A Xenomorph drone is also able to create an egg, by a process of metamorphosis on a captured(cacooned) victim which then changes into a viable ovomorph.
Henry Marlow, the captain of the Anesidora, and his crew were witnesses to an alien egg hatching. What resulted was a parasite attaching itself to Catherine Foster. Due to concern for his wife, Marlow used Nostomo's flight recorder to bargain for access to Sevastopol's medical facilities. Thus causing the demise of nearly every inhabitant and visitor to Sevastopol.
Some time after killing that Alien, Amanda Ripley stumbles upon its nest in an attempt to investigate what was wrong with the reactor core. She succeeds in destroying it, but not before several Xenomorphs escape.
It is susceptible to fire damage. Ideally it would be better to use the Flamethrower over the Molotov. Due to the latter having splash damage if thrown to closely to the player. On the other hand, ammo for the flamethrower is quite valuable. So it's best to avoid the eggs completely when possible.