Pembrolizumab and Pelareorep in Treating Patients With Advanced Pancreatic Cancer

Inclusion Criteria:

* Patients must have histologically confirmed advanced (unresectable or metastatic) pancreatic adenocarcinoma, documented objective radiographic progression and have failed or not tolerated first-line therapy.

  * Note: First-line therapy denotes systemic chemotherapy for advanced pancreatic adenocarcinoma. Only one line of therapy is permitted in this setting. Intolerant to first line therapy are patients that have developed \>= grade 3 adverse events related to first line therapy and treating physician deems continuing of systemic chemotherapy would be detrimental to patient.
* Patients must have confirmation of an existing formalin-fixed paraffin-embedded (FPPE) tumor sample from archival tissue or from a fresh biopsy of a primary or metastatic lesion at baseline, either as a block or unstained slides for performance of correlative studies.

  * Note: Patients must undergo a fresh biopsy if archival tissue is not available.
* Patients must have measurable disease as defined by RECIST v 1.1.
* Any major surgery (except biopsies) must have occurred at least 28 days prior to first day of study treatment.
* Patients must have an Eastern Cooperative Oncology Group (ECOG) performance score =\< 1.
* Patients must have a life expectancy of \>= 6 months.
* Absolute neutrophil count (ANC) \>= 1,500 /mcL (with or without growth factor use).
* Platelets \>= 100,000 / mcL.
* Hemoglobin \>= 9 g/dL, OR \>= 5.6 mmol/L with (if clinically indicated)/without transfusion or erythropoietin \[EPO\] dependency).
* Serum creatinine =\< 1.5 x upper limit of normal (ULN), OR measured or calculated creatinine clearance (glomerular filtration rate \[GFR\] can also be used in place of creatinine or creatinine clearance \[CrCl\]) \>= 60 mL/min for subject with creatinine levels \> 1.5 x institutional ULN.

  * (Note: creatinine clearance should be calculated per institutional standard.)
* Serum total bilirubin =\< 1.5 x ULN, OR direct bilirubin =\< ULN for subjects with total bilirubin levels \> 1.5 x ULN.
* Aspartate aminotransferase (AST) (serum glutamic oxaloacetic transaminase \[SGOT\]) and alanine aminotransferase (ALT) (serum glutamate pyruvate transaminase \[SGPT\]) =\< 2.5 x ULN, OR =\< 5 x ULN for subjects with liver metastases.
* Albumin \>= 2.5 mg/dL.
* International normalized ratio (INR) or prothrombin time (PT) =\< 1.5 x ULN unless subject is receiving anticoagulant therapy. For patients on anticoagulant therapy, PT/INR must be within therapeutic range.
* Activated partial thromboplastin time (aPTT) =\< 1.5 x ULN unless subject is receiving anticoagulant therapy. For patients on anticoagulant therapy, PT/INR must be within therapeutic range
* Thyroid-stimulating hormone (TSH), thyroxine (T4) and corticotropin (ACTH) within normal range (prior to registration).
* Proteinuria within institutional normal or =\< grade 1 OR urinary protein \< 1 g/24 hours (hr) (prior to registration).
* Female subject of childbearing potential must have a negative urine or serum pregnancy within 7 days of registration. It is to be repeated on day 1 of study treatment, before infusion, if it is done greater than 3 days of day 1. If the urine test is positive or cannot be confirmed as negative, a serum pregnancy test is required. Female subjects of childbearing potential must be willing to use an adequate method of contraception (willing to use 2 methods of birth control or be surgically sterile, or abstain from heterosexual activity), for the course of the study through 120 days after the last dose of study medication. Should a female patient become pregnant or suspect she is pregnant while participating in this study, she should inform her treating physician immediately.

  * Note: A female of childbearing potential (FOCBP) is any woman (regardless of sexual orientation, having undergone a tubal ligation, or remaining celibate by choice) who meets the following criteria:

    * Has not undergone a hysterectomy or bilateral oophorectomy
    * Has had menses at any time in the preceding 12 consecutive months (and therefore has not been naturally postmenopausal for \> 12 months).
* Male subjects of childbearing potential must agree to use an adequate method of contraception or be surgically sterile or abstain from heterosexual activity, starting with the first dose of study therapy through 120 days after the last dose of study therapy.
* Patients must have signed an informed consent indicating that the patient is aware of the neoplastic nature of their disease and have been informed of the procedures of the protocol, the experimental nature of the therapy, alternatives, potential benefits, side effects, risks, and discomforts.
* Patients must be willing and able to comply with scheduled visits, the treatment plan, and laboratory tests.

Exclusion Criteria:

* Patients who have had chemotherapy or radiotherapy within 4 weeks prior first day of study drug or those who have not recovered from adverse events due to agents administered more than 4 weeks from cycle 1 day 1 are not eligible.
* Patients who have a diagnosis of immunodeficiency or is receiving systemic steroid therapy or any other form of immunosuppressive therapy within 7 days prior to the first dose of study treatment are excluded.

  * Note: If patient is on high dose of steroid therapy, it needs to be brought down to \< 10 mg prednisone or equivalent for at least 7 days prior to day 1 of study treatment.
* Patients receiving any other investigational agents for at least 4 weeks before the first dose of study treatment are not eligible.
* Patients with a known history of active TB (Bacillus tuberculosis) are excluded.
* Patients with a hypersensitivity to pembrolizumab or any of its excipients are excluded.
* Patients who have had a prior anti-cancer monoclonal antibody (mAb) within 28 days prior to study day 1 or who has not recovered (i.e., =\< grade 1 or at baseline) from adverse events due to agents administered more than 4 weeks earlier.
* Patients who have had prior chemotherapy, targeted small molecule therapy, or radiation therapy within 28 days prior to study day 1 or who has not recovered (i.e., NCI CTCAE version 4.03 grade =\< 1 or at baseline) from adverse events due to a previously administered agent are not eligible.

  * Note: If subject received major surgery, they must have recovered adequately from the toxicity and/or complications from the intervention prior to starting therapy.
  * Exceptions to this criteria are:

    * Subjects with =\< grade 2 neuropathy or alopecia are an exception to this criterion and may qualify for the study.
* Patients receiving palliative radiation are eligible for this study. Palliative radiation is allowed during treatment as well. Patients with a known additional malignancy that is progressing or requires active treatment within the past 5 years are excluded. Exceptions include basal cell carcinoma of the skin or squamous cell carcinoma of the skin that has undergone potentially curative therapy or in situ cervical cancer.
* Patients with a known active central nervous system (CNS) metastases and/or carcinomatous meningitis are excluded.

  * Note: Subjects with previously treated brain metastases may participate provided they are stable (without evidence of progression by imaging for at least four weeks prior to the first dose of trial treatment and any neurologic symptoms have returned to baseline), have no evidence of new or enlarging brain metastases, and are not using steroids for at least 7 days prior to trial treatment.
  * This exception does not include carcinomatous meningitis, which is excluded regardless of clinical stability.
* Patients with an active autoimmune disease that has required systemic treatment in the past 2 years (i.e. with use of disease modifying agents, corticosteroids or immunosuppressive drugs) are excluded.

  * Note: Replacement therapy (e.g. thyroxine, insulin, or physiologic corticosteroid replacement therapy for adrenal or pituitary insufficiency, etc.) is not considered a form of systemic treatment.
* Patients with a history of (non-infectious) pneumonitis that required steroids or current pneumonitis are excluded.
* Patients with an active infection requiring systemic therapy are excluded.
* Patients with a history or current evidence of any condition, therapy, or laboratory abnormality that might confound the results of the trial, interfere with the subject?s participation for the full duration of the trial, or is not in the best interest of the subject to participate, in the opinion of the treating investigator are excluded.
* Patients with a known psychiatric or substance abuse disorders that would interfere with cooperation with the requirements of the trial are excluded.
* Patients who are pregnant or breastfeeding, or expecting to conceive or father children within the projected duration of the trial, starting with the pre-screening or screening visit through 120 days after the last dose of trial treatment are excluded.
* Patients who have received prior therapy with an anti-PD-1, anti-PD-L1, or anti-PDL2 agent are excluded.
* Patients with a known history of Human Immunodeficiency Virus (HIV) (HIV 1/2 antibodies) are excluded.
* Patients with a known active hepatitis B (e.g., hepatitis B surface antigen \[HBsAg\] reactive) or hepatitis C (e.g., hepatitis C virus \[HCV\] ribonucleic acid \[RNA\] \[qualitative\] is detected) are excluded.
* Patients who have received a live vaccine within 30 days of planned start of study therapy are excluded.

  * Note: Seasonal influenza vaccines for injection are generally inactivated flu vaccines and are allowed; however intranasal influenza vaccines (e.g., Flu-Mist) are live attenuated vaccines, and are not allowed.
* Patients with clinically significant cardiac disease (New York Heart Association, class III or IV including pre-existing arrhythmia, uncontrolled angina pectoris, and myocardial infarction 1 year prior to registration, or grade 2 or higher compromised left ventricular ejection fraction are excluded.
* Patients who have dementia or altered mental status that would prohibit informed consent are excluded.