PhII Neo-Adjuvant Letrozole & Lapatinib in Pts w/HER2+ & Hormone Receptor+ Operable Breast CA SPORE

OBJECTIVES: Primary * To determine the pathological complete response in patients with HER2-positive and hormone receptor-positive operable stage I-III breast cancer. Secondary * To determine tumor cell apoptosis in situ as measured by TUNEL analysis of tumor sections from fresh frozen or paraffin-embedded core biopsies. (Parts 1 and 2) * To determine whether EGFR, P-EGFR, P-HER2, Ser118 P-ERα, P-Akt, and P-MAPK (by IHC using fresh frozen or paraffin-embedded core biopsies) predict the inhibition of proliferation in situ (Ki67) and/or induction of cell death (TUNEL). (Parts 1 and 2) * To determine the safety profile of neoadjuvant letrozole and lapatinib. (Part 2) * To evaluate tumor response to treatment as measured by ultrasound. (Part 2) * To evaluate the rate of breast conservation surgery. (Part 2) * To determine the inhibition in cell proliferation in situ in response to letrozole and lapatinib as measured by the change in percentage of Ki67-positive tumor cells (determined by IHC using tumor sections from fresh frozen or paraffin-embedded surgical material). (Part 2) OUTLINE: This is a randomized, double-blind, placebo-controlled, two-part study. * Part 1: Patients are randomized to treatment arm. * Patients receive lapatinib and letrozole once daily for 2 weeks. * Patients receive letrozole and placebo once daily for 2 weeks. Patients then proceed to part 2. * Part 2: All patients receive lapatinib and letrozole once daily for 14 weeks. Patients then undergo surgical resection of disease. Patients undergo tissue sample collection at baseline, at 2 weeks, and then at the time of surgery for biomarker and laboratory studies. Samples are analyzed by IHC and TUNEL.