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Telmisartan eye drop suspension was formulated. The complexation efficiency of telmisartan/γ-cyclodextrin was enhanced by preventing zwitterion form.Binary and ternary complexes were obtained from two different methods and were investigated for stability of complex in formulation.Eye drop suspension containing ternary complex exhibited overall superior physical and chemical stability than binary complex formulation and displayed sustained drug delivery in in vitro studies.The polymer effectively prevented the crystal growth and precipitation of drugs when was added to complex media.In this study, cyclodextrin-based aqueous eye drop suspension of the water insoluble drug telmisartan was developed. Formation of a drug/γ-cyclodextrin complex was enabled by preventing formation of a poorly water-soluble zwitterion using a volatile base that was removed upon drying of the complex powder. Hydroxypropyl methylcellulose was shown to have the overall best effect, stabilizing the complexes without hampering the drug release from the formulation. Two strategies for preparing cyclodextrin-based aqueous eye drop suspensions of telmisartan were investigated, one where hydroxypropyl methylcellulose was added to the medium during preparation of the drug/γ-cyclodextrin complex powder (ternary complex) and the other where hydroxypropyl methylcellulose was added to the complex powder after preparation of the complex (binary complex). The complexation was characterized by DSC, FT-IR and 1H NMR and the eye drop suspensions formed were examined regarding their stability and in vitro mucoadhesion property. The ternary complex exhibited inferior mucoadhesive property compared to the binary complex. However, the ternary complex was more stable as no notable change in particle size and particle size distribution was observed during storage at 4 °C over 6 months (p < 0.05) with the mean particle size determined between 2.0 and 2.5 μm.