Study was terminated due to cease in manufacturing of study drug.

This is an open-label phase 1/2 study that will combine the chemotherapy agents gemcitabine and nab-paclitaxel with an oral hedgehog inhibitor LDE225 (Sonidegib). The objective is to assess tolerability and the resection rate of patients with borderline resectable pancreatic adenocarcinoma who use this treatment.

The investigators propose treating 6-12 patients during the phase 1 portion and 40 patients in the phase 2 stage.

Phase 1 Stage:

Four cycles of gemcitabine 1000 mg/m2 and nab-paclitaxel 125 mg/m2 on days 1, 8 and 15 in combination with escalating doses (400mg, or 600mg, or 800mg) of LDE-225. After completion of neoadjuvant therapy, the subjects will receive combined chemotherapy and radiation. Then subjects who are eligible for resection will go ahead with surgery. Following resection, subjects will complete two additional cycles of gemcitabine 1000 mg/m2 and nab-paclitaxel 125 mg/m2 in combination with LDE-225.

Phase 2 Stage: In the Phase 2 stage the patients will be randomized to receive gemcitabine and nab-paclitaxel with or without the hedgehog inhibitor LDE225:

1. Arm A: Four cycles of gemcitabine 1000 mg/m2 and nab-paclitaxel 125 mg/m on days 1, 8 and 15 in combination with LDE-225 at the recommended phase 2 dose.
2. Arm B: Four cycles of gemcitabine 1000 mg/m2 and nab-paclitaxel 125 mg/m on days 1, 8 and 15.

After completion of neoadjuvant therapy, the subjects will receive combined chemotherapy and radiation. Then subjects who are eligible for resection will go ahead with surgery. Following resection, subjects will complete two additional cycles of the pre-surgical therapy.

Several correlative laboratory studies will be conducted during the course of this study. They were designed around the goals of providing us with a better understanding of how the stroma-tumor interaction and the intra-tumoral drug levels of gemcitabine are affected with the use of LDE-225. Two additional biopsies are required to participate in this study.

Inclusion Criteria:

• Histologically or cytologically confirmed adenocarcinoma of the pancreas.
• Must have borderline resectable pancreatic adenocarcinoma
• Measurable disease, defined as at least one lesion that can be accurately measured in at least one dimension
• No previous radiotherapy, surgery, chemotherapy or investigational drug therapy.
• Age >18 years
• Life expectancy of greater than 1 month.
• ECOG (Eastern Cooperative Oncology Group) performance status 0 or 1
• Adequate organ and marrow function
• Asymptomatic for jaundice and ascites. Pain symptoms should be stable.
• Negative serum pregnancy test
• Sexually active males should agree to use a barrier form of contraception, even if they have had a vasectomy, during the study and for 6 months after stopping LDE225. Males should not donate sperm during treatment, and for up to six months after last dose. Sexually active females of child bearing potential agree to using highly effective contraception during study and for 20 months after final dose of LDE225.
• Agree not to donate blood products for 12 months after stopping LDE225.
• Willing to have two biopsies while on treatment for correlative studies.

Exclusion Criteria:

• Patients who have had previous radiotherapy, surgical resection, chemotherapy or investigational drug therapy for pancreatic adenocarcinoma.
• Patient has known metastatic disease.
• History of allergic reactions attributed to compounds of similar chemical or biologic composition to LDE225 or other agents used in the study.
• Patients taking medications with narrow therapeutic indices that are metabolized by cytochrome P450 (CYP450), including warfarin sodium (Coumadin®)
• Uncontrolled illness including, but not limited to, ongoing or active infection requiring IV antibiotics, symptomatic congestive heart failure not controlled with medication, unstable angina pectoris, cardiac arrhythmia, or psychiatric illness/social situations that would limit compliance with study requirements.
• Pregnant women are excluded
• Patient has undergone a major surgery, other than diagnostic surgery within four weeks prior to starting treatment on this study.
• Patients who are receiving treatment with medications known to be moderate and strong inhibitors or inducers of CYP3A4/5 or drugs metabolized by CYP2B6 or CYP2C9 that have narrow therapeutic index, and that cannot be discontinued before starting treatment with LDE225. Medications that are strong CYP3A4/5 inhibitors should be discontinued at least 7 days and strong CYP3A/5 inducers for at least 2 weeks prior to starting treatment with LDE225.
• Patients with neuromuscular disorders.
• Patients with impaired cardiac function.