Inclusion Criteria:

• Ability to understand and voluntarily sign an informed consent form
• Age > 18 years at the time of signing the informed consent form
• Pathological confirmation of leukemia or myelodysplastic syndrome.
• AML according to WHO criteria; except for core-binding factor AMLs (t(8;21), inv(16) or t(16;16)) and APL
• ALL
• MDS
• Patients with AML include the following:
• Patients in 2nd or greater relapse
• Patients in first relapse with initial CR duration lasting <6 months
• Patients in first relapse refractory to induction therapy
• Patients with primary refractory AML
• Patients with ALL include the following
• Patients with T-cell ALL refractory or in relapse following nelarabine
• Patients with other ALL that is refractory or in relapse.
• Patients with MDS include the following:
• The subset of RAEB-2 patients with >10% blasts with at least 1 prior therapy that includes a hypomethylating agent.
• Previously untreated chemotherapy induced AML
• Eastern Cooperative Oncology Group (ECOG) performance status score of 0,1 or 2
• Able to adhere to the study visit schedule and other protocol requirements
• Life expectancy of at least 12 weeks
• Laboratory values fulfilling the following:
• Serum creatinine < 1.5 mg/dL
• Serum total bilirubin < 1.5 mg/dL
• Serum alanine aminotransferase or aspartate aminotransferase < 150 IU/liter Note: If elevated liver enzymes are related to disease; contact medical monitor to discuss.
• Cardiac ejection fraction > 50% by MUGA scan or echocardiography
• All men and women must agree to practice effective contraception during the study period if not otherwise documented to be infertile.

Exclusion Criteria:

• Any serious medical condition, laboratory abnormality or psychiatric illness that would prevent the patient from signing the informed consent form
• Chemotherapy or other investigational anticancer therapeutic drugs in the two weeks prior to study entry; in the event of rapidly proliferative disease, however, the use of hydroxyurea is permitted up to 24 hours before study entry
• Clinical evidence of active CNS leukemic involvement
• Pregnant or lactating women
• Clinically significant cardiac disease (New York Heart Association Class III or IV)
• Severe debilitating pulmonary disease
• Active and uncontrolled infection. Patients with an infection under active treatment with antibiotics and whose infection is controlled may be entered into the study
• Current evidence of invasive fungal infection (blood or tissue culture); HIV or hepatitis C infection
• Hypersensitivity to cytarabine, daunorubicin or liposomal products
• History of Wilson's disease or other copper-related disorder