Could biotechnology startups spring from the ashes of Icos Corp.? Seattle entrepreneurs and venture capitalists are already working on that.

Calistoga Pharmaceuticals is a new startup company created with technology from Icos, the Bothell biotech whose controversial $2.28 billion sale to Eli Lilly and Co. is scheduled for a shareholder vote Jan. 25.

Incubated at the Seattle offices of Frazier Healthcare Ventures, the secretive startup is led by Michael Gallatin.

That name should be familiar to Icos employees.

Gallatin, who joined Frazier as a venture partner in early 2006, is the former vice president and scientific director at Icos. In that role, he oversaw preclinical research -- a position that would have given him insights into some of the biotechnology company's most promising drug candidates.

Bridget Rauvola, senior vice president of marketing at Frazier, confirmed Thursday the existence of the startup and Gallatin's involvement. However, she declined to disclose Calistoga's product focus or the role that Icos is playing in the new company.

Rauvola said more details would be made available when its first round of funding is "fully complete."

A filing with the Securities and Exchange Commission from last month indicates that the company, which was formed in April, has already raised $6.5 million. In addition to Gallatin, the filing lists Alan Frazier and James Topper as directors. Both are partners at Seattle-based Frazier Healthcare, one of the largest life science investors in the country with more than $1 billion under management. Icos also is listed as a partial owner.

The creation of Calistoga is especially interesting given that Lilly has said that it will lay off most of the 700 employees at Icos if the deal is approved. That has caused some speculation that Icos' experimental drug programs will be scrapped.

Icos is best known for creating the erectile dysfunction drug Cialis, a blockbuster with estimated sales of more than $950 million last year.

But the biotechnology company has seven other programs in preclinical or early-stage research studies, including drugs for infectious and inflammatory diseases. It also has two programs that just entered clinical studies: drugs for cancer and psoriasis.

It was not known whether any of those drug candidates had been transferred to Calistoga or whether the startup had secured rights to other technologies from Icos.

Lacy Fitzpatrick, an Icos spokeswoman, declined to comment on the relationship between Icos and Calistoga.

However, she said that Lilly would obtain rights to the clinical and preclinical programs if the acquisition is completed.

"All of the decisions on these programs would become Lilly's," she said. Representatives at Lilly could not be reached for comment.

Paul Latta, a biotechnology analyst at the Seattle investment firm McAdams Wright Ragen, was not familiar with Calistoga. And he said it was a little hard to speculate without knowing the terms of the agreement between Icos and Calistoga or the technology in question.

"What might be most relevant to Icos shareholders is if there is some sort of investment in Calistoga that may be worthwhile or may not be fully appreciated in the Lilly buyout of Icos," Latta said.

"My gut feel is that, at the venture capital level, it is a fairly early-stage technology, likely preclinical. If it is indeed preclinical, there is probably not going to be a premium in Icos stock associated with it."

Gallatin, who joined Icos in 1990 as one of the founding scientists, oversaw the company's product pipeline when several of its drug programs hit dead ends.

"That was an extremely challenging time for the company when effectively you see your future disappearing one by one," Latta said.

Gallatin could be trying to resurrect one of those technologies, potentially creating a new biotechnology company in Seattle to help offset the loss of Icos. Yet, Latta said that could be a tough void to fill.

"I imagine (Calistoga) will be a little smaller than 700 employees," he said.