Investors looking to cash in on the fast-growing market for weight management medicines will naturally turn to the two leaders in this area, Eli Lilly and Novo Nordisk. However, several other companies seem to have somewhat promising prospects in this field. This group includes Amgen (AMGN -0.29%) and Viking Therapeutics (VKTX -1.58%), two drugmakers that have produced phase 2 clinical trial data for their leading weight management candidates.

Despite these positive clinical developments, Amgen and Viking Therapeutics have performed poorly on the stock market in the past 12 months, though progress in this area might eventually help them bounce back. But which of these two biotechs should investors trying to profit from the rapid spending on anti-obesity medicines put their money in?

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The case for Amgen

Amgen's leading weight loss candidate is called MariTide. In November, the biotech reported that in a phase 2 study, the medicine led to an average weight loss of about 20% in overweight or obese patients after 52 weeks, with no weight loss plateau observed. Importantly, MariTide is administered subcutaneously once a month -- the current weight management leaders are taken once weekly. A less frequent dosing could appeal to many patients.

The market expected greater weight loss in this study. That's why Amgen's shares fell after it released its phase 2 results. However, the company's data still makes it somewhat likely that it will go on to carve out a solid niche in the rapidly growing weight loss area, although it won't dethrone the leaders.

Further, Amgen's prospects go well beyond its work in the anti-obesity market. The company's deep lineup allows it to generate consistent revenue and profits. In the first quarter, Amgen's sales increased by 9% year over year to $8.1 billion, while its adjusted earnings per share came in at $4.90, 24% higher than the year-ago period. Amgen has several growth drivers. Tezspire, an asthma medicine, is performing well, as is Prolia, a treatment for osteoporosis (a bone disease) in postmenopausal women.

Amgen also has a deep pipeline of investigational products besides MariTide that will eventually lead to brand-new medicines. Lastly, it is an excellent dividend stock. It offers a forward yield of 3.5% -- compared to the S&P 500 index's average of 1.3% -- and has increased its payouts by 201.3% in the past 10 years. Amgen could generate strong returns over the long run even if MariTide doesn't pan out.

The case for Viking Therapeutics

Viking Therapeutics is a clinical-stage biotech. The company's VK2735, its weight management candidate, looks promising. Last year, it reported that at the highest dose, the drug led to a placebo-adjusted mean weight loss of 13.1% (or 14.7% from baseline) after a mere 13 weeks. VK2735 is in the same class of drugs as Eli Lilly's Zepbound. It mimics the action of two gut hormones: GLP-1 and GIP. That doesn't guarantee that it will achieve the same kind of success, but so far, the data looks highly encouraging.

Viking Therapeutics has other candidates. The company's VK2809 targets metabolic dysfunction-associated steatohepatitis. It delivered solid phase 2 results last year. Viking Therapeutics is also developing an oral formulation of VK2735 that is currently in mid-stage studies, while VK0214 is an investigational treatment for a rare, nervous system disorder called X-linked adrenoleukodystrophy.

There is no approved treatment for the disease yet. Viking Therapeutics carries above-average risk, as do all biotech companies without a single product on the market. But if VK2735 aces phase 3 results and earns approval -- and Viking's other candidates pan out as well -- the stock could deliver substantial returns.

The verdict

Amgen is a well-established company that generates consistent financial results. It also pays a dividend. It is a far better option for low-risk, income-seeking investors. There is no contest there. However, Viking Therapeutics has far more upside potential. If the smaller biotech can deliver solid pipeline and regulatory progress in the next few years, its shares will likely skyrocket. Note that the company also has significant potential drawbacks. It could be more appealing for investors with a higher tolerance for volatility.