SK Bioscience said Friday that the company will invest 2.4 trillion won ($1.79 billion) over the next five years into new vaccine development and the expansion of manufacturing facilities both here and abroad.

“The next five years and the company’s investments made during the period will determine SK Bioscience’s future,” said SK Bioscience CEO Ahn Jae-yong during a press conference held in Seoul.

The size of the latest investment is around five times bigger than investment made over the last five years, between 2018 and 2022.

Due to the heavy expenditures, Ahn expects SK Bioscience will post operating losses for the next three years but make a turnaround afterwards.

Of the total amount of the investment, Ahn said around 1.3 trillion won will be spent on expanding its facilities and equity investments, which include a 300 billion won investment in building the company’s Songdo Global Research & Process Development Center and expanding its manufacturing facility in Andong, North Gyeongsang Province.

The company will annually spend between 200 and 300 billion won in research and development, while allocating 500-600 billion won for mergers and acquisitions.

SK Bioscience’s goal is to step up as a global vaccine developer, Ahn noted.

Under its mid-term investment plan, SK Bioscience aims to develop five new vaccines, including pneumococcal vaccine SKYPAC, human papillomavirus vaccine HPV-10, a recombinant shingles vaccine, a pan-sarbecovirus vaccine and a respiratory syncytial virus vaccine.

SK Bioscience may start SKYPAC’s phase three clinical trials this year. By 2027, the company plans to launch its HPV-10, shingles and pan-sarbecovirus vaccines, while introducing its RSV vaccine in 2029.

In terms of overseas manufacturing facilities, Ahn said SK Bioscience is currently in discussions with countries in the Middle East, Africa, Southeast Asia and South America. The company expects to finalize contracts with at least two countries during this year.

SK Bioscience will establish joint ventures in foreign countries where foreign governments will make their own investments to build vaccine manufacturing and research facilities in their countries. SK Bioscience expects to receive 30-40 percent of the shares in the joint ventures in return for transferring related technologies.

When asked about SK Bioscience’s mergers and acquisitions plans, Ahn said that the company is expected to ink two M&A deals, one with a cell and gene therapy developer and another one with a vaccine developer. Ahn added at least one transaction will be completed within this year.

About the possibility of sizing up its investment, Ahn hinted that doing so is possible as the company has 1.36 trillion won in cash. With debt and equity financing, the company could additionally raise a total of 3 trillion won in investment, he added.

The company’s investment plan came amid its declining earnings. According to the company’s earnings report released on Thursday, SK Bioscience posted an operating loss of some 29.1 billion won in the first quarter of this year. The company’s sales during the three-month period also decreased 76.4 percent to reach 20.5 billion won, mainly due to reduced sales from contract manufacturing of the AstraZeneca and Novavax vaccines.

The CEO hinted at a short-term improvement in the company’s earnings. He said SK Bioscience’s revenue should reach around 220 billion won next year, up from 44 billion won last year as the company newly launches its vaccines in overseas markets.

Ahn said SK Bioscience has currently received regulatory approvals for its cell culture-based influenza vaccine, SKYCellflu, from 11 countries. The company hopes to clear regulatory procedures for its shingles vaccine, SKYZoster, and chickenpox vaccine SKYVaricella down the road.

In the near future, as early as the first half of this year, SK Bioscience also expects to sign a new contract manufacturing deal with an international pharmaceutical company, which could also help the company make up its losses.