• Incidence of adverse events (dose-escalation stage) [ Time Frame: Up to 30 days ]
  Safety data of the patients will be summarized using descriptive statistics such as mean, standard deviation, median, and range. Toxicity type, severity, and attribution will be summarized for each patient using frequency tables.
• Maximum-tolerated dose (MTD) of liposome-encapsulated daunorubicin-cytarabine (dose-escalation stage) [ Time Frame: Up to 28 days ]
  Defined as the highest dose level in which a dose-limiting toxicity (DLT) occurs within at most 1 out of 6 patients treated. DLTs are defined as any related non-hematological Common Terminology Criteria for Adverse Events grade >= 3 adverse events that prevent further administration of the agent at that same dose level.
• Incidence of adverse events (dose-expansion stage) [ Time Frame: Up to 30 days ]
  Safety data of the patients will be summarized using descriptive statistics such as mean, standard deviation, median, and range. Toxicity type, severity, and attribution will be summarized for each patient using frequency tables.
• Objective response rate (ORR) (dose-expansion stage) [ Time Frame: Up to 1.5 years ]
  Defined as complete response (CR), partial response, CR with incomplete bone marrow recovery, marrow CR or hematological improvement. Will be estimated along with 95% confidence intervals treated at the MTD (i.e., including those treated at the MTD during dose escalation and dose expansion phases). The association between ORR and patient's clinical characteristics will be examined by Wilcoxon's rank sum test or Fisher's exact test, as appropriate.

• Overall response rate [ Time Frame: Up to 1.5 years ]
• Overall survival [ Time Frame: Up to 1.5 years ]
  The distribution of time-to-event endpoints will be estimated using the method of Kaplan and Meier. Comparisons of time-to-event endpoints by important subgroups will be made using the log-rank tests.
• Duration of response [ Time Frame: Up to 1.5 years ]
  Will be summarized using descriptive statistics such as mean, standard deviation, median and range.
• Relapse-free survival [ Time Frame: Up to 1.5 years ]
  The distribution of time-to-event endpoints will be estimated using the method of Kaplan and Meier. Comparisons of time-to-event endpoints by important subgroups will be made using the log-rank tests.
• Incidence of adverse events [ Time Frame: Up to 1.5 years ]
  Safety data of the patients will be summarized using descriptive statistics such as mean, standard deviation, median, and range. Toxicity type, severity, and attribution will be summarized for each patient using frequency tables.

PRIMARY OBJECTIVES:

I. To characterize the safety and tolerability of CPX-351 in patients with intermediate-2 or high-risk myelodysplastic syndrome (MDS). (Dose Escalation Stage) II. To determine the maximum tolerated dose (MTD) of intravenous CPX-351 in patients with intermediate-2 or high-risk MDS. (Dose Escalation Stage) III. To further characterize the safety and tolerability of CPX-351 in patients with intermediate-2 and high-risk MDS. (Dose-Expansion Stage) IV. To evaluate preliminary efficacy of CPX-351 in patients with intermediate-2 or high-risk MDS. (Dose-Expansion Stage)

SECONDARY OBJECTIVES:

I. To assess overall response (OR) rate. II. To assess overall survival. III. To assess duration of response. IV. To assess relapse-free survival. V. To assess safety profile.

OUTLINE: This is a dose-escalation study.

INDUCTION THERAPY: Patients receive liposome-encapsulated daunorubicin-cytarabine intravenously (IV) over 90 minutes on days 1, 3, and 5 in the absence of disease progression or unacceptable toxicity. After 2-5 weeks, patients who do not achieve a complete response (CR)/CR with incomplete bone marrow recovery (CRi)/CR with incomplete platelet recovery (CRp), have acceptable or no toxicity, and have stable disease and no disease progression may receive liposome-encapsulated daunorubicin-cytarabine IV over 90 minutes on days 1 and 3 in the absence of disease progression or unacceptable toxicity.

CONSOLIDATION THERAPY: Patients who achieve at least a hematological improvement (HI) response, receive liposome-encapsulated daunorubicin-cytarabine IV over 90 minutes on days 1 and 3. Treatment repeats every 28 days for up to 12 cycles in the absence of disease progression or unacceptable toxicity. After 5-8 weeks, patients who do not show clinically significant disease progression or unacceptable toxicity may receive liposome-encapsulated daunorubicin-cytarabine for up to 12 additional cycles.

After completion of study treatment, patients are followed up at 30 days and then every 6 months thereafter.

• Blasts 10-19 Percent of Bone Marrow Nucleated Cells
• Blasts More Than 5 Percent of Bone Marrow Nucleated Cells
• High Risk Chronic Myelomonocytic Leukemia
• Recurrent Chronic Myelomonocytic Leukemia
• Recurrent High Risk Myelodysplastic Syndrome
• Refractory Chronic Myelomonocytic Leukemia
• Refractory High Risk Myelodysplastic Syndrome

Inclusion Criteria:

• Diagnosis of MDS or chronic myelomonocytic leukemia (CMML) according to World Health Organization (WHO)
• Patients are either not eligible for or choose not to proceed with a stem cell transplant at the time of enrollment
• MDS and CMML classified by International Prognostic Scoring System (IPSS) as intermediate-2/high risk with excess blasts > 5%, or with 10-19% bone marrow blasts
• No response following at least 4 cycles of therapy or relapse after initial CR, partial response (PR), or HI or progression after any number of cycles of either azacitidine, decitabine, guadecitabine or ASTX727 (oral decitabine) as single agents or in combination with other investigational agents
• Patient (or patient's legally authorized representative) must have signed an informed consent document indicating that the patient understands the purpose of and procedures required for the study and is willing to participate in the study
• Total bilirubin < 3 mg/dL (will allow less than 5 x upper limit of normal [ULN] if Gilbert's at investigator's discretion)
• Aspartate aminotransferase (AST) or alanine aminotransferase (ALT) =< 3 x ULN
• Serum creatinine clearance > 30 mL/min and no end/stage renal disease
• Hydroxyurea for control of leukocytosis or use of hematopoietic growth factors (eg, granulocyte-colony stimulating factor [G-CSF], granulocyte-macrophage colony-stimulating factor [GM-CSF], procrit, aranesp, thrombopoietins) is allowed at any time prior to or during study if considered to be in the best interest of the patient

Exclusion Criteria:

• New York Heart Association (NYHA) class III or IV congestive heart failure or left ventricular ejection fraction (LVEF) < 50 by echocardiogram or multigated acquisition (MUGA) scan
• History of myocardial infarction within the last 6 months or unstable/uncontrolled angina pectoris or history of severe and/or uncontrolled ventricular arrhythmias
• Uncontrolled infection not adequately responding to appropriate antibiotics
• Female patients who are pregnant or lactating
• Patients with reproductive potential who are unwilling to following contraception requirements (including condom use for males with sexual partners, and for females: prescription oral contraceptives [birth control pills], contraceptive injections, intrauterine devices [IUD], double-barrier method [spermicidal jelly or foam with condoms or diaphragm], contraceptive patch, or surgical sterilization) throughout the study
• Female patients with reproductive potential who have a positive urine or blood beta-human chorionic gonadotropin (beta HCG) pregnancy test at screening
• Patients receiving any other concurrent investigational agent or chemotherapy, radiotherapy, or immunotherapy (within 14 days of initiating study treatment)
• Prior cumulative anthracycline exposure of > 550 mg/m^2 daunorubicin or equivalent, or > 400 mg/m^2 in patients who received radiation therapy to the mediastinum