On the verge of a trial, the Church of Scientology has settled a $40-million federal lawsuit against its former publicity agent, Hill & Knowlton, and foe Eli Lilly and Co. for an undisclosed sum of money.

"All parties acknowledged that they are pleased that the case has been settled," said a statement from the Church of Scientology International in Los Angeles.

The agreement requires confidentiality, said Kurt Weiland, a director of the Church of Scientology International and head of its Office of Special Affairs.