To establish the efficacy and safety of CARTISTEM®, a combination product composed of allogeneic human umbilical cord blood-derived mesenchymal stem cells (hUCB-MSCs) formulated with a cross-linked sodium hyaluronate (HA) hydrogel, CARTISTEM® compared to the surgical comparator of debridement in Subjects with knee cartilage lesions and osteoarthritis.

This trial is intended to provide evidence of the superiority of CARTISTEM® to reduce knee pain and improve knee function compared to debridement for Subjects with knee cartilage lesions and osteoarthritis at 2-years post-treatment.

Additionally, this trial is intended to intended to explore whether CARTISTEM® may have disease-modifying effects on osteoarthritis progression through the use of semi-quantitative MRI assessment.

Inclusion Criteria:

1. Age ≥ 18 and ≤ 75 years old.

2. Knee Osteoarthritis diagnosed in the index knee according to the clinical definition of American College of Rheumatology (ACR) guidelines at screening.

3. Failed conservative knee osteoarthritis treatment for at least 3 months prior to consent (weight reduction, physical therapy, injections, pain medications, etc.).

4. Kellgren-Lawrence (KL) in the index knee of grade 2 to 3 as determined by independent radiologist review of study X-Ray.

5. Clinically relevant femoral cartilage defects classified using modified Outerbridge Grade 3 or 4 in index knee with combined lesion area ≥ 2 cm2 and ≤ 9 cm2 and at least a single femoral lesion ≥ 2 cm2 as determined by independent radiologist review of study MRI.

6. Body Mass Index (BMI) ≤ 35 kg / m2 .

7. VAS PAIN index knee score ≥ 40 to ≤ 90 based on 100-point scale at screening.

8. VAS PAIN contralateral knee score ≤ 30 based on 100-point scale at screening.

9. WOMAC® FUNCTION index knee mean score ≥ 25 to ≤ 90 based on 100-point scale at screening.

10. WOMAC® Pain index knee mean score ≥ 40 to ≤ 90 based on 100-point VAS (visual analogue scale) at screening.

11. Subjects must be willing to abstain from treatments in the index knee from the time the informed consent is signed until after the last study follow up visit.

12. Subjects must be willing to discontinue analgesics except:

    • Rescue medication (acetaminophen) allowed for break-through pain throughout the study.
    • Subjects must be willing to discontinue use of all pain medications at least 48 hours prior to baseline assessment and each follow up visit.
    • Limited postoperative NSAID use is permissible per IND clinical guidance and site manual, provided washout before scheduled efficacy assessments.
    • Post operative narcotics.

13. Subjects with stage 3 hypertension (systolic ≥ 180 mm Hg and diastolic ≥ 120 mmHg) must have blood pressure (BP) controlled prior to surgical procedure.

14. Subject's central lab results are within normal ranges or deemed as not clinically significant by investigator for CARTISTEM® treatment or surgical comparator.

15. Female Subjects of childbearing potential must agree to practice adequate methods of birth control to prevent pregnancy during the study.

16. Subjects must be able to comply fully with the rehabilitation requirements.

17. Subjects must be able to understand and comply with the requirements of the study.

18. Subjects must voluntarily provide written informed consent.

Exclusion Criteria:

1. Subject received an IA injection of Hyaluronic Acid (HA), Platelet Rich Plasma (PRP), Bone Marrow Aspirate / Concentrate (BMA / BMAC), long-acting / conventional steroid, or investigational drug in either knee within 3 months of signing informed consent. Note: injections of the contralateral knee are allowed during the trial.
2. Bone marrow lesion (BML) grade 3 on femur, tibia, or patella except at femoral lesion area (BML grade 3 allowed) in index knee as determined by independent radiologist review of study MRI.
3. KL index knee grade 0, 1 or 4 as determined by independent radiologist review of study X-Ray.
4. KL Contralateral knee severity grade 4 as determined by independent radiologist review of study X-Ray.
5. Anatomical axis varus or valgus malalignment ≥ 6° in either knee as determined by independent radiologist.
6. Joint ligament instability in index knee ≥ Grade 3 or ligament instability that would require surgical intervention as determined by investigator or designee.
7. Complete meniscal deficiency, meniscal root tears and / or severe meniscal extrusion as determined by independent radiologist.
8. Kissing bipolar lesions (tibial or patellar) Outerbridge 4 exceeding 25% of the femoral lesion area in size and/or penetrating through the subchondral bone as determined by independent radiologist.
9. Surgery of the index knee joint within 6 months of signing the informed consent. Investigator confirms that Subject has recovered from any prior surgical intervention to enable treatment within this study protocol. No radiation therapy of the index knee as determined by documented medical history.
10. Chronic inflammatory articular diseases such as rheumatoid arthritis, gout, pseudogout, gouty arthritis, or fibromyalgia as determined by documented medical history.
11. Bone disorders of index knee: osteonecrosis including avascular necrosis (AVN); Osteochondritis dissecans (OCD); Spontaneous Osteonecrosis of the Knee (SONK); Subchondral Insufficiency Fracture (SIF); Subchondral / intraosseous bone cyst >4mm at femoral treatment location, bone tumors, bone contusion or stress fracture, pathologic fracture, and other bone exclusionary findings as determined by independent radiologist review of study MRI or X-ray.
12. Joint disorders of the index knee including infection, osteomyelitis, soft tissue tumors, and bone marrow infiltration as determined by independent radiologist review of study MRI or X-ray.
13. Diseases or disorders including Paget's disease, ochronosis, acromegaly, haemochromatosis, Wilson's disease, genetic disease (hyperkinesia, etc.), or genetic collagen disorder as determined by documented medical history.
14. Vascular or neurological disorders of the lower extremities as determined by documented medical history. Note: Varicose veins are not an exclusion criteria.
15. Autoimmune diseases - documented medical history. Addison's Disease, Dermatomyositis, Irritable Bowel Diseases (IBD) or Irritable Bowel Syndrome (IBS) (including Crohn's disease and ulcerative colitis), Multiple sclerosis, Myasthenia gravis, Pernicious anemia, Rheumatoid Arthritis, Sjogren's Syndrome, systemic Lupus erythematosus. Note: Celiac disease is not an exclusion criterion.
16. Subject has documented systemic diseases such as but not limited to HIV, hepatitis, HTVL, syphilis, and blood coagulopathies (including hemophilia, Von Willebrand disease, thrombocytopenia, disseminated intravascular coagulation (DIC)). Note: Occurrence of Deep Vein Thrombosis ≥ 5 years prior to consent is not an exclusion.
17. Subject is taking anticoagulant medication (e.g., warfarin, (Coumadin), apixaban (Eliquis), rivaroxaban (Xarelto), clopidogrel (Plavix) or equivalent) but not excluding 81mg aspirin.
18. Uncontrolled diabetes with HbA1c > 8% as determined by documented medical history.
19. Infectious disease requiring parenteral administration of antibiotics.
20. Administered immunosuppressants such as Cyclosporin A or azathioprine within 6 months of signing the informed consent.
21. Subject has received chemotherapy in the 12 months prior to signing informed consent.
22. Subject has received other allogeneic stem cell therapy.
23. Prior cartilage repair procedure (such as MACI, ACI, OATS, OCA, Agili-C) in the index knee or the index knee contains a uni-compartmental knee replacement. Revision of a prior microfracture procedure is allowed if subchondral plate remains intact and lesion is lacking significant intra-lesional osteophytes.
24. Prior invasive knee osteoarthritis treatment including subchondroplasty, cryoneurolysis, genicular nerve ablation, genicular artery embolization, in situ MISHA (medial knee implanted shock absorber), prosthetic implants or other knee implants or invasive treatments for the index knee.
25. Known history of hypersensitivity / allergy to hyaluronan.
26. Currently pregnant or nursing.
27. Psychotic diseases, epilepsy, or any history of such diseases.
28. Known substance or alcohol abuse in the prior 3 years.
29. Contraindication to MRI imaging or unwillingness to undergo MRI.
30. Currently receiving or in litigation related to workman's compensation, personal injury, or disability claims.
31. Considered by principal investigator inappropriate for the clinical trial due to any reasons other than those listed above.

Baseline PRO Assessment Inclusion Criteria:

1. VAS PAIN index knee score ≥ 40 to ≤ 90 based on 100-point scale at baseline PRO assessment.
2. WOMAC® FUNCTION index knee mean score ≥ 25 to ≤ 90 based on 100-point scale at baseline PRO assessment.

Baseline Surgical Inclusion Criteria:

1. Treated cartilage defects Outerbridge Grade 3 or 4 in index knee with combined femoral lesion area ≤ 9 cm2 as determined arthroscopically or by arthrotomy by treating physician.

Baseline Surgical Exclusion Criteria:

1. Meniscal root tears and / or severe meniscal extrusion or non-functional meniscus as determined arthroscopically or by arthrotomy by treating physician.
2. Kissing bipolar lesions (tibial or patellar) Outerbridge 4 exceeding 25% of the femoral lesion area in size and/or penetrating through the subchondral bone as determined arthroscopically or by arthrotomy by treating physician.
3. Bone or joint disorders of the index knee including infection, osteomyelitis, soft tissue tumors, bone marrow infiltration, osteonecrosis (AVN or OCD) as determined arthroscopically or by arthrotomy by treating physician.
4. Identification of prior cartilage repair procedure (such as MACI, ACI, OATS, OCA, Agili-C) or uni-compartmental knee replacement in the index knee as determined arthroscopically or by arthrotomy by treating physician. Revision of a prior microfracture procedure is allowed if subchondral bone remains intact and lacking significant intra-lesional osteophytes.
5. Subject is documented as pregnant based on hCG urine or blood test prior to surgery.