Morpheus pods were invented in the 38th century by Gagan Rassmussen, a scientist. It simulated the body sleeping a whole night in just a five minute period. It sent electrical signals into the brain and changed its chemistry. This was meant to improve productivity. The pods were named after Morpheus, the god of dreams.
Aboard the Le Verrier research station orbiting Neptune, Rassmussen experimented on his creation to improve it. However, things went awry when the sleep dust from the Morpheus pod users came to life in the form of "Sandmen" and digested all the crew aboard the station. Some of the sleep dust took on the form of Rassmussen and waited for a rescue mission for itself. Rassmussen put on a show for dramatic effect to broadcast a video of the rescue mission throughout the solar system for humanity to watch, encoding the same signal that altered the sleep dust into Sandmen in it. (TV: Sleep No More)