SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K


[X]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934

For the Fiscal Year Ended December 31, 1995

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 0-15681


                         WESTMED VENTURE PARTNERS, L.P.
===============================================================================
             (Exact name of registrant as specified in its charter)


Delaware                                                              13-3443230
================================================================================
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

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

Securities registered pursuant to Section 12(b) of the Act:

    Title of each class               Name of each exchange on which registered
           None                                      None

Securities registered pursuant to Section 12(g) of the Act:

                      Units of Limited Partnership Interest
================================================================================
                                (Title of class)


<PAGE>


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


Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

At March 26, 1996, 66,919 units of limited  partnership  interest ("Units") were
held by non-affiliates of the registrant. There is no established public trading
market for such Units.



<PAGE>


                                     PART I

Item 1.       Business.

Formation

WestMed Venture  Partners,  L.P. (the  "Partnership"  or the  "Registrant") is a
Delaware  limited  partnership  organized  in February  1987.  In May 1987,  the
Partnership  elected  to operate as a  business  development  company  under the
Investment  Company Act of 1940, as amended (the "1940 Act"). The  Partnership's
investment  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 considers this activity to constitute the
single industry segment of venture capital investing.

The  general  partners  of the  Partnership  consist of three  individuals  (the
"Independent General Partners") and WestMed Venture Management, L.P., a Delaware
limited  partnership (the "Managing  General  Partner"),  the general partner of
which is Medical Venture Holdings,  Inc. ("MVH"), a Delaware  corporation and an
affiliate of Oppenheimer & Co., Inc. ("Opco").

In 1987, the Partnership  publicly offered 100,000 units of limited  partnership
interest (the  "Units") at $500 per Unit.  The Units were  registered  under the
Securities Act of 1933,  pursuant to a Registration  Statement on Form N-2 (File
No.  33-11926),  which was declared  effective on July 2, 1987. The  Partnership
held its initial  closing on  September  1, 1987 and  completed  the offering on
April 1, 1988, at which time it had accepted subscriptions for a total of 66,929
Units.  Gross capital  contributions to the Partnership from the public offering
total $33,802,529; $33,464,500 from the limited partners (the "Limited Partners"
and collectively with the Managing General Partner, the "Partners") and $338,029
from the Managing General Partner.

The Venture Capital Investments

From its inception through December 31, 1995, the Partnership had invested $28.4
million in 23  portfolio  companies  (including  venture  capital fees and other
acquisition   costs   totaling  $1.9   million).   At  December  31,  1995,  the
Partnership's  investment  portfolio  consisted of  investments in 13 companies.
Such  investments  had an  aggregate  cost of $11.7  million and a fair value of
$13.7 million. From its inception through December 31, 1995, the Partnership had
liquidated  10  portfolio  investments  with  a cost  of  $16.7  million.  These
liquidated investments returned $7 million to the Partnership for a net realized
loss of $9.7 million. At December 31, 1995, the Partnership had a cumulative net
loss from its venture  capital  investments  totaling  $9.2  million,  including
$492,000 of interest and other income from portfolio  investments.  During 1995,
the Partnership  invested $292,000 in two existing  portfolio  companies.  These
investments  and other events  affecting the  Partnership's  portfolio  security
holdings during 1995 are listed below.

During March 1995, Cortex Pharmaceuticals,  Inc. effected a one-for-five reverse
split of its outstanding  common stock. As a result,  the Partnership  exchanged
its 704,167  shares of common  stock and warrants to purchase  32,500  shares of
Cortex  common  stock at $1.84 per share for 140,833  shares of common stock and
warrants  to  purchase  6,500  shares of common  stock at $9.19  per  share.  In
December 1995, such warrants expired unexercised.

In June 1995, the Partnership made a follow-on  investment  totaling $238,635 in
UroCor,  Inc.,  acquiring  45,000  shares of  preferred  stock and a warrant  to
purchase 9,000 shares of common stock at $5.00 per share. The Partnership paid a
$13,635 venture capital fee relating to this investment.

In May 1995, the  Partnership's  warrant to purchase 15,446 shares of Aprogenex,
Inc.  common stock was increased to 16,458 and the exercise price was reduced to
$7.39 as a result of an  anti-dilutive  provision in the warrant  agreement.  In
July and August 1995,  the  Partnership  sold 51,000 shares of  Aprogenex,  Inc.
common stock for $276,000, realizing a gain of $65,000.

On July 31, 1995, the Partnership's warrants to purchase 46,535 shares of common
stock of Ultramed, Inc. expired unexercised.

In  October  1995,  HBO  &  Company,   a  public  company,   acquired   CliniCom
Incorporated.   The   Partnership   exchanged   its  4,908  shares  of  CliniCom
Incorporated for 1,963 shares of HBO & Company.

In  November  1995,  the  Partnership  made a $53,030  follow-on  investment  in
Exocell,  Inc.,  including  $3,030 of venture  capital fees paid to the Managing
General Partner, to acquire a $50,000 non-interest-bearing  convertible note due
March 31, 1997.

During 1995, the Partnership  received a $55,593 cash  distribution  from Nimbus
Medical, L.P. and reversed $2,351 of interest income recorded in 1994.

Competition

The  Partnership  encounters  competition  from other  entities  having  similar
investment  objectives.  Primary competition for venture capital investments has
been from venture  capital  partnerships,  venture  capital  affiliates of large
industrial  and financial  companies,  small business  investment  companies and
wealthy  individuals.  Competition has also been from foreign investors and from
large industrial and financial  companies investing directly rather than through
venture  capital  affiliates.  The Partnership has frequently been a co-investor
with other professional  venture capital investors and these  relationships have
expanded the Partnership's access to investment opportunities.

Employees

The  Partnership  has no  employees.  The Managing  General  Partner,  under the
supervision  of the  Independent  General  Partners,  manages and  controls  the
Partnership's   venture  capital  investments.   The  Managing  General  Partner
performs,  or arranges for others to perform,  the management and administrative
services  necessary for the operation of the  Partnership and is responsible for
managing the Partnership's short-term investments.



<PAGE>


Item 2.       Properties.

The Partnership does not own or lease physical properties.

Item 3.       Legal Proceedings.

The Partnership is not a party to any material pending legal proceedings.

Item 4.       Submission of Matters to a Vote of Security Holders.

No matter was submitted to a vote of security  holders during the fourth quarter
of the fiscal year covered by this report.

                                     PART II

Item 5.   Market for Registrant's Common Equity and Related Stockholder Matters.

There is no  established  public  trading  market  for the  Units  and it is not
anticipated  that a public  market  for the Units  will  develop.  The number of
individual holders of Units at December 31, 1995 was approximately 6,500.

There were no cash distributions to Partners during the years ended December 31,
1995, 1994 or 1993.  Cumulative cash distributions to Partners from inception to
December 31, 1995, total $5.7 million; $5.65 million to the Limited Partners, or
approximately $85 per Unit, and $57,000 to the Managing General Partner.

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 equal to 6% per
annum, simple interest, on their total Adjusted Invested Capital; i.e., original
capital contributions reduced by previous distributions (the "Priority Return").
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.


<PAGE>


Item 6.       Selected Financial Data.

($ In Thousands, Except For Per Unit Information)

<TABLE>
                                                                           Years Ended December 31,
                                                           1995           1994            1993           1992           1991
                                                       -----------     -----------    -----------    -----------    --------
<S>                                                    <C>             <C>            <C>            <C>            <C>        
Net assets                                             $    15,855     $    14,533    $    18,394    $    19,402    $    25,961

Net investment loss                                           (375)           (421)          (540)          (479)          (253)

Net realized gain (loss) from investments                       65          (2,823)        (4,043)         2,313         (4,377)

Net unrealized appreciation (depreciation)
of investments                                               1,978             345            964         (2,612)           793

Cost of portfolio investments purchased                        292             693            177          1,791            948

Cumulative cost of portfolio investments                    28,407          28,115         27,422         27,245         25,454

Cash distributions to Partners                                   -               -              -          4,989              -

Cumulative cash distributions to Partners                    5,711           5,711          5,711          5,711            723

PER UNIT OF LIMITED PARTNERSHIP INTEREST:*

Net asset value, including net unrealized
appreciation (depreciation) of investments                  $  235         $   215        $   272         $  287        $   384

Net investment loss                                             (6)             (6)            (8)            (7)            (4)

Net realized gain (loss) on investments                          1             (42)           (60)            34            (65)

Net unrealized appreciation (depreciation)
of investments                                                  29               5             14            (39)           (12)

Cash distributions                                               -               -              -             74              -

Cumulative cash distributions                                   85              85             85             85             11
</TABLE>

*   Limited Partners were admitted to the Partnership in eight separate closings
    from  September 1, 1987 to April 1, 1988.  Per Unit amounts  shown above 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>


Item 7. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations.

Liquidity and Capital Resources

During the year ended  December  31, 1995,  the  Partnership  invested  $292,000
(including  venture  capital fees  totaling  $17,000) in two existing  portfolio
companies.  At December 31, 1995, the  Partnership  had invested an aggregate of
$28.4 million in 23 portfolio companies (including acquisition costs and venture
capital fees totaling $1.9 million).  The Partnership has invested approximately
95% of its original $30 million of net  proceeds  received  from the offering of
Units.

At December 31, 1995, the  Partnership  held $2.3 million in cash and short-term
investments as follows: $1.8 million in short-term securities with maturities of
less than three months and $512,000 in an interest-bearing cash account. For the
years ended December 31, 1995,  1994 and 1993, the  Partnership  earned interest
from such investments  totaling  $129,000,  $105,000 and $96,000,  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.  It is  anticipated  that  funds  needed to cover the  Partnership's
future  follow-on  investments  and  operating  expenses  will be obtained  from
existing cash reserves, interest earned from the short-term investment portfolio
and proceeds from the sale of portfolio investments.

Results of Operations

For the years ended December 31, 1995,  1994 and 1993, the Partnership had a net
realized  loss from  operations  of  $309,000,  $3.2  million and $4.6  million,
respectively.  Net realized gain or loss from operations is comprised of (i) net
realized  gains or losses from  portfolio  investments  and (ii) net  investment
income or loss (interest and dividends less operating expenses).

Realized  Gains and  Losses  from  Portfolio  Investments  - For the year  ended
December 31,  1995,  the  Partnership  had a net  realized  gain from  portfolio
investments  of  $65,000  resulting  from the sale of  51,000  common  shares of
Aprogenex, Inc. in the public market for $276,000.

For the year ended December 31, 1994, the Partnership had a net realized loss of
$2.8 million from its portfolio  investments.  During March and April 1994,  the
Partnership  sold 20,000  common shares of CliniCom  Incorporated  in the public
market for $422,000, realizing a loss of $944,000.  Additionally at December 31,
1994, the Partnership wrote-off $166,000 of cost relating to its remaining 4,908
shares of common stock of CliniCom due to the continued  depressed public market
price of such shares.  Also, in December  1994,  the  Partnership  wrote-off its
$323,000  investment in Vaso Products Inc.,  $576,000 of its $826,000 investment
in Bellara Medical Products Inc. and $801,000 of its $1.3 million  investment in
Ultramed,  Inc. due to continued  business and financial  difficulties  at these
companies.

For the year ended December 31, 1993, the Partnership had a $4 million  realized
loss from  portfolio  investments.  In March 1993, the  Partnership  sold 40,000
common shares of Somatogen, Inc. in the public market for $440,000,  realizing a
gain  of  $319,000.   On  December  31,  1993,  the  Partnership  wrote-off  its
investments  in  LMA,   Ltd.,   Oncodiagnostics,   Inc.  and  Advanced   Medical
Technologies totaling $4.3 million due to business and financial difficulties at
these companies.


<PAGE>


Investment  Income  and  Expenses  - Net  investment  loss for the  years  ended
December  31,  1995,  1994  and  1993  was  $375,000,   $421,000  and  $540,000,
respectively.  The  decrease in net  investment  loss for 1995  compared to 1994
primarily is attributable to the $41,000 increase in investment income for 1995.
This  increase   reflects  a  $24,000   increase  in  interest  from  short-term
investments for 1995 compared to 1994, due to higher  short-term  interest rates
during the 1995 period.  Additionally,  accrued portfolio interest of $2,400 and
$19,000 was reversed in 1995 and 1994, respectively,  resulting in an additional
$17,000  increase in  investment  income for 1995  compared  to 1994.  Operating
expenses  remained  relatively  flat,  decreasing only $5,000 from 1995 to 1994.
Management  fees and  professional  fees  decreased by $76,000 while general and
administrative  and other expenses increased by $71,000 for the 1995 period. The
increase in general and  administrative  expense  resulted  from  directors  and
officers liability insurance coverage initiated in August 1994.

The  decrease in net  investment  loss for the 1994 period  compared to the 1993
period is attributable to a decrease in operating  expenses for the 1994 period,
primarily professional fees and general and administrative  expenses.  Operating
expenses   declined  $118,000  from  $625,000  in  1993  to  $507,000  in  1994.
Professional  fees  declined  $71,000 and general  and  administrative  expenses
declined  $29,000 for the 1994 period compared to the 1993 period due to certain
cost control  measures  implemented by the Managing  General  Partner during the
fourth quarter of 1993.

Pursuant to a  management  agreement  between the  Partnership  and the Managing
General Partner, the Managing General Partner is responsible for the management,
administrative  and  certain  investment  advisory  services  necessary  for the
operation of the  Partnership.  For such services,  the Managing General Partner
receives  a  management  fee at the  annual  rate of 2% of the lesser of the net
assets of the  Partnership or the net  contributed  capital of the  Partnership;
i.e., gross capital contributions to the Partnership (net of selling commissions
and  organizational  expenses)  reduced  by  capital  distributed.  Such  fee is
determined and payable  quarterly.  For the years ended December 31, 1995,  1994
and 1993, the management fee was $268,000, $361,000 and $379,000,  respectively.
The decrease in the management fee for each year is a result of a decline in the
Partnership's net assets for the respective  years. 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  received
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 year ended  December 31, 1995,
the  Partnership  had a  $1.6  million  unrealized  gain  from  the  net  upward
revaluation of its publicly-held  portfolio  investments,  primarily  Somatogen,
Inc. and Corvita Corporation.

For the year ended  December 31, 1994,  the  Partnership  had a $3.5 million net
unrealized loss from its portfolio investments, primarily resulting from the net
downward revaluation of its publicly-held  portfolio  investments.  Additionally
during 1994, $2.9 million was transferred  from unrealized loss to realized loss
relating to the write-off of certain portfolio investments,  as discussed above.
The $3.5 million  unrealized loss partially  offset by the $2.9 million transfer
from  unrealized  loss to realized loss  resulted in a $618,000  decrease to net
unrealized appreciation of investments for 1994.



<PAGE>


For the year ended  December  31,  1993,  the  Partnership  had a  $276,000  net
unrealized  loss from its portfolio  investments,  primarily  related to the net
downward revaluation of its publicly-held  portfolio  investments.  Additionally
during 1993, the Partnership transferred a net $3.9 million from unrealized loss
to realized  loss  related to the sale and the  write-off  of certain  portfolio
investments,  as discussed  above.  The $3.9 million  transfer to realized  loss
partially  offset by the additional  $276,000 net unrealized  loss resulted in a
$3.6 million increase to net unrealized appreciation of investments for 1993.

Net Assets - Changes to net assets resulting from operations is comprised of (i)
net realized gains and losses from operations and (ii) changes to net unrealized
appreciation or depreciation of portfolio investments.

At December 31, 1995 the Partnership's net assets were $15.8 million, reflecting
an increase  of $1.3  million  from $14.5  million at December  31,  1994.  This
increase resulted from the $1.6 million increase in net unrealized  appreciation
of  investments  offset by the $309,000 net realized  loss from  operations  for
1995.

At  December  31,  1994,  the  Partnership's  net  assets  were  $14.5  million,
reflecting a decrease of $3.9  million from $18.4  million at December 31, 1993.
This decrease  resulted from the $3.2 million net realized loss from  operations
and the $618,000  decrease in net unrealized  appreciation  of  investments  for
1994.

At  December  31,  1993,  the  Partnership's  net  assets  were  $18.4  million,
reflecting  a decrease of $1 million  from $19.4  million at December  31, 1992.
This decrease  resulted from the $4.6 million net realized loss from  operations
partially offset by the $3.6 million increase in net unrealized  appreciation of
investments for 1993.

At  December  31,  1995,  1994 and  1993,  the net asset  value  per $500  Unit,
including an  allocation  of net  unrealized  appreciation  or  depreciation  of
investments,  was $235, $215 and $272,  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>


Item 8.       Financial Statements and Supplementary Data.


                         WESTMED VENTURE PARTNERS, L.P.
                                      INDEX


Independent Auditors' Report

Balance Sheets as of December 31, 1995 and 1994

Schedule of Portfolio  Investments as of December 31, 1995 Schedule of Portfolio
Investments as of December 31, 1994

Statements of Operations for the years ended December 31, 1995, 1994 and 1993

Statements of Cash Flows for the years ended December 31, 1995, 1994 and 1993

Statements  of Changes in  Partners'  Capital for the years ended  December  31,
1993, 1994 and 1995

Notes to Financial Statements

NOTE - All other  schedules  are omitted  because of the  absence of  conditions
under which they are required or because the required information is included in
the financial statements or the notes thereto.



<PAGE>


INDEPENDENT AUDITORS' REPORT



WestMed Venture Partners, L.P.:

We have audited the  accompanying  balance sheets of WestMed  Venture  Partners,
L.P. (the "Partnership"),  including the schedules of portfolio investments,  as
of December 31, 1995 and 1994, and the related  statements of  operations,  cash
flows,  and  changes in  partners'  capital  for each of the three  years in the
period  ended   December  31,  1995.   These   financial   statements   are  the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned at December 31, 1995 and 1994 by correspondence
with the custodian;  where  confirmation  was not possible,  we performed  other
audit  procedures.  An audit also includes  assessing the accounting  principles
used and  significant  estimates made by  management,  as well as evaluating the
overall financial statement  presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our  opinion,  such  financial  statements  present  fairly,  in all material
respects,  the financial position of WestMed Venture Partners,  L.P. at December
31,  1995 and 1994,  and the results of its  operations,  its cash flows and the
changes in its partners' capital for each of the three years in the period ended
December 31, 1995 in conformity with generally accepted accounting principles.

As explained in Note 2, the financial  statements  include  securities valued at
$11,079,422  and  $11,953,915  at  December  31,  1995 and  1994,  respectively,
representing  70% and 82% of net assets,  respectively,  whose  values have been
estimated   by  the  Managing   General   Partner  in  the  absence  of  readily
ascertainable  market  values.  We  have  reviewed  the  procedures  used by the
Managing General Partner in arriving at its estimate of value of such securities
and have  inspected  underlying  documentation,  and, in the  circumstances,  we
believe  the  procedures  are  reasonable  and  the  documentation  appropriate.
However,  because of the inherent  uncertainty  of  valuation,  those  estimated
values may differ  significantly from the values that would have been used had a
ready market for the securities existed, and the differences could be material.


Deloitte & Touche LLP


New York, New York
February 17, 1996



<PAGE>


WESTMED VENTURE PARTNERS, L.P.
BALANCE SHEETS
December 31,


<TABLE>
                                                                                                1995                1994
                                                                                          ----------------    ----------
<S>                        <C> <C>           <C>   <C>                                    <C>                  <C>             
ASSETS

Portfolio investments, at fair value
   (cost $11,690,534 at December 31, 1995 and
   $11,667,193 at December 31, 1994) - Notes 2 and 4                                      $     13,668,256     $     12,012,688
Cash and cash equivalents - Note 2                                                               2,310,697            2,609,028
Accrued interest receivable and other assets                                                        39,088               49,016
                                                                                          ----------------     ----------------

TOTAL ASSETS                                                                              $     16,018,041     $     14,670,732
                                                                                          ================     ================




LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
Accounts payable and accrued expenses                                                     $         64,979     $         38,059
Due to Managing General Partner - Note 4                                                            82,705               85,148
Due to Independent General Partners - Note 4                                                        15,000               15,000
                                                                                          ----------------     ----------------
   Total liabilities                                                                               162,684              138,207
                                                                                          ----------------     ----------------

Partners' Capital:
Managing General Partner                                                                           158,557              145,329
Limited Partners (66,929 Units)                                                                 15,696,800           14,387,196
                                                                                          ----------------     ----------------
   Total Partners' capital                                                                      15,855,357           14,532,525
                                                                                          ----------------     ----------------

TOTAL LIABILITIES AND PARTNERS' CAPITAL                                                   $     16,018,041     $     14,670,732
                                                                                          ================     ================
</TABLE>


See notes to financial statements.



<PAGE>


WESTMED VENTURE PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1995

Active Portfolio Investments:

<TABLE>
                                                                     Initial Investment
Company / Position                                                          Date                   Cost              Fair Value
Aprogenex, Inc.(A)(B)
<C>                                                                           <C>            <C>                <C>            
476,739 shares of Common Stock                                           Jan. 1989           $     1,471,807    $       625,719
Warrant to purchase 16,458 shares of Common Stock
   at $7.39 per share, expiring 10/15/98                                                                   0                  0
-------------------------------------------------------------------------------------------------------------------------------
Bellara Medical Products Ltd.(A)
442,430 shares of Common Stock                                           Sept. 1987                  250,000             36,810
-------------------------------------------------------------------------------------------------------------------------------
Cortex Pharmaceuticals, Inc.(A)(C)
140,833 shares of Common Stock                                           May 1988                    504,038            532,700
75,000 shares of Preferred Stock                                                                      53,030             27,835
                                                                                             ---------------    ---------------
                                                                                                     557,068            560,535
-------------------------------------------------------------------------------------------------------------------------------
Corvita Corporation*(A)
410,765 shares of Common Stock                                           Aug. 1988                 2,394,797          3,204,002
Warrant to purchase 36,916 shares of Common Stock
   at $7 per share, expiring 11/1/99                                                                       0                  0
-------------------------------------------------------------------------------------------------------------------------------
Exocell, Inc.*(D)
598,083 shares of Preferred Stock                                        Feb. 1988                   714,266            714,266
Convertible note due 3/31/97                                                                          53,030             53,030
                                                                                             ---------------    ---------------
                                                                                                     767,296            767,296
-------------------------------------------------------------------------------------------------------------------------------
HBO & Co.(A)(E)
1,963 shares of Common Stock                                             Dec. 1987                   165,934            149,727
-------------------------------------------------------------------------------------------------------------------------------
MNI Group Inc.(A)
211,973 shares of Common Stock                                           Sept. 1987                  451,457             95,854
-------------------------------------------------------------------------------------------------------------------------------
Nimbus Medical, Inc.
200,709 shares of Common Stock                                           Apr. 1988                   380,431            192,374
   Nimbus Medical, L.P.(F)
   38,340 units of limited partnership interest                                                       30,924             76,316
                                                                                             ---------------    ---------------
                                                                                                     411,355            268,690
-------------------------------------------------------------------------------------------------------------------------------
Oclassen Pharmaceuticals, Inc.
292,955 shares of Preferred Stock                                        Jan. 1989                 1,351,405          2,705,842
-------------------------------------------------------------------------------------------------------------------------------
Somatogen, Inc.(A)
125,404 shares of Common Stock                                           Dec. 1988                   657,194          2,439,107
-------------------------------------------------------------------------------------------------------------------------------
Ultramed, Inc.(G)
954,545 shares of Preferred Stock                                        Oct. 1987                   333,410                  0
18% Convertible Promissory Notes                                                                     159,090            150,000
12% Promissory Note                                                                                    7,500              7,500
Warrant to purchase 7,500 shares of Common Stock
   at $.05 per share, expiring 2/1/97                                                                      0                  0
                                                                                              --------------    ---------------
                                                                                                     500,000            157,500
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>


WESTMED VENTURE PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS - continued
December 31, 1995

Active Portfolio Investments:

<TABLE>
                                                                     Initial Investment
Company / Position                                                          Date                   Cost              Fair Value
UroCor, Inc.(H)
<C>                                                                          <C>             <C>                <C>            
368,930 shares of Preferred Stock                                        May 1991            $     1,097,258    $     1,844,650
Warrant to purchase 8,000 shares of Common Stock
   at $1.25 per share, expiring 2/13/01                                                                    0             30,000
Warrant to purchase 8,995 shares of Common Stock
   at $4.30 per share, expiring 10/18/98                                                                   0              6,297
Warrant to purchase 9,000 shares of Common Stock
   at $5 per share, expiring 6/2/00                                                                        0                  0
-------------------------------------------------------------------------------------------------------------------------------
Xenova Group plc*(A)
304,403 Ordinary shares                                                  Aug. 1988                 1,614,963            776,227
-------------------------------------------------------------------------------------------------------------------------------

Totals From Active Portfolio Investments                                                      $   11,690,534    $    13,668,256
                                                                                              =================================
</TABLE>



SUPPLEMENTAL INFORMATION: LIQUIDATED PORTFOLIO INVESTMENTS(I)


<TABLE>
                                                                                    Cost        Realized Loss            Return
<S>                                                                       <C>                 <C>               <C>            
Totals From Liquidated Portfolio Investments                              $   16,716,260      $   (9,693,973)   $     7,022,287
                                                                          =====================================================


                                                                                                     Combined          Combined
                                                                                               Unrealized and        Fair Value
                                                                                    Cost        Realized Loss        and Return

Totals From Active and Liquidated Portfolio Investments                   $   28,406,794      $   (7,716,251)   $    20,690,543
                                                                          =====================================================
</TABLE>


(A)  Public company

(B)  In May  1995,  the  Partnership's  warrant  to  purchase  15,446  shares of
     Aprogenex, Inc. common stock was increased to 16,458 and the exercise price
     was  reduced  to $7.39 as a result  of an  anti-dilutive  provision  in the
     warrant  agreement.  In July and August 1995, the  Partnership  sold 51,000
     shares of Aprogenex,  Inc.  common stock for $276,000,  realizing a gain of
     $65,000.



<PAGE>


WESTMED VENTURE PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS - continued
December 31, 1995



(C)  During March 1995,  Cortex  Pharmaceuticals,  Inc.  effected a one-for-five
     reverse split of its outstanding common stock. As a result, the Partnership
     exchanged  its  704,167  shares of common  stock and  warrants  to purchase
     32,500 shares of Cortex common stock at $1.84 per share for 140,833  shares
     of common  stock and  warrants to purchase  6,500 shares of common stock at
     $9.19 per share. In December 1995, the warrants expired unexercised.

(D)  In November 1995, the Partnership  made a $53,030  follow-on  investment in
     Exocell,  Inc.,  including  $3,030  of  venture  capital  fees  paid to the
     Managing  General  Partner,  to  acquire  a  50,000  non-interest   bearing
     convertible note due March 31, 1997.

(E)  In  October  1995,  HBO &  Company,  a public  company,  acquired  CliniCom
     Incorporated.  The  Partnership  exchanged  its 4,908  shares  of  CliniCom
     Incorporated for 1,963 shares of HBO & Company.

(F)  During 1995,  the  Partnership  received a $55,593 cash  distribution  from
     Nimbus  Medical,  L.P. and reversed  $2,351 of interest  income recorded in
     1994.

(G)  On July 31, 1995, the  Partnership's  warrants to purchase 46,535 shares of
     common stock of Ultramed, Inc. expired unexercised.

(H)  In June 1995, the Partnership made a follow-on investment totaling $238,635
     in UroCor,  Inc.,  acquiring 45,000 shares of preferred stock and a warrant
     to  purchase  9,000  shares  of  common  stock  at  $5.00  per  share.  The
     Partnership paid a $13,635 venture capital fee relating to this investment.

(I)  Amounts  provided  for  "Supplemental  Information:   Liquidated  Portfolio
     Investments" are cumulative from inception through December 31, 1995.

* 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, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1994

Active Portfolio Investments:

<TABLE>
                                                                     Initial Investment
Company / Position                                                          Date                   Cost              Fair Value
Aprogenex, Inc.*(A)
<C>                                                                           <C>            <C>                <C>            
527,739 shares of Common Stock                                           Jan. 1989           $     1,682,187    $     2,849,791
Warrant to purchase 15,446 shares of Common Stock
   at $7.88 per share, expiring 10/15/98                                                                   0                  0
-------------------------------------------------------------------------------------------------------------------------------
Bellara Medical Products Ltd.(A)
442,430 shares of Common Stock                                           Sept. 1987                  250,000             40,704
-------------------------------------------------------------------------------------------------------------------------------
CliniCom Incorporated(A)
4,908 shares of Common Stock                                             Dec. 1987                   165,934             58,773
-------------------------------------------------------------------------------------------------------------------------------
Cortex Pharmaceuticals, Inc.(A)
704,167 shares of Common Stock                                           May 1988                    504,038            347,753
75,000 shares of Preferred Stock                                                                      53,030             18,171
Warrants to purchase 32,500 shares of Common Stock
   at $1.84 per share, expiring on 4/30/95                                                                 0                  0
                                                                                             ---------------    ---------------
                                                                                                     557,068            365,924
-------------------------------------------------------------------------------------------------------------------------------
Corvita Corporation*(A)
410,765 shares of Common Stock                                           Aug. 1988                 2,394,797          1,340,121
Warrant to purchase 36,916 shares of Common Stock
   at $7 per share, expiring 11/1/99                                                                       0                  0
-------------------------------------------------------------------------------------------------------------------------------
Exocell, Inc.*
598,083 shares of Preferred Stock                                        Feb. 1988                   714,266            714,266
-------------------------------------------------------------------------------------------------------------------------------
MNI Group Inc.(A)
211,973 shares of Common Stock                                           Sept. 1987                  451,457             37,477
-------------------------------------------------------------------------------------------------------------------------------
Nimbus Medical, Inc.
200,709 shares of Common Stock                                           Apr. 1988                   380,431            192,374
   Nimbus Medical, L.P.
   38,340 units of limited partnership interest                                                       88,868             76,316
                                                                                             ---------------    ---------------
                                                                                                     469,299            268,690
-------------------------------------------------------------------------------------------------------------------------------
Oclassen Pharmaceuticals, Inc.
292,955 shares of Preferred Stock                                        Jan. 1989                 1,351,405          2,705,842
-------------------------------------------------------------------------------------------------------------------------------
Somatogen, Inc.(A)
125,404 shares of Common Stock                                           Dec. 1988                   657,194            740,824
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>


WESTMED VENTURE PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS - continued
December 31, 1994

Active Portfolio Investments:

<TABLE>
                                                                     Initial Investment
Company / Position                                                          Date                   Cost              Fair Value
Ultramed, Inc.
<C>                                                                           <C>             <C>               <C>            
954,545 shares of Preferred Stock                                        Oct. 1987            $      333,410    $             0
18% Convertible Promissory Notes                                                                     159,090            150,000
12% Promissory Note                                                                                    7,500              7,500
Warrant to purchase 7,500 shares of Common Stock
   at $.05 per share, expiring 2/1/97                                                                      0                  0
Warrants to purchase 46,535 shares of Common Stock
   at $.55 per share, expiring 7/31/95                                                                     0                  0
                                                                                              --------------    ---------------
                                                                                                     500,000            157,500
-------------------------------------------------------------------------------------------------------------------------------
UroCor, Inc.*
323,930 shares of Preferred Stock                                        May 1991                    858,623          1,408,623
Warrant to purchase 8,000 shares of Common Stock
   at $1.25 per share, expiring 2/13/01                                                                    0                  0
Warrant to purchase 8,995 shares of Common Stock
   at $4.30 per share, expiring 10/18/98                                                                   0                  0
-------------------------------------------------------------------------------------------------------------------------------
Xenova Group plc*(A)
304,403 Ordinary shares                                                  Aug. 1988                 1,614,963          1,324,153
-------------------------------------------------------------------------------------------------------------------------------

Totals From Active Portfolio Investments                                                      $   11,667,193    $    12,012,688
                                                                                              =================================
</TABLE>


SUPPLEMENTAL INFORMATION: LIQUIDATED PORTFOLIO INVESTMENTS(B)


<TABLE>
                                                                                    Cost        Realized Loss            Return
<S>                                                                       <C>                 <C>               <C>            
Totals From Liquidated Portfolio Investments                              $   16,447,936      $   (9,759,442)   $     6,688,494
                                                                          =====================================================

                                                                                                     Combined          Combined
                                                                                               Unrealized and        Fair Value
                                                                                    Cost        Realized Loss        and Return

Totals From Active and Liquidated Portfolio Investments                   $   28,115,129      $   (9,413,947)   $    18,701,182
                                                                          =====================================================
</TABLE>

(A)  Public company
(B)  Amounts  provided  for  "Supplemental  Information:   Liquidated  Portfolio
     Investments" are cumulative from inception through December 31, 1994.
* May be deemed an  affiliated  person of the  Partnership  as is defined in the
Investment Company Act of 1940.

See notes to financial statements.


<PAGE>


WESTMED VENTURE PARTNERS, L.P.
STATEMENTS OF OPERATIONS
For the Years Ended December 31,


<TABLE>
                                                                                 1995             1994               1993
                                                                           --------------     --------------    ---------

INVESTMENT INCOME AND EXPENSES

   Income:
<S>                                                                        <C>                <C>               <C>            
   Interest from short-term investments                                    $      128,996     $      104,856    $        95,611
   Interest and dividend income from portfolio
      investments - net                                                            (2,351)           (19,032)           (10,508)
                                                                           --------------     --------------    ---------------
   Total                                                                          126,645             85,824             85,103
                                                                           --------------     --------------    ---------------

   Expenses:
   Management fee - Note 4                                                        267,975            361,029            379,383
   Professional fees                                                               63,665             47,170            118,184
   General and administrative expenses                                            154,870             83,742            112,546
   Independent General Partners' fees - Note 4                                     15,000             15,000             15,000
                                                                           --------------     --------------    ---------------
   Total                                                                          501,510            506,941            625,113
                                                                           --------------     --------------    ---------------

NET INVESTMENT LOSS                                                              (374,865)          (421,117)          (540,010)

Net realized gain (loss) from investments                                          65,470         (2,822,688)        (4,043,045)
                                                                           --------------     --------------    ---------------

NET REALIZED LOSS FROM OPERATIONS                                                (309,395)        (3,243,805)        (4,583,055)

Net change in unrealized appreciation or depreciation
   of investments                                                               1,632,227           (618,032)         3,575,791
                                                                           --------------     --------------    ---------------

NET INCREASE (DECREASE) IN NET ASSETS
   RESULTING FROM OPERATIONS
   (allocable to Partners) - Note 3                                        $    1,322,832     $   (3,861,837)   $    (1,007,264)
                                                                           ==============     ==============    =============== 
</TABLE>


See notes to financial statements.



<PAGE>


WESTMED VENTURE PARTNERS, L.P.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,


<TABLE>
                                                                                 1995                1994            1993
                                                                            -------------      --------------   ---------

CASH FLOWS USED FOR OPERATING ACTIVITIES

<S>                                                                         <C>                <C>              <C>             
Net investment loss                                                         $     (374,865)    $     (421,117)  $      (540,010)

Adjustments  to  reconcile  net  investment  loss to  cash  used  for  operating
   activities:

(Increase) decrease in accrued interest receivable and
   other assets                                                                      9,928             (6,653)           34,945
Increase (decrease) in payables                                                     24,477            (19,407)          (67,207)
                                                                            --------------     --------------   ---------------
Cash used for operating activities                                                (340,460)          (447,177)         (572,272)
                                                                            --------------     --------------   ---------------

CASH FLOWS PROVIDED FROM (USED FOR)
   INVESTING ACTIVITIES

Cost of portfolio investments purchased                                           (291,665)          (692,965)         (177,244)
Proceeds from the sale of portfolio investments                                    275,850            421,875           443,816
Cash distribution from investment in Limited Partnership                            57,944             62,052                 -
Repayment of notes due from portfolio companies                                          -            201,392           165,632
                                                                            --------------     --------------   ---------------
Cash provided from (used for) investing activities                                  42,129             (7,646)          432,204
                                                                            --------------     --------------   ---------------

Decrease in cash and cash equivalents                                             (298,331)          (454,823)         (140,068)
Cash and cash equivalents at beginning of period                                 2,609,028          3,063,851         3,203,919
                                                                            --------------     --------------   ---------------

CASH AND CASH EQUIVALENTS AT END
   OF PERIOD                                                                $    2,310,697     $    2,609,028   $     3,063,851
                                                                            ==============     ==============   ===============
</TABLE>


See notes to financial statements.


<PAGE>


WESTMED VENTURE PARTNERS, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Years Ended December 31, 1993, 1994 and 1995


<TABLE>
                                                            Managing
                                                             General                   Limited
                                                             Partner                  Partners                      Total
<S>                 <C> <C>                               <C>                      <C>                        <C>             
Balance at December 31, 1992                              $    194,020             $    19,207,606            $     19,401,626

Net decrease in net assets resulting from
operations - Note 3                                            (10,073)                   (997,191)                 (1,007,264)
                                                          ------------             ---------------            ----------------

Balance at December 31, 1993                                   183,947                  18,210,415(A)               18,394,362

Net decrease in net assets resulting from
operations - Note 3                                            (38,618)                 (3,823,219)                 (3,861,837)
                                                          ------------             ---------------            ----------------

Balance at December 31, 1994                                   145,329                  14,387,196(A)               14,532,525

Net increase in net assets resulting
from operations - Note 3                                        13,228                   1,309,604                   1,322,832
                                                          ------------             ---------------            ----------------

Balance at December 31, 1995                              $    158,557             $    15,696,800(A)         $     15,855,357
                                                          ============             ===============            ================
</TABLE>


(A)  The net asset value per unit of limited partnership interest,  including an
     allocation of net unrealized  appreciation  or depreciation of investments,
     was $235, $215 and $272 at December 31, 1995, 1994 and 1993,  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 of
     limited partnership interest held by each limited partner.


See notes to financial statements.


<PAGE>


WESTMED VENTURE PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS


1.     Organization and Purpose

WestMed Venture Partners, L.P. (the "Partnership") was formed under Delaware law
on February 5, 1987. The Partnership  operates as a business development company
under the  Investment  Company Act of 1940,  as amended.  The  Partnership  is a
closed-end  investment  fund and  accordingly  its units of limited  partnership
interest  ("Units")  are not  redeemable.  A total of 66,929  Units were sold to
limited  partners  ("Limited  Partners" and together  with the Managing  General
Partner (as hereinafter defined), the "Partners") at $500 per Unit.

The  general  partners  of  the  Partnership   include  three  individuals  (the
"Independent  General  Partners")  and the  managing  general  partner,  WestMed
Venture Management,  L.P., a Delaware limited partnership (the "Managing General
Partner" and collectively with the Independent  General  Partners,  the "General
Partners").  The  general  partner of the  Managing  General  Partner is Medical
Venture  Holdings,  Inc., a Delaware  corporation  affiliated with Oppenheimer &
Co., Inc.  ("Opco").  The limited  partners of the Managing  General Partner are
Oppenheimer  Holdings,  Inc.,  MVP  Holdings,  Inc.  and BSW,  Inc.,  a Delaware
corporation  owned  by John A.  Balkoski,  Philippe  L.  Sommer  and  Howard  S.
Wachtler.  Messrs. Sommer and Wachtler are principally  responsible for managing
the investments of the Partnership.

Opco, a member firm of the New York Stock Exchange,  the National Association of
Securities Dealers,  Inc., and all principal United States securities exchanges,
is a diversified investment banking and securities firm, a registered investment
advisor and Futures  Commission  Merchant 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,  1997.  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 average  closing  public market price for the last
five trading days of each quarter  discounted  for sales  restrictions.  Factors
considered in the determination of an

<PAGE>


WESTMED VENTURE PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS


appropriate   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 no longer  reflects 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  appreciation of $2 million
at December 31, 1995, which was recorded for financial statement  purposes,  was
not  recognized for tax purposes.  Additionally,  from inception to December 31,
1995, other timing differences  totaling $7.9 million,  relating to net realized
losses,  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, L.P.
NOTES TO FINANCIAL STATEMENTS


3.     Allocations of Partnership Profits and Losses

Pursuant to the Partnership's agreement of limited partnership (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 equal to 6% per
annum, simple interest, on their total Adjusted Invested Capital; i.e., original
capital contributions reduced by previous distributions (the "Priority Return").
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 December 31, 1995, the Partnership had a $9.2 million net loss from
its venture capital investments  including  cumulative interest and other income
from portfolio investments totaling $492,000.

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 investments. For the years ended December 31, 1995, 1994 and 1993,
the Partnership  incurred venture capital fees of $17,000,  $40,000 and $10,000,
respectively.  Cumulative  venture  capital  fees  incurred  from  inception  to
December 31, 1995 totaled $1.6 million.

Pursuant to a  management  agreement  between the  Partnership  and the Managing
General Partner, the Managing General Partner is responsible for the management,
administrative  and  certain  investment  advisory  services  necessary  for the
operation of the  Partnership.  For such services,  the Managing General Partner
receives  a  management  fee at the  annual  rate of 2% of the lesser of the net
assets of the  Partnership or the net  contributed  capital of the  Partnership;
i.e., gross capital contributions to the Partnership (net of selling commissions
and  organizational  expenses)  reduced  by  capital  distributed.  Such  fee is
determined and payable quarterly.

For services rendered to the Partnership,  each of the three Independent General
Partners  receives a $5,000 annual fee and  reimbursement  for all out-of-pocket
expenses relating to attendance at meetings of the General Partners.



<PAGE>


WESTMED VENTURE PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS


5.     Cash Distributions

No cash  distributions  were paid to Partners in 1995, 1994 or 1993.  Cumulative
cash  distributions paid to Limited Partners from inception through December 31,
1995 total $5.7 million, or approximately $85 per $500 Unit.

6.       Classification of Investments

As of December 31, 1995,  the  Partnership's  investments  were  categorized  as
follows:

<TABLE>
Type of Investments                                        Cost                    Fair Value              % of Net Assets*
-------------------                                  ----------------           ---------------            ----------------
<S>                                                  <C>                        <C>                           <C>   
Common Stock                                         $      7,890,621           $     8,088,817               51.02%
Preferred Stock                                             3,549,369                 5,292,593               33.38%
Debt Securities                                               219,620                   210,530                1.33%
Limited Partnerships                                           30,924                    76,316                 .48%
                                                     ----------------           ---------------              -------
                                                     $     11,690,534           $    13,668,256               86.21%
                                                     ================           ===============                =====

Country/Geographic Region
United States                                        $      9,825,571           $    12,855,219               81.08%
United Kingdom                                              1,614,963                   776,227                4.90%
Australia                                                     250,000                    36,810                 .23%
                                                     ----------------           ---------------              -------
                                                     $     11,690,534           $    13,668,256               86.21%
                                                     ================           ===============                =====

Industry
Biotechnology                                        $     11,690,534           $    13,668,256               86.21%
                                                     ================           ===============                =====
</TABLE>

* Percentage of net assets is based on fair value.




<PAGE>


Item 9.       Disagreements on Accounting and Financial Disclosure.

None.

                                    PART III

Item 10.      Directors and Executive Officers.

The Independent General Partners

The Independent  General Partners have full authority over the management of the
Partnership  and provide overall  guidance and  supervision  with respect to the
operations  of the  Partnership  and perform the various  duties  imposed on the
general  partners  of  business  development  companies  under the 1940 Act.  In
addition to general fiduciary duties,  the Independent  General Partners,  among
other things,  supervise the management  arrangements  of the  Partnership,  the
custody  arrangement  with respect to  portfolio  securities,  the  selection of
accountants,  fidelity  bonding  and  the  activities  of the  Managing  General
Partner. As required by the 1940 Act, a majority of the general partners must be
individuals  who are not  "interested  persons" of the Partnership as defined in
the 1940  Act.  In 1987,  the  Securities  and  Exchange  Commission  issued  an
exemptive  order  declaring  that  Messrs.   Elliott,   Taylor  and  White,  the
Independent General Partners of the Partnership, are not "interested persons" of
the  Partnership  as  defined  in the 1940 Act  solely by reason of their  being
general  partners of the  Partnership.  Such individuals also comprise the Audit
Committee of the Partnership.

Presented below is information  concerning the Independent  General  Partners of
the Partnership as of March 26, 1996:

Thomas E. White, Age 62, Independent General Partner since 1987
485 Madison Avenue
New York, New York 10022
Mr.  White is an  attorney in private  practice in New York City.  He is also an
     independent  general partner of WestMed Venture Partners 2, L.P.  ("WVP2").
     From 1974 to 1983,  Mr.  White was Senior Vice  President  and  Director of
     Howmedica,  Inc. with responsibility for various health-care  operations in
     the United States, Europe and Latin America.

Robert A. Elliott, Age 56, Independent General Partner since 1987
Elliott Investment Co.
5000 Birch Street, Suite 6200
Newport Beach, California 92660
Mr.  Elliott, currently a private investor, was the Chairman and Chief Executive
     Officer  of VLI  Corporation  from  1983 to 1987.  Mr.  Elliott  is also an
     independent  general  partner of WVP2, a member of the Board of Trustees of
     Chapman  University  and  a  member  of  the  Board  of  Directors  of  two
     privately-held  medical device  companies.  He is a former  Director of the
     Health  Industries  Manufacturers  Association.  From 1979 until 1983,  Mr.
     Elliott  was  Vice   President  and  Director  of   Howmedica,   Inc.  with
     responsibility  for the  Medical  Specialty  Products  Division,  including
     domestic and international manufacturing and distribution.

Dr. Alan F. Taylor, Age 66, Independent General Partner since 1987
2421 Island Drive
Gainesville, GA  30501
Dr.  Taylor is presently  Managing  Director of Development  Southeast,  Inc., a
     management and marketing consulting firm. Dr. Taylor is also an independent
     general partner of WVP2. Dr. Taylor has over thirty years experience in the
     international  pharmaceutical industry. From 1985 to 1988, he was President
     and Director of CytRx  Corporation.  From November 1981 until January 1984,
     he was President and a director of Elan Pharmaceutical Research Corporation
     and was President of Elan Corporation from January 1984 until January 1985.

The Managing General Partner

The Managing  General  Partner,  subject to the  supervision of the  Independent
General  Partners,  has exclusive  power and authority to manage and control the
Partnership's  venture  capital  investments.  Subject to the supervision of the
Independent General Partners, the Managing General Partner is authorized to make
all decisions regarding the Partnership's  venture capital investment portfolio,
including,  among  other  things,  to find,  evaluate,  structure,  monitor  and
liquidate  such  investments  and to provide,  or arrange for the  provision of,
managerial  assistance  to the  portfolio  companies  in which  the  Partnership
invests.

The  general  partner  of the  Managing  General  Partner  is  MVH,  a  Delaware
corporation  affiliated with Opco. The limited  partners of the Managing General
Partner are (i) Oppenheimer  Holdings,  Inc. ("OHI"), a Delaware corporation and
the parent of Opco, (ii) MVP Holdings, Inc., a Delaware corporation ("MVP"), and
(iii)  BSW,  Inc.,  a Delaware  corporation  wholly-owned  by John A.  Balkoski,
Philippe  L.  Sommer and  Howard S.  Wachtler  ("BSW").  On July 19,  1991,  Mr.
Balkoski  voluntarily resigned from all offices he held with MVH to pursue other
interests. Prior to his resignation, Mr. Balkoski shared with Messrs. Sommer and
Wachtler the primary responsibility for managing the venture capital investments
of the Partnership. Messrs. Sommer and Wachtler currently are officers of MVH.

Presented  below, as of March 26, 1996, is information  concerning the directors
and officers of MVH that are  principally  involved  with the  operations of the
Partnership.  Messrs.  Sommer,  Wachtler and McGrath have been directors  and/or
officers of MVH since June 1990.  The address of each such person is Oppenheimer
Tower, World Financial Center, New York, New York 10281.

Howard S. Wachtler, Age 47, Executive Vice President and Managing Director
     Mr.  Wachtler  is a Managing  Director  of BSW and a member of the Board of
     Directors of BSW and three portfolio  companies of the Partnership.  He has
     been involved in  health-care  industry  management  for the past 22 years.
     From  April  1988 to June  1990,  he was a  general  partner  of WVP2 and a
     Managing  Director of MVP from April 1987 to June 1990.  From November 1982
     to October 1986, he was a Director of Business Planning and Development for
     Pfizer Hospital  Products Group ("HPG") and as such was responsible for all
     activities  associated with HPG's small acquisition program,  licensing and
     technology program and venture program. In addition,  Mr. Wachtler directed
     business and strategic planning projects for HPG worldwide.

Philippe L. Sommer, Age 44, Executive Vice President and Managing Director
     Mr.  Sommer  is a  Managing  Director  of BSW and a member  of the Board of
     Directors of BSW and one portfolio company of WVP2. He has been involved in
     health-care  industry  management for the past 15 years.  He was a Managing
     Director  of MVP  from  April  1987  to June  1990.  From  January  1982 to
     September  1986, he was a Director of Business  Development  for HPG and as
     such was responsible for directing HPG's merger and acquisition  activities
     for medium to larger  acquisitions  and for the  financial  evaluation  and
     valuation of all of HPG's acquisition, venture and licensing projects.

Stephen M. McGrath, Sr., Age 60, Vice President and Director
     Mr.  McGrath has been  Executive Vice President of Opco and director of its
     Investment  Banking  Group since July 1985.  He also served as President of
     Oppenheimer  Strategic  Investments,  Inc. between May 1983 and April 1985.
     Mr.  McGrath  was Senior Vice  President  of Planning  and  Development  at
     Warner-Lambert   until   1985  and  has  been  a   director   of   Alliance
     Pharmaceutical  Corp.  since  June  1989.  He also  serves as an  executive
     officer and director of certain current and/or former affiliates of Opco.

There are no family  relationships among any of the Independent General Partners
and the officers and directors of MVH. MVH is owned 100% by OHI.

Opco,  a  member  firm  of the New  York  Stock  Exchange,  Inc.,  the  National
Association  of  Securities  Dealers,  Inc. and all  principal  U.S.  securities
exchanges,  is a diversified investment banking and securities firm, providing a
broad range of services to individual, corporate and institutional clients. Opco
is registered as a broker-dealer and investment adviser with the Commission, and
also is registered as a broker-dealer  in all of the states of the United States
and with the Securities Association in the United Kingdom and with the Commodity
Futures Trading  Commission as a futures commission  merchant.  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 investment  banking,  securities  brokerage,  securities
research,  customer  financing,  securities  trading  and  arbitrage,  corporate
finance,  real  estate  financing  and  investment  advisory  services.   Opco's
investment  banking  activities  include an active engagement in the health-care
area.  Opco  provides  public  equity  and  debt  financing  to  clients  in the
biotechnology,  instrumentation and pharmaceutical products and services sectors
in the health-care  field.  Opco also provides  private  financing,  and merger,
acquisition  and  divestiture  assistance  to  health-care   companies.   Opco's
Health-care  Investment Banking Group is supported by Opco's securities research
team which reports on public companies in the human health-care sector.

Item 11.      Executive Compensation.

Each Independent  General Partner receives an annual fee from the Partnership of
$5,000  together  with all  out-of-pocket  expenses  relating to  attendance  at
meetings of the General Partners.

For a  description  of the  allocation  and  distribution  of the  Partnership's
profits  and losses to the  Managing  General  Partner,  see Item 5.  Market for
Registrant's Common Equity and Related Stockholder Matters.

For the year ended December 31, 1995, the Managing General Partner was allocated
$13,000 of the Partnership's net increase in net assets from operations. For the
years  ended  December  31,  1994 and 1993,  the  Managing  General  Partner was
allocated  $39,000 and $10,000 of the  Partnership's  net decrease in net assets
from operations, respectively.

Pursuant to the Management Agreement,  the Managing General Partner performs, or
arranges  for others to  perform,  the  management,  administrative  and certain
investment advisory services necessary for the operation of the Partnership. For
such services,  the Managing  General  Partner  received a management fee at the
annual rate of 2% of the lesser of the net assets of the  Partnership or the net
contributed capital of the Partnership; i.e., gross capital contributions to the
Partnership (net of selling commissions and organizational  expenses) reduced by
capital distributed. Such fee is determined and payable quarterly. For the years
ended December 31, 1995, 1994 and 1993, the Managing  General  Partner  received
management fees of $268,000, $361,000 and $379,000 respectively.

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 investments. For the years ended December 31, 1995, 1994 and 1993,
the Managing General Partner  received venture capital fees of $17,000,  $40,000
and $10,000, respectively.

Item 12.      Security Ownership of Certain Beneficial Owners and Management.

Security Ownership

As of March 26, 1996, no person or group is known by the  Partnership  to be the
beneficial owner of more than 5% of the Units. The Independent  General Partners
and the  directors,  officers and employees of MVH own as a group ten Units,  or
less than one-tenth of one percent of the total Units outstanding.

Item 13.      Certain Relationships and Related Transactions.

The  description of the management fee and the venture  capital fee set forth in
Item 11. Executive Compensation is incorporated herein by reference.

The description of the allocation and distribution of the Partnership's  profits
and  losses to the  Managing  General  Partner  set forth in Item 5.  Market for
Registrant's  Common  Equity and  Related  Stockholder  Matters is  incorporated
herein by reference.



<PAGE>


                                     PART IV


Item 14.      Exhibits, Financial Statements, Schedules and Reports on Form 8-K.

(a)    1.     Financial Statements

              Independent Auditors' Report

              Balance Sheets as of December 31, 1995 and 1994

              Schedule of Portfolio Investments as of December 31, 1995 Schedule
              of Portfolio Investments as of December 31, 1994

<TABLE>
<S>           <C>     <C>   <C>   
              Statements of Operations for the years ended December 31, 1995, 1994 and 1993

              Statements of Cash Flows for the years ended December 31, 1995, 1994 and 1993

              Statements of Changes in Partners' Capital for the years ended December 31, 1993, 1994 and  1995

              Notes to Financial Statements

       2.     Exhibits

              3.1     Amended and Restated Certificate of Limited Partnership***

              3.2     Amendment to Amended and Restated Certificate of Limited Partnership***

              3.3     Partnership Agreement*

              3.4     Amendment No. 1 to the Partnership Agreement**

              4       Articles Five through Eleven of the Partnership Agreement*

              10.1    Management Agreement between the Partnership and the Managing General Partner**

              27      Financial Data Schedule

              28.1    Custodian Agreement between the Partnership and Investors Fiduciary Trust Company*

(b)           No reports on Form 8-K were filed during the quarter for which this report is filed.
</TABLE>



<PAGE>



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

*    Filed as an exhibit to the Partnership's Registration Statement on Form N-2
     (33-11926), and incorporated herein by reference.

**   Filed as an exhibit to the Partnership's  Report on Form 8-K dated July 10,
     1990 and incorporated herein by reference.

***  Filed as an exhibit to the  Partnership's  Report on Form 10-K for the year
     ended December 31, 1990.





<PAGE>


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized on the 26th day of March 1996.

WESTMED VENTURE PARTNERS, L.P.

By:  WestMed Venture Management, L.P.,
     Managing General Partner

By:  Medical Venture Holdings, Inc.,
     General Partner

<TABLE>
<S>     <C>    <C>                                              <C>    <C>    <C> 
By:  /s/   Philippe L. Sommer                                    By:   /s/   Howard S. Wachtler
     Philippe L. Sommer                                                Howard S. Wachtler
     Executive Vice President and Managing Director                    Executive Vice President and Managing Director
</TABLE>

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed by the following persons on behalf of the registrant
and in the capacities and on the dates indicated on the 26th day of March 1996.

<TABLE>
<S>     <C>    <C>                                <C>
WESTMED VENTURE
MANAGEMENT, L.P.                                 Managing General Partner of WestMed Venture Partners, L.P.

By:  Medical Venture Holdings, Inc.              General Partner of WestMed Venture Management, L.P.

By:  /s/ Philippe L. Sommer                      Executive Vice President and Managing Director (principal executive,
     Philippe L. Sommer                          financial and accounting officer) of Medical Venture Holdings, Inc.


By:  /s/ Howard S. Wachtler                      Executive Vice President and Managing Director
     Howard S. Wachtler                          (principal executive officer) of Medical Venture Holdings, Inc.


By:  /s/ Thomas E. White                         General Partner of WestMed Venture Partners, L.P.
     Thomas E. White


By:  /s/ Robert A. Elliott                       General Partner of WestMed Venture Partners, L.P.
     Robert A. Elliott


By:  /s/ Dr. Alan F. Taylor                      General Partner of WestMed Venture Partners, L.P.
     Dr. Alan F. Taylor
</TABLE>