<ARTICLE> 5 <CIK> 0000865936 <NAME> PAINEWEBBER R&D PARTNERS III, L.P. <PERIOD-TYPE> 12-MOS <FISCAL-YEAR-END> DEC-31-1996 <PERIOD-END> DEC-31-1996 <CASH> 0 <SECURITIES> 32,335,129 <RECEIVABLES> 0 <ALLOWANCES> 0 <INVENTORY> 0 <CURRENT-ASSETS> 30,185,129 <PP&E> 0 <DEPRECIATION> 0 <TOTAL-ASSETS> 32,633,103 <CURRENT-LIABILITIES> 190,300 <BONDS> 0 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <COMMON> 0 <OTHER-SE> 32,442,803 <TOTAL-LIABILITY-AND-EQUITY> 32,633,103 <SALES> 0 <TOTAL-REVENUES> 40,810,648 <CGS> 0 <TOTAL-COSTS> 0 <OTHER-EXPENSES> 1,297,219 <LOSS-PROVISION> 0 <INTEREST-EXPENSE> 0 <INCOME-PRETAX> 39,513,429 <INCOME-TAX> 0 <INCOME-CONTINUING> 0 <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> 39,513,429 <EPS-PRIMARY> 0 <EPS-DILUTED> 0