Transgenic animals are animals produced with externally introduced genes. Transgenic animals can be used in many fields and as models to test the effect of certain genes on health. They can be used to produce "enhanced" versions of an animal.
They can also be used as bioreactors: animals that produce an extra substance we want. Imagine having a transgenic cow that is modified to produce insulin in large quantities in its milk. This insulin can then be purified from the cows milk and used in replacement therapy for treating patiens with diabetes mellitus.