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. Yesþ Noo

Indicate by check mark whether the Registrantregistrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a non-accelerated filer.smaller reporting company. See definitionthe definitions of “large accelerated filer,” “accelerated filerfiler” and large accelerated filer”“smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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

The number of shares outstanding of the registrant’s Common Stock, $.001 par value, as of NovemberMay 7, 2007,2008, was 43,673,173.44,078,109.

The accompanying unaudited consolidated financial statements of Third Wave Technologies, Inc. have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results that may be expected for the year ending December 31, 2007.2008.

The balance sheet at December 31, 20062007 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

The accompanying unaudited consolidated financial statements should be read in conjunction with the audited financial statements and footnotes thereto included in our Form 10-K for the fiscal year ended December 31, 20062007 filed with the Securities and Exchange Commission (SEC).

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

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

In accordance with GAAP, basic net lossincome (loss) per share has been computed using the weighted-average number of shares of common stock outstanding during the respective periods. Diluted net lossincome (loss) per share takes into account the weighted average shares from options that could potentially dilute basic net income per share in the future. Shares associated with stock options are excluded for the periods presentedthree months ended March 31, 2008 because they are anti-dilutive.

The following table presents the calculation of basic and diluted net lossincome (loss) per share:share (Amounts in thousands except for per share amounts):

The Company purchases shares of its common stock to cover employee related taxes withheld on vested restricted shares. During the nine months ended September 30, 2007,first quarter of 2008, the Company repurchased and retired approximately 10,00011,000 shares of its common stock for an aggregate pricecost of approximately $53,000.$94,000.

The Company has Incentive Stock Option Plans for its employees and Nonqualified Stock Option Plans (collectively, the Plans) for employees and non-employees under which an aggregate of 13,213,18314,213,183 stock options and stock purchase rights (including restricted stock units (RSUs)) may be granted. Options under the Plans have a maximum life of ten years. Options vest at various intervals, as determined by the compensation committee of the Board of Directors at the date of grant. At September 30, 2007,March 31, 2008, approximately 2.12.6 million shares were available for future grant under the Plans.

The following table summarizes the stock option activity under the Plans for the ninethree months ended September 30, 2007:March 31, 2008:

determined by the compensation committee of the Board of Directors at the date of grant. The following table presents a summary of the Company’s nonvested restricted stock units granted to employees as of September 30, 2007.March 31, 2008.

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

In January 2006, the Company entered a two-year nonexclusive license agreement for rent payments on a non-cancelable lease, net of estimated sublease income, which will continuecertain patent rights involving hepatitis C (HCV) technology. This license permits the Company to be paid overmarket and sell HCV Invader products in the lease term through 2011. The current portionU.S. In January 2008, upon expiration of the accrualinitial license period, the Company extended the license agreement for an additional 1,250,000 Euros. The present value of the fee of $1.7 million (1.2 million Euros) will be amortized over its estimated useful life. The future payments under this license agreement are as follows (in USD) (in thousands):

The license fee is included in other accrued liabilitiesclassified as capitalized license fees on the balance sheets andConsolidated Balance Sheet.

Other long-term assets consist of the remainder is included in other long-term liabilities.following (in thousands):

Other long-term liabilities consist of the long-term portion of the following items:items (in thousands):

recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, FIN No. 48 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN No. 48 is effective for fiscal years beginning after December 15, 2006.2007.

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

The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accruals for interest and penalties on the Company’s Consolidated Balance Sheets at December 31, 20062007 and at September 30, 2007,March 31, 2008, and has not recognized any interest or penalties in the Statement of Operations for the first nine monthsquarter of 2007.2008.

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

This Management’s Discussion and Analysis of Financial Condition and Results of Operations as of September 30, 2007March 31, 2008 and for the three and nine months ended September 30,March 31, 2008 and 2007 and 2006 should be read in conjunction with our Form 10-K for the fiscal year ended December 31, 20062007 filed with the SEC. In this Form 10-Q, the terms “we,” “us,” “our,” “Company,” and “Third Wave” each refer to Third Wave Technologies, Inc. and its subsidiaries. The following discussion of our financial condition and results of our operations should be read in conjunction with our Financial Statements, including the Notes thereto, included elsewhere in this Form 10-Q.

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

More than 200230 clinical laboratory customers are using Third Wave’s molecular diagnostic reagents. Other customers include pharmaceutical and biotechnology companies, academic research centers and major health care providers.

Currently, one of our key strategic initiatives is the commercialization of our Human Papillomavirus (HPV) offering. In August 2005,2006, we received clearance frombegan clinical trials for two HPV pre-market approval submissions to the FDA. We expect to spend $18 million on these submissions over three years, however, this amount could vary pending FDA review and ongoing trial performance. In March 2008, we disclosed the achievement of positive clinical trial data, in which we achieved all primary clinical endpoints in the clinical trial for our human papillomavirus (HPV) tests. The Company submitted the pre-market approval application to the U.S. Food and Drug Administration (the FDA) for both its high-risk and 16/18 genotyping products in April 2008. If for any reason we are unable to successfully commercialize our Invader UGT1A1 Molecular Assay. The Invader UGT1A1 Molecular Assay is cleared for use to identify patients who mayHPV offering, our business and prospects would likely be at increased risk of adverse reaction to the chemotherapy drug Camptosar(R) (irinotecan) by detecting and identifying specific mutationsmaterially adversely impacted. Additionally, we anticipate significant competition in the UGT1A1 gene thatHPV market as additional large competitors have been associated with that risk. Camptosar, marketedannounced plans to enter the market in the U.S. by Pfizer, Inc., is used to treat colorectal cancer and was relabeled in 2005 to include dosing recommendations basednear future. This competition may have a significant impact on a patient’s genetic profile. In December 2006, we submitted a cystic fibrosis product to the FDA. The Company is awaiting FDA clearance for this product.success of our commercialization of our HPV offering.

We also market a growing number of products, including analyte specific reagents (ASRs). These ASRs allow certified clinical reference laboratories to create assays to perform hepatitis C virus genotyping, inherited disorders testing (e.g., Factor V Leiden), and a host of other mutations associated with genetic predispositions and other diseases.diseases (e.g. Cystic Fibrosis). We have developed or plan to develop a menu of molecular diagnostic products for clinical applications that include genetic testing,women’s health applications, hospital acquired infections, genetics and pharmacogenetics, and women’s health.oncology. We also have a number of other Invader products including those for research, agricultural and other applications.

The FDA has issued a guidance document regarding the sale of ASRs. This guidance document may negatively impact our ability to continue to successfully market and sell our ASR products.

Currently, one ofIn March 2008, we received clearance from the FDA for our key strategic initiatives is the commercialization of our Human Papillomavirus (HPV) offering. InPlex™ Cystic Fibrosis (CF) Molecular Test. The test simultaneously detects and identifies cystic fibrosis mutations in patient DNA samples.

In August 2006,2005, we began clinical trialsreceived clearance from the FDA for two HPV premarket approval submissionsour Invader UGT1A1 Molecular Assay. The Invader UGT1A1 Molecular Assay is cleared for use to identify patients who may be at increased risk of adverse reaction to the FDA. We expect to spend between $12 millionchemotherapy drug Camptosar^® (irinotecan) by detecting and $17.5 million on these submissions over three years. If for any reason these trials are not successful or are substantially delayed or for any other reason we are unable to successfully commercialize our HPV offering, our business and prospects would likely be materially adversely impacted. Additionally, we anticipate competitionidentifying specific mutations in the HPV market as additional large competitorsUGT1A1 gene that have announced plans to enter the marketbeen associated with that risk. Camptosar, marketed in the near future. This competition may haveU.S. by Pfizer, Inc., is used to treat colorectal cancer and was relabeled in 2005 to include dosing recommendations based on a significant impact on the success of our commercialization of our HPV offering.

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

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

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

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

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

Significant management judgment is required to determine the reserve for obsolete or excess inventory. Inventory on hand may exceed future demand either because of process improvements or technology advancements, the amount on hand is more than can be used to meet future need, or estimates of shelf lives may change. We currently consider all inventory that we expect will have no activity within one year or within the period defined by the expiration date of the product, as well as any additional specifically identified inventory to be subject to a provision for excess inventory (including inventory that we determine to be obsolete based on criteria such as changing manufacturing processes and technologies). At September 30, 2007,March 31, 2008, our inventory reserves were approximately $736,000,$785,000, or 13% of our $5.6$6.1 million total gross inventories.

On July 13, 2006,In November 2007, the Financial EITF reached a consensus on EITF Issue No. 07-1,Accounting Standards Board (FASB) issued Financial Interpretation (FIN) No. 48, “Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109”Collaborative Arrangements(EITF 07-1). FIN No. 48 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes”, and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under FIN No. 48, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, FIN No. 48 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN No. 48EITF 07-1 is effective for fiscal years beginning after December 15, 2006.

Three and Nine Months Ended September 30,March 31, 2008 and 2007 and 2006

NET LOSS.INCOME (LOSS). Net loss for the three months ended September 30, 2007March 31, 2008 was $6.4$7.6 million compared to a net lossincome of $5.2$4.8 million for the corresponding period of 2006. Net loss for2007. The change in the nine months ended September 30, 2007results from operations was $8.9primarily due to the impact of the $10.75 million compared to a net loss of $14.3 million forother income from the same periodsettlement of patent litigation with the former Stratagene Corporation in 2006.2007.

REVENUES. Revenues for the three months ended September 30, 2007March 31, 2008 of $8.2$8.4 million represented an increase of $1.6$1.7 million, compared to revenues of $6.6$6.7 million for the corresponding period of 2006. Revenues for the nine months ended September 30, 2007 of $22.2 million represented an increase of $1.0 million, compared to revenues of $21.2 million for the corresponding period of 2006.2007. Following is a discussion of changes in revenues:

Clinical molecular diagnostic product revenue increased to $6.7$7.4 million in the quarter ended September 30, 2007March 31, 2008 from $5.4$6.0 million in the quarter ended September 30, 2006. Clinical revenue for the nine months ended September 30, 2007 increased to $19.0 million, compared to $15.1 million in 2006.March 31, 2007. The increase in revenue is due to an increase in the number of customers buying our product and growth in purchases from current customers.

Research product revenuerevenues increased to $1.4$1.0 million in the three months ended September 30, 2007March 31, 2008 from $1.2$0.6 million in the three months ended September 30, 2006. Research product revenue forMarch 31, 2007.

Significant Customers. In the ninethree months ended September 30, 2007 decreased to $3.0 million from $5.8 million in 2006. During the first half of 2006, we received $2.7 million in Japanese research revenue, the last period in which substantial revenue of this type was generated.

COST OF GOODS SOLD. Cost of goods sold consists of materials used in the manufacture of product, depreciation on manufacturing capital equipment, salaries and related expenses for management and personnel associated with our manufacturing and quality control departments and amortization of licenses and other intangible assets. For the three months ended September 30, 2007,March 31, 2008, cost of goods sold decreased slightlyincreased to $2.1$2.2 million, compared to $2.2$2.0 million infor the corresponding period of 2006. Cost of goods sold for2007. The increase in the nine months ended September 30, 2007 decreased to $6.1 million from $6.3 million in 2006. The decrease in cost of goods soldthree month period was primarily due to operational efficiencies.the increase in sales volume.

RESEARCH AND DEVELOPMENT EXPENSES. Our research activities are focused on moving our technology into broader markets. Our development activities are focused on new products to expand our molecular diagnostics menu. Research and development expenses consist primarily of salaries and related personnel costs, material costs for assays and product development, fees paid to consultants, depreciation and facilities costs and other expenses related to the design, development, testing, (including clinical trials to validate the performance of our products) and enhancement of our products, and acquisition of technologies used in our products. Research and development costs are expensed as they are incurred. Research and development expenses for the three months ended September 30, 2007March 31, 2008 were $5.8$6.2 million, compared to $3.5$5.1 million for the three months ended September 30, 2006. In the nine months ended September 30, 2007, research and development expenses increased to $16.1 million from $8.8 million in 2006.March 31, 2007. The increase in research and development expenses was primarily due to an increase in personnel and product development expense, (includingincluding clinical trial costs incurred by us in pursuit of FDA premarketpre-market approval for our HPV offerings). We will continue to invest in research and development, and expenditures in this area will increase as we expand our product development efforts. In addition, as the Company moves towards consideration of FDA cleared or approved products, there will be increased expenses attributed to these activities.offerings.

SELLING AND MARKETING EXPENSES. Selling and marketing expenses consist primarily of salaries and related personnel costs for our sales and marketing management and field sales force, commissions, office support and related costs, and travel and entertainment. Selling and marketing expenses for the three months ended September 30, 2007March 31, 2008 were $2.9$3.5 million, an increase of $0.2$0.9 million, compared to $2.7$2.6 million for the corresponding period of 2006.2007. The increase in selling and marketing expenses was due to an increase in consultingpersonnel related expenses and marketing expenses, compared to the same period in 2006. Selling and marketing expense for the nine months ended September 30, 2007 increased slightly to $8.7 million compared to $8.6 million for the corresponding period of 2006.2007.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses consist primarily of salaries and related expenses for executive, finance and other administrative personnel, legal and professional fees, office support and depreciation. General and administrative expenses increased to $4.8$3.7 million in the three months ended September 30, 2007,March 31, 2008, from $3.5$2.9 million for

INTEREST INCOME. Interest income for the three months ended September 30,March 31, 2008 and 2007 was $0.3 million and 2006 was $0.5 million, respectively. The reduction in interest income is primarily due to the reduction in cash and $0.4 million, respectively. Interest income forshort-term investments held during the nine months ended September 30, 2007 and 2006 was $1.6 million and $1.1 million, respectively.first quarter 2008 compared to 2007.

INTEREST EXPENSE. Interest expense for the three months ended September 30, 2007March 31, 2008 was $0.3$1.0 million compared to $55,000 in the corresponding period in 2006. Interest expense for the nine months ended September 30, 2007 was $0.9 million compared to $0.2$0.3 million in the corresponding period in 2006.2007. The increase in interest expense was due to the interest accretion onaccrual and amortization of fees related to the convertible note payablecredit facility entered into in December 2006.2007.

OTHER INCOME (EXPENSE). Other incomeexpense for the three months ended September 30, 2007March 31, 2008 was $2.5 million$26,000 compared to other expenseincome of $0.1$10.7 million for the same period in 2006. Other income for the nine months ended September 30, 2007 was $13.2 million compared to other expense of $0.1 million for the same period in 2006.2007. Other income in the three months ended September 30, 2007 included the reversal of long-standing accruals. Other income for the nine month period included $10.75 million from the settlement of patent litigation with the former Stratagene Corporation.

MINORITY INTEREST. Minority interest for the three months ended September 30, 2007March 31, 2008 was $0.2 million compared to $65,000 in 2006. Minority interest for the nine months ended September 30, 2007 was $0.4 million, compared to $0.1 million in 2006 .2007. Minority interest represents Third Wave Japan’s minority investors’ share of the equity and earnings of the subsidiary.

Since our inception, we have financed our operations primarily through private placements of equity securities, research grants from federal and state government agencies, payments from strategic collaborators, equipment loans, capital leases, product sales, convertible notes and an initial public offering. As of September 30, 2007,March 31, 2008, we had cash and cash equivalents and short-term investments of $43.6$28.9 million.

In April 2006, we raised $5.1 million from the sale of a minority equity investment in our Japan subsidiary. In May 2007 we raised an additional $5.3 million from the sale of additional minority equity investments in our Japan subsidiarysubsidiary. The proceeds from thesethe equity investmentsinvestment are required to be used in the operations of our Japan subsidiary.

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

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

Net cash used in operations for the ninethree months ended September 30, 2007March 31, 2008 was $6.6$7.1 million, compared to $10.7net cash provided of $3.0 million in the corresponding period in 2006.2007. The change was primarily due to the proceeds received from the settlement of patent litigation with Stratagene Corporation offset by increased expenses related to our HPV clinical trial and litigation expenses.in 2007.

Net cash used in investing activities for the ninethree months ended September 30, 2007March 31, 2008 was $2.0$0.4 million, compared to net cash provided of $8.8$0.3 million in the corresponding period in 2006.2007. Investing activities included capital expenditures of $2.5$0.2 million in the ninethree months ended September 30, 2007 compared to $0.6 million in 2006.March 31, 2008 and 2007. Investing activities in the ninethree months ended September 30, 2007 and 2006March 31, 2008 included the payment on license fee arrangements of $0.9 and $0.7$0.6 million respectively.compared to $0.2 million in 2007. In addition, net cash provided by investing activities in the nine months ended September 30, 2007 included net proceeds of $1.4$0.4 million and $0.2 million from the maturitypurchases and purchase activitysales or maturities of short-termshort term investments compared to $9.3 million in 2006. Investing activities in the ninethree months ended September 30, 2006 also included a change in the restricted cash balance of $0.8 million.March 31, 2008 and 2007, respectively.

Net cash provided by financing activities was $9.0$0.4 million in the ninethree months ended September 30, 2007 compared to $5.4 million in 2006.March 31, 2008 and 2007. Cash provided by financing activities in the ninethree months ended September 30,ending March 31, 2008 and 2007 consisted of proceeds from the sale of common stock under the Company’s employee stock purchase plan and stock option plans of $4.6 million compared to $0.7 million in$0.5 million. In the corresponding period of 2006. Financing activities in the ninethree months ended September 30,March 31, 2007, and 2006 also included proceeds from a minority equity investment in our Japan subsidiary of $5.3 million and $5.1 million, respectively. In the nine months ended September 30, 2007, $0.6$0.1 million was used to repay debt compared to $0.3 milliondebt. Additionally, in 2006. In addition, $100,000the three months ended March 31, 2008 and 2007, $20,000 and $34,000 was used for capital lease obligations, in the nine months ended September 30, 2007 and 2006.respectively.

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

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

Condition and Results of Operations sections of our annual report on Form 10-K for the fiscal year ended December 31, 20062007 filed with the SEC, which factors are specifically incorporated herein by this reference. You should also carefully consider the factors set forth in other reports or documents that we file from time to time with the SEC. Except as required by law, we undertake no obligation to update any forward-looking statements. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions, or circumstances on which any such statements are based.

Our exposure to market risk is currently confined to changes in foreign exchange and interest rates. Our exposure to market risk was discussed in the Quantitative and Qualitative Disclosures About Market Risk section of our annual report on Form 10-K for the fiscal year ended December 31, 20062007 filed with the SEC. There have been no material changes to such exposures during the secondfirst quarter of 2007.2008.

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

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

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