RATIONALE: PEG-interferon alfa-2b may interfere with the growth of tumor cells. Biological therapies, such as thalidomide, may stimulate the immune system in different ways and stop tumor cells from growing. PEG-interferon alfa-2b and thalidomide may also stop the growth of melanoma by blocking blood flow to the tumor. Giving PEG-interferon alfa-2b together with thalidomide may be an effective treatment for melanoma.

PURPOSE: This phase II trial is studying how well giving PEG-interferon alfa-2b together with thalidomide works in treating patients with recurrent or metastatic melanoma.

OBJECTIVES:

• Determine the response rate in patients with recurrent or metastatic malignant melanoma treated with PEG-interferon alfa-2b and thalidomide.
• Determine the quantitative and qualitative toxic effects of this regimen in these patients.
• Determine progression-free and overall survival of patients treated with this regimen.

OUTLINE: Patients receive PEG-interferon alfa-2b subcutaneously once weekly and oral thalidomide once daily. Treatment continues for at least 2 weeks but no more than 8 months in the absence of disease progression or unacceptable toxicity. Patients achieving a complete response (CR) receive PEG-interferon alfa-2b and thalidomide for 2 months beyond documentation of CR.

PROJECTED ACCRUAL: A total of 18-32 patients will be accrued for this study within 14-38 months.

DISEASE CHARACTERISTICS:

• Histologically confirmed malignant melanoma, including any of the following:

  • Cutaneous melanoma
  • Ocular melanoma
  • Mucosal melanoma
  • Unidentified primary tumor

• Recurrent or metastatic disease

• Bidimensionally measurable or evaluable disease

• Brain metastases allowed provided disease is stable for ≥ 6 weeks after prior radiotherapy

PATIENT CHARACTERISTICS:

Age

• 18 and over

Performance status

• SWOG 0-2

Life expectancy

• At least 12 weeks

Hematopoietic

• Absolute granulocyte count ≥ 1,500/mm^3
• Platelet count ≥ 100,000/mm^3

Hepatic

• Bilirubin ≤ 2 times upper limit of normal (ULN)
• SGOT ≤ 2 times ULN

Renal

• Creatinine ≤ 2 mg/dL

Cardiovascular

• None of the following conditions within the past 3 months:

  • Congestive heart failure
  • Second- or third-degree heart block
  • Myocardial infarction

Other

• Not pregnant or nursing
• Negative pregnancy test
• Fertile patients must use effective double-method contraception (1 highly effective and 1 additional method) for ≥ 4 weeks before, during, and for ≥ 4 weeks after completion of study treatment
• No other malignancy within the past 2 years except adequately treated skin cancer or carcinoma in situ of the cervix
• No concurrent blood, sperm, or ova donation

PRIOR CONCURRENT THERAPY:

Biologic therapy

• Prior biologic therapy (e.g., interferon) allowed

Chemotherapy

• Not specified

Endocrine therapy

• Not specified

Radiotherapy

• See Disease Characteristics
• At least 28 days since prior radiotherapy

Surgery

• At least 28 days since prior surgery

Other

• No more than 2 prior systemic treatment regimens for metastatic malignant melanoma