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The Mutant Dalek Embryos were failed attempts at creating new Daleks on 1930s Earth. The creature vaguely resembled a Kaled mutant, although it missed the eye and tentacles. It also had a striking resemblance to a Rutan.
Being the last Daleks in existence, the Cult of Skaro had to act quick in order to ensure their race's survival. Trying to grow new Dalek embryos failed to create anything, as the flesh was too weak.
The Cult moved on to converting Humans into Human-Daleks in the Final Experiment and the embryos were dumped in the sewers to die in the dark. This is where the Doctor found one, which told him the Daleks were in Manhattan. (DW: Daleks in Manhattan)