SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the Quarterly Period Ended March 31, 1996
Commission file number 33-21281
WESTMED VENTURE PARTNERS 2, L.P.
================================================================================
(Exact name of registrant as specified in its charter)
Delaware 13-3473015
================================================================================
(State of organization) (I.R.S. Employer Identification No.)
Oppenheimer Tower, World Financial Center
New York, New York 10281
================================================================================
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 667-7000
Not applicable
================================================================================
Former name, former address and former fiscal year, if changed since 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
<PAGE>
WESTMED VENTURE PARTNERS 2, L.P.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets as of March 31, 1996 (Unaudited) and December 31, 1995
Schedule of Portfolio Investments as of March 31, 1996 (Unaudited)
Statements of Operations for the Three Months Ended March 31, 1996 and 1995
(Unaudited)
Statements of Cash Flows for the Three Months Ended March 31, 1996 and 1995
(Unaudited)
Statement of Changes in Partners' Capital for the Three Months Ended March 31,
1996 (Unaudited)
Notes to Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
WESTMED VENTURE PARTNERS 2, L.P.
BALANCE SHEETS
<TABLE>
March 31, 1996 December 31,
(Unaudited) 1995
ASSETS
Portfolio investments, at fair value
(cost $9,060,595 at March 31, 1996 and $8,961,656
<S> <C> <C> <C> <C> <C> <C>
at December 31, 1995) - Notes 2 and 4 $ 7,353,666 $ 6,050,203
Cash and cash equivalents 6,104,227 6,226,065
Accrued interest receivable 23,602 12,331
Other assets 25,999 35,891
--------------- ----------------
TOTAL ASSETS $ 13,507,494 $ 12,324,490
=============== ================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses $ 75,036 $ 55,929
Due to Managing General Partner - Note 4 72,768 61,268
Due to Independent General Partners - Note 4 3,750 15,000
--------------- ----------------
Total liabilities 151,554 132,197
--------------- ----------------
Partners' Capital:
Managing General Partner 133,559 121,923
Limited Partners (38,727 Units) 13,222,381 12,070,370
--------------- ----------------
Total Partners' capital 13,355,940 12,192,293
--------------- ----------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 13,507,494 $ 12,324,490
=============== ================
</TABLE>
See notes to financial statements.
<PAGE>
WESTMED VENTURE PARTNERS 2, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED)
March 31, 1996
Active Portfolio Investments:
<TABLE>
Initial Investment
Company / Position Date Cost Fair Value
Gliatech, Inc.(A)
<C> <C> <C> <C>
124,210 shares of Common Stock Feb. 1992 $ 962,009 $ 1,409,007
- -------------------------------------------------------------------------------------------------------------------------------
Hepatix, Inc.*(B)
668,346 shares of Common Stock Jan. 1992 1,025,168 512,584
$491,986 10% Convertible Notes due 6/30/97 497,639 248,819
Warrant to purchase 797,399 shares of Common Stock
at $.01 per share, expiring 10/2/00 0 0
Warrant to purchase 186,572 shares of Common Stock
at $.01 per share, expiring 3/1/01 0 0
-------------- ---------------
1,522,807 761,403
- -------------------------------------------------------------------------------------------------------------------------------
IVF America, Inc.(A)
211,672 shares of Common Stock Mar. 1989 2,322,426 416,729
Warrant to purchase 18,340 shares of Common Stock
at $10.34 per share, expiring 7/31/96 0 0
- -------------------------------------------------------------------------------------------------------------------------------
KeraVision, Inc.(A)
68,728 shares of Common Stock Nov. 1992 530,300 637,881
- -------------------------------------------------------------------------------------------------------------------------------
La Jolla Pharmaceutical Company(A)
100,383 shares of Common Stock Nov. 1991 678,579 602,298
25,076 warrants to purchase 12,538 shares of Common
Stock at $6 per share, expiring 6/3/99 0 29,092
Warrant to purchase 5,015 shares of Common Stock
at $5 per share, expiring 6/3/99 0 5,015
-------------- ---------------
678,579 636,405
- -------------------------------------------------------------------------------------------------------------------------------
Sennes Drug Innovations, Inc.*
2,750,000 shares of Preferred Stock June 1993 1,175,579 1,175,579
412,500 shares of Common Stock 4,375 4,375
-------------- ---------------
1,179,954 1,179,954
- -------------------------------------------------------------------------------------------------------------------------------
Synaptic Pharmaceutical Corporation(A)
96,395 shares of Common Stock June 1991 797,167 1,445,925
- -------------------------------------------------------------------------------------------------------------------------------
Targeted Genetics, Inc.(A)
225,395 shares of Common Stock June 1992 1,067,353 866,362
Warrant to purchase 16,666 shares of Common Stock
at $4.68 per share, expiring 7/31/97 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Totals from Active Portfolio Investments $ 9,060,595 $ 7,353,666
==================================
</TABLE>
<PAGE>
WESTMED VENTURE PARTNERS 2, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) - continued
March 31, 1996
SUPPLEMENTAL INFORMATION: LIQUIDATED PORTFOLIO INVESTMENTS(C)
<TABLE>
Cost Realized Loss Return
<S> <C> <C> <C>
Total from Liquidated Portfolio Investments $ 5,240,515 $ (3,000,553) $ 2,239,962
==========================================================
Combined Combined
Unrealized and Fair Value
Cost Realized Loss and Return
Totals from Active and Liquidated Portfolio
Investments $ 14,301,110 $ (4,707,482) $ 9,593,628
==========================================================
</TABLE>
(A) Public company
(B) On February 29, 1996, the Partnership made a $93,286 follow-on investment
in Hepatix, Inc., acquiring a 10% convertible note and a warrant to
purchase 186,572 shares of common stock at $.01 per share. The Partnership
paid a $5,653 venture capital fee relating to this investment.
(C) Amounts provided for "Supplemental Information: Liquidated Portfolio
Investments" are cumulative from inception through March 31, 1996.
* May be deemed an affiliated person as defined in the Investment Company Act of
1940.
See notes to financial statements.
<PAGE>
WESTMED VENTURE PARTNERS 2, L.P.
STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months Ended March 31,
<TABLE>
1996 1995
-------------- -------
INVESTMENT INCOME AND EXPENSES
Income:
<S> <C> <C>
Interest from short-term investments $ 72,772 $ 99,850
Interest income from portfolio investments 10,771 -
-------------- ------------
Totals 83,543 99,850
-------------- ------------
Expenses:
Management fee - Note 4 67,115 67,516
Professional fees 24,333 15,574
Insurance expense 19,268 16,779
Mailing and printing 6,759 9,252
Independent General Partners' fees - Note 4 3,750 3,750
Custodial fees 1,193 1,940
Miscellaneous 2,002 250
-------------- ------------
Totals 124,420 115,061
-------------- ------------
NET INVESTMENT LOSS (40,877) (15,211)
Net change in unrealized depreciation of investments 1,204,524 305,506
-------------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS (allocable to Partners) - Note 3 $ 1,163,647 $ 290,295
============== ============
</TABLE>
See notes to financial statements.
<PAGE>
WESTMED VENTURE PARTNERS 2, L.P.
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended March 31,
<TABLE>
1996 1995
--------------- ---------
CASH FLOWS USED FOR OPERATING ACTIVITIES
<S> <C> <C>
Net investment loss $ (40,877) $ (15,211)
Adjustments to reconcile net investment loss to cash used for operating
activities:
Increase (decrease) in accrued interest receivable and other assets (1,379) 4,329
Increase (decrease) in payables 19,357 (8,866)
--------------- ---------------
Cash used for operating activities (22,899) (19,748)
CASH FLOWS USED FOR INVESTING ACTIVITIES
Purchase of portfolio investments (98,939) -
--------------- ---------------
Decrease in cash and cash equivalents (121,838) (19,748)
Cash and cash equivalents at beginning of period 6,226,065 6,969,849
--------------- ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,104,227 $ 6,950,101
=============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
WESTMED VENTURE PARTNERS 2, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (UNAUDITED)
For the Three Months Ended March 31, 1996
<TABLE>
Managing
General Limited
Partner Partners Total
<S> <C> <C> <C>
Balance at beginning of period $ 121,923 $ 12,070,370 $ 12,192,293
Net increase in net assets resulting
from operations - Note 3 11,636 1,152,011 1,163,647
------------- --------------- ----------------
Balance at end of period $ 133,559 $ 13,222,381 $ 13,355,940
============= =============== ================
</TABLE>
(A) The net asset value per unit of limited partnership interest, including an
assumed allocation of net unrealized depreciation of investments, was $341
at March 31, 1996. Such per Unit amount is based on average allocations to
all limited partners and does not reflect specific limited partner
allocations, which are determined by the original closing date associated
with the units of limited partnership interest held by each limited
partner.
See notes to financial statements.
<PAGE>
WESTMED VENTURE PARTNERS 2, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Purpose
WestMed Venture Partners 2, L.P. (the "Partnership") was formed under Delaware
law in April 1988. The Partnership operates as a business development company
under the Investment Company Act of 1940, as amended. The Partnership is a
closed-end partnership and accordingly its units of limited partnership interest
("Units") are not redeemable by the Partnership. A total of 38,727 Units were
sold to limited partners ("Limited Partners" and together with the Managing
General Partner (as hereinafter defined), the "Partners") at $500 per Unit.
The general partners of the Partnership include three individuals (the
"Independent General Partners") and the managing general partner, WestMed
Venture Management 2, L.P., a Delaware limited partnership (the "Managing
General Partner" and collectively with the Independent General Partners, the
"General Partners"). The general partner of the Managing General Partner is
Medical Venture Holdings, Inc., a Delaware corporation affiliated with
Oppenheimer & Co., Inc. ("Opco"). The limited partners of the Managing General
Partner are Oppenheimer Holdings, Inc., MVP Holdings, Inc. and BSW, Inc., a
Delaware corporation owned by John A. Balkoski, Philippe L. Sommer and Howard S.
Wachtler. Messrs. Sommer and Wachtler are principally responsible for managing
the investments of the Partnership.
Opco, a member firm of the New York Stock Exchange, the National Association of
Securities Dealers, Inc., and all principal United States securities exchanges,
is a diversified investment banking and securities firm and registered
investment advisor, providing a broad range of services to individual,
corporate, and institutional clients. Opco operates in the capacity of broker
and dealer for its customers, as well as trader for its own account. The
services provided by Opco and its subsidiaries, and the activities in which it
is engaged, include securities brokerage, securities research, customer
financing, securities trading, corporate finance, mergers and acquisitions,
underwriting and investment advisory services.
The Partnership's objective is to achieve long-term capital appreciation from
its portfolio of venture capital investments, consisting of companies engaged in
the health care industry. The Partnership is scheduled to terminate on December
31, 1998. However, the General Partners can extend the term for up to two
additional two-year periods, if they determine that such extensions are in the
best interest of the Partnership.
2. Summary of Significant Accounting Policies
Valuation of Investments - Portfolio investments are carried at fair value as
determined quarterly by the Managing General Partner under the supervision of
the Independent General Partners. The fair value of publicly-held portfolio
securities is adjusted to the closing public market price for the last trading
day of the accounting period discounted for sales restrictions. Factors
considered in the determination of an appropriate
<PAGE>
WESTMED VENTURE PARTNERS 2, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
discount include, underwriter lock-up or Rule 144 trading restrictions, insider
status where the Partnership either has a representative serving on the board of
directors of the portfolio company under consideration or is greater than a 5%
shareholder thereof, and other liquidity factors such as the size of the
Partnership's position in a given company compared to the trading history of the
public security. Privately-held portfolio securities are carried at cost until
significant developments affecting the portfolio company provide a basis for
change in valuation. The fair value of private securities is adjusted (i) to
reflect meaningful third-party transactions in the private market and (ii) to
reflect significant progress or slippage in the development of the company's
business such that cost is no longer reflective of fair value. As a venture
capital investment fund, the Partnership's portfolio investments involve a high
degree of business and financial risk that can result in substantial losses. The
Managing General Partner considers such risks in determining the fair value of
the Partnership's portfolio investments.
Use of Estimates - The preparation of 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
disclosure 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.
Investment Transactions - Investment transactions are recorded on the accrual
method. For portfolio investments, transactions are recorded on the date which
the Partnership obtains an enforceable right to demand the securities or payment
thereof. Realized gains and losses on investments sold are computed on a
specific identification basis.
Statements of Cash Flows - Cash and cash equivalents include short-term
interest-bearing investments in commercial paper and other money market
investments. The Partnership considers its interest-bearing cash account to be
cash equivalents.
Income Taxes - No provision for income taxes has been made since all income and
losses are allocable to the Partners for inclusion in their respective tax
returns. The Partnership's net assets for financial reporting purposes differ
from its net assets for tax purposes. Net unrealized depreciation of $1.7
million at March 31, 1996, which was recorded for financial statement purposes,
was not recognized for tax purposes. Additionally, from inception to March 31,
1996, other timing differences totaling $2.3 million, primarily relating to
original sales commissions paid and other costs of selling the Units, have been
recorded on the Partnership's financial statements but have not yet been
deducted for tax purposes.
<PAGE>
WESTMED VENTURE PARTNERS 2, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Allocations of Partnership Profits and Losses
Pursuant to the Partnership's agreement of limited partnership, as amended (the
"Partnership Agreement"), the Partnership's net income and net realized gains
from all sources are allocated to all Partners, in proportion to their capital
contributions, until all Partners have been allocated an amount (the "Priority
Return") equal to 6% per annum, simple interest, on their total Adjusted
Invested Capital; i.e., original capital contributions reduced by previous
distributions. Thereafter, net income and net realized gains from venture
capital investments in excess of the amount used to cover the Priority Return
are allocated 20% to the Managing General Partner and 80% to all Partners in
proportion to their capital contributions. Any net income from non-venture
capital investments in excess of the amount used to cover the Priority Return is
allocated to all Partners in proportion to their capital contributions. Realized
losses are allocated to all Partners in proportion to their capital
contributions. However, if realized gains had been previously allocated in the
80-20 ratio, then losses are allocated in the reverse order in which profits
were allocated. From its inception to March 31, 1996, the Partnership had a $2.7
million net loss from its venture capital investments, including $259,000 of
cumulative interest and other income from portfolio investments.
4. Related Party Transactions
Pursuant to the Partnership Agreement, the Managing General Partner is entitled
to receive a one-time venture capital fee equal to 5% of the gross proceeds from
the sale of Units. Such fee is incurred as portfolio investments are made in the
proportion of the cost of each portfolio investment to the net proceeds from the
sale of Units. Venture capital fees incurred are recorded as a cost of acquiring
the portfolio investment. The Partnership incurred venture capital fees of
$6,000 for the three months ended March 31, 1996. Cumulative venture capital
fees incurred from inception to March 31, 1996 totaled $819,000.
Pursuant to a management agreement between the Partnership and the Managing
General Partner, the Managing General Partner is responsible for the management,
administrative and certain investment advisory services necessary for the
operation of the Partnership. For such services, the Managing General Partner
receives a management fee at the annual rate of 2% of the lesser of the net
assets of the Partnership or the net contributed capital of the Partnership;
i.e., gross capital contributions to the Partnership (net of selling commissions
and organizational expenses) reduced by capital distributed. Such fee is
determined and payable quarterly.
For services rendered to the Partnership, each of the three Independent General
Partners receives a $5,000 annual fee and reimbursement for all out-of-pocket
expenses relating to attendance at meetings of the General Partners.
<PAGE>
WESTMED VENTURE PARTNERS 2, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. Classification of Investments
As of March 31, 1996, the Partnership's investments were categorized as follows:
<TABLE>
Type of Investments Cost Fair Value % of Net Assets*
- ------------------- --------------- -------------- ----------------
<S> <C> <C> <C>
Common Stock $ 7,387,377 $ 5,929,268 44.40%
Preferred Stock 1,175,579 1,175,579 8.80%
Debt Securities 497,639 248,819 1.86%
--------------- -------------- ----------
$ 9,060,595 $ 7,353,666 55.06%
=============== ============== ==========
Country/Geographic Region
United States $ 9,060,595 $ 7,353,666 55.06%
=============== ============== ==========
Industry
Biotechnology $ 9,060,595 $ 7,353,666 55.06%
=============== ============== ==========
</TABLE>
* Percentage of net assets is based on fair value.
6. Interim Financial Statements
In the opinion of the Managing General Partner, the unaudited financial
statements as of March 31, 1996, and for the three-month period then ended,
reflect all adjustments necessary for the fair presentation of the results of
the interim period.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
In February 1996 the Partnership made a $99,000 follow-on investment (including
venture capital fees of $6,000) in Hepatix, Inc., an existing portfolio company.
From its inception through March 31, 1996, the Partnership had invested an
aggregate of $14.3 million in ten portfolio companies (including acquisition
costs and venture capital fees totaling $918,000) representing approximately 83%
of the original $17.3 million of net proceeds received from the offering of
Units. From its inception to March 31, 1996, the Partnership had liquidated two
investments with an aggregate cost basis of $5.2 million. These liquidated
investments returned $2.2 million to the Partnership, resulting in a $3 million
cumulative net realized loss. At March 31, 1996, the Partnership's remaining
eight portfolio investments had an aggregate cost basis of $9.1 million and a
fair value of $7.4 million.
At March 31, 1996, the Partnership held $6.1 million of cash and short-term
investments: $5.8 million in short-term securities with maturities of less than
one year and $297,000 in an interest-bearing cash account. Such investments
provide the Partnership with the liquidity necessary to make new investments in
venture situations, as opportunities arise, and to make follow-on investments in
existing portfolio companies when required. The Partnership earned $73,000 of
interest from its short-term investments for the three months ended March 31,
1996. Interest earned from short-term investments in future periods is subject
to fluctuations in short-term interest rates and changes in funds available for
investment in such securities.
It is anticipated that funds needed to cover the Partnership's future
investments and operating expenses will be obtained from existing cash reserves,
interest from short-term investments and proceeds realized from the sale of
portfolio investments.
Results of Operations
Investment Income and Expenses - For the three months ended March 31, 1996 and
1995, the Partnership had a net investment loss (investment income less
operating expenses) of $41,000 and $15,000, respectively. The increase in net
investment loss for the 1996 period compared to the same period in 1995,
resulted from a $27,000 decrease in interest earned from short-term investments,
which was partially offset by an $11,000 increase in interest income from
portfolio investments for the 1996 period. The decrease in interest earned from
short-term investments, primarily resulted from reduced interest rates during
the 1996 period. The interest earned from portfolio investments during the 1996
period resulted from the debt investments made by the Partnership in Hepatix,
Inc. during the later part of 1995. Operating expenses increased by $9,000 for
the 1996 period compared to the same period in 1995 primarily due to an increase
in professional fees for the 1996 period.
Pursuant to a management agreement between the Partnership and the Managing
General Partner, the Managing General Partner is responsible for the management,
administrative and certain investment advisory services necessary for the
operation of the Partnership. For such services, the Managing General Partner
receives a management fee at the annual rate of 2% of the lesser of (1) the net
assets of the Partnership or (2) the net contributed capital of the Partnership;
i.e., gross capital contributions to the Partnership (net of selling commissions
and organizational expenses) reduced by capital distributed. For the three
months ended March 31, 1996 and 1995, the management fee was $67,000 and $68,000
respectively. The slight decrease in the management fee for the 1996 period
compared to the same period in 1995, was due to a decrease in the Partnership's
net asset value at March 31, 1996 compared to March 31, 1995. To the extent
possible, the management fee and other operating expenses are paid with funds
provided from operations. Funds provided from operations are obtained from
interest earned from short-term investments, interest and dividend income from
portfolio investments and proceeds received from the sale of portfolio
investments.
Unrealized Gains and Losses and Changes in Unrealized Appreciation or
Depreciation of Portfolio Investments - For the three months ended March 31,
1996, the Partnership had a $1.2 million net unrealized gain primarily resulting
from the net upward revaluation of its publicly-traded securities. As a result,
net unrealized depreciation of investments decreased by $1.2 million for the
three-month period.
For the three months ended March 31, 1995, the Partnership had a $306,000 net
unrealized gain resulting from the net upward revaluation of its publicly-traded
securities. As a result, net unrealized depreciation of investments decreased by
$306,000 for the three-month period.
Net Assets - At March 31, 1996, the Partnership's net assets were $13.4 million,
an increase of $1.2 million from $12.2 million at December 31, 1995. This
increase resulted from the $1.2 million unrealized gain from investments
partially offset by the $41,000 net investment loss for the three-month period.
At March 31, 1995, the Partnership's net assets were $13.4 million, an increase
of $290,000 from $13.1 million at December 31, 1994. This increase resulted from
the $306,000 unrealized gain from investments partially offset by the $15,000
net investment loss for the three-month period.
The net asset value per $500 Unit, including an allocation of net unrealized
depreciation of investments, at March 31, 1996 and December 31, 1995 was $341
and $312, respectively. Such per Unit amounts are based on average allocations
to all Limited Partners and do not reflect specific Limited Partner allocations,
which are determined by the original closing date associated with the Units held
by each Limited Partner.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Partnership is not a party to any material pending legal proceedings.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders during the quarter covered
by this report.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
(27) Financial Data Schedule.
(b) No reports on Form 8-K have been filed during the quarter for which this
report is filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WESTMED VENTURE PARTNERS 2, L.P.
By: WestMed Venture Management 2, L.P.
The Managing General Partner
By: MEDICAL VENTURE HOLDINGS, INC.
General Partner
By: /s/ Philippe L. Sommer
Philippe L. Sommer
Executive Vice President and Principal
Financial and Accounting Officer
By: /s/ Howard S. Wachtler
Howard S. Wachtler
Executive Vice President
Date: May 13, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM WESTMED
VENTURE PARTNERS 2, L.P.'S QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED
MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> MAR-31-1996
<INVESTMENTS-AT-COST> 9,060,595
<INVESTMENTS-AT-VALUE> 7,353,666
<RECEIVABLES> 23,602
<ASSETS-OTHER> 25,999
<OTHER-ITEMS-ASSETS> 6,104,227
<TOTAL-ASSETS> 13,507,494
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 151,554
<TOTAL-LIABILITIES> 151,554
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 38,727
<SHARES-COMMON-PRIOR> 38,727
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,706,929)
<NET-ASSETS> 13,355,940
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 83,543
<OTHER-INCOME> 0
<EXPENSES-NET> 124,420
<NET-INVESTMENT-INCOME> (40,877)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 1,204,524
<NET-CHANGE-FROM-OPS> 1,163,647
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,183,004
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 12,774,117
<PER-SHARE-NAV-BEGIN> 312
<PER-SHARE-NII> (1)
<PER-SHARE-GAIN-APPREC> 30
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 341
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
