By: Dan Klevisha, CEO, Pion Inc.
Today’s small molecule drug pipelines look very different from those of 10 or 20 years ago. Historically, a large proportion of oral drug candidates were highly soluble and highly permeable compounds that were comparatively straightforward to formulate. These molecules fall into Class I of the Biopharmaceutics Classification System (BCS), a framework that categorizes drug substances based on aqueous solubility and permeability, two properties that directly influence the absorption of orally administered drugs. For BCS Class I compounds, solubility and permeability are both favorable.
The BCS system helps streamline drug development and regulatory approval processes by predicting in vivo performance based on in vitro data. For BCS Class I drugs, in vitro dissolution testing serves as a reliable and practical surrogate for in vivo performance. Dissolution testing measures the rate and extent to which a drug enters solution under defined conditions. That information is indispensable as a drug must dissolve before it can permeate the intestinal membrane and enter systemic circulation. Dissolution testing has long been one of the foundational tools of pharmaceutical development. It is standardized, widely understood, and deeply integrated into regulatory and internal development workflows.
If a BCS Class I drug formulation dissolves sufficiently, it is likely to be absorbed well and have high bioavailability. For these compounds, dissolution and absorption are largely aligned, and development decisions can be made with a reasonable degree of confidence.
In recent years, however, an increasing percentage of small molecule drug candidates are categorized as BCS Class II, characterized by low solubility but relatively high permeability. It is estimated that up to 70% of small molecules in development pipelines and 40% of approved drugs fall into this category, respectively.
Because BCS Class II small molecules are typically more hydrophobic and often exhibit extremely low aqueous solubility, they require formulation strategies to enhance solubility to achieve the necessary bioavailability. These drug candidates are also driving a necessary shift in how risk is assessed in early formulation development.
Dissolution: Essential, But No Longer Decisive
Unlike BCS Class I compounds, for which dissolution is a reasonably reliable predictor of in vivo performance, formulating BCS Class II drugs present a different challenge. These drug candidates require deliberate strategies to enhance solubility to increase the fraction of drug available for absorption. Techniques such as amorphous solid dispersions (ASDs), lipid-based systems, particle size reduction, or salt formation are routinely deployed to overcome solubility limitations. Unfortunately, improving dissolution does not automatically ensure improved absorption.
Enhancing dissolution can change the concentration gradient driving absorption, but it can also introduce complex, nonlinear effects. A formulation may generate supersaturation in the gastrointestinal environment, temporarily increasing dissolved drug levels. If precipitation occurs before absorption, however, the net fraction absorbed may decline. Certain excipients may enhance solubility while simultaneously interacting with membranes in ways that reduce effective permeability. In other cases, increasing dissolved concentration beyond a threshold does not proportionally increase absorption because membrane transport or surface area becomes rate-limiting.
The result is a disconnect. Dissolution curves may appear highly favorable in vitro, while in vivo bioavailability falls short of a necessary threshold. In these situations, dissolution data are not necessarily wrong, rather, they are incomplete. In BCS Class II drug development, solubility and permeability are no longer inherently aligned. And when these characteristics are not aligned, evaluating one without the other introduces a blind spot into the development strategy. Evaluating dissolution in isolation can create a false sense of security, leading to the advancement of drug formulations that appear optimized but remain vulnerable to absorption limitations in the in vivo setting.
The Business Cost of False Confidence
Such scientific blind spots can lead to significant business risks.
Drug development is capital-intensive and time-sensitive. Advancing a formulation into animal or clinical studies based solely on dissolution data can lead to costly late-stage challenges including lower-than-expected bioavailability, variability under fed versus fasted conditions, or failure to meet target exposure levels.
The consequences can be significant. Clinical delays can add six to eighteen months to development timelines, significantly slowing progress toward approval and commercialization. Reformulation efforts consume resources that could have otherwise been directed toward new drug candidates with estimated costs ranging from $5M to $30M. For smaller companies operating on milestone-driven funding, missed performance targets can affect investor confidence, partnership agreements, or in a worst-case scenario, organizational survival. Depending on the indication and patient population size, the impact on lost revenues can reach upwards of $500M.
A compound that appears weak based on dissolution alone may, in fact, possess adequate permeability and clinical potential. Conversely, a formulation with excellent dissolution may underperform in human studies because permeability constraints were not fully understood.
In competitive therapeutic areas, speed and optimization matter. Companies that enter clinical development with a more complete understanding of absorption dynamics inherently carry less risk and greater strategic flexibility.
The Limits of In Vivo Studies as an Iterative Tool
When dissolution studies deliver incomplete answers, development programs often rely on animal studies to provide absorption data. While animal testing remains an important part of drug development, it has limitations as an iterative optimization tool.
Cycle times are slow and costs are substantial. Each adjustment to a formulation may require weeks or months to evaluate in vivo. In addition, the correlation with human outcomes is not always strong. In some drug development contexts, such as subcutaneous administration, published data have shown low correlations between primate and human performance.
When formulation optimization depends heavily on in vivo iteration, progress slows as this model is increasingly misaligned with the time and cost pressures of modern drug development.
Removing the Development Blindspot
The shift from alignment to separation of solubility and permeability is why BCS Class II development requires a different approach to early formulation risk assessment.
A useful way to reframe formulation development for BCS Class II compounds is to ask what the true rate-limiting factor to bioavailability is:
- Is the drug candidate solubility-limited?
- Is it permeability-limited?
- Is absorption constrained by dose or concentration?
Without measuring both dissolution and permeability, it is difficult to answer these questions with confidence.
If solubility is the primary constraint, further formulation innovation may result in meaningful gains. If permeability becomes limiting once solubility improves, additional solubility enhancement may yield diminishing returns. If dose escalation leads to nonlinear absorption behavior, then this option may not be viable.
Understanding the rate-limiting mechanism allows formulation scientists to optimize strategically rather than empirically over round after round of costly iteration. Instead of testing variations and waiting for in vivo results to confirm or refute predictions, formulation teams can use integrated in vitro dissolution and permeability data to determine where intervention will have the greatest impact.
Integrating Dissolution and Permeability Earlier
Parallel Artificial Membrane Permeability Assay (PAMPA) technology was originally developed in the 1990s to assess passive permeability of active pharmaceutical ingredients (APIs) in high-throughput screening formats. Over time, this artificial membrane methodology matured into a robust and widely accepted in vitro permeability platform.
This approach has now been extended to complete drug formulations, enabling simultaneous measurement of dissolution and permeability in a single experiment. Instead of measuring solubility and permeability sequentially, or inferring one from the other, scientists can observe how formulation strategies influence both processes in real time. Rank-ordering candidate formulations becomes more meaningful when based on predicted fraction absorbed rather than dissolution alone. Fed and fasted conditions can also be simulated under physiologically relevant parameters, allowing food-effect risk to be assessed earlier.
Most importantly, the iteration cycle is dramatically shortened. Rather than waiting for in vivo results, formulation adjustments can be rapidly tested in vitro. This acceleration transforms development from a slow, reactive process into a proactive optimization strategy.
For in vitro models to be truly valuable, however, they must do more than generate data, they must inform decision-making.
A predictive model should provide insight that meaningfully correlates with human absorption outcomes. It should identify rate-limiting steps, quantify trade-offs, and support confident go/no-go decisions. Optimizing toward fraction absorbed rather than dissolution percentage shifts the focus from surrogate metrics to clinically relevant outcomes.
In practical terms, this means evaluating a manageable number of candidate formulations under conditions that simulate real physiological environments. By integrating dissolution and permeability measurements, formulation teams gain a multidimensional view of performance that is far more aligned with clinical realities.
Cultural and Regulatory Drivers of Change
Adopting integrated dissolution-permeation testing is not purely a technical decision; it is also cultural. Introducing new workflows requires confidence in the data to be generated and a willingness to evolve established practices.
Broader industry forces are encouraging this evolution. Regulatory agencies have expressed increasing interest in reducing reliance on animal testing where scientifically appropriate. As companies seek validated in vitro methods that can reduce animal studies without compromising predictive value, integrated dissolution and permeability assessment becomes an attractive option.
At the same time, the growing dominance of BCS Class II compounds is driving the need for new formulation strategies to reduce the risk of late-stage failures. Development teams are recognizing that adding absorption insight earlier is not an incremental improvement, it is a strategic necessity.
Practical Considerations for Today’s R&D Leaders
For formulation teams evaluating their workflows, several key questions are worth asking:
- Are advancement decisions being made with a full understanding of both solubility and permeability?
- Are solubility-enhancing strategies evaluated for their impact on membrane transport?
- Can the fraction absorbed be predicted and used as a comparative metric during formulation selection?
- How quickly can iteration cycles occur, and are they limited by in vivo testing?
Integrating simultaneous dissolution and permeability testing does not require abandoning established methods. Dissolution remains foundational and pairing it with permeability transforms it into part of a complete absorption model.
The cost and complexity of adding this dimension are modest compared to the cost of reformulation after disappointing clinical results. More importantly, the strategic benefits, which include reduced uncertainty, accelerated optimization, and improved confidence in advancement decisions, increase over the life of a development program.
A Necessary Evolution in Formulation Science
Drug molecules are becoming more complex. As pipelines continue to be dominated by poorly soluble compounds, the dynamic of solubility and absorption will remain central to development success.
Dissolution testing will always have a critical role, but it is no longer decisive. It provides an essential piece of information, but not the full picture required to de-risk today’s small molecule pipelines. By understanding both how a drug dissolves and its permeability, formulation scientists can make better decisions faster, leading to reduced late-stage failures, decreased timelines, and a greater probability of getting promising therapies to patients.
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