Can Time Lords/Gallifreyans reproduce?

I have been doing research for a role play where my friend and I play the Doctor and a companion. He insists that Tim Lords cannot reproduce sexually, but rather are "loomed". I looked this up and I suppose it's from a book. However, I also read that The Doctor has memories of being both Loomed and born, which contradict each other. I also read that Time Lords have a very complex reproductive system. And in series 6, so far they have been stringing us along to believe Melody is the Doctor's. We now know that is not true, but if the Doctor cannot have children, then when he dies there would be no others. I know this sounds silly but I'm really curious now.