Newsgroups: alt.religion.scientology
From: davidb@caen.engin.umich.edu (David Bonnell)
Subject: The Story That TIME Couldn't Tell-2
Message-ID: <q3f_c4-@engin.umich.edu>
Date: Sat, 09 Nov 91 18:19:26 EST
Organization: The University of Michigan, Ann Arbor

LILLY STOCK AFFECTED. On July 17, 1990, the first lawsuit to connect Prozac with intense, violent suicidal thoughts and actions was filed in New York. the next morning The Wall Street Journal carried a headlined "Prozac said to Spur Idea of Suicide," which reported the shocking charges levelled at Prozac and described the investigation being conducted by CCHR and the Church of Scientology of the drug. Lilly investors reacted immediately by selling their shares. In just two days Lilly's stock price fell 5% from $89.75 to $85.00 per share. By August 23, just one month alter, Lilly stock had dropped 20.75 points - a whopping $5.8 billion decrease in the stock's market value. BATTLE LINE DRAWN. Lilly denies any link between Prozac, a drug that registered $750 million in sales in 1990, and the sage of human tradegy publicized by the Church and CCHR. The negative publicity generated by the Church and the CCHR was accompanied by invester insecurity that was adversely affecting both Prozac's luster and Lilly's market performance. Lilly sought to bolster its own image and that of its lucrative but controversial frug, and it appears to have done so at the expense of its most vocal critics, CCHR and the Church of Scientology. In the summer of 1990, a Paine Webber market analyst named Ronald Nordmann distributed a memoranfum to all Paine Webber brokers encouraging confidence in Lilly stock. In a suit filed in New York, CCHR sued both Paine Webber and Lilly because the Nordmann memoranfum falsely stated that Joseph Wesbecker, of the Prozac related Louisville massacre, had been a member of the Church of Scientology. Pain Webber has since issued a partial retraction. The path of Lilly and the Church and CCHR also crossed in the public relations and advertising arenas. Since 1988, Hill and Knowlton, a public relations subsidary of the London-based WPP Group, counted amoung its clients the Church of Scientology. Lilly, while having no relationship with Hill and Kn owlton, is a major client of J. Walter Thompson Co., a WPP-owned advertising agency. What began as a coincidence became a battleground. In May, the National Journal described the beginnings of the confrontation between Lilly and the Church in the corridors of the WPP group: "A few months ago, Lilly began to talk ominously about cancelling the Thompson account, prompting WPP chairman Martin Sorrel to fly to Indianapolis where, company officals say, he personally assured them that Hill and Knowlton didn't do any work for the Scientologists on Prozac." Sorrel was in a vulnerable position. A flurry of takeovers (15 acquisitions in his first 18 months as head of WPP and 13 additional acquisitions in 1989 alone) left WPP hundred of millions of dollars in debt. In the last quarter of 1990, Sorrel announced first that WPP's earning would be "somewhat lower" than originally estimated. Later that quarter, WPP announced that a previously anticipated dividend would not be forthcoming. WPP's financial challenges continue, with the focus on 1993. That's when WPP' s debt restructuring requires the company begin payments totalling $604 million within a four-year period. WPP's Sorrel faces that instense financial turbulence in the volatile, fickle climate in which public relations firms (like WPP's Hill & Knowlton) and advertising agencies (like WPP's J. Walter Thompson) operate. Entire companies can evaporate with the loss of a major client. Compounding WPP's problem is the fact that shortly after WPP acquired JWT, the agency lost the $200 million Burger King account, the $25 million Goodyear account. JWT was in serious trouble. It was against that backdrop that Lilly, who according to the National Journal has a "huge account" with JWT, began to complain to WPP about Hill and Knlowlton's representation of the Church of Scientology.

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