EB-OC is a tissue engineered osteochondral tissue graft comprising of a living tissue engineered cartilage layer attaching to a bone scaffold. The goal of this clinical trial is to learn about in the safety and efficacy of the EB-OC graft in participants who require repair of chondral/osteochondral defects of the knee. The main question it aims to answer is if the EB-OC graft works to regenerate osteochondral tissue comprising of native hyaline cartilage anchors to the regenerated bone. Participants will receive treatment of either the EB-OC Graft implantation in an arthrotomy procedure or abrasion chondroplasty. Researchers will compare results from the EB-OC graft to abrasion chondroplasty to assess overall safety and effectiveness.

This is a prospective, randomized, controlled, open-label, first-in-human Phase I/IIb study to evaluate the safety and efficacy of the EB-OC graft in the repair of full thickness chondral/ osteochondral defects of the knee as compared to abrasion chondroplasty. Enrollment in this study is expected to occur over 12 months. Subjects will be evaluated for safety and efficacy for 24 months post-surgery. It is anticipated that the study will be completed in approximately 36 months.

EB-OC comprising of a living tissue engineered cartilage layer attaching to a bone scaffold. The living tissue engineered cartilage layer is a cartilage-like tissue grown in the lab from an allogeneic (from donor) bone-marrow derived mesenchymal stem cells that have been induced to under cartilage development refered as Drug Substance EB-CMB.

Inclusion Criteria:

1. Subject is male or female, between 18 and 65 years of age

2. Subject's body mass index (BMI) is ≤ 35 kg/m2.

3. Subject has up to two symptomatic, full-thickness cartilage defects of the knee femoral condyle with or without bone involvement that are:

   1. Located on the femoral condyles or femoral trochlea
   2. Each between 0.75 and 3 cm2 in area on screening images as confirmed by an independent radiologist
   3. Classified as International Cartilage Repair Society (ICRS) grade 3 or 4.
   4. Has baseline Knee Injury and Osteoarthritis Outcome Score (KOOS) Pain <65 and KOOS Activities of Daily Life <70.

4. Subject is willing and able to provide informed consent and comply with study requirements.

5. Subject agrees to actively participate in a strict rehabilitation protocol and follow-up program.

6. For women of childbearing potential, subject must have a negative pregnancy test at Screening, cannot be lactating and must be willing to use adequate contraception throughout study participation.

   Note: Adequate contraception methods will include the following: Abstinence, Oral Contraceptives, Barrier Methods (Condoms, IUD's), or surgical sterilization.

7. Subject is willing to give up the use of narcotics for 6 months post-surgery and use and record alternative pain medications (e.g., acetaminophen, or narcotic analgesics, if prescribed).

Note: Post-surgical use of aspirin for clot prevention and narcotics for immediate post-surgical pain are acceptable.

Exclusion Criteria:

1. Lesions on the opposing surface of the tibia that are classified as ICRS grade 3 or 4.

2. Lesions on the opposing surface of the patella that are classified as ICRS grade 3 or 4 if a trochlear defect is being treated.

3. Any existing prosthetic implants in the index knee.

4. History of knee surgery in the index knee within 6 months prior to screening.

5. Has osteoarthritis of Kellgren-Lawrence Grade ≥3 as diagnosed on standing radiographs in the index knee.

6. Known history of hypersensitivity to gentamicin, other aminoglycosides, or products of bovine origin.

7. Inflammatory arthritis, inflammatory joint disease, or uncorrected congenital blood coagulation disorders.

8. Current infection or history of infection in the index knee joint.

9. Current skin infection of the index knee joint or skin infection of the index knee joint within the past 3 months.

10. Osteochondral defect greater than 7 mm in depth.

11. Avascular necrosis (AVN) or osteonecrosis (ON).

12. Meniscus tears or defects that require concomitant or prior removal of >50% of meniscus in the index knee.

13. Varus or valgus malalignment exceeding 5° in either knee.

14. Need for corrective concomitant osteotomy (tibio-femoral or patellofemoral).

15. Symptomatic musculoskeletal condition in the lower limbs that could impede efficacy measures in the target knee.

16. Diagnosed musculoskeletal cancer or any diagnosed cancer, other than musculoskeletal if not on long term remission (e.g., at least 5 years or negative biopsy at last exam), except basal cell carcinoma.

17. Clinically significant abnormalities in vital signs at the time of screening defined by

    • Systolic BP >140 or <90 mmHg or diastolic BP >90 or <60 mmHg
    • Pulse <60 or >100 bpm
    • Respiratory Rate <9 or >20
    • Temperature >99 °F

18. Hemoglobin, platelet, white blood cell count, creatinine, aspartate aminotransferase (AST), and alanine aminotransferase (ALT), prothrombin time (PT), and partial thromboplastin time (PTT) below the lower limit of normal or above the upper limit of normal.

19. Active infection (e.g., HIV, viral hepatitis, syphilis, cellulitis, respiratory infection, etc.).

20. Alcohol and drug (including medication) abuse.

21. Subjects with any contraindications to MR imaging.

22. Participation in concurrent trials or in previous trial within 90 days of signing informed consent.

Intra-Operative Exclusion Criteria

1. Greater than 2 defects requiring treatment
2. A symptomatic defect with greater than 5 mm of bone loss