<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10Q

     [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
          EXCHANGE ACT OF 1934 For the period ended June 30, 1999.

                                       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)

<TABLE>
<CAPTION>
                     DELAWARE                             94-2976937
         -------------------------------              ------------------
<S>                                                   <C>
         (State or other jurisdiction of               (I.R.S. employer
         incorporation or organization)               identification no.)

               3865 North Business                          85705
                  Center Drive
                   Tucson, AZ
     --------------------------------------                --------
    (Address of principal executive offices)              (Zip Code)
</TABLE>

       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 --- 13,503,710 shares as of July 31, 1999.

<PAGE>   2

                          VENTANA MEDICAL SYSTEMS, INC.


                               INDEX TO FORM 10-Q


Part I.      Financial Information

        Item 1.   Financial Statements

                  Condensed Consolidated Balance Sheets
                  June 30, 1999 (Unaudited) and December 31, 1998

                  Condensed Consolidated Statements of Operations Three
                  and  six  months   ended  June  30,   1999  and  1998
                  (Unaudited)

                  Condensed Consolidated Statements of Cash Flows
                  Six months ended June 30, 1999 and 1998 (Unaudited)

                  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>   3

                          VENTANA MEDICAL SYSTEMS, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (in thousands except share data)

<TABLE>
<CAPTION>
                                                         June 30,      December 31,
                        ASSETS                            1999            1998
                                                         --------      ------------
                                                        (Unaudited)       (Note)
<S>                                                      <C>            <C>
Current assets:
   Cash and cash equivalents                             $  2,463       $  2,424
   Accounts receivable                                     15,338         16,531
   Inventories (Note 2)                                    12,162         11,009
   Other current assets                                     2,508          1,787
                                                         --------       --------
Total current assets                                       32,471         31,751
Property and equipment, net                                13,928          9,937
Intangibles, net (Note 3)                                  14,559         14,592
                                                         --------       --------
Total assets                                             $ 60,958       $ 56,280
                                                         ========       ========

     LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
   Accounts payable                                      $  3,102       $  3,536
   Other current liabilities                                6,387          5,053
                                                         --------       --------
Total current liabilities                                   9,489          8,589
Long term debt                                              1,809          1,907
Stockholders' equity
   Common stock - $.001 par value; 50,000,000
     shares authorized;  13,538,593 and 13,421,819
     shares issued and outstanding at June 30, 1999
     and December 31, 1998, respectively                       13             13
   Additional Paid-In Capital                              79,718         78,716
   Accumulated deficit                                    (29,278)       (32,152)
   Accumulated other comprehensive income                    (193)          (193)
   Treasury Stock - 40,000 shares, at cost                   (600)          (600)
                                                         --------       --------
Total stockholders' equity                                 49,660         45,784
                                                         --------       --------
Total liabilities and stockholders' equity               $ 60,958       $ 56,280
                                                         ========       ========
</TABLE>

    Note: The consolidated balance sheet at December 31, 1998 has been derived
          from the audited financial statements at that date but does not
          include all of the information and footnotes required by generally
          accepted accounting principles for complete financial statements.

See accompanying notes

                                        3
<PAGE>   4

                          VENTANA MEDICAL SYSTEMS, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands except per share data)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                              Three Months Ended           Six Months Ended
                                                   June 30                     June 30
                                           -----------------------      ----------------------
                                             1999           1998          1999          1998
                                           --------       --------      --------      --------
<S>                                        <C>            <C>           <C>           <C>
Sales:
  Instruments                              $  4,726       $  3,827      $  9,846      $  7,422
  Reagents and other                         11,589          7,755        22,101        14,515
                                           --------       --------      --------      --------
    Total net sales                          16,315         11,582        31,947        21,937
Cost of goods sold                            4,765          3,477         9,753         6,930
                                           --------       --------      --------      --------
Gross profit                                 11,550          8,105        22,194        15,007
Operating expenses:
  Research and development                    1,908          1,391         3,537         2,591
  Selling, general and administrative         7,875          5,547        15,274        10,521
  Amortization of intangibles                   258            127           511           254
                                           --------       --------      --------      --------
Income from operations                        1,509          1,040         2,872         1,641
Other income                                    (22)           262             2           472
                                           --------       --------      --------      --------
Pretax income                                 1,487          1,302         2,874         2,113
Provision for income tax (Note 7)              (138)            --            --            --
                                           --------       --------      --------      --------
Net income                                 $  1,625       $  1,302      $  2,874      $  2,113
                                           ========       ========      ========      ========
Net income per share (Note 4)
  Basic                                    $   0.12       $   0.10      $   0.21      $   0.16
                                           ========       ========      ========      ========
  Diluted                                  $   0.11       $   0.09      $   0.20      $   0.14
                                           ========       ========      ========      ========
</TABLE>

 See accompanying notes


                                       4
<PAGE>   5

                          VENTANA MEDICAL SYSTEMS, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                             Six Months Ended
                                                                 June 30
                                                          -----------------------
                                                            1999           1998
                                                          --------       --------
<S>                                                       <C>            <C>
Operating activities:
Net Income                                                $  2,874       $  2,113
Adjustments to reconcile net income to net cash
  provided by (used in) operating activities:
    Depreciation and amortization                            1,431          1,189
    Changes in operating assets and liabilities, net        (1,544)        (3,325)
                                                          --------       --------
Net cash provided by (used in) operating activities          2,761            (23)

Investing activities:
Purchase of property and equipment, net                     (4,922)        (1,173)
Purchase of intangible assets                                 (502)            --
                                                          --------       --------
Net cash used in investing activities                       (5,424)        (1,173)

Financing activities:
Issuance of debt                                             1,700          1,508
Issuance of stock                                            1,002             --
                                                          --------       --------
Net cash provided by financing activities                    2,702          1,508

Effect of exchange rate change on cash                          --            (36)
                                                          --------       --------
Net increase in cash and cash equivalents                       39            276

Cash and cash equivalents, beginning of period               2,424         18,902
                                                          --------       --------
Cash and cash equivalents, end of period                  $  2,463       $ 19,178
                                                          ========       ========
</TABLE>


See accompanying notes

                                        5
<PAGE>   6

                          VENTANA MEDICAL SYSTEMS, INC.

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


1.   SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed consolidated financial statements are unaudited. They
have been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission and are subject to year-end audit by
independent auditors. Certain information and footnote disclosure normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. It is suggested that the consolidated financial statements be read
in conjunction with the financial statements and notes included in the Company's
Annual Report and Form 10-K for the year ended December 31, 1998.

The information furnished reflects all adjustments which, in the opinion of
management, are necessary for a fair presentation of results for the interim
periods. Such adjustments consisted only of normal recurring items. It should
also be noted that results for the interim periods are not necessarily
indicative of the results expected for the full year or any future period.

The presentation of these consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.


2.   INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
                                        June 30,                December 31,
                                          1999                      1998
                                        -------                 -----------
                                                (in thousands)
<S>                                     <C>                     <C>
Raw material and work-in-process        $ 5,479                   $ 5,165
Finished goods                            6,683                     5,844
                                        -------                    ------
                                        $12,162                   $11,009
                                        =======                   =======
</TABLE>

                                       6
<PAGE>   7

                          VENTANA MEDICAL SYSTEMS, INC.

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


3.   INTANGIBLES

Intangibles consist of the following:

<TABLE>
<CAPTION>
                                                       June 30,      December 31,
                                                         1999           1998
                                                       -------       -----------
                                                            (in thousands)
<S>                                                    <C>           <C>
     Customer base                                     $ 4,100        $ 4,100
     Developed technology                                2,800          2,800
     Goodwill                                            8,080          7,637
     Supply contract                                     1,200          1,200
     Workforce in place                                    100            100
     Patents                                               551            492
                                                       -------        -------
                                                        16,831         16,329
         Less accumulated amortization                   2,272          1,737
                                                       -------        -------
                                                       $14,559        $14,592
                                                       =======        =======
</TABLE>

                                       7
<PAGE>   8

4.   EARNINGS PER SHARE

The following sets forth the computation of basic and diluted earnings per share
for the periods indicated (in thousands except per share data).

<TABLE>
<CAPTION>
                                                 Three Months Ended         Six Months Ended
                                                      June 30,                  June 30,
                                              ---------------------      ---------------------
                                                1999         1998          1999         1998
                                              --------     --------      --------     --------
<S>                                           <C>          <C>           <C>          <C>
 Net income                                   $  1,625     $  1,302      $  2,874     $  2,113
 Weighted average common shares
   outstanding, basic                           13,462       13,298        13,433       13,277
 Add: dilutive stock options and warrants        1,304        1,549         1,218        1,421
                                                ------       ------        ------       ------
 Weighted average common shares
   outstanding, diluted                         14,766       14,847        14,651       14,698
                                                ======       ======        ======       ======
 Net income per share, basic                  $   0.12     $   0.10      $   0.21     $   0.16
                                                ======       ======        ======       ======
 Net income per share, diluted                $   0.11     $   0.09      $   0.20     $   0.14
                                                ======       ======        ======       ======
</TABLE>

                                       8
<PAGE>   9

                          VENTANA MEDICAL SYSTEMS, INC.

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


5.   COMPREHENSIVE INCOME

The components of comprehensive income for the three and six month periods ended
June 30, 1999 and 1998 are as follows (in thousands):

<TABLE>
<CAPTION>
                                   Three Months Ended              Six Months Ended
                                        June 30,                       June 30,
                                   ------------------             -----------------
                                     1999      1998                1999        1998
                                   -------   --------             -------    -------
<S>                                <C>       <C>                  <C>        <C>
Net income                         $ 1,625   $  1,302             $ 2,874    $ 2,113
Foreign currency translation            -         (57)                 -         (36)
                                   -------   --------             -------    -------
Comprehensive income               $ 1,625   $  1,245             $ 2,874    $ 2,077
                                   =======   ========             =======    =======
</TABLE>


Accumulated other comprehensive income consists exclusively of foreign currency
translation adjustments.


6.   FOREIGN CURRENCY TRANSLATIONS

Due to a significant change in economic facts and circumstances during 1998,
effective January 1, 1999 the Company changed the functional currencies for its
foreign subsidiaries from the local currencies to the U.S. Dollar. The primary
change in the economic facts and circumstances involved changing the business
model for the subsidiaries from one of essentially serving the needs of local
distributors to a model where the subsidiary is an active marketer of the
Company's instruments and reagents, which has resulted in higher pricing and
improved gross margins. The change in model was precipitated by litigation with
a major European distributor, which was settled in 1998.


7.   PROVISION FOR INCOME TAXES

Income taxes were provided for in the first quarter at a consolidated effective
rate of 10%, the rate expected to approximate the 1999 full year provision. In
the second quarter of 1999, the amount provided in the first quarter of 1999 was
reversed. Management believes no provision for income taxes is required in the
six month period ended June 30, 1999 due to the existence of deferred tax assets
not previously recognized.

                                       9
<PAGE>   10

8.   LINE OF CREDIT

The Company, under its revolving line of credit agreement, has $10 million
available, which is subject to renewal on March 31, 2000. At June 30, 1999, $1.7
million was outstanding under the line of credit. Amounts outstanding bear
interest at the bank's prime rate.


9.   OPERATING SEGMENT AND ENTERPRISE DATA

The Company has three reportable segments: North America (primarily the United
States), Europe (primarily France and Germany) and Japan (formed in 1998).
Segment information at and for the three and six months ended June 30, 1999 and
1998 follows (in thousands):

<TABLE>
<CAPTION>
                                            Three months ended June 30, 1999
                                 -----------------------------------------------------
                                  North                          Elimina-
                                 America    Europe     Japan      tions         Totals
                                 -------    ------    ------    ---------      -------
<S>                              <C>        <C>       <C>       <C>            <C>
Sales to external customers      $13,340    $2,509    $  466      $    --      $16,315
Segment profit (loss)              1,883        24      (272)         (10)       1,625


                                            Three months ended June 30, 1998
                                 -----------------------------------------------------
                                  North                          Elimina-
                                 America    Europe     Japan       tions        Totals
                                 -------    ------    ------     ---------     -------
Sales to external customers      $10,242    $1,337    $    3      $    --      $11,582
Segment profit (loss)              1,601       (99)     (255)          55        1,302


                                             Six months ended June 30, 1999
                                 -----------------------------------------------------
                                  North                          Elimina-
                                 America    Europe     Japan       tions        Totals
                                 -------    ------    -------    ---------     -------
Sales to external customers      $26,265    $4,567    $1,115      $     --     $31,947
Segment profit (loss)              3,370      (424)     (103)           31       2,874
Segment assets                    74,509     7,493     1,951       (22,995)     60,958


                                             Six months ended June 30, 1998
                                 -----------------------------------------------------
                                  North                          Elimina-
                                 America    Europe     Japan       tions       Totals
                                 -------    ------    ---------- ---------    --------
Sales to external customers      $19,561    $2,279    $   97      $     --    $21,937
Segment profit (loss)              3,014      (516)     (399)           14      2,113
Segment assets                    65,030     5,198       650       (17,671)    53,207
</TABLE>


                                       10
<PAGE>   11


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. Actual events or results may differ materially from those anticipated by
such forward-looking statements as a result of the factors described herein and
in the documents incorporated herein by reference. Such forward-looking
statements include, but are not limited to, statements concerning risks
associated with the incidence of cancer and cancer screening; improvements in
automated immunohistochemistry ("IHC"); the ability of the Company to implement
its business strategy; development and introduction of new products by the
Company or other parties; research and development; marketing, sales and
distribution; manufacturing; competition; third-party reimbursement; government
regulation; and operating and capital requirements.

OVERVIEW

Ventana develops, manufactures and markets proprietary instrument/reagent
systems that automate tissue preparation, IHC tests, special stains ("SS") tests
and in situ hybridization ("ISH") tests for the analysis of cells and tissues on
microscope slides.


RESULTS OF OPERATIONS

Net Sales

Net sales for the three and six months ended June 30, 1999 as compared to the
same periods in 1998 increased 41% and 46% to $16.3 million and $31.9 million
from $11.6 million and $21.9 million, respectively. The increase in net sales
was attributable to a 23% and 33% increase in instrument sales for the three
month and six month periods and a 49% and 52% increase in reagent and other
sales for the three and six month periods. Instrument and reagent sales
increased primarily due to the introduction of the special stains tissue
processors and electron microscopy instruments which were not offered by the
Company in the first and second quarters of 1998. In addition, IHC continued a
strong growth trend. Sales increased in the 1999 three and six month periods
compared to the 1998 three and six month periods in all geographic segments: 30%
and 34% in North America ($13.3 million and $26.3 million versus $10.2 million
and $19.6 million), 88% and 100% in Europe ($2.5 million and $4.6 million versus
$1.3 million and $2.3 million) and Japan $0.5 million and $1.1 million versus
$0.003 million and $0.1 million.

Gross Profit

Gross profit for the three and six months ended June 30, 1999 increased to $11.6
million and $22.2 million, respectively, from $8.1 million and $15.0 million for
the same periods in 1998. In addition, the Company's gross margin for the three
and six month periods increased to 71% and 69% from 70% and 68% for the prior
year periods. The slight margin increase was due to a larger portion of revenue
being derived from reagents, which have better margins than instruments.

                                       11
<PAGE>   12

Research and Development

Research and development expenses were $1.9 million for the three months ended
June 30, 1999 and $3.5 million for the six months ended June 30, 1999. These
amounts represent a 37% increase for both the three month period and the six
month period over the prior year. The increase results primarily from
substantial development work on the new in situ hybridization instrument, and
increase in reagent research activity. Research and development expenses
remained consistent as a percent of sales, 12%, for the three month period for
both 1998 and 1999. For the six month period ending June 30,1999 research and
development expenses fell from 12% in 1998 to 11% in 1999.

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

Presented below is a summary of SG&A expense for the three and six months ended
June 30, 1999 and 1998.

                                       12
<PAGE>   13

SG&A SUMMARY

<TABLE>
<CAPTION>
                                    Three Months Ended                 Six Months Ended
                                         June 30,                          June 30,
                                --------------------------         -------------------------
                                  1999              1998             1999             1998
                                --------          --------         --------         --------
                                    %                 %                %                %
                                $  Sales          $  Sales         $  Sales         $  Sales
                                --------          --------         --------         --------
                                                      ($ in thousands)
<S>                           <C>      <C>       <C>     <C>      <C>      <C>     <C>     <C>
Sales and marketing           $6,364   39%       $4,360  38%      $12,428  39%     $ 8,211 37%
Administration                 1,511    9%        1,187  10%        2,846   9%       2,310 11%
                              -----------        ----------       -----------      ----------
Total SG&A                    $7,875   48%       $5,547  48%      $15,274  48%     $10,521 48%
                              ===========        ==========       ===========      ==========
</TABLE>


SG&A expense for the three and six months ended June 30, 1999 increased to $7.9
million and $15.3 million from $5.5 million and $10.5 million for the same
periods of the prior year. SG&A expense as a percentage of net sales remained
constant during the respective periods in 1998 and 1999. Total SG&A expenses
increased in absolute terms due primarily to the Company's expanding business
base in Europe and Japan plus costs associated with implementing new
administrative systems and functions.

Amortization of Intangibles

Intangible assets consist primarily of goodwill, customer base and developed
technology resulting from acquisitions and patents. Such assets are amortized
over estimated useful lives of 15 to 20 years resulting in quarterly costs
approximating $0.3 million. Additionally, the Company will review the utility of
these assets each quarter to assess their continued value and recognize any
impairment should the Company determine such a condition exists.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 1999 the Company's principal source of liquidity consisted of
cash and cash equivalents of $2.5 million. The Company also had a $10 million
revolving bank credit facility and $1.7 million outstanding thereunder as of
June 30, 1999. 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.

The Company's liquidity has been favorably impacted in 1999 by an improvement in
accounts receivable days sales outstanding (DSO) from 104 days at the end of
1998 to 86 days at June 30, 1999. The improvement occurred primarily in North
America due to a concerted effort to collect past due balances.

                                       13
<PAGE>   14

The Company expects to use a significant portion of its available resources
during the current year for fixed asset expenditures to increase manufacturing
capacity, increase instrument placements with new and existing customers, and
enhance its business application computer hardware and software resources. The
Company anticipates that its remaining capital resources will be used for
working capital and general corporate purposes. Pending such uses, the Company
intends to invest its cash resources in short-term, interest-bearing, investment
grade securities.

During the six months ended June 30, 1999, net cash used in operations and
investing activities was approximately $2.7 million, versus $1.2 million in the
six months ended June 30, 1998, primarily due to purchases of property and
equipment.

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. The Company's future capital requirements will
depend on many factors, including the extent to which the Company's products
gain market acceptance, the mix of instruments placed through direct sales or
rentals, progress of the Company's product development programs, competing
technological and market developments, expansion of the Company's sales and
marketing activities, the cost of manufacturing scale up activities, possible
acquisitions of complementary businesses, products or technologies, the extent
and duration of operating losses and the timing of regulatory approvals. The
Company may be required to raise additional capital in the future through the
issuance of either debt instruments or equity securities, or both. There is no
assurance that such capital will be available to the extent required or on terms
acceptable to the Company, or at all.

ADDITIONAL RISK FACTORS

Continuing Losses; Uncertainty of Future Profitability

The Company has incurred significant cumulative losses from its inception in
1985 through June 30, 1999. The Company's ability to sustain profitability is
dependent on a variety of factors including the extent to which its instrument
and reagent systems continue to achieve market acceptance, the Company's ability
to sell reagents to its customers, the Company's ability to compete
successfully, the Company's ability to develop, introduce, market and distribute
existing and new diagnostic systems, the level of expenditures incurred by the
Company in investing in product development and sales and marketing, the
Company's ability to expand manufacturing capacity as required and the receipt
of required regulatory approvals for products developed by the Company. There
can be no assurance that the Company will be successful in these efforts.
Moreover, the level of future profitability, if any, cannot be accurately
predicted and there can be no assurance that profitability will be sustained on
a quarterly or annual basis, or at all, or that the Company will not incur
operating losses in the future.

                                       14
<PAGE>   15

Future Fluctuations in Operating Results

The Company derives revenues from the sale of reagents and instruments. The
initial placement of an instrument is subject to a longer, less consistent sales
cycle than the sale of reagents, which begin and are typically recurring once an
instrument is placed. The Company's future operating results are likely to
fluctuate substantially from period to period because instrument sales are
likely to remain an important part of revenues in the near future. The degree of
fluctuation will depend on the timing, level and mix of instruments placed
through direct sales and instruments placed through QRIBs and rentals. In
addition, average daily reagent use by customers may fluctuate from period to
period, which may contribute to future fluctuations in revenues.

Other factors that may result in fluctuations in operating results include the
timing of new product announcements and the introduction of new products and new
technologies by the Company and its competitors, market acceptance of the
Company's current or new products, developments with respect to regulatory
matters, availability and cost of raw materials from its suppliers, competitive
pricing pressures, increased research and development expenses, and increased
marketing and sales expenses associated with the implementation of the Company's
market expansion strategies for its instrument and reagent products. Future
instrument and reagent sales could also be adversely affected by the
configuration of the Company's patient priority systems, which require the use
of the Company's detection chemistries, particularly if and to the extent that
competitors are successful in developing and introducing new IHC instruments or
if competitors offer reagent supply arrangements having pricing or other terms
more favorable than those offered by the Company. Such increased competition in
reagent supply could also adversely affect sales of reagents to batch processing
instrument customers since those instruments do not require the use of the
Company's reagents. In connection with future introductions of new products, the
Company may be required to incur charges for inventory obsolescence in
connection with unsold inventory of older generations of products. To date,
however, the Company has not incurred material charges or expenses associated
with inventory obsolescence in connection with new product introductions. In
addition, a significant portion of the Company's expense levels is based on its
expectation of a higher level of revenues in the future and are relatively fixed
in nature. Therefore, if revenue levels are below expectations, operating
results in a given period are likely to be adversely affected.

Rate of Market Acceptance and Technological Change

Use of automated systems to perform diagnostic tests is relatively new.
Historically, the diagnostic tests performed by the Company's systems have been
performed manually by laboratory personnel. The rate of market acceptance of the
Company's products will be largely dependent on the Company's ability to
persuade the medical community of the benefits of automated diagnostic testing
using the Company's products. Market acceptance and sales of the Company's
products may also be affected by the price and quality of the Company's and its
competitors' products. The Company's products could also be rendered obsolete or
noncompetitive by virtue of technological innovations in the fields of cellular
or molecular diagnostics. Failure of the Company's products to achieve market
acceptance would have a material adverse effect on the Company's business,
financial condition and results of operations.

                                       15
<PAGE>   16

Risks Associated with Development and Introduction of New Products

The Company's future growth and profitability will be dependent, in large part,
on its ability to develop, introduce and market new instruments and reagents
used in diagnosing and selecting appropriate treatment for cancer and additional
disease states. The Company depends in part on the success of medical research
in developing new antibodies, nucleic acid probes and clinical diagnostic
procedures that can be adapted for use in the Company's systems. In addition,
the Company will need to obtain licenses on satisfactory terms to certain of
these technologies, for which there can be no assurance. Certain of the
Company's products are currently under development, initial testing or
preclinical or clinical evaluation by the Company. Other products are scheduled
for future development. Products under development or scheduled for future
development may prove to be unreliable from a diagnostic standpoint, may be
difficult to manufacture in an efficient manner, may fail to receive necessary
regulatory clearances, may not achieve market acceptance or may encounter other
unanticipated difficulties. The failure of the Company to develop, introduce and
market new products on a timely basis or at all could have a material adverse
effect on the Company's business, financial condition and results of operations.

Manufacturing Risks

The Company has only manufactured patient priority instruments and reagents for
commercial sale since late 1991, and manufacturing of the Company's batch
processing instruments is performed by third parties. As the Company continues
to increase production of such instruments and reagents and develops and
introduces new products, it may from time to time experience difficulties in
manufacturing. The Company must continue to increase production volumes of
instruments and reagents in a cost-effective manner in order to be profitable.
To increase production levels, the Company will need to scale-up its
manufacturing facilities, increase its automated manufacturing capabilities and
continue to comply with the current good manufacturing practices ("GMPs")
prescribed by the United States Food and Drug Administration ("FDA") and other
standards prescribed by various federal, state and local regulatory agencies in
the United States and other countries, including the International Standards
Organization ("ISO") 9000 Series certifications. There can be no assurance that
manufacturing and quality problems will not arise as the Company increases its
manufacturing operations or that such scale-up can be achieved in a timely
manner or at a commercially reasonable cost. Manufacturing or quality problems
or difficulties or delays in manufacturing scale-up could have a material
adverse effect on the Company's business, financial condition and results of
operations.

Dependence Upon Key Suppliers

The Company's reagent products are formulated from both chemical and biological
materials utilizing proprietary Ventana technology as well as standard
processing techniques. Certain components and raw materials, primarily
antibodies, used in the manufacturing of the Company's reagent products are
currently provided by single-source vendors. There can be no assurance that the
materials or reagents needed by the Company will be available in commercial
quantities or at acceptable prices. Any supply interruption or yield problems
encountered in the use of materials from these vendors could have a material
adverse effect on the Company's ability to manufacture its products until a new
source of supply is obtained. The use of alternative or additional suppliers
could be time consuming and expensive. In addition, a number of the components
used to manufacture instruments are fabricated on a custom basis to the
Company's specifications and

                                       16
<PAGE>   17

are currently available from a limited number of sources. Consequently, in the
event the supply of materials or components from any of these vendors were
delayed or interrupted for any reason or in the event of quality or reliability
problems with such components or suppliers, the Company's ability to supply such
instruments could be impaired, which could have a material adverse effect on the
Company's business, financial condition and results of operations.

Risks Associated with Past and Future Acquisitions

Although the Company has no pending agreements or commitments, the Company may
make additional acquisitions of complementary businesses, products or
technologies in the future. Acquisitions of companies, divisions of companies,
or products entail numerous risks, including (i) the potential inability to
successfully integrate acquired operations and products or to realize
anticipated synergies, economies of scale or other value, (ii) diversion of
management's attention and (iii) loss of key employees of acquired operations.
No assurance can be given that the Company will not incur problems with respect
to any future acquisitions, and there can be no assurance that any future
acquisitions will result in the Company becoming profitable or, if the Company
achieves profitability, that such acquisition will increase the Company's
profitability. Furthermore, there can be no assurance that the Company will
realize value from any such acquisition, which equals or exceeds the
consideration paid. Any such problems could have a material adverse effect on
the Company's business, financial condition and results of operations. In
addition, any future acquisitions by the Company may result in dilutive
issuances of equity securities, the incurrence of additional debt, large
one-time write-offs and the creation of goodwill or other intangible assets that
could result in amortization expense. These factors could have a material
adverse effect on the Company's business, financial condition and results of
operations.

Risks Relating to Patents and Proprietary Rights

The Company's success depends, in part, on its ability to obtain patents,
maintain trade secret protection and operate without infringing the proprietary
rights of others. There can be no assurance that the Company's patent
applications will result in patents being issued or that any issued patents will
provide adequate protection against competitive technologies or will be held
valid if challenged. Others may independently develop products similar to those
of the Company or design around or otherwise circumvent patents issued to the
Company. In the event that any relevant claims of third-party patents are upheld
as valid and enforceable, the Company could be prevented from practicing the
subject matter claimed in such patents, or would be required to obtain licenses
from the patent owners of each of such patents or to redesign its products or
processes to avoid infringement. There can be no assurance that such licenses
would be available or, if available, would be on terms acceptable to the Company
or that the Company would be successful in any attempt to redesign its products
or processes to avoid infringement. If the Company does not obtain necessary
licenses, it could be subject to litigation and encounter delays in product
introductions while it attempts to design around such patents. Alternatively,
the Company's development, manufacture or sale of such products could be
prevented by the patent holder. Litigation would result in significant cost to
the Company as well as diversion of management time. Adverse determinations in
any such proceedings could have a material adverse effect on the Company's
business, financial condition and results of operations.

Ventana also relies upon trade secret protection for its confidential and
proprietary information. There can be no assurance that others will not
independently develop substantially equivalent

                                       17
<PAGE>   18

proprietary information or techniques, gain access to Ventana's trade secrets or
disclose such technology, or that Ventana can effectively protect its trade
secrets. Litigation to protect Ventana's trade secrets would result in
significant cost to the Company as well as diversion of management time. Adverse
determinations in any such proceedings or unauthorized disclosure of Ventana
trade secrets could have a material adverse effect on Ventana's business,
financial condition and results of operations.

Uncertainty of Future Funding of Capital Requirements

The Company anticipates that its existing capital resources and available
borrowing capacity under the Company's revolving credit line will be adequate to
satisfy its capital requirements for the next 12 months. The Company's future
capital requirements will depend on many factors, including the extent to which
the Company's products gain market acceptance, the mix of instruments placed
through direct sales or through QRIBs, progress of the Company's product
development programs, competing technological and market developments, expansion
of the Company's sales and marketing activities, the cost of manufacturing
scale-up activities, possible acquisitions of complementary businesses, products
or technologies, the extent and duration of operating losses, the Company's
ability to sustain profitability and timing of regulatory approvals. The Company
may require additional capital resources and there is no assurance such capital
will be available to the extent required, on terms acceptable to the Company or
at all. Any such future capital requirements could result in the issuance of
equity securities, which would be dilutive to existing stockholders.

Dependence on Key Personnel

The Company is dependent upon the retention of principal members of its
management, Board of Directors, scientific, technical, marketing and sales staff
and the recruitment of additional personnel. The Company does not have an
employment agreement with any of its executive officers. The Company does not
maintain "key person" life insurance on any of its personnel. The Company
competes with other companies, academic institutions, government entities and
other organizations for qualified personnel in the areas of the Company's
activities. The inability to hire or retain qualified personnel could have a
material adverse effect on the Company's business, financial condition and
results of operations.

Uncertainties Related to Government Funding

A portion of the Company's products are sold to universities, research
laboratories, private foundations and other institutions where funding is
dependent upon grants from government agencies, such as the National Institutes
of Health. Research funding by the government could be significantly reduced.
Any such reduction may materially affect the ability of many of the Company's
research customers to purchase the Company's products.

FDA and Other Government Regulation

The manufacturing, marketing and sale of the Company's products are subject to
extensive and rigorous government regulation in the United States and in other
countries. In the United States and certain other countries, the process of
obtaining and maintaining required regulatory approvals is lengthy, expensive
and uncertain. In the United States, the FDA regulates, as medical devices,
clinical diagnostic tests and reagents, as well as instruments used in the

                                       18
<PAGE>   19

diagnosis of adverse conditions. The Federal Food, Drug, and Cosmetic Act
governs the design, testing, manufacture, safety, efficacy, labeling, storage,
record keeping, approval, advertising and promotion of the Company's products.
There are two principal FDA regulatory review paths for medical devices: the
510(k) pre-market notification ("510(k)") process and the pre-market approval
("PMA") process. The PMA process typically requires the submission of more
extensive clinical data and is costlier and more time-consuming to complete than
the 510(k) process.

The FDA regulates, as medical devices, instruments, diagnostic tests and
reagents that are traditionally manufactured and commercially marketed as
finished test kits or equipment. Some clinical laboratories, however, choose to
purchase individual reagents intended for specific analyses and develop and
prepare their own finished diagnostic tests. Although neither the individual
reagents nor the finished tests prepared from them by the clinical laboratories
have traditionally been regulated by the FDA, the FDA has recently proposed a
rule that, if adopted, would regulate the reagents sold to clinical laboratories
as medical devices. The proposed rule would also restrict sales of these
reagents to clinical laboratories certified under the Clinical Laboratory
Improvement Amendments of 1988 ("CLIA") as high complexity testing laboratories.
The Company intends to market some diagnostic products as finished test kits or
equipment and others as individual reagents; consequently, some or all of these
products may be regulated as medical devices.

Medical devices generally require FDA approval or clearance prior to being
marketed in the United States. The process of obtaining FDA clearances or
approvals necessary to market medical devices can be time-consuming, expensive
and uncertain, and there can be no assurance that any clearance or approval
sought by the Company will be granted or that FDA review will not involve delays
adversely affecting the marketing and sale of the Company's products. Further,
clearances or approvals may place substantial restrictions on the indications
for which the product may be marketed or to whom it may be marketed.
Additionally, there can be no assurance that the FDA will not require additional
data, require that the Company conduct further clinical studies or obtain a PMA
causing the Company to incur further cost and delay.

With respect to automated IHC testing functions, the Company's instruments have
been categorized by the FDA as automated cell staining devices and have been
exempted from the 510(k) notification process. To date, ISH tests have not
received FDA approval or clearance and, therefore, use of the GenII for ISH
tests will be restricted to research applications. New instrument products that
the Company may introduce could require future 510(k) clearances. Certain
antibodies that the Company may wish to market with labeling indicating that
they can be used in the diagnosis of particular diseases may require PMA
approval. In addition, the FDA has proposed that some of the antibody products
that Ventana may wish to market be subjected to a pre-filing certification
process. Certain of the Company's products are currently sold for research use
and are labeled as such.

Failure to comply with applicable regulatory requirements can, among other
consequences, result in fines, injunctions, civil penalties, suspensions or loss
of regulatory approvals, recalls or seizures of products, operating restrictions
and criminal prosecutions. In particular, the FDA enforces regulations
prohibiting the marketing of products for non-indicated uses. In addition,
governmental regulations may be established that could prevent or delay
regulatory approval of the Company's products. Delays in or failure to receive
approval of products the Company plans to introduce, loss of or additional
restrictions or limitations relating to previously received

                                       19

<PAGE>   20

approvals, other regulatory action against the Company or changes in the
applicable regulatory climate could individually or in the aggregate have a
material adverse effect on the Company's business, financial condition and
results of operations.

The Company is also required to register as a medical device manufacturer with
the FDA and is inspected on a routine basis by the FDA for compliance with its
regulations. The Company's clinical laboratory customers are subject to CLIA,
which is intended to ensure the quality and reliability of medical testing.

In addition to these regulations, the Company is subject to numerous federal,
state and local laws and regulations relating to such matters as safe working
conditions and environmental matters. There can be no assurance that such laws
or regulations will not in the future have a material adverse effect on the
Company's business, financial condition and results of operations.

Risks Relating to Availability of Third-Party Reimbursement and Potential
Adverse Effects of Health Care Reform

The Company's ability to sustain revenue growth and profitability may depend on
the ability of the Company's customers to obtain adequate levels of third-party
reimbursement for use of certain diagnostic tests in the United States, Europe
and other countries. Currently, the availability of third-party reimbursement is
limited and uncertain for some IHC tests.

In the United States, the Company's products are purchased primarily by medical
institutions and laboratories which bill various third-party payors, such as
Medicare, Medicaid, other government programs and private insurance plans, for
the health care services provided to their patients. Third-party payors may deny
reimbursement to the Company's customers if they determine that a prescribed
device or diagnostic test has not received appropriate FDA or other governmental
regulatory clearances or approvals, is not used in accordance with
cost-effective treatment methods as determined by the payor, or is experimental,
unnecessary or inappropriate. The success of the Company's products may depend
on the extent to which appropriate reimbursement levels for the costs of such
products and related treatment are obtained by the Company's customers from
government authorities, private health insurers and other organizations, such as
health maintenance organizations ("HMOs"). Third-party payors are increasingly
challenging the prices charged for medical products and services. The trend
towards managed health care in the United States and the concurrent growth of
organizations such as HMOs could significantly influence the purchase of health
care services and products. In addition, the federal government and certain
members of Congress have proposed, and various state governments have adopted or
are considering, programs to reform the health care system. These proposals are
focused, in large part, on controlling the escalation of health care
expenditures. The cost containment measures that health care payors are
instituting and the impact of any health care reform could have a material
adverse effect on the levels of reimbursement the Company's customers receive
from third-party payors and the Company's ability to market and sell its
products and consequently could have a material adverse effect on the Company's
business, financial condition and results of operations.

Environmental Matters

Certain of the Company's manufacturing processes, primarily processes involved
in manufacturing certain of the Company's reagent products, require the use of
potentially

                                       20

<PAGE>   21

hazardous and carcinogenic chemicals. The Company is required to comply with
applicable federal, state and local laws regarding the use, storage and disposal
of such materials. The Company currently uses third-party disposal services to
remove and dispose of the hazardous materials used in its processes. The Company
could in the future encounter claims from individuals, governmental authorities
or other persons or entities in connection with exposure to or disposal or
handling of such hazardous materials or violations of environmental laws by the
Company or its contractors and could also be required to incur additional
expenditures for hazardous materials management or environmental compliance.
Costs associated with environmental claims, violations of environmental laws or
regulations, hazardous materials management and compliance with environmental
laws could have a material adverse effect on the Company's business, financial
condition and results of operations.


READINESS FOR THE YEAR 2000

The Company is engaged in a company-wide project to prepare its business for the
change in date from the year 1999 to 2000. The Company has assembled a Year 2000
project team consisting of Company employees and third-party consultants. The
goal of the Year 2000 project is to assure that there are no major interruptions
in the Company's business operations relating to the transition to the year
2000. The scope of the Company's Year 2000 project includes (i) identifying and
taking appropriate corrective action to remedy the Company's software, hardware
and embedded technology, (ii) working with the payroll service, with which the
Company communicates electronically, to help protect such activity from being
adversely affected by the Year 2000, and (iii) contacting key vendors and
service providers and requesting assurances that such third parties will be Year
2000 compliant. The status of the Year 2000 project is reported regularly to
senior management and the Board of Directors.

The Year 2000 project team has implemented a compliance process to address Year
2000 issues in the Company's software and hardware systems and embedded
technology consisting of the following nine steps: (1) inventory, (2) risk
assessment, (3) prioritization, (4) impact analysis, (5) remediation, (6)
testing, (7) certification, (8) deployment, and (9) approval. The Company's
critical systems have been the project team's top priority. The Company's
critical systems include systems which are the most essential to the Company to
continue its operations without interruption. The Company believes it has
completed its compliance process beyond the deployment and testing phases for
approximately 90 percent of its critical software and hardware systems. With
regard to embedded technology, the Company has completed the remediation and
testing phases for 80 percent of its facilities. The Company has completed its
compliance process for all of its domestic critical systems and anticipates
compliance for all critical systems within its international operations by
November 1999. The Company's target for completing its compliance process for
its non-critical systems is the end of 1999.

All costs and expenses incurred to address the Year 2000 issue are charged
against income on a current basis. The total cost of the project is expected to
be approximately $30,000. These costs include costs of internal employees and
third-party consultants involved in the project and the costs of software and
hardware.

While the Company continues to focus on solutions for Year 2000 issues, and
expects to complete its Year 2000 project in a timely manner, the Company is in
the process of identifying potential major business interruptions that could
reasonably likely result from Year 2000 issues and will develop contingency
plans designed to address such potential interruptions. The Company may also
develop contingency plans designed to generally help protect the Company

                                       21

<PAGE>   22

from unanticipated Year 2000 business interruptions. Contingency plans are
anticipated to include, for example, the identification of alternate suppliers
or service providers, increases in safety levels of raw material and finished
goods inventories, and the development of alternate procedures. The Company's
contingency plans will be developed and modified over time as it receives better
information regarding the Year 2000 status of its systems and embedded
technology and third party readiness.

Management's estimates regarding expected completion dates and costs involved in
the Company's Year 2000 project are based upon various assumptions regarding
future events, including the availability of resources, the success of third
parties in addressing their Year 2000 issues, and other factors. While
management believes the Company is addressing the Year 2000 issue, there is no
guarantee that these estimated completion dates and costs will be achieved. In
the event that the estimated completion dates and costs differ materially from
the actual completion dates and costs, such could have a materially adverse
effect on the Company's financial condition and results of operations. In
addition, the Company cannot reasonably estimate the impact of Year 2000 on the
Company if key third parties, including financial institutions, suppliers,
customers, service providers, public utilities and governments, are unsuccessful
in completing their Year 2000 efforts.

                                       22
<PAGE>   23

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 U.S.
District Court for the District of Delaware. The complaint alleges, 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 substantial compensatory
damages several times in excess of the principal amount of their BioTek notes,
as well as substantial punitive damages, fees and costs. On April 25, 1997,
plaintiffs filed an amended complaint. The amended complaint makes the same
allegations as the original complaint and adds a claim under North Carolina
securities laws. In May 1997, the Company made a motion to transfer the action
to the district of Arizona, or alternatively to the Central District of
California, which was denied by the Court. On December 16, 1997, the Company
filed a motion to dismiss the amended complaint. On September 23, 1998, the
Court granted in part and denied in part the Company's motion to dismiss the
suit. Specifically, the Court dismissed two counts of the complaint but declined
to dismiss four counts. In October the Company filed an application for order
certifying an immediate appeal, which is pending. Based on the facts known to
date, the Company believes the claims are without merit and intends to
vigorously contest this suit. After consideration of the nature of the claims
and the facts relating to the merger and the BioTek note exchange, the Company
believes that it has meritorious defenses to the claims and that resolution of
this matter will not have a material adverse effect on the Company's business,
financial condition and results of operations; however, the results of the
proceedings are uncertain and there can be no assurance to that effect.

On July 16, 1997, a shareholder demand to review and copy corporate documents
pursuant to Section 220 of the Delaware General Corporation Law was denied by
the Company. As a result, an action entitled, , CA. Leung v. Ventana Medical
Systems, Inc., No. 15812, was filed in the Court of Chancery for the State of
Delaware. The plaintiff, which is related to the plaintiffs in the securities
action discussed in the preceding paragraph, seeks inspection of certain books
and records of the Company. The Company believes the plaintiff seeks the
documents for an improper purpose and intends to defend this case vigorously. A
trial on March 3, 1998 resulted in the judge ordering the parties to reach an
agreement without a court order. The agreement provides only for the plaintiff's
attorney to review the corporate documents supplied.

On April 16, 1999, Nelson Leung filed suit in Chancery Court of the State of
Delaware against the Company and its directors at the time of the Biotek
acquisition alleging breach of fiduciary duty, breach of contract and related
claims. Many of these claims are similar to those asserted in the Tse suit. The
suit, which the Company believes to be totally without merit, seeks class action
status for the Biotek shareholders. Based on the facts known to date, the
Company believes the claims are without merit and intends to vigorously contest
this suit. After consideration of the nature of the claims and the facts
relating to the merger and the BioTek note exchange, the Company believes that
it has meritorious defenses to the claims and that resolution of this matter
will not have a material adverse effect on the Company's business, financial
condition and results of operations; however, the results of the proceedings are
uncertain and there can be no assurance to that effect.

                                       23
<PAGE>   24

In connection with a disagreement as to which price should be charged by BioTek
to DAKO for the sale of TechMate 250 instruments, DAKO filed an arbitration
request with the International Chamber of Commerce in July 1997. The arbitration
was scheduled for October 1998. The parties entered into an agreement in May
1998 which resulted in a resolution of the pricing dispute and termination of
the arbitration proceeding.

The Company has received notices of various claims from certain former
employees. In particular, a lawsuit was filed by a former employee in May 1998
against the Company alleging sexual discrimination and associated claims. Based
on its review of the matter, the Company does not believe that the resolution of
these claims will have a material adverse effect on the Company's business,
financial condition, cash flows or results of operations.

Other than the foregoing proceedings, the Company is not a party to any material
pending litigation.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The annual meeting of stockholders of the Company was held on May 6, 1999, for
the purpose of electing three Class III directors, Thomas M. Grogan, M.D., Jack
W. Schuler, and John Patience, increasing the number of shares reserved for
issuance under the 1996 Stock Option Plan, approving the appointment of
auditors, and transacting any other business that might be brought forth.
Proxies for the meeting were solicited pursuant to section 14(a) of the
Securities and Exchange Act of 1934 and there were no solicitations in
opposition to management's solicitations.

Management's nominees for Class III directors, as listed in the proxy statement
were elected with the following vote:

<TABLE>
<CAPTION>
                                 Shares                  Shares                 Shares
                               voted "for"             "withheld"              not voted
                               -----------             ----------              ---------
<S>                            <C>                     <C>                     <C>
Thomas M. Grogan, M.D.          9,812,707               264,066                3,348,433
John Patience                   9,812,434               264,339                3,348,433
Jack W. Schuler                 9,701,347               375,426                3,348,433
</TABLE>


The amendment to the Company's 1996 Stock Option Plan to increase the number of
shares of common stock reserved for issuance thereunder by 725,000 shares to a
new total of 2,475,000 was approved by the following vote:

<TABLE>
<CAPTION>
       Shares                 Shares                      Shares                 Shares
     voted "for"         voted "against"               "abstaining"             not voted
     -----------         ---------------               ------------             ---------
<S>                      <C>                           <C>                      <C>
     5,189,907              3,398,291                     18,633                4,818,375
</TABLE>

                                       24
<PAGE>   25

The appointment of Ernst & Young, LLP as independent auditors was approved by
the following vote:

<TABLE>
<CAPTION>
           Shares                   Shares                   Shares                Shares
         voted "for"            voted "against"           "abstaining"            not voted
         -----------            ---------------           ------------            ---------
<S>                             <C>                       <C>                     <C>
         10,067,262                 5,911                     3,600               3,348,433
</TABLE>


No other matters were submitted for vote.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          27.1 Financial Data Schedule.

     (b)  Reports on Form 8-K.

     No reports were filed on Form 8-K during the quarter ended June 30, 1999.

                                       25
<PAGE>   26

                                    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: August 16, 1999                   By: /s/ JAY MERIDEW
                                            ------------------------------------
                                            Jay Meridew
                                            Vice President of Finance

                                       26
<PAGE>   27

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER           DESCRIPTION
-------          -----------
<S>        <C>
  27.1     Financial Data Schedule.
</TABLE>