<Page>
<Table>
EXHIBIT 1
VISIBLE GENETICS INC.
CONSOLIDATED BALANCE SHEETS
( UNITED STATES DOLLARS)
<Caption>
SEPTEMBER 30 DECEMBER 31
2001 2000
(UNAUDITED)
------------- -------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 14,889,971 $ 18,476,303
Short-term investments 25,818,332 61,922,687
Trade receivables, net of allowance for doubtful accounts 3,413,179 3,214,934
Other receivables 949,030 884,995
Prepaid and deposits 632,207 452,124
Inventory 2,805,733 2,268,877
------------- -------------
TOTAL CURRENT ASSETS 48,508,452 87,219,920
------------- -------------
FIXED ASSETS 19,117,220 10,292,282
PATENTS AND LICENSES 15,087,035 12,182,112
OTHER LONG TERM ASSETS 288,329 290,633
------------- -------------
$ 83,001,036 $ 109,984,947
============= =============
LIABILITIES
CURRENT LIABILITIES
Accounts payable $ 2,952,007 $ 3,847,364
Accrued liabilities 7,120,451 5,265,864
------------- -------------
TOTAL CURRENT LIABILITIES 10,072,458 9,113,228
------------- -------------
MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED SHARES 25,998,099 24,397,398
------------- -------------
SHAREHOLDERS' EQUITY
Share capital 172,128,921 169,717,379
Other equity (3,443,872) (1,017,321)
Cumulative translation adjustment (908,499) (1,013,459)
Deficit (120,846,071) (91,212,278)
------------- -------------
46,930,479 76,474,321
------------- -------------
$ 83,001,036 $ 109,984,947
============= =============
</Table>
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VISIBLE GENETICS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNITED STATES DOLLARS)
(UNAUDITED)
<Table>
<Caption>
THREE MONTHS ENDED SEPTEMBER 30 NINE MONTHS ENDED SEPTEMBER 30
2001 2000 2001 2000
---- ---- ---- ----
SALES
Products $ 2,834,364 $ 2,934,278 $ 10,186,865 $ 9,675,155
Services 52,462 74,188 202,282 384,854
------------ ------------ ------------ ------------
2,886,826 3,008,466 10,389,147 10,060,009
------------ ------------ ------------ ------------
COST OF SALES
Products 2,347,306 2,804,305 7,252,073 7,264,251
Services 35,265 92,915 172,092 299,706
------------ ------------ ------------ ------------
2,382,571 2,897,220 7,424,165 7,563,957
------------ ------------ ------------ ------------
GROSS MARGIN 504,255 111,246 2,964,982 2,496,052
EXPENSES
Sales, general and administrative 8,618,175 7,423,619 25,006,016 20,141,522
Research and development 2,589,273 2,835,718 7,955,097 7,859,436
Exit and termination costs 1,380,000 -- 1,920,000 --
------------ ------------ ------------ ------------
12,587,448 10,259,337 34,881,113 28,000,958
------------ ------------ ------------ ------------
LOSS FROM OPERATIONS BEFORE INTEREST (12,083,193) (10,148,091) (31,916,131) (25,504,906)
Interest income 402,102 1,305,460 2,290,041 3,304,269
Interest and financing expense (5,204) (1,530) (7,703) (9,123)
------------ ------------ ------------ ------------
NET LOSS FOR THE PERIOD (11,686,295) (8,844,161) (29,633,793) (22,209,760)
Cumulative preferred dividends and accretion
of discount attributable to preferred stock (876,960) (868,985) (2,538,922) (2,806,134)
------------ ------------ ------------ ------------
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS $(12,563,255) $ (9,713,146) $(32,172,715) $(25,015,894)
------------ ------------ ------------ ------------
Weighted average number of common
shares outstanding 16,469,097 15,512,249 16,385,987 14,125,983
------------ ------------ ------------ ------------
BASIC AND FULLY DILUTED LOSS PER SHARE $ (0.76) $ (0.63) $ (1.96) $ (1.77)
------------ ------------ ------------ ------------
</Table>
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VISIBLE GENETICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNITED STATES DOLLARS)
(UNAUDITED)
<Table>
<Caption>
NINE MONTHS ENDED SEPTEMBER 30
2001 2000
------------- -------------
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Net loss for the period $ (29,633,793) $ (22,209,760)
Add: Items not involving cash -
Depreciation 3,315,106 1,837,871
Amortization 2,308,165 1,464,708
Foreign exchange 19,736 (113,844)
Increase ( decrease ) from changes in -
Trade receivables (216,966) 2,161,046
Other receivables (81,623) 372,816
Prepaid and deposits (182,613) (267,554)
Inventory (523,033) (620,367)
Other long term assets 2,304 1,887
Accounts payable (867,126) 761,890
Accured liabilities 1,919,737 318,051
------------- -------------
(23,940,106) (16,293,256)
============= =============
INVESTING ACTIVITIES
Purchase of fixed assets (12,248,544) (5,970,824)
Licenses and patents acquired (5,213,088) (12,326,574)
Purchase of short-term investments (101,256,639) (86,722,840)
Redemption of short-term investments 137,360,994 39,894,978
------------- -------------
18,642,723 (65,125,260)
============= =============
FINANCING ACTIVITIES
Common shares issued, net of expenses 1,690,652 80,584,446
------------- -------------
1,690,652 80,584,446
============= =============
EFFECT OF EXCHANGE RATE FLUCTUATIONS ON CASH BALANCES 20,399 25,895
------------- -------------
INCREASE ( DECREASE ) IN CASH DURING THE YEAR (3,586,332) (808,175)
CASH, BEGINNING OF PERIOD 18,476,303 2,792,985
------------- -------------
CASH, END OF PERIOD $ 14,889,971 $ 1,984,810
============= =============
SUPPLEMENTAL INFORMATION
Interest paid $ 7,703 $ 5,152
Income taxes paid $ -- $ --
</Table>
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VISIBLE GENETICS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNITED STATES DOLLARS)
(UNAUDITED)
<Table>
<Caption>
NINE MONTHS ENDED SEPTEMBER 30
2001 2000
------------- -------------
Net loss for the period $(29,633,793) $(22,209,760)
Other comprehensive income:
Foreign currency translation adjustments 104,960 (585,175)
------------- -------------
Comprehensive loss for the period $(29,528,833) $(22,794,935)
------------- -------------
</Table>
VISIBLE GENETICS INC.
CONSOLIDATED STATEMENTS OF DEFICIT
(UNITED STATES DOLLARS)
(UNAUDITED)
<Table>
<Caption>
NINE MONTHS ENDED SEPTEMBER 30
2001 2000
------------- -------------
Deficit, beginning of year $ (91,212,278) $ (59,438,142)
Net loss for the period (29,633,793) (22,209,760)
------------- -------------
Deficit, end of the period $(120,846,071) $ (81,647,902)
------------- -------------
</Table>
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VISIBLE GENETICS INC,
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared in United States
dollars, in accordance with accounting principles generally accepted in the
United States. The principal accounting policies of the Company have been
applied on a consistent basis. See the Company's 2000 Annual Report for a
description of the Company's significant accounting policies. These interim
financial statements do not include all of the information and note disclosure
required by generally accepted accounting principles. In the opinion of
management, all adjustments considered necessary for a fair presentation of
results for the reported periods have been included.
Note 2 - REGULATORY APPROVAL
In September 2000, the Company filed an application with the United States Food
and Drug Administration ("FDA") to market our TRUGENE(TM) HIV-I genotyping kit
and OpenGene(TM) system in the clinical diagnostic market in the United States.
In September 2001, the FDA approved such application. Prior to marketing
additional products in the clinical diagnostic market, the Company may require
appropriate regulatory approval.
Note 3 -INVENTORY
<Table>
<Caption>
SEPTEMBER 30,
-------------
2001 2000
---- ----
Raw materials $ 984,757 $1,909,695
Work in process 392,186 215,008
Finished goods 1,428,790 928,072
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$ 2,805,733 $3,052,775
=========== ==========
</Table>
Note 4 - CONVERSION OF SERIES A MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED
SHARES
On March 15, 2001 a holder of 3,948 shares of the Company's Series A Mandatorily
Redeemable Convertible Preferred Shares (the Series A Shares) converted a total
of 1,000 of the Series A Shares, plus a total of $139,050 of dividends that
accrued on those shares, into 103,550 of the Company's common shares. Upon
conversion of the 1,000 Series A Shares, approximately $938,221 attributable to
such shares and carried in Mandatorily Redeemable Convertible Preferred Shares
on the Balance Sheet was transferred to Share Capital.
As of September 30, 2001, a total of 25,153 Series A Shares remain
outstanding, and such shares, including dividends accrued on such shares through
September 30, 2001, are convertible into 2,767,692 shares of the Company's
common stock.
Note 5 - WARRANT EXERCISE
On July 10, 2001, warrants to purchase 12,576 common shares were exercised at a
price of $12.81 per common share. Under terms of the warrant agreement, the
warrant holder elected to pay the exercise price for the warrants through a
non-cash exercise. As a result the warrant holder received 5,135 common shares
rather than 12,576 common shares they would otherwise have received upon
exercise in cash of all of their warrants.
<Page>
Note 6 - ACQUISITION OF RESEARCH LABORATORY
On September 12, 2001, the Company acquired the Cambridge, England research
laboratory of Virco UK Ltd., together with substantially all the research staff
of approximately 25 scientists. The Company paid approximately $830,000 for the
laboratory assets and assumed the lease of a 20,000 square foot building, which
houses the laboratory. The Cambridge facility will become the Company's
principal international research facility.
Note 7 - EXIT AND TERMINATION COSTS
Concurrent with the acquisition of the research laboratory and related staff in
Cambridge, England, the Company approved a plan to close, during the fourth
quarter of 2001, it's Toronto, Canada research facility. Accordingly, during the
third quarter of 2001 the Company recorded a charge of $1,180,000 in the
statement of operations related to such closure. Such charge represents costs
related to employee severance, relocation of certain employees, the remaining
future lease commitments, net of estimated sub-lease income, of the Toronto
research facility, the write-off of the unamortized balance of leasehold
improvements, and other miscellaneous costs.
During the first quarter of 2001 the Company approved a plan to close
its Pittsburgh facility and move all of its kit manufacturing to productions
lines that are currently undergoing testing and validation in the Company's
facility in Atlanta. It is expected that the Pittsburgh facility will be closed
in the fourth quarter of 2001.
As a result of the decision to centralize kit manufacturing in Atlanta
certain employees will be terminated and the Pittsburgh facility will be
vacated. Accordingly, the Company recorded a charge of $540,000 in the statement
of operations in the first quarter of 2001. This amount represents the expected
severance payments to be made to terminated employees, the remaining future
lease commitments, the unamortized balance of leasehold improvements and other
costs related to closure of the facility.
During 1999, the Company approved a plan to move the sales, marketing
and various other functions from Canada to the Company's United States facility
in Atlanta. In 2000 these functions were moved to the United States facility.
As a result of the decision to centralize United States operations in
Atlanta, certain premises leased by the Company were vacated. In December 1999,
the Company commenced efforts to sublease the premises to be vacated.
Accordingly, during 1999 the Company recorded a charge to reflect the estimated
costs of sub-leasing these vacated facilities. All of the vacated facilities
were sub-leased during 2000. During the third quarter of 2001 the sub-lessee on
one of the facilities declared bankruptcy and as a result the Company took back
the facility and sub-leased this facility to another organization. As a result
of this during the third quarter of 2001 the Company recorded an additional
charge in the statement of operations of $200,000 to reflect the costs to again
sub-lease this facility.
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Note 8 - SEGMENT INFORMATION
The Company's reportable segments are Sequencing Systems, Gene Kits and Other
Consumables, and Testing, Sequencing and Other Services. Total assets shown
below are as of September 30th, while all other numbers are for the nine-month
period ended September 30th, of the respective year.
September 30, 2001
<Table>
<Caption>
Sequencing GeneKits Testing Reconciling Total
Systems and Other Sequencing and Items(A)
Consumables Other Services
Revenues $ 2,107,326 $ 8,079,539 $ 202,282 -- $ 10,389,147
Depreciation & Amtz. 1,358,063 3,707,258 557,950 -- 5,623,271
(Loss) from operations
before interest (6,679,363) (25,133,453) (103,315) -- (31,916,131)
Additions to fixed assets 482,465 11,617,262 148,817 -- 12,248,544
Total assets 3,490,092 37,243,697 1,558,944 40,708,303 83,001,036
</Table>
September 30, 2000
<Table>
<Caption>
Sequencing GeneKits Testing Reconciling Total
Systems and Other Sequencing and Items(A)
Consumables Other Services
Revenues $ 3,933,098 $ 5,742,057 $ 384,854 -- $ 10,060,009
Depreciation & Amtz. 1,217,877 1,868,164 216,538 -- 3,302,579
(Loss) from operations
before interest (9,877,707) (15,513,384) (113,815) -- (25,504,906)
Additions to fixed assets 1,088,241 3,339,852 1,542,731 -- 5,970,824
Total assets 4,740,001 22,006,213 2,435,079 88,707,650 117,888,943
</Table>
(A) Reconciling items consist of cash, cash equivalents and short-term
investments.
Note 9 - CONTINGENCY
In September 2001, a lawsuit was filed against the Company alleging unspecified
damages resulting from the Company's alleged infringement of certain patents.
The Company has previously studied these patents and has received legal advice
that it is not liable for any claims of infringement. Management believes that
these allegations are without merit and intends to vigorously defend against
these allegations. No amount has been provided in these financial statements in
respect of these allegations, as the amount of loss, if any, cannot be
determined and the results of such allegations cannot be predicted with
certainty.