The Demon Mutagen was a mutating agent used by Umbra during the late 14th and early 15th Centuries in order to mutate humans and Pokémon into monsters, taking the form of a purple goo.
The Demon Mutagen was originally a creation of the Latios and Latias sibling duo Muninn and Huginn, which ended up getting them punished by the Moon Tribe, who were destroyed by them in retaliation. It was eventually found by the Seel Yami and the Hydreigon Orochi at Mt. Moon more than 6,000 years ago, who used it to mutate into truly monstrous forms capable of rivaling legendaries such as Ho-oh in terms of power. At some point after destroying the Celestials and falling to Earth they met Umbra, who was able to produce the mutagen on a massive scale and used it to create a monster army.
After Umbra was defeated, the mutagen factories were destroyed in order to prevent the creation of more monsters.