RATIONALE: Drugs used in chemotherapy work in different ways to stop cancer cells from dividing so they stop growing or die. Peripheral stem cell transplantation may allow doctors to give higher doses of chemotherapy drugs and kill more cancer cells. Biological therapies, such as interferon alfa, use different ways to stimulate the immune system and stop cancer cells from growing. Thalidomide may stop the growth of cancer cells by stopping blood flow to the tumor. Pamidronate may help to reduce the side effects of treatment for multiple myeloma.

PURPOSE: This phase II trial is studying combination chemotherapy, peripheral stem cell transplantation, biological therapy, pamidronate, and thalidomide to see how well they work in treating patients with stage I, stage II, or stage III multiple myeloma.

OBJECTIVES:

• Determine the feasibility and toxic effects of high-dose melphalan, busulfan, and cyclophosphamide followed by autologous peripheral blood stem cell rescue, interferon alfa, and pamidronate in patients with responsive or stable, low-bulk multiple myeloma.
• Determine the response rate and progression-free and overall survival of patients treated with this regimen.
• Determine the feasibility of adding thalidomide to interferon alfa and pamidronate in patients who are not in complete remission (CR) 6 months after the second course of high-dose chemotherapy.
• Determine whether administration of thalidomide can increase the CR rate in patients who are not in CR 6 months after the second course of high-dose chemotherapy and determine its effect on progression-free and overall survival of these patients.
• Determine the pharmacokinetics of busulfan and cyclophosphamide and correlate the pharmacokinetics with the toxic effects of these drugs and outcome in these patients.
• Determine the effect of thalidomide on microvascular density of bone marrow and correlate these possible effects with outcome in these patients.
• Determine the cytogenetics, gene rearrangement, and fluorescence in situ hybridization in baseline and post treatment bone marrow and blood specimens and correlate the presence/persistence of these features with treatment outcome in these patients.

OUTLINE: Patients receive cyclophosphamide IV over 2 hours on day 1 and filgrastim (G-CSF) subcutaneously (SC) or IV twice a day beginning on day 2 and continuing until peripheral blood stem cells (PBSCs) are collected. PBSCs are collected beginning on day 10.

Patients receive high-dose melphalan IV on day -1. PBSCs are reinfused on day 0. G-CSF is administered IV or SC daily beginning on day 1 and continuing until blood counts recover. Between 8 and 14 weeks later, patients receive high-dose busulfan IV every 6 hours on days -7 to -4 and cyclophosphamide IV over 2 hours on days -3 and -2. PBSCs are reinfused on day 0 and G-CSF is administered IV or SC daily until blood counts recover.

Patients with responding or stable disease after chemotherapy receive maintenance therapy with interferon alfa beginning 14-20 weeks after day 0 of the second course of chemotherapy. Interferon alfa is administered SC 3 times a week for 3 years. Patients also receive pamidronate IV every 4 weeks until disease progression. Patients who are not in complete remission (CR) 6 months after completing the second course of chemotherapy receive oral thalidomide daily for a maximum of 1 year or for 3 months after achieving CR.

Patients are followed monthly for 1 year, every 3 months for 1 year, and then periodically thereafter.

PROJECTED ACCRUAL: A total of 70 patients will be accrued for this study within approximately 2.5 years.

DISEASE CHARACTERISTICS:

• Histologically proven stage I-III multiple myeloma

  • Less than 18 months since diagnosis

  • Smoldering myeloma allowed if there is evidence of progressive disease requiring therapy

    • At least 25% increase in M protein levels or Bence Jones excretion
    • Hemoglobin no greater than 10.5 g/dL
    • Hypercalcemia
    • Frequent infections
    • Rise in serum creatinine above normal on 2 separate occasions

  • Nonquantifiable monoclonal proteins allowed if other criteria for multiple myeloma or smoldering myeloma are met

• Response/status after induction therapy:

  • Responding or stable disease AND no greater than 40% myelomatous involvement of bone marrow

• No Waldenstrom's macroglobulinemia

PATIENT CHARACTERISTICS:

Age:

• 65 and under

Performance status:

• Karnofsky 80-100%

Life expectancy:

• Not specified

Hematopoietic:

• See Disease Characteristics
• Absolute neutrophil count greater than 1,500/mm^3
• Platelet count greater than 100,000/mm^3

Hepatic:

• Bilirubin no greater than 1.5 mg/dL
• Serum glutamic axaloacetic transaminase (SGOT) and serum glutamic pyruvic transaminase (SGPT) less than 2.5 times upper limit of normal
• Hepatitis B antigen or hepatitis C ribonucleaic acid (RNA) negative

Renal:

• See Disease Characteristics
• Creatinine no greater than 1.4 mg/dL
• Creatinine clearance greater than 65 mL/min

Cardiovascular:

• Cardiac ejection fraction at least 50% by multigated acquisition scan (MUGA) or echocardiogram

Pulmonary:

• Forced-expiratory volume in one second (FEV_1) greater than 60% of normal
• Diffusing capacity for carbon monoxide (DLCO) greater than 50% of predicted lower limit

Other:

• Not pregnant
• Negative pregnancy test
• Fertile patients must use effective contraception
• Human immunodeficiency virus (HIV) negative
• No other medical or psychosocial problems that would increase patient risk
• No other malignancy within past 5 years except nonmelanomatous skin cancer or carcinoma in situ of the cervix
• No known hypersensitivity to filgrastim (G-CSF) or Escherechi coli-derived proteins

PRIOR CONCURRENT THERAPY:

Biologic therapy:

• Not specified

Chemotherapy:

• See Disease Characteristics
• No more than 3 prior chemotherapy regimens
• At least 4 weeks since prior chemotherapy

Endocrine therapy:

• Not specified

Radiotherapy:

• At least 4 weeks since prior radiotherapy

Surgery:

• Not specified