Sauron's involvement in breeding orcs and werewolves is canon; his involvement in breeding big scaly lizard things that breathe fire is my extrapolation.
Also, in his earlier writing Tolkien described there being hordes of Balrogs - entire armies of them. Later on he wrote that pehaps it would be better if there were only a few, maybe seven or so.
Or maybe there were hundreds of lesser Balrogs, but only seven of them had wings? :)
Part 205: Breeding programmes
Next time: Part 206: King of the world
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