Should not need to be dropped. I haven't done a replacement myself, but when I did the install for my x-pipe seems like you should have enough room to do it all with the pipe in place.
08 E90 | Jet Black / Black | 6MT
Mods: RAC RG63 w/ Pirelli Corsa 255F/285R | Akrapovic Evo Exhaust | OEM Blacklines
Winter Setup: OEM 18s w/ Nokian Hakkapeliita R 245/40-18