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Purpose: Oxazaphosphorines, such as ifosfamide (IFA), are frequently used in the treatment of pediatric sarcomas. They are pro-drugs and undergo hepatic metabolism into the active moiety and potentially toxic by-products such as acrolein and chloracetaldehyde, which may cause hemorrhagic cystitis and encephalopathy, respectively. In addition, resistance to oxazaphosphorines can be mediated by overexpression of enzymes involved in their catabolism. Isophosphoramide mustard (IPM, palifosfamide) is the active moiety of IFA. In the current study, the activity of palifosfamide lysine (ZIO-201), a stable form of palifosfamide, was evaluated in a panel of sarcoma cell lines and tumor xenografts including oxazaphosphorine-resistant xenografts., Methods: The cytotoxic effect of palifosfamide lysine was studied in osteosarcoma (OS), Ewing's sarcoma (ES) and rhabdomyosarcoma (RMS) cell lines using the MTT assay. In vivo, the maximum tolerated dose (MTD) of palifosfamide lysine was determined in SCID mice based on a 3-day intravenous (IV) administration schedule. The effect on tumor growth and event-free survival was assessed at the MTD in all three sarcoma xenografts. In OS, cyclophosphamide (CPA)-resistant and -sensitive xenografts (OS31 and OS33, respectively) were evaluated for palifosfamide lysine activity. ALDH1A1 and ALDH3A1 gene expression data for the OS xenografts were mined from the Pediatric Preclinical Testing Program gene expression data. ALDH3A1 enzyme levels were compared between the CPA-resistant and -sensitive xenografts., Results: Palifosfamide lysine was cytotoxic against all the cell lines tested with the IC(50) ranging from 0.5 to 1.5 microg/ml except for OS222, which had an IC(50) of 7 microg/ml. The IV MTD of palifosfamide lysine in mice was 100 mg/kg per day for three consecutive days. Tumor growth inhibition was seen in both OS31 and OS33 xenografts and the RMS xenograft resulting in a significant difference in event-free survival between the control and the treated groups. Differential gene expression of ALDH3A1 but not ALDH1A1 was noted in the OS31 xenograft. This was confirmed by RT-PCR and the ALDH3A1 enzyme assay. ALDH3A1 enzyme activity was measured at 100 mIU/mg of protein in OS31 xenograft but no significant activity was seen in the OS33 xenograft., Conclusions: We conclude that palifosfamide lysine has broad activity in a panel of sarcoma cell lines. It inhibits tumor growth in OS and RMS xenografts. Furthermore, it is active against the CPA-resistant, ALDH3A1 overexpressing, OS xenograft suggesting that it might have the potential of overcoming this resistance mechanism against oxazaphosphorines and may be an active agent in resistant/relapsed sarcomas in patients.