Many active pharmaceutical ingredients (APIs) display poor powder properties and cannot be directly compressed into intact tablets with sufficient strength. The desired powder properties are often difficult to achieve through conventional particle engineering approaches, such as particle size and habit modification during crystallization. Co-processing of API with excipients can significantly improve the functional properties to overcome these challenges. In this talk, we will present a novel co-processing technology that we developed at Bristol-Myers Squibb to improve powder properties in which polymer is precipitated and coats the crystalline particles resulting in discrete, nearly spherical agglomerates. We identified critical process parameters and demonstrated scalability up to 50 kg scale in the pilot plant using theophylline. Furthermore the co-processed theophylline generated under various process conditions were formulated into a blend at 50-90% loading and successfully processed by direct compression.