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 June 30, 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 June 30, 1997 (Unaudited) and December 31, 1996
Schedule of Portfolio Investments as of June 30, 1997 (Unaudited)
Statements of Operations for the Three and Six Months Ended June 30, 1997 and
1996 (Unaudited)
Statements of Cash Flows for the Six Months Ended June 30, 1997 and 1996
(Unaudited)
Statement of Changes in Partners' Capital for the Six Months Ended June 30, 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>
June 30, 1997 December 31,
(Unaudited) 1996
ASSETS
Portfolio investments, at fair value (cost $10,198,968 at
<S> <C> <C> <C> <C> <C> <C> <C>
June 30, 1997 and $9,138,368 at December 31, 1996) $ 6,966,017 $ 6,585,790
Cash and cash equivalents 683,631 4,876,135
Accrued interest receivable 3,737 2,377
Other assets 9,404 29,710
--------------- -----------------
TOTAL ASSETS $ 7,662,789 $ 11,494,012
=============== =================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Cash distribution payable $ - $ 3,012,100
Accounts payable and accrued expenses 98,664 106,263
Due to Managing General Partner 36,696 41,828
Due to Independent General Partners 5,000 10,000
--------------- -----------------
Total liabilities 140,360 3,170,191
--------------- -----------------
Partners' Capital:
Managing General Partner 75,224 83,238
Limited Partners (38,727 Units) 7,447,205 8,240,583
--------------- -----------------
Total Partners' capital 7,522,429 8,323,821
--------------- -----------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 7,662,789 $ 11,494,012
=============== =================
</TABLE>
See notes to financial statements.
<PAGE>
WESTMED VENTURE PARTNERS 2, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED)
June 30, 1997
Active Portfolio Investments:
<TABLE>
Initial Investment
Company / Position Date Cost Fair Value
Abtox, Inc.
<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 962,009 871,023
- -------------------------------------------------------------------------------------------------------------------------------
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 2,322,426 258,727
- -------------------------------------------------------------------------------------------------------------------------------
KeraVision, Inc.(A)
68,728 shares of Common Stock Nov. 1992 530,300 627,143
- -------------------------------------------------------------------------------------------------------------------------------
La Jolla Pharmaceutical Company(A)
100,383 shares of Common Stock Nov. 1991 678,579 464,272
25,076 warrants to purchase 12,538 shares of Common
Stock at $6.00 per share, expiring 6/3/99 0 17,252
Warrant to purchase 5,015 shares of Common Stock
at $5.00 per share, expiring 6/3/99 0 0
--------------- ---------------
678,579 481,524
- -------------------------------------------------------------------------------------------------------------------------------
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 1,265,185
- -------------------------------------------------------------------------------------------------------------------------------
Targeted Genetics, Inc.(A)(B)
225,395 shares of Common Stock June 1992 1,067,353 601,503
Warrant to purchase 16,666 shares of Common Stock
at $4.68 per share, expiring 1/31/98 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Totals from Active Portfolio Investments $ 10,198,968 $ 6,966,017
=============== ===============
</TABLE>
<PAGE>
WESTMED VENTURE PARTNERS 2, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED) - continued
June 30, 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 $ (7,258,672) $ 9,205,979
=============== ================== ===============
</TABLE>
(A) Public company
(B) On July 28, 1997, Targeted Genetics, Inc. extended the expiration date
of its warrants from July 31, 1997 to January 31, 1998.
(C) Amounts provided for "Supplemental Information: Liquidated Portfolio
Investments" are cumulative from inception through June 30, 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)
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
--------------- ------------ -------------- -------
INVESTMENT INCOME AND EXPENSES
Income:
<S> <C> <C> <C> <C>
Interest from short-term investments $ 7,732 $ 74,541 $ 36,620 $ 147,313
Interest and dividend income from portfolio
investments 1,070 - 1,995 10,771
------------- --------------- ------------- -------------
Totals 8,802 74,541 38,615 158,084
------------- --------------- ------------- -------------
Expenses:
Management fee 36,696 58,298 79,146 125,413
Professional fees 14,507 31,967 33,510 56,300
Mailing and printing 4,780 5,122 12,694 11,881
Insurance expense 13,738 16,905 27,522 36,173
Custodial fees 393 1,037 1,512 2,230
Independent General Partners' fees 2,500 3,627 5,000 7,377
Miscellaneous - 1,212 250 3,214
------------- --------------- ------------- -------------
Totals 72,614 118,168 159,634 242,588
------------- --------------- ------------- -------------
NET INVESTMENT INCOME (LOSS) (63,812) (43,627) (121,019) (84,504)
Net change in unrealized depreciation
of investments (580,697) (1,715,801) (680,373) (511,277)
------------- --------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ (644,509) $ (1,759,428) $ (801,392) $ (595,781)
============= =============== ============= =============
</TABLE>
See notes to financial statements.
<PAGE>
WESTMED VENTURE PARTNERS 2, L.P.
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30,
<TABLE>
1997 1996
-------------- ---------
CASH FLOWS USED FOR OPERATING ACTIVITIES
<S> <C> <C>
Net investment loss $ (121,019) $ (84,504)
Adjustments to reconcile net investment loss to cash used for operating
activities:
Decrease in accrued interest receivable and other assets 18,946 15,526
Increase (decrease) in payables (17,731) 29,318
-------------- ---------------
Cash used for operating activities (119,804) (39,660)
-------------- ---------------
CASH FLOWS USED FOR INVESTING ACTIVITIES
Purchase of portfolio investments (1,060,600) (130,303)
-------------- ---------------
CASH FLOWS USED FOR FINANCING ACTIVITIES
Cash distribution to Partners (3,012,100) -
-------------- ---------------
Decrease in cash and cash equivalents (4,192,504) (169,963)
Cash and cash equivalents at beginning of period 4,876,135 6,226,065
-------------- ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 683,631 $ 6,056,102
============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
WESTMED VENTURE PARTNERS 2, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (UNAUDITED)
For the Six Months Ended June 30, 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 (8,014) (793,378) (801,392)
------------ --------------- ----------------
Balance at end of period $ 75,224 $ 7,447,205 $ 7,522,429
============ =============== ================
</TABLE>
(A) The net asset value per unit of limited partnership interest, including an
assumed allocation of net unrealized depreciation of investments, was $192
at June 30, 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 the Partnership,
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 (UNAUDITED) - continued
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 $3.2
million at June 30, 1997, which was recorded for financial statement purposes,
was not recognized for tax purposes. Additionally, from inception to June 30,
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 (UNAUDITED) - continued
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 June 30, 1997, the Partnership had a $3.8
million net loss from its venture capital investments, including $243,000 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 six month period ended June 30, 1997. Cumulative venture capital
fees incurred from inception to June 30, 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 (UNAUDITED) - continued
5. Classification of Investments
As of June 30, 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 $ 4,106,199 54.59%
Preferred Stock 3,794,360 2,838,618 37.74%
Debt Securities 42,399 21,200 0.27%
---------------- -------------- ---------
$ 10,198,968 $ 6,966,017 92.60%
================ ============== =========
Country/Geographic Region
Eastern U.S. $ 3,119,593 $ 1,523,912 20.26%
Midwestern U.S. 2,022,609 1,931,623 25.68%
Western U.S. 3,834,413 3,194,293 42.46%
Southwestern U.S. 1,222,353 316,189 4.20%
---------------- -------------- ----------
Total $ 10,198,968 $ 6,966,017 92.60%
================ ============== ==========
Industry
Biotechnology $ 5,788,061 $ 4,596,024 61.09%
Medical Devices 2,088,481 2,111,266 28.07%
Medical Services 2,322,426 258,727 3.44%
---------------- -------------- ---------
$ 10,198,968 $ 6,966,017 92.60%
================ ============== =========
</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
At June 30, 1997, the Partnership held $684,000 in cash and cash equivalents,
consisting of $399,000 in short-term securities with maturities of less than one
year and $285,000 in an interest-bearing cash account. The Partnership earned
$8,000 and $37,000 of interest from such investments for the three and six
months ended June 30, 1997, respectively. 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.
The Partnership made no new or follow-on investments during the three month
period ended June 30, 1997. From its inception through June 30, 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.
Results of Operations
Investment Income and Expenses - For the three months ended June 30, 1997 and
1996, the Partnership had a net investment loss (interest and dividend income
less operating expenses) of $64,000 and $44,000, respectively. The increase in
net investment loss for the 1997 period compared to the same period in 1996
resulted from a $66,000 decrease in interest earned from short-term investments
partially offset by a $46,000 decrease in operating expenses. The decrease in
interest earned from short-term investments primarily resulted from a reduced
amount of funds available for investment in such securities during the 1997
period. The reduced amount of cash invested in short-term securities during the
1997 period reflects the $3.0 million cash distribution paid to Partners in
January 1997 and the $1.0 million investment in Abtox, Inc., a new portfolio
investment, purchased in March 1997. The decrease in operating expenses
primarily resulted from a $21,000 decrease in management fees, as discussed
below, and a $17,000 reduction in professional fees for the 1997 period. Legal
fees were higher during the 1996 period due to legal work relating to the
preparation of a proxy statement in connection with the Special Meeting of
Limited Partners held on June 21, 1996.
Net investment loss for the six months ended June 30, 1997 and 1996 was $121,000
and $85,000, respectively. The increase in net investment loss for the 1997
period includes a $110,000 decrease in interest from short-term investments,
primarily resulting from a decrease in funds available for investment in such
securities during the 1997 period, as discussed above. Interest income from
portfolio investments also declined $9,000 due to a reduction of interest
bearing securities held during the 1997 period compared to the same period in
1996. The $119,000 decrease in investment income was partially offset by an
$83,000 decrease in operating expenses, primarily resulting from a $46,000
decrease in management fees, as discussed below, and a $23,000 reduction in
professional fees for the 1997 period compared to the same period in 1996. As
discussed above, 1996 professional fees included legal fees relating to the
preparation of a proxy statement in connection with the Special Meeting of
Limited Partners held on June 21, 1996. Professional fees in 1996 also include
certain adjustments to accrued audit and tax fees for the six months ended June
30, 1996.
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. Such fee is
determined and paid quarterly. The management fee for the three months ended
June 30, 1997 and 1996 was $37,000 and $58,000, respectively. For the six months
ended June 30, 1997 and 1996, the management fee was $79,000 and $125,000,
respectively. The decrease in the management fee is due to a decrease in the
Partnership's net asset value for the 1997 periods compared to the same periods
in 1996. The reduced net asset value reflects 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 six months ended June 30, 1997,
the Partnership had a $680,000 net unrealized loss resulting from the net
downward revaluation of its publicly-traded securities. As a result, net
unrealized depreciation of investments increased by $680,000 for the six month
period.
For the six months ended June 30, 1996, the Partnership had a $511,000 net
unrealized loss resulting from the net downward revaluation of its
publicly-traded securities. As a result, net unrealized depreciation of
investments increased by $511,000 for the six month period.
Net Assets - At June 30, 1997, the Partnership's net assets were $7.5 million,
reflecting a decrease of $801,000 from $8.3 million at December 31, 1996. This
decrease resulted from the $680,000 net unrealized loss from investments and the
$121,000 net investment loss for the six month period.
At June 30, 1996, the Partnership's net assets were $11.6 million, reflecting a
decrease of $596,000 from $12.2 million at December 31, 1995. This decrease
resulted from the $511,000 net unrealized loss from investments and the $85,000
net investment loss for the six month period.
The net asset value per $500 Unit, including an allocation of net unrealized
depreciation of investments, at June 30, 1997 and December 31, 1996 was $192 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.
The Managing General Partner
By: MEDICAL VENTURE HOLDINGS, INC.
General Partner
By: /s/ Stephen McGrath
Stephen McGrath
Executive Vice President
By: /s/ Ann Oliveri Fusco
Ann Oliveri Fusco
Vice President and Principal Financial
and Accounting Officer
Date: August 14, 1997
<PAGE>
<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
JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 10,198,968
<INVESTMENTS-AT-VALUE> 6,966,017
<RECEIVABLES> 3,737
<ASSETS-OTHER> 9,404
<OTHER-ITEMS-ASSETS> 683,631
<TOTAL-ASSETS> 7,662,789
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 140,360
<TOTAL-LIABILITIES> 140,360
<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> (3,232,951)
<NET-ASSETS> 7,522,429
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 38,615
<OTHER-INCOME> 0
<EXPENSES-NET> 159,634
<NET-INVESTMENT-INCOME> (121,019)
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (680,373)
<NET-CHANGE-FROM-OPS> (801,392)
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