Investor Björgólfur Thor Björgólfsson is said to be among the lead financial backers of a healthcare firm that is conducting clinical studies of psilocybin—the psychoactive substance in magic mushrooms—to treat depression.

According to Bloomberg, Björgólfsson was a key player in recent fundraising by Atai Life Sciences AG, where the company reportedly secured $25 million.

Atai owns a large stake in Compass Pathways, a company developing a psilocybin therapy through late-stage clinical trials in Europe and North America, for patients with treatment-resistant depression.

Mr. Björgólfsson has neither been available for comment nor has he released a statement on the matter.

Multiple peer reviewed academic studies—dating back to the 1950s—have found that psilocybin therapy can provide immediate and long-lasting remissions in depression and other illnesses.

In 2016, researchers at Johns Hopkins reported that an overwhelming majority of patients suffering cancer-related anxiety found significant relief for months on end from a single large dose of psilocybin.

Psilocybin mushrooms have been used ceremonially by indigenous peoples’ for millennia, and are considered a sacred medicine among multiple cultures, nations and individuals across the world.

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