A Phase III Study of CLS2901C in Patients With Osteoarthritis of the Knee

Inclusion Criteria:

1. Male or female aged 20 to 79 years at informed consent.

2. Diagnosis of OAK classified as Kellgren-Lawrence (K-L) Grade 2 to 4 based on plainlower extremity X-ray.

3. OAK eligible for proximal tibial osteotomy based on the following criteria: Range ofmotion (ROM): >=120 degree flexion, <=5 degree extension

4. Preoperative cartilage defect of the femoral condyle/trochlear groove or medialtibial condyle with an area of >=4 cm2 per defect site.

5. Total defect area of <=21 cm2 in individuals with multiple cartilage defects.

6. Body mass index (BMI) <30.

7. No coexisting ligament injury requiring surgery, and no meniscal injury requiringsuturing or surgical repair other than partial resection, in the target knee.

8. No history of ligament reconstruction, meniscal suturing, total meniscectomy or bonemarrow stimulation, and no history of treatment with regenerative medicine products (including investigational products), cell processing products or gene therapy, inthe target knee.

9. No history of treatment with hyaluronic acid products and/or opioid for severe painin the target knee within 1 month prior to informed consent.

10. No history of treatment with corticosteroid products and/or immunosuppressive drugin the target knee within 3 months prior to informed consent.

11. No history of platelet-rich plasma (PRP) therapy within 6 months prior to informedconsent.

12. Non-smoker; provided, however, that smokers will be eligible for study entry if theyconsent to abstain from smoking from 3 months prior to proximal tibial osteotomy orproximal tibial osteotomy+RMSC until postoperative bone healing.

13. Written informed consent to participate in the study on a voluntary basis.

Exclusion Criteria:

1. Requires surgical treatment of the non-target knee during the study period.

2. Any coexisting illness that would interfere with surgery under general anesthesia orthat would affect knee surgery.

3. Systemic inflammatory disease such as rheumatoid arthritis.

4. Systemic Active infectious disease such as bacterial, fungal or viral infection.

6. Serious disease such as liver disorder, renal disorder, heart disease, lung disease, blood disease or metabolic disease that would make the patient unsuitable for study entry in the opinion of the investigator.

7. Diagnosed or suspected malignant tumor or history of malignant tumor within the past 5 years.

8. Uncontrolled psychiatric disorder. 9) Poorly-controlled diabetes (HbA1c: >7.0%). 10) septic arthritis of the target knee. 11) Women who are pregnant or breastfeeding, or women of childbearing potential. Women of childbearing potential must agree to use the following contraceptive methods (i.e., contraceptives and medical devices that are approved/certified in Japan) or to abstain completely from sexual intercourse from the time of informed consent and for the study duration (excluding the follow-up period) in order to be eligible for study entry. (a) Primary contraceptive methods: Oral contraceptives, intrauterine devices (IUDs) including progesterone-releasing systems. (b) Adjunctive contraceptive methods: Condoms Use of a primary contraceptive method is mandatory, whereas use of the adjunctive contraceptive method must be in conjunction with a primary contraceptive method. Given that oral contraceptive doses can be missed and that their effects may be diminished when used concomitantly with other medications or dietary health supplements, subjects should consider changing their primary contraceptive method.

9. Participated in another clinical study within the past 6 months, currently participating in another clinical study, or planning to participate in another clinical study while also participating in the present study.

10. Known history of hypersensitivity to antibiotics (benzylpenicillin potassium, streptomycin sulfate, amphotericin B).

11. Known history of hypersensitivity to bovine-derived materials. 15) Any other reason the investigator deems the subject unsuitable for study entry.