BOSTON - Researchers announced today that they have successfully created two identical, genetically engineered calves, a step that could lead to the mass production of drugs for humans in cows' milk. Named George and Charlie, the calves were created through a combination of cloning and genetic engineering by Dr. James Robl at the University of Massachusetts and Dr. Steven Stice of Advanced Cell Technology Inc. They were to detail their findings at the International Embryo Transfer Society meeting today. The calves aren't the first animal clones with altered genes _ lambs Molly and Polly have a human gene expected to make them produce a protein helpful in blood clotting. But even Dr. Ian Wilmut, the Scottish researcher who genetically engineered the lambs and the now-famous Dolly, acknowledged that drug-making cows could be more valuable because they produce much more milk than sheep. Researchers said the cows mark the most viable step so far toward "pharming" _ developing pharmaceuticals using farm animals. "It's a big deal," said Mark Westhusin, a researcher at Texas A&M University. "This technology has the potential to be a lot more efficient than the technology that we have now." Robl said the technique his team used to clone the cows was a variation on the nuclear transfer process Wilmut used last year to clone Dolly the sheep, the first mammal cloned from an adult cell. But Stice said unlike the method used with sheep, cloning the cows did not require surgery and it was relatively quick. In nuclear transfer, scientists remove the nucleus from an egg and replace it with the nucleus from another cell. The egg is then placed into the uterus of a surrogate mother that gives birth to an offspring that has only the genes of the original cell. But the process can require at least two surgeries. The UMass researchers said the genetically altered egg was grown in a laboratory, then inserted into the uterus without major surgery. The calves were born last week at a ranch in Texas. They contain two genetic alterations _ a "marker" gene and one that made cells resistant to an antibiotic. Those markers have shown up everywhere, from the blood to the spleen to the bones. One of the researchers, Jose Bernardo Cibelli, said the team's technique takes cells that have already differentiated to produce a specific type of tissue _ muscle, for example _ and brings them back to the state where they can divide and form every type of cell in the body. Robl and Stice say that process could lead to the ability to produce cells that can be transferred into humans to treat such diseases at Parkinson's and Alzheimer's. "The cells that we use are very easy to program, very easy to genetically alter," Robl said. Molly and Polly differ from Dolly in that they were cloned from the cell of a sheep fetus, not an adult animal. The lambs were born in July and will be tested this spring to see if their milk produces useful quantities of factor IX, a protein that helps blood clot. It is hoped that the factor IX could be extracted from the milk and used to treat patients with hemophilia, an inherited bleeding disorder in which the blood lacks the ability to clot. "Obviously I'm delighted that the nuclear transfer technology is very robust," Wilmut said upon learning of the cloned calves. The UMass researchers haven't produced a cow that can produce a drug. But they said they have pregnant cows carrying fetuses that have been altered to produce milk with the human serum albumin, a protein essential to the blood that is widely used by hospitals. Advanced Cell Technology, the company founded by the researchers, already has a deal with Genzyme Transgenics Corp. of Framingham to produce albumin. "We've taken a significant step toward making this commercially viable," Robl said. Neither the lambs nor the calves are absolute pioneers. Other techniques have been used to reap drugs for the treatment of cystic fibrosis and heart attacks from the milk of genetically engineered sheep or goats. These animals, however, were produced by injecting genes into a fertilized egg and then implanting the egg in a surrogate mother, a technique less efficient than cloning. Only about 2 percent of such eggs grow to live animals and only a small percentage of the survivors actually contain the target genes. Scientists at the conference, many of whom are researching animal cloning, said the arrival of George and Charlie has been much anticipated. "It's not Dolly but it's a substantial contribution," said Dr. Caird Rexroad, the society president. "We've all been awaiting more information on what you can do with cattle. A cow can make a tremendous amount of protein."