Level 1 of Alchemy allows you to mix health and mana potions to create
restoration potions. Higher levels let you create potions from empty bottles and appropriate ingredients, which can be handy but isn't really needed for health or mana potions (could be more useful for poison potions; I'm not sure how easy they are to come by).
You can get a level of Alchemy as a quest reward in the Dark Forest, and it can show up as an equipment bonus on armour or jewelry.