living cells such as animal cells which produce biologically active factors are encapsulated within a semipermeable , polymeric membrane such as polyacrylate by co - extruding an aqueous cell suspension and a polymeric solution through a common port having at least one concentric bores to form a tubular extrudate having a polymeric membrane which encapsulates the cell suspension . the cell suspension is extruded through an inner bore and the polymeric solution is extruded through an outer bore while a pressure differential is maintained between the cell suspension and the polymeric solution to impede solvent diffusion from the polymeric solution into the cell suspension . the polymeric solution coagulates to form an outer coating or membrane as the polymeric solution and the cell suspension are extruded through the extrusion port . as the outer membrane is formed , the ends of the tubular extrudate are sealed to form a cell capsule . in one embodiment , the tubular extrudate is sealed at intervals to define separate cell compartments connected by polymeric links . in another embodiment , a cell capsule connected to a tethering filament is formed . the polymeric membrane may contain additives such as a surfactant , an anti - inflammatory agent or an anti - oxidant and can be coated with a protective barrier . the cell suspension may contain nutrients and an anchorage substrate .