RATIONALE: Nilotinib may stop the growth of cancer cells by blocking some of the enzymes needed for cell growth. Drugs used in chemotherapy work in different ways to stop the growth of cancer cells, either by killing the cells or by stopping them from dividing. Giving nilotinib together with combination chemotherapy may kill more cancer cells.

PURPOSE: This phase II trial is studying how well giving nilotinib together with combination chemotherapy works in treating patients with newly diagnosed acute lymphoblastic leukemia.

OBJECTIVES:

Primary

• To determine the clinical efficacy of nilotinib and combination chemotherapy, in terms of hematologic and molecular complete remission (CR) rates, in patients with newly diagnosed Philadelphia chromosome-positive acute lymphoblastic leukemia or acute mixed lineage leukemia.

Secondary

• To establish the prognostic factors for patients treated with this regimen.
• To determine the duration of CR in patients treated with this regimen.
• To determine the duration of progression-free and overall survival of these patients.
• To determine the toxicity of this regimen in these patients.

OUTLINE: This is a multicenter study. Patients are stratified according to age (15 to 64 years vs ≥ 65 years).

• Induction therapy: Patients receive daunorubicin hydrochloride IV continuously over 24 hours on days 1-3, vincristine sulfate IV on days 1 and 8, and oral prednisolone on days 1-14. Patients undergo bone marrow examination on day 14. Patients in hematologic remission proceed to consolidation therapy. Patients with residual leukemic cells > 5% receive an additional dose of daunorubicin hydrochloride IV continuously over 24 hours on day 15 before proceeding to consolidation therapy.
• Consolidation therapy: For course 1, patients receive daunorubicin hydrochloride IV continuously over 24 hours on days 1 and 2, vincristine sulfate IV on days 1 and 8, and oral prednisolone on days 1-14. For courses 2 and 4, patients receive cytarabine IV over 2 hours and etoposide IV over 3 hours on days 1-4. For courses 3 and 5, patients receive methotrexate IV continuously over 36 hours on days 1, 2, 15, and 16 and leucovorin calcium IV every 6 hours for 3 doses and then orally until blood methotrexate levels are in a safe range.

Patients also receive oral nilotinib twice daily beginning on day 8 of induction therapy and continuing until the completion of consolidation therapy.

After completion of consolidation therapy, patients with a hematopoietic stem cell donor proceed to allogeneic hematopoietic stem cell transplantation (HSCT). Patients who do not undergo HSCT continue to receive oral nilotinib twice daily for up to 2 years after completion of consolidation therapy.

After completion of study therapy, patients are followed periodically for up to 1 year.

DISEASE CHARACTERISTICS:

• Newly diagnosed acute lymphoblastic leukemia or acute mixed lineage leukemia

  • Positive for Bcr-Abl fusion transcript (Philadelphia chromosome-positive disease) by RT-PCR

PATIENT CHARACTERISTICS:

• ECOG performance status 0-2

• Total bilirubin < 2 mg/dL

• SGOT < 3 times upper limit of normal (ULN)

• Alkaline phosphatase ≤ 2.5 times ULN (unless considered tumor-related)

• Creatinine < 2.0 mg/dL ULN

• Serum amylase and lipase ≤ 1.5 times ULN

• Potassium, magnesium, and phosphorus normal (supplementation allowed)

• Not pregnant or nursing

• Negative pregnancy test

• Fertile patients must use effective contraception

• No rare hereditary problems with galactose intolerance, severe lactase deficiency, or glucose-galactose malabsorption

• No known sensitivity to any of the study drugs

• No severe medical condition that, in the opinion of the investigator, would preclude study participation

• No impaired cardiac function, including any of the following:

  • LVEF < 45% or below the lower limit of normal by ECHO

  • Long QT syndrome or known family history of long QT syndrome

  • Clinically significant resting bradycardia (< 50 beats per minute)

  • QTc > 450 msec on baseline ECG (using the QTcF formula)

  • Myocardial infarction within the past 12 months

  • Other clinically significant heart disease, including any of the following:

    • Unstable angina
    • Congestive heart failure
    • Uncontrolled hypertension
    • Uncontrolled arrhythmias

• No other primary malignant disease requiring systemic treatment

• No acute or chronic liver, pancreatic, or severe renal disease

• No other severe and/or life-threatening medical disease

• No history of significant congenital or acquired bleeding disorder unrelated to cancer

• No impairment of gastrointestinal (GI) function or GI disease that may significantly alter the absorption of study drug

• No history of non-compliance

PRIOR CONCURRENT THERAPY:

• More than 30 days since prior investigational agents
• No concurrent medications that have the potential to prolong the QTc interval
• No concurrent strong CYP3A4 inhibitors
• No concurrent therapeutic coumarin derivatives