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, 1997
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, 1997 (Unaudited) and December 31, 1996
Schedule of Portfolio Investments as of March 31, 1997 (Unaudited)
Statements of Operations for the Three Months Ended March 31, 1997 and 1996
(Unaudited)
Statements of Cash Flows for the Three Months Ended March 31, 1997 and 1996
(Unaudited)
Statement of Changes in Partners' Capital for the Three Months Ended March 31,
1997 (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, 1997 December 31,
(Unaudited) 1996
ASSETS
Portfolio investments, at fair value (cost $10,198,968 at
<S> <C> <C> <C> <C> <C> <C> <C>
March 31, 1997 and $9,138,368 at December 31, 1996) $ 7,546,714 $ 6,585,790
Cash and cash equivalents 806,171 4,876,135
Accrued interest receivable 3,936 2,377
Other assets 23,142 29,710
--------------- -----------------
TOTAL ASSETS $ 8,379,963 $ 11,494,012
=============== =================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Cash distribution payable $ - $ 3,012,100
Accounts payable and accrued expenses 107,474 106,263
Due to Managing General Partner 103,051 41,828
Due to Independent General Partners 2,500 10,000
--------------- -----------------
Total liabilities 213,025 3,170,191
--------------- -----------------
Partners' Capital:
Managing General Partner 81,669 83,238
Limited Partners (38,727 Units) 8,085,269 8,240,583
--------------- -----------------
Total Partners' capital 8,166,938 8,323,821
--------------- -----------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 8,379,963 $ 11,494,012
=============== =================
</TABLE>
See notes to financial statements.
<PAGE>
WESTMED VENTURE PARTNERS 2, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED)
December 31, 1996
<TABLE>
Active Portfolio Investments:
Initial Investment
Company / Position Date Cost Fair Value
Abtox, Inc. (B)
<C> <C> <C> <C>
454,545 shares of Preferred Stock Mar. 1997 $ 1,060,600 $ 1,060,600
- -------------------------------------------------------------------------------------------------------------------------------
Gliatech, Inc.(A)
124,210 shares of Common Stock Feb. 1992 962,009 1,044,470
- -------------------------------------------------------------------------------------------------------------------------------
Hepatix, Inc.*
1,484,123 shares of Preferred Stock Jan. 1992 1,558,181 1,484,123
- -------------------------------------------------------------------------------------------------------------------------------
Integramed America, Inc.(A)
211,672 shares of Common Stock Mar. 1989 2,322,426 326,197
- -------------------------------------------------------------------------------------------------------------------------------
KeraVision, Inc.(A)
68,728 shares of Common Stock Nov. 1992 530,300 695,871
- -------------------------------------------------------------------------------------------------------------------------------
La Jolla Pharmaceutical Company(A)
100,383 shares of Common Stock Nov. 1991 678,579 489,377
25,076 warrants to purchase 12,538 shares of Common
Stock at $6.00 per share, expiring 6/3/99 0 14,805
Warrant to purchase 5,015 shares of Common Stock
at $5.00 per share, expiring 6/3/99 0 0
-------------- ---------------
678,579 504,182
- -------------------------------------------------------------------------------------------------------------------------------
Sennes Drug Innovations, Inc.*
2,750,000 shares of Preferred Stock June 1993 1,175,579 293,895
412,500 shares of Common Stock 4,375 1,094
$39,976 10% Promissory Note due 10/7/97 42,399 21,200
-------------- ---------------
1,222,353 316,189
- -------------------------------------------------------------------------------------------------------------------------------
Synaptic Pharmaceutical Corporation(A)
96,395 shares of Common Stock June 1991 797,167 1,349,531
- -------------------------------------------------------------------------------------------------------------------------------
Targeted Genetics, Inc.(A)
225,395 shares of Common Stock June 1992 1,067,353 765,551
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 $ 10,198,968 $ 7,546,714
==================================
</TABLE>
<PAGE>
WESTMED VENTURE PARTNERS 2, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) - continued
March 31, 1997
SUPPLEMENTAL INFORMATION: LIQUIDATED PORTFOLIO INVESTMENTS(C)
<TABLE>
Cost Realized Loss Return
<S> <C> <C> <C>
Total from Liquidated Portfolio Investments $ 6,265,683 $ (4,025,721) $ 2,239,962
==========================================================
Combined Combined
Unrealized and Fair Value
Cost Realized Loss and Return
Totals from Active and Liquidated Portfolio
Investments $ 16,464,651 $ (6,677,975) $ 9,786,676
==========================================================
</TABLE>
(A) Public company
(B) In March 1997, the Partnership completed a $999,999 investment in Abtox,
Inc., acquiring 454,545 shares of series F Preferred stock. The Partnership
paid the Managing General Partner $60,601 in venture capital fees relating
to this investment.
(C) Amounts provided for "Supplemental Information: Liquidated Portfolio
Investments" are cumulative from inception through March 31, 1997.
* May be deemed an affiliated person of the Partnership 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>
1997 1996
-------------- -------
INVESTMENT INCOME AND EXPENSES
Income:
<S> <C> <C>
Interest from short-term investments $ 28,888 $ 72,772
Interest income from portfolio investments 925 10,771
------------- ----------------
Totals 29,813 83,543
------------- ----------------
Expenses:
Management fee 42,450 67,115
Professional fees 14,503 24,333
Insurance expense 13,784 19,268
Mailing and printing 7,914 6,759
Independent General Partners' fees 2,500 3,750
Custodial fees 1,119 1,193
Miscellaneous 4,750 2,002
------------- ----------------
Totals 87,020 124,420
------------- ----------------
NET INVESTMENT LOSS (57,207) (40,877)
Net change in unrealized depreciation of investments (99,676) 1,204,524
------------- ----------------
NET (DECREASE) INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS (allocable to Partners) $ (156,883) $ 1,163,647
============= ================
</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>
1997 1996
--------------- ---------
CASH FLOWS PROVIDED FROM (USED FOR)
OPERATING ACTIVITIES
<S> <C> <C>
Net investment loss $ (57,207) $ (40,877)
Adjustments to reconcile net investment loss to cash provided from (used for)
operating activities:
(Decrease) increase in accrued interest receivable and other assets 5,009 (1,379)
Increase in payables 54,934 19,357
-------------- ----------------
Cash provided (used) for operating activities 2,736 (22,899)
-------------- ----------------
CASH FLOWS USED FOR INVESTING ACTIVITIES
Cost of portfolio investments purchased (1,060,600) (98,939)
-------------- ----------------
CASH FLOWS USED FOR FINANCING ACTIVITIES
Cash distribution to Partners (3,012,100) -
-------------- ----------------
Decrease in cash and cash equivalents (4,069,964) (121,838)
Cash and cash equivalents at beginning of period 4,876,135 6,226,065
-------------- ----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 806,171 $ 6,104,227
============== ================
</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, 1997
<TABLE>
Managing
General Limited
Partner Partners Total
<S> <C> <C> <C>
Balance at beginning of period $ 83,238 $ 8,240,583 $ 8,323,821
Net increase in net assets resulting
from operations (1,569) (155,314) (156,883)
------------ --------------- ----------------
Balance at end of period $ 81,669 $ 8,085,269 $ 8,166,938
============ =============== ================
</TABLE>
(A) The net asset value per unit of limited partnership interest, including an
assumed allocation of net unrealized depreciation of investments, was $209
at March 31, 1997. 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 two 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. Alsacia Venture Management, Inc. (the "Sub-Manager"), a
corporation controlled by Philippe L. Sommer, is the sub-manager of the
Partnership pursuant to a sub-management agreement among thePartnership,
the Managing General Partner and the Sub-Manager. The Sub-Manager has been
retained by the Managing General Partner to assist the Managing General Partner
in the performance of its duties to 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
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 $2.7
million at March 31, 1997, which was recorded for financial statement purposes,
was not recognized for tax purposes. Additionally, from inception to March 31,
1997, other timing differences totaling $2.2 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
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, 1997, the Partnership had a $3.8
million net loss from its venture capital investments, including $242,000 of
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
$60,601 for the quarter ended March 31, 1997. Cumulative venture capital fees
incurred from inception to March 31, 1997 totaled $942,000.
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. The compensation of the Sub-Manager is paid
directly by the Managing General Partner.
For services rendered to the Partnership, each of the two 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
5. Classification of Investments
As of March 31, 1997, the Partnership's investments were categorized as follows:
<TABLE>
Percentage of
Type of Investments Cost Fair Value Net Assets*
- ------------------- ---------------- -------------- -----------
<S> <C> <C> <C>
Common Stock $ 6,362,209 $ 4,686,896 57.39%
Preferred Stock 3,794,360 2,838,618 34.76%
Debt Securities 42,399 21,200 0.26%
---------------- -------------- -------
$ 10,198,968 $ 7,546,714 92.41%
================ ============== ======
Country/Geographic Region
United States $ 10,198,968 $ 7,546,714 92.41%
================ ============== ======
Industry
Biotechnology $ 5,788,061 $ 5,040,523 61.73%
Medical Devices 2,088,481 2,179,994 26.69%
Medical Services 2,322,426 326,197 3.99%
---------------- -------------- -------
$ 10,198,368 $ 7,546,714 92.41%
================ ============== ======
</TABLE>
* Percentage of net assets is based on fair value.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
In March 1997, the Partnership made a $1,061,000 investment (including venture
capital fees of $61,000) in Abtox, Inc., a new, privately-held portfolio
company. From its inception through March 31, 1997, the Partnership had invested
an aggregate of $16.5 million (including acquisition costs and venture capital
fees totaling $1,042,000), representing approximately 95% of the original $17.3
million of net proceeds received from the offering of Units.
At March 31, 1997, the Partnership held $806,000 in an interest-bearing cash
account. It is anticipated that funds needed to cover the Partnership's future
investments and operating expenses will be obtained from its 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, 1997 and
1996, the Partnership had a net investment loss (investment income less
operating expenses) of $57,207 and $40,877, respectively. The increase in net
investment loss for the 1997 period compared to the same period in 1996,
resulted from a $53,730 decrease in income which was partially offset by a
$37,400 decrease in operating expenses for the 1997 period. The decrease in
investment income resulted mainly from a $43,884 reduction in interest earned
from short-term investments, reflecting reduced funds available for investment
in such securities. The reduced amount of funds invested in short-term
securities resulted from the $3.0 million cash distribution paid to Partners in
January 1997 and the $1.0 million new portfolio investment made in March 1997,
as discussed above. Investment income also declined due to a $9,846 decline in
interest income from portfolio investments, due to a reduction of interest
bearing securities outstanding during the 1997 period compared to the same
period in 1996.
The decrease in operating expenses for the three months ended March 31, 1997
compared to the same period in 1996 resulted mainly from a $24,665 reduction in
management fees incurred. 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, 1997 and 1996, the management
fee was $42,450 and $67,115 respectively. The decrease in the management fee for
the 1997 period compared to the same period in 1996, was due to a decrease in
the Partnership's net asset value at March 31, 1997 compared to March 31, 1996,
primarily resulting from the $3.0 million cash distribution accrued at December
31, 1996 and paid to Partners in January 1997. 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,
1997, the Partnership had a $99,676 net unrealized loss primarily resulting from
the net downward revaluation of its publicly-traded securities. As a result, net
unrealized depreciation of investments increased by $99,676 for the three-month
period.
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.
Net Assets - At March 31, 1997 the Partnership's net assets were $8.2 million, a
decrease of $156,883 from $8.3 million at December 31, 1996. This decrease
resulted from the $99,676 unrealized loss from investments and the $57,207 net
investment loss for the three-month period.
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
$40,877 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, 1997 and December 31, 1996 was $209
and $213, 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.
Managing General Partner
By: Medical Venture Holdings, Inc.
General Partner
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
By: /s/ Stephen McGrath Executive Vice President (principal executive officer) of Medical
Stephen McGrath Venture Holdings, Inc.
By: /s/ Ann Oliveri Fusco Vice President (principal financial and accounting officer) of Medical Ann
Oliveri Fusco Venture Holdings, Inc.
</TABLE>
Date: May 15, 1997
<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, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 10,198,968
<INVESTMENTS-AT-VALUE> 7,546,714
<RECEIVABLES> 3,936
<ASSETS-OTHER> 23,142
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8,379,963
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 213,025
<TOTAL-LIABILITIES> 213,025
<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> (2,652,254)
<NET-ASSETS> 8,166,938
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 29,813
<OTHER-INCOME> 0
<EXPENSES-NET> 87,020
<NET-INVESTMENT-INCOME> (57,207)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (99,676)
<NET-CHANGE-FROM-OPS> (156,883)
<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> (156,883)
<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> 8,245,380
<PER-SHARE-NAV-BEGIN> 213
<PER-SHARE-NII> (1)
<PER-SHARE-GAIN-APPREC> (3)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 209
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
