Pilot Trial of KD018 With Neo-Adjuvant Concurrent Chemo-Radiation Therapy in Patients With Locally Advanced Rectal Cancer

Inclusion Criteria: * Patients must have histologically confirmed T3-T4 and N0-N2, M0 adenocarcinoma of the rectum with the inferior margin within 16 cm from the anal verge. * Patients must have had a Transrectal ultrasound (TRUS)/endoscopic ultrasound (TEUS) staging within two months prior to treatment start. * Patients must have had a pelvic MRI within 28 days prior to the initiation of treatment. * Patient must have the ability to swallow multiple capsules. * Women of child bearing potential between the ages of 18 and 60 years of age must have a negative urine pregnancy test prior to undergoing simulation in preparation for radiation therapy to the pelvis. * ECOG performance status of 0 to 1 within 28 days prior to initiation of treatment. * Patients must have normal organ and marrow function as defined below. All laboratory values must be obtained within 14 days prior to initiation of treatment: * absolute neutrophil count \>= 1,500/mcL * platelets \>= 100,000/mcL * hemoglobin \>= 8.0 g/ dL * serum bilirubin \< 1.5 times the upper limit of of normal (ULN) * serum AST, ALT \< 2.5 times ULN * serum Creatinine ≤ 1.5 times ULN * The effects of radiation on the developing human fetus are known to be teratogenic. For this reason, all women and sexually active men must agree to use adequate contraception (hormonal or barrier method of birth control; abstinence) prior to study entry and for the duration of study participation. Should a woman become pregnant or suspect she is pregnant while participating in this study, she should inform her treating physician immediately. * Patients must have the ability to understand and the willingness to sign a written informed consent document. Exclusion Criteria * History of clinically significant Crohn's disease or inflammatory bowel disease (IBD). * Active collagen vascular disease. * History of previous abdominal or pelvic radiation therapy. * History of previous systemic chemotherapy unless given curatively for other malignancy now \> 5 years without evidence of recurrence. * Patients with suspected or confirmed poor compliance, mental instability, or prior or current alcohol or drug abuse deemed by the investigator to be likely to affect their ability to sign the informed consent, or undergo study procedures will be excluded. * Pregnant women are excluded from this study because radiation has the potential for teratogenic or abortifacient effects. Because there is an unknown but potential risk for adverse events in nursing infants secondary to treatment of the mother with either KD018 or Capecitabine, breastfeeding should be discontinued if the mother is treated. * Patients with known HIV infection or viral hepatitis. * Patients with Dihydropyrimidine dehydrogenase (DPD) deficiency.