The potential of a stem cell to differentiate into specialized cell types for restoring normal tissue/organ function has stimulated interest in stem cell research. The methods used to coax stem cells differentiate into specialized cells still remain in their infancy stages. The disclosed invention is the generation of mammalian or avian cell hybrids formed from fusing lineage committed somatic cells with nucleated stem cells or nucleated transit amplifying cells. The fusion of lineage committed somatic cells with nucleated stem cells, or nucleated transit amplifying cells as described herein facilitates stem cell differentiation and lineage commitment of hybrid cells and can be aided by inclusion of an encapsulation step. By the fusion of cells in this invention, this invention also provides for methods to restore damaged tissue or the expression of defective, dysfunctional, decreased, lost or not previously expressed bio-pharmaceutical products.