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RATIONALE: OTI-010 may be effective for graft-versus-host disease prophylaxis (prevention) in patients who are undergoing donor peripheral stem cell transplantation for hematologic malignancies (cancer of the blood or bone marrow). PURPOSE: This randomized phase II trial is studying how well OTI-010 works in preventing graft-versus-host disease in patients who are undergoing donor peripheral stem cell transplantation for hematologic cancer. OBJECTIVES: * Compare the safety and efficacy of OTI-010 vs placebo as graft-versus-host disease prophylaxis in patients with hematologic malignancies undergoing HLA-identical sibling matched peripheral blood stem cell transplantation. OUTLINE: This is a randomized, double-blind, placebo-controlled, multicenter study. Patients are stratified according to age (18 to 34 vs 35 to 55) and donor/recipient gender (female donor/male recipient vs female donor/female recipient vs male donor/female recipient vs male donor/male recipient). * Conditioning regimen: Patients receive cyclophosphamide IV once daily on days -5 and -4 and undergo total body irradiation twice daily on days -3 to -1 OR busulfan IV over 2 hours every 6 hours on days -7 to -4 and cyclophosphamide IV once daily on days -3 and -2. * Graft-versus-host disease prophylaxis: Patients receive methotrexate IV on days 1, 3, 6, and 11. Patients also receive cyclosporine orally or IV (over 1-4 hours) twice daily beginning on day -1 and continuing for at least 6 months followed by a taper until 1 year after transplantation. * OTI-010 therapy: Patients are randomized to 1 of 3 treatment arms. * Arm I: Patients receive placebo IV 4 hours before peripheral blood stem cell transplantation (PBSCT) on day 0. * Arm II: Patients receive OTI-010 IV 4 hours before PBSCT on day 0. * Arm III: Patients receive a higher dose of OTI-010 IV 4 hours before PBSCT on day 0. * Allogeneic stem cell transplantation: Patients undergo allogeneic PBSCT on day 0. Patients are followed at 18 weeks, at 6, 9, and 12 months, every 6 months for 1 year, and then annually for 3 years. PROJECTED ACCRUAL: A total of 99 patients (33 per treatment arm) will be accrued for this study within 5 months.
DISEASE CHARACTERISTICS: * Histologically confirmed diagnosis of 1 of the following hematologic malignancies: * Acute lymphoblastic leukemia, meeting 1 of the following criteria: * In first or second remission * In early first or second relapse\* * Acute myeloid leukemia, meeting 1 of the following criteria: * In first or second remission * In early first or second relapse\* * Chronic myelogenous leukemia * Chronic or accelerated phase * Any of the following myelodysplastic syndromes: * Refractory anemia (RA) * RA with ringed sideroblasts * RA with excess blasts NOTE: \*\< 24% marrow blasts and \< 5% peripheral blood blasts (within 10 days of beginning conditioning regimen) * No secondary acute leukemia * Prior CNS tumor involvement allowed provided patient is asymptomatic and there is no evidence of CNS disease on lumbar puncture and CT scan of the brain * Must have a 6/6 HLA-identical sibling donor available PATIENT CHARACTERISTICS: Age * 18 to 55 Performance status * Karnofsky 70-100% Life expectancy * Not specified Hematopoietic * Not specified Hepatic * Bilirubin \< 2 times upper limit of normal (ULN) * SGOT \< 10 times ULN * Hepatitis B core antigen, surface antigen, and e-antigen negative * Hepatitis B DNA negative * Hepatitis C RNA negative Renal * Creatinine clearance ≥ 60 mL/min Cardiovascular * LVEF ≥ 50% by MUGA or echocardiogram * No right sided heart failure Pulmonary * FEV_1 \> 50% of predicted * DLCO ≥ 50% of predicted (corrected for anemia) * Oxygen saturation ≥ 97% on room air * No pulmonary hypertension Immunologic * HIV-1 and 2 antibody negative * HIV-1 antigen negative * HTLV-I and II antibody negative * No active infection Other * CNS function normal * No uncontrolled alcohol or substance abuse within the past 6 months * No other concurrent underlying medical condition that would preclude study participation * Not pregnant * Negative pregnancy test * Fertile patients must use 2 effective methods of contraception PRIOR CONCURRENT THERAPY: Biologic therapy * No prior allogeneic or autologous hematopoietic stem cell transplantation * No concurrent medication to accelerate neutrophil or platelet engraftment except filgrastim (G-CSF) Chemotherapy * Not specified Endocrine therapy * Not specified Radiotherapy * Not specified Surgery * No prior solid organ transplantation Other * More than 30 days since prior investigational agents or devices * No other concurrent investigational agents or devices * No concurrent anti-infective therapy except prophylactic therapy * No other concurrent conditioning regimen agents * No concurrent herbal remedies except multivitamins * No other concurrent graft-versus-host disease prophylaxis medications (e.g., ursodeoxycholic acid)