On August 20, 2010, the Company acquired a controlling financial interest in Silver Creek. At such time, the Company had the ability to direct the activities of Silver Creek that most significantly impacted Silver Creek’s economic performance through its ownership percentage and through the board of director seats controlled by the Company. As such, Silver Creek was consolidated by the Company.

Since the Company acquired its financial interest, Silver Creek has raised funding through the issuance of Series A, B and C preferred stock. The Company has not participated in any Silver Creek financings nor has it provided any funding since the Company acquired its financial interest. As of December 31, 2016, the Company held an ownership interest in Silver Creek greater than 50% and maintained the ability to control the board of directors and the activities that most significantly impacted the economic performance of Silver Creek.

During the third quarter of 2017, Silver Creek completed its Series C preferred stock financing, which reduced the Company’s ownership percentage in Silver Creek below 50% and resulted in the Company no longer controlling the Silver Creek board of directors. As of December 31, 2018, the Company’s ownership percentage in Silver Creek was approximately 40%. The Company determined that it is no longer the primary beneficiary of Silver Creek since the Company does not control the board of directors and does not direct the activities that have the most significant impact on Silver Creek’s economic performance. Therefore, the Company deconsolidated Silver Creek from its financial statements on July 13, 2017. Starting on July 14, 2017, the Company accounted for its investment in Silver Creek under the equity method of accounting as it has the ability to exercise significant influence over Silver Creek’s operating and financial policies and controls between twenty and forty-nine percent of the voting shares. Under the equity method of accounting, the Company records its proportionate share of Silver Creek’s net losses in its consolidated statements of operations and comprehensive loss with a corresponding decrease in the carrying value of the investment. Silver Creek continues to be a related party to the Company after deconsolidation.

The Company recorded a gain on the deconsolidation of Silver Creek of $10.8 million for the year ended December 31, 2017 in the consolidated statement of operations and comprehensive loss. On the date of deconsolidation, the fair value of the Company’s investment in Silver Creek exceeded the Company’s share of the net assets of Silver Creek, which generated the gain. On July 14, 2017, the Company recorded its investment in Silver Creek at a fair value of $11.4 million, which was based on a third party valuation report. The gain on deconsolidation includes the following:

(in thousands)
Fair value of the Company's retained investment in Silver Creek	$	11,400
Carrying value of non-controlling interest		(1,852	)
Derecognition of Silver Creek's net liabilities		1,300
Gain recognized on deconsolidation of Silver Creek	$	10,848

As of December 31, 2018 and 2017, the Company held an equity investment in Silver Creek, which was accounted for as an equity method investment. The carrying value of the investment in Silver Creek was $7.4 million and $10.6 million at December 31, 2018 and 2017, respectively. During the years ended December 31, 2018 and 2017, the Company recorded a loss associated with Silver Creek of $3.1 million and $0.8 million, respectively, as a component of other (expense) income, net in the consolidated statements of operations and comprehensive loss, representing its proportionate share of Silver Creek’s losses from July 14, 2017 through December 31, 2018. The Company reviews the investment for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. These circumstances can include, but are not limited to, negative current events or long-term outlooks impacting Silver Creek and/or its programs, planned or announced delays in the clinical development process to advance its programs, a current fair value of investment at a lower value than the Company’s investment and/or investors no longer providing financial support or reducing their financial commitment to Silver Creek. To date, the Company has not recorded any impairment losses.