Ahead of the Bell: Shares of drugmaker Lilly slip

Eli Lilly and Co. received a key regulatory approval for a new cancer treatment Monday evening, but the drugmaker's shares slipped in premarket trading Tuesday after Lilly also announced a $5.4 billion acquisition.

The Food and Drug Administration said on Monday it had approved Cyramza to treat patients with a form of advanced stomach cancer or a cancer that forms where the esophagus joins the stomach.

Lilly also is studying the drug, known as ramucirumab, as a possible treatment for other cancers. Analysts have said the stomach cancer use alone could generate about $850 million in sales by 2020, and uses in other forms of cancer might push sales past $1 billion.

Indianapolis-based Lilly has been touting its pipeline of drugs under development as a way to make up for revenue it is losing due to the expirations of patents protecting key products like the antidepressant Cymbalta.

The drugmaker known for its portfolio of diabetes and cancer treatments, has said it expects both its revenue and earnings to fall this year due to the patent expirations. But it hopes to return to growth after 2014, with help from new drugs, existing products, cost cutting and the company's growing animal health business.

Lilly also said early Tuesday morning that it planned to buy the animal health business of Swiss drugmaker Novartis in an all-cash deal that will strengthen its Elanco animal health operation.

Lilly shares were down 5 cents to $60.81 less than an hour before markets opened Tuesday.