BUDAPEST--Pharmaceutical firm Richter Gedeon Nyrt., Hungary's largest home-grown drug maker signed a deal with US-based peer Evestra Inc on providing it with a $5 million convertible loan for drug development.

MAIN FACTS:

- The financing will help Evestra to accelerate the development of its women's health product pipeline into clinical stages.

- Under the terms of the agreement, after three years Richter has an option to decide whether the loan is to be reimbursed, including earned interest, or converted into an equity stake in Evestra.

- Evestra's products are based on medicinal chemistry and vaginal drug delivery technology, and address so far unmet medical needs in women's health areas.

Write to Veronika Gulyas at veronika.gulyas@wsj.com; Twitter: @VeronikaGulyas1