Different formulation approaches were evaluated to ensure that the formulation of a poorly water soluble compound chosen during early development achieves optimum bioavailability. The insoluble compound has an aqueous solubility of 0.17 µg/mL at 25 ± 1°C, a relatively high permeability (Caco2 Papp = 6.1 × 10−4 cm/min), and poor bioavailability in dogs (dry blend formulation). Based on the prediction by GastroPlus™, the oral absorption of this compound is sensitive to its apparent solubility and particle size. The oral bioavailability of three different formulations was compared in a dog model: a cosolvent-surfactant solution, a solid dispersion in a mixture of polyethylene glycol 3350 and polysorbate 80, and a dry blend of micronized drug with microcrystalline cellulose. In absence of a parenteral injection, the bioavailability of the solution was considered to be 100%, and the relative oral bioavailability of the three formulations was 100, 99.1, 9.8, respectively. Comparable bioavailability was obtained with the solid dispersion and the cosolvent-surfactant solution, both of which showed a 10-fold higher bioavailability than the dry blend. Thus, a 20 mg dose strength capsule containing the solid dispersion formulation was selected for clinical development. The selected solid dispersion system was physically and chemically stable for at least 16 months at 25°C/60% RH. In conclusion, the bioavailability of a poorly water soluble drug was greatly enhanced using the solid dispersion formulation containing a water soluble polymer with a surface active agent.