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.