive income (loss)           $ 370       $ (543)     $ (701)  $(25,033)
                                           =====       ======      ======   ========
</TABLE>

Accumulated comprehensive income (loss) consists exclusively of foreign currency
translation adjustments.

6.  Provision for Income Taxes

Management believes no benefit for corporate income taxes is required for U.S.
tax jurisdictions for the three and nine month periods ending September 30, 2001
given that the deferred tax assets generated by the operating loss have not been
assessed as being more likely than not of being recovered in the foreseeable
future. The actual tax provision reported consists of certain state taxes as
well as other international income taxes.

7.  Line of Credit

The Company has a $10.0 million line of credit arrangement with a bank which is
subject to renewal May 31, 2002. Borrowings under the line are collateralized by
the Company's receivables, inventories, machinery and equipment, and
intellectual property. The line of credit contains certain financial covenants
(measured quarterly) with which the Company must comply, prohibits the payment
of dividends on the Company's stock and limits the number of treasury shares the
Company may purchase. The Company was in compliance with these covenants as of
September 30, 2001. In addition, borrowings are limited based on outstanding
accounts receivables of the Company, which as of September 30, 2001 resulted in
available borrowing of $10.0 million, of which, $7.0 million has been committed
in support of various standby letters of credit.

                                       8

<PAGE>

                          Ventana Medical Systems, Inc.
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

8.  Operating Segment and Enterprise Data

The Company has two reportable segments: North America (the United States and
Canada) and International (primarily France, Germany, and Japan). Segment
information for the three and nine months ended September 30, 2001, and 2000 are
as follows (in thousands):

<TABLE>
<CAPTION>
                                                Three months ended September 30, 2001
                                       -----------------------------------------------------
                                                                      Elimina-
                                           U.S.     International      tions         Totals
                                       -----------------------------------------------------
<S>                                    <C>          <C>               <C>           <C>
 Sales to external customers           $   16,167     $   5,490       $      -     $  21,657
 Segment profit                                21           269              -           290
</TABLE>

<TABLE>
<CAPTION>
                                                Three months ended September 30, 2000
                                       -----------------------------------------------------
                                                                      Elimina-
                                           U.S.     International      tions         Totals
                                       -----------------------------------------------------
<S>                                    <C>          <C>               <C>           <C>
Sales to external customers            $   13,826     $   4,073       $      -     $  17,899
Segment loss                                  (92)         (149)             -          (241)
</TABLE>

<TABLE>
<CAPTION>
                                                Nine months ended September 30, 2001
                                       -----------------------------------------------------
                                                                      Elimina-
                                           U.S.     International      tions         Totals
                                       -----------------------------------------------------
<S>                                    <C>          <C>               <C>          <C>
 Sales to external customers           $   45,546     $  16,729       $      -     $  62,275
 Segment (loss) profit                     (2,129)        1,307              -          (822)
 Segment assets                           102,461        21,034        (15,627)      107,868
</TABLE>

<TABLE>
<CAPTION>
                                                Nine months ended September 30, 2000
                                       -----------------------------------------------------
                                                                      Elimina-
                                           U.S.     International      tions         Totals
                                       -----------------------------------------------------
<S>                                    <C>          <C>               <C>          <C>
Sales to external customers            $   39,747     $  14,001       $      -     $  53,748
Segment loss                              (22,921)       (1,846)             -       (24,767)
Segment assets                            103,720        17,234        (13,876)      107,078
</TABLE>

                                      9

<PAGE>

                          Ventana Medical Systems, Inc.
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

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

The following discussion of the financial condition and results of operations of
Ventana Medical Systems, Inc. ("Ventana" or "the Company") should be read in
conjunction with the Condensed Consolidated Financial Statements and related
Notes thereto included elsewhere in this Form 10-Q. This Report on Form 10-Q
contains certain forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Forward-looking statements, by their very nature, contain risks and
uncertainties. Accordingly, actual events or results may differ materially from
those anticipated by such forward-looking statements. A wide variety of factors
could cause or contribute to such differences and could adversely impact
revenues, profitability, cash flows and capital needs. Such factors, many of
which are beyond the Company's control, include the following: market acceptance
of new automated histology products, continued success in asset management,
continued improvements in our manufacturing efficiencies, on-schedule launches
of our new products, currency exchange rate variability, competition and
competitive pressures on pricing and general economic conditions in the United
States and in the regions served by the Company. A more complete listing of
cautionary statements and risk factors is contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 2000, filed with the
Securities and Exchange Commission.

Overview

Ventana develops, manufactures and markets instrument/reagent systems that
automate tissue preparation and slide staining in clinical histology and drug
discovery laboratories worldwide. Ventana's clinical systems are important tools
used in the diagnosis and treatment of cancer and infectious diseases. Ventana's
drug discovery systems are used to accelerate the discovery of new drug targets
and evaluate the safety of new drug compounds.

Results of Operations

Net Sales

Net sales for the three and nine months ended September 30, 2001 as compared to
the same periods in 2000 increased 21% and 16% to $21.7 million and $62.3
million from $17.9 million and $53.7 million, respectively. Net sales growth was
attributable to 24% and 21% increases in reagent and non-instrument sales for
the three and nine month periods respectively. The increase in reagent sales was
driven by both the growth in the underlying installed base and revenues
associated with the launch of new reagent systems. Instrument sales increased
14% and 5% during the three and nine months ended September 30, 2001,
respectively although electron

                                       10

<PAGE>

                          Ventana Medical Systems, Inc.
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


microscopy product line sales were discontinued after the third quarter of 2000.
Sales across both geographic segments were higher in the three and nine month
periods ended September 30, 2001 versus the same periods in 2000: 17% and 15% in
the US ($16.2 million and $45.5 million versus $13.8 million and $39.7 million),
and 35% and 20% internationally ($5.5 million and $16.7 million versus $4.1
million and $14.0 million).

Gross Profit

Gross profit for the three and nine months ended September 30, 2001 increased to
$15.2 million and $42.6 million, respectively, from $12.1 and $23.2 million for
the same periods in 2000. The Company's gross margin for the three and nine
months ended September 30, 2001 increased to 70% and 68% from 68% and 43% for
the same periods in 2000. The increase in gross margin for the nine months is
primarily attributable to $11.8 million of charges taken in the second quarter
of 2000.

Research and Development

Research and development expenses for the three and nine months ended September
30, 2001 increased to $4.1 million and $11.3 million, respectively, from $2.7
million and $8.1 million for the same periods in 2000. The increase results
primarily from substantial investment in new products, including development of
chemistry applications for both DNA microarrays and mRNA tissue testing.

Selling, General and Administrative ("SG&A")

Presented below is a summary of SG&A expense for the three and nine months ended
September 30, 2001 and 2000 (in thousands):

                              Three Months Ended            Nine Months Ended
                                September 30,                  September 30,
                            ---------------------          -------------------
                            2001             2000          2001           2000
                            ----             ----          ----           ----
                                %                %             %              %
                       $   Sales        $   Sales      $  Sales      $    Sales
                       ------------     ------------   -----------   ----------

Sales and marketing    $  8,587  39%    $  7,594  43%  $26,040  42%  $24,866 46%
Administration            1,853   9%       2,222  12%    5,380   9%    7,840 15%
                       ------------     ------------   -----------   ----------
  Total SG&A           $ 10,440  48%    $  9,816  55%  $31,420  51%  $32,706 61%
                       ============     ============   ===========   ==========


SG&A expense for the three months ended September 30, 2001 increased to $10.4
million from $9.8 million for the same period in 2000. SG&A expense for the nine
months ended September 30, 2001 decreased to $31.4 million from $32.7 million
for the same period in 2000. The primary reason for the decrease is attributable
to $5.7 million of charges taken in the second quarter of 2000. Absent these
charges, SG&A expense would have increased due to the hiring of new sales and
marketing personnel for the Molecular Discovery business in both North America
and

                                       11

<PAGE>

                          Ventana Medical Systems, Inc.
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

Europe together with a significant investment in sales training for our North
American clinical histology sales force.

Amortization of Intangibles

Intangible assets consist primarily of goodwill, customer base, and supply
agreements resulting from acquisitions and patents. Such assets are amortized on
a straight-line basis over estimated useful lives ranging from 5 to 20 years,
resulting in quarterly costs approximating $0.4 million.

In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 141, Business Combinations, and No.
142, Goodwill and Other Intangible Assets, effective for fiscal years beginning
after December 15, 2001. Under the new rules, goodwill and intangible assets
deemed to have indefinite lives will no longer be amortized, but will be subject
to annual impairment tests in accordance with the statements. Other intangible
assets will continue to be amortized over their useful lives. The company is
currently reviewing the impact of SFAS Nos. 141 and 142. At the present time,
the Company reviews, on a quarterly basis, the utility of these assets and
recognizes any impairment should the condition exist.

Liquidity and Capital Resources

As of September 30, 2001, the Company's principal source of liquidity consisted
of cash and cash equivalents of $20.8 million. The Company also had an unused
$10.0 million revolving bank credit facility of which $7 million has been
committed in support of various standby letters of credit. Any borrowings under
the Company's bank credit facility are secured by a pledge of substantially all
of the Company's assets and bear interest at the bank's prime rate.

During the nine months ended September 30, 2001, net cash used in operations and
investing activities increased to $22.7 million, versus $14.9 million in the
nine months ended September 30, 2000. Net cash used in operations and investing
was primarily associated with $12.9 million used on the construction of our
corporate headquarters and manufacturing facility in suburban Tucson, Arizona
and a final payment of $1.3 million resulting from a prior period acquisition.
Additional spending on the corporate headquarters is expected to be
approximately $2.9 million.

The Company believes that its existing capital resources, together with cash
generated from product sales and available borrowing capacity under its bank
credit facilities will be sufficient to satisfy its working capital requirements
for the foreseeable future.

Foreign Currency Risk

The Company does not currently hedge against foreign currency fluctuations,
because the Company does not believe it runs a serious risk of experiencing
permanent impairment to any material assets denominated in foreign currency. The
Company re-evaluates this situation from time to time. As a result, to the
extent local currency revenues and expenses in foreign subsidiaries are
translated into U.S. dollars at differing rates over time, the Company may

                                       12

<PAGE>

                          Ventana Medical Systems, Inc.


experience fluctuations in operating results. The Company conducts a relatively
small but growing portion of its business in the Euro, the Japanese Yen and the
Australian Dollar.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

In January 1997, four individuals who are former BioTek noteholders who held in
the aggregate approximately $1.1 million in principal amount of BioTek notes
filed an action, TSE, ET AL. v. VENTANA MEDICAL SYSTEMS, INC., ET AL. No. 97-37,
against the Company and certain of its directors and stockholders in the United
States District Court for the District of Delaware. The complaint alleged, among
other things, that the company violated federal and California securities laws
and engaged in common law fraud in connection with the BioTek shareholders'
consent to the February 1996 merger of BioTek into Ventana and the related
conversion of BioTek notes into Ventana notes. Plaintiffs seek compensatory
damages in excess of the principal amount of their BioTek notes, as well as
punitive damages, and fees and costs.

On April 25, 1997, plaintiffs filed an Amended Complaint. The Amended Complaint
made the same allegations as the original Complaint and added a claim under
North Carolina securities laws. On December 16, 1997, we filed a motion to
dismiss plaintiffs' Amended Complaint. On September 23, 1998, the Court issued
its Order granting in part and denying in part our motion to dismiss. The Court
dismissed plaintiffs' claims based upon the North Carolina securities laws and
California's insider-trading statute. Plaintiffs' surviving claims included
violations of federal and California securities laws, common law fraud and
breach of fiduciary duty. On June 5, 2000, we filed a motion for summary
judgment on all of plaintiffs' remaining claims. On November 22, 2000, the Court
issued an Order granting our motion for summary judgment in its entirety.
Plaintiffs subsequently filed a notice of appeal on December 8, 2000. Briefing
has been completed on the appeal and oral arguments are being considered for
January 2002 unless the court determines that it can render judgment based on
the briefs. Based on the facts known to date, we believe that the claims are
without merit and we will vigorously defend this suit.

A related Delaware state court action entitled LEUNG v. VENTANA MEDICAL SYSTEMS,
INC., ET AL., C.A. was dismissed with prejudice on our summary judgment motion
in February 2000 and an appeal of that decision was denied in May 2001.

On June 15, 1999 we filed a proof of claim against Oncor, Inc. in an action
pending in the United States Bankruptcy Court for the District of Delaware
titled IN RE ONCOR, INC., No. 9-437 (JJF). Our claims arise out of an Asset
Purchase Agreement dated November 23, 1998 and related documents wherein we
acquired Oncor's unincorporated In Situ Hybridization Technology Division and
rights related thereto. In February 2000, we filed an amended proof of claim
alleging, inter alia, that Oncor breached the terms of the Asset Purchase
Agreement by purporting to transfer or assign to us Oncor's rights under a
license agreement, which were not transferable or assignable under the
circumstances then existing. The amended proof of claim seeks damages of no less
than approximately $7.3 million. On August 17, 2000, Oncor filed an Omnibus
Objection to Claims, which included our claims. However, the Omnibus Objection
did not set forth any specific allegations with respect to our claims. On July
20, 2001, we filed our

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                          Ventana Medical Systems, Inc.


response to the Omnibus Objection reasserting our original claim and discovery
has commenced. We continue to believe our claims are meritorious and that we
will prevail, however, the results of the proceedings are uncertain and there
can be no assurance to that effect.

On December 9, 1999 we filed an action, VENTANA MEDICAL SYSTEMS, INC. v.
CYTOLOGIX CORP., No. CIV99-606 TUC FRZ, alleging that sales of CytoLogix
Corporation's ARTISAN(TM) special stainer infringe U.S. Patent No. 5,355,439
(Bernstein), and seeking monetary damages and injunctive relief in the United
States District Court in Tucson. The original complaint was amended March 21,
2000 by the addition of another patent to the litigation (U.S. 5,232,664
(Krawzak)). The amended complaint sought an injunction against the continued
sale of the ARTISAN instrument, and damages for lost sales. On July 25, 2001,
the parties submitted a joint Stipulation and Order dismissing all claims
related to the Krawzak patent. We believe the remaining claims are meritorious
and that we will prevail, however, because little discovery has been completed,
results of the proceedings are uncertain and there can be no assurance to that
effect. The trial has been set for May 2002.

CytoLogix Corp. has filed three separate actions against us in various courts.
The first action is CYTOLOGIX v. VENTANA, Case No. CV 12231 REK, filed Oct. 27,
2000 in federal district court in Boston. The complaint claims, under state-law
based unfair competition law, that Ventana misappropriated CytoLogix's trade
secrets related to individual slide heating and incorporated such secrets into
our Discovery and BenchMark instruments. CytoLogix seeks assignment of our
patent applications relating to individual slide heating claiming the idea,
treble damages (unspecified amount) and an injunction against our further sales
of Discovery and BenchMark instruments. We believe that we have meritorious
defenses to the claims in this action and that resolution of this matter will
not have a material adverse effect on our business, financial condition or
results of operation; however, this litigation is in an early stage and the
results of the proceeding are uncertain and there can be no assurance to that
effect.

The second is CYTOLOGIX v. VENTANA, Case No. 4 Ni 54/00 (EU) (Nullity suit),
filed November 9, 2000 in the German Federal Patent Court, Munich, Germany.
CytoLogix seeks to invalidate our German patent (no. DE 69117052.5), which
covers various aspects of our automated, slide staining system. We believe we
can defend this patent through the Nullity proceeding, however because this
action is relatively new, results of the proceeding are uncertain and there can
be no assurance to that effect. We have responded to this action and now await
further orders from the German Federal Patent Court. Oral proceedings are
currently scheduled for March 2002.

The third action is CYTOLOGIX v. VENTANA, Case No. 01-10178 REK, filed January
30, 2001 in the U.S. District Court, Eastern District of Massachusetts. This
complaint claims that we infringed on CytoLogix's patent No. 6,180,061, entitled
"Moving Platform Slide Stainer with Heating Elements," and was later amended to
add U.S. Patent No. 6,183,693, issued Feb. 7, 2001, entitled "Random Access
Slide Stainer with Independent Slide Heating Regulation," both assigned to
CytoLogix Corporation. CytoLogix seeks assignment of our patent applications
claiming the independent slide heater idea, treble damages (unspecified amount)
and an

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                          Ventana Medical Systems, Inc.


injunction against our further sales of Discovery and BenchMark instruments. We
believe that we have meritorious defenses to the claims in this action and that
resolution of this matter will not have a material adverse effect on our
business, financial condition or results of operation; however, this litigation
is in an early stage and the results of the proceeding are uncertain and there
can be no assurance to that effect. The trial has been set for April 2002.

Item 6.  Exhibits and reports on Form 8-K

         (a) Exhibits - No Exhibits

         (b) Reports on Form 8-K.

             No reports were filed on Form 8-K during the quarter ended
 September 30, 2001.

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                                    SIGNATURE


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

                                         Ventana Medical Systems, Inc.



Date: November 14, 2001              By: /s/ Nicholas Malden
                                         ---------------------------------
                                        Nicholas Malden, Vice President,
                                        Chief Financial Officer and Secretary

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