Used primarily as a key intermediate in the synthesis of pharmaceuticals, particularly in the development of antiviral and anticancer agents. Its structure supports the formation of more complex heterocyclic compounds, making it valuable in medicinal chemistry research. It also serves in the preparation of bioactive molecules and natural product analogs due to its reactivity and ability to form stable derivatives. Additionally, it finds use in the study of enzyme inhibitors where its lactam and hydroxyl functional groups participate in binding interactions.