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Muramyl tripeptide phosphatidylethanolamine (MTP-PE) is a synthesized lipophilic analogue of muramyl dipeptide. MTP-PE encapsulated in liposomes (L-MTP-PE) allows selective delivery to pulmonary macrophages and circulating monocytes. In vivo administration has resulted in tumor regression in mice with B16 melanoma lung and lymph node metastases and a 40% long-term disease-free survival in dogs with osteosarcoma. Phase I studies have demonstrated that the drug is well tolerated. A Phase II trial using L-MTP-PE was undertaken in relapsed osteosarcoma patients to determine whether L-MTP-PE therapy could improve the progression-free interval in this high-risk group of patients. Patients had histologically proven osteosarcoma and pulmonary metastases that had developed during adjuvant chemotherapy or that were present at diagnosis and had persisted despite chemotherapy. Patients were rendered disease free by surgery. L-MTP-PE, 2 mg/m2, was infused over a 1-hour period twice a week for 12 weeks in 12 patients (Group 1). Sixteen patients (Group 2) received 2 mg/m2 L-MTP-PE twice a week for 12 weeks, then once a week for 12 weeks, for a total of 24 weeks of therapy. Progression-free intervals in each group were calculated from the day of surgery to the day of relapse and compared with the progression-free interval of a historical control group (Group 3) treated postoperatively with chemotherapy at M. D. Anderson Cancer Center between 1980 and 1990. Patients who received 24 weeks of L-MTP-PE therapy had a significant prolongation in time to relapse but those who received 12 weeks of therapy did not. The median time to relapse for group 2 patients was 9.0 months compared with 4.5 months for the control group (Group 3). These data suggest that L-MTP-PE deserves further investigation in a more appropriate adjuvant setting. A nationwide randomized Phase III trial is now underway in newly diagnosed osteosarcoma patients in conjunction with the Children's Cancer Study Group and the Pediatric Oncology Group.