There is a need for new reagents for the production of optically pure pharmaceuticals. For this purpose, the investigators propose to develop for commercialization the new biphasic biocatalyst system for organic synthesis for which feasibility was successfully established in the Phase I work. The general objective is to develop the Phase I methodology in which cofactor dependent enzymes were used in organic solvents for the stereospecific production of high value compounds such as pharmaceuticals. The Phase I results demonstrated that horse liver alcohol dehydrogenase (HLADH), along with its cofactor nicotinamide adenine dinucleotide (NAD(H)), can be immobilized in a hydrogel, and operate in a bulk organic solvent to produce optically pure compounds from optically inactive precursors. The specific objective of Phase II will be to develop this new synthetic methodology into a general procedure for the low cost production of pharmaceutical and agricultural compounds using immobilized cofactor dependent oxido-reductase enzymes in organic solvents. The expected result is a commercially viable prototype immobilized oxido- reductase catalyst capable of operating in a bulk organic solvent. The three researchers submitting this proposal have collaborated successfully to establish the feasibility of an immobilized, cofactor-dependent, enzyme system for stereoselective hydrolysis and transesterification in organic solvent.