Forms part of the pathway for the biosythesis of the β-lactamase inhibitor clavulanate in Streptomyces clavuligerus. It has been proposed  that L-N2-(2-carboxyethyl)arginine is first converted into an acyl-AMP by reaction with ATP and loss of diphosphate, and that the β-lactam ring is then formed by the intramolecular attack of the β-nitrogen on the activated carboxy group.
Zhou, J., Kelly, W.L., Bachmann, B.O., Gunsior, M., Townsend, C.A. and Solomon, E.I. Spectroscopic studies of substrate interactions with clavaminate synthase 2, a multifunctional α-KG-dependent non-heme iron enzyme: Correlation with mechanisms and reactivities. J. Am. Chem. Soc.123 (2001) 7388–7398. [PMID: 11472170]
Townsend, C.A. New reactions in clavulanic acid biosynthesis. Curr. Opin. Chem. Biol.6 (2002) 583–589. [PMID: 12413541]
Bachmann, B.O., Li, R. and Townsend, C.A. β-Lactam synthetase: a new biosynthetic enzyme. Proc. Natl. Acad. Sci. USA95 (1998) 9082–9086. [PMID: 9689037]