Phase I Dose Finding and Proof-of-concept Study of Panobinostat With Standard Dose Cytarabine and Daunorubicin for Untreated Acute Myeloid Leukemia or Advanced Myelodysplastic Syndrome

Inclusion Criteria:

* Untreated histologically confirmed acute myeloid leukemia OR advanced myelodysplastic syndrome (INT-2 or High risk) not previously treated with anthracycline-based chemotherapy OR a therapy-related myeloid neoplasm
* Male or female aged ≥ 60 years
* ECOG performance status 0-2
* Ability to provide written informed consent obtained prior to participation in the study and any related procedures being performed
* Absence of major metabolic, renal and hepatic impairment as defined by the following laboratory parameters: AST and ALT ≤ 2.5 x ULN Serum bilirubin ≤ 1.5 x ULN Albumin \> 3.0 g/dl Serum potassium ≥ LLN Total serum calcium \[corrected for serum albumin\] or ionized calcium ≥LLN Serum magnesium ≥ LLN
* Clinically euthyroid. Note: Patients are permitted to receive thyroid hormone supplements to treat underlying hypothyroidism.
* Prior treatment of myelodysplastic syndrome or myeloproliferative neoplasm acceptable

Exclusion Criteria:

* Acute promyelocytic leukemia (FAB M3 AML)
* Known central nervous system involvement by leukemia
* Isolated myeloid sarcoma not meeting bone marrow criteria for AML or MDS
* Cumulative anthracycline exposure greater than 200 mg/m2 doxorubicin isotoxic equivalents (See Appendix A6 for conversions)
* Prior HDAC inhibitor, DAC inhibitor, Hsp90 inhibitor or valproic acid for the treatment of cancer
* Patients who will need valproic acid for any medical condition during the study or within 5 days prior to first panobinostat treatment
* Prior allogeneic hematopoietic stem cell transplant
* Prior solid organ transplant
* Active bleeding diathesis or current treatment with therapeutic doses of sodium warfarin (Coumadin®) or other vitamin K active agents (Note: mini-dose of Coumadin® (e.g., 1 mg/day) or anti-coagulants given to maintain intravenous line patency, as well as unfractionated or low molecular weight heparin therapy are permitted)
* Impaired cardiac function or clinically significant cardiac diseases, including any one of the following:

History or presence of sustained ventricular tachyarrhythmia. (Patients with a history of atrial arrhythmia are eligible but should be discussed with Novartis prior to enrollment) Any history of ventricular fibrillation or torsade de pointes Bradycardia defined as HR\< 50 bpm. Patients with pacemakers are eligible if HR ≥ 50 bpm Screening ECG with a QTcF \> 450 msec Right bundle branch block + left anterior hemiblock (bifascicular block) Patients with myocardial infarction or unstable angina ≤ 6 months prior to starting study drug Congestive heart failure (CHF) that meets New York Heart Association (NYHA) Class II to IV definitions and/or ejection fraction \<50% by MUGA scan or by transthoracic echocardiogram Other clinically significant heart disease (e.g. uncontrolled hypertension, or history of labile hypertension)

* Impairment of GI function or GI disease that may significantly alter the absorption of panobinostat.
* Patients with active diarrhea \> CTCAE grade 2
* Known HIV infection
* Known active Hepatitis B or Hepatitis C virus infection
* Other concurrent severe and/or uncontrolled medical conditions (e.g. uncontrolled diabetes or active or uncontrolled infection) including abnormal laboratory values that could in the opinion of the investigator cause unacceptable safety risks or compromise compliance with the protocol.
* Active second malignancy except localized prostate cancer, basal cell carcinoma of the skin and carcinoma in situ of the skin or cervix
* Patients who are unwilling to stop the use of herbal remedies while on the Treatment Phase of the study
* Concomitant use of drugs with a risk of prolonging the QT interval and/or causing torsades de pointes if treatment cannot be discontinued or switched to a different medication prior to starting study drug. Concomitant use of strong CYP3A4 inhibitors.
* Patients who have received targeted agents within 2 weeks or within 5 half-lives of the agent and active metabolites (which ever is longer) and who have not recovered from side effects of those therapies.
* Patients who have received either immunotherapy within \< 8 weeks; chemotherapy within \< 4 weeks; or radiation therapy to \> 30% of marrow-bearing bone within \< 2 weeks prior to starting study treatment; or who have not yet recovered from side effects of such therapies.
* Patients who have undergone major surgery ≤ 4 weeks prior to starting study drug or who have not recovered from side effects of such therapy
* Treatment with investigational agent within 30 days prior to enrollment
* Male patients whose sexual partners are women of childbearing potential not using a double method of contraception during the study and 3 months after the end of treatment. One of these methods must be a condom.
* Unwilling to accept blood product transfusions
* Unable to swallow pills
* Patients with any significant history of non-compliance to medical regimens or unwilling or unable to comply with the instructions given to him/her by the study staff.