A Phase 1, Double-Blind, Randomized, Single Dose Escalation Safety Study of Intra-articular OP-1 in Subjects With Osteoarthritis of the Knee

Inclusion Criteria: * Ambulatory subjects with OA of the knee with symptoms for at least 6 months and pain on the majority of days in the last 30 days. Symptoms must include knee joint pain, and may include crepitus, swelling and/or effusion of the knee. In subjects with bilateral knee OA, the more symptomatic knee is the index knee. Subjects may be taking NSAIDs, analgesics and/or undergoing physical therapy. * Age \> 40 years * Radiographic evidence on posteroanterior (PA) and lateral standing, flexed x-rays of at least one osteophyte. * Subjects must be willing to abstain from other intraarticular treatments of the knee or any surgery for 12 weeks on study. * Ability to comply with the study and give informed consent. * Subjects must be willing to abstain from NSAIDs or analgesic medications (except for acetaminophen) for 48 hours prior to assessments, at screening, day 1 and week 4, 8, 12, and 24 visits. Exclusion Criteria: * Concurrent medical or arthritic conditions which could interfere with evaluation of the index knee joint including fibromyalgia. * Subject has received arthroscopic or open surgery to the index joint within 6 months of study start * The presence of surgical hardware or other foreign body in the index joint * Corticosteroid, hyaluronic acid or other intraarticular injection within 3 months of study start * Use of chondroitin and/or glucosamine within 4 weeks prior to study start * History of Reiter's syndrome, rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, lymphoma, arthritis associated with inflammatory bowel disease, sarcoidosis or amyloidosis * Clinical signs and symptoms of active knee infection or crystal disease * Clinically significant cardiac disease, consult study Medical Monitor * Have an increased predisposition for the development of infections * History of malignancy, with the exception of resected basal cell carcinoma, squamous cell carcinoma of the skin, or resected cervical atypia or carcinoma in situ. * More significant pain from the back or the hip than the knee * Skin breakdown at the knee where the injection would take place * Planned knee replacement during the study period * For subjects undergoing MRI, the presence of contraindications to having an MRI at the specific imaging facility. * For subjects undergoing MRI, an estimated Glomerular Filtration Rate (eGFR) of \<45 mL/min calculated using the Cockcroft-Gault estimate for eGFR as follows: eGFR = (140-age \[yrs\]) X weight \[kg\] / serum creatinine \[mg/dL\] X 72 (X 0.85 for women) * For subjects undergoing MRI, known allergy to gadolinium contrast material * Has known or clinically suspected infection with human immunodeficiency virus (HIV), hepatitis C or B viruses * Has participated within 30 days or will participate concurrently in another investigational drug or vaccine study * Has a history of drug or alcohol dependence in the past 3 years * Known sensitivity to lidocaine or OP-1 * Female with reproductive capability * Has other serious, non-malignant, significant, acute or chronic medical or psychiatric illness that, in the judgment of the Investigator, could compromise subject safety, limit the subject's ability to complete the study, and/or compromise the objectives of the study. * Prior use of a bone morphogenetic protein.