The purpose of this study is to determine whether TissueGene-C, an allogeneic human chondrocytes expressing Transforming Growth Factor(TGF)-b1, is effective and safe in patients with degenerative arthritis.

TissueGene-C is a biological new drug which consists of normal chondrocyte cells and transduced chondrocyte cells that express growth factor to modify osteoarthritis symptom for long term period.

During the Phase 3 clinical trial , we will compare TissueGene-C to placebo in 26, 52 weeks trial with 156 outpatients who have osteoarthritis. The outpatients are randomized to TissueGene-C or placebo in 1:1 ratio, and they will be monitored and recorded in terms of alleviating symptoms, sports activities, function of the knee, and the presence of adverse events.

Inclusion Criteria:

1. Male or female patients at least 19 years of age

2. Patients diagnosed with degenerative arthritis

3. Patients with IKDC(Knee Documentation Committee subjective score) score of 60 or below

4. Patients with 100 mm VAS(Visual Analog Scale) score of 40 or above

5. With Grade 3 osteoarthritis as determined by the radiographic criteria of Kellgren and Lawrence

6. With an International Cartilage Repair Society(ICRS) Grade III or IV cartilage damage in the major lesions, as confirmed through an MRI scan

7. With a Body Mass Index(BMI) of higher than18.5 and lower than 30

8. Patients who satisfies the clinical/radiational criteria by the American College of Rheumatology (ACR) guidelines, and applies to one of the following.

   • Older than 50
   • Morning stiffness for less than 30 minutes
   • Crepitus and Osteophytes

9. With major lesions concentrated in one section of the knee, and with the major lesions considered the main cause of the clinical symptoms

10. With no alleviation of the symptoms even after at least three months of non-surgical treatment

11. Healthy, with no major findings from the physical examination, hematology, serum chemistry, and urine tests, and no significant medical history

12. Agreed to use an effective contraceptive method during the study period

13. Voluntarily agreed to participate in this study, and signed the informed consent form

Exclusion Criteria:

1. Showed clinically significant hematology, serum chemistry, and urine test results at the screening visit

2. Regarding inclusion criteria 6. following patients should not be included

   • patients with a major lesion of ICRS grade 4 which is larger than 6cm2(for patient with ICRS grade 4)
   • patients with a major lesion of ICRS grade 3 which is larger than 6cm2(for patient without a ICRS grade 4),

3. Patient who had skin disease around target knee

4. patients who have a positive skin reaction to CS-10

5. Patients who had been administered with drugs such as oriental medicine, glucosamine and chondroitin within 14 days of baseline visit

6. Patients taking steroidal anti-inflammatory medications within 14 days of baseline visit

7. Patients with severe pain in other areas that could effect the diagnosis of the symptoms of the

8. History of surgery like arthroendoscopy within the past 6 months on the target knee

9. Patients who had been administered with immunosuppressants, including antirheumatic drugs (including methotrexate or antimetabolite), within the past 3 months

10. Patients who had been treated with physical therapy or herbal remedy (acupuncture, heat etc.) within 2 weeks of baseline visit

11. History of injection within the past 3 months on the target knee

12. Pregnant or breastfeeding female

13. With another joint disease apart from degenerative arthritis (e.g., systemic rheumatic inflammatory disease associated with the knee or chondrocalcinosis, hemachromatosis, inflammatory arthritis, necrosis of the trochanter, Paget's disease adjacent to a joint in the femur or tibia, ochronosis, hemophilic arthropathy, infectious arthritis, Charcot's disease in the knee joint, villonodular synovitis, synovial chondromas)

14. With an infectious disease, including HIV or hepatitis

15. With any of the following clinically significant diseases:

    • heart disease (e.g., myocardial infarction, arrhythmia, other serious heart diseases, coronary artery bypass graft)

    • kidney disease (e.g., chronic renal failure, glomerulonephritis)

    • liver disease (e.g., liver cirrhosis, fatty liver, acute or chronic liver disease)

    • endocrine disease (e.g., hyperthyroidism, hypothyroidism, thyroiditis, diabetes insipidus, Cushing's disease)

    • insulin-dependent diabetes mellitus

    • medical history of past or current malignant tumor

    • In particular, the tumors that TissueGene-C may aggravate can be screened using the following tests:

      • Leukemia (White Blood Cell level in the hematology)
      • Osteochondroma, Chondromas, Chondroblastoma, Chondromyxoid fibroma, Chondrosarcoma (Alkaline phosphatase level in the hematology)

16. Participated in another clinical trial (using the investigational drug or a medical device) within 30 days before enrollment in this study

17. Patients who administered the TissueGene-C from past clinical trial

18. Considered inappropriate by the investigator for participation in this study