UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                             ----------------------

                                    FORM 10-Q

         [X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                  SECURITIES EXCHANGE ACT OF 1934.

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001

                                       OR

         [_]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                  SECURITIES EXCHANGE ACT OF 1934.

                 FOR THE TRANSITION PERIOD FROM ______ TO ______

                         Commission File Number 33-14582

                        PAINEWEBBER R&D PARTNERS II, L.P.
             (Exact name of registrant as specified in its charter)

         DELAWARE                                       13-3437420
(State or other jurisdiction of                         (I.R.S. Employer
Incorporation or organization)                         Identification No.)

         1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK        10019
(Address of principal executive offices)                        (Zip code)

       Registrant's telephone number, including area code: (212) 713-2000

                             ----------------------


      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>

                             SPECIAL NOTE REGARDING
                           FORWARD LOOKING STATEMENTS




      The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Except for the historical information
contained herein, the matters discussed herein are forward-looking statements.
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors that may cause the actual results, performance or achievements
of PaineWebber R&D Partners II, L.P. or industry results to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include, among others,
the following: general economic and business conditions; fluctuations in the
value of securities for which only a limited, or no, public market exists; the
Sponsor Companies (hereinafter defined) having insufficient funds to
commercialize products to their maximum potential; the restructuring of Sponsor
Companies; the dependence of PaineWebber R&D Partners II, L.P. on the skills of
certain scientific personnel; and the dependence of PaineWebber R&D Partners II,
L.P. on the General Partner (hereinafter defined).



<PAGE>

                        PAINEWEBBER R&D PARTNERS II, L.P.
                        (A DELAWARE LIMITED PARTNERSHIP)


                                    FORM 10-Q
                                  JUNE 30, 2001

                                Table of Contents


PART I.  FINANCIAL INFORMATION                                              Page

Item 1.  Financial Statements

         Statements of Financial Condition (unaudited) at                     2
         June 30, 2001 and December 31, 2000

         Statements of Operations
         (unaudited) for the three months and six months
         ended June 30, 2001 and 2000                                         3

         Statement of Changes in Partners' Capital
         (unaudited) for the six months ended
         June 30, 2001                                                        4

         Statements of Cash Flows
         (unaudited) for the six months ended
         June 30, 2001 and 2000                                               5

         Notes to Financial Statements
         (unaudited)                                                       6-10

Item 2.  Management's Discussion and Analysis of Financial                   11
         Condition and Results of Operations

PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K                                    12

         Signatures                                                          13

All schedules are omitted either because they are not applicable or the
information required to be submitted has been included in the financial
statements or notes thereto.

                                        1

<PAGE>

                          PART I FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

PAINEWEBBER R&D PARTNERS II, L.P.
(A DELAWARE LIMITED PARTNERSHIP)

STATEMENTS OF FINANCIAL CONDITION
(unaudited)
                                                       June 30,     December 31,
                                                         2001           2000
--------------------------------------------------------------------------------

Assets:

     Cash                                          $      6,998     $     6,998

     Marketable securities, at market value           8,289,005       1,018,977

     Royalty income receivable                        1,074,833       1,893,334

                                                   ------------     -----------
Total assets                                       $  9,370,836     $ 2,919,309
                                                   ============     ===========


Liabilities and partners' capital:

     Accrued liabilities                           $     59,375     $   146,657

     Partners' capital                                9,311,461       2,772,652

                                                   ------------     -----------
Total liabilities and partners' capital            $  9,370,836     $ 2,919,309
                                                   ============     ===========

--------------------------------------------------------------------------------
See notes to financial statements.

                                        2

<PAGE>

PAINEWEBBER R&D PARTNERS II, L.P.
(A DELAWARE LIMITED PARTNERSHIP)

STATEMENTS OF OPERATIONS
(unaudited)

<TABLE>
<CAPTION>
For the three months ended June 30,                                          2001                 2000
-------------------------------------------------------------------------------------------------------
<S>                                                             <C>                    <C>
Revenues:
     Interest income                                            $          71,157      $        72,548
     Income from product development projects                           1,037,458              963,970
                                                                -----------------      ---------------
                                                                        1,108,615            1,036,518
                                                                -----------------      ---------------

Expenses:
     General and administrative costs                                      65,226              125,932
                                                                -----------------      ---------------

Net income                                                      $       1,043,389      $       910,586
                                                                =================      ===============

Net income per partnership unit:
     Limited partners (based on 8,257 units)                    $          125.10      $        109.18
     General partner                                            $       10,433.89      $      9,105.86



-------------------------------------------------------------------------------------------------------
For the six months ended June 30,                                            2001                 2000
-------------------------------------------------------------------------------------------------------
Revenues:
     Interest income                                            $         123,290      $        76,579
     Income from product development projects                           6,539,744           10,423,468
                                                                -----------------      ---------------
                                                                        6,663,034           10,500,047
                                                                -----------------      ---------------

Expenses:
     General and administrative costs                                     124,225              290,934
                                                                -----------------      ---------------

Net income                                                      $       6,538,809      $    10,209,113
                                                                =================      ===============

Net income per partnership unit:
     Limited partners (based on 8,257 units)                    $          783.99      $      1,224.05
     General partner                                            $       65,388.09      $    102,091.13

-------------------------------------------------------------------------------------------------------
</TABLE>

See notes to financial statements.

                                        3

<PAGE>

PAINEWEBBER R&D PARTNERS II, L.P.
(A DELAWARE LIMITED PARTNERSHIP)

STATEMENT OF CHANGES IN PARTNERS' CAPITAL
(unaudited)

<TABLE>
<CAPTION>
                                                                    Limited                General
For the six months ended June 30, 2001                              Partners               Partner               Total
----------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>                    <C>                  <C>
Balance at January 1, 2001                                      $       2,740,843      $        31,809      $     2,772,652

Net income                                                              6,473,421               65,388            6,538,809

                                                                -----------------      ---------------      ---------------
Balance at June 30, 2001                                        $       9,214,264      $        97,197      $     9,311,461
                                                                =================      ===============      ===============

-------------------------------------------------------------------------------------------------------
</TABLE>

See notes to financial statements.





                                        4

<PAGE>

PAINEWEBBER R&D PARTNERS II, L.P.
(A DELAWARE LIMITED PARTNERSHIP)

STATEMENTS OF CASH FLOWS
(unaudited)

<TABLE>
<CAPTION>
For the six months ended June 30,                                            2001                 2000
-------------------------------------------------------------------------------------------------------
<S>                                                             <C>                    <C>
Cash flows from operating activities:
Net income                                                      $       6,538,809      $    10,209,113

(Increase) decrease in operating assets:
 Marketable securities                                                 (7,270,028)          (9,827,200)
 Royalty income receivable                                                818,501             (430,344)

Increase in operating liabilities:
  Accrued liabilities                                                     (87,282)              48,431
                                                                -----------------      ---------------
Cash provided by operating activities                                           -                    -
                                                                -----------------      ---------------

Cash flows from financing activities:
  Distributions to partners                                                     -                    -
                                                                -----------------      ---------------

Increase in cash                                                                -                    -

Cash at beginning of period                                                 6,998                6,998
                                                                -----------------      ---------------

Cash at end of period                                           $           6,998      $         6,998
                                                                =================      ===============


-------------------------------------------------------------------------------------------------------
Supplemental disclosure of cash flow information:
The Partnership paid no cash for interest or taxes during the six months ended
June 30, 2001 and 2000.
-------------------------------------------------------------------------------------------------------
</TABLE>

See notes to financial statements.

                                        5

<PAGE>

                        PAINEWEBBER R&D PARTNERS II, L.P.
                        (A DELAWARE LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.       ORGANIZATION AND BUSINESS

         The financial information as of June 30, 2001 and for the periods ended
June 30, 2001 and 2000 is unaudited. However, in the opinion of management of
PaineWebber R&D Partners II, L.P. (the "Partnership"), such information includes
all adjustments, consisting only of normal recurring accruals, necessary for a
fair presentation. The results of operations reported for the interim periods
ended June 30, 2001, are not necessarily indicative of results to be expected
for the year ended December 31, 2001. These financial statements should be read
in conjunction with the most recent annual report of the Partnership on Form
10-K for the year ended December 31, 2000 and the previously issued quarterly
report on Form 10-Q for the quarter ended March 31, 2001.

         The Partnership is a Delaware limited partnership that commenced
operations on September 30, 1987 with a total of $72.0 million available for
investment. PWDC Holding Company (the "Manager") is the general partner of
PaineWebber Technologies II, L.P. (the "General Partner"), which is the general
partner of the Partnership. PWDC Holding Company is a wholly-owned subsidiary of
Paine Webber Development Corporation ("PWDC"), an indirect, wholly-owned
subsidiary of UBS Americas Inc. (formerly, Paine Webber Group Inc. ("PWG")).1
The General Partner intends to distribute the Partnership's assets to the
Partners and dissolve the Partnership by December 31, 2001.

         The principal objective of the Partnership has been to provide
long-term capital appreciation to investors through investing in the development
and commercialization of new products with technology companies ("Sponsor
Companies"), which have been expected to address significant market
opportunities. The Partnership has been engaged in diverse product development
projects (the "Projects") including product development contracts, participation
in other partnerships and investments in securities of the Sponsor Companies.
Once the product development phase has been completed, the Sponsor Companies
have had the option to license and commercialize the products resulting from the
product development project, and the Partnership has had the right to receive
payments based upon the sale of such products.

------------------------
1    On November 3, 2000, pursuant to the Agreement and Plan of Merger dated as
     of July 12, 2000 by and among PWG, UBS AG and UBS Americas Inc., PWG merged
     with and into UBS Americas Inc. The General Partner does not expect this
     transaction to have a material effect on the Partnership.

                                        6

<PAGE>

                        PAINEWEBBER R&D PARTNERS II, L.P.
                        (A DELAWARE LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


(NOTE 1 CONTINUED)

         The following table sets forth the proportion of each distribution to
be received by limited partners of the Partnership (the "Limited Partners") and
the General Partner (collectively the "Partners"). All distributions to the
individual Limited Partners have been made pro rata in accordance with their
individual capital contributions.

<TABLE>
<CAPTION>
                                                                 LIMITED         GENERAL
                                                                 PARTNERS        PARTNER
                                                                 --------        -------
<S>                                                                 <C>             <C>
     I.   Until the value of the aggregate distributions for
          each limited partnership unit ("Unit") equals
          $10,000 plus simple interest on such amount accrued
          at 7% per annum for each Unit sold at the Initial
          Closing (6% per annum for each subsequent Unit sold
          up to the 5,000th Unit and 5% per annum for each
          Unit sold thereafter) ("Contribution Payout"). At
          June 30, 2001, Contribution Payout ranged from
          $16,000 per Unit to $19,625 per Unit .................... 99%              1%

     II.  After Contribution Payout and until the value of
          the aggregate distributions for each Unit equals
          $50,000 ("Final Payout") ................................ 80%             20%

     III. After Final Payout ...................................... 75%             25%
</TABLE>

         Effective May 31, 2001, the Partnership distributed to the Partners its
rights to receive contingent payments from Centocor, Inc. and Genzyme
Corporation (see Note 5). The General Partner valued these rights as of this
date at $2,601 per Unit. As of June 30, 2001, the Partnership has made cash and
security distributions, as valued on the dates of distribution, since inception
of $5,856 and $9,807 per Unit, respectively.


         Profits and losses of the Partnership are allocated as follows: (i)
until cumulative profits and losses for each Unit equals Contribution Payout,
99% to Limited Partners and 1% to the General Partner, (ii) after Contribution
Payout and until cumulative profits and losses for each Unit equals Final
Payout, 80% to Limited Partners and 20% to the General Partner, and (iii) after
Final Payout, 75% to Limited Partners and 25% to the General Partner. As of June
30, 2001, the cumulative profit for the Partnership was $1,733 per Unit.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The financial statements are prepared in conformity with accounting
principles generally accepted in the United States which require management to
make certain estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ from
those estimates.

         Marketable securities consist of a money market fund which is recorded
at market value. Marketable securities are not considered cash equivalents for
the Statements of Cash Flows.

                                        7

<PAGE>

                        PAINEWEBBER R&D PARTNERS II, L.P.
                        (A DELAWARE LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


(NOTE 2 CONTINUED)

         The Partnership has invested in product development contracts with
Sponsor Companies either directly or through product development limited
partnerships. The Partnership has expensed product development costs when
incurred by the Sponsor Companies. Income received and/or accrued from
investments in Projects is reflected in the Statements of Operations for the
period in which the income has been earned.

3.       MARKETABLE SECURITIES

         As of June 30, 2001 and December 31, 2000, the Partnership had invested
$8,289,005 and $1,018,977, respectively, in a money market fund.

4.        RELATED PARTY TRANSACTIONS

         The Manager is entitled to receive a management fee for services
rendered to the Partnership. Commencing July 1, 1996, the Manager elected to
discontinue the management fee charged to the Partnership.

         The money market fund invested in by the Partnership is managed by an
affiliate of UBS PaineWebber Inc. ("PWI").

         PWDC and PWI, and its affiliates, have acted in an investment banking
capacity for several of the Sponsor Companies. In addition, PWDC and its
affiliates have had direct limited partnership interests in some of the same
Projects as the Partnership.

5.       PRODUCT DEVELOPMENT PROJECTS

         On January 31, 1997, pursuant to the provisions of the Partnership
Purchase Option Agreement between Centocor, Inc. ("Centocor") and the
Partnership, Centocor exercised its option to purchase the limited partnership
interests of Centocor Partners III, L.P. ("CP III"). The Partnership owned 22
Class A limited partnership units and 111 Class C limited partnership units. As
a result, the Partnership is entitled to receive future quarterly payments (the
"Centocor CPIs") through 2007 based on sales of ReoPro(TM), a drug developed by
CP III. For the quarter ended June 30, 2001 the Partnership accrued income due
from the Centocor CPIs of $1,033,333 which represents income for the two months
ended May 31, 2001. (See discussion of Partner distribution in this note.) For
the three months ended June 30, 2000, the Partnership accrued income from the
Centocor CPIs of $1,550,000 which was prior to an estimate adjustment of
approximately $587,000 as of March 31, 2000. For the six months ended June 30,
2001 and 2000, the Partnership recognized income from CP III of $2,551,212 and
$3,163,970, respectively.

         Pursuant to the terms of the Partnership Purchase Agreement among
Genzyme Corporation ("Genzyme"), Genzyme Development Partners ("GDP"), Genzyme
Development Corporation and the Class A Limited Partners of GDP (including the
Partnership), Genzyme exercised its option to purchase the Class A limited
partnership interests of GDP on January 12, 2001. The purchase price consisted
of

                                        8
<PAGE>

                        PAINEWEBBER R&D PARTNERS II, L.P.
                        (A DELAWARE LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


(NOTE 5 CONTINUED)

an advance payment price of $35,000 per Class A limited partnership interest
plus royalties on the sale of Sepra products for ten years (the "Genzyme CPIs")
commencing with the first calendar quarter of 2001. In January 2001 the
Partnership received $3,885,000 as the owner of 111 Class A limited partnership
interests and recognized income from product development projects of this
amount. For the three months and six months ended June 30, 2001 the Partnership
accrued and/or received income from the Genzyme CPIs in the amount of $41,500
and $103,532, respectively.

         Effective May 31, 2001, the Partnership distributed the Centocor CPIs
and Genzyme CPIs to its Partners in accordance with the distribution provisions
pursuant to its Partnership Agreement as summarized in Note 1. PWDC will act as
agent to receive future Centocor CPI and Genzyme CPI payments and make quarterly
distributions to the Partners with the exception of Partners owning more than 5%
of the Units (who will receive their allocable share of the Centocor CPI and
Genzyme CPI payments directly from Centocor and Genzyme).

         On June 29, 2001, the Partnership and the other parties to the Amended
and Restated Contractual Payment Interest Purchase Agreement dated April 4,
2000, agreed that in exchange for the release of any Partnership liabilities
relating to the termination of that agreement, those other parties (who are
holders of 5% or more of the Units) will receive future Centocor CPI and Genzyme
CPI payments directly from Centocor and Genzyme.

6.       INCOME TAXES

         The Partnership is not subject to federal, state or local income taxes.
Accordingly, individual Partners are required to report their distributive share
of realized income and loss on their respective federal and state income tax
returns.

7.       LEGAL PROCEEDING

         On July 12, 1995, the Partnership commenced a derivative action against
Centocor and Centocor Development Corporation III in the Chancery Court of
Delaware (the "Court") arising from certain agreements entered into by Centocor
and Eli Lilly & Company in July 1992. In June 1997, the parties to the
Partnership's action entered into an agreement to settle the action which
provided, among other things, for Centocor to pay to CP III investors (including
the Partnership, a former limited partner in CP III) in the aggregate: $10.8
million, net of attorneys' fees and expenses as may be awarded by the Court (the
"Initial Payment"); an additional $5.0 million, if and when cumulative
world-wide sales of ReoPro exceed $600 million (the "Milestone Payment"); and
possible additional payments totaling $2.2 million, depending upon regulatory
developments in Japan. The agreement further provided for revisions to the
ReoPro royalties payable by Centocor to CP III investors through 2007 (the
"Retroactive Payments"). On March 15, 1999, the Court issued a memorandum
opinion and order approving the settlement as fair and reasonable.

         On January 31, 2000, the Court awarded legal fees and expenses relating
to the Centocor litigation of approximately $1,476,000 to the Partnership's
counsel plus interest at the statutory rate. PWDC, which had advanced the funds
necessary to pay the Partnership's legal fees and expenses relating to this
litigation, was reimbursed its applicable share of this award in the amount of
$1,244,000. Legal fees and expenses in the amount of $650,000 together with
interest at the statutory rate was awarded to counsel for certain objectors to
the settlement. On February 17, 2000, the Court signed an order of final

                                        9

<PAGE>

                        PAINEWEBBER R&D PARTNERS II, L.P.
                        (A DELAWARE LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


(NOTE 7 CONTINUED)

judgment resolving all settlement matters regarding the litigation with
Centocor. During the six months ended June 30, 2000, the Partnership received
$3,195,190 representing its allocable share of the Initial Payment and the
amount of $4,064,308 representing the Partnership's allocable share of the
Milestone Payment and the Retroactive Payments due for the years 1997 through
1999. These settlement payments of $7,259,498 have been included as income from
product development projects in the accompanying financial statements.





                                       10

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS.
         -----------------------------------------------------------


LIQUIDITY AND CAPITAL RESOURCES

         Partners' capital increased from $2.8 million at December 31, 2000, to
$9.3 million at June 30, 2001, resulting from the recognition of net income of
$6.5 million (as more fully explained in Results of Operations below).

         The Partnership's funds are invested in a money market fund until cash
is needed to pay for the expenses incurred in connection with the dissolution of
the Partnership or upon the remittance of cash distributions to the Partners.
Liquid assets increased from $1.0 million at December 31, 2000 to $8.3 million
at June 30, 2001, resulting primarily from the sale by the Partnership of its
interest in GDP for proceeds of $3.9 million and the receipt of quarterly
payments due from the Centocor and Genzyme CPIs aggregating $3.5 million.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2001 COMPARED
TO THE THREE MONTHS ENDED JUNE 30, 2000:
----------------------------------------

         Net income for the quarters ended June 30, 2001 and 2000 was $1.0
million and $0.9 million, respectively. The increase in net income was due to an
increase in income from product development projects of $0.1 million and a
decrease in expenses of the same amount.

         Revenues for the three months ended June 30, 2001 and 2000 were $1.1
million and $1.0 million, respectively. For the quarter ended June 30, 2001, the
Partnership accrued $1.1 million with respect to income due from Sponsor
Companies as of this date. For this same period in 2000, the Partnership accrued
$1.6 million relating to income due from Sponsor Companies which was offset by
an estimate adjustment of income for the previous quarter of $0.6 million.

         Expenses decreased from $0.126 million for the quarter ended June 30,
2000 to $0.065 million for this same period in 2001 resulting primarily from a
decrease in the Partnership's legal expenses.

SIX MONTHS ENDED JUNE 30, 2001 COMPARED
TO THE SIX MONTHS ENDED JUNE 30, 2000:
--------------------------------------

         Net income for the six months ended June 30, 2001 and 2000 was $6.5
million and $10.2 million, respectively. The unfavorable variance of $3.7
million resulted from a decrease in revenues of $3.9 million offset by a
decrease in expenses of $0.2 million.

         Revenues for the six months ended June 30, 2001 and 2000 were $6.7
million and $10.5 million, respectively, consisting primarily of income from
product development projects. For the six months ended June 30, 2001 the
Partnership received and/or accrued income from product development projects in
the amount of $6.5 million. The Partnership received proceeds of $3.9 million
upon the sale of its interest in GDP and recognized income of $2.7 million from
the Genzyme CPIs and Centocor CPIs. During this same period in 2000 the
Partnership received payments due pursuant to a settlement agreement with
Centocor in the amount of $7.3 million. Also, the Partnership received and/or
accrued quarterly payments from the Centocor CPIs in the amount of $3.2 million
resulting in total income from product development projects of $10.5 million.

         Expenses for the six months ended June 30, 2001 and 2000 were $0.124
million and $0.291 million, respectively. The decrease was due primarily to
decreased legal fees incurred with respect to the proposed sale of the Centocor
CPIs to third parties in 2000.

                                       11

<PAGE>

                            PART II OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.
         ---------------------------------

           a)     EXHIBITS:

                  None

           b)     REPORTS ON FORM 8-K:

                  None





                                       12

<PAGE>

                                   SIGNATURES


         Pursuant to the requirements of Section 13 or 15(d) 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, on this 14th day of
August 2001.



                  PAINEWEBBER R&D PARTNERS II, L.P.


                  By:   PaineWebber Technologies II, L.P.
                        (General Partner)


                  By:   PWDC Holding Company
                        (general partner of the General Partner)



                  By:   /s/ Stephen R. Dyer
                        ------------------------------
                        Stephen R. Dyer
                        President*



                  By:   /s/ Robert J. Chersi
                        ------------------------------
                        Robert J. Chersi
                        Principal Financial and Accounting Officer*





*    The capacities listed are with respect to PWDC Holding Company, the
     Manager, as well as PWDC, the parent company of the Manager.

                                       13