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 MARCH 31, 1998
                                       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 2-98260
                         PAINEWEBBER R&D PARTNERS, L.P.
             (Exact name of registrant as specified in its charter)


           DELAWARE                                              13-3304143
(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>

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


                                    FORM 10-Q
                                 MARCH 31, 1998

                                TABLE OF CONTENTS



PART I.       FINANCIAL INFORMATION                                      Page

Item 1.       Financial Statements

              Statements of Financial Condition (unaudited) at            2
              March 31, 1998 and December 31, 1997

              Statements of Operations
              (unaudited) for the three months ended
              March 31, 1998 and 1997                                     3

              Statement of Changes in Partners' Deficit
              (unaudited) for the three months ended
              March 31, 1998                                              3

              Statements of Cash Flows
              (unaudited) for the three months
              ended March 31, 1998 and 1997                               4

              Notes to Financial Statements
              (unaudited)                                                 5-8

Item 2.       Management's Discussion and Analysis of Financial
              Condition and Results of Operations                         9

PART II.      OTHER INFORMATION

Item 1.       Legal Proceedings                                           10

Item 5.       Other Information                                           10

Item 6.       Exhibits and Reports on Form 8-K                            10

              Signatures                                                  11

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.

<PAGE>

                          PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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

STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
<TABLE>
<CAPTION>

                                                                      March 31,          December 31,
                                                                           1998                  1997
------------------------------------------------------------------------------------------------------
<S>                                                          <C>                   <C>               
Assets:

      Cash equivalents                                       $           31,248    $           12,245

      Due from sponsor company                                            5,000                     -

      Prepaid expense                                                     2,345                     -

                                                               =================     =================
Total assets                                                 $           38,593    $           12,245
                                                               =================     =================


Liabilities and partners' deficit:

      Accrued liabilities                                    $           69,404    $           47,986

      Partners' deficit                                                 (30,811)              (35,741)

                                                               =================     =================
Total liabilities and partners' deficit                      $           38,593    $           12,245
                                                               =================     =================

------------------------------------------------------------------------------------------------------
See notes to financial statements.
</TABLE>

                                       2
<PAGE>
<TABLE>
<CAPTION>

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

STATEMENTS OF OPERATIONS
(UNAUDITED)

For the three months ended March 31,                                       1998                  1997
------------------------------------------------------------------------------------------------------
<S>                                                          <C>                   <C>               
Revenues:
      Interest income                                        $              179    $              295
      Income from product development projects                            5,568                   963
                                                               -----------------     -----------------
                                                                          5,747                 1,258
                                                               -----------------     -----------------

Expenses:
      General and administrative costs                                   30,817                36,605
                                                               -----------------     -----------------


Net loss                                                     $          (25,070)   $          (35,347)
                                                               =================     =================

Net loss per partnership unit:
      Limited partners (based on 37,799 units)               $                -    $                -
      General partner                                        $       (25,070.00)   $       (35,347.00)

------------------------------------------------------------------------------------------------------
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>

STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(UNAUDITED)
                                                                   Limited               General
For the three months ended March 31, 1998                          Partners              Partner                 Total
------------------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>                   <C>                    <C>                
Balance at January 1, 1998                                   $                -    $          (35,741)    $          (35,741)

Net loss                                                                      -               (25,070)               (25,070)
Capital contribution                                                          -                30,000                 30,000

                                                               =================     =================      =================     
Balance at March 31, 1998                                    $                -    $          (30,811)    $          (30,811)
                                                               =================     =================      =================

------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements.
</TABLE>
                                       3

<PAGE>
<TABLE>
<CAPTION>

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

STATEMENTS OF CASH FLOWS
(UNAUDITED)

For the three months ended March 31,                                       1998                  1997
------------------------------------------------------------------------------------------------------
<S>                                                          <C>                   <C>               
Cash flows from operating activities:
Net loss                                                     $          (25,070)   $          (35,347)

(Increase) decrease in operating assets:
  Due from sponsor company                                               (5,000)                    -
  Prepaid expense                                                        (2,345)                    -
  Royalty income receivable                                                   -                   700

Increase in operating liabilities:
  Accrued liabilities                                                    21,418                26,749

                                                               -----------------     -----------------
Cash used in operating activities                                       (10,997)               (7,898)
                                                               -----------------     -----------------

Cash flows from financing activities:
  Contribution by partner                                                30,000                34,264
                                                               -----------------     -----------------
Cash provided by financing activities                                    30,000                34,264
                                                               -----------------     -----------------

Increase in cash equivalents                                             19,003                26,366

Cash equivalents at beginning of period                                  12,245                22,634
                                                               -----------------     -----------------

Cash equivalents at end of period                            $           31,248    $           49,000
                                                               =================     =================


------------------------------------------------------------------------------------------------------
Supplemental disclosure of cash flow information:
The Partnership paid no cash for interest or taxes during the three months ended
March 31, 1998 and 1997.
------------------------------------------------------------------------------------------------------
See notes to financial statements.
</TABLE>

                                       4

<PAGE>

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

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.    ORGANIZATION AND BUSINESS

      The financial information as of and for the periods ended March 31, 1998
and 1997 is unaudited. However, in the opinion of management of PaineWebber R&D
Partners, 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 period ended March 31, 1998
are not necessarily indicative of results to be expected for the year ended
December 31, 1998. 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, 1997.

      The Partnership is a Delaware limited partnership that commenced
operations on March 6, 1986 with a total of $62.1 million available for
investment. PWDC Holding Company is the general partner of PaineWebber
Technologies, 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 Paine
Webber Group Inc. ("PWG"). The principal objective of the Partnership was to
provide long-term capital appreciation to investors through investing in the
development and commercialization of new products with technology companies
("Sponsor Companies"), which were expected to address significant market
opportunities.

      The General Partner has commenced with the dissolution of the
Partnership's assets. In 1995, the Partnership distributed its contingent
payment rights ("CPR") due from Amgen Inc. ("Amgen") through the year 2005 from
the sale of Neupogen(R) to its General Partner and limited partners (the
"Limited Partners", collectively, the "Partners"). Such continuing CPR payments
are no longer available to pay any expenses of the Partnership. In February
1998, the Partnership sold back its rights as a former limited partner of BBN
Advance Computer Partners, L.P. to receive quarterly payments from BBN
Corporation for proceeds of $5,000 which were received subsequent to March 31,
1998. Currently, the Partnership does not have available sufficient cash flow to
meet working capital requirements (consisting primarily of expenses relating to
the dissolution of the Partnership). The General Partner is making, and intends
to continue to make, capital contributions to the Partnership to fund working
capital deficits until such time as the Partnership is terminated. The General
Partner does not intend to terminate the Partnership until a lawsuit with
Centocor, Inc. ("Centocor") has been fully resolved (see Note 5).

                                       5

<PAGE>

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

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


(NOTE 1 CONTINUED)

      All distributions to the Partners from the Partnership have been made pro
rata in accordance with their respective net capital contributions. The
following table sets forth the proportion of each distribution to be received by
the Limited Partners and the General Partner, respectively:
<TABLE>
<CAPTION>

                                                                                         LIMITED      GENERAL 
                                                                                        PARTNERS      PARTNER
                                                                                       ----------    ---------
<S>                                                                                        <C>          <C> 
     I.  Until the value of the aggregate distributions for each limited
         partnership unit ("Unit") equals $1,850 plus interest on such amount
         accrued at 5% per annum, compounded annually ("Contribution Payout").  At
         March 31, 1998, Contribution Payout was $3,322  per Unit.................         99%           1%
                                                                                           

    II.  After Contribution Payout and until the value of the aggregate
         distributions for each Unit equals $9,250 ("Final Payout")...............         80%          20%


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

      During the three months ended March 31, 1998, the Partnership made no cash
or security distributions. As of March 31, 1998, the Partnership has made cash
and security distributions, as valued on the dates of distribution, since
inception of $889 and $593 per Unit, respectively. The cash and security
distributions do not include distributions made in connection with the CPR
through March 31, 1998, in the amount of $338 per Unit.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The financial statements are prepared in conformity with generally
accepted accounting principles 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.

3.    RELATED PARTY TRANSACTIONS

      PWDC and PaineWebber Incorporated ("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 the same product development limited partnerships as the Partnership.

      Cash equivalents represent an investment in a money market fund which is
managed by an affiliate of PWI.

                                       6

<PAGE>

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

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


4.    INCOME TAXES

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

5.    LEGAL PROCEEDING

      ACTION AGAINST CENTOCOR, INC.

      The Partnership commenced an action in the Supreme Court of the State of
New York in July 1995 against Centocor arising out of Centocor's July 1992
transaction with Eli Lilly & Company ("Lilly"). In April 1996, the Supreme Court
of the State of New York dismissed the action on the grounds that New York was
an inconvenient forum. Accordingly, the Partnership refiled its claims in
Delaware Superior Court (the "Court").

      In 1986, PWDC acted as sales agent for the sale of limited partnership
interests in Centocor Partners II, L.P. ("CP II"), a limited partnership formed
by Centocor for the research and development of Centoxin. The Partnership was
among those who purchased limited partnership interests in CP II.

      On February 21, 1992, Centocor exercised its option to purchase all of the
limited partnership interests in CP II, including those held by the Partnership.
The purchase agreement provided that Centocor would thereafter pay to the former
limited partners of CP II 50% of Centocor's revenues from the licensing or
sublicensing of Centoxin and 8% of Centocor's revenues from Centoxin sales.

      In July 1992, Centocor entered into a set of agreements with Lilly for the
stated purposes of Lilly making an equity investment in Centocor and furthering
the testing and eventual distribution of Centoxin. Pursuant to those agreements,
Lilly paid Centocor a total of $100 million, and Centocor conveyed to Lilly,
among other things, two million shares of Centocor common stock, exclusive
marketing rights to Centoxin, and an option to acquire exclusive marketing
rights to CentoRx (now ReoPro), another Centocor drug.

      The Partnership's complaint alleges, among other things, that part of the
$100 million paid by Lilly constitutes revenues to Centocor from the licensing,
sublicensing and/or sale of Centoxin, and that Centocor is obligated to pay 50%
of that part to the former limited partners of CP II, including the Partnership.

      In or about February 1996, Jerome Petrisko, another former limited partner
of CP II, commenced an action against Centocor on behalf of a class of former
limited partners of CP II in the Pennsylvania Court of Common Pleas. His
complaint was similar to the Partnership's complaint. In April 1996, Mr.
Petrisko amended his complaint to add purported claims against PWDC and PWG. In
February 1997, Mr. Petrisko entered into an agreement with PWDC and PWG pursuant
to which PWDC and PWG agreed to toll the statute of limitations and Mr. Petrisko
agreed to dismiss his claims against them with prejudice. On March 27, 1997, Mr.
Petrisko moved to intervene as a plaintiff in the Partnership's action. The
Court granted that motion on April 7, 1997. On July 7, 1997, Mr. Petrisko
discontinued his Pennsylvania action against PWDC and PWG without prejudice.

                                       7

<PAGE>

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

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


(NOTE 5 CONTINUED)

      On September 30, 1997, the Court granted the motions of the Partnership
and Mr. Petrisko for class certification, designating the Partnership and Mr.
Petrisko as the representatives of a class of the former limited partners of CP
II whose interests were acquired by Centocor in February 1992 (the "Class").

      On November 7, 1997, Centocor moved for summary judgment.

      On February 13, 1998, the Court entered an order granting in part and
denying in part Centocor's motion for summary judgment. The Court held that no
part of the $100 million paid by Lilly to Centocor was for a license or
sublicense. The Court further held that there appeared to be a triable issue
whether some part of that $100 million was for the sale or other disposition of
Centoxin, as to which the Class would be entitled to an 8% royalty.

      This action is presently scheduled for trial in June 1998.

      PWDC has been advancing, and may continue to advance, the funds necessary
to pay the Partnership's legal fees and expenses relating to this action. In the
event of a recovery on behalf of the Class, the Court may award legal fees and
expenses to the Partnership's counsel, to be paid out of the recovery. The
amounts of any recovery and award of legal fees and expenses cannot be estimated
at this time. It is anticipated that: the net proceeds of any recovery will be
distributed to the members of the Class, including the Partnership, on a pro
rata basis; the Partnership and/or its counsel will reimburse PWDC; and any
remaining Partnership proceeds will be distributed to the Partners of the
Partnership in accordance with the distribution criteria as outlined in Note 1.

                                       8

<PAGE>

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

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


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

LIQUIDITY AND CAPITAL RESOURCES

      Partners' deficit decreased from $36,000 at December 31, 1997, to $31,000
at March 31, 1998 resulting from a net loss of $25,000 offset by a contribution
by the General Partner of $30,000. The Partnership does not have available
sufficient cash flow to meet working capital requirements. Therefore, the
General Partner is making, and will continue to make, capital contributions to
the Partnership to fund working capital deficits. Cash increased by $19,000 from
December 31, 1997 to March 31, 1998 primarily as a result of the General
Partner's capital contribution to the Partnership to partially fund the
Partnership's outstanding accrued liabilities as of March 31, 1998.

RESULTS OF OPERATIONS

      THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 1997:

      The net loss for the quarter ended March 31, 1998, approximated $25,000
compared to a net loss of $35,300 for the quarter ended March 31, 1997. Revenues
for the Partnership consisted of minimal amounts received from a product
development project and interest income earned on cash balances. Expenses
consisted of general and administrative costs incurred in connection with the
dissolution of the Partnership.

                                       9

<PAGE>

                           PART II OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS.

        ACTION AGAINST CENTOCOR, INC.

               Information regarding this action was disclosed on the
        Partnership's Form 10-K for the year ended December 31, 1997. On
        February 13, 1998, the Court entered an order granting in part and
        denying in part Centocor's motion for summary judgment. The Court held
        that no part of the $100 million paid by Lilly to Centocor was for a
        license or sublicense. The Court further held that there appeared to be
        a triable issue whether some part of that $100 million was for the sale
        or other disposition of Centoxin, as to which the Class would be
        entitled to an 8% royalty.

ITEM 5. OTHER INFORMATION.

               Effective January 1, 1998, the General Partner discontinued the
        right of Limited Partners to transfer Units except for transfers that
        may occur as a result of the laws of descent and distribution or by
        operation of law.

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

        A)     EXHIBITS:

               None

        B)     REPORTS ON FORM 8-K:

               None.

                                       10

<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 15th day of May
1998.

                  PAINEWEBBER R&D PARTNERS, L.P.


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


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


                  By: /s/ Dhananjay M. Pai
                  ------------------------
                  Dhananjay M. Pai
                  President*


                  By: /s/ Anthony M. DiIorio
                  --------------------------
                  Anthony M. DiIorio
                  Principal Financial and Accounting Officer*
                  
*  The capacities listed are with respect to PWDC Holding Company as well as
   PWDC, the parent company of PWDC Holding Company.

                                       11