Removes, in the presence of oxygen, 4 hydrogen atoms from delta-L-(alpha-aminoadipyl)-L-cysteinyl-D-valine (ACV) to form the azetidinone and thiazolidine rings of isopenicillin. N-[(5S)-5-amino-5-carboxypentanoyl]-L-cysteinyl-D-valine + O2 = 2 H2O + isopenicillin N Antibiotic biosynthesis; penicillin G biosynthesis; penicillin G from L-alpha-aminoadipate and L-cysteine and L-valine: step 2/3. Belongs to the iron/ascorbate-dependent oxidoreductase family.