DAOCS catalyzes the step from penicillin N to deacetoxy-cephalosporin C, which is used as a substrate by DACS to form deacetylcephalosporin C. 2-oxoglutarate + O2 + penicillin N = CO2 + deacetoxycephalosporin C + H2O + succinate 2-oxoglutarate + deacetoxycephalosporin C + O2 = CO2 + deacetylcephalosporin C + succinate Antibiotic biosynthesis; cephalosporin C biosynthesis. Belongs to the iron/ascorbate-dependent oxidoreductase family.