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The primary objective is to determine whether a surgical intervention involving removing of the calcified cartilage cap in patients with Grade II Kellgren-Lawrence osteoarthritis influences the incorporation of labeled bone marrow aspirate concentrate (BMAC)-derived cells within the cartilage regenerate vs labeled BMAC cells delivered after arthroscopy without removing of the calcified cartilaginous layer. The survival and incorporation of the BMAC labeled cells will be evaluated with MRI using the Ferumoxytol infusion stem cell labeling technique. The second arm of the study evaluating cell fate after injecting stem cells under a rotator cuff repair will also be explored.

The secondary objectives are to 1) determine which surgical intervention leads to better clinical outcomes as measured by Knee Injury and Osteoarthritis Outcome Score (KOOS) at 12 months, and 2) determine who long we can track the labeled-BMAC cells in the knee.

Articular cartilage repair and regeneration has become a focal point for scientists and surgeons in search for a biological treatment for osteoarthritis that has failed non-operative management. Surgeons have begun to harvest and centrifuged bone marrow aspirate to produce bone marrow aspirate concentrate (BMAC) in hopes that the mesenchymal stem cells in the bone marrow aspirate can stimulate cartilage regeneration in areas of articular cartilage deficiency. This study is a first-in-human blinded randomized clinical trial using labeled BMAC cells in adults diagnosed with grade II-III Kellgren-Lawrence osteoarthritis.

This is a single site study where 20 cases among eligible patients will be identified and randomly assigned to either the control (no calcified cartilage) or experimental (calcified cartilage removed) group. A power analysis will be performed after 20 patients to determine the total number of patients required to reach adequate power.

A patient will receive an infusion of Feraheme 2 days before the procedure and a baseline MR Pelvis and knee. A nurse will be present at all times during the infusion to monitor vitals. On the day of the procedure patient will undergo harvesting of the bone marrow from the pelvis and arthroscopy procedure involving menisectomy, synovectomy and debridement. Patients in the experimental group will also undergo removal of the calcified cartilage cap. The bone marrow aspirate will be centrifuged and about 5-7 cc of BMAC injected into knee. MRIs will be done at the 2 day mark for confirmation of the labeling of the mesenchymal cells, and at the two week and 3 month mark. Patient related Outcomes will be measured using the Knee injury and Osteoarthritis Score at 12 months follow up.

Inclusion Criteria:

1. Adults aged 30-70 patients with Kellgren grade II-III osteoarthritis,
2. Symptomatic knee pain greater than 6 months
3. At least one discrete contained chondral defect
4. Failed a minimum of 6 weeks of physical therapy
5. Grossly normal knee alignment: <5 degrees of varus or valgus alignment
6. Lesion located on medial or lateral femoral condyle or trochlea

Exclusion Criteria:

1. Radiographs demonstrating either no or little osteoarthritis (Kellgren-Lawrence Grade 0 or 1)
2. Diagnosis of Inflammatory (RA, JIA etc) or infectious arthritis
3. Malalignment of mechanical axis > or = 5 degrees of varus/valgus
4. Cortisone and/or Hyaluronic acid intra-articular injection within the last 3 months
5. Ligamentous knee instability
6. The subject is on ongoing specific osteoarthritis drugs such as chondroitin sulphate, diacerein, N-glucosamine, piascledine, capsaicin in the 2 weeks prior to baseline treatment
7. BMI > 30
8. Currently pregnant or planning to become pregnant (no MRI possible).

Patients will not know if they received the surgical intervention that entails removing of the calcified cartilage or not.