The main purpose of the study is to find out if, after 4 weeks of dosing, signs of the investigational drug AGG-523, or its effects, can be measured in urine, blood, or the knee joint. A secondary purpose is to evaluate the safety of taking the drug either once a day or twice a day for 4 weeks.

This is a multicenter study of 2 dosing regimens of AGG-523, an investigational aggrecanase inhibitor that is taken orally. Potential study subjects are those with severe Osteoarthritis (OA) of the knee who are scheduled to undergo total joint replacement surgery.

Study subjects will be randomly assigned to 1 of 2 dosing regimens (once-daily or twice-daily dosing) of either 1800 mg AGG-523 or placebo, which will be taken during the 4-week period before having the total knee replacement. The treatments will be assigned using a 4:1 ratio of active to placebo treatment, which means that more subjects will receive the active treatment than the placebo (see below).

• AGG-523 1800 mg once a day (32 subjects)
• AGG-523 900 mg twice a day (32 subjects)
• Placebo once a day (8 subjects)
• Placebo twice a day (8 subjects)

Study subjects will have weekly evaluations as outpatients during the 4-week dosing period. The purpose of these evaluations is to monitor for potential complications, ensure compliance with taking the study drug, ask about the use of other medications, and, when necessary, replenish the supply of study drug. These assessments may be conducted by telephone, as a home visit, or by having the subject travel to the clinic for an outpatient office visit. A final (in person) visit will happen 2 weeks after having total knee replacement surgery.

Inclusion Criteria:

• Generally healthy, men or women, at least 55 years old
• Osteoarthritis of the knee requiring total knee replacement surgery

Exclusion Criteria:

• Other types of arthritis, like rheumatoid arthritis
• Recent major surgery (in past 3 months)
• Recent knee injections (in past 6 months)