This is a medication that is used to treat the symptoms of psychotic disorders like Schizophrenia. The medication is called an atypical anti psychotic and works on certain naturally occurring chemicals in the brain, chemicals that are thought to be associated with normal thought process.
These chemicals may be unbalanced and disproportionate in an illness like your daughter is experiencing. The drug helps restore normal balance.
The medication can be used with a Bipolar diagnosis and often is given for this reason, especially if the person has a tendency to experience moods that are elevated and "manic"... Many times when this drug is used, the suspected diagnosis of record is schizoaffective disorder, an illness that has features of both mood instability and thoughts that are distorted and unclear.
A long term illness such as what your daughter is experiencing can be hard on her, and you and the family. NAMI (nami.org) can link you to local and internet groups that offer support for chronic mental conditions, and often sharing the ups and downs of this disorder with others who have children with this same issue can allow you to feel more encouraged and informed.
Stabilization for an illness such as you describe can occur, but often it does take a while, as even our best science is just trial and error. However, if she continues to have significant symptoms longer than seven months on this medication it is typical for another medication to be tried. Do not hesitate to advocate for your daughter and to use resources like NAMI to assist in that effort. Steven