Ans:
Study of normal physiology and development: Transgenic animals are useful to study gene regulation, their effect on the normal functions of the body and its development.
Study of disease: Transgenic models have been developed for many human diseases like cancer, cystic fibrosis, rheumatoid arthritis and Alzheimer's disease.
To obtain useful biological products: For example, human protein (α-1-antitrypsin) is used to treat emphysema. The milk contained the human alpha-lactalbumin and was more nutritionally balanced for human babies than natural cow milk.
Transgenic mice are developed to test the safety of vaccines, before being used on humans.
Chemical safety testing: Transgenic animals are made to carry genes, which make them more sensitive to the toxic substances than non-transgenic animals.