As usual, I don't say anything for certain :-). But I'm pretty sure here all the same: Only the Valar can create lifeforms. Manwë created Elf and Man, Aulë created dwarf, and Morgoth, though he didn't really create a new lifeform: he captured some of the first elves and tortured them into another species, the orcs.
What Saruman did, and what (I'm not sure of but think that) Morgoth did before him (with his own orcs, that is), was just like another dog-breeder amongst us can do! :-)
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«We're all but noon now; dawn, evening and midnight.»
Aki Benetah.
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