Alphabet and ResMed are spinning out a start-up to solve sleep apnea, a hidden health crisis 

  • Alphabet's Verily is spinning out another joint venture, this time with ResMed, to help people with undiagnosed and untreated sleep apnea.
  • Most people with sleep apnea have never been diagnosed.
  • Thats a huge, and costly problem, as sleep apnea is correlated with a wide range of medical conditions, including heart failure, obesity and strokes.
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Millions of people have sleep apnea, a potentially serious sleep disorder in which breathing repeatedly stops and starts. But most of them go undiagnosed. Those missed diagnoses cost an estimated $150 billion a year in the United States alone from things such as lost productivity and car accidents, according to the American Academy of Sleep Medicine.

So how do you reach more people at risk for the disease? Alphabet's Verily, its health unit, is spinning out a new company along with ResMed, a public company that specializes in sleep apnea and chronic respiratory diseases, to do just that.

Both companies are investing an undisclosed amount in the as-yet-unnamed venture, and is focused on sleep apnea and other sleep breathing disorders. This is not the first time that Verily has partnered with a life sciences company for a joint venture: It is also working with Johnson & Johnson on an effort called Verb Surgical to develop a next-generation surgical robot.

"The most important piece is really understanding and raising awareness around what a big problem this is," said Verily's chief medical officer Jessica Mega, in an interview with CNBC. "And then it's to identify people earlier and in the long-run really help this group."

An estimated 22 million Americans have sleep apnea, with about 80 percent of them unaware that they have it. It's associated with an increased risk of cardiovascular disease, obesity and diabetes, and it can also be dangerous for undiagnosed sufferers who experience a lot of fatigue during the day. Those who have it often wake up feeling like they're not well-rested after a full night's sleep. Other tells are loud snoring and interrupted breathing in the night, according to Jason Graff, medical director for sleep disorders for St Luke's Health System in Kansas City, Missouri.

'Millions of nights of data'

Other technology companies like Fitbit and Apple have shown an interest in sleep-tracking in recent years. Fitbit is hoping that its fitness trackers can provide a useful service in alerting people to potential sleep apnea. And Apple acquired a sleep-tracking hardware company called Beddit in 2017, indicating its interest in the space.

But the Alphabet joint venture appears to be more ambitious than that.

ResMed's chief medical officer Carlos Nunez described a series of goals for the partnership, which involve reaching people who might have the condition but don't know it; as well as helping those who have been diagnosed stay compliant with their treatment. They're also looking at raising awareness among the traditional health system, so that doctors will know what questions to ask.

"We also want to help providers, patients, payers and health systems understand that treating and managing these patients will help drive down cost and improve efficiency of health delivery," he said.

Both companies said they would deploy clinical studies to ensure they're on the right track.

Another core component of the joint venture will be technology and data. Nunez described it as an "unknown" fact that ResMed has generated "billions of nights of data" about how people sleep via its devices for sleep apnea and other conditions. By working with Verily, which boasts many former Google engineers, the company hopes to find new insights.

Independent sleep specialists say that technology companies have a big opportunity to help people with sleep apnea.

"There has been a lot of buzz of late in developing apps and other programs or hardware to help diagnose the disease," said Graff.