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Continuous manufacturing of pharmaceuticals offers such benefits as production flexibility, reduced drug product costs, and improved product quality. Moving toward continuous manufacturing requires suitable small-scale equipment, either by development of new equipment or optimization of existing equipment. In primary manufacturing, particle properties are often altered during crystallization and have to be restored during subsequent processing. Drying a crystallized product is one of the most challenging steps, especially since attrition and agglomeration can occur. To that end, we investigated the drying behavior of a crystalline model compound with moisture levels of up to 10 wt % in a corotating twin-screw extruder. The feed mass flows on a piece of small-scale equipment used for pharmaceutical production varied between 0.5 and 2.0 kg/h. Experiments were conducted to evaluate the drying performance in various process settings. Because of a very narrow and consistent residence time distribution, extrusion drying has the potential for pharmaceutical compound drying. In our study, we successfully accomplished drying of a crystalline product with very little agglomeration and/or attrition in some process settings while preserving a crystal size similar to that of the raw material. The reduction in particle size occurred as a result of long residence times (low extruder screw speed) and a decrease in the residual moisture of the product. The aim of our work was to show the potential of extruder drying as a novel continuous manufacturing process for pharmaceuticals and to enable further process development.